Federal Register, Volume 59 Issue 102 (Friday, May 27, 1994)

[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12516]

[[Page Unknown]]

[Federal Register: May 27, 1994]

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Part III

Department of Health and Human Services

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Health Care Financing Administration

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42 CFR Parts 412, 413, 485 and 489

Medicare; Hospital Inpatient Prospective Payment Systems and Fiscal
Year 1995 Rates; Proposed Rule
DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 412, 413, 482, 485, and 489

[BPD-802-P]
RIN 0938-AG46

Medicare Program; Changes to the Hospital Inpatient Prospective
Payment Systems and Fiscal Year 1995 Rates

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

ACTION: Proposed rule.

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SUMMARY: We are proposing to revise the Medicare hospital inpatient
prospective payment systems for operating costs and capital-related
costs to implement necessary changes arising from our continuing
experience with the system. In addition, in the addendum to this
proposed rule, we are describing proposed changes in the amounts and
factors necessary to determine prospective payment rates for Medicare
hospital inpatient services for operating costs and capital-related
costs. These changes would be applicable to discharges occurring on or
after October 1, 1994. We are also setting proposed rate-of-increase
limits for hospitals and hospital units excluded from the prospective
payment systems.

DATES: Comments will be considered received at the appropriate address,
as provided below, no later than 5 p.m. on July 26, 1994.

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

Health Care Financing Administration, Department of Health and Human
Services, Attention: BPD-802-P, P.O. Box 7517, Baltimore, MD 21207-
0517.

. If you prefer, you may deliver your written comments (an 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-802-P. 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 comments that relate to information collection requirements,
mail a copy of comments to: Office of Information and Regulatory
Affairs, Office of Management and Budget, Room 3001, New Executive
Office Building, Washington, DC 20503, Attn: Allison Herron Eydt, HCFA
Desk Officer.
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 Master Card
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 is $6.00. As an alternative, you can view
and photocopy the Federal Register document at most libraries
designated as Federal Depository Libraries and at many other public and
academic libraries throughout the country that receive the Federal
Register.
To obtain data used in deriving the standardized amounts and DRG
relative weights, see section VIII.B. of the Supplementary Information
section of this preamble, Requests for Data From the Public.

FOR FURTHER INFORMATION CONTACT: Lana Price, (410) 966-4529.

SUPPLEMENTARY INFORMATION:

I. Background

A. Summary

Under section 1886(d) of the Social Security Act (the Act), a
system of payment for the operating costs of acute hospital inpatient
stays under Medicare Part A (Hospital Insurance) based on
prospectively-set rates was established effective with hospital cost
reporting periods beginning on or after October 1, 1983. Under this
system, Medicare payment for hospital inpatient operating costs is made
at a predetermined, specific rate for each hospital discharge. All
discharges are classified according to a list of diagnosis-related
groups (DRGs). The regulations governing the hospital inpatient
prospective payment system are located in 42 CFR part 412. On September
1, 1993, we published a final rule with comment period (58 FR 46270) to
implement changes to the prospective payment system for hospital
operating costs beginning with Federal fiscal year (FY) 1994.
For cost reporting periods beginning before October 1, 1991,
hospital inpatient operating costs were the only costs covered under
the prospective payment system. Payment for capital-related costs had
been made on a reasonable cost basis because, under sections 1886(a)(4)
and (d)(1)(A) of the Act, those costs had been specifically excluded
from the definition of inpatient operating costs. However, section
4006(b) of the Omnibus Budget Reconciliation Act of 1987 (Public Law
100-203) revised section 1886(g)(1) of the Act to require that, for
hospitals paid under the prospective payment system for operating
costs, capital-related costs would also be paid under a prospective
payment system effective with cost reporting periods beginning on or
after October 1, 1991. As required by section 1886(g) of the Act, we
replaced the reasonable cost-based payment methodology with a
prospective payment methodology for hospital inpatient capital-related
costs. Under the new methodology, effective for cost reporting periods
beginning on or after October 1, 1991, a predetermined payment amount
per discharge is made for Medicare inpatient capital-related costs.
(See subpart M of 42 CFR part 412, and the August 30, 1991, final rule
(56 FR 43358) for a complete discussion of the prospective payment
system for hospital inpatient capital-related costs.)

B. Major Contents of This Proposed Rule

In this proposed rule, we are setting forth proposed changes to the
Medicare hospital inpatient prospective payment systems for both
operating costs and capital-related costs. This proposed rule would be
effective for discharges occurring on or after October 1, 1994.
Following is a summary of the major changes that we are proposing to
make:
1. Changes to the DRG Classification and Relative Weights
As required by section 1886(d)(4)(C) of the Act, we must adjust the
DRG classifications and relative weights at least annually. Our
proposed changes for FY 1995 are set forth in section II of this
preamble.
2. Changes to the Hospital Wage Index
In section III of this preamble, we discuss revisions to the wage
index and the annual update of the wage data. Specific issues addressed
in this section include:
FY 1995 wage index update.
Changes in the reporting of hospital wage index data.
Revisions to the wage index based on hospital
redesignations.
Impact of the revised hospital wage index.
Occupational mix adjustment.
Research on refinements to labor market areas.
State labor market options.
3. Other Changes to the Prospective Payment System for Inpatient
Operating Costs
In section IV of this preamble, we discuss several provisions of
the regulations in 42 CFR parts 412, 413, 485, and 489 and set forth
certain proposed changes concerning the following:
Definition of and payment for transfer cases.
Review of DRG assignments.
National average standardized amounts for FY 1995.
Outliers.
Rural referral centers.
Determination of number of beds in determining the
indirect medical education adjustment.
Disproportionate share adjustment.
Changes affecting essential access community hospitals
(EACHs) and rural primary care hospitals (RPCHs).
Clarification of payments to rural referral center/EACH
hospitals.
Direct graduate medical education payment.
Other technical changes.
4. Changes and Clarifications to the Prospective Payment System for
Capital-Related Costs
In section V of this preamble, we discuss several provisions of the
regulations in 42 CFR parts 412 and 413 and set forth certain proposed
changes concerning the following:
Evaluation of provisions relating to obligated capital for
hospitals subject to lengthy certificate-of-need (CON) process.
Specific adjustment for taxes to the capital prospective
payment system federal rate.
Revision of provision relating to exceptions payments.
Extraordinary circumstances exceptions payments.
Funding of depreciation.
5. Changes for Hospitals Excluded from the Prospective Payment System
In section VI of this preamble, we discuss changes to the
regulations at 42 CFR parts 412 and 413 for hospitals and hospital
units excluded from the prospective payment system. The proposed
changes concern the following:
New requirements for certain long-term care hospitals
excluded from the prospective payment systems.
Removal of the 1986 malpractice rule.
Related technical changes.
6. Determining Prospective Payment Rates and Rate-of-Increase Limits
In the addendum to this proposed rule, we set forth proposed
changes to the amounts and factors for determining the FY 1995
prospective payment rates for operating costs and capital-related
costs. We are also proposing new update factors for determining the
rate-of-increase limits for cost reporting periods beginning in FY 1995
for hospitals and hospital units excluded from the prospective payment
system.
7. Impact Analysis
In Appendix A, we set forth an analysis of the impact that the
proposed changes described in this rule would have on affected
entities.
8. Capital Acquisition Model
Appendix B contains the technical appendix on the proposed FY 1995
capital acquisition model and budget neutrality adjustment.
9. Report to Congress on the Update Factor for Prospective Payment
Hospitals and Hospitals Excluded from the Prospective Payment System
Section 1886(e)(3)(B) of the Act requires that the Secretary report
to Congress no later than March 1, 1994 on our initial estimate of an
update factor for FY 1995 for both prospective payment hospitals and
hospitals excluded from the prospective payment system. This report is
included as Appendix C to this proposed rule.
10. Proposed Recommendation of Update Factor for Hospital Inpatient
Operating Costs
As required by sections 1886 (e)(4) and (e)(5) of the Act, Appendix
D provides our recommendation of the appropriate percentage change for
FY 1995 for the following:
Large urban, other urban, and rural average standardized
amounts (and hospital-specific rates applicable to sole community
hospitals) for hospital inpatient services paid for under the
prospective payment system for operating costs.
Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by hospitals and
hospital units excluded from the prospective payment system.
11. Framework for Capital Update
In Appendix E, we are setting forth a preliminary framework for
developing the annual update factor for inpatient hospital capital-
related costs.
12. Discussion of Prospective Payment Assessment Commission
Recommendations
The Prospective Payment Assessment Commission (ProPAC) is directed
by section 1886(e)(2)(A) of the Act to make recommendations on the
appropriate percentage change factor to be used in updating the average
standardized amounts. In addition, section 1886(e)(2)(B) of the Act
directs ProPAC to make recommendations regarding changes in each of the
Medicare payment policies under which payments to an institution are
prospectively determined. In particular, the recommendations relating
to the hospital inpatient prospective payment systems are to include
recommendations concerning the number of DRGs used to classify
patients, adjustments to the DRGs to reflect severity of illness, and
changes in the methods under which hospitals are paid for capital-
related costs. Under section 1886(e)(3)(A) of the Act, the
recommendations required of ProPAC under sections 1886(e)(2) (A) and
(B) of the Act are to be reported to Congress not later than March 1 of
each year.
We are printing ProPAC's March 1, 1994 report, which includes its
recommendations, as Appendix F of this document. The recommendations,
and the actions we are proposing to take with regard to them (when an
action is recommended), are discussed in detail in the appropriate
sections of this preamble, the addendum, or the appendices to this
proposed rule. See section VII of this preamble for specific
information concerning where individual recommendations are addressed.
For a brief summary of the ProPAC recommendations, we refer the reader
to the beginning of the ProPAC report as set forth in Appendix F of
this proposed rule. ProPAC also produced technical appendices in its
March 1, 1994 report that provide background material and detailed
analyses used in preparation of the ProPAC recommendations. For further
information relating specifically to the ProPAC report or to obtain a
copy of the technical appendices, contact ProPAC at (202) 401-8986.

II. Proposed Changes to DRG Classifications and Relative Weights

A. Background

Under the prospective payment system, we pay for inpatient hospital
services on the basis of a rate per discharge that varies by the DRG to
which a beneficiary's stay is assigned. The formula used to calculate
payment for a specific case takes an individual hospital's payment rate
per case and multiplies it by the weight of the DRG to which the case
is assigned. Each DRG weight represents the average resources required
to care for cases in that particular DRG relative to the average
resources used to treat cases in other DRGs.
Congress recognized that it would be necessary to recalculate the
DRG relative weights periodically to account for changes in resource
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires
that the Secretary adjust the DRG classifications and relative weights
annually. These adjustments are made to reflect changes in treatment
patterns, technology, and any other factors that may change the
relative use of hospital resources. The proposed changes to the DRG
classification system and the proposed recalibration of the DRG weights
for discharges occurring on or after October 1, 1994 are discussed
below.

B. DRG Reclassification

1. General
Cases are classified into DRGs for payment under the prospective
payment system based on the principal diagnosis, up to eight additional
diagnoses, and up to six procedures performed during the stay, as well
as age, sex, and discharge status of the patient. The diagnosis and
procedure information is reported by the hospital using codes from the
International Classification of Diseases, Ninth Edition, Clinical
Modification (ICD-9-CM). The Medicare fiscal intermediary enters the
information into its claims system and subjects it to a series of
automated screens called the Medicare Code Editor (MCE). These screens
are designed to identify cases that require further review before
classification into a DRG can be accomplished.
After screening through the MCE and any further development of the
claims, cases are classified by the GROUPER software program into the
appropriate DRG. The GROUPER program was developed as a means of
classifying each case into a DRG on the basis of the diagnosis and
procedure codes and demographic information (that is, sex, age, and
discharge status). It is used both to classify past cases in order to
measure relative hospital resource consumption to establish the DRG
weights and to classify current cases for purposes of determining
payment. The records for all Medicare hospital inpatient discharges are
maintained in the Medicare Provider Analysis and Review (MedPAR) file.
The data in this file are used to evaluate possible DRG classification
changes and to recalibrate the DRG weights.
Currently, cases are assigned to one of 491 DRGs in 25 major
diagnostic categories (MDCs). Most MDCs are based on a particular organ
system of the body (for example, MDC 6, Diseases and Disorders of the
Digestive System); however, some MDCs are not constructed on this basis
since they involve multiple organ systems (for example, MDC 22, Burns).
In general, principal diagnosis determines MDC assignment. However,
there are four DRGs to which cases are assigned on the basis of
procedure codes rather than first assigning them to an MDC based on the
principal diagnosis. These are the DRGs for liver and bone marrow
transplant (DRGs 480 and 481, respectively) and the two DRGs for
tracheostomies (DRGs 482 and 483). Cases are assigned to these DRGs
before classification to an MDC.
Within most MDCs, cases are then divided into surgical DRGs (based
on a surgical hierarchy that orders individual procedures or groups of
procedures by resource intensity) and medical DRGs. Medical DRGs
generally are differentiated on the basis of diagnosis and age. Some
surgical and medical DRGs are further differentiated based on the
presence or absence of complications or comorbidities (hereafter CC).
Generally, GROUPER does not consider other procedures; that is,
nonsurgical procedures or minor surgical procedures generally not
performed in an operating room are not listed as operating room (OR)
procedures in the GROUPER decision tables. However, there are a few
non-OR procedures that do affect DRG assignment for certain principal
diagnoses, such as extracorporeal shock wave lithotripsy for patients
with a principal diagnosis of urinary stones.
The changes we are proposing to make to the DRG classification
system for FY 1995 are set forth below.
2. MDC 2 (Diseases and Disorders of the Eye)
When a case is coded with a principal diagnosis of subcorneal
pustular dermatosis (diagnosis code 694.1), it is classified to MDC 2
(Diseases and Disorders of the Eye), where it is assigned to DRGs 46,
47, and 48 (Other Disorders of the Eye).\1\ We recently received a
suggestion from the public that we should review the DRG classification
of subcorneal pustular dermatosis because it is a dermatological
condition and is not a disease or disorder of the eye.
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\1\A single title combined with two DRG numbers is used to
signify pairs. Generally, the first DRG is for cases with CC and the
second is for cases without CC. If a third number is included, it
represents cases of patients who are age 0-17. Occasionally, a pair
of DRGs is split on age >17 and age 0-17.
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Since this issue involves a possible medical misclassification of a
diagnosis, we asked our medical consultants to evaluate the condition.
They determined that subcorneal pustular dermatosis is indeed a
dermatological condition and not an eye condition. Based on their
determination and recommendations, we propose to remove diagnosis code
694.1 from its current classification in MDC 2 and assign it to MDC 9
(Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast).
In order to determine the appropriate DRG assignment in MDC 9, we
first made a clinical evaluation of the medical DRGs. Based on the
current MDC 9 configuration, the only possible DRGs appear to be DRGs
272 and 273 (Major Skin Disorders) or DRGs 283 and 284 (Minor Skin
Disorders). After reviewing the average standardized charges and the
types of costs assigned to DRGs 272 and 273, we believe the best
assignment for 694.1 is DRGs 283 and 284. We note that the proposed FY
1995 relative weights of DRGs 46, 47, and 48 (0.7573, 0.4330, and
0.4182, respectively) are approximately equal to those of DRGs 283 and
284 (0.7142 and 0.4358, respectively). Therefore, we propose to move
diagnosis code 694.1 to DRGs 283 and 284.
3. MDC 15 (Newborns and Other Neonates with Conditions Originating in
the Perinatal Period)
In the September 1, 1993 final rule (58 FR 46283), we stated that
we would be evaluating the newborn and neonate DRG classifications and
relative weights for possible improvements. Because of the low volume
of cases in these DRGs in the MedPAR file, we stated that we intended
to rely on data bases outside the Medicare claims file to supplement
our data. We expect that any major reclassification changes to MDC 15
will be based on an evaluation of actual neonate case data, including
charges and clinical information.
As we have not yet completed this evaluation, we will not be
proposing our MDC 15 revisions for FY 1995. However, since publication
of the September 1, 1993 final rule, we have received several
suggestions from the public concerning improvements for the neonate DRG
classifications. Some commenters suggested that we reevaluate the
diagnoses that are currently considered significant problems in
determining the assignment of a neonate case to DRG 390 (Neonate with
Other Significant Problems) rather than DRG 391 (Normal Newborn). These
commenters believe that many of the diagnoses currently assigned to DRG
390 are not truly significant clinically and in terms of resource use.
These commenters also identified specific diagnoses within this group
that are problematic. Even though we are not ready to proceed with a
comprehensive proposal for revising MDC 15, we did ask our medical
specialists to evaluate the specific conditions that were identified as
problematic in the assignment of newborns to DRG 390.
Currently, cases of otherwise normal newborns with one of the
following diagnoses are assigned to DRG 390 rather than DRG 391:

752.5--Undescended testicle
795.4--Other nonspecific abnormal histological findings
V05.3--Need for prophylactic vaccination against viral hepatitis
V05.4--Need for prophylactic vaccination against Varicella
V20.1--Other healthy infant or child receiving care

All of these diagnoses were identified by the commenters as
nonsignificant conditions that are either not problems or require only
minimal diagnostic work-up, no treatment, and result in the consumption
of minimal or no additional resources. For these reasons, the
commenters believe that these diagnoses should be added to the list of
conditions that may be found as secondary diagnoses for DRG 391.
Specifically, a healthy newborn with undescended testicles requires
only a minimal diagnostic work-up and no treatment at the time of
birth. In addition, the conditions that are assigned to diagnosis code
795.4 (Other nonspecific abnormal histological findings) are
nonsignificant problems and require no additional resources to treat.
Commenters also pointed out that it has become standard practice to
inoculate newborns against viral hepatitis, and that a prophylactic
vaccination against Varicella is normal and routine and does not
indicate a problem with the newborn. Diagnosis code V20.1 is generally
used to identify a healthy infant that remains in the hospital for an
extended period of time because of maternal illness, and should not be
considered a significant problem.
All of the conditions listed above were reevaluated on a clinical
basis by our medical specialists, who determined that these diagnoses
are not significant problems in neonates. Therefore, we are proposing
to add them to the list of secondary diagnoses that would assign an
otherwise normal newborn to DRG 391.
Based on comments received, we also reevaluated perinatal jaundice
(diagnosis codes 774.0 through 774.7) and its DRG assignments.
Currently, all of these diagnosis codes except 774.6 (unspecified fetal
and neonatal jaundice) are considered major problems and are assigned
to DRGs 387 (Prematurity with Major Problems) and 389 (Full Term
Neonate with Major Problems). Diagnosis code 774.6 is not considered a
significant problem and is assigned to DRG 388 (Prematurity without
Major Problems) and DRG 391. Some commenters did not believe that 774.6
should be assigned to DRG 391 when all the other perinatal jaundice
codes are considered major problems. Other commenters believe that some
of the perinatal jaundice diagnoses that are currently considered major
are really not that resource intensive.
Our medical specialists reevaluated these perinatal jaundice
conditions, and, based on their determinations, we are proposing
several revisions to the neonatal DRG assignments. First, the following
diagnosis codes would be removed from the major problems list in DRGs
387 and 389 and would be added to the significant problems list:

774.0--Perinatal jaundice from hereditary hemolytic anemias
774.1--Perinatal jaundice from other excessive hemolysis
774.2--Neonatal jaundice associated with preterm delivery

Thus, a premature newborn with one of these codes would be assigned to
DRG 388 and a full-term newborn with one of these codes would be
assigned to DRG 390.

The following diagnosis codes would be removed from the major
problems list in DRGs 387 and 389 and would not be added to the
significant problems list:

774.30--Neonatal jaundice due to delayed conjugation, cause unspecified
774.31--Neonatal jaundice due to delayed conjugation in diseases
classified elsewhere
774.39--Other neonatal jaundice due to delayed conjugation from other
causes
774.5--Perinatal jaundice from other causes

Therefore, a premature newborn with one of these conditions would be
assigned to DRG 388 and a full-term newborn with one of these
conditions would be assigned to DRG 391.
The following diagnosis codes would remain on the major problems
list and continue to result in assignment to DRGs 387 and 389:

774.4--Perinatal jaundice due to hepatocellular damage
774.7--Kernicterus not due to isoimmunization

Finally, diagnosis codes 774.6 (Unspecified fetal and neonatal
jaundice) would continue to be considered a nonsignificant condition
and result in assignment to DRGs 388 and 391.
We note again that these proposals are based only on clinical
considerations and respond to specific requests made by the public. We
will continue our work on a more comprehensive evaluation of the MDC 15
DRGs and will announce our proposal when that evaluation is completed.
4. Surgical Hierarchies
Some inpatient stays entail multiple surgical procedures, each one
of which, occurring by itself, could result in assignment of the case
to a different DRG within the MDC to which the principal diagnosis is
assigned. It is, therefore, necessary to have a decision rule by which
these cases are assigned to a single DRG. The surgical hierarchy, an
ordering of surgical classes from most to least resource intensive,
performs that function. Its application ensures that cases involving
multiple surgical procedures are assigned to the DRG associated with
the most resource-intensive surgical class.
Because the relative resource intensity of surgical classes can
shift as a function of DRG reclassification and recalibration, we
reviewed the surgical hierarchy of each MDC, as we have for previous
reclassifications, to determine if the ordering of classes coincided
with the intensity of resource utilization, as measured by the same
billing data used to compute the DRG relative weights.
A surgical class can be composed of one or more DRGs. For example,
in MDC 5, the surgical class ``heart transplant'' consists of a single
DRG (DRG 103) and the class ``coronary bypass'' consists of two DRGs
(DRGs 106 and 107). Consequently, in many cases, the surgical hierarchy
has an impact on more than one DRG. The methodology for determining the
most resource-intensive surgical class, therefore, involves weighting
each DRG for frequency to determine the average resources for each
surgical class. For example, assume surgical class A includes DRGs 1
and 2 and surgical class B includes DRGs 3, 4, and 5, and that the
average charge of DRG 1 is higher than that of DRG 3, but the average
charges of DRGs 4 and 5 are higher than the average charge of DRG 2. To
determine whether surgical class A should be higher or lower than
surgical class B in the surgical hierarchy, we would weight the average
charge of each DRG by frequency (that is, by the number of cases in the
DRG) to determine average resource consumption for the surgical class.
The surgical classes would then be ordered from the class with the
highest average resource utilization to that with the lowest, with the
exception of ``other OR procedures'' as discussed below.
This methodology may occasionally result in a case involving
multiple procedures being assigned to the lower-weighted DRG (in the
highest, most resource-intensive surgical class) of the available
alternatives. However, given that the logic underlying the surgical
hierarchy provides that the GROUPER searches for the procedure in the
most resource-intensive surgical class, which may sometimes occur in
cases involving multiple procedures, this result is unavoidable.
We note that, notwithstanding the foregoing discussion, there are a
few instances when a surgical class with a lower average relative
weight is ordered above a surgical class with a higher average relative
weight. For example, the ``other OR procedures'' surgical class is
uniformly ordered last in the surgical hierarchy of each MDC in which
it occurs, regardless of the fact that the relative weight for the DRG
or DRGs in that surgical class may be higher than that for other
surgical classes in the MDC. The ``other OR procedures'' class is a
group of procedures that are least likely to be related to the
diagnoses in the MDC but are occasionally performed on patients with
these diagnoses. Therefore, these procedures should only be considered
if no other procedure more closely related to the diagnoses in the MDC
has been performed.
A second example occurs when the difference between the average
weights for two surgical classes is very small. We have found that
small differences generally do not warrant reordering of the hierarchy
since, by virtue of the hierarchy change, the relative weights are
likely to shift such that the higher-ordered surgical class has a lower
average weight than the class ordered below it.
Based on the preliminary recalibration of the DRGs, we are
proposing to modify the surgical hierarchy as set forth below. As we
stated in the September 1, 1989 final rule (54 FR 36457), we are unable
to test the effects of the proposed revisions to the surgical hierarchy
and to reflect these changes in the proposed relative weights due to
the unavailability of revised GROUPER software at the time this
proposed rule is prepared. Rather, we simulate most major
classification changes to approximate the placement of cases under the
proposed reclassification and then determine the average charge for
each DRG. These average charges then serve as our best estimate of
relative resource use for each surgical class. We test the proposed
surgical hierarchy changes after the revised GROUPER is received and
reflect the final changes in the DRG relative weights in the final
rule. Further, as discussed below in section II.C of this preamble, we
anticipate that the final recalibrated weights will be somewhat
different from those proposed, since they will be based on more
complete data. Consequently, further revision of the hierarchy, using
the above principles, may be necessary in the final rule.
At this time, we would revise the surgical hierarchy for MDC 2
(Diseases and Disorders of the Eye) and MDC 3 (Diseases and Disorders
of the Ear, Nose, Mouth and Throat).
In MDC 2, we would reorder Extraocular Procedures Except
Orbit (DRGs 40 and 41) above Intraocular Procedures Except Retina, Iris
and Lens (DRG 42).
In MDC 3, we would reorder Rhinoplasty (DRG 56) above
Salivary Gland Procedures Except Sialoadenectomy (DRG 51).
5. Refinement of Complications and Comorbidities List
There is a standard list of diagnoses that are considered
complications or comorbidities (CCs). We developed this list using
physician panels to include those diagnoses that, when present as a
secondary condition, would be considered a substantial complication or
comorbidity. In preparing the original CC list, a substantial CC was
defined as a condition that, because of its presence with a specific
principal diagnosis, would increase the length of stay by at least 1
day for at least 75 percent of the patients.
In previous years, we have made changes to the standard list of
CCs, either by adding new CCs or deleting CCs already on the list. For
FY 1995, we are not proposing to make any changes to the current CC
list.
In the September 1, 1987 final notice concerning changes to the DRG
classification system (52 FR 33143), we modified the GROUPER logic so
that certain diagnoses included on the standard list of CCs would not
be considered a valid CC in combination with a particular principal
diagnosis. Thus, we created the CC Exclusions List. We made these
changes to preclude coding of CCs for closely related conditions, to
preclude duplicative coding or inconsistent coding from being treated
as CCs, and to ensure that cases are appropriately classified between
the complicated and uncomplicated DRGs in a pair.
In the May 19, 1987 proposed notice concerning changes to the DRG
classification system (52 FR 18877), we explained that the excluded
secondary diagnoses were established using the following five
principles:
Chronic and acute manifestations of the same condition
should not be considered CCs for one another (as subsequently corrected
in the September 1, 1987 final notice (52 FR 33154)).
Specific and nonspecific (that is, not otherwise specified
(NOS)) diagnosis codes for a condition should not be considered CCs for
one another.
Conditions that may not co-exist, such as partial/total,
unilateral/bilateral, obstructed/unobstructed, and benign/malignant,
should not be considered CCs for one another.
The same condition in anatomically proximal sites should
not be considered CCs for one another.
Closely related conditions should not be considered CCs
for one another.
The creation of the CC Exclusions List was a major project
involving hundreds of codes. The FY 1988 revisions were intended to be
only a first step toward refinement of the CC list in that the criteria
used for eliminating certain diagnoses from consideration as CCs were
intended to identify only the most obvious diagnoses that should not be
considered complications or comorbidities of another diagnosis. For
that reason, and in light of comments and questions on the CC list, we
have continued to review the remaining CCs to identify additional
exclusions and to remove diagnoses from the master list that have been
shown not to meet the definition of a CC stated above, as appropriate.
(See the September 30, 1988 final rule for the revision made for the
discharges occurring in FY 1989 (53 FR 38485), the September 1, 1989
final rule for the revision made for discharges occurring in FY 1990
(54 FR 36552), the September 4, 1990 final rule for the revision made
for discharges occurring in FY 1991 (55 FR 36126), the August 30, 1991
final rule for the revision made for discharges occurring in FY 1992
(56 FR 43209), the September 1, 1992 final rule for the revisions made
for discharges occurring in FY 1993 (57 FR 39753), and the September 1,
1993 final rule for the revisions made for discharges occurring in FY
1994 (58 FR 46278).)
We are proposing a limited revision of the CC Exclusions List to
take into account the changes that will be made in the ICD-9-CM
diagnosis coding system effective October 1, 1994. (See section II.B.7,
below, for a discussion of these changes.) These proposed changes are
being made in accordance with the principles established when we
created the CC Exclusions List in 1987.
In addition, upon review of our current CC Exclusions List, we
found that there are some diagnosis codes that do not exclude
themselves as CCs. In the September 1, 1987 final notice, we noted that
a very few codes were not excluded from themselves because they may
signify the bilateral occurrence of a particular condition (for
example, diagnosis code 730.02 (acute osteomyelitis of upper arm)) (52
FR 33154). However, we found some diagnosis codes that do not meet this
criterion. Therefore, we are proposing to add the following diagnosis
codes to the CC Exclusions List as excluding themselves when they are
secondary diagnoses:

710.0--Systemic lupus erythematous
710.1--Systemic sclerosis
710.3--Sicca syndrome
710.4--Dermatomyositis
710.8--Other specified diffuse diseases of connective tissue

Based on a comment we received, we are also proposing to exclude
diagnosis code 707.1 (Ulcer of lower limb, except decubitus) as a CC
when the principal diagnosis is 440.23 (atherosclerosis of the
extremities with ulceration). The commenter believes that this
exclusion is similar to the current exclusion of 785.4 (Gangrene) when
the principal diagnosis is 440.24 (Atherosclerosis of the extremities
with gangrene), and we agree with the commenter's assessment.
Finally, it was brought to our attention by another commenter that
when a patient's principal diagnosis is complication of a transplant
condition (diagnosis codes 996.71 and 996.8x), the diagnosis codes used
to denote transplant status (V42.x) should not be considered CCs. Thus,
for the following principal diagnoses, we are proposing to delete the
indicated status code:
For code 996.71 (Complications due to heart valve
prosthesis) delete code V42.2 (Heart valve transplant influencing
health status) as a CC.
For code 996.80 (Complications of unspecified organ
transplant) delete codes V42.0 (Kidney transplant influencing health
status), V42.1 (Heart transplant influencing health status), V42.6
(Lung transplant influencing health status), V42.7 (Liver transplant
influencing health status), and V42.8 (Other specified organ or tissue
transplant influencing health status) as CCs.
For code 996.81 (Complications of kidney transplant)
delete code V42.0 (Kidney transplant influencing health status) as a
CC.
For code 996.82 (Complications of liver transplant) delete
code V42.7 (Liver transplant influencing health status)
For code 996.83 (Complications of heart transplant) delete
code V42.1 (Heart transplant influencing health status) as a CC.
For code 996.84 (Complications of lung transplant) delete
code V42.6 (Lung transplant influencing health status) as a CC.
For code 996.86 (Complications of pancreas transplant)
delete code V42.8 (Other specified organ or tissue transplant
influencing health status) as a CC.
For code 996.89 (Complications of other specified organ
transplant) V42.8 (Other specified organ or tissue transplant
influencing health status) as a CC.
All of the changes discussed above have been added to Table 6f,
Additions to the CC Exclusions List, in section V of the addendum to
this proposed rule.
Tables 6f and 6g in section V of the addendum to this proposed rule
contain the proposed revisions to the CC Exclusions List that would be
effective for discharges occurring on or after October 1, 1994. Each
table shows the principal diagnoses with proposed changes to the
excluded CCs. Each of these principal diagnoses is shown with an
asterisk and the additions or deletions to the CC Exclusions List are
provided in an indented column immediately following the affected
principal diagnosis.
CCs that are added to the list are in Table 6f--Additions to the CC
Exclusions List. Beginning with discharges on or after October 1, 1994,
the indented diagnoses will not be recognized by the GROUPER as valid
CCs for the asterisked principal diagnosis.
CCs that are deleted from the list are in Table 6g--Deletions from
the CC Exclusions List. Beginning with discharges on or after October
1, 1994, the indented diagnoses will be recognized by the GROUPER as
valid CCs for the asterisked principal diagnosis.
Copies of the original CC Exclusions List applicable to FY 1988 can
be obtained from the National Technical Information Service (NTIS) of
the Department of Commerce. It is available in hard copy for $84.00 and
on microfiche for $20.50, plus $3.00 for shipping and handling. A
request for the FY 1988 CC Exclusions List (which should include the
identification accession number, (PB) 88-133970) should be made to the
following address: National Technical Information Service; United
States Department of Commerce; 5285 Port Royal Road, Springfield,
Virginia 22161; or by calling (703) 487-4650.
Users should be aware of the fact that all revisions to the CC
Exclusions List (FYs 1989, 1990, 1991, 1992, 1993, and 1994) and those
in Tables 6f and 6g of this document must be incorporated into the list
purchased from NTIS in order to obtain the CC Exclusions List
applicable for discharges occurring on or after October 1, 1994.
Alternatively, the complete documentation of the GROUPER logic,
including the current CC Exclusions List, is available from 3M/Health
Information Systems (HIS), which, under contract with HCFA, is
responsible for updating and maintaining the GROUPER program. The
current DRG Definitions Manual, Version 11.0, is available for $195.00,
which includes $15.00 for shipping and handling. Version 12.0 of this
manual, which will include the changes proposed in this document as
finalized in response to public comment, will be available in September
1994 for $195.00. These manuals may be obtained by writing 3M/HIS at:
100 Barnes Road; Wallingford, Connecticut 06492; or by calling (203)
949-0303. Please specify the revision or revisions requested.
6. Review of Procedure Codes in DRGs 468, 476, and 477
Each year, we review cases assigned to DRG 468 (Extensive OR
Procedure Unrelated to Principal Diagnosis), DRG 476 (Prostatic OR
procedure Unrelated to Principal Diagnosis), and DRG 477 (Nonextensive
OR Procedure Unrelated to Principal Diagnosis) in order to determine
whether procedures are properly assigned among these DRGs.
DRGs 468, 476, and 477 are reserved for those cases in which none
of the OR procedures performed is related to the principal diagnosis.
These DRGs are intended to capture atypical cases, that is, those cases
not occurring with sufficient frequency to represent a distinct,
recognizable clinical group. DRG 476 is assigned to those discharges in
which one or more of the following prostatic procedures are performed
and are unrelated to the principal diagnosis:

60.0--Incision of prostate
60.12--Open biopsy of prostate
60.15--Biopsy of periprostatic tissue
60.18--Other diagnostic procedures on prostate and periprostatic tissue
60.2--Transurethral prostatectomy
60.61--Local excision of lesion of prostate
60.69--Prostatectomy NEC
60.81--Incision of periprostatic tissue
60.82--Excision of periprostatic tissue
60.93--Repair of prostate
60.94--Control of (postoperative) hemorrhage of prostate
60.95--Transurethral balloon dilation of the prostratic urethra
60.99--Other operations on prostate
All remaining OR procedures are assigned to DRGs 468 and 477, with
DRG 477 assigned to those discharges in which the only procedures
performed are nonextensive procedures that are unrelated to the
principal diagnosis. The original list of the ICD-9-CM procedure codes
for the procedures we consider nonextensive procedures if performed
with an unrelated principal diagnosis was published in Table 6C in
section IV of the addendum to the September 30, 1988 final rule (53 FR
38591). As part of the final rules published on September 4, 1990,
August 30, 1991, September 1, 1992, and September 1, 1993, we moved
several other procedures from DRG 468 to 477. (See 55 FR 36135, 56 FR
43212, 57 FR 23625, and 58 FR 46279, respectively.)
a. Adding Procedure Codes to MDCs. We annually conduct a review of
procedures producing DRG 468 or 477 assignments on the basis of volume
of cases in these DRGs with each procedure. Our medical consultants
then identify those procedures occurring in conjunction with certain
principal diagnoses with sufficient frequency to justify adding them to
one of the surgical DRGs for the MDC in which the diagnosis falls. On
the basis of this review, we are proposing the following DRG
classification changes in order to reduce unnecessary assignment of
cases to DRG 468 or 477.
MDC 1 (Diseases and Disorders of the Nervous System)
We have observed that surgical pacemaker procedures are being
performed with increasing frequency for anatomical nerve problems
associated with heart block. These diagnoses, diagnosis codes 337.0
(Idiopathic peripheral autonomic neuropathy), 742.8 (Other specified
anomalies of nervous system), and 742.9 (Unspecified anomaly of brain,
spinal cord, and nervous system), are assigned to MDC 1, but the
surgical pacemaker procedures are not. Consequently, when a pacemaker
procedure is performed on a patient with one of these diagnoses, the
case is assigned to DRG 468. Therefore, we propose to add the following
procedure codes to DRGs 7 and 8 (Peripheral and Cranial Nerve and Other
Nervous System Procedures):

37.74--Insertion or replacement of epicardial lead (electrode) into
epicardium
37.75--Revision of lead (electrode)
37.76--Replacement of transvenous atrial and/or ventricular lead(s)
(electrode)
37.77--Removal of lead(s) (electrode) without replacement
37.79--Revision or relocation of pacemaker pocket
37.80--Insertion of permanent pacemaker, initial or replacement, type
of device not specified
37.85--Replacement of any type pacemaker device with single-chamber
device, not specified as rate responsive
37.86--Replacement of any type pacemaker device with single-chamber
device, rate responsive
37.87--Replacement of any type pacemaker device with dual-chamber
device
37.89--Revision or removal of pacemaker device

In addition, during our review of DRG 468 cases, we found that
there are several hundred cases of lower limb amputation procedures
with a principal diagnosis from MDC 1. Patients with diabetes often
develop complications that require the performance of a lower limb
amputation. Although the majority of the diagnosis codes for diabetes
are assigned to MDC 10 (Endocrine, Nutritional and Metabolic Diseases
and Disorders), cases with a principal diagnosis of diabetes with
neurological manifestations (diagnosis codes 250.60, 250.61, 250.62 and
250.63) are assigned to MDC 1. Therefore, we are proposing to move the
following procedures to DRGs 7 and 8:

84.11--Amputation of toe
84.12--Amputation through foot
84.13--Disarticulation of ankle
84.14--Amputation of ankle through malleoli of tibia and fibula
84.15--Other amputation below knee
84.16--Disarticulation of knee
84.17--Amputation above knee
MDC 5 (Diseases and Disorders of the Circulatory System)
Closed endoscopic biopsy of lung (procedure code 33.27) and open
biopsy of lung (procedure code 33.28), diagnostic tools for vascular
tumors, are often performed on patients with a principal diagnosis of
228.00 (Hemangioma of unspecified site) or 228.09 (Hemangioma of other
sites). Although these principal diagnoses are assigned to MDC 5, the
diagnostic procedures are not. Thus, if they are included together on
the same claim, the case will be assigned to DRG 468. Therefore, we are
proposing to assign procedure codes 33.27 and 33.28 to DRG 120 (Other
Circulatory System OR Procedures) in MDC 5.
In addition, we identified the following nonextensive OR procedures
(that is, procedures assigned to DRG 477) as appropriate to move to MDC
5:

40.11--Biopsy of lymph structure
40.19--Other diagnostic procedures on lymphatic structures
40.21--Excision of deep cervical lymph node
40.23--Excision of axillary lymph node
40.24--Excision of inguinal lymph node
40.29--Simple excision of other lymphatic structure
40.3--Regional lymph node excision

These procedures are commonly performed with a variety of diagnoses
found in MDC 5 such as disorders of the peripheral vascular system
(diagnosis codes 747.60 and 747.69) and peripheral angiopathy
(diagnosis code 443.81), as well as a number of heart conditions
including malignant neoplasm of the heart (diagnosis code 164.1), and
coxsackie carditis, coxsackie pericarditis, coxsackie endocarditis, and
coxsackie myocarditis (diagnosis codes 074.20, 074.21, 074.22, 074.23,
respectively). We note that these commonly performed diagnostic
procedures are assigned to virtually every other MDC because they are
associated with many diagnoses. Therefore, we propose to move these
procedures to DRG 120.
We also note that hemangioma and anomalies of the peripheral
vascular system may require open rectal biopsy (procedure code 48.25)
or excision of the rectal lesion (procedure code 48.35) as part of
their treatment. At the present time, neither of these procedure codes
classify to MDC 5. Thus, we are proposing to move procedure codes 48.25
and 48.35 to DRG 120.
MDC 6 (Diseases and Disorders of the Digestive System)
A total splenectomy (procedure code 41.5) may be performed on
patients with a principal diagnosis of secondary malignant neoplasm of
other digestive organs and spleen (diagnosis code 197.8). This
diagnosis is included in MDC 6, but the procedure is not, resulting in
the assignment of cases to DRG 468. Thus, we propose to add procedure
code 41.5 to DRG 170 and 171 (Other Digestive System OR Procedures) in
MDC 6.
b. Reassignment of Procedures Among DRGs 468, 476, and 477. We also
reviewed the list of procedures that produce assignments to each of DRG
468, 476, and 477 to ascertain if any of those procedures should be
moved to one of the other DRGs based on average charges and length of
stay. Generally, we move only those procedures for which we have an
adequate number of discharges to analyze the data. Based on our review
this year, we are proposing to move a limited number of procedures.
In reviewing the list of OR procedures that produce DRG 468
assignments, we analyzed the average charge and length of stay data for
cases assigned to that DRG to identify those procedures that are more
similar to the discharges that currently group to either DRG 476 or
477. We identified three procedures that are significantly less
resource intensive than the other procedures assigned to DRG 468.
Therefore, we are proposing to move the following procedures to the
list of procedures that result in assignment to DRG 477:

24.5--Alveoloplasty
53.61--Incisional hernia repair with prosthesis
53.69--Repair of other hernia of anterior abdominal wall with
prosthesis

We conducted a similar analysis of the procedures that assign cases
to DRG 477 to determine if any of those procedures might more
appropriately be classified to DRG 468. Again, we analyzed charge and
length of stay data to identify procedures that were more similar to
discharges assigned to DRG 468 than to those classified in DRG 477. We
did not identify any procedures in DRG 477 that should be assigned to
DRG 468.
All of the proposed reassignments of procedures in DRGs 468 and 477
would be effective with discharges beginning on or after October 1,
1994.
7. Changes to the ICD-9-CM Coding System
As discussed above in section II.B.1. of this preamble, the ICD-9-
CM is a coding system that is used for the reporting of diagnoses and
procedures performed on a patient. In September 1985, the ICD-9-CM
Coordination and Maintenance Committee was formed. This is a Federal
interdepartmental committee charged with the mission of maintaining and
updating the ICD-9-CM. That mission includes approving coding changes,
and developing errata, addenda, and other modifications to the ICD-9-CM
to reflect newly developed procedures and technologies and newly
identified diseases. The Committee is also responsible for promoting
the use of Federal and non-Federal educational programs and other
communication techniques with a view toward standardizing coding
applications and upgrading the quality of the classification system.
The Committee is co-chaired by the National Center for Health
Statistics (NCHS) and HCFA. The NCHS has lead responsibility for the
ICD-9-CM diagnosis codes included in Volume 1--Diseases: Tabular List
and Volume 2--Diseases: Alphabetic Index, while HCFA has lead
responsibility for the ICD-9-CM procedure codes included in Volume 3--
Procedures: Tabular List and Alphabetic Index.
The Committee encourages participation in the above process by
health-related organizations. In this regard, the Committee holds
public meetings for discussion of educational issues and proposed
coding changes. These meetings provide an opportunity for
representatives of recognized organizations in the coding fields, such
as the American Health Information Management Association (AHIMA)
(formerly American Medical Record Association (AMRA)), the American
Hospital Association (AHA), and various physician specialty groups as
well as physicians, medical record administrators, health information
management professionals, and other members of the public to contribute
ideas on coding matters. After considering the opinions expressed at
the public meetings and in writing, the Committee formulates
recommendations, which then must be approved by the agencies.
The Committee presented proposals for coding changes at public
meetings held on May 6, August 5, and December 2, 1993, and finalized
the coding changes after consideration of comments received at the
meetings and in writing within 30 days following the December 1993
meeting. The initial meeting for consideration of coding issues for
implementation in FY 1996 will be held on May 5, 1994. Copies of the
minutes of these meetings may be obtained by writing to one of the co-
chairpersons representing NCHS and HCFA. We encourage commenters to
address suggestions on coding issues involving diagnosis codes to: Sue
Meads, Co-Chairperson; ICD-9-CM Coordination and Maintenance Committee;
NCHS; Rm. 9-58; 6525 Belcrest Road; Hyattsville, Maryland 20782.
Questions and comments concerning the procedure codes should be
addressed to: Patricia E. Brooks, Co-Chairperson; ICD-9-CM Coordination
and Maintenance Committee; HCFA, Office of Coverage and Eligibility
Policy; Rm. 401 East High Rise Building; 6325 Security Boulevard;
Baltimore, Maryland 21207.
The ICD-9-CM code changes that have been approved will become
effective October 1, 1994. The new ICD-9-CM codes are listed, along
with their proposed DRG classifications, in Tables 6a and 6b (New
Diagnosis Codes and New Procedure Codes, respectively) in section IV of
the addendum to this proposed rule. As we stated above, the code
numbers and their titles were presented for public comment in the ICD-
9-CM Coordination and Maintenance Committee meetings. Both oral and
written comments were considered before the codes were approved.
Therefore, we are soliciting comments only on the proposed DRG
classification.
Further, the Committee has approved the expansion of certain ICD-9-
CM codes to require an additional digit for valid code assignment.
Diagnosis codes that have been replaced by expanded codes, other codes,
or have been deleted are in Table 6c (Invalid Diagnosis Codes). The
invalid diagnosis codes will not be recognized by the GROUPER beginning
with discharges occurring on or after October 1, 1994. The
corresponding new or expanded codes are included in Tables 6a and 6b.
The committee did not delete any procedure codes effective for October
1, 1994. Revisions to diagnosis and procedure code titles are in Tables
6d (Revised Diagnosis Code Titles) and 6e (Revised Procedure Code
Titles), which also include the proposed DRG assignments for these
revised codes.
8. DRG Refinements
For several years, we have been analyzing major refinements to the
DRG classification system to compensate hospitals more equitably for
treating severely ill Medicare patients. These refinements, generally
referred to as severity of illness adjustments, would create DRGs
specifically for hospital discharges involving very ill patients who
consume far more resources than do other patients classified to the
same DRGs in the current system. This approach has been taken by
various other groups in refining the DRG system, most notably the
research done for Yale, the changes incorporated by the State of New
York into its all patient (AP) DRG system, and the all-patient refined
(APR) DRGs, which are a joint effort of 3M/HIS and the National
Association of Children's Hospitals and Related Institutions.
Our preliminary work on these refinements is finished, and we have
prepared a paper available to the public for comment that describes our
proposed severity DRG classification system as well as the analysis
upon which our proposal was formulated. Briefly, our approach was to
develop a list of secondary diagnoses that have a major effect on the
resources used by hospitals in treating patients across DRGs and to
evaluate the need to create DRGs for major CCs on a DRG-by-DRG basis.
The following is a description of our methodology:
Our first step, similar to the process used by Yale, was
to collapse the current paired DRG groupings (DRGs with and without
CCs). We also evaluated the current DRGs to determine if any of them
could be combined. Based on this analysis, we eliminated 24 DRGs.
Our next step was to evaluate individual diagnosis codes
to determine if the presence of the diagnosis as a secondary condition
resulted in increased resource use for hospitals across all DRGs. We
analyzed how the presence of the secondary diagnosis affected resource
use compared to other secondary diagnoses that have been classified as
non-CC, CC, or major CC.
Although our final decisions of the CC designation of a
secondary diagnosis were primarily data driven, we did make some
designations based on other factors. Specifically, regardless of the
data, we did not designate a diagnosis as major if it is indicative of
poor quality of care or is prone to hospital upcoding.
After finalizing the classification of secondary
diagnoses, we evaluated which collapsed DRGs should be split on the
basis of the presence of a major CC, other CCs, or both. We developed
criteria for this evaluation that allow a DRG to split only if the
volume and difference in resource use is significantly different from
the remainder of the cases in the DRG and there is a significant
reduction in variance. The collapsed DRGs can be split into three
variations:

--DRG With CC or Major CC
--DRG Without CC
--DRG With Major CC
--DRG Without Major CC
--DRG With Major CC
--DRG With CC
--DRG Without CC

There are 120 DRGs that do not split at all. This final step resulted
in the creation of 652 DRGs compared to the 491 DRGs we currently use.
The paper we have prepared includes a listing of the revised DRGs
as well as the relative weights that would have been assigned to the
DRGs using the FY 1992 MedPAR data and a list of every diagnosis code
in effect in FY 1993 with its current and proposed CC assignment (non-
CC, CC, or major CC). In order to begin consultation with the hospital
industry and other interested organizations before formally proposing
our revised system, we will be distributing the paper to many hospital-
related associations and organizations for their comment. In addition,
requests for the DRG severity refinement paper may be made to the
following address: Division of Hospital Payment Policy, 1-H-1 East Low
Rise, 6325 Security Boulevard, Baltimore, Maryland 21207, Attn: Nancy
Edwards; or by calling (410) 966-4532. Comments are due to HCFA by
September 30, 1994.
Similar to our usual practice for proposed DRG changes to the
prospective payment system, we are making available to the public an FY
1992 Expanded Modified MedPAR File for Severity that contains the
discharge records we used to calculate the severity DRG relative
weights. Requests for this file can be made by following the
instructions set forth in section VIII.B of this preamble (Requests for
Data from the Public). Also available are Severity versions of the HCFA
Medicare Case-Mix Index File, Table 5 DRG, and the AOR/BOR File.
Our plan is to incorporate comments and suggestions we receive and
to consider proposing the complete revised DRG system as part of the FY
1996 prospective payment system proposed rule, which will be published
in the spring of 1995. However, as the final rule published on
September 1, 1992 (57 FR 39761) indicates, we would not propose to make
significant changes to the DRG classification system unless we are able
either to improve our ability to predict coding changes by validating
in advance the impact that potential DRG changes may have on coding
behavior, or to make methodological changes to prevent building the
inflationary effects of the coding changes into future program
payments.
Besides the mandate of section 1886(d)(4)(C)(iii) of the Act, which
provides that aggregate payments may not be affected by DRG
reclassification and recalibration changes, we do not believe it is
prudent policy to make changes for which we cannot predict the effect
on the case-mix index and, thus, payments. Our goal is to refine our
methodology so that we can fulfill, in the most appropriate manner,
both the statutory requirement to make appropriate DRG classification
changes and to recalibrate DRG relative weights (as mandated by section
1886(d)(4)(C) of the Act) as well as to make DRG changes in a budget
neutral manner.
One approach to this problem would be to maintain the average case
weight at 1.0 after recalibration, thereby eliminating the process of
normalization. In other words, after recalibration, we would not scale
the new relative weights upward to carry forward the cumulative effects
of past case-mix increases. We would, instead, make an adjustment or
include in the annual update factor a specific allowance for any real
case-mix change that occurred during the previous year. This is a
relatively simple and straightforward system for preventing the effects
of year-to-year increase in the case-mix index from accumulating in the
DRG weights.
In addition to the severity changes, we also intend to improve the
classification and relative weights of the DRGs that apply to newborns,
children, and maternity patients. The Medicare population does not
include many of these individuals. The original DRG classification
system was developed from analysis of claims data representative of the
total inpatient population. When we calculated the original Medicare
weights for the DRGs to which newborn, children and maternity patients
are classified, we used non-MedPAR discharge records from Maryland and
Michigan hospitals because there were either no MedPAR cases or too few
cases assigned to these DRGs to provide a reasonably precise estimate
of the average cost of care. (See the September 1, 1983 prospective
payment final rule with comment period (48 FR 39768).) Since that time,
because of the lack of MedPAR data, these low-volume DRGs have not been
analyzed and refined, and the relative weights assigned to them may no
longer be entirely reflective of the resources needed to treat the
patients. We again intend to rely on data bases outside the MedPAR file
to supplement our data.

C. Recalibration of DRG Weights

We are proposing to use the same basic methodology for the FY 1995
recalibration as we did for FY 1994. (See the September 1, 1993 final
rule (58 FR 46290).) That is, we would recalibrate the weights based on
charge data for Medicare discharges. However, we would use the most
current charge information available, the FY 1993 MedPAR file, rather
than the FY 1992 MedPAR file. The MedPAR file is based on fully-coded
diagnostic and surgical procedure data for all Medicare inpatient
hospital bills.
The proposed recalibrated DRG relative weights are constructed from
FY 1993 MedPAR data, received by HCFA through December 1993, from all
hospitals subject to the prospective payment system and short-term
acute care hospitals in waiver States. The FY 1993 MedPAR file includes
data for approximately 10.5 million Medicare discharges.
The methodology used to calculate the proposed DRG relative weights
from the FY 1993 MedPAR file is as follows:
To the extent possible, all the claims were regrouped
using the proposed DRG classification revisions discussed above in
section II.B of this preamble. As noted in section II.B.4, due to the
unavailability of revised GROUPER software, we simulate most major
classification changes to approximate the placement of cases under the
proposed reclassification. However, there are some changes that cannot
be modeled.
Charges were standardized to remove the effects of
differences in area wage levels, indirect medical education costs,
disproportionate share payments, and, for hospitals in Alaska and
Hawaii, the applicable cost-of-living adjustment.
The average standardized charge per DRG was calculated by
summing the standardized charges for all cases in the DRG and dividing
that amount by the number of cases classified in the DRG.
We then eliminated statistical outliers using the same
criterion as was used in computing the current weights. That is, all
cases outside of 3.0 standard deviations from the mean of the log
distribution of charges per case for each DRG were eliminated.
The average charge for each DRG was then recomputed
(excluding the statistical outliers) and divided by the national
average standardized charge per case to determine the relative weight.
We established the relative weight for heart transplants
(DRG 103) in a manner consistent with the methodology for all other
DRGs except that the heart transplant cases that were used to establish
the weight were limited to those Medicare-approved heart transplant
centers that have cases in the FY 1993 MedPAR file. Similarly, we
limited the liver transplant cases that were used to establish the
weight for DRG 480 (Liver Transplant) to those hospitals that are
Medicare-approved liver transplant centers.
Acquisition costs for kidney, heart, and liver transplants
continue to be paid on a reasonable cost basis. Unlike other excluded
costs, the acquisition costs are concentrated in specific DRGs (DRG 302
(Kidney Transplant); DRG 103 (Heart Transplant); and DRG 480 (Liver
Transplant)). Because these costs are paid separately from the
prospective payment rate, it is necessary to make an adjustment to
prevent the relative weights for these DRGs from including the effect
of the acquisition costs. Therefore, we subtracted the acquisition
charges from the total charges on each transplant bill that showed
acquisition charges before computing the average charge for the DRG and
before eliminating statistical outliers.
When we recalibrated the DRG weights for previous years, we set a
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We propose to use that same case threshold
in recalibrating the DRG weights for FY 1995. Using the FY 1993 MedPAR
data set, there are 35 DRGs that contain fewer than 10 cases. We
computed the weight for the 35 low-volume DRGs by adjusting the
original weights of these DRGs by the percentage change in the average
weight of the cases in the remaining DRGs.
The weights developed according to the methodology described above,
using the proposed DRG classification changes, result in an average
case weight that is different from the average case weight before
recalibration. Therefore, the new weights are normalized by an
adjustment factor, so that the average case weight after recalibration
is equal to the average case weight before recalibration. This
adjustment is intended to ensure that recalibration by itself neither
increases nor decreases total payments under the prospective payment
system.
Section 1886(d)(4)(C)(iii) of the Act requires that beginning with
FY 1991, reclassification and recalibration changes be made in a manner
that assures that the aggregate payments are neither greater than nor
less than the aggregate payments that would have been made without the
changes. Although normalization is intended to achieve this effect,
equating the average case weight after recalibration to the average
case weight before recalibration does not necessarily achieve budget
neutrality with respect to aggregate payments to hospitals because
payment to hospitals is affected by factors other than average case
weight. Therefore, as discussed in section II.A.4.b. of the Addendum to
this proposed rule, we are proposing to make a budget neutrality
adjustment to assure the requirement of section 1886(d)(4)(C)(iii) of
the Act is met.

III. Proposed Changes to the Hospital Wage Index and Possible
Refinements to Labor Market Areas

A. Background

Under the Medicare prospective payment system, different payment
rates are calculated for hospitals located in rural, urban, and large
urban areas. For purposes of the standardized payment amount, section
1886(d)(2)(D) of the Social Security Act requires that we use
Metropolitan Statistical Areas (MSAs) as defined by the Office of
Management and Budget (OMB) to determine whether hospitals are located
in rural, urban or large urban areas (areas with a population over 1
million). However, section 1886(d)(3)(A) of the Act provides for the
elimination of separate urban and rural standardized payment amounts
beginning in FY 1995. This change is discussed below in section IV.C.
of this proposed rule.
Section 1886(d)(3)(E) of the Act requires that, as part of the
methodology for determining prospective payments to hospitals, the
Secretary shall adjust the standardized amounts ``for area differences
in hospital wage levels by a factor (established by the Secretary)
reflecting the relative hospital wage level in the geographic area of
the hospital compared to the national average hospital wage level.'' In
accordance with the broad discretion conferred by this provision, we
currently define hospital labor market areas based on the definitions
of MSAs issued by OMB. Additionally, as discussed below, we adjust the
wage index to take into account the geographic reclassification of
hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of
the Act.
Section 1886(d)(3)(E) of the Act also requires that the wage index
be updated annually beginning October 1, 1993. This section further
provides that the Secretary base the update on a survey of wages and
wage-related costs of short-term acute care hospitals. The survey
should measure, to the extent feasible, the earnings and paid hours of
employment by occupational category and must exclude data with respect
to the wages and wage-related costs incurred in furnishing skilled
nursing services.
For determining prospective payments to hospitals in FY 1994, the
wage index is based on the data collected from the Medicare cost
reports submitted by short-term acute care hospitals for cost reporting
periods beginning in FY 1990 (that is, cost reporting periods beginning
on or after October 1, 1989 and before October 1, 1990). The current
wage index includes wages and salaries paid by a hospital, home office
salaries, fringe benefits, and certain contract labor costs and hours.
The current computation for the wage index excludes salaries and wages
associated with non-hospital type services, such as skilled nursing
facility services, home health agency services, or other subprovider
components that are not subject to the prospective payment system.
As discussed in detail below, we are proposing to use updated wage
data to construct the wage index as required by section 1886(d)(3)(E)
of the Act. The FY 1995 wage index would be based on data for hospital
cost reporting periods beginning on or after October 1, 1990 and before
October 1, 1991 (FY 1991).

B. FY 1995 Wage Index Update

We propose to base the FY 1995 wage index, effective for hospital
discharges occurring on or after October 1, 1994 and before October 1,
1995, upon the data collected from the Medicare cost report (Worksheet
S-3, Part II) submitted by hospitals for cost reporting periods
beginning in FY 1991.
We propose to use all of the categories of data collected from
Worksheet S-3, Part II. Therefore, the proposed FY 1995 wage index
reflects the following:
Total short-term acute care hospital salaries and hours.
Home office costs and hours.
Fringe benefits associated with hospital and home office
salaries.
Direct patient care related contract labor cost and hours.
The exclusion of salaries and hours for non-hospital type
services such as skilled nursing facility services, home health
services, or other sub-provider components that are not subject to the
prospective payment system.
1. Verification of Wage Data from the Medicare Cost Report
The data for the proposed FY 1995 wage index was obtained from
Worksheet S-3, Part II, of the HCFA-2552 submitted by short-term acute
care hospitals for cost reporting periods beginning during FY 1991. The
wage data are reported electronically to HCFA through the Hospital Cost
Report Information System (HCRIS). Because of substantial deficiencies
in the initial data reported by hospitals on the cost report (including
missing data items such as excluded hours and total paid hours), we
initiated an intensive review of the wage data and made numerous edits
to ensure quality and accuracy. Medicare intermediaries were instructed
to transmit any revisions through HCRIS by early January 1994.
We subjected the revised cost report data to several edit checks.
Of the 5,294 providers in the data base, over 1,400 providers had data
elements that failed an edit; 53 of these involved mathematical errors
and have been resolved.
The other edits involved data that appeared unusual and had to be
verified by the intermediary. Only 74 providers had data elements that
were unresolved as of March 14, 1994. Most of the unresolved data
elements fall outside established edit parameters and require
verification by the intermediary. None of the unresolved data elements
failed critical edits (that is, edits indicating serious data errors
that affect the wage index computation).
The wage file used to construct the proposed wage index includes
data obtained in late January 1994 from the HCRIS database and
subsequent changes we received from intermediaries through March 14,
1994. We have instructed the intermediaries to complete their
verification of questionable data elements and to transmit any changes
to the wage data, via HCRIS, no later than June 15, 1994. We expect
that all outstanding data elements will be resolved by that date and
that we will be able to reflect the corrected data in the final rule.
In the past, the hospital wage index data file was not available to
the public until mid-May. However, to allow hospitals more time to
evaluate the wage data used to construct the proposed hospital wage
index, on March 16, 1994, we made available to the public a diskette
containing the raw hospital wage data that were used to construct the
proposed FY 1995 wage index. We advised State and national hospital
groups of the availability of the data. We also instructed all fiscal
intermediaries to inform the prospective payment hospitals they service
that we would not be sending out hospital-specific wage data as we had
for the proposed FY 1994 wage index, but that we would make the FY 1991
data available on a diskette. The fiscal intermediaries were instructed
to advise hospitals of the availability of the data either through
their representative hospital organizations or directly from HCFA using
order forms provided to them. Additional details on the cost and
ordering of this file will be found below in section VIII. B. of this
proposed rule, Requests for Data from the Public.
In addition, we note that Table 3c in the Addendum to this proposed
rule contains each hospital's inflated average hourly wage used to
construct the wage index values. By backing out the applicable
inflation factors (set forth below in section III.B.3.), a hospital can
determine its uninflated average hourly wage as reflected in the
proposed wage index. This table will also be included in the final
rule. If a hospital believes, based on its review of the data contained
in Table 3c, that its average hourly wage is inconsistent with the data
submitted on Worksheet S-3, the hospital should contact its
intermediary.
2. Requests for Wage Data Corrections
As noted above we will use cost report data from FY 1991 (that is,
cost reporting periods beginning on or after October 1, 1990 and before
October 1, 1991) for the update to the wage index. As such, we believe
hospitals have had ample time to ensure the accuracy of their FY 1991
wage data. Moreover, the ultimate responsibility for accurately
completing the cost report rests with the hospital, which must attest
to the accuracy of the data at the time the cost report is filed.
However, if a hospital believes that its FY 1991 wage data have been
incorrectly reported, the hospital must submit corrections along with
complete supporting documentation to its intermediary in time to allow
for review, verification and transmission of the data before the
development of the final wage index. To allow sufficient time to
process any changes, a hospital must submit requests for corrections to
its fiscal intermediary by May 15, 1994. The request should include all
documentation necessary to support the requested change. To be
reflected in the final wage index, any wage data corrections must be
reviewed by the intermediary and transmitted to HCFA via HCRIS on or
before June 15, 1994.
This deadline is necessary to allow sufficient time to download and
edit the data so that the final wage index calculation can be completed
for development of the final prospective payment rates to be published
by September 1, 1994. We cannot guarantee that corrections transmitted
to HCFA after June 15, 1994, will be reflected in the final wage index.
Therefore, we suggest that hospitals wishing to submit corrected data
do so as soon as possible and follow up with their intermediaries to
ensure inclusion of the corrected data in the final FY 1995 wage index.
After reviewing requested changes submitted by hospitals,
intermediaries will transmit any revised cost reports to HCRIS and will
forward to the hospitals a copy of the revised Worksheet S-3, Part II.
If requested changes are not accepted, fiscal intermediaries will
notify hospitals in writing of reasons why the changes were not
accepted. This procedure will ensure that hospitals have an opportunity
to verify the data that will be used to construct their wage index
values. We believe that fiscal intermediaries are in the best position
to make evaluations regarding the appropriateness of a particular cost
and whether it should be included in the wage index data. However, in
the event that a hospital disagrees with the intermediary's resolution
of a requested change, the hospital may contact HCFA to attempt to
resolve the dispute.
We have created the above-described process to resolve all
substantive wage data correction disputes before we finalize the raw
wage data for the FY 1995 payment rates, Accordingly, hospitals that do
not meet the procedural deadlines described above will not be afforded
a later opportunity to submit wage corrections or to dispute the
intermediary's decision with respect to requested changes. We note that
we intend to make a diskette available in mid-August that will contain
the finalized raw wage data that will be used to construct the wage
index values in the final rule. As with the diskette made available in
March 1994, HCFA will make the August diskette available to hospital
associations and the public. This August diskette, however, is being
made available only for the limited purpose of identifying any
potential errors made by HCFA or the intermediary in the entry of the
finalized wage data, not for the initiation of new wage data correction
requests. Hospitals are encouraged to review their hospital wage data
promptly after the release of the second diskette.
If after reviewing the August diskette, a hospital believes that
its wage data is incorrect due to a fiscal intermediary or HCFA error,
it should send a letter to both its fiscal intermediary and HCFA. The
letters to the intermediary and HCFA should outline why the hospital
believes an error exists. These requests must be received by HCFA no
later than September 23. Requests should be sent to: Charles R. Booth,
Director; Office of Payment Policy; 181 East High Rise; 6325 Security
Boulevard; Baltimore, Maryland 21207. The intermediary will review
requests upon receipt and, if it is determined that an intermediary or
HCFA error exists, the fiscal intermediary will notify HCFA
immediately.
As indicated above, after mid-August, we will make changes to the
hospital wage data only in those very limited situations involving an
error by the intermediary or HCFA that the hospital could not have
known about before its review of the August diskette. Specifically,
neither the intermediary nor HCFA will accept the following types of
requests in conjunction with this mid-August process: requests for wage
data correction that were submitted too late to be included in the data
transmitted to the HCRIS system on or before June 15, 1994, requests
for correction of errors made by the hospital not identified during the
hospital's review of the March 1994 data, or requests to revisit
factual determinations or policy interpretations made by the
intermediary or HCFA during the wage data correction process. Verified
corrections to the wage index made as a result of an intermediary or
HCFA error received timely (that is, by September 23, 1994) will be
effective October 1, 1994.
We continue to believe, as outlined in the final rule published
September 1, 1992 (57 FR 39765), that midyear corrections should not be
made in most cases. We believe the wage data correction process
described above provides hospitals with sufficient opportunity to bring
errors made during the preparation of Worksheet S-3 to the
intermediary's attention. Moreover, because hospitals will have access
to the raw wage data in mid-August, they will have the opportunity to
detect any ministerial data tabulation errors made by the intermediary
or HCFA before the implementation of the prospective payment rates on
October 1. We believe that if hospitals avail themselves of this
opportunity, the wage index implemented on October 1 should be free of
such errors. Nevertheless, in the unlikely event that such errors
should occur, we do not believe a hospital should be disadvantaged
because actions taken by its intermediary or HCFA in the tabulation of
its data resulted in an error of which the hospital could not have been
aware. Since the current regulations do not provide for midyear
corrections in these situations, we are proposing to revise the
regulations to specify that the Secretary retains the right to make
midyear changes to the wage index under very limited circumstances.
Again, we believe that it is appropriate to reserve the right to make
midyear changes to the wage index in those limited circumstances where
the hospital can show that an error was made, and the hospital could
not have known about, or sought to correct, the error by September 23,
1994.
Specifically, we propose to revise Sec. 412.63(s)(2) to provide
that the Secretary may make midyear corrections to the wage index only
in those limited circumstances where a hospital can show: (1) That the
intermediary or HCFA made an error in tabulating its data, and (2) that
the hospital could not have known about the error, or did not have an
opportunity to correct the error, by September 23, 1994. As indicated
earlier, since a hospital will have the opportunity to verify its data
and the intermediary will notify the hospital of any changes, we do not
foresee any specific circumstances under which midyear corrections
would be made. However, should a midyear correction be necessary, the
wage index change for the affected area will be made prospectively from
the date the correction is made. If midyear corrections are made, we
will evaluate their impact to determine if a budget neutrality
adjustment to the program payments should be made at the beginning of
the following fiscal year in accordance with Sec. 412.63(s)(4).
3. Computation of the Wage Index
As noted above, we are proposing to base the FY 1995 wage index on
wage data reported on the FY 1991 cost report. The wage index would be
based on data from 5,294 hospitals paid under the prospective payment
system and short-term acute care hospitals in waiver States. The method
used to compute the proposed wage index is as follows:
Step 1--We gathered data from each of the non-Federal short-term
acute care hospitals for which data were reported on the Worksheet S-3,
Part II of the Medicare cost report for the hospital's cost reporting
periods beginning on or after October 1, 1990, and before October 1,
1991. Each hospital was assigned to its appropriate urban or rural area
prior to any reclassifications under sections 1886(d)(8) or 1886(d)(10)
of the Act. In addition, we included data from a few hospitals that had
cost reporting periods beginning in September 1990 and had reported a
cost reporting period exceeding 52 weeks. The data were included
because no other data from these hospitals would be available for the
cost reporting period described above, and particular labor market
areas might be affected due to the omission of these hospitals.
However, we generally describe this wage data as FY 1991 data.
Step 2--For each hospital, we subtracted the excluded salaries
(that is, direct salaries attributable to skilled nursing facility
services, home health services, and other sub-provider components not
subject to the prospective payment system) from gross hospital salaries
to determine net hospital salaries. To the net hospital salaries, we
added hospital contract labor costs, hospital fringe benefits, and any
home office salaries and fringe benefits reported by the hospital to
determine total salaries plus fringe benefits.
Step 3--For each hospital, we inflated or deflated, as appropriate,
the total salaries plus fringe benefits resulting from Step 2 to a
common period to determine total adjusted salaries. To make the wage
inflation adjustment, we used the percentage change in average hourly
earnings for each 30-day increment from October 14, 1990 through
September 15, 1992, for hospital industry workers from S.I.C. 806,
Bureau of Labor Statistics Employment and Earnings Bulletin. The annual
inflation rates used were 5.6 percent for FY 1990 and FY 1991 and 4.8
percent for FY 1992. The inflation factors used to inflate the
hospital's data were based on the midpoint of the cost reporting period
as indicated below.

Midpoint of Cost Reporting Period
------------------------------------------------------------------------
Adjustment
After Before factor
------------------------------------------------------------------------
10/14/90........................................ 11/15/90 1.071953
11/14/90........................................ 12/15/90 1.067097
12/14/90........................................ 01/15/91 1.062262
01/14/91........................................ 02/15/91 1.057450
02/14/91........................................ 03/15/91 1.052659
03/14/91........................................ 04/15/91 1.047890
04/14/91........................................ 05/15/91 1.043143
05/14/91........................................ 06/15/91 1.038417
06/14/91........................................ 07/15/91 1.033713
07/14/91........................................ 08/15/91 1.029030
08/14/91........................................ 09/15/91 1.024368
09/14/91........................................ 10/15/91 1.019727
10/14/91........................................ 11/15/91 1.015751
11/14/91........................................ 12/15/91 1.011790
12/14/91........................................ 01/15/92 1.007845
01/14/92........................................ 02/15/92 1.003915
02/14/92........................................ 03/15/92 1.000000
03/14/92........................................ 04/15/92 0.996101
04/14/92........................................ 05/15/92 0.992217
05/14/92........................................ 06/15/92 0.988348
06/14/92........................................ 07/15/92 0.984494
07/14/92........................................ 08/15/92 0.980655
08/14/92........................................ 09/15/92 0.976831
------------------------------------------------------------------------

For example, the midpoint of a cost reporting period beginning January
1, 1991 and ending December 31, 1991 is June 30, 1991. An inflation
adjustment factor of 1.033713 would be applied to the wages of a
hospital with such a cost reporting period. In addition, for the data
for any cost reporting period that began in FY 1991 and covers a period
of less than 360 days or greater than 370 days, we annualized the data
to reflect a 1-year cost report. Annualization is accomplished by
dividing the data by the number of days in the cost report and then
multiplying the results by 365.
Step 4--For each hospital, we subtracted the reported excluded
hours from the gross hospital hours to determine net hospital hours. We
increased the net hours by the addition of any reported contract labor
hours and home office hours to determine total hours.
Step 5--As part of our editing process, we deleted data for 69
hospitals that are no longer participating in the Medicare program or
that are in bankruptcy status, and for which we lacked sufficient
documentation to verify data that failed edits. We retained the data
for other hospitals that are no longer participating in the Medicare
program because these hospitals contributed to the relative wage levels
in their labor market areas during their FY 1991 cost reporting period.
Step 6--Within each urban or rural labor market area we added the
total adjusted salaries plus fringe benefits obtained in Step 3 for all
hospitals in that area to determine the total adjusted salaries plus
fringe benefits for the labor market area.
Step 7--We divided the total adjusted salaries plus fringe benefits
obtained in Step 6 by the sum of the total hours (from Step 4) for all
hospitals in each labor market area to determine an average hourly wage
for the area.
Step 8--We added the total adjusted salaries plus fringe benefits
obtained in Step 3 for all hospitals in the nation and then divided the
sum by the national sum of total hours from Step 4 to arrive at a
national average hourly wage. Using the data as described above, the
national average hourly wage is $18.1808.
Step 9--For each urban or rural labor market area, we calculated
the hospital wage index value by dividing the area average hourly wage
obtained in Step 7 by the national average hourly wage computed in Step
8.

C. Changes In the Reporting of Hospital Wage Index Data

Currently, the data used to develop the wage index are submitted by
hospitals on the Worksheet S-3, Part II of the Medicare cost report. We
developed this worksheet as part of the FY 1990 cost reports, and we
used the worksheet to calculate the wage index for FY 1994. The
worksheet has been evaluated by HCFA and industry representatives to
ensure that this data collection mechanism captures relative wage costs
as accurately as possible and to determine whether any refinements are
appropriate. The Medicare Technical Advisory Group (MTAG) established a
task force to study and recommend changes to the cost reporting form
used to collect wage index data. The task force was comprised of
hospital, intermediary, and HCFA representatives. The MTAG task force
recommended, and we are proposing, three major changes to the Worksheet
S-3, Part II; the provider cost report questionnaire (HCFA 339); and
accompanying instructions as discussed below. We note that the proposed
changes outlined below are effective for cost reporting periods
beginning on or after October 1, 1994. Therefore the proposed changes
will not affect the proposed FY 1995 wage index, which is based on FY
1991 wage data.
1. The Elimination of Part A Physicians' and CRNA Salaries
Currently, a hospital that directly employs and pays the salary of
a physician can include the Part A portion of the physician's salary in
total salaries reported on Worksheet S-3, Part II. (The Part B portion
of physician salaries has always been excluded from the wage index.)
However, if a hospital contracts for physician services, it is not
permitted to include the Part A physician services as contract labor
because we consider Part A physician services to be administrative, not
direct patient-care related (to be included in the computation of the
wage index, contract labor must be directly related to patient care).
Not all hospitals directly employ physicians. There are currently
five States in which State laws specifically restrict hospitals from
directly hiring physicians. Hospitals in these States are forced to
contract out for physicians. The inability of those hospitals that
contract for physician services to include the Part A portion of the
services as contract labor has been perceived as inequitable. In States
where hospitals may directly employ physicians, the hospitals may
include some of these characteristically high wages in the wage data,
while in States where hospitals must contract for their physician
services, these contract wages cannot be included in their wage data.
We agree with the MTAG task force recommendation and are proposing
to exclude all Part A physician costs on the Worksheet S-3, Part II,
regardless of whether the physician is a hospital employee or
contractor. For purposes of this exclusion, physician's salaries are
defined as salaries applicable to positions that require a licensed
physician, such as a medical director of a department. Salaries for
physicians employed in other positions, such as hospital administrator,
that do not require a physician would not be excluded.
Since this change would apply equally to hospitals that are
permitted to employ physicians and to those that must contract for
physician services, we believe this proposal will promote payment
equity and provide more uniformity in the wage data across areas. This
action should not require any additional reporting burden since these
Part A physician salaries already are reported on the cost report
(Worksheet A-8-2).
We believe that this proposal to eliminate Part A physicians'
salaries is more appropriate than the alternative of allowing all Part
A physician costs (whether salaried or under contract) for three
reasons. First, physician costs are not driven by normal labor market
situations and, in many cases, hospitals must hire physicians from
outside of their recruiting areas. Second, many hospitals have
indicated difficulty in accurately determining the hours for the
physicians attributable to Part A services, especially for those under
contract.
Third, we have found that some hospitals that employ physicians are not
appropriately eliminating Part B physician salaries from the total
salaries reported for the wage index as required in the cost reporting
instructions. Accordingly, we are proposing that hospitals exclude all
physicians' salaries (both Part A and Part B related) from the wage
data reported on the Medicare cost report. In addition, we are
proposing that the salaries for teaching physicians also be excluded,
since payment for these services does not fall under the prospective
payment system.
Regarding Part A CRNA (certified registered nurse anesthetist)
costs, we propose to require hospitals to exclude these salaries from
the wage data reported on the cost report. These Part A services are
currently paid on a ``pass-through'' basis, outside the prospective
payment system. Therefore, we believe it is appropriate to exclude
these costs from the wage index. Moreover, this Part A pass-through
provision is applicable to a limited number of hospitals (small rural
hospitals). All other hospitals are paid for CRNA services under Part B
of the Medicare program. Therefore, in order to ensure consistency
across areas, we believe that no CRNA costs should be reflected in the
wage index computation. CRNA services are generally excluded from the
wage index as Part B services. Since the Part A portion was granted as
a pass through for certain rural hospitals, it is currently included in
wage index.
We note that these changes are effective for cost reporting periods
beginning on or after October 1, 1994 and will not affect the current
reporting of physicians and CRNA salaries.
2. Management Contracts
The second major proposed change concerns the inclusion of certain
management contracts in the hospital wage index data. Before FY 1994,
the wage index did not include any costs associated with contract
services. However, many hospitals indicated that they were
inappropriately disadvantaged because they were forced to contract out
for nurses and technicians due to shortages of these services in their
areas. To alleviate this problem, we revised the cost report to collect
the data associated with any direct patient care service contract (that
is, nursing, therapeutic, etc.). We specifically excluded any Part B
services, Part A physician services, management contracts, or any
contract for services not directly involved with patient care.
The hospital industry has expressed concern that we do not
currently recognize the cost of certain contract management services.
In particular, many rural hospitals that are either unable to recruit
or cannot afford top managers such as hospital administrators must
contract for the services of these individuals. Therefore, we believe
it is appropriate to include the costs of certain management contracts
in the wage index. We propose to expand the definition of contract
services reported on the Worksheet
S-3 to include the personnel cost associated with contracts for any
personnel hired in the top four positions within the hospital.
Allowable contract management services would be limited to the
personnel costs for those individuals who are working at the hospital
facility in the capacity of the Chief Executive Officer (CEO)/Hospital
Administrator, Chief Operating Officer (COO), Chief Financial Officer
(CFO), or Nursing Administrator. The exact titles assigned to
individuals may vary but the individuals should be performing
essentially the same duties as customarily assigned these management
positions.
The hospitals (via HCFA-339 form) would be required to provide the
fiscal intermediary with complete details on all direct patient care
related contracts and the description and aggregate totals for all
management contracts. Because of the difficulty in accurately
determining hours and isolating wage related costs for the other types
of contract services, the wage data would continue to exclude all other
non-patient care contract services except those limited management
contracts discussed above.
Since the current cost report does not provide for the collection
of management contract data, this revised definition would not be
effective until cost reporting periods beginning on or after October 1,
1994. To provide consistent reporting of data, hospitals must continue
to exclude all management contracts until the FY 1995 data is reported.
3. Reporting of Wage-Related Costs
Since we began including fringe benefits in the wage index, we have
been concerned with the inconsistent reporting of fringe benefits,
whether because of a lack of provider proficiency in identifying fringe
benefit costs or varying interpretations across fiscal intermediaries
of the definition for fringe benefits in PRM-I, Sec. 2144.1. Although
we have attempted to promote consistent reporting of fringe benefits by
providing fiscal intermediaries with general guidelines to be used in
determining allowable fringe benefit costs, the intermediaries must
necessarily make judgments as to whether certain costs qualify as a
fringe benefit, and inconsistencies persist.
Last summer, HCFA conducted a survey to determine what costs the
health care industry thought should be recognized as fringe benefit
costs. The survey consisted of a questionnaire with a yes/no response
column and a column for comments. We received 238 responses from
hospitals, fiscal intermediaries, state hospital associations, national
hospital associations, state agencies, and bureaus and offices within
HCFA. The results of those surveys were examined closely by the MTAG
task force.
Based on the recommendations of the task force, we are proposing
several changes that we believe will promote more equitable and
consistent reporting of wage-related costs for all hospitals. Where the
term ``fringe benefit'' has been used in the past, we will now refer to
these costs as ``wage- related costs'' for wage index purposes. We
believe that this change in terminology will eliminate the confusion
regarding those wage-related costs that we will allow to be
incorporated in the wage index versus the definition of fringe benefits
required by Medicare principles for cost reimbursement purposes.
Accordingly, we are proposing to revise the Worksheet S-3, Part II to
capture wage-related costs in three parts.
a. Wage-Related Costs (Core). For most hospitals, the wage-related
costs used to develop the wage index would be limited to ``core'' wage-
related costs. The list of ``core'' wage-related costs includes all
commonly recognized costs (which are similar to fringe benefits used
for cost reimbursement purposes) that contribute significantly to the
wage costs of a hospital and that are readily identifiable on the
hospital records. These costs will also be listed on the revised HCFA-
339 form, and hospitals will be required to provide the intermediary
with a detailed description of the wage-related costs in Exhibit 7.
This description will allow the intermediary to review the
appropriateness of each wage-related cost. We believe that this core
list includes virtually all significant wage-related costs, including
those costs that are required by statute.
To develop the list of core wage-related costs, the MTAG task force
established a number of specific criteria. To be considered a core
wage-related cost, one or more of the following criteria must be met:
The wage-related cost is provided at a significant
financial cost to the employer.
The wage-related cost is of a type and nature that would
generally be offered as a fringe benefit by most employers.
The perceived value of this wage-related cost is of such
importance that it would influence an individual's employment
decisions.
The wage-related cost is a mandatory requirement under
Federal or State law (for example FICA, Federal and State unemployment,
etc.).
Fees paid to external organizations that are directly
associated with the core wage-related costs may be included as part of
the wage-related cost (for example, actuarial fees, claim
administration fees, IRS form preparation fees, etc.).
The following is the proposed list of core wage-related costs:

(1) Retirement Costs:
401(k) employer contributions
Tax sheltered annuity (TSA) employer contributions
Qualified and non-qualified pension plan cost
Prior year pension service cost
(2) Plan Administration Costs (Paid to external organization):
401(k)/TSA plan administration fees
Legal/accounting/management fees--pension plan
Employee managed care program administration fees
(3) Health and Insurance Costs:
Health insurance (purchased or self-funded)
Prescription drug plan
Dental, hearing, vision plans
Life insurance (if employee is owner or beneficiary)
Accident insurance (if employee is owner or beneficiary)
Disability insurance (if employee is owner or beneficiary)
Long-term care insurance (if employee is owner or beneficiary)
Workmen's compensation insurance
Retiree health care cost (only current year, not the extraordinary
accrual required by FASB 106 (that is, the non-cumulative portion))
(4) Taxes:
FICA--employers portion only
Medicare taxes--employers portion only
Unemployment insurance
State or Federal unemployment taxes
(5) Other:
Executive deferred compensation
Day care cost and allowances
Tuition reimbursement
b. Other Wage-Related Costs. A hospital may be able to report an
additional wage-related cost that does not appear on the core list if
it meets the following criteria:
The wage-related cost is provided at a significant
financial cost to the employer. To meet this test the individual wage-
related cost must be greater than 1 percent of total salaries after the
direct excluded salaries are removed (Column 3, line 3 on Worksheet S-
3, Part II).
Any wage-related cost that would be a fringe benefit if
reported to the IRS as a fringe benefit.
The wage-related cost has not been furnished for the
convenience of the provider.
We note that those wage-related costs that are required to be
reported to the IRS as salary (for example, loan forgiveness and sick
pay accruals) would not be included as other wage-related costs, since
the costs associated with these items are considered salaries and would
already be included in the total salaries reported on line 1.01 of the
Worksheet S-3, Part II.
c. Wage-Related Costs (Excluded Area). Wage-related costs
associated with employees in areas of the hospital that are excluded
from the data used to calculate the wage index (such as a hospital-
based SNF) should be removed from the total wage-related costs. This is
not a new policy; however, to ensure that hospitals are removing these
costs, we have added a new line on the Worksheet S-3, Part II.
In addition to the above changes, we are proposing that, beginning
on or after October 1, 1994, hospitals use Generally Accepted
Accounting Principles (GAAP) in developing the wage-related costs
contained in the Worksheet S-3, Part II, for purposes of the hospital
wage index. For all other purposes, however, Medicare principles will
continue to apply in determining the allowability of fringe benefit
costs. The MTAG task force recommended application of GAAP for purposes
of developing wage-related costs used to construct the hospital wage
index. We believe it is appropriate to apply GAAP for these purposes
because the function of the wage index is to measure relative hospital
labor costs across areas. This function is distinct from that of cost
reimbursement, in which applicable Medicare principles (which may
differ from GAAP) measure the actual costs incurred by individual
hospitals. We believe the application of GAAP for purposes of compiling
data on wage-related costs used to construct the wage index will more
accurately reflect relative labor costs, because certain wage-related
costs (such as pension costs) as recorded under GAAP tend to be more
static from year to year. Application of Medicare principles, on the
other hand, could create large swings in these costs from year to year,
particularly in years when there are large over- or under-funded
pension estimates; such application might lead to a wage index that
does not accurately reflect relative labor costs. Again, we emphasize
that under this proposal, GAAP will apply only for purposes of
developing wage-related costs on Worksheet S-3 Part II. Our policy
requiring the use of applicable Medicare principles for determining
fringe benefits for all other purposes remains unchanged.
The revised cost report and the HCFA-339 forms are currently being
evaluated by the Office of Management and Budget. Once these forms are
approved, we propose to implement the form to collect wage data for any
cost report beginning on or after October 1, 1994. However, we will
issue subsequent revisions to the forms and instructions to reflect any
changes incorporated in the final rule based on public comments.

D. Revisions to the Wage Index Based on Hospital Redesignation

Under section 1886(d)(8)(B) of the Act, hospitals in certain rural
counties adjacent to one or more Metropolitan Statistical Areas (MSAs)
are considered to be located in one of the adjacent MSAs if certain
standards are met. Under section 1886(d)(10) of the Act, the Medicare
Geographic Classification Review Board (MGCRB) considers applications
by hospitals for geographic reclassification for purposes of payment
under the prospective payment system.
The methodology for determining the wage index values for
redesignated hospitals is applied jointly to the hospitals located in
those rural counties that were deemed urban under section 1886(d)(8)(B)
of the Act and those hospitals that were reclassified as a result of
the MGCRB decisions under section 1886(d)(10) of the Act. Section
1886(d)(8)(C) of the Act provides that the application of the wage
index to redesignated hospitals is dependent on the hypothetical impact
that the wage data from these hospitals would have on the wage index
value for the area to which they have been redesignated. Therefore,
pursuant to section 1886(d)(8)(c) of the Act, the wage index values
were determined by considering the following:
If including the wage data for the redesignated hospitals
reduces the MSA wage index value by 1 percentage point or less, the MSA
wage index value determined exclusive of the wage data for the
redesignated hospitals applies to the redesignated hospitals.
If including the wage data for the redesignated hospitals
reduces the wage index value for the area to which the hospitals are
redesignated by more than 1 percentage point, the hospitals that are
redesignated are subject to the wage index value of the area that
results from including the wage data of the redesignated hospitals (the
``combined'' wage index value). However, the wage index value for the
redesignated hospitals cannot be reduced below the wage index value for
the rural areas of the State in which the hospitals are located.
Rural areas whose wage index values would be reduced by
excluding the data for hospitals that have been redesignated to another
area continue to have their wage index calculated as if no
redesignation had occurred. Those rural areas whose wage index value
increases as a result of excluding the wage data for the hospitals that
have been redesignated to another area have their wage index calculated
exclusive of the redesignated hospitals.
The wage index value for an urban area is calculated
exclusive of the wage data for hospitals that have been reclassified to
another area. However, geographic reclassification may not reduce the
wage index for an urban area below the Statewide rural average,
provided the wage index prior to reclassification was greater than the
Statewide rural wage index value.
Section 13501(b) of Public Law 103-66 amended section
1886(d)(8)(C) of the Act to provide that a change in classification of
hospitals from one area to another may not result in the reduction in
the wage index for any urban area whose wage index is below the rural
wage index for the State. This provision also applies to any urban area
that encompasses an entire State.
We note that, except for those rural areas where redesignation
would reduce the rural wage index value, and in the situation described
above that was addressed by section 13501(b) of Public Law 103-66, the
wage index value for each area is computed exclusive of the data for
hospitals that have been redesignated from the area for purposes of
their wage index. As a result, several MSAs listed in Table 4a have no
hospitals remaining in the MSA. This is because all the hospitals
originally in these MSAs have been reclassified to another area by the
MGCRB. For those areas, we have listed the Statewide rural wage index
value.
The proposed revised wage index values effective for discharges
occurring on or after October 1, 1994 are shown in Tables 4a, 4b, and
4c of the addendum to this proposed rule. Hospitals that are
redesignated should use the wage index values shown in Table 4c. For
some areas, more than one wage index value will be shown in Table 4c.
This occurs when hospitals from more than one State are included in the
group of redesignated hospitals, and one State has a higher Statewide
rural wage index value than the wage index value otherwise applicable
to the redesignated hospitals. Tables 4d and 4e list the average hourly
wage for each labor market area based on the FY 1991 wage data. In
addition, we have expanded Table 3c (Hospital Case-Mix Indexes for
Discharges) to include the average hourly wage for each hospital based
on the FY 1991 data. The average hourly wage published in the final
rule will be used by the MGCRB to evaluate if a hospital meets the
reclassification criteria. Hospitals that choose to apply before
publication of the final rule can use the proposed wage data in
applying to the MGCRB for wage index reclassifications that would be
effective for FY 1996. We note that in adjudicating these wage
reclassification requests during FY 1995, the MGCRB will use the
average hourly wages for each hospital and labor market area that are
reflected in the final FY 1995 wage index.
The proposed FY 1995 wage index values incorporate all
reclassification decisions made by the MGCRB for FY 1995. At the time
this proposed wage index was constructed, the MGCRB had completed its
review. There were 429 hospitals redesignated for purposes of the wage
index (including hospitals redesignated under both sections
1886(d)(8)(B) and 1886(d)(10) of the Act). This number does not include
MGCRB decisions that are still under review by the Administrator.
Any changes to the wage index that result from withdrawals of
requests for reclassification, wage index corrections, appeals, and the
Administrator's review process will be incorporated into the wage index
values published in the final rule. The changes may affect not only the
wage index value for specific geographic areas, but also whether
redesignated hospitals receive the wage index value for the area to
which they are redesignated or a combined wage index that includes the
data for both the hospitals already in the area and the redesignated
hospitals. Further, the wage index value for the area from which the
hospitals are redesignated may be affected.
Under Sec. 412.273, hospitals that have been reclassified by the
MGCRB are permitted to withdraw their applications within 45 days of
the publication of this Federal Register document. The request for
withdrawal of an application for reclassification that would be
effective in FY 1995 must be received by the MGCRB by [OFR: Insert date
45 days after date of publication]. A hospital that requests to
withdraw its application may not request that the MGCRB decision be
reinstated after publication of the final wage index values.

E. Impact of the Revised Hospital Wage Index

Section 1886(d)(3)(E) of the Act requires that the wage index be
updated annually beginning October 1, 1993. In addition, this section
requires that updates to the hospital wage index be budget neutral. The
FY 1995 wage index will represent the second annual update to the wage
data. We will use the wage data from the FY 1991 Medicare cost report
to calculate the updated wage index. For FY 1995, the wage index will
continue to include salaries, fringe benefits, home office salaries,
and certain contract labor salaries. In the past, updates to the wage
data have resulted in significant payment shifts among hospitals. Since
the wage index is now updated annually and there are no changes to the
types of costs included in the wage index data, we expect these payment
fluctuations will be minimized. Based on the proposed wage index
calculation (after reclassifications under sections 1886(d)(8)(B) and
1886(d)(10) of the Act), there is a significant drop, compared with
previous years, in the number of labor markets that experience major
increases or decreases in wage index values. We reviewed the data for
any area that experienced a wage index change of 10 percent or more to
determine the reason for the fluctuation. When necessary, we contacted
the intermediaries to determine the validity of the data, or to obtain
an explanation for the change. Our review indicated that most of the
significant changes were attributable to improved reporting by
hospitals.
The following chart compares the shifts in wage index values (after
reclassifications) for labor markets for FY 1995 with those experienced
as a result of last year's wage index update.

------------------------------------------------------------------------
Number of labor
market areas
Percentage change in area wage index values -----------------
FY 1995 FY 1994
------------------------------------------------------------------------
Increase more than 10 percent......................... 6 13
Increase between 5 and 10 percent..................... 18 24
Decrease between 5 and 10 percent..................... 17 58
Decrease more than 10 percent......................... 11 14
------------------------------------------------------------------------

Under the proposed FY 1995 wage index, 86.4 percent of all
prospective payment hospitals (4,778 hospitals) would experience a
change in their wage index value of less than 5.0 percent.
Approximately 5.2 percent (283 hospitals) would experience a change of
between 5 and 10 percent, and 8.4 percent (469 hospitals) would
experience a change of more than 10 percent. The following chart shows
the projected impact for urban and rural hospitals. (The totals in this
chart exceed the number of hospitals in our database, as our projection
includes new hospitals and hospitals that for other reasons are not
included in our wage file.)

------------------------------------------------------------------------
Number of
hospitals
Percentage change in area wage index values -----------------
Rural Urban
------------------------------------------------------------------------
Decrease more than 10 percent......................... 188 196
Decrease between 5 and 10 percent..................... 26 94
Change between -5 and +5 percent...................... 2,099 2,679
Increase between 5 and 10 percent..................... 44 119
Increase more than 10 percent......................... 67 18
------------------------------------------------------------------------

F. Occupational Mix Adjustment

In its March 1, 1994 report, ProPAC recommended that the Secretary
develop methods to collect more timely hospital wage data by
occupational categories and to adjust the HCFA wage index for
occupational mix (Recommendation 15).
The HCFA wage index reflects variations in the cost of labor; that
is, it includes the effects of variations in the mix of occupations as
well as the price of labor. ProPAC believes that the wage index should
reflect only variations in the price of labor, which are beyond the
hospital's control and are not otherwise accounted for by adjustments
in the prospective payment system.
Previous ProPAC studies on the effect of adjusting the wage index
for occupational mix using data collected from California hospitals
found that a wage index adjusted for occupational mix would
redistribute funds from urban to rural hospitals. Within urban areas,
the occupational mix adjustment would redistribute funds from large to
small hospitals. Within rural areas, the occupational mix adjustment
would increase the wage index values of all bed-size groups. ProPAC
also reanalyzed the California data to examine the impact of an
occupational mix adjustment on wage index values based on hospital-
specific labor market areas. ProPAC currently believes that the
implementation of revised labor areas, including nearest neighbor labor
markets, would substantially improve payment equity among hospitals if
an occupational adjustment was developed.
We are not convinced that an occupational mix adjustment would
improve the accuracy of the wage index, as we have discussed most
recently in the August 30, 1991 final rule (56 FR 43222). Currently,
the wage index measures the overall costs of labor. If the wage index
were to measure the price of labor, then a set of occupational weights
would have to be developed to determine a standard occupational mix.
Hospitals would not be compensated for a mix of employees above the
standard, while hospitals with a mix of employees below the standard
would be overcompensated, relative to their cost of labor. If we were
to adopt hospital-specific labor market areas in conjunction with an
occupational mix adjustment, one concern would be the application of
occupational weights to every prospective payment hospital in the
country. Application of one set of occupational weights to every
prospective payment hospital would conflict with the intended purpose
of hospital-specific labor markets, which is to make the wage index
more responsive to local conditions. We cannot envision a single set of
occupational weights that could be applied to all prospective payment
hospitals in an equitable manner.
Last year, ProPAC suggested that we convene a working group made up
of representatives from HCFA and the hospital industry to try to
improve the timeliness and accuracy of the wage data. HCFA assembled
such a discussion work group and presented ProPAC comments concerning
the equity of adopting a method to collect data to assist in the
development of an occupational mix. The discussion workgroup's
consensus was that the data required to implement the proposal is not
currently available and the likelihood of obtaining such data would be
minimal. There seems to be little support among hospital industry
representatives for developing a system that in their opinion clearly
creates additional reporting burdens with an unproven or minimal impact
on the distribution of payments. Therefore, at this time we are not
proposing any changes to the collection of data to be used in
developing an occupational mix adjustment.

G. Research on Refinements to Labor Market Areas

1. Background
Almost from the beginning of the prospective payment system, we
have received comments from hospitals and ProPAC objecting to the use
of MSA-based labor market areas to construct the wage index. Common
concerns have been that the Statewide rural areas are too large to
distinguish differences in labor market conditions, and that the MSA-
based wage index does not reflect the fact that hospitals in the center
cities (the ``urban core'') pay higher wages than suburban hospitals.
Some commenters have argued that rural labor market areas should be
subdivided into two smaller groups based on county populations and that
MSA-based labor market areas should be divided into urban core and
suburban ring labor markets to distinguish the differences in labor
market conditions.
In light of these concerns, we have continued to examine a variety
of options for revising wage index labor market areas. In this proposed
rule, we discuss in detail issues raised by commenters concerning
ProPAC's ``nearest neighbor'' recommendation, our research and analysis
on alternative labor market areas, and the possibility of allowing all
hospitals in a State to opt out of the current labor market system.
2. Discussion of Comments Concerning ProPAC's Nearest Neighbor
Recommendation
In its March 1, 1993 report, ProPAC recommended that the Secretary
substantially revise the hospital wage index under the prospective
payment system for FY 1994. In its March 1, 1994 report, ProPAC made
the same recommendation (Recommendation 16). Specifically, ProPAC
recommends that we develop hospital-specific labor market areas based
on geographic proximity, using each hospital's ``nearest neighbors''
for purposes of a revised wage index. As in 1993, ProPAC has also
recommended that Congress repeal the current statutory provisions
relating to geographic reclassification for the wage index.
In ProPAC's 1993 report, the Commission discussed establishing each
hospital's labor market area based on its 10 nearest neighbors within a
50-mile radius. In its 1994 report, ProPAC examined defining labor
markets for each hospital by including the nearest 15 hospitals within
a 20-mile radius, and extending the radius up to 30 or 35 miles when
needed in order to include a total of at least 3 hospitals.
In our May 26, 1993 proposed rule (58 FR 30242), we stated that we
believed, and ProPAC agreed, that legislation would be required before
we could use hospital-specific labor market areas in constructing the
wage index due to the statutory requirements regarding hospital
reclassifications for wage index purposes. We also stated that in
addition to the statutory constraints, we did not believe that it would
be feasible or advisable to attempt to implement ProPAC's
recommendation in FY 1994. Although we acknowledged that ProPAC's
recommendation might have promise, we indicated that careful analysis
of the impact of such a proposal on hospitals was necessary before
proposing to adopt such a significant change. In addition, we stated
there were also a number of administrative issues that must be
carefully considered before ProPAC's proposal could be implemented,
including the possible development of an exceptions or appeals process
to resolve disputes concerning the labor market areas. We agreed with
ProPAC that if we adopted hospital-specific labor market areas using
its methodology, the MGCRB as it is currently constituted might no
longer be necessary. We also stated that we would not recommend that
Congress repeal the MGCRB provisions of the Act until we had analyzed
fully the implications of adopting hospital-specific labor market areas
or some other revisions to labor market areas. We noted that after our
analysis was complete, we would decide whether to recommend that the
mission of the MGCRB be altered to make it responsible for resolving
disputes concerning hospital-specific labor market areas.
To facilitate a thorough analysis of ProPAC's proposal, we
published in the FY 1994 proposed rule hospital-specific wage index
values using ProPAC's data on hospital locations and the new FY 1990
hospital wage data (58 FR 30457). The tables indicated what each
hospital's wage index value would be if the wage index were based on
the wage data for the hospital and its 10 nearest neighbors up to a
radius of 50 air miles. The tables also showed which hospitals were in
each hospital's labor market area based on ProPAC's data base.
Subsequently, we discovered a technical error in the wage index values
and republished a revised wage index value for each hospital in a
correction notice (June 29, 1993, 58 FR 34742).
We solicited public comments on ProPAC's proposal and suggestions
concerning the development of an exceptions or appeals process, if
appropriate, for possible implementation in FY 1995. We also solicited
comments on a number of other issues such as the feasibility of using
road miles instead of air miles, a process to verify hospital
locations, and what the process should be to establish a wage index for
new hospitals. We stated that we planned to continue our analysis of
alternatives based on the current MSA based system that have appeared
promising in the past, and that we planned to evaluate all potential
labor market revisions using the same basic criteria. Comments on these
issues were due to HCFA by August 31, 1993.
In both the proposed and final rules for FY 1994, we stated our
intention to analyze the comments we received as well as to conduct the
research we outlined. We also stated that we would continue to consult
with ProPAC and study any additional information they developed. We
stated our intention to publish a proposal for formal public comment in
the FY 1995 proposed rule if hospital-specific labor market areas based
on the nearest neighbor concept proved promising. We indicated that we
would include information describing all aspects of our proposal, and
consider all comments, before issuing a final rule for implementation.
In response to the May 26, 1993 proposed rule, we received a total
of 266 comments on the nearest neighbor wage index proposal, including
28 from national, State, and local organizations representing
hospitals. In all, 33 commenters were in favor of the nearest neighbors
proposal, 128 were opposed and 105 were in support if changes were made
to satisfy their concerns. The areas of major concern raised by the
commenters were the redistribution of Medicare payments that would
occur if hospital-specific labor market areas were adopted, how the
boundaries should be drawn around hospitals to define labor market
areas, and the nature and extent of an exceptions process. Several
commenters also had reservations about whether a hospital's nearest
neighbors were reflective of its labor market area. We discuss these
and other issues below.
Redistribution of Medicare Payments--Many commenters were
concerned about whether instituting hospital-specific labor market
areas would lead to major shifts in Medicare payments at the same time
that hospitals face an uncertain financial future because of the impact
of health care reform. One state hospital association noted that
adoption of the nearest neighbors proposal would cause a major
redistribution of payments among rural hospitals, and that many
hospitals that would be adversely affected were already in precarious
financial condition. Another state association commented that the
effects of the proposal on the hospitals in its State would vary
greatly, with substantially increased payments to some hospitals and
decreased payments to others. Many commenters suggested that if we were
to adopt the nearest neighbors proposal, some type of phase-in over
several years would be essential.
Definition of Labor Market Areas--Several commenters
stated that hospital characteristics such as size, services offered,
and case mix are a more reliable determinant of who a hospital competes
with for labor than who its nearest neighbors are. One state
association stated that its analysis of the wage index computed under
the nearest neighbors proposal demonstrates that geographic proximity
does not provide an accurate measure of the amount a hospital must pay
to compete for labor. Since there are a wide range of options for
defining hospital-specific labor market areas, many of the commenters
suggested variations depending on their perception of what new labor
market areas should achieve. Some favored changing the size of labor
market areas so as to increase payment to a particular hospital or type
of hospital, while others favored defining labor markets in a way that
would decrease the payment shifts that would occur under the options.
In order to minimize the payment changes that would result from the
wage index, some groups supported including a larger number of
hospitals in each labor market, while others supported limiting the
size of labor market areas. One state association asserted that both
nearest neighbor and fixed boundary labor market alternatives are
problematic because neither method allows a sufficient amount of
flexibility for determining labor market areas. The association
believes that it would be more accurate if the direction and distance
of worker commuting patterns were incorporated into the determination
of a hospital's nearest neighbors. Another association stated that it
may be difficult to identify a uniform approach that is equitable for
all areas of the country, and urged HCFA to consider using different
methodologies in different regions as appropriate. A national
association stated that while the nearest neighbors proposal has
conceptual appeal, whether the association would support a nearest
neighbor proposal ultimately would depend on where HCFA draws the line
around hospitals.
Exceptions Process--Most of the commenters agreed that
some type of exceptions process would be needed regardless of which
system for defining hospital labor market areas is developed. Several
commenters stressed the need for an exceptions process to address
geographic anomalies; cases in which air miles are not equivalent to
road miles; and cases in which a hospital is grouped with unlike
hospitals, such as a rural referral center (RRC) grouped with much
smaller primary care hospitals or a tertiary care hospital in a single
hospital MSA that is grouped with much smaller rural hospitals. Another
commenter supported giving a hospital the right to appeal to add or
delete hospitals from its labor market area if the target hospital can
demonstrate substantial labor market competition (or a lack of it) with
a specific hospital. Some commenters supported special exception
criteria for RRCs. One group believes that the nearest neighbors
proposal should be modified to accommodate RRCs that otherwise would
have been reclassified, that have only other rural hospitals in their
nearest neighbors group, or that would be significantly harmed by the
proposal. Another group believes that RRCs should be excluded from a
nearest neighbors wage index and that they should be allowed to use
either their own hospital-specific wage index or be allowed to
reclassify into the nearest MSA using the existing MGCRB rules.
Multi-campus hospitals--We received a wide range of
comments concerning multi-campus hospitals. Some commenters suggested
that the hospital's location should be its main address listed on the
cost report. Other commenters suggested that the facility with the
largest concentration of employees be defined as the hospital's
location, or that a hospital should be allowed to pick which campus
would be considered its location for labor market area purposes.
Hospital Location Verification--Some commenters suggested
that we publish each hospital's longitude and latitude and require them
to submit documentation to verify any requests for corrections to this
data. Others suggested that we use the Global Positioning System to
verify location. Some commenters suggested that the hospital's
emergency room entrance should be used as the hospital's location,
others suggested the main employee entrance, and still others suggested
that a hospital be allowed to designate any point on its campus as its
location.
State Boundaries--Some commenters stated that labor market
areas should not be constructed across State lines because cost of
living and labor costs can vary greatly from State to State due to
differences in State tax structures, costs of health insurance and
other employee benefit programs dependent on State law.
Blend/Floor--Some commenters suggested that a nearest
neighbors wage index should not be adopted unless a hospital's own wage
data were weighted more heavily than those of its neighbors. Other
commenters suggested that we institute a floor below which a hospital's
wage index could not fall or that we blend the current wage index with
any index based on revised labor market definitions.
3. Analysis of Alternative Labor Market Areas
We agree with commenters, and with ProPAC, that improvements to the
current labor market system should be explored. Below, we discuss the
feasibility of several alternative methodologies for establishing labor
markets, including revised versions of the current MSA-based system,
various hospital-specific methodologies, as well as an alternative that
combines the hospital-specific and MSA-based methodologies. In
evaluating each of the alternatives presented, we considered the major
issues raised by commenters, ProPAC's recommendations, as well as our
own internal research and analysis. ProPAC's data on air-mile distances
between hospitals were used to develop wage indexes based on hospital-
specific systems.
We note that in our May 26, 1993 proposed rule (58 FR 30244), we
indicated that we would hold a meeting with a working group consisting
of hospital industry representatives to review potential revisions to
labor market areas, and other issues related to the wage index. On
November 19, 1993, HCFA staff met with 17 representatives of State and
national hospital associations to discuss options for redefining
hospital labor market areas and other issues related to the current
wage index. A ProPAC representative also attended and presented
information on the status of the Commission's current research. HCFA
staff presented information on each of the options under consideration.
The group expressed no preference for any of the hospital-specific
or MSA-based options with the possible exception of a hospital-specific
wage index based in large part on the hospital's own wages. The group
was extremely concerned about the redistribution of dollars that would
occur if nearest neighbors labor market areas were adopted in the
current budgetary climate. It was also concerned about how an
exceptions process would function under any revised labor market
scheme, fearing that it would be too subjective and that it would be
impossible to predict how many hospitals would be reclassified.
a. MSA-based and Hospital-Specific Alternatives. In our labor
market research, we reviewed a large number of options: nine hospital-
specific wage indexes based on the nearest neighbor and fixed radius
approaches and seven MSA-based indexes involving ways of subdividing
MSAs or statewide rural areas. Following is a description of the
options we reviewed. We have assigned each option a name to facilitate
discussion and for use in tables that follow later in this section.

Hospital-Specific Alternatives

10 Nearest Neighbors--A wage index based on each hospital's own
wage data and that of its 10 nearest neighbors, or all hospitals within
a distance of 50 miles, if there are fewer than 10 other hospitals
within 50 miles. One hundred ninety-five hospitals had no neighbor
within 50 miles. These hospitals were assigned their own relative wage
level, which is computed by comparing its own wages to the national
average hourly wage. The same 195 hospitals also were assigned their
``own wage index'' for the 15 Nearest Neighbors and 20 Nearest
Neighbors wage indexes.
10 Nearest Neighbors/Minimum of 2--A wage index based on each
hospital's own wage data and that of its 10 nearest neighbors within 20
miles (with a minimum of at least 2 nearest neighbors within 20 miles
or all hospitals within 35 miles).
15 Nearest Neighbors--A wage index based on each hospital's own
wage data and that of its 15 nearest neighbors, or all hospitals within
a distance of 50 miles if there are fewer than 15 other hospitals
within 50 miles.
15 Nearest Neighbors/Minimum of 2--A wage index based on each
hospital's own wage data and that of its 15 nearest neighbors within 20
miles (with a minimum of at least 2 nearest neighbors within 20 miles
or all hospitals within 35 miles).
20 Nearest Neighbors--A wage index based on each hospital's own
wage data and that of its 20 nearest neighbors, or all hospitals within
50 miles if there are fewer than 20 other hospitals within 50 miles.
20-Mile Radius--A wage index based on each hospital's own wage data
and that of all its neighbors within a 20-mile radius. The 887
hospitals having no neighbor within 20 miles were assigned their own
relative wage level.
25-Mile Radius--A wage index based on each hospital's own wage data
and that of all its neighbors within a 25-mile radius. The 522
hospitals having no neighbor within 25 miles were assigned their own
relative wage level.
30-Mile Radius--A wage index based on each hospital's own wage data
and that of all its neighbors within a 30-mile radius. The 391
hospitals having no neighbor within 30 miles were assigned their own
relative wage level.
35-Mile Radius--A wage index based on each hospital's own wage data
and that of all its neighbors within a 35-mile radius. The 301
hospitals having no neighbor within 35 miles were assigned their own
relative wage level.

MSA-Based Alternatives

These alternatives represent various subdivisions (by counties) of
the current MSA/rural labor market area definitions. As such, all
counties in each subdivided category need not be contiguous.
Central-Outlying--A wage index in which each MSA is divided into 2
areas based on its central and outlying counties.
Rural-Population--A wage index in which each Statewide rural area
is divided into 2 distinct labor market areas, one including all
counties with populations greater than 25,000 and one made up of
counties with populations less than 25,000.
Rural-Density--A wage index in which each Statewide rural area is
divided into 2 areas if it contains counties with population densities
greater and less than 35 persons per square mile.
Rural-Population/Density--A wage index in which each Statewide
rural area is divided into as many as 4 areas depending on whether
populations are greater or less than 25,000 person and population
densities are greater or less than 35 persons per square mile.
Rural-Adjacent--A wage index in which each Statewide rural area is
divided into 2 areas, one including all counties adjacent to an MSA and
the other made up of counties not adjacent to an MSA.
Rural-Population/Adjacent--A wage index in which each Statewide
rural area is divided into as many as 4 areas depending on the
adjacent/non-adjacent status of its non-MSA counties and whether county
populations are greater or less than 25,000 persons.
Rural-Density/Adjacent--A wage index in which each Statewide rural
area is divided into as many as 4 areas depending on the adjacent/non-
adjacent status of its non-MSA counties and whether county population
densities are greater or less than 35 persons per square mile.
As a basis of comparison for these alternatives, we also reviewed
three variations of the current MSA-based wage index.

Current MSA-based Indexes

Geographic--The FY 1994 hospital wage index without the effects of
geographic reclassification.
Reclassification--The actual FY 1994 hospital wage index after
reclassification.
Estimated FY 1995--The FY 1994 hospital wage index revised to
include an estimate of the effects of geographic reclassification in FY
1995 (based on FY 1990 data).
We used three basic criteria to analyze each of the alternatives:
(1) Wage Conformity Within Labor Markets. This criterion assesses
the extent to which a wage index conforms to a hospital's own relative
wage level. It also evaluates the extent to which a hospital's wages
are aberrant for its labor market area (that is, are more than one
standard deviation above the labor market wage index);
(2) Wage Index Conformity Across Labor Markets (Boundary Problems).
This criterion measures the extent to which the new labor market areas
reflect uniform labor market conditions as indicated by the degree of
similarity in the hospital wage rates across labor market areas. The
boundaries should minimize inequitable treatment, that is, cases in
which hospitals facing similar labor costs are grouped into different
labor markets.
(3) Distributional Equity Improvement. This criterion examines the
impact of a labor market option to determine its effects on the
distribution of hospital payments, and the extent to which the
hospitals that would gain and lose under various proposals are already
doing well or poorly under the current system. Redistribution of
payments should fairly compensate both high-wage hospitals and low-wage
hospitals.
None of the options we initially reviewed were a significant
improvement over the current reclassified wage index in terms of wage
conformity within labor markets, wage conformity across labor markets,
or distributional equity improvement. The following tables summarize
our major results:
Wage Conformity Within Labor Markets
Table A displays the number of hospitals for which the difference
between the area wage index value for a given alternative and the
hospital's own relative wage index value (determined by dividing the
hospital's average hourly wage by the national average hourly wage) is
greater than .08 either positive or negative. A .08 difference in the
wage index was selected as it represents approximately a $200
difference in payments per case. For each wage index option, the Lose
and Gain columns show the number of hospitals for whom the difference
represents a given decrease or increase in wage index value.
Table B displays the number of hospitals whose wage index values
are more than 108 percent above their labor market wage index value
(that is, one standard deviation greater).

Table A.--Number of Hospitals Losing or Gaining More Than .08 Relative to Own Wage Level, for Selected Wage
Indexes by Type of Geographic Area
----------------------------------------------------------------------------------------------------------------
All hospitals Large urban n=1,612 Other urban n=1,307 Rural n=2,311
n=5,230 -----------------------------------------------------------------
Wage index ----------------------
Lose >.08 Gain >.08 Lose >.08 Gain >.08 Lose >.08 Gain >.08 Lose >.08 Gain >.08

----------------------------------------------------------------------------------------------------------------
Existing System:
Geographic FY 94.... 682 1,708 263 531 137 321 282 856
Estimate FY 95...... 590 1,672 289 493 141 317 160 862
Hospital-Specific:
Nearest 10.......... 627 1,674 268 452 178 302 181 920
Nearest 10/Min 2.... 597 1,204 260 421 140 259 197 524
Nearest 15/Min 2.... 592 1,224 255 439 140 261 197 524
20 Mile Radius...... 549 1,014 264 438 141 244 144 332
MSA-Based:
Central-Outlying.... 676 1,576 264 474 134 233 278 869
Rural-Adjacent...... 682 1,690 263 530 137 321 282 839
Rural-Density....... 706 1,540 262 530 137 321 307 689
----------------------------------------------------------------------------------------------------------------

Table B.--Number of Hospitals Whose Wages are More Than 108 Percent
Above Their Labor Market Area
------------------------------------------------------------------------
Number of hospitals with wages
greater than 108 percent
----------------------------------
Wage index Large Other
All urban urban Rural
hospitals n=1612 n=1307 n=2311
n=5230
------------------------------------------------------------------------
Existing System:
Geographic FY 94................. 746 235 144 367
Estimate FY 95................... 559 232 137 190
Hosp.-Specific:
Nearest 10....................... 620 217 181 222
Nearest 10/Min 2................. 650 224 135 291
Nearest 15/Min 2................. 653 228 134 291
20 Mile Radius................... 594 229 139 226
MSA-based:
Central-Outlying................. 758 243 148 367
Rural-Adjacent................... 756 235 144 377
Rural-Density.................... 798 235 144 419
------------------------------------------------------------------------

Wage Conformity Across Labor Markets
Table C presents the assessment of wage conformity across labor
markets. We determined that a ``boundary problem'' existed for a target
hospital (that is, the hospital whose wage index value is being
calculated) if--
Among nearby hospitals, one or more other hospitals' wage
index value is at least .04 greater than that of the target hospital,
corresponding to approximately a $100 difference in payments per case,
and
The hospital with the lower wage index value pays higher
wages than the hospital with the higher wage index value.
``Nearby hospitals'' were defined as the 20 nearest hospitals or if
a hospital does not have 20 other hospitals within a 35 mile radius,
all hospitals within a 35 mile radius. Table C shows the number of
hospitals with one or more boundary problems and the average size of
the wage index difference for those boundary problems. An average wage
index difference of .12 corresponds to a payment difference of about
$300 per case.
Table D shows the effects that different labor market alternatives
would have when compared to the current FY 1994 pre-reclassified wage
index.

Table C.--Number of Hospitals Subject to ``Boundary Problem'' and Average Size of ``Boundary Problem'' by Type
of Geographic Area
----------------------------------------------------------------------------------------------------------------
All hospitals n=5230 Large Urban n=1612 Other urban n=1307 Rural n=2311
-------------------------------------------------------------------------------------------
Wage index Number Average Number Average Number Average Number Average
hospitals difference hospitals difference hospitals difference hospitals difference

----------------------------------------------------------------------------------------------------------------
Existing System:
Geographic FY 94 760 0.113 49 0.099 240 0.103 471 0.125
Estimate FY 95.. 662 0.110 51 0.105 215 0.101 396 0.120
Hospital--Specific:
Nearest 10...... 1223 0.077 387 0.074 224 0.074 612 0.086
Nearest 10/Min 2 1343 0.084 405 0.079 263 0.079 675 0.091
Nearest 15/Min 2 1240 0.085 305 0.080 260 0.079 676 0.091
20 Mile Radius.. 1041 0.083 169 0.079 264 0.080 608 0.089
MSA-Based:
Central-Outlying 712 0.101 106 0.107 232 0.094 374 0.107
Rural-Adjacent.. 838 0.106 49 0.098 241 0.102 548 0.113
Rural-Density... 884 0.109 49 0.098 241 0.103 594 0.120
----------------------------------------------------------------------------------------------------------------

Table D.--Labor Market Alternatives: Percent Change from Current MSA Values
[Pre-Reclassification]
----------------------------------------------------------------------------------------------------------------
Greater Less than
All hospitals N than 10 5-10 0-5 0 -5 to 0 -10 to -5 -10
percent percent percent percent percent percent
----------------------------------------------------------------------------------------------------------------
Estimate FY 95.......... 5,230 210 64 1,114 3,556 235 48 3
Nearest 10.............. 5,230 614 665 1,629 0 1,514 490 318
Nearest 10/Min 2........ 5,230 366 480 1,692 0 1,353 590 749
Nearest 15/Min 2........ 5,230 356 452 1,761 0 1,359 553 749
20 Mile Radius.......... 5,230 356 333 1,775 0 1,381 491 894
Central-Outlying........ 5,230 10 3 1,380 3,389 150 108 190
Rural-Adjacent.......... 5,230 9 5 1,441 2,936 685 126 28
Rural-Density........... 5,230 7 163 775 3,149 506 432 198
----------------------------------------------------------------------------------------------------------------

As demonstrated by the above tables, our analyses showed that none
of the MSA-based options consistently outperformed the current
estimated FY 1995 post-reclassified wage index in terms of wage
conformity within labor market areas and wage conformity across labor
market areas.
With respect to wage conformity within labor market areas, the
results in Table A demonstrate that the 20-mile radius hospital-
specific option, with 549 losing hospitals, best reduces the number of
hospitals with wage index values more than .08 below their own wage
level. The FY 1995 post-reclassified wage index was second best, with
590 hospitals with wage index values more than .08 below their own wage
level. The 20-mile radius approach also produced the fewest number of
hospitals (1014) with wage index values more than .08 above their own
wage levels. However, as demonstrated in Table B, the estimated FY 1995
post-reclassified wage index outperformed the other labor market
options, with only 559 hospitals whose own average hourly wages were
108 percent or more of their respective labor market area's average
hourly wage. Therefore, the 20-mile radius and the estimated FY 1995
post-reclassified wage indexes demonstrated somewhat better outcomes
for wage conformity within labor market areas than any of the other
options we studied.
With respect to wage conformity across labor market areas
(``boundary problems''), as indicated in Table C, the estimated FY 1995
post-reclassified wage index generated the fewest hospitals having
boundary problems (662), with the central-outlying MSA option having
the second lowest number of such hospitals (712). All of the nearest
neighbor options, including the 20-mile radius option (with 1,041
hospitals), had the effect of significantly increasing the number of
boundary problems that would occur, although the problems were of a
smaller magnitude.
Overall, none of the MSA-based options or the nearest neighbor
options consistently outperformed the current estimated FY 1995 post-
reclassification wage index. While the 20-mile radius option performed
well in terms of wage conformity within labor market areas, it
performed significantly worse than the current system with respect to
wage conformity across labor market areas. Additionally, with respect
to the distributional effects of all the options, none demonstrated any
measurable improvement in payment equity across hospital groups.
Therefore, we are not presenting any tables concerning the
distributional effect in this discussion. We have decided not to
propose changes to labor market areas for FY 1995 because we believe
that neither revisions to the current MSA-based system or the nearest
neighbors labor market options that we studied constitute a clearly
demonstrable improvement over the current system.
b. Options for Future Wage Index Refinements Using Combined MSA/
Hospital-Specific Approach. While none of the alternative labor market
areas that we studied, whether based on current MSA definitions or the
``nearest neighbor'' approach, provided a distinct improvement over the
current reclassification wage index, we believe a classification system
that uses a combination of both approaches has considerable potential
for improving the wage index. Discussed below are some options for
further study that we believe may offer a viable alternative to the
current system by taking into consideration all of the varying factors
that affect a hospital's labor market. Each of these options is based
on a weighted average of each hospital's own average hourly wages and
the average hourly wages of a group of other hospitals. The following
concepts and assumptions underlie the wage index options that we are
now analyzing:
Empirically defining labor market areas in a highly
accurate, definitive manner is extremely difficult, if not impossible.
MSAs and statewide rural areas may be reasonably accurate in many
cases, but in other cases, these areas may be larger than a hospital's
``true'' labor market area. None of the methodologies we studied for
subdividing MSAs and/or statewide rural areas or for designing nearest
neighbor labor market areas proved to have been demonstrably more
accurate than the current system.
Both a hospital's own wage data and that of other
hospitals in its vicinity may contain relevant information about the
level of wages in the hospital's true labor market. In particular, a
hospital's own data may reflect specific circumstances of the
hospital's labor market that we have yet to discover in our analysis of
the data, but that reflect geographic variation that Medicare would
want to capture in the wage index.
No matter how we determine labor market areas, both a
hospital's own wage data and that of other hospitals assigned to its
labor market area may contain any number of spurious sources of
variation, including data errors, that should not be captured in the
wage index. The larger the number of hospitals whose data are averaged,
the more the effects of spurious factors are reduced.
To address all of these considerations, we have designed for
comment and future study an approach that uses the current MSA system
but generally gives a hospital's own wages a higher weight than under
the current system. (We have assigned each hospital's own wages a
weight sufficient to ensure that in no case would the weight of a
hospital's own wages be reduced below its current level.) We believe
that a hospital's own wages, to some degree, reflect its specific labor
market conditions. Hence, a hospital's wage index would be more
representative of these labor market conditions if a higher weight was
assigned to its own wages than typically occurs in large MSA or
statewide rural area labor markets. If this approach results in
situations in which a hospital's wage level continues to be
significantly higher than the combined average hourly wage used to
construct its wage index, we would provide an exceptions mechanism
whereby a hospital's wage index would be derived entirely or in part
from its ``nearest neighbor'' labor market area.
We are considering two alternative wage indexes based on this
approach. The first of two wage indexes we considered places a 25
percent (.25) weight on each hospital's own average hourly wage and a
75 percent weight (.75) on the average hourly wage of the other
hospitals in each hospital's MSA or statewide rural area. However, if a
hospital's data represent more than 25 percent of the hours in the MSA
or statewide rural area in which it is located, then, in calculating
the hospital's wage index, that higher percent was used instead of the
25 percent weight. The resulting weighted average hourly wage is
divided by the national average hourly wage to obtain each hospital's
wage index value. For purposes of discussion, this wage index is
denoted as ``Minimum 25'' or ``M25''.
The second wage index differs from the first alternative only in
that a minimum weight of .50 is given the hospital's own average hourly
wage, instead of a minimum 25 percent. This wage index is denoted as
``Minimum 50'' or ``M50''.
However, we recognize that in some cases a hospital's immediate
labor market area as defined under a ``nearest neighbor'' approach may
be more representative of its true labor market area than an MSA-based
labor market area. To address such situations, we have developed a
mechanism that would essentially provide a hospital with an alternative
wage index derived entirely or in part from its nearest neighbors labor
market. Currently, we are examining two methods for reclassification, a
``simple'' method and a ``refined'' method. Both methods utilize the
two wage indexes just introduced, and like the current MGCRB
reclassification system, also require a hospital's own wages to exceed
certain thresholds to meet eligibility. These thresholds are as
follows:
The first threshold would be used to identify hospitals
whose own wage levels are still aberrant when using the Minimum 25 or
Minimum 50 wage indexes. We set this threshold at the mean plus 1.0
standard deviation of the ratio of each hospital's own average hourly
wage to the weighted sum of its own average hourly wage plus the
average hourly wage of the other hospitals in the MSA or Statewide
rural area in which the hospital is located. For the M25 wage index,
the threshold would be 1.07. That is, a hospital's average hourly wage
would have to equal at least 107 percent of the weighted average hourly
wage used to develop its wage index in order to qualify for
reclassification. For the M50 wage index, the threshold would be 1.05.
The second threshold, which would be used to identify
hospitals whose wages are comparable to the hospitals in the immediate
(that is, nearest neighbor) labor market area, was set at 83 percent,
which equals the mean minus 1 standard deviation of the ratio of each
hospital's average hourly wage to the average hourly wage of its
nearest 10 neighbors.
Under the ``simple'' reclassification methodology, there would be
only a single adjustment available to a hospital that demonstrates that
its wages are aberrant within its labor market area (that is, it meets
both thresholds discussed above). The basis for the adjustment is
evidence that the average hourly wage of the other hospitals in its MSA
or statewide rural area is not representative of the average hourly
wage in the hospital's actual labor market. A common reason that the
MSA's average hourly wage may not be representative of a particular
hospital's actual wage costs is that the MSA is too large and comprises
multiple labor markets.
To qualify for reclassification under this method, a hospital would
have to meet a third criterion. The average hourly wage of a hospital's
nearest 10 neighbors (with a minimum of at least 2 neighbor hospitals
within 20 miles or all hospitals within 35 miles) would have to exceed
the average hourly wage of the other hospitals in its MSA or statewide
rural area. If this is the case, then the average hourly wage of the
hospital's nearest 10 neighbors would be substituted for the MSA or
statewide rural average hourly wage in calculating the numerator of the
hospital's wage index. Under this reclassification scheme a hospital's
own wages would be given the same weight as in the MSA-based
alternative wage index (M25 or M50).
The ``refined'' reclassification methodology would add a second
basis for adjusting a reclassified hospital's wage index. This was
developed to assist hospitals whose situation warrants a different
nearest neighbor approach. For example, it is possible that a
hospital's data could represent more than 25 percent, or even 50
percent, of the total hours when combined with its 10 nearest
neighbors. However, the same hospital's data very likely might
represent a much lower percentage of the total hours in the MSA or
statewide rural area in which it is located. This refined method would
allow a hospital to use not only the average hourly wage of its 10
nearest neighbors, but also its hours weight when combined with its 10
nearest neighbors. So, in addition to the test of the
representativeness of the other hospitals' average hourly wage
described above, there would be a test of the appropriateness of
substituting its hours weight from the hospital's immediate labor
market for the weight that would otherwise be used (.25, .50, or its
MSA/statewide rural hours weight). A reclassified hospital's hour
weight reflected in the wage index would be adjusted under this method
if two criteria are met. First, a hospital's share of the total hours
in its nearest 10 neighbors ``labor market'' would have to exceed its
hour weight in its MSA/statewide rural labor market. Second, the use of
the nearest neighbors' hours weight would have to increase the average
hourly wage that comprises the numerator of its wage index value. If
both criteria were met, then the nearest neighbors' weight would be
substituted for the hours weight that would have been used were the
hospital not reclassified.
This refined reclassification methodology would allow for three
different types of reclassification groups under which a hospital's
wage index would be calculated by using one of the following: (1) The
nearest neighbors' average hourly wage and the MSA hour weight; (2) the
nearest neighbors' hours weight and the MSA-based average hourly wage;
or (3) both the nearest neighbors' weight and average hourly wage. The
following tables summarize our findings under each of the options we
examined in comparison with the current labor market system.
Table E displays the number of hospitals for which the difference
between the area wage index value for a given alternative and the
hospital's own relative wage index value (determined by dividing the
hospital's average hourly wage by the national average hourly wage) is
greater than .08, either positive or negative. For each wage index
option, the Lose and Gain columns show the number of hospitals for whom
the difference represents a given decrease or increase in wage index
value.
Table F presents the assessment of wage conformity across labor
markets. We determined that a ``boundary problem'' existed for a target
hospital (that is, the hospital whose wage index value is being
calculated) if--
Among nearby hospitals, one or more other hospitals' wage
index value is at least .04 greater than that of the target hospital,
and
The hospital with the lower wage index value pays higher
wages than the hospital with the higher wage index value.
``Nearby hospitals'' were defined as the 20 nearest hospitals or if
a hospital does not have 20 other hospitals within a 35 mile radius,
all hospitals within a 35 mile radius. Table F shows the number of
hospitals with one or more boundary problems and the average size of
the wage index difference for those boundary problems. An average wage
index difference of .12 corresponds to a payment difference of about
$300 per case.

Table E.--Number of Hospitals Losing or Gaining More Than .08 Relative to Their Own Wage Level for Selected Wage
Indexes by Type of Geographic Area
----------------------------------------------------------------------------------------------------------------
All hospitals Large urban Other urban Rural
---------------------------------------------------------------------------------------
Wage index Lose >.08 Lose >.08 Lose >.08 Lose >.08 Gain >.08
Gain >.08 Gain >.08 Gain >.08
----------------------------------------------------------------------------------------------------------------
FY94 Pre-Reclass WI..... 684 1,708 263 530 137 321 281 857
Est. 95 Post-Reclass WI. 590 1,672 289 493 141 317 160 862
M25 Simple.............. 385 1,305 161 412 101 269 123 624
M25 Refined............. 352 1,284 165 408 104 266 83 610
M50 Simple.............. 195 698 90 235 48 153 57 310
M50 Refined............. 187 693 91 234 48 151 48 308
----------------------------------------------------------------------------------------------------------------

Table F.--Number of Hospitals Subject to and Average Size of ``Boundary Problem'' by Type of Geographic Area
----------------------------------------------------------------------------------------------------------------
All hospitals Large urban Other urban Rural
-------------------------------------------------------------------------------------------
Wage Index Number Number Number Number
hospitals Average hospitals Average hospitals Average hospitals Average
difference difference difference difference
----------------------------------------------------------------------------------------------------------------
FY94 Pre-Reclass WI. 760 0.113 49 0.099 240 0.103 471 0.125
Est. 95 Post-Reclass
WI................. 662 0.110 51 0.105 215 0.101 396 0.120
M25 Simple.......... 532 0.087 26 0.081 161 0.083 345 0.090
M25 Refined......... 515 0.085 25 0.081 161 0.082 329 0.089
M50 Simple.......... 273 0.067 8 0.089 86 0.060 179 0.071
M50 Refined......... 268 0.067 8 0.089 85 0.060 175 0.071
----------------------------------------------------------------------------------------------------------------

Table G shows the effects of the two possible reclassification
schemes as compared to the current reclassification system. Table H
shows the effects the different labor market alternatives would have
when compared to the current FY 1994 pre-reclassified wage index.

Table G.--Number of Hospitals Qualifying for Simple and Refined
Reclassification Using the Minimum 25 (M25) and the Minimum 50 (M50)
Wage Indexes, Compared to the Number of Hospitals Estimated to Reclass
for the Wage Index in FY 1995
------------------------------------------------------------------------
Reclassification All Large urban Other urban
alternatives hospitals Rural
------------------------------------------------------------------------
Estimated FY 1995
Reclasses.......... 362 60 81 221
Hospitals Eligible
for Reclass under
1.07 Criterion for
M25................ 660 197 141 322
Simple Reclass:
N10 AHW/MSA Hrs. 411 121 84 206
No Adjustment... 249 76 57 116
Refined Reclass:
N10 AHW/MSA Hrs. 250 111 61 78
N10 AHW/N10 Hrs. 161 10 23 128
MSA AHW/N10 Hrs. 110 7 13 90
No Adjustment... 139 69 44 26
Hospitals for
Reclass under 1.05
Criterion for M50.. 610 178 140 292
Simple Reclass:
N10 AHW/MSA Hrs. 378 102 85 191
No Adjustment... 232 76 55 101
Refined Reclass:
N10 AHW/MSA Hrs. 300 98 75 127
N10 AHW/N10 Hrs. 78 4 10 64
MSA AHW/N10 Hrs. 54 1 4 49
No Adjustment... 178 75 51 52
------------------------------------------------------------------------

Table H--Labor Market Alternatives--Percent Change From Current MSA Values
[Pre-Reclassification]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Greater than -5 to - Less than -
10percent 5-10 percent 0-5percent 0 0 to -5percent 10percent 10percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Est. 95 Post-Reclass WI................. 210 64 1,114 3,556 235 48 3
M25 Simple.............................. 180 201 2,155 0 2,302 379 13
M25 Refined............................. 222 230 1,982 0 2,387 396 13
M50 Simple.............................. 318 332 1,662 0 1,528 925 465
M50 Refined............................. 343 301 1,643 0 1,546 927 470
--------------------------------------------------------------------------------------------------------------------------------------------------------

As demonstrated in the above tables, we believe these options for
refining the wage index show promising results. All four of the wage
index options significantly reduce the number of boundary problems, as
seen in Table F. Not only would the number of boundary problems be
reduced, but the boundary problems that do remain would be smaller,
especially for the M50 wage indexes where the average difference is
0.067 for both the simple and refined reclassification methods. As
indicated in Table E, these wage index options produce wage index
values that would more closely resemble a hospital's own wage level, as
was expected. Table G demonstrates that the new reclassification
methods would likely affect a larger number of hospitals than the
current system. Whereas in the current system, we estimated that only
362 hospitals qualify for the wage index reclassification, under the
M25 wage index the simpler reclassification method would lead to 411
hospitals being adjusted to their nearest neighbors' average hourly
wage. The refined reclassification method under the M25 wage index
would make it possible for 250 hospitals to use the nearest neighbors'
average hourly wage, 161 hospitals to use both the nearest neighbors'
average hourly wage and hours weight, and 110 hospitals to use just the
nearest neighbors' hours weight. We show the effects the four new
options would have when compared to the estimated 1995 post-
reclassified system against the current 1994 pre-reclassified values in
Table H.
We plan to continue our evaluation of these new wage index options
in the coming months and are soliciting public comment. We will
continue to accept comments on these wage index refinements until
August 31, 1994. We will respond to these comments in the FY 1996
prospective payment system proposed rule. Comments on this issue should
be sent to: Lana Price, Director; Division of Hospital Payment Policy;
1-H-1 East Low Rise; 6325 Security Boulevard; Baltimore, Maryland
21207.
While we believe the alternatives discussed above offer much
promise with respect to refining the hospital wage index, we do not
believe that sections 1886(d)(2), (3) and (8) of the Act authorize a
hospital-specific wage index scheme that combines each hospital's own
wages and the wages of other hospitals in its MSA or Statewide rural
area using different hour weights. Moreover, the MGCRB provisions under
section 1886(d)(10) of the Act contemplate wage index reclassifications
from one area to another that cannot be reasonably implemented
consistent with these alternatives. Therefore, before we could
implement these alternatives, legislative changes would be necessary to
allow the Secretary greater flexibility in refining the hospital wage
index. Again, we invite public comments on these issues by August 31,
1994, so that we may consider them in our continuing evaluation of wage
index refinements.

H. State Labor Market Option

In addition to the alternatives discussed above, we are also
considering a State labor market option (SLMO) under which hospitals
would be able to voluntarily design labor market areas within their own
State boundaries. Although we are not formally proposing the SLMO at
this time, we welcome comments on this option. Under the SLMO, an
application to design labor market areas could be submitted by a group
of hospitals or any entity that represents hospitals that would be
affected under the SLMO (for example, a state hospital association, the
Office of the Governor, etc.). The application would have to include a
statement signed by each hospital's chief executive or chief financial
officer supporting participation in the SLMO.
The SLMO is being considered on the premise that hospitals within a
State may, in some circumstances, have better information than HCFA
concerning local labor market competition between hospitals.
Accordingly, we are considering the SLMO along with the alternatives
discussed above, which we believe would require legislative changes.
Absent changes to the statute, we believe that the SLMO would offer
opportunities for hospitals to design labor market areas that are more
reflective of local wage conditions than the current system.
1. Criteria for Participating in a SLMO
Below we describe some of the criteria we would apply to determine
whether labor market areas under the SLMO could be approved. (We have
not fully designed or specified the limitations for creating labor
market areas under the SLMO, and we are interested in any comments from
the public for developing criteria under which a SLMO would be
approved.) However, we envision that hospitals participating in a SLMO
could design labor market areas under the following restrictions:
We are considering limiting approval of labor market areas
under the SLMO to cases in which there is unanimous support among
hospitals. (We may also consider use of ``overwhelming support'' as a
criterion rather than unanimous support. We likely would specify a
percentage of participating hospitals that must support the SLMO labor
market areas (for example, 75 percent). Such a criterion may also
specify that to be approved, the SLMO labor market area must be
supported by each hospital that would lose more than 5 percent of
payments relative to the current system.)
Aggregate payments to hospitals participating in the SLMO
could be no higher than they otherwise would have been in the absence
of the SLMO.
All hospitals that participate in the SLMO must sign an
application for it to become effective. Although the application could
come from a group of hospitals or its representatives, each
participating hospital must sign the application and agree to its
provisions. In addition, each participating hospital must indicate in
the application (or a separate agreement) that:
The participating hospital waives its rights to any wage index it
would otherwise receive absent the SLMO, including a wage index it
might receive through geographic reclassification.
The hospital understands how its participation in the SLMO would
affect its prospective payments, including an understanding that the
hospital's wage index could be higher or lower under the SLMO in
comparison to its wage index under labor market areas in the absence of
the SLMO. (The SLMO application would only have to specify that the
hospital understands the effect of HCFA regulations regarding SLMOs and
that there may be a reduction of their wage index as a result of
participation. The hospital would not have to indicate the precise
level of its wage index in the SLMO application.)
Labor market areas under the SLMO would be automatically renewed
each year for the purpose of calculating the wage index until one or
more participating hospitals withdraws its support for the SLMO.
Labor market areas under the SLMO generally would be
prohibited from crossing State boundaries. The only exception would be
that hospitals from a bordering State may be included in a SLMO labor
market area if they are currently located in an MSA that crosses a
State boundary. In this case, the wage index would be calculated as if
hospitals in the bordering State were included under the SLMO labor
market area. For hospitals in the bordering State, the wage index would
continue to be calculated as it is under the current system.
Section 1886(d)(3)(E) of the Act requires that the Secretary
establish the wage index for the purposes of adjusting payment rates
for hospital inpatient services to reflect wages in a geographic area
relative to the national average. For this reason, we are considering
establishing a criterion that labor market areas under the SLMO must
include all hospitals within a contiguous area or must have defined
geographic boundaries or distance parameters. However, we are concerned
that such a requirement may prevent hospitals in noncontiguous areas
within a State that share similar demographic features from being
grouped in one labor market area under the SLMO. We are also concerned
that hospitals may be able to meet the contiguity requirement but
design an area with an illogical configuration that may not represent a
labor market area. For example, we do not believe it would be
appropriate to approve an application for a new labor market area that
groups 2 hospitals 100 miles apart but excludes the hospitals located
in between. We are also concerned about approving a SLMO application
under which the wage index would be based only on hospital-specific
wages. Such an application would not reflect local market conditions
based on contiguous geographic areas. Because of these concerns, we are
soliciting public comments regarding appropriate criteria for approving
labor market areas under the SLMO.
2. Calculation of Budget Neutrality
As noted above, we would require payments to hospitals under the
SLMO to be budget neutral in relation to payments in the absence of the
SLMO. We are considering alternatives for applying a budget neutrality
adjustment. Because the budget neutrality calculation for the SLMO
labor market areas would be made after the effects of reclassification,
we expect that hospitals under a SLMO will continue to apply for
reclassification as they do under the current system. Such
reclassifications would be recognized both for purposes of computing
the budget neutrality adjustment and computing the wage index values
applicable to reclassified hospitals. We envision two options for
applying the budget neutrality adjustment:
Adjusting the wage index for the SLMO labor market areas.
Under this option, there would be a single adjustment to the wage index
that would affect all hospitals participating in the SLMO in equal
proportions.
Adjusting the wage index for selected hospitals within the
SLMO labor market areas. Under this option, the application to create
labor market areas under SLMO would specify how the budget neutrality
adjustment would be applied. For example, it could be applied equally
to all SLMO hospitals or it could be limited to selected hospitals.
If the SLMO application does not specify how to apply the budget
neutrality adjustment, the adjustment to the wage index would have a
proportional effect on payments to all hospitals participating in a
SLMO labor market area. (As indicated above, reclassification granted
to hospitals participating in a SLMO would be recognized in computing
the wage index values applicable to non-SLMO reclassified hospitals
under section 1886(d)(8)(C) of the Act.)
3. Effect on Hospitals Not Participating in the SLMO
Hospitals that are not part of labor market areas under the SLMO
would continue to have their wage index calculated under the current
labor market areas--including the effects of reclassification. The wage
index for these hospitals would continue to reflect the average hourly
wage in their current labor market area relative to the national
average. If a non-SLMO hospital were reclassified to an MSA that
includes hospitals that are part of a SLMO labor market area, the wage
index for the non-SLMO hospital would be calculated as if the SLMO did
not exist.
We note that hospitals in SLMO States that are not part of a
redesigned labor market area would not necessarily have to be part of
the budget neutrality adjustment and their support for the SLMO would
not be needed. However, if they chose to be part of the budget
neutrality adjustment, their support for the SLMO would be needed even
if they were not included in a redesigned labor market areas.
4. Process for Submitting a SLMO Proposal
We are considering establishing the process described below for
establishing labor market areas under the SLMO. Given that hospitals
may apply both for geographic reclassification by the MGCRB and for a
revised labor market area under the SLMO in the same year, our time
frames for SLMO decisions may parallel the time frames used for
reclassification decisions by the MGCRB. However, we expect that
approval or rejection of SLMO applications would be made by HCFA's
Bureau of Policy Development. The potential process would consist of
the following:
(1) The initial SLMO application would be made to HCFA and would
include a statement from each participating hospital attesting to their
support for labor market areas under the SLMO.
(2) We envision providing notification to applicants of approval of
the SLMO labor market areas before publication of our annual
prospective payment system proposed rule (usually published in the
Federal Register by May of each year). For hospitals whose SLMO
application has been denied, we are considering providing an
opportunity to submit additional information in support of a SLMO
application. This information would be used by HCFA in reconsidering a
denial before publication of the proposed rule.
(3) Approval of SLMO labor market areas and the resulting proposed
wage indices would be announced in the proposed rule. The proposed rule
would include the wage index under the current labor market areas
(including the effects of reclassification) and under the SLMO labor
market areas.
(4) Hospitals participating in the SLMO would be able to withdraw
support for the SLMO during the 60-day comment period following
publication of the proposed rule. If one or more hospitals withdraws
support for a labor market area under the SLMO, the SLMO would not go
into effect in the following fiscal year. To withdraw from the SLMO,
the participating hospital would submit a letter to HCFA referencing
the appropriate proposed rule and stating its participation in the SLMO
labor market area is being withdrawn.
(5) Absent any withdrawal of support for labor market areas under
the SLMO, HCFA would announce labor market areas and wage indices under
the SLMO in the prospective payment system final rule (published by
September 1 of each year).
(6) The labor market areas under the SLMO would be in effect for at
least 1 Federal fiscal year following approval by HCFA. The SLMO labor
market areas would be automatically renewed for following years unless
a participating hospital informed HCFA in writing of its decision to
withdraw.
5. Special Issues Affecting the SLMO
We are considering the following policies that would address the
effects of special situations on the SLMO concept.
New Hospitals--If a new hospital is established in a SLMO
labor market area after its approval, the wage index for the new
hospital would be determined as it is under the current system for the
remainder of the fiscal year. In order for the SLMO labor market area
to be renewed for the following fiscal year, the new hospital would
have to inform HCFA in writing of its support for the SLMO labor market
area.
Ownership Changes and Hospital Mergers--If there is an
ownership change or hospital merger during the period that the SLMO
labor market area is in effect, the SLMO would remain in effect for the
remainder of the fiscal year. In order for the SLMO labor market area
to be renewed for the following fiscal year, the new ownership would
have to inform HCFA in writing of its support for the SLMO labor market
area.
We will accept comments on the SLMO until August 31, 1994. These
comments should be sent directly to: Lana Price, Director; Division of
Hospital Payment Policy; 1-H-1 East Low Rise; 6325 Security Boulevard;
Baltimore, Maryland 21207. Responses to these comments will appear in
the FY 1996 prospective payment system proposed rule.

I. Conclusion

Since the inception of the prospective payment system, we have
repeatedly solicited comments concerning how labor market areas used to
construct the wage index should be defined. In recent years, we have
also solicited comments concerning specific proposals to modify or
replace our current use of MSAs. For example, we have offered for
public comment the reclassification criteria used by the MGCRB and
alternatives to the MSA-based system such as ProPAC's nearest neighbor
proposal and the options outlined in the present rule. In essence,
therefore, we have been engaged in a continuing dialogue with the
public concerning whether it is appropriate to use MSAs to define labor
market areas to construct the wage index.
On June 30, 1993, the Office of Management and Budget announced the
revised definitions for Metropolitan Areas (MA) to reflect the MA
standards published on March 30, 1990, and the demographic data drawn
from the 1990 Decennial Census. In that bulletin, OMB stated that in
cases where an agency is publishing for comment a proposed regulation
that would use the MA definitions for a nonstatistical purpose, the
agency should seek public comment on the proposed use of the MA
definitions. As indicated above, we are not proposing the options
outlined in sections III G and H at this time. However, consistent with
OMB's bulletin and as part of our continuing review of the definitions
used to define labor market areas for wage index purposes, we are
soliciting comments on the use of MSA definitions as incorporated in
the options described in this document.

IV. Other Proposed Changes to the Prospective Payment System for
Inpatient Operating Costs

A. Definition of and Payment for Transfer Cases (Sec. 412.4)
The prospective payment system distinguishes between
``discharges'', situations in which a patient leaves an acute-care
hospital after receiving complete treatment, and ``transfers'',
situations in which the patient is transferred to another acute-care
hospital for related care. If a full DRG payment were made to each
hospital involved in a transfer situation irrespective of the length of
time the patient spent in the ``sending'' hospital prior to transfer,
this would create a strong incentive to increase transfers, thereby
unnecessarily endangering patients' health. Therefore, the regulations
at Sec. 412.4(d) provide that, in a transfer situation, full payment is
made to the final discharging hospital and each transferring hospital
is paid a per diem rate for each day of the stay, not to exceed the
full DRG payment that would have been made if the patient had been
discharged without being transferred.
Currently, the per diem rate paid to a transferring hospital is
determined by dividing the full DRG payment that would have been paid
in a nontransfer situation by the geometric mean length-of-stay for the
DRG into which the case falls. Transferring hospitals are also eligible
for outlier payments for cases that meet the cost outlier criteria
established for all other cases (nontransfer and transfer cases alike)
classified to the DRG. They are not, however, eligible for day outlier
payments. Two exceptions to the transfer payment policy are transfer
cases classified into DRG 385 (Neonates, Died or Transferred to Another
Acute Care Facility) or DRG 456 (Burns, Transferred to Another Acute
Care Facility), which are not paid on a per diem basis but instead
receive the full DRG payment.
1. Definition of a Transfer Case
Under current policy, cases that are transferred from an acute-care
area paid under the prospective payment system to a hospital or unit
excluded from the prospective payment system are considered to be
discharges (as opposed to transfers) from the acute-care hospital. As a
discharge, payment for the case is the full DRG amount.
The rationale for this policy was set forth in the initial hospital
inpatient prospective payment interim final rule with comment period,
which was published on September 1, 1983. In that document, we stated
that: ``* * * Hospitals and units excluded from the prospective payment
system are organized for treatment of conditions distinctly unlike
treatment encountered in short-term acute care facilities. Therefore,
the services obtained in excluded facilities would not be the same
services obtained in transferring hospitals (that is, paid under the
prospective payment system), and payment to both facilities would be
appropriate.'' (See 48 FR 39759.) Thus, since the prospective payment
hospital was assumed to be providing a full course of acute inpatient
care before transfer to the excluded hospital or unit for additional
care and treatment, we believed it was appropriate to pay the
prospective payment hospital the full DRG amount.
For the most part, inpatient hospital services furnished by
hospitals and hospital units excluded from the prospective payment
system are paid on a reasonable cost basis, subject to a cost per
discharge limit. This payment does not vary by source of admission or
discharge destination. Under Secs. 412.22 through 412.29, the following
types of facilities are identified as being excluded from the
prospective payment system: psychiatric hospitals and distinct part
units; rehabilitation hospitals and distinct part units; long-term care
hospitals; cancer hospitals; children's hospitals; hospitals outside
the 50 States, the District of Columbia, or Puerto Rico; Veterans
Administration and other Federal hospitals; and nonparticipating
hospitals furnishing emergency services to Medicare beneficiaries. Also
listed in Sec. 412.22(c) (2) and (3) are hospitals paid under approved
State cost control systems and hospitals reimbursed in accordance with
authorized demonstration projects. Under Sec. 412.4(b)(3)(i), patients
moving from an acute-care hospital paid under the prospective payment
system to hospitals within either of these categories are currently
considered transfers, and therefore they are not referred to in the
following discussion.
Since implementation of the prospective payment system over 10
years ago the distinctions between the types of services provided in
acute-care hospitals and excluded hospitals and hospital units have
become less clear. Acute-care hospitals may have an incentive to reduce
patient lengths of stay, and thus patient costs, in order to maximize
profits since payment is no longer linked to actual costs. This has led
to a steady increase in the numbers of excluded hospitals and units, as
well as postacute-care facilities, as acute-care hospitals look to
discharge patients whom heretofore they were treating until the
patients were ready to be discharged to their homes. (See Langenbruner
et al., Health Care Financing Review, Spring 1989.)
As part of a study of Medicare transfer cases funded by HCFA
(``Transfers of Medicare Hospital Patients under the Prospective
Payment System'', PM-191-HCFA, January 1994), RAND examined trends in
transfer episodes from FY 1987 to FY 1991. RAND's analysis found that,
from 1987 to 1991, while transfers from one prospective payment system
setting to another increased 4.1 percent, transfers from a prospective
payment system setting to excluded rehabilitation units and excluded
psychiatric units increased 18.9 percent and 7.0 percent, respectively.
We believe that this growth in transfers to excluded hospital units is
an indication that the distinction in the types of services provided in
short-term acute-care settings and excluded settings is not as
significant as it was in 1983.
In addition, in section VI.A. of this preamble, we are proposing
revised criteria for determining whether an entity qualifies for
exclusion from the prospective payment system as a separate long-term
care hospital. This proposed change is in response to situations where
hospitals are manipulating the process for recognition as a separate
Medicare provider in order to circumvent the prospective payment system
exclusion rules. For example, some hospitals have begun to organize
themselves under what they themselves refer to as the ``hospital within
a hospital'' model. The effect of such a reorganization is to grant an
exclusion to what is, for all practical purposes, a long-term care
hospital unit, even though section 1886(d)(1)(B) of the Act limits the
exclusion from the prospective payment system for hospital units to
rehabilitation and psychiatric units.
We believe that the motivation for such arrangements is primarily
financial and may lead to inappropriate transfers that are not
necessarily in the best interests of patients' health and well-being.
We strongly believe that patients should be treated in settings that
are best suited to provide the levels of care the patients need.
Decisions regarding the most appropriate setting should be based on
clinical criteria. To help ensure that this occurs, to the greatest
extent practicable, financial incentives should be neutral regarding
the setting wherein a patient is treated. This means matching payments
as nearly as possible to the resources required to treat the patient.
We believe our current definition of transfer cases provides financial
incentives on the acute-care side to transfer patients to excluded
hospitals and units in order to reduce lengths of stay and at the same
time receive payment at the full DRG amount. These incentives exist
whether the acute-care hospital is transferring patients to its
hospital-based excluded units or to other excluded hospitals.
For these reasons, we are proposing to change our definition of a
transfer case by adding new Sec. 412.4(b)(4) to include cases
transferred from an acute-care setting paid under the prospective
payment system to an excluded hospital or unit. We believe that this
policy would more appropriately pay those prospective payment hospitals
that are transferring patients to an excluded hospital or unit before
completion of a course of treatment. This policy would extend to cases
transferred to all excluded hospitals and units, Veterans
Administration hospitals, other Federal hospitals, and hospitals not
participating in Medicare. Discharges to non-hospital settings, such as
skilled nursing facilities and intermediate care facilities, would
still be paid as discharges.
2. Payment for Transfer Cases
Since the inception of the prospective payment system, there has
been concern that a flat per diem payment rate for transfer cases fails
to account for the likelihood that the beginning of a patient's
hospitalization is the most resource intensive portion of the stay.
Comments received in response to the September 1, 1983 interim final
rule recommended that the transferring hospital should receive either
the full DRG amount or should be paid on a sliding scale to reflect the
higher costs of the first few days of a patient's stay. Our response at
that time was that little or no data were provided in support of this
position (49 FR 245, January 3, 1984).
Last year, in the May 26, 1993 proposed rule, we responded to a
ProPAC recommendation concerning payment of transfer cases and
described the preliminary results of the analysis undertaken by RAND to
evaluate the adequacy of our transfer payment policy (58 FR 30245).
RAND found that among cases transferred prior to reaching the mean
length-of-stay, 1-day stays cost 2.096 times the per diem payment
amount for cases in nonsurgical DRGs (based on the geometric mean
length of stay) and 2.576 times the per diem for surgical DRGs. Among
nonsurgical transfer cases, the costs of 2-day stays are about 1.215
times the per diem payment amount, and cases transferred after 2 days
cost about 10 percent more than the applicable per diem amount. Among
surgical cases, the costs of stays of 2 or more days are actually about
7 percent below the applicable per diem amount.
To evaluate the impact of replacing the flat per diem methodology
with one designed to reflect the observed relationship between costs
and the first few days of hospitalization, RAND simulated a transfer
payment methodology that multiplies the per diem amounts by the
coefficients referred to above. The improvement in payment-to-cost
ratios for per diem transfer cases was significant, from 0.7224 under
current policy to 0.9722 using the scaled per diem.
We did not propose a change to the transfer payment policy last
year, however, due to concerns over the specification of the transfer
payment formula. First, the coefficients used to graduate the per diem
amount are dependent on the specification of the model and the data
employed. Ensuring the continued validity of the per diem weighting
factors would require frequent reestimation as other payment parameters
change and more recent data become available.
Second, we were concerned that weighting the per diem amounts by
the coefficients directly from the regression may overstate the
precision of the estimates of costs per day prior to transfer. Because
available data do not attribute charges or costs to a particular day,
the estimated costs for each additional day reflect the incrementally
higher costs per case compared to transfers occurring 1 day earlier.
If, in transfers occurring after 3 or more days, for example, costs per
day were more evenly distributed than the graduated per diem payments,
the coefficients in the regression might not reflect the costs of
additional days.
This leads to a third concern, that the graduation of the scaled
per diem amounts may generate inappropriate incentives to transfer
patients as soon as possible, that is, before the point at which costs
equal payments. This incentive could arise, for example, for cases in
which payments early in a patient's stay are greater than costs (that
is, cases with more even costs throughout the stay rather than high
costs in the first day or two). In such cases, the longer the patient
stays in the hospital, the more likely that total costs will approach
total payments. Under this scenario, a hospital seeking to maximize its
profit could do so by transferring the patient as soon as possible.
In order to address these concerns and to pay hospitals more
appropriately for the treatment they furnish to patients before
transfer, we are proposing at Sec. 412.4(d)(1) to pay transfers twice
the per diem amount for the first day of any transfer stay plus the per
diem amount for each of the remaining days prior to transfer, up to the
full DRG amount. We believe this method will improve the payment equity
for transfer cases in a straightforward way while alleviating our
concerns about a steeply graduated per diem based directly on
regression coefficients. We are proposing that this change be applied
uniformly for both medical and surgical transfer cases; although
surgical transfer cases appear to be more costly, on average, the first
day, they are relatively less costly for the second day and beyond.
Using the graduated per diem methodology we are proposing, RAND
estimated the payment-to-cost ratio of transfer cases that were
transferred prior to reaching the geometric mean length of stay would
be 0.9321. While this is somewhat less than the payment-to-cost ratio
for nontransfer cases (0.9645), it represents a significant improvement
over the current ratio for these cases (0.7224).
Since publication of the September 1, 1993 final rule, RAND has
completed the second and final phase of its study. This phase of the
study focused on the receiving hospitals and how they fare under our
current transfer payment policy. Their findings in this regard were
more ambiguous than in the case of sending hospitals. RAND performed
regressions on transfer cases in receiving hospitals to determine
whether these cases were more expensive than nontransfer cases within
the same DRGs. They found no consistent relationship.
Over 60 percent of all transfer cases were assigned DRGs from MDC 5
(Diseases and Disorders of the Circulatory System). According to RAND,
``* * * for the surgical DRGs in MDC 5 (DRGs 104 through 116), the
costs of transfer cases relative to nontransfer cases at the same
hospital range from almost the same (in DRG 106, coefficient = 0.007)
to about 11 percent greater (DRG 105, coefficient = 0.105). In the
medical DRGs in MDC 5, the range is even wider, with transfers received
into DRG 121 and 122 actually costing less than other cases in the same
DRG at the same hospital and transfers received in DRG 127 costing 37
percent more.'' (See RAND page 40.)
Based on these results, RAND did not recommend and we are not
proposing any change in the payments for the receiving hospital in a
transfer episode. That is, if the receiving hospital is also the final
discharging hospital, they will be paid the full DRG amount plus any
outlier payments they are eligible to receive (under either the day or
cost outlier thresholds). If the patient is transferred again prior to
discharge, then, under the change we are proposing, the sending
hospital in this second transfer episode would be paid using the
graduated per diem methodology, rather than the flat per diem rate they
currently receive.

B. Review of DRG Assignments (Sec. 412.60)

Under the provisions of Sec. 412.60(d), a hospital has 60 days from
the date of the notice of the initial DRG assignment of a claim to
request review of that assignment. The hospital may submit additional
information as part of its request. The intermediary reviews the
request and any additional information and decides if a change in the
assignment is appropriate. Any change by the intermediary to a higher-
weighted DRG must be reviewed by the hospital's Peer Review
Organization (PRO) to determine if the request and the change are
appropriate.
Under the first PRO contract cycle, this review was conducted on a
postpayment basis. However, the second PRO contract, effective July 1,
1986, required that this review be conducted on a prepayment basis.
Therefore, Sec. 412.60(d)(2) currently provides that the intermediary
must request that the PRO review any change in assignment to a higher-
weighted DRG.
Under the fourth contract cycle, the PROs are no longer required to
review these cases on a prepayment basis. Rather, the cases are flagged
and the PRO conducts a 100 percent review after payment. Therefore, we
are proposing to revise Sec. 412.60(d)(2) to conform the regulations to
current practice. At the same time, we would revise an incorrect cross-
reference to the regulations that govern the PROs' review of these DRG
reassignments. The correct cross-reference is Sec. 466.71(c)(2).

C. National Average Standardized Amounts for FY 1995 (Sec. 412.63)

Section 1886(d)(3)(A) of the Act directs the Secretary to compute
national average standardized amounts for use in determining payments
for inpatient operating services, updated annually by the applicable
percentage increase set forth under section 1886(b)(3)(B) of the Act.
Under section 1886(d)(3)(A)(ii) of the Act, for FYs 1988 through 1994,
the Secretary has computed separate national average standardized
amounts for large urban, other urban and rural areas. However, section
1886(d)(3)(A)(iii) of the Act requires that, for discharges occurring
after October 1, 1994, the average standardized amounts for hospitals
located in a rural area shall be equal to the average standardized
amount for hospitals located in an other urban area. We note that
hospitals located in a rural area will continue to be considered rural
for all other payment purposes, such as the disproportionate share
adjustment.
The Secretary has been applying updates to the average standardized
amounts for each fiscal year as provided under section 1886(b)(3)(B) of
the Act. For FY 1995, section 1886(b)(3)(B)(i)(X) of the Act directs
the Secretary to update the rural national average standardized amount
by the amount necessary to make it equal to the other urban national
average standardized amount.
Current Sec. 412.63(m) already reflects the requirement that, for
discharges occurring after October 1, 1994, we will pay for inpatient
hospital services based on national average standardized amounts for
large urban and other areas. Thus, there will no longer be separate
national average standardized amounts for other urban and rural areas.
However, we are proposing to make several technical changes to
Sec. 412.63(m) and (r), concerning computation of Federal rates, to
eliminate now obsolete references to the rural and other urban
standardized amounts and replace them with references to the
standardized amounts for other areas. In the addendum to this proposed
rule, we provide a description of the updates being proposed for FY
1995 under the requirements of sections 1886(b)(3)(B)(i)(X) and
1886(d)(3)(A)(iv) of the Act.

D. Outliers (Secs. 412.80, 412.82 and 412.84)

Section 1886(d)(5)(A) of the Act provides that, in addition to the
basic prospective payment rates, payments must be made for discharges
involving day outliers and may be made for cost outliers. Under section
1886(d)(3)(B) of the Act, the Secretary has been required to separately
reduce the urban and rural national standardized amount by the
proportion of estimated total DRG payments attributable to outliers in
each respective area. Beginning with FY 1995, section 1886(d)(3)(B) of
the Act, as amended by section 4002(c)(2)(B)(iii) of Public Law 101-
508, requires the Secretary to reduce the large urban and other
national standardized amounts by the same factor to account for the
proportion of total DRG payments made to outlier cases. (As explained
in section IV.C. of this preamble, section 1886(d)(3)(A)(iii) of the
Act specifies that beginning in FY 1995, the standardized amount for
other urban and rural areas will be equal, with the result that there
will be only two standardized amounts, one for large urban areas and
one for all other areas.) Section 1886(d)(9)(B)(iv) of the Act requires
that the urban and other standardized amounts applicable to hospitals
in Puerto Rico be reduced by the proportion of estimated total DRG
payments attributable to estimated outlier payments. Furthermore,
section 1886(d)(5)(A)(iv) of the Act directs that outlier payments in
any year may not be less than 5 percent nor more than 6 percent of
total payments projected or estimated to be made based on the
prospective payment rates.
Section 13501(c) of the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66) amended section 1886(d)(5)(A) of the Act with
respect to outliers beginning in FY 1995. With regard to cost outliers,
section 13501(c) of Public Law 103-66 requires that the Secretary
modify the methodology for determining the cost outlier threshold.
Formerly, section 1886(d)(5)(A)(ii) of the Act specified that a
hospital can receive payment for a cost outlier if the adjusted costs
for a discharge exceed the greater of a fixed dollar amount or a fixed
multiple the DRG payment for the case. As amended by section
13501(c)(2) of Public Law 103-66, section 1886(d)(5)(A)(ii) of the Act
now specifies that, for discharges on or after October 1, 1994, a
hospital may receive payment for a cost outlier if adjusted costs
exceed the DRG prospective payment rate plus a fixed dollar amount
determined by the Secretary. We will refer to this revised cost outlier
threshold as ``fixed loss.'' A further discussion of the methodology
for determining the fixed loss is provided below.
Section 13501(c) of Public Law 103-66 also amended section
1886(d)(5)(A) of the Act with respect to day outliers. Beginning with
FY 1995, section 1886(d)(5)(A) of the Act requires the Secretary to
reduce the proportion of total outlier payments paid under the day
outlier methodology. Under the requirements of section 1886(d)(5)(A)(v)
of the Act, the proportion of outlier payments paid under the day
outlier methodology, relative to the proportion of outlier payments in
FY 1994, shall be 75 percent in FY 1995, 50 percent in FY 1996 and 25
percent in FY 1997. Under the provisions of section 1886(d)(5)(A)(i) of
the Act, the Secretary will no longer pay for day outliers after
September 30, 1997. As indicated in the table published in our
September 1, 1993 final rule (58 FR 46348), we estimated that 18
percent of FY 1994 outlier payments would be for outliers meeting the
day outlier threshold only, while 13 percent would meet the day and
cost outlier thresholds and be paid under the day outlier methodology.
Thus, a total of 31.3 percent of total outlier payments in FY 1994
would be paid as day outlier cases. Pursuant to section 1886(d)(5)(A)
of the Act, we propose setting the day outlier thresholds for FY 1995
through FY 1998 so that day outlier payments approximate the following
proportion of total outlier payments:
FY 1995--24 percent (75 percent of 31.3 percent).
FY 1996--16 percent (50 percent of 31.3 percent).
FY 1997--8 percent (25 percent of 31.3 percent).
As payments to day outliers are reduced, there will be a
corresponding increase in payments to cost outliers.
1. FY 1995 Outlier Thresholds
For FY 1994, the day outlier threshold is the geometric mean length
of stay for each DRG plus the lesser of 23 days or 3.0 standard
deviations. The marginal cost factor (or the percent of Medicare's
average per diem payment paid for each outlier day) for day outliers is
equal to 55 percent in FY 1994. The cost outlier threshold is the
greater of 2.0 times the prospective payment rate for the DRG or
$36,000 ($33,000 for hospitals that have not yet entered the
prospective payment system for inpatient capital-related costs). The
marginal cost factor (or the percent of costs paid after costs for the
case exceed the threshold) for cost outliers is 75 percent.
For FY 1995, we propose to set the day outlier threshold at the
geometric mean length of stay for each DRG plus the lesser of 22 days
or 3.0 standard deviations. Section 13501(c)(3) of Public Law 103-66
provides that the additional payments for outlier cases may be
different than the hospital's marginal cost of care during the
transition period phasing out payments to day outliers. We are
proposing to revise Sec. 412.80 to reflect this provision. We also
propose to revise Sec. 412.82(c), so that it does not specify a
marginal cost factor of 55 percent. HCFA will specify the level of the
marginal cost factor during the day outlier phase-out in the annual
prospective payment system rulemaking process.
Our proposed policy would reduce the proportion of outlier payments
paid to day outliers as required by section 1886(d)(5)(A) of the Act.
We are proposing to accomplish the required reduction in payments to
day outliers for FY 1995 solely through a reduction in the marginal
cost factor rather than through an increase in the threshold. To
determine the marginal cost factor necessary to achieve the mandated
reduction in outlier payments, we simulated both the current and
proposed outlier policies. Based on these simulations, we determined
that a reduction in the marginal cost factor to 49 percent is necessary
to achieve the required 25 percent reduction in the proportion of
payments paid under the day outlier methodology. Therefore, we are
proposing to reduce the marginal cost factor from 55 percent in FY 1994
to 49 percent in FY 1995.
We are also proposing a fixed loss cost outlier threshold in FY
1995 equal to the prospective payment rate for the DRG plus $23,300
($21,400 for hospitals that have not yet entered the prospective
payment system for capital-related costs). The fixed loss threshold
would replace the current threshold, which is equal to the greater of
2.0 multiplied by the DRG payment for the case or $36,000. We are
proposing the fixed loss threshold under the requirements of section
1886(d)(5)(A) of the Act. We believe the fixed loss threshold is an
improvement over current policy because it focuses Medicare's outlier
payments on the most costly cases. Under current policy, it is possible
that cases in certain high-weight DRGs can incur losses significantly
greater than $36,000 before Medicare will make an outlier payment. (We
note that the fixed loss threshold is adjusted by the wage index,
similar to the current cost outlier threshold. Thus, hospitals that are
paid based on a wage index value of less than 1.0 will have this
threshold reduced while other hospitals will be paid based on a higher
threshold.)
To further focus Medicare's cost outlier payments on the costliest
cases, we are proposing to increase the marginal cost factor from 75
percent to 80 percent. We note that raising the marginal cost factor to
80 percent is consistent with a recommendation made by ProPAC in its
March 1, 1994 annual report. While we are raising the marginal cost
factor for cost outlier cases to 80 percent, we are continuing to set
the cost and day outlier thresholds in order to maintain the estimated
5.1 percent proportion of total DRG payments paid as outliers.
The thresholds we would propose if we were not implementing the
change in the day and cost outlier payment methodology required by
section 1886(d)(5)(A)(v) of the Act and discussed above would be:
Day outliers--The geometric mean length of stay for each
DRG plus the lesser of 21 days or 3 standard deviations.
Cost outliers--The greater of 2.0 times the prospective
payment rate for the DRG or $31,000.
We estimate that the proposed FY 1995 outlier thresholds would
result in 76 percent of outlier cases paid using the cost outlier
methodology and 24 percent paid using the day outlier methodology.
Cases that meet the day outlier threshold but that would be paid using
the cost outlier methodology, because it yields the higher payment,
would represent 20 percent of all outlier cases. Our simulation of FY
1995 outlier payments based on FY 1993 MedPAR data indicates that the
percentage of outlier cases that would qualify as day outliers is
approximately 67 percent. The cases qualifying as day outliers would
receive 69 percent of operating outlier payments in FY 1995. An
estimated 33 percent of outlier cases would be cost-only outlier cases,
which would receive about 31 percent of operating outlier payments.
The following table illustrates these findings in greater detail:

------------------------------------------------------------------------
Percentage
Percentage of Percentage Percentage
Type of outlier of outlier operating of capital of total
cases outlier outlier outlier
payments payments payments
------------------------------------------------------------------------
Meets day threshold
only............... 38.0 13.0 10.0 12.0
Meets day and cost
thresholds, paid
using day
methodology........ 9.0 11.0 9.0 11.0
Meets day and cost
thresholds, paid
using cost
methodology........ 20.0 45.0 44.0 45.0
---------------------------------------------------
Subtotal--All cases
meeting day
threshold.......... 67.0 69.0 63.0 68.0
Meets cost threshold
only............... 33.0 31.0 37.0 32.0
---------------------------------------------------
Total......... 100.0 100.0 100.0 100.0
------------------------------------------------------------------------

When we modeled the combined operating and capital outlier
payments, we found that using a common set of thresholds resulted in a
slightly higher percentage of outlier payments for capital-related
costs than for operating costs. We estimate the proposed thresholds for
FY 1995 would result in outlier payments equal to 5.1 percent of
operating DRG payments and 6.3 percent of capital payments based on the
Federal rate.
2. Outlier Changes Planned for FY 1996 Through FY 1998
As stated above, section 1886(d)(5)(A) of the Act requires us to
phase out payments for day outliers over the FY 1995 through FY 1997
period. We currently expect to meet the statutory reductions in day
outlier payments for FY 1996 and FY 1997 solely through a reduction in
the marginal cost factor without having to raise the day outlier
threshold. If necessary, we will propose achieving the reduction in day
outlier payments between FYs 1996 and 1997 through a combination of
reducing the marginal cost factor and raising the threshold. There will
be corresponding increases in payments to cost outliers as we phase-out
payment to day outliers. We welcome comments on this issue.

E. Rural Referral Centers (Sec. 412.96)

Under the authority of section 1886(d)(5)(C)(i) of the Act,
Sec. 412.96 sets forth the criteria a hospital must meet in order to
receive special treatment under the prospective payment system as a
rural referral center. For discharges occurring before October 1, 1994,
rural referral centers receive the benefit of payment based on the
other urban payment rate rather than the rural payment rate. As of that
date, the other urban and rural payment rates will be the same.
However, rural referral centers will continue to receive special
treatment under both the disproportionate share hospital payment
adjustment and the criteria for geographic reclassification.
One of the criteria under which a rural hospital may qualify as a
referral center is to have 275 or more beds available for use. A rural
hospital that does not meet the bed size criterion can qualify as a
rural referral center if the hospital meets two mandatory criteria
(number of discharges and case-mix index) and at least one of three
optional criteria (medical staff, source of inpatients, or volume of
referrals). With respect to the two mandatory criteria, a hospital is
classified as a rural referral center if its--
Case-mix index is at least equal to the lower of the
median case-mix index for urban hospitals in its census region,
excluding hospitals with approved teaching programs, or the median
case-mix index for all urban hospitals nationally; and
Number of discharges is at least 5,000 discharges per year
or, if fewer, the median number of discharges for urban hospitals in
the census region in which the hospital is located. (The number of
discharges criterion for an osteopathic hospital is at least 3,000
discharges per year.)
1. Case-Mix Index
Section 412.96(c)(1) provides that HCFA will establish updated
national and regional case-mix index values in each year's annual
notice of prospective payment rates for purposes of determining rural
referral center status. In determining the proposed national and
regional case-mix index values, we would follow the same methodology we
used in the November 24, 1986, final rule, as set forth in regulations
at Sec. 412.96(c)(1)(ii). Therefore, the proposed national case-mix
index value includes all urban hospitals nationwide, and the proposed
regional values are the median values of urban hospitals within each
census region, excluding those with approved teaching programs (that
is, those hospitals receiving indirect medical education payments as
provided in Sec. 412.105).
These values are based on discharges occurring during FY 1993
(October 1, 1992, through September 30, 1993), and include bills posted
to HCFA's records through December 1993. Therefore, in addition to
meeting other criteria, we are proposing that to qualify for initial
rural referral center status for cost reporting periods beginning on or
after October 1, 1994, a hospital's case-mix index value for FY 1993
would have to be at least--
1.3028; or
Equal to the median case-mix index value for urban
hospitals (excluding hospitals with approved teaching programs as
identified in Sec. 412.105) calculated by HCFA for the census region in
which the hospital is located.
The median case-mix values by region are set forth in the table
below:

------------------------------------------------------------------------
Case-mix
Region index
value
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT)...................... 1.1976
2. Middle Atlantic (PA, NJ, NY).............................. 1.2040
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)....... 1.3082
4. East North Central (IL, IN, MI, OH, WI)................... 1.2234
5. East South Central (AL, KY, MS, TN)....................... 1.2499
6. West North Central (IA, KS, MN, MO, NE, ND, SD)........... 1.2033
7. West South Central (AR, LA, OK, TX)....................... 1.2844
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................. 1.3572
9. Pacific (AK, CA, HI, OR, WA).............................. 1.3087
------------------------------------------------------------------------

The above numbers will be revised in the final rule to the extent
required to reflect the updated MedPAR file, which will contain data
from additional bills received for discharges through September 30,
1993.
For the benefit of hospitals seeking to qualify as referral centers
or those wishing to know how their case-mix index value compares to the
criteria, we are publishing each hospital's FY 1993 case-mix index
value in Table 3C in section V of the addendum to this proposed rule.
In keeping with our policy on discharges, these case-mix index values
are computed based on all Medicare patient discharges subject to DRG-
based payment.
2. Discharges
Section 412.96(c)(2)(i) provides that HCFA will set forth the
national and regional numbers of discharges in each year's annual
notice of prospective payment rates for purposes of determining
referral center status. As specified in section 1886(d)(5)(C)(ii) of
the Act, the national standard is set at 5,000 discharges. However, we
are proposing to update the regional standards. The proposed regional
standards are based on discharges for urban hospitals' cost reporting
periods that began during FY 1992 (that is, October 1, 1991 through
September 30, 1992). That is the latest year for which we have complete
discharge data available.
Therefore, in addition to meeting other criteria, we are proposing
that to qualify for initial rural referral center status for cost
reporting periods beginning on or after October 1, 1994, the number of
discharges a hospital must have for its cost reporting period that
began during FY 1993 would have to be at least--
5,000; or
Equal to the median number of discharges for urban
hospitals in the census region in which the hospital is located, as
indicated in the table below.

------------------------------------------------------------------------
No. of
Region discharges
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT)..................... 6707
2. Middle Atlantic (PA, NJ, NY)............................. 8965
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)...... 6972
4. East North Central (IL, IN, MI, OH, WI).................. 7043
5. East South Central (AL, KY, MS, TN)...................... 5363
6. West North Central (IA, KS, MN, MO, NE, ND, SD).......... 5649
7. West South Central (AR, LA, OK, TX)...................... 4385
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................ 8529
9. Pacific (AK, CA, HI, OR, WA)............................. 5768
------------------------------------------------------------------------

We reiterate that, to qualify for rural referral center status for
cost reporting periods beginning on or after October 1, 1994, an
osteopathic hospital's number of discharges for its cost reporting
period that began during FY 1993 would have to be at least 3,000.
3. Retention of Referral Center Status
Section 412.96(f) states that each hospital receiving the referral
center adjustment is reviewed every 3 years to determine if the
hospital continues to meet the criteria for referral center status. To
retain status as a referral center, a hospital must meet the criteria
for classification as a referral center specified in Sec. 412.96 (b)(1)
or (b)(2) or (c) for 2 of the last 3 years, or for the current year. A
hospital may meet any one of the three sets of criteria for individual
years during the 3-year period or the current year. For example, a
hospital may meet the two mandatory requirements in Sec. 412.96(c)(1)
(case-mix index) and (c)(2) (number of discharges) and the optional
criterion in paragraph (c)(3) (medical staff) during the first year.
During the second or third year, the hospital may meet the criteria
under Sec. 412.96(b)(1) (rural location and appropriate bed size).
A hospital must meet all of the criteria within any one of these
three sections of the regulations in order to meet the retention
requirement for a given year. That is, it will have to meet all of the
criteria of Sec. 412.96(b)(1) or Sec. 412.96(b)(2) or Sec. 412.96(c).
For example, if a hospital meets the case-mix index standards in
Sec. 412.96(c)(1) in years 1 and 3 and the number of discharge
standards in Sec. 412.96(c)(2) in years 2 and 3, it will not meet the
retention criteria. All of the standards would have to be met in the
same year.
The requirement for triennial review was originally added to the
regulations in 1984, to be effective for cost reporting periods
beginning on or after October 1, 1987 (the end of the first 3 years of
the referral center adjustment). However, three statutory moratoriums
on the performance of the triennial reviews were enacted by Congress.
The third of these moratoriums expires at the end of cost reporting
periods that began during FY 1994. (See the September 1, 1993 final
rule (58 FR 46310) for a detailed explanation of the moratorium and the
implementation of the triennial reviews.)
With the expiration of the current moratorium, we will begin
reviewing each rural referral center's compliance with the triennial
review criteria effective with cost reporting periods beginning on and
after October 1, 1994. As noted above, although rural referral centers
will no longer be paid a higher standardized amount than other rural
hospitals, hospitals approved as rural referral centers continue to be
entitled to higher disproportionate share payments and continue to
receive preferential consideration before the Medicare Geographic
Classification Review Board. Therefore, we believe it is important that
only those hospitals that meet the rural referral center triennial
review criteria continue to be so classified. Thus, effective with cost
reporting periods beginning on and after October 1, 1994, a hospital
that has been classified as a referral center for at least 3 years will
be subject to the triennial review criteria as discussed below.
In accordance with Sec. 412.96(f)(2), the review process is limited
to the hospital's compliance during the last 3 years. Thus, if a
hospital meets the criteria in effect for at least 2 of the last 3
years or if it meets the criteria in effect for the current year (that
is, the criteria for FY 1995 outlined above in this section of the
preamble), it will retain its status for another 3 years. No hospital
is subject to a review until the end of its third full cost reporting
period as a referral center. We have constructed the following chart
and example to aid hospitals that qualify as referral centers under the
criteria in Sec. 412.96(c) in projecting whether they will retain their
status as a referral center.
Under Sec. 412.96(f), to qualify for a 3-year extension effective
with cost reporting periods beginning in FY 1995, a hospital must meet
the criteria in Sec. 412.96(c) for FY 1995 or it must meet the criteria
for 2 of the last 3 years as follows:

------------------------------------------------------------------------
Use the
discharges
For the Use for the
cost hospital's hospital's
reporting case-mix cost Use numerical standards as published
period index for reporting in the Federal Register on
beginning FY period
during FY beginning
during FY
------------------------------------------------------------------------
1994..... 1992...... 1992...... September 1, 1993.
1993..... 1991...... 1991...... September 1, 1992.
1992..... 1990...... 1990...... August 30, 1991.
------------------------------------------------------------------------

Example: A hospital with a cost reporting period beginning July 1
qualified as a referral center effective July 1, 1992. The hospital has
fewer than 275 beds. Its 3-year status as a referral center is
protected through June 30, 1995 (the end of its cost reporting period
beginning July 1, 1994). To determine if the hospital should retain its
status as a referral center for an additional 3-year period, we will
review its compliance with the applicable criteria for its cost
reporting periods beginning July 1, 1992, July 1, 1993, and July 1,
1994. The hospital must meet the criteria in effect either for its cost
reporting period beginning July 1, 1995, or for two out of the three
past periods. For example, to be found to have met the criteria at
Sec. 412.96(c) for its cost reporting period beginning July 1, 1993,
the hospital's case-mix index value during FY 1991 must have equaled or
exceeded the lower of the national or the appropriate regional standard
as published in the September 1, 1992 final rule. The hospital's total
number of discharges during its cost reporting year beginning July 1,
1991, must have equaled or exceeded 5,000 or the regional standard as
published in the September 1, 1992 final rule.
For those hospitals that seek to retain referral center status by
meeting the criteria of Sec. 412.96(b)(1)(i) and (ii) (that is, rural
location and at least 275 beds), we will look at the number of beds
shown for indirect medical education purposes (as defined at
Sec. 412.105(b)) on the hospital's cost report for the appropriate
year. We will consider only full cost reporting periods when
determining a hospital's status under Sec. 412.96(b)(1)(ii). This
definition varies from the number of beds criterion used to determine a
hospital's initial status as a referral center because we believe it is
important for a hospital to demonstrate that it has maintained at least
275 beds throughout its entire cost reporting period, not just for a
particular portion of the year.

F. Determination of Number of Beds in Determining the Indirect Medical
Education Adjustment (Sec. 412.105)

Section 1886(d)(5)(B) of the Act provides that prospective payment
hospitals that have residents in an approved graduate medical education
program receive an additional payment to reflect the higher indirect
operating costs associated with graduate medical education. The
regulations regarding the calculation of this additional payment, known
as the indirect medical education (IME) adjustment, are at
Sec. 412.105. The additional payment is calculated by multiplying a
hospital's DRG revenue (including outlier payments) by the applicable
IME adjustment factor. The adjustment factor is calculated by using a
hospital's ratio of residents-to-beds in the formula set forth at
section 1886(d)(5)(B)(ii) of the Act.
Section 412.105(b) states that the number of beds used in the
resident-to-bed ratio is calculated by dividing the number of days
during the cost reporting period into ``the number of available bed
days during the cost reporting period, not including beds assigned to
newborns, custodial care, and excluded distinct part hospital units * *
*.'' Since we added this language to the regulations in the September
3, 1985 final rule (50 FR 35679 and 35690), there has been some
confusion over whether this definition includes or excludes bed days
attributable to neonatal intensive care units. This confusion has
resulted in some hospitals contesting their fiscal intermediaries'
inclusion of intensive care neonatal intensive care beds in the
hospitals' count of available beds.
Prior to the adoption of Sec. 412.105(b), the definition of
available beds was at section 2510.5A of the Provider Reimbursement
Manual--Part 1, which was originally used to establish bed-size
categories for purposes of applying the cost limits under section
1861(v)(1)(A) of the Act. That definition excluded newborn beds but
specifically included beds in intensive care units, coronary care
units, and other special care inpatient hospital units. This exclusion
of newborn beds was consistent with the exclusion of newborn days and
costs from the determination of Medicare's share of allowable routine
service costs (see section 2202.11B of the Manual). If a neonatal unit
qualifies as an intensive care unit, however, the costs of that unit
are included in determining Medicare's costs (see section 2202.7.II.B
of the Manual). Correspondingly, the days in a neonatal unit that
qualifies as an intensive care unit are counted as intensive care type
days rather than nursery days (see section 2202.7.II.A of the Manual).
Finally, section 2510.5A of the Manual clearly indicates that intensive
care unit beds and special care unit beds are included in a hospital's
bed complement.
In the September 3, 1985 final rule, we added the definition of
available beds to the regulations governing the IME adjustment (then
Sec. 412.118(b)). The expressed purpose for the change was to stop
counting beds ``based upon the total number of beds available on the
first day of the pertinent cost reporting period'' and to begin
counting based on ``the number of available bed days (excluding beds
assigned to newborns, custodial beds, and beds in excluded units)
during the current cost reporting period divided by the number of days
in the cost reporting period'' (50 FR 35679). We did not change the
definition of available beds. Our current position regarding the
treatment of these beds is unchanged from the time when the cost limits
established under section 1861(v)(1)(A) of the Act were in effect and
is consistent with the way we treat beds in other hospital areas. That
is, if the bed days and costs are allowable in the calculation of
Medicare's share of inpatient costs, the beds within that unit are
included as well.
Some hospitals have asserted that when we excluded beds assigned to
newborns, we changed our treatment of neonatal intensive care unit
beds. However, we note that the term ``newborn'' has historically been
used synonymously with nursery. Perhaps the clearest illustration of
this is the definition of a ``newborn inpatient day'' as a day that
``an infant occupies a newborn bed in the nursery'' (see section 2815
of the Provider Reimbursement Manual--Part 2.) This definition dates
back at least to 1975. If Sec. 412.105(b) was indeed meant to change
our established policy, we would have referenced that intent at the
time. This would have been necessary since neonatal intensive care
costs and days were still included in the calculation of Medicare's
costs. Finally, in August 1988, we issued Provider Reimbursement Manual
Transmittal No. 345, revising section 2405.3G of the Manual, which
provides implementing instructions for the IME adjustment. As part of
this revision, the definition of the number of beds was clarified to
specifically exclude beds ``* * * assigned to newborns which are not in
intensive care areas * * *.'' Those arguing that Sec. 412.105(b)
excludes neonatal intensive care unit beds from the hospital bed count
also argue that this Manual issuance is contradictory to the
regulations.
In order to clarify our policy, we are proposing to revise the
regulations at Sec. 412.105(b) to exclude specifically only beds
assigned to newborns in the nursery. Thus, neonatal intensive care beds
would not be excluded from the bed count. We would like to stress that
this does not represent a policy change in our bed counting rules, but
rather a reaffirmation of our longstanding position. Revising the
wording of the regulations should alleviate any future
misunderstandings, as well as clarify our position regarding previous
application of this policy, both before and since the original
publication of our bed counting regulations now specified at
Sec. 412.105(b).
We are also proposing to make a technical change to
Sec. 412.105(d)(1) to correct a reference.

G. Disproportionate Share Adjustment (Sec. 412.106)

Section 1886(d)(5)(F) of the Act provides for additional Medicare
payments for hospitals that serve a disproportionate share of low
income patients. Section 1886(d)(5)(F)(vii) of the Act, as added by
section 6003(c)(1)(B) of Public Law 101-239 and amended by section
4002(b)(1) of Public Law 101-508, specifies the formula for determining
the disproportionate share adjustment percentage for hospitals that are
located in an urban area and have 100 or more beds, or are located in a
rural area and have 500 or more beds. The statute establishes different
payment formulas for different years, including a change in the formula
for discharges occurring on or after October 1, 1994.
Regulations concerning the Medicare disproportionate share
adjustment are set forth at Sec. 412.106. Under Sec. 412.106(c)(1)(i),
a hospital that is located in an urban area and has 100 or more beds,
or is located in a rural area and has 500 or more beds, must have a
``disproportionate patient percentage'' of at least 15 percent to
qualify for a disproportionate share payment adjustment. Section
412.106(d)(2) sets forth the formulas for determining the
disproportionate payment adjustment factors applicable to these two
groups of hospitals.
We are not proposing changes to any part of Sec. 412.106 in this
proposed rule. However, we wish to ensure that hospitals are aware of
the revised payment formulas that will take effect in FY 1995 pursuant
to the statute. Specifically, for discharges occurring on or after
October 1, 1994, any such hospital with a disproportionate share
patient percentage greater than 20.2 percent will receive a
disproportionate share adjustment equal to 5.88 percent plus 82.5
percent of the difference between 20.2 percent and the hospital's
disproportionate share patient percentage.

H. Changes Affecting Essential Access Community Hospitals (EACHs) and
Rural Primary Care Hospitals (RPCHs) (Secs. 412.109, 485.602, 485.635,
and 489.102)

On May 26, 1993, we published a final rule to implement the EACH
program (58 FR 30630). The rule set forth the requirements for
designating certain hospitals as EACHs or RPCHs, the conditions that an
RPCH must meet to participate in Medicare, and the rules for Medicare
payment for services furnished by EACHs and RPCHs. The final rule
implemented section 1820 of the Act, as added by sections 6003(g) and
6116(b)(2) of Public Law 101-239 and revised by section 4008(d) of
Public Law 101-508. The amendments were intended to promote
regionalization of rural health services in grant States, improve
access to hospital and other health services for rural residents, and
enhance the provision of emergency and other transportation services
related to health care.
Since the publication of that rule, we have identified several
necessary additions to the EACH/RPCH provisions. First, to provide for
orderly review and adjudication of disagreements about whether a
facility's designation has been terminated properly, we propose to
specify under new Sec. 412.109(e) that a determination by HCFA that a
hospital does not meet the criteria for EACH designation, or that a
hospital's EACH designation should be terminated, is subject to review
under 42 CFR part 405, subpart R.
We also propose several clarifying changes to the definition of
``direct services'' at Sec. 485.602, as well as clarifying references
in Sec. 485.635, the condition of participation on provision of
services. These revisions merely would restate more clearly our
existing policies under which the services listed in Sec. 485.635(b)
(``direct services'') must be furnished by employed staff, not under
agreements or arrangements.
In addition, we are proposing to revise the range of laboratory
services that an RPCH must furnish as direct services. In a final rule
with comment period published on December 2, 1993 (58 FR 63533), we
revised the RHC regulations at Sec. 491.9 to eliminate, as required
direct services, tests not classified as waived under the Clinical
Laboratories Improvement Act of 1988 (CLIA). (See 42 CFR 493.15.) We
made these changes in the RHC regulations because the CLIA program
introduced participation requirements that may cause some RHCs to
withdraw from the program, creating a shortage of available medical
care in some areas.
Because RPCHs typically are located in rural areas similar to those
served by RHCs and serve similar patient populations, and because the
RPCH designation criteria in section 1820(f)(1)(H) of the Act state
that RPCHs must meet the requirement for direct provision of routine
diagnostic services in the statutory definition of ``rural health
clinic,'' we believe it is appropriate to impose the same requirements
in both settings. Therefore, we propose to revise the RPCH regulations
at Sec. 485.635 to require the RHCs to provide directly the following
laboratory services:
(1) Chemical examination of urine by stick or tablet method or both
(including urine ketones);
(2) Hemoglobin or hematocrit;
(3) Blood glucose;
(4) Examination of stool specimens for occult blood;
(5) Pregnancy tests; and
(6) Primary culturing for transmittal to a certified laboratory.
We note that this change would not prevent any RPCH from providing
tests that are not listed in Sec. 485.635(b)(2). An RPCH is free to
choose a higher level CLIA certification than the certificate of waiver
if it wishes to provide tests of a higher complexity and to comply with
all CLIA requirements.
The current regulations do not set out a clear and consistent
position on the applicability of the advance directives requirement.
Under the regulations in Sec. 485.645(b)(1), swing-bed RPCHs are
required to meet a number of skilled nursing facility (SNF)
requirements, including Sec. 483.10(b)(4). That regulation requires
that the patient be given the right to make an advance directive. (An
advance directive is a written instruction, such as a living will or a
durable power of attorney for health care, that deals with the
provision of health care when the individual is incapacitated. See
Subpart I of 42 CFR Part 489.) Thus, the regulations apply the advance
directives requirement to RPCH inpatients receiving a SNF level of care
in swing beds, but not to inpatients receiving RPCH care.
We believe the RPCH benefit could be administered more simply and
equitably if both hospitals and RPCHs were required to comply with the
same advance directives requirement. As explained in the preamble to
the May 26, 1993 final rule on EACHs (58 FR 30635-30636), as authorized
by section 1861(e) of the Act, we have read the word ``hospital'' to
include RPCHs where the context appears to support such a reading. We
believe the context of section 1866(a)(1)(Q) of the Act would support
this reading, since many patients are likely to seek RPCH care as an
alternative to treatment in a hospital or SNF, and many RPCHs will
accept patients who are at risk of the kind of incapacitating condition
addressed by an advance directive. Thus, we propose to revise the
regulations at Sec. 489.102 to provide for more consistent application
of the advance directive requirement, by specifying that it will apply
to RPCHs on the same basis as to hospitals.
We believe this approach is simpler to administer and expands
beneficiary rights. Moreover, since all prospective RPCHs must be (or
have been) hospitals and have been required to meet the advance
directive requirement, there should not be any added burden.

I. Clarification of Payment to RRC/EACH Hospitals

We wish to clarify a response in the EACH final rule of May 26,
1993 (58 FR 30639-30640), regarding the effect on a rural referral
center's (RRC) payment rate should it elect to become an EACH. An RRC
that elects to become an EACH is considered to have dual
classification; that is, it is classified as an RRC/EACH. Since section
1886(d)(5)(D)(iii)(III) of the Act specifies that an EACH is to be
treated as an sole community hospital (SCH), in determining which of
the three payment rates will yield the highest aggregate payment, we
will use the ``other'' standardized amount in determining the Federal
payment rate for discharges occurring on or after October 1, 1994. (As
discussed above, as of that date, the other urban and rural payment
rates will be the same.) For discharges occurring before October 1,
1994, the Federal payment rate is based on the ``other urban'' payment
rate.
Thus, an RRC that elects to become an EACH is paid based on
whichever of the following rates yields the greatest aggregate payment
for the cost reporting period:
The national Federal rate applicable to the hospital (that
is, other urban before October 1, 1994 and ``other'' on or after that
date);
The updated hospital-specific rate using FY 1982 cost per
discharge; or
The updated hospital-specific rate using the FY 1987 cost
per discharge.

J. Direct Graduate Medical Education Payment (Sec. 413.86)

1. Definition of Initial Residency Period
Section 1886(h)(4) of the Act bases payment for direct graduate
medical education (GME) costs on the hospital's number of full-time
equivalent (FTE) residents multiplied by a hospital-specific adjusted
base year per resident amount. The number of FTE residents is
determined by applying a weighting factor to each FTE resident. A
resident in an initial residency period is weighted as 1.0 FTE.
Residents in approved training programs that are beyond their initial
residency period are required by law to be counted as .50 FTE. The
initial residency period is defined at Sec. 413.86(g)(1), as the
minimum number of years of formal training necessary to satisfy the
requirements for initial board eligibility in the particular specialty
plus 1 year, not to exceed 5 years.
Section 13563(b) of Public Law 103-66 amended section 1886(h)(5)(F)
of the Act by deleting ``plus one year'' from the statutory definition
of initial residency period, effective July 1, 1995. To conform the
regulations to the statute, we propose to revise Sec. 413.86(g)(1) by
specifying that, effective July 1, 1995, an initial residency period is
defined as the minimum number of years required for board eligibility.
For example, if a resident completed a 3-year internal medicine
program and then started a cardiology program that requires an
additional 2 years of training, the resident would be counted as 1.0
FTE for the 3 years spent in internal medicine and as a .50 for 2 years
in the cardiology program. (Prior to Public Law 103-66, the resident
would have been counted as 1.0 FTE during the first year of the
cardiology residency program.)
2. Part-time Resident
Currently, the last sentence of Sec. 413.86(f)(1)(ii) specifies
that, for purposes of GME, ``[a] part-time resident counts as a partial
FTE based on the proportion of time worked as compared to the average
time spent by other residents working in the same specialty program.''
The definition of part-time resident for purposes of GME is
consistent with the definition of part-time resident for purposes of
IME. However, the language in the regulations text differs and this
difference has led to some confusion. Therefore, we are proposing to
revise the language at Sec. 413.86(f)(1)(ii) as follows:
A part-time resident counts as a partial FTE based on the
proportion of time worked in the hospital compared to the total time
necessary to fill a full-time internship or residency slot.
This definition of part-time resident, for the purpose of
determining GME full-time equivalent resident counts, is consistent
with the IME definition specified at Sec. 412.105(g).
Thus, in determining the FTE count for a part-time resident, for
purposes of GME, the proportion of time the resident works in an
approved program in any area of the hospital complex is compared to the
total time necessary to fill a full-time slot.
We are also proposing to make a technical change to
Sec. 412.113(b)(3) to correct a reference to Sec. 413.86.

K. Other Technical Changes (Sec. 412.232)

We are republishing provisions in Sec. 412.232(c) that were
inadvertently deleted from the regulations text published in the Code
of Federal Regulations (CFR) due to an error in amendatory language in
our September 1, 1992 final rule. In order to provide the public with
the complete text of the provisions of Sec. 412.232(c), pending
publication of the next edition of the CFR, we are publishing
Sec. 412.232(c) in its entirety.

V. Proposed Changes and Clarifications to the Prospective Payment
System for Capital-Related Costs

A. Evaluation of Provisions Relating to Obligated Capital for Hospitals
Subject to Lengthy Certificate-of-Need (CON) Process
(Sec. 412.302(c)(2))

Section 412.302(c)(2) of the regulations specifies the conditions
under which capital projects may be treated as obligated capital for
hospitals subject to a lengthy CON process. Under this provision, a
capital project that is subject to a CON process may qualify as
obligated capital if several conditions are met. These conditions are:
The hospital is required under State law to obtain prior
approval of the capital project by a designated State or local planning
authority in the State in which the hospital is located;
The hospital filed by December 31, 1989, an initial
application meeting the requirements of the State that includes, at a
minimum, a detailed description of the project and its estimated cost,
and had not received approval or disapproval by September 30, 1990;
The hospital expended the lesser of $750,000 or 10 percent
of the estimated project cost by December 31, 1990; and
The project is completed and the asset put into use for
patient care on or before the earlier of September 30, 1996 or 4 years
from the date CON approval is received.
The purpose of allowing hospitals in CON states to qualify projects
for recognition as obligated capital under these special conditions was
to recognize that in situations where there is a lengthy CON process,
hospitals may have deferred making the legal commitments required under
the general rule for recognizing obligated capital until the CON
approval was received. We believe that such hospitals should not be
disadvantaged if they reasonably anticipated the CON approval process
in their capital planning but were unable to meet the December 31, 1990
cut-off date for obligated capital because timely approval had not been
received. Our intent was not to afford more favorable treatment for
these hospitals relative to other hospitals, but rather to make a
reasonable and equitable allowance for the impact a lengthy CON process
may have on the ability of hospitals that have already made a
substantial financial commitment to meet the criteria for recognition
of obligated capital costs. Thus, the intent was to put these hospitals
on an even footing with other hospitals.
Since we established this special provision in the August 30, 1991
final rule implementing the prospective payment system for capital-
related costs (56 FR 43393-43394), we have received comments from
individual hospitals and hospital associations requesting revision to
the provision. With one exception, these hospitals come from a single
State and indeed most of them are located in a single large urban area
of that State. Citing varied problems and delays frequently encountered
throughout the CON process, such as a requirement for separate CON
approval for each phase of a multi-phase project, the commenters have
suggested that the policies be revised as follows:
Allow later phases of a staged construction project to be
deemed part of the originally approved obligation for purposes of
meeting the December 31, 1989 deadline.
Extend the deadline for putting the project into use for
patient care by up to 3 years.
Allow a 10-year transition for each phase under the hold-
harmless methodology.
We stated in our September 1, 1993 final rule that we would conduct
an evaluation of the issues raised by these commenters once we were
able to obtain data on the impact of the current provision. We also
noted that any reassessment of the current provisions would be made
solely within the policy framework used to establish the initial
transition payment policies. We emphasized that we would not adopt
revisions that would give hospitals subject to CON processes more
favorable treatment than other hospitals.
We now have limited, but significant, data available on the impact
of the obligated capital provisions. Since the beginning of the capital
prospective payment system, the Medicare intermediaries have compiled a
special data set to monitor the implementation of the system. These
intermediary data have provided us with information concerning
virtually all hospitals that have requested recognition of obligated
capital and the amount, if any, of the obligated capital approved by
the intermediary. Using this data, we have been able to develop some
relevant comparisons. The data show, for example, that nationally 42.9
percent (2,281 out of 5,316) of all hospitals requested recognition of
obligated capital. A total of $21.2 billion in obligated capital has
been recognized by the intermediaries. The average amount of obligated
capital recognized is $9.3 million per requesting hospital.
Since most of the comments concerning the effects of the CON
provision have come from a small group of hospitals in one particular
State with a lengthy CON process, we compared the data for that group
of hospitals, and the hospitals in that State as a whole, with the
national average and the averages for similar States. We found that the
group of hospitals that has recommended revisions to the current rule
had an average approved amount of obligated capital far above the
national average approved amount per requesting hospital. All of the 21
hospitals in the group in question requested recognition of obligated
capital. Furthermore, 17 of those hospitals (81 percent) received at
least partial approval of that request. The average amount of obligated
capital approved was $139.5 million. Since 1 of these 21 hospitals
received approval for an extraordinarily large obligated capital
project, we also computed the average amount of obligated capital
approved for the other 20 hospitals. Even excluding the hospital with
the extraordinarily large project, the average amount of obligated
capital approved in the group in question is $67.5 million. This group
of 21 hospitals, in fact, accounted for 13.8 percent of all the
obligated capital recognized in the country (6.4 percent for 20
hospitals, excluding the hospital with the extraordinarily large
project). This group of hospitals also has averages of obligated
capital approved that are significantly above the average for the State
in which they are located. In turn, the averages for the State in which
they are located are significantly higher than the averages for similar
States (that is, States with large populations, CON processes, and/or
large urban areas).
Although the fiscal intermediary data base contains data on the
amount of obligated capital approved for each hospital, it does not
include data on the amount of obligated capital requested by each
hospital. We are therefore unable to develop ratios of obligated
capital approved to obligated capital requested for specific hospitals
and groups of hospitals in order to determine whether that ratio is
lower for this group of hospitals than the average for any regional or
other groups of hospitals. However, we believe that the large amounts
of obligated capital approved for the hospitals that have requested
revision of the current rules indicate that the current rules do not
disadvantage hospitals subject to lengthy CON processes.
In addition, our current data also cannot show how much of the
obligated capital tentatively approved by the intermediaries will
eventually meet the deadlines imposed under the general rule for
obligated capital and each of the special rules for putting assets into
use for patient care. Under the general rule, the asset must be put in
use for patient care no later than October 1, 1994 (which is 45 months
after the latest date by which the asset must have been obligated under
the general rule). In cases of extraordinary circumstances beyond the
hospital's control, that deadline can be extended to no later than
September 30, 1996. For hospitals in CON states, the deadline for
putting the asset into use for patient care is the earlier of September
30, 1996 or 4 years from the date of CON approval
(Sec. 412.302(c)(2)(D)).
Thus, under current regulations, hospitals that receive CON
approval after September 30, 1992 may have less than 4 years to
complete the project in order to meet the deadline. In the interests of
maintaining an equal playing field for those hospitals, we are
proposing to change the deadline for putting assets into use for
patient care to the later of September 30, 1996 or 4 years from the
date of CON approval. We believe that establishing any later deadline
for hospitals in CON states would violate the principle of equal
treatment by giving those hospitals an advantage over hospitals that
must satisfy the upcoming deadline established in the general rule for
obligated capital.
On the basis of the available data, it appears that the existing
CON provision has otherwise given this group of hospitals fair access
to the special protection for obligated capital. The amounts of
obligated capital approved for the affected hospitals simply do not
support the need for more extensive relief to these hospitals in the
context of the obligated capital provisions. Revision of practically
every element of the obligated capital provision would be required to
accommodate all the requests of the affected hospitals. Since it
appears the CON rules have provided fair access to obligated capital
protections, we do not believe that it would be appropriate to propose
significant changes. We are therefore proposing no other revisions to
the obligated capital rules at this time.
However, this does not mean that revisions to other provisions of
the capital prospective payment system, such as the exceptions process,
are also unwarranted. The same hospitals that have recommended changes
in the obligated capital rules have also recommended policy measures in
connection with exceptions payments under the prospective payment
system for capital-related costs. Specifically, these hospitals have
asked that the present 80 percent minimum payment level for urban
hospitals with at least 100 beds and a disproportionate share
percentage of at least 20.2 percent be guaranteed through the rest of
the transition and extended for at least 10 years after the transition.
While we do not propose to adopt those precise recommendations, we have
tried to address the legitimate concerns of these hospitals in
developing the revisions which we are proposing to exceptions payment
policy below in section V.C. of this preamble.

B. Specific Adjustment for Taxes to the Capital Prospective Payment
System Federal Rate (Sec. 412.312)

In the August 30, 1991 final rule implementing the capital
prospective payment system, we acknowledged the need to study whether
special treatment of the property tax component of capital-related
costs is appropriate (56 FR 43364-43365). Subsequently, comments
received on the May 26, 1993 proposed rule asked that we revisit this
issue in a timely manner to eliminate any inequitable payment
distributions. One of the commenters also suggested a specific
methodology to adjust the capital Federal rate using a capital
prospective payment system base-year survey to develop a hospital-
specific adjustment to the capital Federal rate payment.
The Medicare cost report has recently been revised to obtain tax
data directly from each hospital for cost reporting periods beginning
on or after October 1, 1991 (FY 1992). These data are just now becoming
available to us. Our preliminary review indicates a need for additional
information and analysis. The FY 1992 cost report data currently
available show that with slightly less than 90 percent of all
prospective payment system hospitals in the data base (only 60 percent
of which reflect audited data), only 77 percent of the proprietary
hospitals reported property tax payments. This leaves a significant
number of proprietary hospitals for which no tax data have been
reported. In addition, approximately 13 percent of the non-proprietary
hospitals are reporting some form of payments ``in lieu of taxes.'' The
nature of the payments ``in lieu of taxes'' is not yet entirely clear.
Given the limitations of the available data, we believe that it
would be premature to develop a proposal for a property tax adjustment.
We do not believe that we should proceed with development and
implementation of a property tax adjustment until we have determined
the status of the reported payments in lieu of taxes and whether an
adjustment would be appropriate for these expenses. We also need to
determine why a significant number of proprietary hospitals have
reported no tax payments and what effect this might have on a budget
neutrality adjustment to the Federal rate if a property tax adjustment
were adopted. We have therefore asked our regional offices to develop
information on a sample of hospitals from each group in order to refine
and complete our analysis. We invite submission of relevant information
and data by interested parties and the public during the comment period
to this proposed rule.
Furthermore, although we appreciate the concern that this issue
addresses, we believe that at this point the possible adverse effects
of our current policy are minimal. Capital costs represent less than 10
percent of total costs and a proprietary hospital's average tax cost
burden for assessed property represents only 7 to 9 percent of its
total capital-related costs. The tax burden for proprietary hospitals
thus amounts to less than 1 percent of total costs. In addition, for
the first 5 years of the capital prospective payment system transition
period, the majority of payments to most hospitals are based on each
hospital's own cost experience. Therefore, we do not believe delaying a
specific adjustment to proprietary hospitals until more data are
available would cause undue hardship to the affected hospitals.
In the interim, we hope to advance the discussion of this issue by
raising the issue of whether a property tax adjustment would be
appropriate and by presenting one approach to such an adjustment. We
welcome comments and recommendations on every aspect of this
presentation.
One approach to a methodology for a property tax adjustment for
proprietary hospitals is to develop a property tax factor (PTF) from
data on hospital-specific tax payments in the most recently audited
cost reporting year.
The PTF would take the form of a percentage add-on to the Federal rate
and would remain fixed for future periods. That is, unless a hospital
had property tax costs in its most recently audited cost reporting
year, it would not qualify for an adjustment. The PTF would be based on
capital cost and property tax information provided on the most current
audited cost report, as follows:
(1) Audited cost report property tax data;
(2) Total capital cost for that year;
(3) Property tax unit cost multiplier (Line 1 divided by Line 2);
(4) Medicare inpatient capital cost;
(5) Medicare inpatient property taxes (Line 3 times Line 4);
(6) Medicare discharges;
(7) Medicare inpatient property taxes per discharge (Line 5 divided
by Line 6);
(8) Federal capital rate (for fiscal year with most recent audited
data);
(9) Property tax factor (Line 7 divided by Line 8).
This approach would be consistent with the philosophy of a
prospective payment system. Although the initial determination of the
PTF reflects a hospital's actual tax burden in a specific year, the PTF
divorces payment from subsequent changes in the tax costs a hospital
may experience. Because the PTF would be determined on the basis of tax
costs from an audited cost reporting year and computed as a constant
ratio of the Federal rate, States could not use property tax changes to
capriciously increase Medicare reimbursement. Under this plan,
Medicare's payment for taxes would increase with the underlying rate of
increase in the Federal rate.
One objection to the PTF is that over time the ratio of actual
Medicare allowable property taxes to Medicare inpatient capital costs
in a rate year could diverge from the ratio in the year used to set the
PTF. Such a divergence would create windfall gains or losses for
particular hospitals, but we know of no way to determine the magnitude
of possible gains and losses to particular hospitals. The greater the
magnitude of such gains and losses, the less appropriate the PTF
methodology would be. We welcome information on this issue and
recommendations about how to determine the magnitude of such gains and
losses, while safeguarding the program from arbitrary increases in
hospital taxes.
A related problem is that applying a constant ratio to the Federal
rate has the effect of increasing (or decreasing) the amount of the
adjustment for property taxes across all hospitals by the same factor
as the increase (or decrease) to the national rate. We currently have
no data that show conclusively whether property taxes generally
increase at the same rate as capital costs as a whole. This is
difficult to determine since property tax assessment systems vary
enormously from one locality to another, and changes in property taxes
can reflect complicated changes in tax rates, methods of property
assessment, and the tax base (that is, the percent of property value
subject to tax assessment) in different localities, as well as
appreciation of existing property values. We know of no definitive
sources of information on this matter. We encourage submission of
relevant information, observations, and suggestions.
An alternative methodology could employ a hospital-specific add-on
amount, as opposed to the hospital-specific ratio discussed above. Such
an add-on could be determined on the basis of the base year tax costs
per discharge attributable to Medicare. This alternative may be
preferable if strong evidence emerges that property taxes do not tend
to increase at the same rate as other capital costs. However, in that
case, a tax increase index would need to be developed. We welcome
comments on the merits of this alternative.
We are especially interested in comments regarding an adjustment
for non-proprietary hospitals that make payments in lieu of taxes and
on a methodology for determining such an adjustment. As we previously
noted, 13 percent of non-proprietary hospitals report payments in lieu
of taxes. The uncertainty about the exact nature of those payments is
one reason why we have decided to delay implementation of a specific
property tax adjustment for those hospitals. However, our initial
limited investigation of this issue suggests that those payments do not
reflect assessments that can be categorized as capital-related costs
under Sec. 413.130(a)(3). It appears that some non-proprietary
hospitals may have reflected payments made for assessments that are not
based on the valuation of the hospital's real or personal property.
Thus, the available evidence does not support adoption of an adjustment
for non-proprietary hospitals' payments in lieu of taxes. However, we
will continue to study this matter.
Any property tax adjustment would have to be implemented in a
budget neutral fashion, so that total estimated payments under the
prospective payment system for capital-related costs with such an
adjustment would equal total estimated payments in the absence of a
property tax adjustment. A property tax adjustment applied to the
Federal rate thus requires a corresponding reduction to the base
Federal rate to assure budget neutrality. It is impossible to determine
the precise magnitude of the required adjustment to the Federal rate
until we determine both the status of those proprietary hospitals that
are not currently reporting taxes and the nature of the payments
reported by non-proprietary hospitals in lieu of taxes. However, since
our preliminary data indicates that tax payments by proprietary
hospitals are at least 0.77 percent of total capital costs, we believe
that a reduction to the base capital rate of at least 0.77 percent
would be necessary. The final amount of the necessary adjustment to the
Federal rate would depend upon the ultimate determination concerning
the proprietary hospitals not reporting tax payments and the nature of
the payments reported by non-proprietary hospitals. We welcome comments
on the equity of removing tax amounts from the base Federal rate and
distributing them only to tax-paying hospitals in the form of an
adjustment to the Federal rate payment. Our concern is that special
payment adjustments recognize only costs that are distinguishable and
unique. We also wish to avoid granting unwarranted advantages to any
particular class of hospitals.
We plan to conduct further analysis on this issue prior to the
publication of the final rule. We will also analyze comments and
recommendations submitted in response to this discussion. We will make
a determination concerning whether to adopt a property tax adjustment,
and the form that any such adjustment would take, when we have obtained
sufficient relevant data and have resolved all significant problems
inherent to any adjustment methodology.

C. Revision of Provision Relating to Exceptions Payment (Sec. 412.348)

Section 412.348 provides that, during the transition period, a
hospital may receive additional payment under an exceptions process
when its regular payments are less than a minimum percentage,
established by class of hospital, of the hospital's reasonable capital-
related costs. The amount of the exceptions payment is the difference
between the hospital's minimum payment level and the payments the
hospital would receive under the capital prospective payment system in
the absence of an exceptions payment. The comparison is made on a
cumulative basis for all cost reporting periods during which the
hospital is subject to the capital prospective payment transition
rules.
Under current Sec. 412.348(b)(1), the minimum payment percentages
by class of hospitals for FY 1995 are:
For sole community hospitals, 90 percent;
For urban hospitals with at least 100 beds that have a
disproportionate share patient percentage of at least 20.2 percent or
that received more than 30 percent of its net inpatient care revenues
from State or local governments for indigent care, 80 percent;
For all other hospitals, 70 percent of the hospital's
reasonable inpatient capital-related costs.
The current regulations also provide that total estimated payments
under the exceptions process in a year may not exceed 10 percent of
total estimated capital prospective payments (exclusive of hold-
harmless payments for old capital) for the same fiscal year. As we
stated in the August 30, 1991 final rule, we will revise the minimum
payment percentages during any subsequent transition year, if
necessary, to ensure that exceptions payments do not exceed the 10
percent limit. It has not yet been necessary to reduce the original
minimum payment percentages to meet the 10 percent limit.
In the final rule for the prospective payment system for capital-
related costs, we stated that we would carefully monitor the impact of
the capital prospective payment system in order to determine whether
``some type of permanent exceptions process is necessary and the
circumstances under which additional payments would be made (56 FR
43409).'' Since the publication of the final rule for the capital
prospective payment system, several commenters have urged us to provide
special protection for hospitals that are undertaking major renovation
or replacement of aging facilities during the decade of the transition.
These commenters have pointed out that, unlike hospitals that undertook
major renovation or replacement during the 1980s, many hospitals that
undertake capital replacement or renovation projects during the
transition do not qualify for the protection for old capital or
obligated capital during the transition. In addition, unlike hospitals
that will undertake major capital replacement or renovation in the
decade after the transition period, such hospitals have not had an
opportunity to accrue capital prospective payments to fund the
projects. We are aware of a number of major projects, scheduled for
completion later in the transition, that could therefore not be
included as old or obligated capital, and that involve major
replacement or renovation of aging facilities. In the design of the
capital prospective payment system, we have made every effort to
consider the circumstances of hospitals for whom the transition to
prospective payment poses special difficulties. We agree with the
commenters that hospitals that need to undertake major renovation or
replacement projects during the transition face special difficulties
merely because of the timing of their projects. We do not believe that
the Medicare program should guarantee to underwrite every major program
of replacement or renovation of capital assets. However, under certain
circumstances we believe that it is fair to provide special protection,
through the exceptions process, for hospitals that find themselves in
the circumstances cited.
In addition to the exceptions categories identified above, we are
therefore proposing at Sec. 412.348 to provide special protection for
some hospitals that are undertaking major projects to renovate or
replace aging plant during the transition period. This special
protection, which will provide a 70 percent minimum payment level for
up to ten years beyond the transition period, will be available only to
the following classes of hospitals:
Sole community hospitals that have a current ratio less
than or equal to of 1.75 in the exception year;
Urban hospitals with at least 100 beds that either have
disproportionate share percentages of at least 20.2 percent or receive
at least 30 percent of their revenue from State or local funds for
indigent care, and that have a current ratio less than or equal to 1.75
in the exception year; and
Hospitals with a combined inpatient Medicare and Medicaid
utilization of at least 70 percent. In addition, the hospital must meet
an age of asset test and, if applicable, receive approval for the
project from a State or local planning authority. If planning approval
is not required, an urban hospital must demonstrate either that it is
in a metropolitan statistical area (MSA) that does not have an overall
average occupancy rate less than 80 percent or that its capacity is no
more than 80 percent of its prior capacity (in terms of bed size).
We believe that this exception should apply only to hospitals that
have previously been identified for special protection under the
Medicare program (that is, sole community hospitals or large urban
hospitals that serve disproportionate shares of indigent patients), or
that have heavy utilization by beneficiaries of the Federal health
programs. The average hospital utilization by Medicaid beneficiaries is
approximately 10 percent. Hospitals with 60 percent Medicare
utilization can reasonably claim high Medicare utilization rates. We
have therefore determined that, aside from certain sole community
hospitals and large urban disproportionate share hospitals, this
special exception should be restricted to hospitals with combined
Medicare and Medicaid utilization of at least 70 percent.
We are also requiring that sole community hospitals and large urban
disproportionate share hospitals must have current ratios of less than
or equal to 1.75 in order to be eligible for this special exception. We
do not believe that hospitals that do not have high Medicare and
Medicaid utilization should be eligible for this special exception
unless they are financially vulnerable. The current ratio is perhaps
the most widely used measure of hospital liquidity. It is defined as
the number of dollars held in current assets per dollar of current
liabilities. Thus, higher values reflect a stronger short-term
financial condition. A current ratio of 2.0 or better is a common
hospital target for financial performance. We therefore believe that a
current ratio of less than or equal to 1.75 is a sufficient indication
of financial stress to qualify for special protection under the
exceptions policy. The current ratio can be determined from information
available on the Medicare cost report (HCFA 2552-92, Worksheet G, Lines
11 and 43).
One concern that we have about the use of the current ratio as a
measure is that it may be possible for hospitals to manipulate cost
report statistics to meet a current ratio threshold. Some analysis
suggests that the current ratio should be supplemented by measures such
as days in accounts receivable and/or days in accounts payable in order
to reduce the prospects for manipulation. We will continue to study
this issue before publication of a final rule on this special
exceptions provision. We welcome comments on the use of the current
ratio as a measure of hospital financial vulnerability, on the
appropriate threshold under this measure, and on whether the current
ratio should be supplemented by other measures.
An eligible hospital must pass an age of asset test in order to
qualify for an exception. Hospitals almost universally have plant and
equipment of varying ages. The average age of a hospital's assets is
commonly determined as the ratio of accumulated depreciation to current
depreciation expense. The current version of the Medicare cost report
(HCFA 2552-92) allows for determination of average age of assets for
all hospital assets, for building and fixed equipment alone, or for
moveable equipment alone. The average age of buildings and fixed
equipment can be determined on the basis of information on the current
Medicare cost report (HCFA 2552-92, Worksheet G, Lines 14, 14.01, 16,
16.01, 18, 18.01, 20, and 20.01, and Worksheet A-7, Part III, Column 9,
Lines 1 and 3).
We propose a two-part age of asset test to identify aging hospitals
that undertake needed major capital replacement or renovation projects
during the transition. The test would only consider changes in the
average age of building and fixed equipment (determined by the ratio of
accumulated depreciation for building and fixed equipment to current
depreciation for building and fixed equipment) in order to focus on
major capital replacement and renovation projects. We believe that it
is appropriate to grant exceptions only to aging hospitals that
undertake and complete major capital projects during the capital
prospective payment transition period.
The first part of the age-of-asset test is designed to determine
whether a hospital had relatively aged fixed assets at the beginning of
the capital transition period (that is, the hospital's first cost
reporting period beginning on or after October 1, 1991). We would
determine a hospital's average age of building and fixed equipment
using cost report data for the first year of the transition in
comparison to the national average age of buildings and fixed equipment
for that year. The threshold for qualifying under this part of the test
would be the 75th percentile. We do not believe that the special
protection we are proposing under this provision should be extended to
hospitals who cannot demonstrate an urgent need for replacement or
renovation of facilities. We believe that an average age of assets at
or above the 75th percentile nationally is a sufficient indicator that
a hospital had a pressing need for renovation or replacement at the
beginning of the capital transition period to serve as a threshold
qualifier for a special exception.
We would determine whether a hospital is at or above the 75th
percentile nationally on the basis of Medicare cost report data for FY
1992. That data is becoming available this year. Preliminary but
incomplete data suggest that the average age of buildings and fixed
equipment at the 75th percentile is approximately 16.4 years. We intend
to make a final determination on the basis of more complete data that
will become available at a later date.
The second part of the test would compare the average age of
buildings and fixed equipment in the cost reporting period beginning in
FY 1992 with the average age of fixed assets in the year the hospital
reports the completion of a major capital replacement or renovation. A
major renovation or replacement of hospital capital during the
transition period should result in a dramatically reduced average age
of buildings and fixed equipment compared to the first year of the
transition. We are therefore proposing that the test would be whether a
hospital's average age of buildings and fixed equipment has declined by
at least 50 percent since the first year of payment under the capital
prospective payment system. Thus, a hospital whose average age of
buildings and fixed equipment is at or above the 75th percentile
nationally in the first year of capital prospective payment, and whose
average age of buildings and fixed equipment has declined by at least
50 percent in a designated year later in the transition, meets the age-
of-assets test.
We welcome comment on the use of an average age of asset measure,
on the age-of-assets test as we have conceived it, and on the
appropriate threshold levels to apply under such a test.
We do not believe that this special exception for replacement and
renovation of old facilities should apply to hospitals whose capital
projects preserve the overcapacity that is currently evident in much of
the hospital industry. Therefore, a hospital cannot qualify for an
exception unless it has received any required approval from a State or
local planning authority. If such approval is not required, an urban
hospital must demonstrate either that (1) overall average occupancy in
its MSA is at least 80 percent, or (2) its capacity is no more than 80
percent of its prior capacity (in terms of bed size). We are exempting
rural hospitals from this requirement because of concern about
maintaining access to needed services in rural areas.
Hospitals that qualify for exceptions under this special provision
may continue to receive exceptions payments for up to 10 years beyond
the transition. Exceptions payments will be available to hospitals that
meet the special criteria above for 10 years after the date when the
hospital meets the age of asset test, provided that the hospital meets
the age of asset test no later than the end of the capital prospective
payment system transition period for the hospital (that is, the last
day of the hospital's last cost reporting period beginning before
October 1, 2001). We believe that extending exceptions payments for up
to 10 years after the transition should be sufficient for hospitals who
must undertake major renovation or replacement of facilities during the
transition period.
We would continue to determine the amount of the exceptions
payments under this special provision on a cumulative basis. That is,
we would determine the hospital's exception payment by comparing the
cumulative payments made to the hospital under the capital prospective
payments system to the cumulative minimum payment levels applicable to
the hospital for each cost reporting period subject to the prospective
payment system. Any amount by which the hospital's cumulative payments
exceed its cumulative minimum payment levels would continue to be
deducted from the additional payment that would otherwise be payable
for the cost reporting period. In addition, we will apply another test
designed to limit the amount of exceptions payments under this special
provision. We would reduce the amount of an exception payment that
would otherwise be made for any cost reporting period under this
special provision by the amount of any Medicare hospital inpatient
prospective payment system payments for the cost reporting period (less
75 percent of operating prospective payment system disproportionate
share payments if applicable) that are in excess of Medicare inpatient
operating and capital costs. This calculation includes payments under
both the capital and operating prospective payment systems. It does not
include graduate medical education payments, outpatient service
payments, or payments for any other services covered under Medicare
Part B. We propose to exclude 75 percent of operating prospective
payment system disproportionate share payments from the determination
of the Medicare operating prospective payments system payments in order
to account for the financial pressure that disproportionate share
hospitals experience in other parts of their operations.
Finally, we emphasize that these proposed policies would be subject
to reevaluation in the light of passage of comprehensive health care
reform by Congress. The hospitals for whom we currently propose to
provide special protections may no longer require such protections
after the implementation of comprehensive health care financing reform.
Therefore, we will carefully monitor the impact of final health care
reform legislation on the hospitals that would receive special
treatment under the policies proposed above to determine whether such
legislation justifies revision of those policies.
We are proposing the following revisions to the regulations text to
implement the changes discussed above:
Under new Sec. 412.348(a), we would define current ratio,
fixed assets, and average age of fixed assets.
The new special exceptions requirements are set forth at
proposed Sec. 412.348(g).
Current paragraphs (a) through (e) have been redesignated
as paragraphs (b) through (f), and current paragraph (f) has been
redesignated as paragraph (h).
We are also proposing to make conforming technical changes
to Sec. 412.348 to correct references.

D. Extraordinary Circumstances Exceptions Payments (Sec. 412.348(e))

Currently, Sec. 412.348(e) provides that a hospital may request an
additional payment during the capital transition period if the hospital
incurs an unanticipated capital expenditure in excess of $5 million
(net of insurance proceeds) due to extraordinary circumstances beyond
the hospital's control. Extraordinary circumstances include but are not
limited to a flood, fire, or earthquake. A hospital must apply to the
HCFA regional office, for a determination by the HCFA Administrator,
within 180 days of the extraordinary circumstance that caused the
unexpected expenditures in order to qualify for exceptions payments. We
propose to revise Sec. 412.348 to clarify our policy and reconcile
conflicts between the regulation text and the language and intent of
the preamble to the August 30, 1991 final rule that implemented
prospective payment system for capital-related costs (56 FR 43411).
With respect to current Sec. 412.348(e)(1), we intend to clarify
that the minimum expenditure criteria that the hospital must meet in
order to qualify for payments is the net amount of proceeds expected to
be recovered by the hospital in connection with the event from any
other source including, but not limited to, insurance, litigation, or
other government relief funding. In the August 30, 1991 final rule, in
response to a comment concerning the exceptions process, we indicated
that we intended to provide for an additional payment when a hospital
has extraordinary circumstances that result in unanticipated capital
spending of at least $5 million. We then stated that in determining
whether this threshold was met, we would take into account any
insurance proceeds received by the hospital in connection with the
extraordinary circumstances. However, we inadvertently failed to list
other sources that may reduce the unanticipated capital-related expense
to the hospital. Later in that response we noted that HCFA's decision
will be contingent on a final determination of the associated costs for
the unanticipated circumstance and we provided an example of how the
extraordinary circumstance exception policy would be applied. In that
example we noted that the hospital must provide evidence of the extent
to which the loss will be covered by insurance proceeds or other
sources. In the regulations text, we reflected our intention to
establish the threshold net of insurance but did not include the other
comparable sources, such as court awards for damages, or other
governmental relief funds.
The purpose of establishing this exception was to protect hospitals
during the transition period from out-of-pocket expenditures at a level
that could put severe financial strain on them. Thus, we clearly did
not intend to replace or supplement other payment sources that have an
obligation to pay or provide special authorization for funding in these
same circumstances. As a result, we intend to revise current
Sec. 412.348(e)(1) to conform with the example provided in the August
30, 1991 final rule concerning application of the extraordinary
circumstances exception policy and, specifically, documentation of
evidence of the extent of net loss.
We also propose to correct the provision in current
Sec. 412.348(e)(2) regarding the level at which the determination of a
hospital's eligibility for an extraordinary circumstance exception
payment is made. Although the determination authority was reserved to
the HCFA Administrator, we believe that the appropriate official to
make this decision is the Director of the Office of Payment Policy,
Bureau of Policy Development, Health Care Financing Administration.
This change is warranted because it is inappropriate that the HCFA
Administrator make a decision that he or she may be called on to review
if a hospital requests an administrative appeal of an adverse decision
on its exceptions application. As the director of the HCFA component
that determines policy on hospital payment in general and exceptions
payment policy in particular, the Director of the Office of Payment
Policy is ideally suited to make the determination on an exceptions
request. The determination is subject to the appeal procedures of
subpart R of 42 CFR part 405 when the provider receives the NPR for the
cost reporting period for which the provider is seeking additional
payments.

E. Funding of Depreciation (Secs. 413.134 and 413.153)

Section 1861(v)(1)(A) of the Act gives the Secretary broad latitude
to prescribe regulations concerning Medicare payments to providers on a
reasonable cost basis. Under this authority, Sec. 413.134(e) provides
that, although we do not require the funding of depreciation, we
strongly recommend it as a means of conserving funds for the
replacement of depreciable assets.
1. Offset of Investment Income
To encourage the funding of depreciation, we have specified at
Secs. 413.134(e)(1) and 413.153(b)(2)(iii) that investment income
earned on funded depreciation will not be used to reduce allowable
interest expense. Further, Sec. 413.134(e) stipulates that additions to
the funded depreciation account must remain in the account for at least
6 months to be considered valid funding transactions and be eligible
for the benefits of a funded depreciation account.
In response to a comment in the August 30, 1991 final rule on the
prospective payment system for inpatient hospital capital-related costs
(56 FR 43424), we stated that interest on any funds that do not qualify
as funded depreciation account funds, which would include funded
depreciation deposits of less than 6 months duration, must be used to
offset interest expense. Section 226.3 of the Provider Reimbursement
Manual (HCFA Pub. 15-1) provides that investment income earned prior to
the elapse of the 6-month period will not be offset unless the deposits
are actually withdrawn during this period.
We are proposing to revise Sec. 413.134(e)(1) to state specifically
that investment income earned during the 6-month period will not be
used to offset interest expense unless the funds are withdrawn for an
improper purpose during this period. Under this change, if a provider
withdraws funds from the funded depreciation account before the
expiration of the 6-month time limit, and the withdrawal is made for an
allowable purpose as described in Sec. 413.134(e)(3)(i)(A), the
investment income earned on the funds is not offset against allowable
interest expense.
2. Loans to the General Fund
We propose to revise and clarify our policy regarding loans from
the provider's funded depreciation fund to the provider's general fund.
Sections 413.153(b)(3)(ii) and (c)(2) permit a provider to lend its
funded depreciation funds to its general fund. Moreover, these sections
provide that interest expense incurred on such loans are considered
allowable costs. Section 226.1 of the Manual amplifies this policy by
explaining that, in order for the interest expense incurred on such
loans to be allowable, the interest expense must meet the ``necessary
and proper'' tests (set forth in the regulations at Sec. 413.153(b) (2)
and (3), and in the Manual at sections 202.2 and 202.3). This section
of the Manual also explains that the funds loaned to the general fund
must not be used to acquire depreciable assets used to furnish patient
care because the provider is expected to use its funded depreciation,
rather than to lend it, for that purpose. Finally, this section of the
Manual explains that deposits to the funded depreciation fund will not
be recognized to the extent that loans of funded depreciation funds to
the general fund are outstanding. Rather, such deposits will be
considered repayments of the loan to the general fund.
Three other sections of the Manual address loans from a provider's
funded depreciation fund to the provider's general fund. Section 226.C
of the Manual, in discussing the availability of funded depreciation
funds, provides that loans made from funded depreciation do not alter
the requirement that funded depreciation must be available for the
acquisition of the provider's depreciable assets used to furnish
patient care, or for other capital purposes related to patient care.
Section 226.3 of the Manual, in discussing the application of the 6-
month rule for a deposit to become a valid funding transaction,
provides that a loan of funded depreciation funds to the general fund
is considered a withdrawal for purposes of applying the 6-month rule.
That is, if the provider borrows from funded depreciation for a working
capital purpose, and some or all of the funds borrowed were not on
deposit in the funded depreciation fund for at least 6 months, the
borrowing would be considered a withdrawal from the funded depreciation
account. In addition, if a deposit did not satisfy the 6-month rule any
investment income earned on the deposit would have to be used to offset
otherwise allowable interest expense. Section 226.4B of the Manual, in
an example of applying of the last-in, first-out basis to withdrawals
from funded depreciation for an improper purpose, also characterizes a
loan to the general fund from the funded depreciation fund as a
withdrawal.
In recent years, we have received a number of inquiries suggesting
that loans from the provider's funded depreciation fund to the
provider's general fund are characterized more appropriately as
investments of funded depreciation, rather than withdrawals. We agree
with the inquirers. The term ``withdrawal'' implies that the funds have
been removed from the funded depreciation account and used, either for
a proper purpose (for example, acquisition of a depreciable asset) or
an improper purpose (for example, to purchase office supplies). In
contrast, the term ``investment'' implies that the funds have not
actually been removed from the funded depreciation account and used;
rather, they have been temporarily converted to one or more income
producing vehicles (for example, the purchase of U.S. Treasury bills).
Because loans from the funded depreciation funds to the general fund
generate investment income for the funded depreciation fund, we believe
that such loans more properly should be considered as investments,
rather than withdrawals.
In conjunction with this change, we had to decide whether such
loans would have to meet the ``readily marketable'' test for allowable
funded depreciation investments expressed in Sec. 413.134(e) and
section 226 of the Manual. We believe that, because we require that
loans made from funded depreciation do not alter the requirement that
the funded depreciation be available for the acquisition of depreciable
assets used to furnish patient care, or for other capital purposes
related to patient care, application of the ``readily marketable'' test
would be redundant. That is, if a provider loans funded depreciation to
the general fund, and while that loan is outstanding the provider needs
funds to acquire a depreciable asset related to patient care, the
provider may not borrow funds to acquire the depreciable asset. Rather,
the provider must recall the funds from the general fund loan to use to
acquire the asset.
Accordingly, we propose to add paragraph (e)(4) to Sec. 413.134 to
address loans from the funded depreciation account. New
Sec. 413.134(e)(4) would both consolidate the policies now set forth in
the manual sections cited above and revise our policy regarding the
characterization of loans from the funded depreciation account. Such
loans would be considered investments, rather than withdrawals.
3. Spenddown of ``Tainted'' Funded Depreciation
The preamble to the August 30, 1991 final rule also addressed the
issue of spenddown (56 FR 43421). ``Spenddown'' is a process whereby we
permit providers to ``cure'' borrowing that was found to be unnecessary
because of available funded depreciation by using those funded
depreciation funds for a proper purpose. Under spenddown, if additional
deposits are made to funded depreciation after the unnecessary
borrowing determination, withdrawals from the funded depreciation
subsequent to a determination of unnecessary borrowing are made on a
last-in, first-out basis (typically, withdrawals for a proper purpose
are made on a first-in, first-out basis). The result of this policy is
that all additional deposits to funded depreciation must be used before
spending can be allotted to the ``tainted'' funds, that is, the portion
of the funded depreciation that resulted in the unnecessary borrowing.
In addition, Medicare's policy has been that any other funded
depreciation funds in the account at the time of the unnecessary
borrowing must be used before the ``tainted'' funds can be spent down
or cured.
Since the publication of the August 30, 1991 final rule, we have
received several inquiries asking why our policy on spenddown was not
incorporated into the regulations. These inquiries also have pointed
out that the last-in, first-out method set forth at
Sec. 413.134(e)(3)(i)(C) will not work properly when the unnecessary
borrowing is repaid from the funded depreciation account and that
account contained untainted funded depreciation at the time of the
unnecessary borrowing or received additional deposits after the
borrowing. The inquirers suggested that this situation may be rectified
by establishing an exception to the last-in, first-out rule when the
unnecessary borrowing that caused the ``tainting'' is repaid out of
funded depreciation. In this case, any use of funded depreciation to
repay the unnecessary borrowing will be deemed to be from ``tainted''
funded depreciation. We agree and propose to provide for such an
exception in Sec. 413.134(e)(2)(iv).
Similarly, where the provider repays part or all of the principal
of the unnecessary borrowing that caused the ``tainted'' funded
depreciation by using general funds, a corresponding amount of the
``tainted'' funded depreciation must be cured. This is necessary so
that the ``tainted'' portion of the funded depreciation does not exceed
the amount of the balance of the unnecessary borrowing that caused the
``tainting'' in the first place.
We are proposing to revise Sec. 413.134(e) to incorporate the
curing process of ``tainted'' funded depreciation and also to provide
that the provider's subsequent repayment of the principal portion of
the unnecessary borrowing will be from the ``tainted'' funds in the
funded depreciation. Thus, neither the first-in, first-out nor the
last-in, first-out basis would be applicable for such repayments.
4. Necessary and Unnecessary Borrowing
In February 1977, HCFA published Sec. 203 of the Provider
Reimbursement Manual to address interest on loans in excess of asset
value acquired after 1970. Section 203.D of the Manual states that
``[r]epayments of the funds borrowed are applied first to reducing the
portion of the loan applied to the allowable cost of the patient care
assets, then to the tangible and intangible assets not considered
reasonably related to patient care, and lastly to goodwill.'' We have
applied this long-standing principle to cases where a provider repays
borrowed funds where some of these funds are deemed to be unnecessary.
In these circumstances, we have held that all of necessary borrowing
must be repaid before any of the repayments may be applied to the
unnecessary borrowing.
We also apply this principle to unnecessary borrowing that causes
``tainted'' funded depreciation. When a portion of a provider's
borrowing is considered unnecessary because of the availability of
funded depreciation, subsequent repayments, whether from funded
depreciation or general funds, are first applied to the allowable
portion of the borrowing and, when all of the allowable borrowing is
repaid, to the unallowable portion of the loan. This places the
provider in the same position as if the available funded depreciation
had been used without any unnecessary borrowing.
These applications have not been clearly set forth in the
regulations. Therefore, we propose to revise Secs. 413.134(e) and
413.153(d) to clearly address both situations.
We are also proposing to make a technical change to
Sec. 413.134(d)(1) to correct a reference.

VI. Proposed Changes for Hospitals Excluded From the Prospective
Payment Systems

A. New Requirements for Certain Long-Term Care Hospitals Excluded From
the Prospective Payment Systems (Sec. 412.23)

Section 1861(e) of the Act and the regulations at 42 CFR part 482
define a hospital as an institution that qualifies to participate in
Medicare because it meets certain health and safety standards, known as
``conditions of participation'' (COPs). A hospital must be surveyed for
compliance with the COPs by State agencies that work under agreement
with HCFA unless, under section 1865 of the Act and regulations at 42
CFR part 488, the hospital is presumed to meet the COPs on the basis of
accreditation by the Joint Commission on Accreditation of Healthcare
Organizations or the American Osteopathic Association.
Recently, some entities have discovered that the process for
becoming a provider under the COPs can be manipulated to permit them to
receive exclusion from the prospective payment systems. Specifically,
hospitals have begun to organize themselves under what they themselves
refer to as the ``hospital within a hospital'' model. Under this model,
an entity may operate in space leased from a hospital, and have most or
all services furnished under arrangements by employees of the lessor
hospital. The newly organized entity may be operated by a corporation
formed and controlled by the lessor hospital, or by a third entity that
controls both. In either case, the new entity seeks State licensure and
Medicare participation as a hospital, demonstrates that it has an
average length of stay of over 25 days, and obtains an exclusion from
the prospective payment systems. The effect of this process is to
extend the long-term care hospital exclusion to what is for all
practical purposes a long-term care hospital unit.
We believe it may not be appropriate for a long-term care
``hospital within a hospital'' to receive an exclusion from the
prospective payment systems. The considerations underlying exclusions
from the prospective payment systems may not apply to these entities.
Under the prospective payment systems, hospitals are paid for
inpatient services on the basis of prospectively determined rates.
Under section 1886(d)(1)(B) of the Act, certain hospitals and units are
excluded from the prospective payment systems including, psychiatric,
rehabilitation, children's, and long-term care hospitals, and
psychiatric and rehabilitation units. These hospitals and units are
excluded because they could not be paid appropriately under the
prospective payment systems. The statute does not exclude ``long-term
care units'' of general hospitals.
The prospective payment systems are based on an averaging concept
which recognizes that some patients will stay longer and consume more
resources than expected, while others will have shorter, less costly
stays. We expect that an efficiently operated hospital will be able to
deliver quality care to Medicare patients at an aggregate cost no
greater than its aggregate Medicare payments under the prospective
payment systems for each cost reporting period.
The DRG system does not, however, apply well to long-stay
hospitals. Those hospitals have few short-stay or low-cost cases, and
might be systematically underpaid if the prospective payment method
applied. Thus, exclusion of entire long-term care hospitals from the
prospective payment systems is appropriate. However, if an entity that
provides long-term care is part of a larger hospital, the reasons for
exclusion may not apply. A long-term care ``hospital within a
hospital'' is essentially a long-term care hospital unit which accounts
for only a part of the larger hospital's patient load. The principles
underlying the prospective payment systems do apply to the larger
hospital, unlike entire long-term care hospitals. Exclusion of long-
term care units could inadvertently encourage hospitals to try to abuse
the prospective payment systems, by diverting all long-stay cases to
the excluded unit, leaving only the shorter, less costly cases to be
paid for under the prospective payment systems. In such cases,
hospitals would profit inappropriately from prospective payments.
For these reasons, we believe it may be inappropriate to grant an
exclusion to a long-term care ``hospital within a hospital.'' Moreover,
exclusion of long-term care ``units'' is inconsistent with the
statutory scheme. Section 1886(d)(1)(B) of the Act clearly provides for
exclusions from the prospective payment systems for long-term care
hospitals, and also for psychiatric units and rehabilitation units, but
the statute does not provide for exclusion of long-term care units.
Also, we note that section 1886(d)(1)(B) of the Act begins with the
phrase ``as used in this section'' in referring to hospitals; we
believe this language suggests that the definition of ``hospital'' for
prospective payment purposes may be different from other definitions.
Furthermore, section 1886(d)(1)(B) of the Act provides that excluded
from the definition of prospective payment systems hospital is a
psychiatric or rehabilitation unit of a hospital that is a distinct
part of the hospital ``as defined by the Secretary.''
We believe these distinctions were intended to be meaningful, and
that it would undermine the distinctions if we allowed exclusion of
long-term care units. Because we believe such exclusions are contrary
to the purpose and scheme of section 1886(d)(1)(B) of the Act, we are
proposing to revise the regulations to prevent inappropriate
exclusions. Section 1871 of the Act provides that the Secretary ``shall
prescribe such regulations as may be necessary to carry out the
administration of the insurance programs under this title,'' and
section 1102 of the Act authorizes the Secretary to ``make and publish
such rules and regulations * * * as may be necessary to the efficient
administration of the functions with which [the Secretary] is charged
under this Act.''
To avoid recognizing nominal hospitals, while allowing adequate
flexibility for legitimate networking and sharing of services, we are
proposing additional criteria in 42 CFR part 412, subpart B for
determining whether an entity qualifies for exclusion from the
prospective payment systems as a separate long-term care hospital.
These criteria would be applied to entities seeking exclusion from the
prospective payment systems as a long-term care hospital. The revised
criteria would apply to entities seeking exclusion as a long-term care
hospital for cost reporting periods beginning on or after October 1,
1994, including reapprovals of long-term care exclusions for entities
that are currently excluded.
We propose that in addition to meeting any of the classification
requirements set forth in Sec. 412.23, for cost reporting periods
beginning on or after October 1, 1994, to be excluded from the
prospective payment systems, a hospital located in the same building or
in one or more entire buildings located on the same campus as another
hospital and seeking long-term care exclusion must meet the following
requirements:
Separate governing body. The hospital has a governing body
that is separate from the governing body of the hospital from which it
obtains space. The hospital's governing body is not under the control
of the hospital that provides space, or of any third entity that
controls both hospitals.
Separate chief medical officer. The hospital has a single
chief medical officer who reports directly to the governing body and
who is responsible for all medical staff activities of the hospital.
The chief medical officer of the hospital is not employed by or under
contract with either the hospital that provides space or any third
entity that controls both hospitals.
Separate medical staff. The hospital has a medical staff
that is separate from the medical staff of the hospital from which it
obtains space. The hospital's medical staff is directly accountable to
the governing body for the quality of medical care provided in the
hospital, and adopts and enforces bylaws governing medical staff
activities, including criteria and procedures for recommending to the
governing body the privileges to be granted to individual
practitioners.
Chief executive officer. The hospital has a single chief
executive officer through whom all administrative authority flows, and
who exercises control and surveillance over all administrative
activities of the hospital. The chief executive officer is not employed
by, or under contract with, either the hospital that provides space or
any third entity that controls both hospitals.
Performance of basic hospital functions. The hospital
performs the basic hospital functions specified in Secs. 482.21 through
482.27, 482.30, and 482.42 through the use of employees or under
contracts or other agreements with entities other than the hospital
from which it obtains space, or a third entity that controls both
hospitals. Food and dietetic services and housekeeping, maintenance,
and other services necessary to maintain a clean and safe physical
environment could be obtained under contracts or other agreements with
the hospital that provides space, or with a third entity that controls
both hospitals.
For purposes of these proposals, we would consider ``control'' to
exist if an individual or organization has the power, directly or
indirectly, significantly to influence or direct the actions or
policies of an organization or institution. This definition of
``control'' is now codified in the regulations at Sec. 413.17(b)(3),
concerning allowable Medicare costs, and we would apply the same
criteria to determine whether hospitals and hospital units should be
excluded from the prospective payment systems. Thus, most hospital
managers and administrators are familiar with this definition. We
welcome comments on this and other issues concerning the proposed
exclusion criteria.
Finally, to ensure that hospitals that are excluded from the
prospective payment systems are not confused with the types of
facilities that can participate separately in Medicare as distinct-part
psychiatric hospitals or skilled nursing facilities, we propose to
delete all references in the current prospective payment systems
regulations to excluded units as ``distinct part'' facilities.

B. Removal of the 1986 Malpractice Rule (Sec. 413.56)

We propose removing from the regulations ``the 1986 malpractice
rule'', which is set forth at Sec. 413.56. We also would remove all
cross-references to Sec. 413.56. This proposal is a technical change
designed to conform the regulations to the various authorities that
have previously established that the 1986 malpractice rule is invalid.
The history of Medicare reimbursement policy under the cost-based
reimbursement system for provider malpractice insurance costs is
described in detail in Sections I. and II.A. of the March 27, 1987
final rule (52 FR 9833). To summarize briefly: for cost reporting
periods beginning before July 1, 1979, provider malpractice insurance
costs were included in the general and administrative cost center (``G
& A pool'') with other overhead costs, and apportioned to the Medicare
program in accordance with the provider's Medicare utilization rate (52
FR 9834). (See also Sec. 405.452(b)(1) (``the pre-1979 utilization
method) redesignated at Sec. 413.53(a)(1)(i).) Effective for cost
reporting periods beginning on or after July 1, 1979, ``the 1979
malpractice rule'' removed provider malpractice insurance costs from
the G & A pool, and directly apportioned those insurance costs based on
the ratio of provider malpractice losses paid for Medicare patients
compared to losses paid for all patients (52 FR 9834). On April 1,
1986, we published an interim final rule with comment period that
replaced the 1979 malpractice rule, effective May 1, 1986, with the
1986 malpractice rule (51 FR 11142). The 1986 malpractice rule was set
forth in regulations at Sec. 405.457, subsequently redesignated as
Sec. 413.456, and then confirmed in our above-cited March 27, 1987
final rule. The 1986 malpractice rule reestablished reimbursement of
skilled nursing facility malpractice insurance costs under the pre-1979
utilization method, Sec. 413.56(c), whereas hospital malpractice
insurance costs were reimbursed based on both a hospital's utilization
rate and aspects of the claims-paid approach of the 1979 regulation.
(See Sec. 413.56(b).)
The Secretary's authority to apply the hospital payment provisions
of the 1986 malpractice rule has been eliminated through a series of
events. As promulgated initially, the 1986 rule applied retroactively,
subject to the Medicare program's general rules of administrative
finality, to cost reporting periods beginning on or after July 1, 1979.
(See Sec. 413.56(a).) Subsequently, however, the Supreme Court held
that the Medicare statute does not generally authorize retroactive
rulemaking, Bowen v. Georgetown University Hosp., 488 U.S. 204 (1988)
(``Georgetown''). Therefore, the Administrator of HCFA issued HCFA
Ruling 89-1 (Jan. 26, 1989) which, first, discontinued retroactive
application of the 1986 rule and, second, required application of the
pre-1979 utilization method to all open hospital malpractice insurance
cost claims, and all properly pending appeals of the malpractice issue,
for cost reporting periods beginning before the May 1, 1986 effective
date of the 1986 rule.
The prospective applicability of the 1986 malpractice rule was
circumscribed from its outset by the prospective payment system. For
hospitals subject to the prospective payment system, malpractice
insurance costs attributable to inpatient services paid under the
prospective payment system are subsumed under the prospectively
determined payment rates that are applied to the various diagnosis
related groups. Thus, the 1986 malpractice rule applied prospectively
to only malpractice insurance costs attributable to: (1) outpatient
services furnished by prospective payment hospitals; and (2) all
services furnished by specialty hospitals and distinct-part hospital
units excluded from the prospective payment system.
In the March 27, 1987 final rule, we determined that it was
necessary to develop separate ``scaling factor formula'' values under
the 1986 malpractice rule (see Sec. 413.56(b)(3) through (5)), for
malpractice insurance costs attributable to hospital outpatient
services and for costs attributable to inpatient services furnished by
facilities excluded from the prospective payment system (see 52 FR
9836). However, we were unable to derive separate formula values for
inpatient and outpatient services for ``the R factor'' in the formula
(that is, the national Medicare malpractice loss ratio, as adjusted for
associated claims adjustment expense), due to the difficulty of
securing hospital data attributing malpractice claims (and associated
claims adjustment expense) separately to outpatient services and
inpatient services. Moreover, separate scaling factor formula values
for hospital facilities excluded from the prospective payment system
were not developed.
In Children's National Medical Center, et al. v. Sullivan, Civil
Action No. 90-1362-WBB (D.D.C. July 16, 1991) (``Children's
National''), the Secretary entered into a Consent Order providing that
the 1986 malpractice rule is invalid and shall not be enforced, due to
the agency's inability to develop separate scaling factor formula
values for outpatient services and for inpatient services furnished by
hospital facilities excluded from the prospective payment system. The
Children's National Consent Order was approved by the United States
District Court for the District of Columbia on July 16, 1991. The
Administrator of HCFA then issued HCFA Ruling 91-1 (Sept. 30, 1991),
which, first, provided that the Children's National Consent Order
governs all open hospital malpractice insurance cost claims, and all
properly pending appeals of the malpractice issue, for cost reporting
periods beginning on or after May 1, 1986 and, second, required
reimbursement of such claims under the pre-1979 utilization method.
The Supreme Court's Georgetown decision, the Children's National
Consent Order, and the two corresponding HCFA Rulings establish that
the 1986 malpractice rule is null and void as to all open hospital
malpractice insurance cost claims, and all properly pending hospital
appeals of the malpractice insurance cost reimbursement issue. See 42
CFR 401.108(c). See also HCFA Transmittal No. 395 (December 1993),
which deleted as ``obsolete,'' due to HCFA Ruling 91-1, the
implementation provisions for the 1986 rule that were formerly included
in Sec. 2214 of the Medicare Intermediary Manual, Part 2. We are
proposing to conform Medicare regulations to the actual state of the
law governing provider malpractice insurance cost reimbursement by
removing Sec. 413.56 from the regulations, and by eliminating all
cross-references to Sec. 413.56 from the regulations. As a result of
this proposal, the amended Medicare rules would reflect the previously
established legal requirement that reasonable cost reimbursement for
provider malpractice insurance cost claims that are either open or the
subject of properly pending appeals, must be determined under the pre-
1979 utilization method.

C. Related Technical Changes (Secs. 412.20, 412.22, 412.25, 412.27,
412.29, 412.30, 412.96, 412.105, 412.108, 412.116, 412.130, 412.71,
413.40, 413.53, 413.174 and 482.66)

We are proposing to remove the words ``distinct part'', wherever
they appear, in the following places:
(a) Section 412.20(b)(1);
(b) Section 412.22(b);
(c) The section title and paragraph (a) of Sec. 412.25;
(d) The undesignated introductory texts of Secs. 412.27 and 412.29;
(e) The section title of Sec. 412.30;
(f) Section 412.96(c)(1) and (c)(2);
(g) Section 412.105(b), (f)(5) and (g)(1)(iii);
(h) Section 412.108(a)(2);
(i) Section 412.116(a) and (b);
(j) The section title of 412.130;
(k) Section 412.130(a)(2) and (a)(3);
(l) Section 413.40(a)(2)(ii), (b)(1)(i) through (b)(1)(iii) and
(f)(2); and
(m) In Sec. 482.66(a)(7)(i), the second appearance of the words
``distinct part'' are removed.
We also propose to revise the section titles of Secs. 412.27 and
412.29 to remove the words ``distinct part'' and replace them with the
word ``excluded''.
In addition, we propose to make technical changes to
Secs. 412.71(b), 413.53 and 413.174(b)(4)(iv) to remove and replace
obsolete language and to correct references.

VII. ProPAC Recommendations

We have reviewed the March 1, 1994 report submitted by ProPAC to
Congress and have given its recommendations careful consideration in
conjunction with the proposals set forth in this document.
Recommendations 1 through 6 focus on specific features of the
President's Health Security Act and other health care reform activities
and will be resolved through the legislative process. Therefore, we are
not addressing these recommendations in this document. Recommendations
9, 12, and 13 concerning the update factors for inpatient operating
costs are discussed in Appendix D of this proposed rule.
Recommendations 10 and 11 concerning the update factors for inpatient
capital costs are also discussed in Appendix E. Recommendations 15 and
16 concerning hospital wage data and the hospital wage index are
discussed in section III of this preamble. The remaining
recommendations are discussed below.

A. Controlling Medicare Spending Across All Sites of Care
(Recommendation 7)

Recommendation: Medicare should continue to develop policies to
monitor and control total expenditure growth across all sites of care.
Payment methods should not unduly favor the choice of one site over
another. They should also provide consistent incentives to constrain
increases in volume and service intensity across physicians and other
providers.
Response: In response to a similar ProPAC recommendation last year,
we stated in the proposed rule for FY 1994 that controlling the overall
growth of Medicare spending is of critical importance. We believe the
hospital inpatient prospective payment system has been effective in
slowing the growth in Medicare spending compared with estimates of
growth in spending under reasonable cost reimbursement. Also, during
the first 2 years of the physician fee schedule, the growth in spending
for physician services under Medicare has been reduced. In addition, we
are developing a prospective payment system for outpatient hospital
services that will provide the appropriate economic incentives to help
control the growth of Medicare spending for outpatient services.
While prospective payment has shown promise for controlling
Medicare spending growth, we remain concerned about growth in the
volume and intensity of Medicare services. Currently, we are using the
Medicare volume performance standard to provide physicians with
incentives to control volume and intensity.
There are no similar volume control systems for other services. We
are continuing to study other mechanisms for controlling expenditures
growth, such as bundling payments for multiple services into a single
payment.

B. Strengthening Medicare's Risk Contracting Program (Recommendation 8)

Recommendation: The Commission recommends that the Secretary
improve Medicare's risk-based managed care program to give more
Medicare beneficiaries the option of enrolling in managed care plans.
To increase plan participation, deficiencies related to the risk
adjustment formula and local differences in payments need to be
corrected.
Response: We support giving more Medicare beneficiaries the option
of enrolling in managed care plans. We are aware of the need to
institute new methodologies for payment to risk plans. Currently, we
are sponsoring research on risk adjustment methods, including
diagnostic cost groups (DCGs) and ambulatory care groups (ACGs). In
addition, our recent grants announcement (Health Care Financing
Research and Demonstration Cooperative Agreements and Grants for Fiscal
Years 1994 Through 1996) (59 FR 1951) calls for work on risk adjustors,
both for the Medicare and the under 65 populations. We have also
initiated a demonstration that is expected to test alternative payment
methods that may incorporate adjustments for enrollee health status.
With regard to correcting local differences in payment to Medicare
risk plans, we note that section 1876 of the Act requires payment to
Medicare risk plans to be based on projected Medicare per capita costs
for beneficiaries who are not enrolled in managed care plans. Given
that there are local differences in Medicare's per capita costs for
these beneficiaries, local differences in Medicare's risk plan payment
rates are a logical result.

C. Update to the Composite Rate for Dialysis Services (Recommendation
14)

Recommendation: The FY 1995 update recommendation for the composite
rate for dialysis services accounts for the following:
The projected increase in the market basket for dialysis
services in FY 1995, estimated at 4.3 percent;
A positive adjustment of 0.7 percentage points to reflect
the additional costs associated with scientific and technological
advances;
A negative adjustment of 1.0 percentage points to
encourage productivity improvements; and
A negative discretionary adjustment of 4.0 percentage
points to reflect the relationship between payments and estimated FY
1994 costs.
This results in a net update recommendation of 0.0 percent.
Response: We agree with ProPAC's recommendation not to propose a
payment rate increase for dialysis services. The 1991 audited data
support this decision. As the Commission points out, these data show
that independent renal facility composite payment rates are higher than
their Medicare allowable costs, while hospital renal facilities
continue to report costs in excess of their payment rates. The audits
did not provide an explanation for the higher reported costs of
hospital renal facilities relative to independent renal facilities.
However, auditors found that hospital renal facilities often fail to
maintain adequate records for allocation costs in the renal department.
Since hospitals' payments are not affected by renal cost reports,
Supplement Worksheet I of HCFA-2552, hospitals do not always complete
their cost reports accurately.
Although we realize the importance of regular renal audits, the
budget for audits continues to decline. Thus, we do not plan to conduct
renal audits in 1994 or 1995. We have requested funds to conduct renal
audits in 1996. During this 2-year interval, we would review the 1992
and 1993 cost report data for those renal facilities in the 1991 audit
sample.
We believe that this analysis will provide cost information about
the ESRD program in lieu of audited data for these years. Furthermore,
it will provide a basis for analyzing cost data over time and allow for
better comparison of audited and unaudited costs.

D. Nursing Facility Wage Index (Recommendation 17)

Recommendation: The Secretary should collect data on employee
compensation and paid hours of employment for employees of nursing
facilities that care for Medicare skilled nursing facility (SNF)
patients. Once these data become available, the Secretary should
develop a nursing facility wage index and use it to adjust Medicare
skilled nursing facility payments.
Response: In recommending an adjustment to SNF payments, we presume
that ProPAC is referring to the SNF cost limits. We agree that HCFA
should collect the data necessary to develop a SNF wage index. In the
conference report on OBRA 1993, the conferees indicated an expectation
that HCFA collect such data (H.R. Rep. No. 2264, 103d Cong., 1st Sess.
747 (1993)). However, we do not believe it is prudent to recommend
implementing a SNF wage index to adjust the SNF cost limits until the
accuracy of those data and impact of the resulting wage index have been
thoroughly analyzed. Under current Medicare rules, most SNFs are paid
their reasonable costs for routine services subject to a cost limit.
The current methodology for computing the SNF routine service cost
limits utilizes the hospital wage index to account for geographic
variations in wages. Only about 35 percent of facilities have costs at
or above these cost limits.
We have maintained that, because hospitals and SNFs generally
compete for employees in the same labor market, one would expect that
the relationship of hospital area average wages to hospital national
average wages would fairly represent the relationship of SNF area
average wages to SNF national average wages. Therefore, we believe the
hospital wage index is an accurate mechanism for adjusting the SNF
routine service cost limits for geographic variations in wages. While
certain limited studies have suggested that a SNF-specific wage index
may be more accurate, no substantial empirical data have been offered
to refute our policy. The study undertaken by ProPAC utilized only
limited data to develop a simulated wage index. Due to the limited
scope of this study, we believe it is not a sufficient basis for
refuting the accuracy of the hospital wage index relative to SNF wages.
We plan to begin collecting SNF wage data for potential use in the
development of a SNF wage index. These data will help us answer two
important questions related to the development of a SNF wage index. The
first is whether SNFs, which are smaller than hospitals and have less
sophisticated accounting systems, can develop and provide accurate wage
index data on a national basis. If such data can be provided, our
second question is whether differences between the resulting wage index
and the hospital wage index would be significant enough to justify the
increased Medicare costs involved and the increased reporting and
information collection burden on SNFs (especially small and rural
SNFs), the fiscal intermediaries, and HCFA.
The collection of SNF wage data also will allow us to determine the
potential impact of a SNF wage index on payments to individual SNFs. A
change in the wage index may favorably impact SNFs in some areas while
it may disadvantage SNFs in other areas (possibly significantly), even
within the same State. While this latter point is not a reason to avoid
the use of a SNF wage index, it does point out the absolute necessity
for collecting accurate wage index data from SNFs for construction of
the wage index. Our experience with the development of a home health
agency (HHA) wage index is also relevant. In 1988, HCFA implemented an
HHA-specific wage index based on data received from HHAs. Subsequently,
HCFA and Congress received numerous complaints from providers
concerning the burden that the reporting requirements posed and the
accuracy of the data. As a result, Congress retroactively repealed its
mandate for use of the HHA wage index and required continued use of the
hospital wage index. This caused great confusion among both providers
and fiscal intermediaries.
Until SNF wage data have been collected and examined, we believe it
is premature to recommend their use for the adjustment of either the
SNF cost limits or any future prospective payment system that may
require a wage adjustment.

E. Improving Outlier Payment Policy (Recommendation 18)

Recommendation: The Commission believes the outlier payment
provisions of the Omnibus Budget Reconciliation Act of 1993 will
improve the current policy for identifying outlier cases and
determining outlier payments under the prospective payment system.
However, the following changes also should be implemented for FY 1995:
The estimated cost of the case and the outlier payment
amount should no longer be adjusted to reflect the hospital's indirect
medical education and disproportionate share status.
The marginal cost factor for cost outliers should be
increased to 80 percent.
These changes would further increase the effectiveness of outlier
payment in protecting against the risk of large losses on some cases.
They would also improve the distribution of outlier payments across
hospitals, including hospitals that receive a large number of transfer
cases.
Response: The Commission's first recommendation with regard to
improving outlier payment policy concerns the methodology we use to
determine whether the cost of a case exceeds the cost outlier
threshold. ProPAC is asking that Medicare no longer standardize
hospital costs to remove the effects of the indirect costs of medical
education (IME) and the costs associated with serving a
disproportionate share of low income patients (DSH). The effect of
standardizing the hospital's charges to remove the effects of their IME
and DSH adjustments is to lower the ``costs'' of cases, for purposes of
applying the cost outlier threshold, for teaching and disproportionate
share hospitals relative to other hospitals.
We responded to this same recommendation in our May 26, 1993
proposed rule (58 FR 30255). In that response, we noted that sections
1886(d)(5)(B)(i) and 1866(d)(5)(F)(ii) of the Act require that we pay
hospitals for IME and DSH costs associated with their outlier payments.
Given this statutory requirement, we believe it would be inappropriate
to implement the Commission's recommendation without a change to the
law.
In that same response, we also stated our belief that the
adjustment for IME and to the prospective payment rate is currently
higher than the additional cost of serving a Medicare beneficiary at a
teaching hospital. The policy advocated by ProPAC in this
recommendation would have the effect of increasing outlier payments to
teaching hospitals. Relative to the costs associated with teaching
activity, we are concerned that the teaching adjustment may
overcompensate teaching hospitals for their Medicare cases. For this
reason, we believe it would be inappropriate to implement ProPAC's
recommendation without making a reduction in the level of the IME
adjustment.
We concur with ProPAC's second recommendation regarding raising the
marginal cost factor for cost outliers to 80 percent from its current
level of 75 percent. We currently pay 75 percent of the difference
between the cost of a case and the cost outlier threshold. Paying 75
percent of costs beyond a threshold protects hospitals against
inordinate losses resulting from the costliest Medicare cases. As we
describe in section IV.D. of this proposed rule, section 13501(c) of
Public Law 103-66 requires that we phase-out payments for day outliers,
while simultaneously increasing payments for cost outliers. We believe
the change mandated by the statute improves Medicare's outlier policy
by focusing outlier payments on the costliest cases. Consistent with
focusing Medicare's outlier payments on cases with the greatest losses,
we are raising the marginal cost factor to 80 percent. We note that
raising the marginal cost factor to 80 percent necessitates an increase
in the fixed loss cost outlier threshold in order to maintain outlier
payments at 5.1 percent of estimated total prospective payments.

F. Level of the Indirect Medical Education Adjustment to PPS Operating
Payments (Recommendation 19)

Recommendation: The Commission recommends that the indirect medical
education adjustment to prospective payments for hospital inpatient
operating costs be reduced from its current level of 7.7 percent to 7.0
percent for fiscal year 1995. This reduction should be implemented with
the anticipated decrease in indirect medical education payments
returned to all hospitals through a proportionate increase in the
standardized payment amounts. The Commission also recommends
continuation of the indirect medical education adjustment to operating
payments until an alternative system of compensating appropriately for
the higher costs of patient care in teaching institutions is fully
operational.
Response: The first part of this recommendation is identical to
ProPAC's recommendation on the level of the IME adjustment for FY 1994,
to which we responded in the May 26, 1993 proposed rule (58 FR 30255)
and September 1, 1993 final rule (58 FR 46326) containing the changes
to the prospective payment systems for FY 1994. We agree that the IME
adjustment should be reduced. Although we have disagreed with ProPAC in
the past over the degree of reduction, we have proposed reductions as
part of the President's budgets for the last several years.
With respect to ProPAC's methodology for estimating the indirect
cost effect of teaching without accounting for the DSH adjustment, we
explained our opposition to this suggestion in the September 1, 1993
final rule (58 FR 46328). To reiterate, our analysis indicates that
there is evidence of significantly higher costs related to DSH among
urban hospitals with 100 or more beds (see O'Dougherty et al., Health
Care Financing Review, Winter 1992, p. 31). Since these hospitals
receive over 96 percent of all DSH payments, we believe ProPAC's claim
that ``DSH payments generally do not reflect differences in costs'' is
overstated. We do agree, however, that the current level of DSH
payments exceeds the measured cost effect of DSH even among urban
hospitals with 100 or more beds. In that regard, we point out that in
the regression model used to estimate the teaching effect, we did not
specify the DSH variable as the level of DSH payments, but instead set
it equal to the DSH percentage for urban hospitals with 100 or more
beds and zero for all other hospitals. (For a complete description of
our estimating model, see the August 30, 1991 final rule implementing
the capital prospective payment system, 56 FR 43370.) As ProPAC alludes
to in its report, not controlling for DSH leads to its higher IME cost
estimate relative to our IME cost estimate.
The remainder of ProPAC's recommendation raises policy issues
related to the appropriate level of IME funding as the transition is
made from the current system to the new health care system. Since these
transition issues are currently being addressed as part of the health
care reform debate, we are not responding in this document to this part
of ProPAC's recommendation.

G. Prospective Payment Method for Outpatient Services (Recommendation
20)

Recommendation: The Commission believes a prospective payment
system for hospital outpatient services should be implemented.
Outpatient payment reform should result in consistent policies across
all sites and providers. Payment should be based on a prospective price
per unit of service until other methods can be developed that would
appropriately control the volume of services. The payment rate should
be adjusted to reflect justifiable cost differences across settings.
Response: We appreciate ProPAC's support for efforts to develop a
prospective payment system for hospital outpatient services. We share
the Commission's view that a hospital outpatient prospective payment
system can provide meaningful incentives for controlling costs. We also
believe that such a system could have the potential to be adapted for
other outpatient settings, resulting in more consistent policies across
varying sites of service. We look forward to the Commission's comments
when our report on a hospital outpatient prospective payment system is
issued.

H. Revision of Payment Formula for Outpatient Services (Recommendation
21)

Recommendation: Until prospective payment systems can be
implemented for hospital outpatient services, the blend formula used to
calculate hospital payments for ambulatory surgery center-approved
procedures, radiology services, and diagnostic services should be
revised. The formula should subtract beneficiary copayment after the
total payment has been calculated. The resulting reduction in Medicare
program payments to hospitals should be used to partially offset
increases in program expenditures due to reducing beneficiary
liability.
Response: We agree that the blend formula used to calculate
Medicare payments to hospitals for ambulatory surgical center-approved
procedures, radiology services, and certain other diagnostic procedures
should be revised, as suggested by ProPAC. It should be noted that the
President's proposed Health Security Act contains a provision that
would make the correction suggested by ProPAC.

I. Beneficiary Liability for Hospital Outpatient Services
(Recommendation 22)

Recommendation: Beneficiary coinsurance for hospital outpatient
services should be limited to 20 percent of the Medicare-allowed
payment, as it is in other settings. For services not paid on a
prospective basis, beneficiary copayment would need to be estimated
because it is not known at the time of service delivery.
Response: We share ProPAC's concern that beneficiaries may be
paying a disproportionate share of the total payment for hospital
outpatient services under the current cost based system. However, we
are in the process of developing a prospective payment system for
hospital outpatient services that will be moving away from costs and
charges as a basis for payment. We believe that it would be most
appropriate to make any changes to beneficiary coinsurance in
conjunction with the implementation of this hospital outpatient
prospective payment system. Therefore, as we develop this system, we
are reviewing the issue of beneficiary liability and are working to
come up with an approach that will be fair to beneficiaries, while
minimizing the negative financial impact on the Medicare program.

J. Limit the Length of Outpatient Observation Stays (Recommendation 23)

Recommendation: The Commission recommends limiting the length of
hospital outpatient observation stays. Further, these changes should be
coordinated with Peer Review Organizations (PROs) so that appropriate
short stay admissions are not denied. ProPAC supports HCFA's efforts in
this regard.
Response: We appreciate ProPAC's support for our efforts to limit
the length of hospital outpatient observation stays. Later this year,
we plan to release Part A Intermediary Manual and Hospital Manual
instructions to help curb inappropriate use of outpatient observation
services, including lengthy stays of days and weeks. These instructions
will require hospitals to admit patients who have been under
observation in outpatient departments for two consecutive midnights.
Release of this new national policy will provide needed consistency
throughout the country in applying outpatient observation service
guidelines, reduce inappropriate use of such services, and reduce the
beneficiary's liability for Part B copayments.
On August 13, 1993, we released a letter to the Executive Directors
of all PROs to clarify PRO responsibilities when conducting reviews of
cases involving short hospital stays. PROs were asked to assure that
their review staffs base their determinations on the beneficiary's need
for inpatient services rather than basing the decision on the payment
consequences.

VIII. Other Required Information

A. Paperwork Reduction Act

As discussed in detail in section III.C. of this preamble, we are
proposing several changes to forms used to gather hospital wage data,
specifically the Worksheet S-3, Part II, of the Medicare cost report,
and the provider cost report questionnaire (HCFA-339). The current
information collection requirements associated with these items have
been approved by the Office of Management and Budget (OMB) under
approval numbers 0938-0050 and 0938-0301, respectively. We are
proposing that the changes to these forms would be effective for cost
reporting periods beginning on or after October 1, 1994. However, these
changes will not be effective until OMB approval is received under the
authority of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et
seq.).

B. Requests for Data from the Public

In order to respond promptly to public requests for data related to
the prospective payment system, we have set up a process under which
commenters can gain access to the raw data on an expedited basis.
Generally, the data are available in computer tape format or
cartridges; however, some files are available on diskette. Data files
are listed below with the cost of each. Anyone wishing to purchase data
tapes, cartridges, or diskettes should submit a written request along
with a company check or money order (payable to HCFA-PUF) to cover the
cost, to the following address: Health Care Financing Administration,
Public Use Files, Accounting Division, P.O. Box 7520, Baltimore,
Maryland 21207-0520, (410) 597-5151.
1. Expanded Modified MedPAR-Hospital (National)
The Medicare Provider Analysis and Review (MedPAR) file contains
records for 100 percent of Medicare beneficiaries using hospital
inpatient services in the United States. The records are stripped of
most data elements that will permit identification of beneficiaries.
Provider numbers and beneficiary claim numbers have been encrypted to
protect the privacy of individuals. The hospital is identified by the 6
position Medicare billing number. The file is available to persons
qualifying under the terms of the Notice of Proposed New Routine Uses
for an Existing System of Records published in the Federal Register on
December 24, 1984 (49 FR 49941), and amended by the July 2, 1985 notice
(50 FR 27361). The national file consists of approximately 11 million
records. Under the requirements of these notices, a data release must
be signed by the purchaser before release of these data. For all files
requiring a signed data release agreement, please write or call to
obtain a blank agreement form before placing order. Two versions of
this file are created each year. They support the following:
Notice of Proposed Rulemaking (NPRM) published in the
Federal Register, usually available by the end of May. This file is
derived from the MedPAR file with a cutoff of 3 months after the end of
the fiscal year (December file).
Final Rule published in the Federal Register, usually
available by the first week of September. This file is derived from the
MedPAR file with a cutoff of 9 months after the end of the fiscal year
(June file).

Media: Tape/Cartridge
File cost: $3,415.00 per fiscal year
Periods available: FY 1988 through FY 1993, and FY 1992 for Severity
DRGs
2. Expanded Modified MedPAR-Hospital (State)
The State MedPAR file contains records for 100 percent of Medicare
beneficiaries using hospital inpatient services in a particular State.
The records are stripped of most data elements that will permit
identification of beneficiaries. Provider numbers and beneficiary claim
numbers have been encrypted to protect the privacy of individuals. The
hospital is identified by the 6 position Medicare billing number. The
file is available to persons qualifying under the terms of the Notice
of Proposed New Routine Uses for an Existing System of Records
published in the December 24, 1984 Federal Register notice, and amended
by the July 2, 1985 notice. This file is a subset of the Expanded
Modified MedPAR-Hospital (National) as described above. Under the
requirements of these notices, a data release must be signed by the
purchaser before release of these data. Two versions of this file are
created each year. They support the following:
NPRM published in the Federal Register, usually available
by the end of May. This file is derived from the MedPAR file with a
cutoff of 3 months after the end of the fiscal year (December file).
Final Rule published in the Federal Register, usually
available by the first week of September. This file is derived from the
MedPAR file with a cutoff of 9 months after the end of the fiscal year
(June file).

Media: Tape/Cartridge
File cost: $1,050.00 per State per year
Periods available: FY 1988 through FY 1993
3. HCFA Hospital Wage Index Data
This tape contains four files. Included are: (1) the hospital hours
and salaries for FY 1991 used to create the proposed FY 1995
prospective payment system wage indexes; (2) a history of all wage
indexes used since October 1, 1983; (3) a list of State and county
codes used by SSA and FIPS (Federal Information Processing Standards),
county name, and Metropolitan Statistical Area (MSA); and (4) a file of
hospitals that were reclassified for the purpose of the FY 1995 wage
index. Two versions of these files are created each year. They support
the following:
NPRM published in the Federal Register, usually by the end
of May.
Final Rule published in the Federal Register, usually by
the first week of September.

Media: Tape/Cartridge
File cost: $500.00
Periods available: FY 1995 PPS Update

We note that the files also are available individually as indicated
below.
(1) HCFA Hospital Wage Index Survey Only (usually available by the
end of March for the NPRM and the middle of August for the final rule.)
(2) Urban and Rural Wage Indices Only
(3) PPS SSA/FIPS MSA State and County Crosswalk Only (usually
available by the end of March)
(4) Reclassified Hospitals by Provider Only

Media: Diskette
File cost: $145.00 Each
4. PPS-I Minimum Data Set, Cost Reporting Periods Beginning On or After
October 1, 1983, and Before October 1, 1984
The PPS-I Minimum Data Set contains cost, statistical, financial,
and other information from the Medicare hospital cost report (HCFA Form
2552-84). The dataset includes only the most current cost report (as
submitted, final settled or reopened) submitted for a Medicare
participating hospital by the Medicare Fiscal Intermediary to HCFA. The
majority of these cost reports have been settled by the Medicare fiscal
intermediary. This file is no longer updated.

Media: Tape/Cartridge
Price: $715.00
5. PPS-II Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1984, and before October 1, 1985
The PPS-II Minimum Data Set contains cost, statistical, financial,
and other information from the Medicare hospital cost report (HCFA Form
2552-85). The dataset includes only the most current cost report (as
submitted, final settled or reopened) submitted for a Medicare
certified hospital by the Medicare fiscal intermediary to HCFA. This
dataset is updated annually (October) and is available on the last day
of the following month.

Media: Tape/Cartridge
Price: $715.00
6. PPS-III Minimum Data Set, Cost Reporting Periods beginning on or
after October 1, 1985, and before October 1, 1986
The PPS-III Minimum Data Set contains cost, statistical, financial,
and other information from the Medicare hospital cost report (HCFA Form
2552-85). The dataset includes only the most current cost report (as
submitted, final settled or reopened) submitted for a Medicare
certified hospital by the Medicare fiscal intermediary to HCFA. This
dataset is updated annually (October) and is available on the last day
of the following month.

Media: Tape/Cartridge
Price: $715.00
7. PPS-IV Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1986, and Before October 1, 1987
The PPS-IV Minimum Data Set, contains cost, statistical, financial,
and other information from the Medicare hospital cost report (HCFA Form
2552-85). The dataset includes only the most current cost report (as
submitted, final settled or reopened) submitted for a Medicare
certified hospital by the Medicare fiscal intermediary to HCFA. This
dataset is updated at the end of each calendar quarter and is available
on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
8. PPS-V Minimum Data Set, Cost Reporting Periods Beginning On or After
October 1, 1987, and Before October 1, 1988
The PPS-V Minimum Data Set, contains cost, statistical, financial,
and other information from the Medicare hospital cost report (HCFA Form
2552-85). The dataset includes only the most current cost report (as
submitted, final settled or reopened) submitted for a Medicare
certified hospital by the Medicare fiscal intermediary to HCFA. This
dataset is updated at the end of each calendar quarter and is available
on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
9. PPS-VI Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1988, and Before October 1, 1989
The PPS-VI Minimum Data Set contains cost, statistical, financial,
and other information from the Medicare hospital cost report for the
hospital fiscal periods beginning on or after October 1, 1988, and
before January 1, 1989, and for the hospital fiscal periods beginning
on or after January 1, 1989, and before October 1, 1989 (Forms HCFA
2552-85 and 2552-89, respectively). The dataset includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This dataset is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
10. PPS-VII Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1989, and Before October 1, 1990
The PPS-VII Minimum Data Set contains cost, statistical, financial
and other information from the Medicare hospital cost report (Form HCFA
2552-89) for the hospital fiscal periods beginning on or after October
1, 1989, and before October 1, 1990. The data set includes only the
most current cost report (as submitted, final settled or reopened)
submitted for a Medicare certified hospital by the Medicare fiscal
intermediary to HCFA. This data set is updated at the end of each
calendar quarter and is available on the last day of the following
month.

Media: Tape/Cartridge
Price: $715.00
11. PPS-VIII Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1990, and Before October 1, 1991
The PPS-VIII Minimum Data Set contains cost, statistical, financial
and other information from the Medicare hospital cost report (Form HCFA
2552-89) for the hospital fiscal periods beginning on or after October
1, 1990, and before October 1, 1991. The data set includes only the
most current cost report (as submitted, final settled or reopened)
submitted for a Medicare certified hospital by the Medicare fiscal
intermediary to HCFA. This data set is updated at the end of each
calendar quarter and is available on the last day of the following
month.

Media: Tape/Cartridge
Price: $715.00
12. PPS-IX Minimum Data Set, Cost Reporting Periods Beginning on or
After October 1, 1991 and Before October 1, 1992
The PPS-IX Minimum Data Set contains cost, statistical, financial
and other information from the Medicare Hospital Cost Report (Form HCFA
2552-89) for the hospital fiscal periods beginning on or after October
1, 1991 and before October 1, 1992. The data set includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This data set is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
File Cost: $715.00
13. PPS-VI Capital Data Set, Cost Reporting Periods Beginning on or
After October 1, 1988, and before October 1, 1989
The PPS-VI Capital Data Set contains selected data for capital-
related costs, interest expense and related information and complete
balance sheet data from the Medicare hospital cost report for the
hospital fiscal periods beginning on or after October 1, 1988, and
before January 1, 1989, and for the hospital fiscal periods beginning
on or after January 1, 1989, and before October 1, 1989 (Forms HCFA
2552-85 and 2552-89, respectively). The data set includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This data set is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
14. PPS-VII Capital Data Set, Cost Reporting Periods Beginning on or
After October 1, 1989, and Before October 1, 1990
The PPS-VII Capital Data Set contains selected data for capital
related costs, interest expense and related information and complete
balance sheet data from the Medicare hospital cost report (Form 2552-
89) for the hospital fiscal periods beginning on or after October 1,
1989, and before October 1, 1990. The data set includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This data set is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
15. PPS-VIII Capital Data Set, Cost Reporting Periods Beginning on or
After October 1, 1990, and Before October 1, 1991
The PPS-VIII Capital Data Set contains selected data for capital
related costs, interest expense and related information and complete
balance sheet data from the Medicare hospital cost report (Form 2552-
89) for the hospital fiscal periods beginning on or after October 1,
1990, and before October 1, 1991. The data set includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This data set is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
16. PPS-IX Capital Data Set, Cost Reporting Periods Beginning on or
After October 1, 1991, and Before October 1, 1992
The PPS-VIII Capital Data Set contains selected data for capital
related costs, interest expense and related information and complete
balance sheet data from the Medicare hospital cost report (Form 2552-
89) for the hospital fiscal periods beginning on or after October 1,
1991, and before October 1, 1992. The data set includes only the most
current cost report (as submitted, final settled or reopened) submitted
for a Medicare certified hospital by the Medicare fiscal intermediary
to HCFA. This data set is updated at the end of each calendar quarter
and is available on the last day of the following month.

Media: Tape/Cartridge
Price: $715.00
17. Provider-Specific File
This file is a component of the PRICER program used in the fiscal
intermediary's system to compute DRG payments for individual bills. The
file contains records for all prospective payment system eligible
hospitals, including hospitals in waiver States, and data elements used
in the prospective payment system recalibration processes and related
activities. Beginning with December 1988, the individual records were
enlarged to include pass-through per diems and other elements.
Beginning with December 1991, the individual records were enlarged to
include elements related to the capital prospective payment system.

Media: Tape/Cartridge
File Cost: $500.00 per file
Periods available: FY 1987 through FY 1994 (December updates)
Media: Diskette
File Cost: $265.00
Periods Available: FY 1994 PPS Update
18. HCFA Medicare Case-Mix Index File
This file contains the Medicare case-mix index by provider number
as published in each year's update of the Medicare hospital inpatient
prospective payment system. The case-mix index is a measure of the
costliness of cases treated by a hospital relative to the cost of the
national average of all Medicare hospital cases, using DRG weights as a
measure of relative costliness of cases. Two versions of this file are
created each year. They support the following:
NPRM published in the Federal Register, usually by the end
of May.
Final rule published in the Federal Register, usually by
the first week of September.

Media: Diskette
Price: $145.00 per year
Periods available: FY 1985 through FY 1993, and FY 1992 for Severity
DRGs
19. Table 5 DRG File
This file contains a listing of DRGs, DRG narrative description,
relative weight, geometric and arithmetic mean lengths of stay, and day
outlier trim points as published in the Federal Register. The hardcopy
image has been copied to diskette. There are two versions of this file
as published in the Federal Register:
1. NPRM, usually published by the end of May.
2. Final rule, usually published by the first week of September.

Media: Diskette
File cost: $145.00
Periods available: FY 1994 PPS Update, and Severity DRGs
20. PPS Payment Impact File
This file contains data used to estimate payments under Medicare's
hospital inpatient prospective payment systems for operating and
capital-related costs. The data are taken from various sources,
including the Provider-Specific File, the PPS-VI and PPS-VII Minimum
Data Sets, and prior impact files. The data set is abstracted from an
internal file used for the impact analysis of the changes to the
prospective payment systems published in the Federal Register. This
file is available for release 1 month after the final rule is published
in the Federal Register, usually during the first week of September.

Media: Diskette
File Cost: $145.00
Periods available: FY 1994 PPS Update
21. AOR/BOR Tables
This diskette contains data used to develop the DRG relative
weights. It contains mean, maximum, minimum, standard deviation and
coefficient of variation statistics by DRG for length of stay and
standardized charges. The BOR tables are ``Before Outliers Removed''
and the AOR is ``After Outliers Removed.'' (Outliers refers to
statistical outliers, not payment outliers.)

Media: Diskette
File cost: $145.00
Periods available: FY 1994 PPS Update, and Severity DRGs

For further information concerning these data tapes, contact Mary
R. White at (410) 597-3671.
In addition, certain other data, such as area wage data and data
used to construct the Puerto Rico standardized amounts, are available
in hard copy format. Commenters interested in examining hard copy data
should contact John Davis at (410) 966-5654.
We realize that commenters may be interested in obtaining data
other than those we have discussed above. These commenters should
direct their requests to John Davis at the number provided above.
Finally, in lieu of obtaining data through the mail, certain data
may also be available for inspection at the central office of the
Health Care Financing Administration in Baltimore, Maryland. Commenters
interested in obtaining more information about this alternative for
reviewing data should also contact John Davis.

C. Public Comments

Because of the large number of items of correspondence we normally
receive on a proposed rule, we are not able to acknowledge or respond
to them individually. However, in preparing the final rule, we will
consider all comments concerning the provisions of this proposed rule
that we receive by the date and time specified in the ``Dates'' section
of this preamble and respond to those comments in the preamble to that
rule. We emphasize that, given the statutory requirement under section
1886(e)(5) of the Act that our final rule for FY 1995 be published by
September 1, 1994, we will consider only those comments that deal
specifically with the matters discussed in this proposed rule.

List of Subjects

42 CFR Part 412

Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.

42 CFR Part 413

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

42 CFR Part 482

Grant programs-health, Hospitals, Medicaid, Medicare, Reporting and
recordkeeping requirements.

42 CFR Part 485

Grant programs-health, Health facilities, Medicaid, Medicare,
Reporting and recordkeeping requirements.

42 CFR Part 489

Health facilities, Medicare, Reporting and recordkeeping
requirements.
42 CFR chapter IV would be amended as set forth below:
A. Part 412 would be amended as follows:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES

1. The authority citation for part 412 continues to read as
follows:

Authority: Secs. 1102, 1815(e), 1820, 1871, and 1886 of the
Social Security Act (42 U.S.C. 1302, 1395g(e), 1395i-4, 1395hh, and
1395ww).

Subpart A--General Provisions

2. In Sec. 412.4, paragraphs (a)(3), (b) introductory text, (b)(2),
and (b)(3)(ii) are revised, a new paragraph (b)(4) is added, and
paragraph (d)(1) is revised to read as follows:

Sec. 412.4 Discharges and transfers.

(a) * * *
(3) For discharges occurring before October 1, 1994, the patient is
transferred to a hospital or hospital unit that is excluded from the
prospective payment systems under subpart B of this part.
(b) Transfers. A discharge of a hospital inpatient is not counted
for purposes of the prospective payment systems when the patient is
transferred--
* * * * *
(2) From the care of a hospital paid under this section to the care
of another such hospital;
(3) * * *
(ii) Whose first cost reporting period under the prospective
payment systems has not yet begun; or
(4) For discharges occurring on or after October 1, 1994, from the
care of a hospital paid under this section to the care of a hospital or
hospital unit that is excluded from the prospective payment systems
under subpart B of this part.
* * * * *
(d) Payment to a hospital transferring an inpatient to another
hospital or unit. (1) A hospital that transfers an inpatient under the
circumstances described in paragraph (b)(2), (b)(3), or (b)(4) of this
section, is paid a graduated per diem rate for each day of the
patient's stay in that hospital, not to exceed the amount that would
have been paid under subparts D, E, and M of this part if the patient
had been discharged to another setting. The per diem is determined by
dividing the appropriate prospective payment rates (as determined under
subparts D, E, and M of this part) by the geometric mean length of stay
for the specific Diagnosis-Related Group (DRG) into which the case
falls. Payment is graduated by paying twice the per diem for the first
day of the stay, and paying the per diem amount for each subsequent
day, up to the full DRG payment amount as described in this paragraph.
* * * * *

Subpart B--Hospital Services Subject to and Excluded From the
Prospective Payment Systems for Inpatient Operating Costs and
Inpatient Capital-Related Costs

3. In Sec. 412.23, paragraph (e) is revised to read as follows:

Sec. 412.23 Excluded hospitals: Classifications.

* * * * *
(e) Long-term care hospitals. A long-term care hospital must meet
the requirements of paragraphs (e)(1) and (e)(2) of this section, and,
where applicable, the additional requirements in paragraph (e)(3) of
this section.
(1) The hospital must have a provider agreement under part 489 of
this chapter to participate as a hospital
(2) The hospital must have an average length of inpatient stay
greater than 25 days--
(i) As computed by dividing the number of total inpatient days
(less leave or pass days) by the number of total discharges for the
hospital's most recent complete cost reporting period; or
(ii) If a change in the hospital's average length of stay is
indicated, as computed by the same method for the immediately preceding
six-month period.
(3) For cost reporting periods beginning on or after October 1,
1994, a hospital that occupies space in a building also used by another
hospital, or in one or more entire buildings located on the same campus
as buildings used by another hospital, must meet the following
additional requirements:
(i) Separate governing body. The hospital has a governing body that
is separate from the governing body of the hospital from which it
obtains space. The hospital's governing body is not under the control
of the hospital that provides space, or of any third entity that
controls both hospitals.
(ii) Separate chief medical officer. The hospital has a single
chief medical officer who reports directly to the governing body and
who is responsible for all medical staff activities of the hospital.
The chief medical officer of the hospital is not employed by or under
contract with either the hospital that provides space or any third
entity that controls both hospitals.
(iii) Separate medical staff. The hospital has a medical staff that
is separate from the medical staff of the hospital from which it
obtains space. The hospital's medical staff is directly accountable to
the governing body for the quality of medical care provided in the
hospital, and adopts and enforces bylaws governing medical staff
activities, including criteria and procedures for recommending to the
governing body the privileges to be granted to individual
practitioners.
(iv) Chief executive officer. The hospital has a single chief
executive officer through whom all administrative authority flows, and
who exercises control and surveillance over all administrative
activities of the hospital. The chief executive officer is not employed
by, or under contract with, either the hospital that provides space or
any third entity that controls both hospitals.
(v) Performance of basic hospital functions. The hospital performs
the basic hospital functions specified in Secs. 482.21 through 482.27,
482.30, and 482.42 of this chapter through the use of employees or
under contracts or other agreements with entities other than the
hospital from which it obtains space, or a third entity that controls
both hospitals. Food and dietetic services and housekeeping,
maintenance, and other services necessary to maintain a clean and safe
physical environment could be obtained under contracts or other
agreements with the hospital that provides space, or with a third
entity that controls both hospitals.
(4) For purposes of this section, control exists if an individual
or an organization has the power, directly or indirectly, significantly
to influence or direct the actions or policies of an organization or
institution.
* * * * *

Sec. 412.27 [Amended]

4. In Sec. 412.27, the section heading is revised to read
``Excluded psychiatric units: Additional requirements.''

Sec. 412.29 [Amended]

5. In Sec. 412.29, the section heading is revised to read
``Excluded rehabilitation units: Additional requirements.''

Subpart D--Basic Methodology for Determining Prospective Payment
Federal Rates for Inpatient Operating Costs

6. In paragraph (d)(2) of Sec. 412.60, the second sentence is
revised to read as follows:

Sec. 412.60 DRG classification and weighting factors.

* * * * *
(d) * * *
(2) * * * If the intermediary decides that a higher-weighted DRG
should be assigned, the case will be reviewed by the appropriate PRO to
verify the change in DRG assignment as specified in Sec. 466.71(c)(2)
of this chapter.
* * * * *
7. In Sec. 412.63, paragraph (m)(1), the paragraph heading of
paragraph (r), and paragraphs (r)(1) introductory text, (r)(1)(i),
(r)(2) introductory text, (r)(2)(i), and (s)(2) are revised to read as
follows:

Sec. 412.63 Federal rates for inpatient operating costs for fiscal
years after Federal fiscal year 1984.

* * * * *
(m) * * *
(1) Plus, for hospitals located in rural areas, the percentage
increase necessary so that the average standardized amounts computed
under paragraph (c) through (i) of this section are equal to the
average standardized amounts for hospitals located in an urban area
other than a large urban area.
* * * * *
(r) Computing Federal rates for inpatient operating costs for
hospitals located in large urban and other
areas. * * *
(1) For hospitals located in a large urban area in the United
States or that region respectively, the rate equals the product of--
(i) The adjusted average standardized amount (computed under
paragraph (c) of this section) for the fiscal year for hospitals
located in a large urban area in the United States or in that region;
and
* * * * *
(2) For hospitals located in an other area in the United States or
that region respectively, the rate equals the product of--
(i) The adjusted average standardized amount (computed under
paragraph (c) of this section) for the fiscal year for hospitals
located in an other area in the United States or that region; and
* * * * *
(s) * * *
(2) HCFA makes a midyear correction to the wage index for an area
only if a hospital can show that--
(i) The intermediary or HCFA made an error in tabulating the
hospital's data; and
(ii) The hospital could not have known about the error, or did not
have the opportunity to correct the error, before the beginning of the
Federal fiscal year. A midyear correction to the wage index is
effective prospectively from the date the change is made to the wage
index.
* * * * *

Subpart E--Determination of Transition Period Payment Rates for the
Prospective Payment System for Inpatient Operating Costs

8. In Sec. 412.71, paragraph (b) introductory text is revised,
paragraph (b)(1) is removed and paragraphs (b)(2) through (b)(8) are
redesignated as paragraphs (b)(1) through (b)(7). The revision is to
read as follows:

Sec. 412.71 Determination of base-year inpatient operating costs.

* * * * *
(b) Modifications to base-year costs. Prior to determining the
hospital-specific rate, the intermediary will adjust the hospital's
estimated base-year inpatient operating costs, as necessary, to include
malpractice insurance costs in accordance with Sec. 413.53(a)(1)(i) of
this chapter, and exclude the following:
* * * * *

Subpart F-- Payment for Outlier Cases

9. In Sec. 412.80, the introductory text of paragraphs (a)(1) and
(a)(1)(ii) are revised, and a new paragraph (a)(1)(iii) is added to
read as follows:

Sec. 412.80 General provisions.

(a) Basic rule. (1) For discharges before October 1, 1994, except
as provided in paragraph (a)(2) of this section concerning transferring
hospitals, HCFA provides for additional payment, approximating a
hospital's marginal cost of care beyond thresholds specified by HCFA,
to a hospital for covered inpatient hospital services furnished to a
Medicare beneficiary if either of the conditions specified in
paragraphs (a)(1)(i) and (a)(1)(ii) of this section is met. For
discharges occurring on or after October 1, 1994, except as provided in
paragraph (a)(2) of this section concerning transferring hospitals,
HCFA provides for additional payment, beyond standard DRG payments, to
a hospital for covered inpatient hospital services furnished to a
Medicare beneficiary if either of the conditions specified in
paragraphs (a)(1)(i) and (a)(1)(iii) of this section is met.
* * * * *
(ii) For discharges occurring before October 1, 1994, the
beneficiary's length of stay does not exceed criteria established under
paragraph (a)(1)(i) of this section, but the hospital's charges for
covered services furnished to the beneficiary, adjusted to operating
costs and, effective with cost reporting periods beginning on or after
October 1, 1991, capital costs, by applying cost-to-charge ratios as
described in Sec. 412.84(h), exceed the greater of the
following: * * *
(iii) For discharges occurring on or after October 1, 1994, the
beneficiary's length of stay does not exceed criteria established under
paragraph (a)(1)(i) of this section, but the hospital's charges for
covered services furnished to the beneficiary, adjusted to operating
costs and capital costs by applying cost-to-charge ratios as described
in Sec. 412.84(h), exceed the DRG payment for the case plus a fixed
dollar amount (adjusted for geographic variation in costs) as specified
by HCFA.
* * * * *
10. In Sec. 412.82, paragraph (c) is revised to read as follows:

Sec. 412.82 Payment for extended length-of-stay cases (day outliers).

* * * * *
(c) Except as provided in Sec. 412.86, the per diem payment made
under paragraph (a) of this section is derived by taking a percentage
of the average per diem payment for the applicable DRG, as calculated
by dividing the Federal prospective payment rate for inpatient
operating costs and inpatient capital-related costs determined under
subpart D of this part by the arithmetic mean length of stay for that
DRG. HCFA issues the applicable percentage of the average per diem
payment in the annual publication of the prospective payment rates in
accordance with Sec. 412.8(b).
* * * * *

Sec. 412.84 [Amended]

11. In paragraph (j) of Sec. 412.84, remove the words ``75
percent'' from wherever they appear in the paragraph and add, in their
place, the words ``80 percent''.

Subpart G--Special Treatment of Certain Facilities Under the
Prospective Payment System for Inpatient Operating Costs

12. In Sec. 412.96, paragraph (d) is revised to read as follows:

Sec. 412.96 Special treatment: Referral centers.

* * * * *
(d) Payment to rural referral centers. Effective for discharges
occurring on or after April 1, 1988, and before October 1, 1994, a
hospital that is located in a rural area and meets the criteria of
paragraphs (b)(1), (b)(2) or (c) of this section is paid prospective
payments for inpatient operating costs per discharge based on the
applicable other urban payment rates as determined in accordance with
Sec. 412.63, as adjusted by the hospital's area wage index.
* * * * *
13. Section 412.105 is amended as follows:
a. Paragraph (b) is revised.
b. In paragraph (d)(1), the phrase ``set forth in paragraph (c)(1)
of this section.'' is revised to read ``set forth in paragraph (c) of
this section.''
The revision is to read as follows:

Sec. 412.105 Special treatment: Hospitals that incur indirect costs
for graduate medical education programs.

* * * * *
(b) Determination of number of beds. For purposes of this section,
the number of beds in a hospital is determined by counting the number
of available bed days during the cost reporting period, not including
beds assigned to newborns who are not in intensive care areas,
custodial care beds, and beds in excluded distinct part hospital units,
and dividing that number by the number of days in the cost reporting
period.
* * * * *
14. In Sec. 412.109, a new paragraph (e) is added to read as
follows:

Sec. 412.109 Special treatment: Essential access community hospitals
(EACHs).

* * * * *
(e) Review of HCFA Determination. A determination by HCFA that a
hospital does not meet the criteria for EACH designation, or that a
hospital's EACH designation should be terminated, is subject to review
under part 405, subpart R of this chapter.

Subpart H--Payments to Hospitals Under the Prospective Payment
Systems

Sec. 412.113 [Amended]

15. In Sec. 412.113(b)(3), the phrase ``Except as provided in
Sec. 413.86(c)(1) of this chapter,'' is revised to read ``Except as
provided in Sec. 413.86(c) of this chapter,''.

Subpart L--The Medicare Geographic Classification Review Board

16. In Sec. 412.232, paragraph (c) is revised to read as follows:

Sec. 412.232 Criteria for all hospitals in a rural county seeking
urban redesignation.

* * * * *
(c) Wage criteria. In applying the following numeric criteria,
rounding of numbers to meet the qualifying percentages is not
permitted.
(1) Aggregate hourly wage. The aggregate average hourly wage for
all hospitals in the rural county must be equal to at least 85 percent
of the average hourly wage in the adjacent urban area; or
(2) Aggregate hourly wage weighted for occupational mix. The
aggregate average hourly wage for all hospitals in the rural county,
weighted for occupational categories, is at least 90 percent of the
average hourly wage in the adjacent urban area.
* * * * *

Subpart M--Prospective Payment System for Inpatient Hospital
Capital Costs

17. In Sec. 412.302, paragraph (c)(2)(i)(D) is revised to read as
follows:

Sec. 412.302 Introduction to capital costs.

* * * * *
(c) * * *
(2) * * *
(i) * * *
(D) The hospital put the asset into patient use on or before the
latter of September 30, 1996 or 4 years from the date the certificate
of need was approved.
* * * * *
18. Section 412.348 is revised to read as follows:

Sec. 412.348 Exception payments.

(a) Definitions. As used in this section--
Average age of fixed assets. The average age of fixed assets is the
ratio of accumulated depreciation for buildings and fixed equipment to
current depreciation expense for buildings and fixed equipment. The
average age of fixed assets is determined from information on the
Medicare cost report.
Current ratio. Current ratio means the ratio of current liabilities
to current assets. The current ratio is determined from information on
the Medicare cost report.
Fixed assets. Fixed assets mean buildings and fixed equipment.
(b) Criterion for additional payment during the transition period.
An additional payment is made to a hospital paid under either the fully
prospective payment methodology or the hold-harmless payment
methodology as determined under paragraph (c) of this section for cost
reporting periods beginning on or after October 1, 1991 and before
October 1, 2001.
(c) Minimum payment level by class of hospital. (1) HCFA
establishes a minimum payment level by class of hospital. The minimum
payment level for a hospital will equal a fixed percentage of the
hospital's capital-related costs. The minimum payment levels may be no
greater than the percentages of allowable capital-related costs that
follow:
(i) 90 percent for sole community hospitals.
(ii) 80 percent for hospitals located in an urban area for purposes
of Sec. 412.63(a) with at least 100 beds, as determined under
Sec. 412.105(b), that have a disproportionate share patient percentage
of at least 20.2 percent as determined under Sec. 412.106(b), and for
hospitals located in an urban area for purposes of Sec. 412.63(a) with
at least 100 beds that qualify for disproportionate share payments
under Sec. 412.106(c)(2).
(iii) 70 percent for all other hospitals.
(2) HCFA will issue the minimum payment levels for each class of
hospital in determining the additional exception payment in the annual
notice of capital prospective payment rates, published in accordance
with Sec. 412.8(b).
(d) Additional payments. A hospital is entitled to an additional
payment if its capital payments for the cost reporting period would
otherwise be less than the applicable minimum payment level. The
additional payment equals the difference between the applicable minimum
payment level and the capital payments that the hospital would
otherwise receive minus any offset amount determined under paragraph
(e)(2) of this section.
(e) Determining a hospital's exception payment amount--(1)
Cumulative comparison. For each cost reporting period beginning before
October 1, 2001, the hospital's exception payment is determined by
comparing the cumulative payments made to the hospital under the
capital prospective payment system to the cumulative minimum payment
levels applicable to the hospital for each cost reporting period
subject to the prospective payment system.
(2) Offsetting amounts. Any amount by which the hospital's
cumulative payments exceed its cumulative minimum payment levels is
deducted from the additional payment that would otherwise be payable
for a cost reporting period.
(f) Additional payment exception for extraordinary circumstances.
(1) A hospital may request an additional payment if the hospital incurs
unanticipated capital expenditures in excess of $5 million (net of
proceeds from other payment sources such as insurance, litigation
decisions and other State, local or Federal government funding
programs) due to extraordinary circumstances beyond the hospital's
control. Extraordinary circumstances include, but are not limited to, a
flood, fire, or earthquake.
(2) A hospital must apply to its HCFA Regional Office by the later
of October 1, 1992 or 180 days after the extraordinary circumstance
causing the unanticipated expenditures for a determination by the
Director, Office of Payment Policy, Bureau of Policy Development, HCFA
of whether the hospital is eligible for an additional payment based on
the nature of the circumstances and the amount of financial loss
documented by the hospital.
(3) Except for sole community hospitals, the additional payment is
based on a minimum payment amount of 85 percent for Medicare's share of
allowable capital-related costs attributable to the extraordinary
circumstances. For sole community hospitals, the minimum payment amount
is 100 percent.
(4) The minimum payment level applicable under paragraph (c)(1) of
this section is adjusted to take into account the 85 percent minimum
payment level (100 percent for sole community hospitals) under
paragraph (f)(3) of this section for the unanticipated capital-related
costs. The additional payment for the cost reporting period equals the
difference between the adjusted minimum payment level and the capital
payments the hospital would otherwise receive less any offset amount
determined under paragraph (e)(2) of this section.
(g) Special exceptions process. For eligible hospitals that meet an
age of assets test, receive any required approval from a State or local
planning authority, and, in the case of urban hospitals, meet an excess
capacity test, an additional payment may be made for up to 10 years
beyond the end of the capital prospective payment system transition
period.
(1) Eligible hospitals. The following classes of hospitals are
eligible to receive exceptions payments under this special exceptions
provision:
(i) Sole community hospitals that have a current ratio less than or
equal to 1.75 in the exception year.
(ii) Hospitals located in an urban area under Sec. 412.63(a) with
at least 100 beds, as determined under Sec. 412.105(b), that either
have a disproportionate share of at least 20.2 percent as determined
under Sec. 412.106(b) or qualify for disproportionate share payments
under Sec. 412.106(c)(2), and that have a current ratio less than or
equal to 1.75 in the exception year.
(iii) Hospitals with a combined inpatient Medicare and Medicaid
utilization of at least 70 percent.
(2) Age of assets test. A hospital meets the age of assets test
if--
(i) Its average age of fixed assets is at or above the 75th
percentile for the hospital's first cost reporting period beginning on
or after October 1, 1991; and
(ii) Its average age of fixed assets in a subsequent cost reporting
period (but no later than the last cost reporting period beginning
before October 1, 2001) declines by at least 50 percent from its
average age of fixed assets in the first cost reporting period
beginning on or after October 1, 1991.
(3) Planning authority approval. The hospital must obtain any
required approval from a State or local planning authority.
(4) Excess capacity test for urban hospitals. Urban hospitals that
are not required to receive approval from a State or local planning
authority must demonstrate that either--
(i) The overall average occupancy rate in its metropolitan
statistical area is at least 80 percent; or
(ii) Its capacity is no more than 80 percent of its prior capacity
(in terms of bed size).
(5) Minimum payment level. The minimum payment level for qualifying
hospitals will be 70 percent.
(6) Limitation on the period for exception payments. A qualifying
hospital may receive an exceptions payment for up to 10 years from the
year in which it first meets the age of assets test, provided that it
meets the age of asset test no later than the last cost reporting
period beginning before October 1, 2001.
(7) Determining a hospital's exception payment amount--(i)
Cumulative comparison. For each cost reporting period, the hospital's
exception payment is determined by comparing the cumulative payments
made to the hospital under the capital prospective payment system to
the cumulative minimum payment levels applicable to the hospital for
each cost reporting period subject to the prospective payment system.
(ii) Offsetting amounts. Any amount by which the hospital's
cumulative payments exceed its cumulative minimum payment levels is
deducted from the additional payment that would otherwise be payable
for a cost reporting period.
(iii) Other offset. Any amount by which the hospital's Medicare
inpatient operating and capital prospective payments exceed its
Medicare inpatient operating and capital costs is deducted from the
additional payment that would otherwise be payable for the cost
reporting period.
(h) Limit on exception payments. Total estimated payments under the
exception process may not exceed 10 percent of the total estimated
capital prospective payments (exclusive of hold-harmless payments for
old capital) for the same fiscal year.

Secs. 412.20, 412.22, 412.25, 412.27, 412.29, 412.30, 412.96, 412.105,
412.108, 412.116 and 412.130 [Amended]

19. In part 412, remove the words ``distinct part'', wherever they
appear, in the following places:
a. Section 412.20(b)(1);
b. Section 412.22(b);
c. Section heading of Sec. 412.25;
d. Section 412.25(a) introductory text;
e. Section 412.27, the introductory text for the section;
f. Section 412.29, the introductory text for the section;
g. Section heading of Sec. 412.30;
h. Section 412.96(c)(1) introductory text and (c)(2)(i)
introductory text;
i. Section 412.105(b), (f)(5) and (g)(1)(iii);
j. Section 412.108(a)(2);
k. Section 412.116(a) and (b)(1) introductory text;
l. Section heading of Sec. 412,130; and
m. Section 412.130 (a)(2) and (a)(3).
B. Part 413 would be amended as follows:

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

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

Authority: Secs. 1102, 1814(b), 1815, 1833 (a), (i), and (n),
1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42
U.S.C. 1302, 1395f(b), 1395g, 13951 (a), (i), and (n), 1395x(v),
1395hh, 1395rr, 1395tt, and 1395ww); sec. 104(c) of Public Law 100-
360 as amended by sec. 608(d)(3) of Public Law 100-485 (42 U.S.C.
1395ww (note)) and sec. 101(c) of Public Law 101-234 (42 U.S.C.
1395ww (note)).

Subpart C--Limits on Cost Reimbursement

Sec. 413.40 [Amended]

2. In paragraph (a)(2)(ii), (b)(1)(i) through (b)(1)(iii) and
(f)(2) of Sec. 413.40, remove the words ``(distinct parts)'' and
``distinct part'', wherever they appear.

Subpart D--Apportionment

3. In Sec. 413.53, paragraph (a)(1)(i) is revised to read as
follows:

Sec. 413.53 Determination of cost of services to beneficiaries.

(a) * * *
(1) Departmental method--(i) Methodology. Except as provided in
paragraph (a)(1)(ii) of this section with respect to the treatment of
the private room cost differential for cost reporting periods starting
on or after October 1, 1982, the ratio of beneficiary charges to total
patient charges for the services of each ancillary department is
applied to the cost of the department; to this is added the cost of
routine services for program beneficiaries, determined on the basis of
a separate average cost per diem for general routine patient care areas
as defined in paragraph (b) of this section, taking into account, in
hospitals, a separate average cost per diem for each intensive care
unit, coronary care unit, and other intensive care type inpatient
hospital units.
* * * * *

Sec. 413.56 [Removed and Reserved]

4. Section 413.56 is removed and reserved.

Subpart F--Specific Categories of Costs

5. Section 413.86 is amended as follows:
a. In paragraph (f)(1)(ii), the third sentence is revised.
b. In paragraph (g)(1) introductory text, a new sentence is added
after the second sentence.
The revision and addition are to read as follows:

Sec. 413.86 Direct graduate medical education payments.

* * * * *
(f) * * *
(1) * * *
(ii) * * * A part-time resident counts as a partial FTE based on
the proportion of time worked in the hospital compared to the total
time necessary to fill a full-time internship or residency slot.
* * * * *
(g) * * *
(1) * * * Effective July 1, 1995, an initial residency period is
defined as the minimum number of years required for board eligibility.
* * *
* * * * *

Subpart G--Capital-Related Costs

6. Section 413.134 is amended as follows:
a. In paragraph (d)(1), the phrase ``where permitted under
Sec. 413.134(a)(3),'' is revised to read ``when permitted under
paragraph (a)(3) of this section,''.
b. Paragraphs (e)(1) and (e)(2)(ii) are revised, and paragraphs
(e)(2)(iii), (e)(2)(iv) and (e)(4) are added.
The revisions and additions are to read as follows:

Sec. 413.134 Depreciation: Allowance for depreciation based on asset
costs.

* * * * *
(e) * * *
(1) Incentive. As an incentive for funding, investment income on
funded depreciation is not treated as a reduction of allowable interest
expense. Investment income earned on deposits before the 6-month period
elapses are not offset unless the deposits are withdrawn for an
improper purpose during this period.
(2) * * *
(ii) Borrowing for a purpose for which funded depreciation account
funds should have been used makes the borrowing unnecessary to the
extent that funded depreciation account funds were available at the
time of the borrowing. Available funds in the funded depreciation
account, to the extent of the unnecessary borrowing, are called
``tainted'' funds. Interest expense incurred on borrowing for a capital
purpose is not an allowable cost to the extent that funded depreciation
account funds were available at the time of the borrowing.
(iii) A provider can remove the ``unnecessary'' characterization of
borrowing, and thereby cure tainted funded depreciation, by using the
tainted funds for a proper purpose described in paragraph (e)(3)(i) of
this section. However, any funded depreciation that existed at the time
of the unnecessary borrowing and is not classified as tainted must be
used before any of the tainted funds.
(iv) When only a portion of the borrowing is considered unnecessary
under paragraph (e)(2)(ii) of this section, subsequent repayments of
such borrowing from general funds is applied first to the allowable
portion of the borrowing and then, when all of the allowable borrowing
is repaid, to the unallowable portion of the borrowing. When funds from
the funded depreciation account are used for the repayment of the
unnecessary borrowing, an equivalent amount of tainted funds is cured
without regard to the provisions of paragraphs (e)(2)(ii) and
(e)(3)(i)(C) of this section. Similarly, where general funds are used
to pay for the unallowable borrowing after the necessary borrowing has
been repaid, an equivalent amount of tainted funded depreciation is
cured without regard to the provisions of paragraphs (e)(2)(ii) and
(e)(3)(i)(C) of this section.
* * * * *
(4) Loans from funded depreciation. (i) When the general fund of
the provider borrows from the funded depreciation to obtain working
capital for normal operating expenses to furnish patient care, interest
incurred by the general fund is an allowable operating cost only if the
interest expense is supported by documents that evidence that the funds
were borrowed and that payment of interest and repayment of the funds
are required, is separately identified in the provider's accounting
records, and meets the necessary and proper tests described in
Secs. 413.153 (b)(2) and (b)(3).
(ii) Loans from funded depreciation to the general fund are
considered investments of funded depreciation, but do not have to meet
the readily marketable test described in paragraph (e) of this section.
Loans made from funded depreciation are subject to the requirement that
funded depreciation must be available for the acquisition of
depreciable assets used to furnish patient care, or for other capital
purposes related to patient care. Costs incurred to secure lines of
credit from lending institutions to ensure such availability are not
allowable costs.
(iii) Funding of depreciation from general funds will not be
recognized to the extent of any outstanding loans from the funded
depreciation account to the general fund. Deposits from the general
fund into the funded depreciation account must be first applied to
reduce any loans outstanding from the funded depreciation to the
general fund. When the loans are repaid in full, general funds
deposited in the funded depreciation account are considered as
repayments of the general fund. Therefore, any subsequent interest
expense of the general fund paid to the funded depreciation fund is not
an allowable cost.
* * * * *
7. In Sec. 413.153, paragraph (d)(2) is revised and a new paragraph
(d)(3) is added to read as follows:

Sec. 413.153 Interest expense.

* * * * *
(d) * * *
(2) In determining whether a loan was made for the purpose of
acquiring a facility, we apply any owner's investment or funds first to
the tangible assets, then to the intangible assets other than goodwill,
and lastly to the goodwill. If the owner's investment or funds are not
sufficient to cover the cost allowed for tangible assets, we apply
funds borrowed to finance the acquisition to the portion of the allowed
cost of the tangible assets not covered by the owner's investment, then
to the intangible assets other than goodwill, and lastly to the
goodwill. Repayments of the funds borrowed are applied first to the
tangible assets, then to the intangible assets other than goodwill, and
lastly to the goodwill.
(3) When a provider borrows funds for a purpose related to patient
care, but only some of the funds are necessary, repayments of the loan
are applied first to pay for the necessary portion of the loan. Only
after all of the necessary portion has been repaid are any repayments
applied to the unnecessary portion of the loan.
* * * * *

Subpart H--Payment for End-Stage Renal Disease (ESRD) Services

8. In Sec. 413.174, paragraph (b)(4)(iv) is revised to read as
follows:

Sec. 413.174 Recordkeeping and cost reporting requirements for
outpatient maintenance dialysis.

* * * * *
(b) * * *
(4) * * *
(iv) Sections 413.64, Payments to providers, and Secs. 413.13,
413.30, 413.35, 413.40, 413.74, and Secs. 405.465 through 405.482 of
this chapter, Principles of reimbursement for services by hospital-
based physicians.
C. Part 482 would be amended as follows:

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

1. The authority citation for part 482 continues to read as
follows:

Authority: Secs. 1102, 1136, 1138, 1814(a)(6), 1861 (e), (f),
(r), (v)(1)(G), (z), and (ee), 1864, 1871, 1883, 1886, 1902(a)(30),
and 1905(a) of the Social Security Act (42 U.S.C. 1302, 1320b-6,
1338, 1395f(a)(6), 1395x (e), (f), (k), (r), (v)(1)(G), (z), and
(ee), 1395aa, 1395aa, 1395hh, 1395tt, 1395ww, 1396a(a)(30), and
1396(a)).

Subpart E--Requirements for Specialty Hospitals

2. In paragraph (a)(7)(i) of Sec. 482.66, the second sentence is
revised to read as follows:

Sec. 482.66 Special requirements for hospital providers of long-term
care services (``swing-beds'').

(a) * * *
(7) * * *
(i) * * * Also excluded from the bed count are beds in separately
certified ``distinct part'' SNFs and NFs and beds in a psychiatric or
rehabilitation unit that is excluded from the prospective payment
system.
* * * * *
D. Part 485 would be amended as follows:

PART 485--CONDITIONS OF PARTICIPATION AND CONDITIONS FOR COVERAGE:
SPECIALIZED PROVIDERS

1. The authority citation for part 485 continues to read as
follows:

Authority: Secs. 1102, 1124, 1138, 1820, 1861 (aa), and (cc) and
1871 of the Social Security Act; (42 U.S.C. 1302, 1320a-3, 1320b-8,
1395i-4, 1395x (aa) and (cc) and 1395hh); and sec. 353 of the Public
Health Service Act (42 U.S.C. 263a).

Subpart F--Conditions of Participation: Rural Primary Care
Hospitals (RPCHs)

2. Section 485.602 is revised to read as follows:

Sec. 485.602 Definitions.

As used in this subpart, unless the context indicates otherwise:
Direct services means services provided by employed staff of the
RPCH, not services provided through arrangements or agreements.
3. In Sec. 485.635, paragraph (b) is revised to read as follows:

Sec. 485.635 Condition of participation: Provision of services.

* * * * *
(b) Standard: Direct services. (1) General. The RPCH staff
furnishes, as direct services, those diagnostic and therapeutic
services and supplies that are commonly furnished in a physician's
office or at another entry point into the health care delivery system,
such as a low intensity hospital outpatient department or emergency
department. These direct services include medical history, physical
examination, specimen collection, assessment of health status, and
treatment for a variety of medical conditions.
(2) Laboratory services. The RPCH provides, as direct services,
basic laboratory services essential to the immediate diagnosis and
treatment of the patient that meet the standards imposed under section
353 of the Public Health Service Act (42 U.S.C. 236a). (See the
laboratory requirements specified in part 493 of this chapter.) The
services provided include:
(i) Chemical examination of urine by stick or tablet method or both
(including urine ketones);
(ii) Hemoglobin or hematocrit;
(iii) Blood glucose:
(iv) Examination of stool specimens for occult blood;
(v) Pregnancy tests; and
(vi) Primary culturing for transmittal to a certified laboratory.
(3) Radiology services. Radiology services furnished at the RPCH
are provided as direct services by staff qualified under State law, and
do not expose RPCH patients or staff to radiation hazards.
(4) Emergency procedures. In accordance with the requirements of
Sec. 485.618, the RPCH provides as direct services medical emergency
procedures as a first response to common life-threatening injuries and
acute illness.
* * * * *
E. Part 489 would be amended as follows:

PART 489--PROVIDER AND SUPPLIER AGREEMENTS

1. The authority citation for part 489 continues to read as
follows:

Authority: Secs. 1102, 1861, 1864, 1866, and 1871 of the Social
Security Act (42 U.S.C. 1302, 1395x, 1395aa, 1395cc, and 1395hh).

Subpart I--Advance Directives

2. In Sec. 489.102, paragraph (a) introductory text is revised to
read as follows:

Sec. 489.102 Requirements for providers.

(a) Hospitals, rural primary care hospitals, skilled nursing
facilities, nursing facilities, home health agencies, providers of home
health care (and for Medicaid purposes, providers of personal care
services), and hospices must maintain written policies and procedures
concerning advance directives with respect to all adult individuals
receiving medical care by or through the provider and are required to:
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

Dated: May 5, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: May 10, 1994.
Donna E. Shalala,
Secretary.
Note: The following addendum and appendixes will not appear in
the Code of Federal Regulations.

Addendum--Proposed Schedule of Standardized Amounts Effective with
Discharges On or After October 1, 1994 and Update Factors and Rate-of-
Increase Percentages Effective With Cost Reporting Periods Beginning On
or After October 1, 1994

I. Summary and Background

In this addendum, we are setting forth the proposed amounts and
factors for determining prospective payment rates for Medicare
inpatient operating costs and Medicare inpatient capital-related costs.
We are also setting forth new proposed rate-of-increase percentages for
updating the target amounts for hospitals and hospital units excluded
from the prospective payment system.
For discharges occurring on or after October 1, 1994, except for
sole community hospitals and hospitals located in Puerto Rico, each
hospital's payment per discharge under the prospective payment system
will be comprised of 100 percent of the Federal national rate.
Sole community hospitals are paid based on whichever of the
following rates yields the greatest aggregate payment: the Federal
national rate, the updated hospital-specific rate based on FY 1982 cost
per discharge, or the updated hospital-specific rate based on FY 1987
cost per discharge. Hospitals in Puerto Rico are paid on the basis of a
rate per discharge comprised of 75 percent of a Puerto Rico rate and 25
percent of a national rate (section 1886(d)(9)(A) of the Act).
As discussed below in section II, we are proposing to make changes
in the determination of the prospective payment rates for Medicare
inpatient operating costs. The changes, to be applied prospectively,
would affect the calculation of the Federal rates. In section III we
discuss our proposed changes for determinating the prospective payment
rates for Medicare inpatient capital-related costs. Section IV sets
forth our proposed changes for determining the rate-of-increase limits
for hospitals excluded from the prospective payment system. The tables
to which we refer in the preamble to the proposed rule are presented at
the end of this addendum in section V.

II. Proposed Changes to Prospective Payment Rates For Inpatient
Operating Costs for FY 1995

The basic methodology for determining prospective payment rates for
inpatient operating costs is set forth at Sec. 412.63 for hospitals
located outside of Puerto Rico. The basic methodology for determining
the prospective payment rates for inpatient operating costs for
hospitals located in Puerto Rico is set forth at Secs. 412.210 and
412.212. Below, we discuss the manner in which we are changing some of
the factors used for determining the prospective payment rates. The
Federal and Puerto Rico rate changes, once issued as final, will be
effective with discharges occurring on or after October 1, 1994. As
discussed in section IV.C of this proposed rule, section
1886(d)(3)(A)(iii) specifies that for discharges occurring in the
fiscal year beginning October 1, 1994, the average standardized amount
for hospitals located in a rural area shall be equal to the average
standardized amount for hospitals located in an other urban area.
Pursuant to section 1886(b)(3)(B)(i)(X) of the Act, we will update the
rural standardized amount by the amount necessary to equate the rural
standardized amount with the other urban standardized amount. As there
will no longer be separate other urban and rural standardized amounts,
we will refer to the urban and rural standardized amounts that will be
effective beginning with FY 1995 as the ``other standardized amount.''
As required by section 1886(d)(4)(C) of the Act, we must adjust the DRG
classifications and weighting factors for discharges in FY 1995.
In summary, the proposed standardized amounts set forth in Tables
1a, 1b, and 1c of section V of this addendum reflect--
Updates of 1.1 percent for large urban and other urban
hospitals (that is, the market basket percentage increase of 3.6
percent minus 2.5 percentage points) and an update for rural hospitals
of approximately 8.4 percent (that is, the amount required to equate
the rural standardized amount with the other urban standardized
amount);
Revised labor and nonlabor shares of the national average
standardized amounts to reflect the national average labor portion of
the standardized amounts for urban and rural hospitals (the revised
labor and nonlabor shares of the Puerto Rico standardized amounts
reflect the Puerto Rico average labor portion of the standardized
amounts for urban and rural hospitals);
An adjustment to ensure budget neutrality as provided for
in sections 1886(d)(4)(C)(iii) and (d)(3)(E) of the Act by applying new
budget neutrality adjustment factors to the urban and other
standardized amounts;
An adjustment to ensure budget neutrality as provided for
in section 1886(d)(8)(D) of the Act by removing the FY 1994 budget
neutrality factor and applying a revised factor; and
An adjustment to apply the revised outlier offset by
removing the FY 1994 outlier offsets and applying a new offset.

A. Calculation of Adjusted Standardized Amounts

1. Standardization of Base-Year Costs or Target Amounts
Section 1886(d)(2)(A) of the Act required the establishment of
base-year cost data containing allowable operating costs per discharge
of inpatient hospital services for each hospital. The preamble to the
September 1, 1983 interim final rule (48 FR 39763) contains a detailed
explanation of how base-year cost data were established in the initial
development of standardized amounts for the prospective payment system
and how they are used in computing the Federal rates.
Section 1886(d)(9)(B)(i) of the Act required that Medicare target
amounts be determined for each hospital located in Puerto Rico for its
cost reporting period beginning in FY 1987. The September 1, 1987 final
rule contains a detailed explanation of how the target amounts were
determined and how they are used in computing the Puerto Rico rates (52
FR 33043, 33066).
The standardized amounts are based on per discharge averages of
adjusted hospital costs from a base period or, for Puerto Rico,
adjusted target amounts from a base period, updated and otherwise
adjusted in accordance with the provisions of section 1886(d) of the
Act. Sections 1886(d)(2)(C) and (d)(9)(B)(ii) of the Act required that
the updated base-year per discharge costs and, for Puerto Rico, the
updated target amounts, respectively, be standardized in order to
remove from the cost data the effects of certain sources of variation
in cost among hospitals. These include case mix, differences in area
wage levels, cost of living adjustments for Alaska and Hawaii, indirect
medical education costs, and payments to hospitals serving a
disproportionate share of low-income patients.
Since the standardized amounts have already been adjusted for
differences in case mix, wages, cost-of-living, indirect medical
education costs, and payments to hospitals serving a disproportionate
share of low-income patients, no additional adjustments for these
factors for FY 1995 were made. That is, the standardization adjustments
reflected in the FY 1995 standardized amounts are the same as those
reflected in the FY 1994 standardized amounts.
Sections 1886(d)(2)(H) and (d)(3)(E) of the Act require that, in
making payments under the prospective payment system, the Secretary
adjust the proportion of payments that are wage-related (as estimated
by the Secretary from time to time). Beginning with October 1, 1990,
when the market basket was rebased, we have considered 71.40 percent of
costs to be labor-related for purposes of the prospective payment
system.
2. Computing Urban and Other Averages Within Geographic Areas
Beginning in FY 1995, section 1886(d)(3) of the Act requires the
Secretary to compute two average standardized amounts for discharges
occurring in a fiscal year: one for hospitals located in large urban
areas and one for hospitals located in other areas. In addition, under
section 1886(d)(9)(B)(iii) of the Act, the average standardized amount
per discharge must be determined for hospitals located in urban and
other areas in Puerto Rico. Hospitals in Puerto Rico are paid a blend
of 75 percent of the applicable Puerto Rico standardized amount and 25
percent of a national standardized payment amount.
Section 1886(d)(2)(D) of the Act defines ``urban areas'' as those
areas within a Metropolitan Statistical Area (MSA). A ``large urban
area'' is defined as an urban area with a population of more than
1,000,000. In addition, section 4009(i) of Public Law 100-203 provides
that a New England County Metropolitan Area (NECMA) with a population
of more than 970,000 is classified as a large urban area. As required
by section 1886(d)(2)(D) of the Act, population size is determined by
the Secretary based on the latest population data published by the
Bureau of the Census. Urban areas that do not meet the definition of a
``large urban area'' are referred to as ``other urban areas.'' Areas
that are not included in MSAs are considered ``rural areas'' under
section 1886(d)(2)(D). Payment for discharges from hospitals located in
large urban areas will be based on the large urban standardized amount.
Payment will be based on the other standardized amount for discharges
from hospitals located in other urban and rural areas.
Based on 1991 population estimates published by the Bureau of the
Census, 54 areas meet the criteria to be defined as large urban areas
for FY 1995. These areas are identified by an asterisk in Table 4a.
Table 1a contains the two national standardized amounts that we are
proposing be applicable to most hospitals. Under section
1886(d)(9)(A)(ii) of the Act, the national standardized payment amount
applicable to hospitals in Puerto Rico consists of the discharge-
weighted average of the national large urban standardized amount and
the national other standardized amount (as set forth in Table 1a). The
national average standardized amount for Puerto Rico is set forth in
Table 1c. This table also includes the two standardized amounts that
would be applicable to most hospitals in Puerto Rico.
3. Updating the Average Standardized Amounts
In accordance with section 1886(d)(3)(A) of the Act, we are
proposing to update the large urban, other urban, and rural average
standardized amounts for FY 1994 using the applicable percentage
increases specified in section 1886(b)(3)(B)(i) of the Act. As
explained earlier, there are currently separate large urban, other
urban and rural standardized payment amounts, and section 1886(d)(3)(A)
of the Act provides for the elimination of separate other urban and
rural payment amounts beginning in FY 1995. Section 1886(b)(3)(B)(i)(X)
of the Act, as amended by section 13501(a)(1) of Public Law 103-66,
specifies the following update factors for the standardized amounts for
FY 1995:
For hospitals located in large urban and other urban
areas, the market basket percentage increase minus 2.5 percentage
points.
For hospitals located in rural areas, the market basket
percentage increase plus the amount necessary to make the rural
standardized amount equal the standardized amount for other urban
areas.
The percentage change in the market basket reflects the average
change in the price of goods and services purchased by hospitals to
furnish inpatient care. The most recent forecasted hospital market
basket increase for FY 1995 is 3.6 percent. For FY 1995, this yields an
update to the urban average standardized amounts of 1.1 percent (3.6
percent minus 2.5 percent). To satisfy the requirement of section
1886(b)(3)(i)(X) of the Act that the update for hospitals located in a
rural area be equal to that for hospitals located in an other urban
area beginning in FY 1995, we estimate that an overall update of the
market basket rate of increase (that is, 3.6 percent) plus
approximately 4.8 percentage points will be necessary. Thus, we are
proposing an update to the other urban and rural average standardized
amounts for FY 1995 of 8.4 percent. However, as explained below, we are
currently estimating that the overall increase in the rural
standardized amount will be approximately 4.6 percent, as a result of
two adjustments that must be made to the updated standardized amounts.
These adjustments were previously applied differentially to the urban
and rural standardized amounts.
First, we are adjusting the FY 1994 standardized amounts to remove
the effects of the FY 1994 geographic reclassifications and outlier
payments before applying the FY 1995 updates. That is, we are
increasing the standardized amounts to restore the reductions that were
made for the effects of geographic reclassification and outliers. As
these reductions were larger for urban than rural hospitals, restoring
the reductions results in a larger increase in the urban standardized
amounts than the rural standardized amounts. After applying an update
of 1.1 percent to the adjusted urban standardized amount, we estimate
that an overall update of 7.3 percent is required to equate the rural
and other urban standardized amounts.
However, the estimated actual increase in the standardized amounts
for rural hospitals will be less because we also have to reduce the
standardized amounts for the effects of geographic reclassification and
outliers. For FY 1995, there will be a single reduction to the
standardized amounts for each of these factors, rather than separate
adjustments to the urban and rural standardized amounts based on the
effect of geographic reclassification and outliers in each respective
area. For instance, in FY 1994, we reduced the urban standardized
amounts by 5.4 percent and the rural standardized amounts by 2.3
percent to account for outliers in each respective area. For FY 1995,
we will apply one adjustment for the effect of outliers--a single
reduction in the standardized amounts of 5.1 percent. Similarly, there
were separate reductions to the standardized amounts in FY 1994 for the
effects of geographic reclassification of 0.7 percent for urban
hospitals and 0.1 percent for rural hospitals. Our proposed
standardized amounts reflect a single reduction for this factor of 0.6
percent. After including offsets to the standardized amounts for
outliers and geographic reclassification, we estimate that there will
be an actual increase of 4.6 percent to the rural standardized amounts
and 1.5 percent to the urban standardized amounts. A more detailed
explanation of the impact of the single standardized amount for other
urban and rural hospitals and single adjustments for the effects of
outliers and geographic reclassification is included in Appendix A of
this proposed rule.
With the phase-out of the rural payment amount, rural hospitals and
other urban hospitals will be paid based on the same standardized
amount. Since Congress has mandated the elimination of separate payment
rates based on whether a hospital is located in an urban or rural area,
we believe it is appropriate to revise the national average
standardized amounts based on national average labor/nonlabor shares.
Therefore, we propose to adjust the labor and nonlabor proportions of
the standardized amount to reflect the national average. (We are
revising the Puerto Rico standardized amounts by the average labor
share in Puerto Rico of 82.7 percent.) Currently, the rural labor share
represents 75.6 percent of the standardized amount while the urban
labor share represents 70.8 percent. This differential is the result of
standardization of labor-related costs by the area wage index. Because
rural hospitals generally have lower wage index values than urban
hospitals, the standardization process resulted in a higher labor share
for rural hospitals. We are therefore proposing to adjust the labor/
nonlabor proportions of the standardized amounts that will be
applicable to both rural and urban hospitals based on the national
average. As a result, the national average labor share (as reflected in
the hospital market basket) will equal 71.4 percent of the standardized
payment amounts.
Although the update factor for FY 1995 is set by law, we were
required by section 1886(e)(3)(B) of the Act to report to Congress no
later than March 1, 1994 on our initial recommendation of update
factors for FY 1995 for both prospective payment hospitals and
hospitals excluded from the prospective payment system. For general
information purposes, we have included the report to Congress as
Appendix C to this proposed rule. Our proposed recommendation on the
update factors (which is required by sections 1886(e)(4)(A) and
(e)(5)(A) of the Act), as well as our responses to ProPAC's
recommendation concerning the update factor, is set forth as Appendix D
to this proposed rule.
4. Other Adjustments to the Average Standardized Amounts
a. Recalibration of DRG Weights and Updated Wage Index--Budget
Neutrality Adjustment. Section 1886(d)(4)(C)(iii) of the Act specifies
that beginning in FY 1991, the annual DRG reclassification and
recalibration of the relative weights must be made in a manner that
ensures that aggregate payments to hospitals are not affected. As
discussed in section II of the preamble, we normalized the recalibrated
DRG weights by an adjustment factor, so that the average case weight
after recalibration is equal to the average case weight prior to
recalibration. While this adjustment is intended to ensure that
recalibration does not affect total payments to hospitals, our analysis
indicates that the normalization adjustment does not necessarily
achieve budget neutrality with respect to aggregate payments to
hospitals.
Section 1886(d)(3)(E) of the Act specifies that the hospital wage
index must be updated based on new survey data no later than October 1,
1990 and on an annual basis beginning October 1, 1993. This provision
also requires that any updates or adjustments to the wage index must be
made in a manner that ensures that aggregate payments to hospitals are
not affected by the change in the wage index.
To comply with the requirement of section 1886(d)(4)(C)(iii) of the
Act that the DRG reclassification changes and recalibration of the
relative weights be budget neutral and the requirement in section
1886(d)(3)(E) of the Act that the updated wage index be implemented in
a budget neutral manner, we compared aggregate payments using the FY
1994 relative weights and the wage index effective October 1, 1993 to
aggregate payments using the proposed FY 1995 relative weights and wage
index. The same methodology was used for the FY 1994 budget neutrality
adjustment. (See the discussion in the September 1, 1992 final rule (57
FR 39832).) Based on this comparison, we computed a budget neutrality
adjustment factor equal to 0.997647. This budget neutrality adjustment
factor is applied to the standardized amounts without removing the
effects of the FY 1994 budget neutrality adjustment. We do not remove
the prior budget neutrality adjustment because the statute requires
that aggregate payments after the changes in the DRG relative weights
and wage index equal estimated payments prior to the changes. If we
removed the prior year adjustment, we would not satisfy this condition.
In addition, we are proposing to continue to apply the same FY 1995
adjustment factor to the hospital-specific rates that are effective for
cost reporting periods beginning on or after October 1, 1994, in order
to ensure that we meet the statutory requirement that aggregate
payments neither increase nor decrease as a result of the
implementation of the DRG weights and updated wage index. (See the
discussion in the September 4, 1990 final rule (55 FR 36073).)
b. Reclassified Hospitals--Budget Neutrality Adjustment. Section
1886(d)(8)(B) of the Act provides that certain rural hospitals are
deemed urban effective with discharges occurring on or after October 1,
1988. In addition, section 1886(d)(10) of the Act provides for the
reclassification of hospitals based on determinations by the Medicare
Geographic Classification Review Board (MGCRB). Under section
1886(d)(10) of the Act, a hospital may be reclassified for purposes of
the standardized amount or the wage index, or both.
Prior to FY 1995, section 1886(d)(8)(D) of the Act required the
Secretary to adjust the urban standardized amounts so as to ensure that
total aggregate payments under the prospective payment system after
implementation of the provisions of sections 1886(d)(8)(B) and (C) and
1886(d)(10) of the Act were equal to the aggregate prospective payments
that would have been made absent these provisions. The rural
standardized amounts were also adjusted to ensure that aggregate
payments to rural hospitals not affected by these provisions neither
increased nor decreased as a result of these provisions. Beginning
October 1, 1994, the Secretary is required to adjust the standardized
amounts by the same factor to account for the effects of
reclassification. We applied an adjustment of 0.993814 to ensure that
the effects of reclassification are budget neutral.
The adjustment factors are applied to the standardized amounts
after removing the effects of the FY 1994 budget neutrality adjustment
factors. We note that the proposed FY 1995 adjustments reflect wage
index and standardized amount reclassifications approved by the MGCRB
or the Administrator as of March 14, 1994. The effects of any
additional reclassification changes resulting from appeals and review
of the MGCRB's decisions for FY 1995 or from a hospital's request for
the withdrawal of a reclassification request will be reflected in the
final budget neutrality adjustment required under section 1886(d)(8)(D)
of the Act and published in the final rule for FY 1995.
c. Outliers. Section 1886(d)(5)(A) of the Act provides that, in
addition to the basic prospective payment rates, payments must be made
for discharges involving day outliers and may be made for cost
outliers. Under section 1886(d)(3)(B) of the Act, the Secretary has
been required to separately reduce the urban and rural national
standardized amounts by the proportion of estimated total DRG payments
attributable to outliers in each respective area. Beginning with FY
1995, section 1886(d)(3)(B) requires the Secretary to adjust both the
large urban and other national standardized amounts by the same factor
to account for the estimated proportion of total DRG payments made to
outlier cases. Section 1886(d)(9)(B)(iv) of the Act requires that the
urban and other standardized amounts applicable to hospitals in Puerto
Rico be reduced by the proportion of estimated total DRG payments
attributable to estimated outlier payments. Furthermore, section
1886(d)(5)(A)(iv) of the Act directs that outlier payments in any year
may not be less than 5 percent nor more than 6 percent of total
payments projected or estimated to be made based on the prospective
payment rates.
Section 13501(c) of the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66) amended section 1886(d)(5)(A) with respect to
outliers beginning in FY 1995. With regard to cost outliers, section
13501(c) of Public Law 103-66 requires that the Secretary modify the
methodology for determining the cost outlier threshold. For discharges
occurring before October 1, 1994, a hospital may receive payment for a
cost outlier if the adjusted costs for a discharge exceed a fixed
multiple of the DRG payment for the case or a fixed dollar amount.
Effective for discharges occurring on or after October 1, 1994, a
hospital may receive payment for a cost outlier if adjusted costs
exceed the DRG prospective payment rate plus a fixed dollar amount. As
discussed in section IV.D of the preamble, we refer to this revised
cost outlier threshold as ``fixed loss.''
Section 13501(c) of Public Law 103-66 also amended section
1886(d)(5)(A) of the Act with respect to day outliers. Beginning with
FY 1995, section 1886(d)(5)(A) requires the Secretary to reduce the
proportion of total outlier payments paid under the day outlier
methodology. Under the requirements of section 1886(d)(5)(A)(v), the
proportion of outlier payments made under the day outlier methodology,
relative to the proportion of outlier payments made under the day
outlier methodology in FY 1994 (which we estimated at 31.3 percent in
our September 1, 1993 final rule (58 FR 46348)), shall be 75 percent in
FY 1995, 50 percent in FY 1996 and 25 percent in FY 1997. After
September 30, 1997, the Secretary will no longer pay for day outliers
under the provisions of section 1886(d)(5)(A)(i). Again, the changes
required by section 1886(d)(5)(A) are discussed in detail in section
IV.D of the preamble to this proposed rule.
i. FY 1995 Outlier Thresholds. For FY 1994, the day outlier
threshold is the geometric mean length of stay for each DRG plus the
lesser of 23 days or 3.0 standard deviations. The marginal cost factor
for day outliers (or the percent of Medicare's average per diem payment
paid for each outlier day) is equal to 55 percent in FY 1994. The cost
outlier threshold is the greater of 2.0 times the prospective payment
rate for the DRG or $36,000 ($33,000 for hospitals that have not yet
entered the prospective payment system for inpatient capital-related
costs). The marginal cost factor for cost outliers (or the percent of
costs paid after costs for the case exceed the threshold) is 75
percent. We applied an outlier adjustment to the FY 1994 standardized
amounts of 0.945960 for the urban rates, 0.977157 for the rural rates,
and 0.9454 for the capital Federal rate.
For FY 1995, we propose to set the day outlier threshold at the
geometric mean length of stay for each DRG plus the lesser of 22 days
or 3.0 standard deviations. We are also proposing to reduce the
marginal cost factor for each outlier day from 55 percent to 49 percent
in FY 1995.
Our proposed policy will reduce the proportion of outlier payments
paid to day outliers as required by section 1886(d)(5)(A) of the Act.
We are also proposing a fixed loss cost outlier threshold in FY 1995
equal to the prospective payment rate for the DRG plus $23,300 ($21,400
for hospitals that have not yet entered the prospective payment system
for capital-related costs). Additionally, we are proposing to increase
the marginal cost factor for cost outliers from 75 to 80 percent.
Pursuant to section 1886(d)(5)(A)(iv) of the Act, we calculated
outlier thresholds so that estimated outlier payments equal 5.1 percent
of estimated DRG payments. In conjunction with the elimination of the
rural standardized amount, we considered raising the proportion of
operating payments estimated to be paid as outliers from 5.1 percent to
5.5 percent. This is the percentage offset that currently applies to
the urban standardized amounts and is in the middle of the 5 to 6
percent range for outlier payments required by statute. Raising the
proportion of operating payments paid as outliers would reduce the
financial risk to hospitals in treating outlier cases. However,
financing 5.5 percent in outlier payments would require reducing the
average standardized amounts by 5.5 percent. We welcome comments on
this issue.
The model that we use to determine the outlier thresholds necessary
to target our desired outlier payment percentage for FY 1995 uses the
FY 1993 MedPAR file and the most recent available information on
hospital-specific payment parameters (such as the cost-to-charge
ratios). This information is based on the January 1994 update of the
provider-specific file used in the PRICER program. In estimating
payments we convert billed charges to costs for purposes of estimating
cost outlier payments. As we explained in the September 1, 1993 final
rule (58 FR 46347), prior to FY 1994, we used a charge inflation factor
to adjust charges to costs; beginning with FY 1994, we are currently
using a cost inflation factor to estimate costs. In other words,
instead of inflating the FY 1993 charge data by a charge inflation
factor for 2 years in order to estimate FY 1995 charge data and then
applying the cost-to-charge ratio, we adjust the charges by the cost-
to-charge ratio and then inflate the estimated costs for 2 years of
cost inflation. In this manner, we will be automatically adjusting for
any changes in the cost-to-charge ratios that may occur, since the
relevant variable is the costs estimated for a given case.
In setting the proposed FY 1995 outlier thresholds, we used a cost
inflation factor of 1.04735. This is the average increase in cost per
case between PPS-7 (data from cost reporting periods beginning in FY
1990) and PPS-9 (data from cost reporting periods beginning in FY
1992), for a matched set of hospitals. We made an audit adjustment for
any cost report that had not been settled, based on the average ratio
between submitted and final cost report data. This adjustment was made
separately for Medicare inpatient capital costs and Medicare inpatient
operating costs. We used the actual settlement ratio for PPS-7 (data
from cost reporting periods beginning in FY 1990), since most cost
reports for that period had been settled. We also used the settlement
ratio from PPS-7 for the PPS-8 cost reports, since the PPS-8 settlement
ratio currently available is based on many fewer hospitals
(approximately 37 percent, as opposed to 92 percent for PPS-7).
When we modeled the combined operating and capital outlier
payments, we found that using a common set of thresholds resulted in a
higher percentage of outlier payments for capital-related costs than
for operating costs. We estimate the proposed thresholds for FY 1995
would result in outlier payments equal to 5.1 percent of operating DRG
payments and 6.3 percent of capital payments based on the Federal rate.
As stated in the September 1, 1993 final rule (58 FR 46348), we
have established outlier thresholds that would be applicable to both
inpatient operating costs and inpatient capital-related costs. As
explained earlier, we will apply a reduction of approximately 5.1
percent to the FY 1995 standardized amounts to account for the
proportion of PPS payments paid to outliers. The proposed outlier
adjustment factors applied to the standardized amounts and the capital
Federal rate for FY 1995 are as follows:

------------------------------------------------------------------------
Operating standardized amounts Capital federal rate
------------------------------------------------------------------------
0.948772........................... 0.9372
------------------------------------------------------------------------

We would apply the proposed outlier adjustment factors after removing
the effects of the FY 1994 outlier adjustment factors on the
standardized amounts and the capital Federal rate.
ii. Other Changes Concerning Outliers. Table 5 of section V of this
addendum contains the DRG relative weights, geometric and arithmetic
mean lengths of stay, as well as the day outlier threshold for each
DRG. When we recalibrate DRG weights, we set a threshold of 10 cases as
the minimum number of cases required to compute a reasonable weight and
geometric mean length of stay. DRGs that do not have at least 10 cases
are considered to be low volume DRGs. For the low volume DRGs, we use
the original geometric mean lengths of stay, because no arithmetic mean
length of stay was calculated based on the original data.
Table 8a in section V of this addendum contains the updated
Statewide average operating cost-to-charge ratios for urban hospitals
and for rural hospitals to be used in calculating cost outlier payments
for those hospitals for which the intermediary is unable to compute a
reasonable hospital-specific cost-to-charge ratio. These Statewide
average ratios would replace the ratios published in the September 1,
1993 final rule (58 FR 46439), effective October 1, 1994. Table 8b
contains comparable Statewide average capital cost-to-charge ratios.
These average ratios would be used to calculate cost outlier payments
for those hospitals for which the intermediary computes operating cost-
to-charge ratios lower than 0.279 or greater than 1.314 and capital
cost-to-charge ratios lower than 0.013 or greater than 0.241. This
range represents 3.0 standard deviations (plus or minus) from the mean
of the log distribution of cost-to-charge ratios for all hospitals. The
cost-to-charge ratios in Tables 8a and 8b would be applied to all
hospital-specific cost-to-charge ratios based on cost report
settlements occurring during FY 1995.
iii. FY 1993 and FY 1994 Outlier Payments. In the May 26, 1993
proposed rule (58 FR 30271), we estimated that actual FY 1993 outlier
payments would be approximately 4.5 percent of actual FY 1993 total DRG
payments. We also estimated that total DRG payments for FY 1993 would
be higher than estimated at the time that we set the FY 1993 outlier
thresholds. Our estimates of actual outlier payments and actual total
DRG payments were computed by simulating payments using actual FY 1993
bill data available at the time. Our current estimate is that actual FY
1993 outlier payments were approximately 4.1 percent of total DRG
payments. At the same time, we estimate that FY 1993 total DRG payments
per case were 1.6 percent higher than we estimated when we set the FY
1993 outlier thresholds (1.9 percent higher if indirect teaching and
disproportionate share payments are included). These estimates are
based on simulations using the January 1994 update of the provider-
specific file and the December 31, 1993 update of the MedPAR file.
In our June 4, 1992 proposed rule (57 FR 23645), we discussed
several factors that could explain the difference between estimated
outlier payments and actual outlier payments, relative to total DRG
payments. With regard to FY 1993 outlier payments, we note that the
percentage increase in the Medicare case-mix index was 0.8 percent
between FY 1992 and FY 1993, which was a lower rate of increase than
for prior years. Although the case-mix index is not a factor in setting
the outlier thresholds, lower growth in FY 1993 indicates that the
average severity of a Medicare case increased less in FY 1993 than in
prior years.
We also believe that use of a charge inflation factor in setting
the FY 1993 outlier thresholds may account for some of the difference.
As we explained in our June 4, 1992 proposed rule, charges have
historically grown faster than costs. In setting thresholds for FY
1993, we used the most recently available Medicare data, but that data
contained 2-year old cost-to-charge ratios. Thus, the cost-to-charge
ratios used to set the FY 1993 outlier thresholds are higher than those
used to determine payments. Consequently, actual FY 1993 outlier
payments as a percent of actual total DRG payments may be lower than we
estimated when setting outlier thresholds.
To address this problem in FY 1994, we began using a cost inflation
factor rather than a charge inflation factor to update billed charges
for purposes of estimating outlier payments. We believed that this
refinement would improve our estimation methodology.
In the September 1, 1993 final rule, we set the outlier thresholds
so that estimated operating outlier payments were equal to 5.1 percent
of estimated total estimated operating prospective payments. We
currently estimate that FY 1994 outlier payments will be 4.0 percent of
total DRG payments. This figure is based on a computer simulation of
payments in FY 1994 using FY 1993 bill data.
We believe that actual outlier payments as a percentage of actual
total DRG payments may be lower than estimated because actual hospital
costs may be lower than reflected in the estimation methodology. Our
most recent data on hospital costs show a significant trend in
declining rates of increase. Thus, the cost inflation factor of 8.3
percent used to estimate FY 1994 outlier payments (based on the best
available data) appears to have been overstated. Based on more recent
data, we are using a cost inflation factor of 4.7 percent to set
outlier payments for FY 1995. Also, although we estimate that FY 1994
outlier payments will approximate 4.0 percent of total DRG payments, we
note that the estimate of the market basket rate of increase used to
set the FY 1994 rates was 4.3 percentage points, while the latest FY
1994 market basket rate of increase forecast is 2.8 percent. Thus, the
net effect is that hospitals are receiving higher FY 1994 payments than
would have been established based on a more recent forecast of the
market basket rate of increase.

B. Adjustments for Area Wage Levels and Cost of Living

This section contains an explanation of the application of two
types of adjustments to the adjusted standardized amounts that would be
made by the intermediaries in determining the prospective payment rates
as described in this addendum. For discussion purposes, it is necessary
to present the adjusted standardized amounts divided into labor and
nonlabor portions. Tables 1a, 1b, and 1c, as set forth in this
addendum, contain the actual labor-related and nonlabor-related shares
that will be used to calculate the prospective payment rates for
hospitals located in the 50 States, the District of Columbia, and
Puerto Rico.
1. Adjustment for Area Wage Levels
Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require
that an adjustment be made to the labor-related portion of the
prospective payment rates to account for area differences in hospital
wage levels. This adjustment is made by multiplying the labor-related
portion of the adjusted standardized amounts by the appropriate wage
index for the area in which the hospital is located. In section III of
the preamble, we discuss certain revisions we are making to the wage
index. This index is set forth in Tables 4a through 4e of this
addendum.
2. Adjustment for Cost of Living in Alaska and Hawaii
Section 1886(d)(5)(H) of the Act authorizes an adjustment to take
into account the unique circumstances of hospitals in Alaska and
Hawaii. Higher labor-related costs for these two States are taken into
account in the adjustment for area wages described above. For FY 1995,
the adjustment necessary for nonlabor-related costs for hospitals in
Alaska and Hawaii would be made by the intermediaries by multiplying
the nonlabor portion of the standardized amounts by the appropriate
adjustment factor contained in the table below. If the Office of
Personnel Management releases revised cost-of-living adjustment factors
before August 1, 1994, we will publish them in the final rule and use
them in determining FY 1995 payments.

Table of Cost-of-Living Adjustment Factors, Alaska and Hawaii Hospitals
Alaska--All areas............................................. 1.25
Hawaii:
Oahu...................................................... 1.225
Kauai..................................................... 1.175
Maui...................................................... 1.20
Molokai................................................... 1.20
Lanai..................................................... 1.20
Hawaii.................................................... 1.15
(The above factors are based on data obtained from the U.S. Office of
Personnel Management.)

C. DRG Relative Weights

As discussed in section II of the preamble, we have developed a
classification system for all hospital discharges, assigning them into
DRGs, and have developed relative weights for each DRG that are
intended to reflect the resource utilization of cases in each DRG
relative to Medicare cases in other DRGs. The intermediary makes an
adjustment to the prospective payment rate by multiplying the
standardized amount by the relative weight for the DRG to which the
discharge is assigned.
Table 5 of section V of this addendum contains the relative weights
that we propose to use for discharges occurring in FY 1995. These
factors have been recalibrated as explained in section II of the
preamble.

D. Calculation of Prospective Payment Rates for FY 1995

General Formula for Calculation of Prospective Payment Rates for FY
1995
Prospective payment rate for all hospitals located outside Puerto Rico
except sole community hospitals=Federal rate.
Prospective payment rate for sole community hospitals=Whichever of the
following rates yields the greatest aggregate payment: 100 percent of
the Federal rate, 100 percent of the FY 1982 hospital-specific rate, or
100 percent of the FY 1987 hospital-specific rate.
Prospective payment rate for Puerto Rico=75 percent of the Puerto
Rico rate+25 percent of a discharge-weighted average of the large
urban, other urban, and rural national rates.
1. Federal Rate
For discharges occurring on or after October 1, 1994 and before
October 1, 1995, except for sole community hospitals and hospitals in
Puerto Rico, the hospital's rate is comprised exclusively of the
Federal national rate.
The Federal rates are determined as follows:
Step 1--Select the appropriate national adjusted standardized
amount considering the type of hospital and designation of the hospital
as large urban or other (see Tables 1a and 1b, section V of this
addendum).
Step 2--Multiply the labor-related portion of the standardized
amount by the applicable wage index for the geographic area in which
the hospital is located (see Tables 4a, 4b, and 4c, section V of this
addendum).
Step 3--For hospitals in Alaska and Hawaii, multiply the nonlabor-
related portion of the standardized amount by the appropriate cost-of-
living adjustment factor.
Step 4--Add the amount from Step 2 and the nonlabor-related portion
of the standardized amount (adjusted if appropriate under Step 3).
Step 5--Multiply the final amount from Step 4 by the relative
weight corresponding to the appropriate DRG (see Table 5, section V of
this addendum).
2. Hospital-Specific Rate (Applicable Only to Sole Community Hospitals)
Sections 1886(d)(5)(D)(i) and (b)(3)(C) of the Act provide that
sole community hospitals are paid based on whichever of the following
rates yields the greatest aggregate payment: the Federal rate, the
updated hospital-specific rate based on FY 1982 cost per discharge, or
the updated hospital-specific rate based on FY 1987 cost per discharge.
Hospital-specific rates have been determined for each of these
hospitals based on both the FY 1982 cost per discharge and the FY 1987
cost per discharge. For a more detailed discussion of the calculation
of the FY 1982 hospital-specific rate and the FY 1987 hospital-specific
rate, we refer the reader to the September 1, 1983 interim final rule
(48 FR 39772); the April 20, 1990 final rule with comment (55 FR
15150); and the September 4, 1990 final rule (55 FR 35994).
a. Updating the FY 1982 and FY 1987 Hospital-Specific Rates for FY
1995. We are proposing to increase the hospital-specific rates by 1.4
percent (the hospital market basket percentage increase minus 2.2
percentage points) for sole community hospitals located in all areas in
FY 1995. Section 1886(b)(3)(C)(ii) of the Act, as amended by Public Law
103-66, provides that the update factor applicable to the hospital-
specific rates for sole community hospitals equals the update factor
provided under section 1886(b)(3)(B)(ii) of the Act, which, for FY
1995, is the market basket rate of increase minus 2.2 percentage
points. Prior to FY 1994, the update to the hospital specific rates was
applied according to a hospital's cost reporting period. However,
beginning with FY 1994, the update to the hospital specific rate is
applied on a Federal fiscal year basis under amended section
1886(b)(3)(C)(ii). Section 1886(b)(3)(C)(ii) required us to apply the
FY 1994 update taking into account the portion of the 12-month cost
reporting period beginning during FY 1993 that occurred during FY 1994.
In our September 1, 1993 final rule with comment (58 FR 46308), we
described a methodology for calculating a ``deemed FY 1993'' update
which affected payment rates in FY 1994. Based on public comments, we
have revised our interpretion of section 1886(b)(3)(C)(ii) and decided
to prorate the FY 1994 applicable update based on the number of months
after the end of a hospital's cost reporting period that occurred in FY
1994. This revision was outlined in a separate final rule.
b. Calculation of Hospital-Specific Rate. For sole community
hospitals, the applicable FY 1995 hospital-specific rate would be
calculated by multiplying a hospital's hospital-specific rate for the
preceding fiscal year by the applicable update factor (that is, 2.4
percent), which equals the average update for all prospective system
hospitals. In addition, the hospital-specific rate would be adjusted by
the budget neutrality adjustment factor (that is, .997647) as discussed
in section II.A.4.b. of this addendum. This resulting rate would be
used in determining under which rate a sole community hospital is paid
for its discharges beginning on or after October 1, 1994, based on the
formula set forth above.
3. General Formula for Calculation of Prospective Payment Rates for
Hospitals Located in Puerto Rico Beginning On or After October 1, 1994
and Before October 1, 1995
a. Puerto Rico Rate. The Puerto Rico prospective payment rate is
determined as follows:
Step 1--Select the appropriate adjusted average standardized amount
considering the large urban or other designation of the hospital (see
Table 1c, section V of the addendum).
Step 2--Multiply the labor-related portion of the standardized
amount by the appropriate wage index (see Tables 4a and 4b, section V
of the addendum).
Step 3--Add the amount from Step 2 and the nonlabor-related portion
of the standardized amount.
Step 4--Multiply the result in Step 3 by 75 percent.
Step 5--Multiply the amount from Step 4 by the appropriate DRG
relative weight (see Table 5, section V of the addendum).
b. National Rate. The national prospective payment rate is
determined as follows:
Step 1--Multiply the labor-related portion of the national average
standardized amount (see Table 1c, section V of the addendum) by the
appropriate wage index.
Step 2--Add the amount from Step 1 and the nonlabor-related portion
of the national average standardized amount.
Step 3--Multiply the result in Step 2 by 25 percent.
Step 4--Multiply the amount from Step 3 by the appropriate DRG
relative weight (see Table 5, section V of the addendum).
The sum of the Puerto Rico rate and the national rate computed
above equals the prospective payment for a given discharge for a
hospital located in Puerto Rico.

III. Proposed Changes to Payment Rates for Inpatient Capital-
Related Costs for FY 1995

The prospective payment system for hospital inpatient capital-
related costs was implemented for cost reporting periods beginning on
or after October 1, 1991. Effective with that cost reporting period and
during a 10-year transition period extending through FY 2001, hospital
inpatient capital-related costs are paid on the basis of an increasing
proportion of the capital prospective payment system Federal rate and a
decreasing proportion of the historical costs for capital.
The basic methodology for determining Federal capital prospective
rates is set forth at Secs. 412.308 through 412.352 of the regulations.
Below we discuss the factors that we propose to use to determine the
Federal rate and the hospital-specific rate for FY 1995. The proposed
rates would be effective for discharges occurring on or after October
1, 1994.
We computed the FY 1992 standard Federal payment rate for capital-
related costs under the prospective payment system by updating the FY
1989 Medicare inpatient capital cost per case by an actuarial estimate
of the increase in Medicare inpatient capital costs per case. Each year
after FY 1992 we updated the standard Federal rate for increases in
capital-related costs as provided in Sec. 412.308(c)(1). Also,
Sec. 412.308(c)(2) provides that the Federal rate is adjusted annually
by a factor equal to the estimated additional payments under the
Federal rate for outlier cases, determined as a proportion of total
capital payments under the Federal rate. For FY 1992 through FY 2001,
Sec. 412.308(c)(3) requires that the Federal rate be reduced by an
adjustment factor equal to the estimated additional payments made for
exceptions under Sec. 412.348, and Sec. 412.308(c)(4)(ii) requires that
the Federal rate be adjusted so that the estimated aggregate payments
after any changes resulting from the annual DRG reclassification and
the recalibration of DRG weights and changes in the geographic
adjustment factor are budget neutral. For FY 1992 through FY 1995,
Sec. 412.352 requires that the Federal rate also be adjusted by a
budget neutrality factor, so that estimated aggregate payments for
inpatient hospital capital costs will equal 90 percent of the estimated
payments that would have been made for capital-related costs on a
reasonable cost basis during the fiscal year. In addition, Public Law
103-66 required that, effective for discharges occurring after
September 30, 1993, the unadjusted standard Federal rate be reduced by
7.4 percent.
The hospital-specific rate for each hospital was calculated by
dividing the hospital's Medicare inpatient capital-related costs for a
specified base year by its Medicare discharges (adjusted for
transfers), and dividing the result by the hospital's case mix index
(also adjusted for transfers). The resulting case-mix adjusted average
cost per discharge was then updated to FY 1992 based on the national
average increase in Medicare's inpatient capital cost per discharge and
adjusted by the exceptions payment adjustment factor and the budget
neutrality adjustment factor to yield the FY 1992 hospital-specific
rate. The hospital-specific rate is updated each year after FY 1992 for
inflation and for changes in the exceptions payment adjustment factor
and the budget neutrality adjustment factor.
To determine the appropriate budget neutrality adjustment factors
and the exceptions payment adjustment factor, we developed a dynamic
model of Medicare inpatient capital-related costs, that is, a model
that projects changes in Medicare inpatient capital-related costs over
time. The model and its application are described more fully in
Appendix B.
In accordance with section 1886(d)(9)(A) of the Act, under the
prospective payment system for inpatient operating costs, hospitals
located in Puerto Rico are paid under a special payment formula. These
hospitals are paid a blended rate that takes into account their
geographical designation and is comprised of 75 percent of the
applicable standardized amount specific to Puerto Rico hospitals and 25
percent of the applicable national average standardized amount. Section
412.374 provides for the use of this blended payment system for
payments to Puerto Rico hospitals under the prospective payment system
for inpatient capital-related costs. Accordingly, for capital-related
costs we compute a separate payment rate specific to Puerto Rico
hospitals using the same methodology used to compute the national
Federal rate for capital. Hospitals in Puerto Rico are paid based on 75
percent of the Puerto Rico rate and 25 percent of the Federal rate.

A. Determination of Federal Inpatient Capital-Related Prospective
Payment Rate Update

For FY 1994, the Federal rate was $378.34. With the changes we are
proposing to the factors used to establish the Federal rate, we are
proposing that the FY 1995 Federal rate would be $353.87.
In the discussion that follows, we explain the factors that were
used to determine the proposed FY 1994 Federal rate. In particular, we
explain why the FY 1994 Federal rate has decreased 6.47 percent
compared to the FY 1993 Federal rate. We also explain that aggregate
payments under the capital proposal are estimated to increase by 2.24
percent.
The major factor contributing to the decrease in the FY 1994 rate
in comparison to FY 1993 is the requirement at Sec. 412.352 that
estimated payments each year from FY 1992 through FY 1995 for capital
costs equal 90 percent of what would have been payable that year on a
reasonable cost basis. Based on the most recent data, we now estimate
that capital payments for FY 1992 were approximately 92.98 percent of
reasonable costs, that capital payments for FY 1993 were approximately
97.44 percent of reasonable costs, and that capital payments for FY
1994 were approximately 93.05 percent of reasonable costs. The data
thus indicate that the budget neutrality adjustments for FY 1992, FY
1993, and FY 1994 were not sufficient to meet the 90 percent target and
that, as a consequence, the Federal rates for both FY 1992, FY 1993,
and FY 1994 were higher than they should have been. While we do not
retroactively adjust the budget neutrality factor and the Federal rate
for previous years to account for revised estimates, we do employ the
most recent information available to refine the budget neutrality
adjustment for subsequent years. The result is a lower budget
neutrality adjustment factor for FY 1995 than FY 1994, which is the
cause of the decrease in the Federal rate.
Although the Federal rate for FY 1995 is 6.47 percent lower than
the FY 1994 Federal rate, we estimate that total capital payments per
case will increase 2.24 percent in FY 1995. The increase in total
payments per case is due to the increase in the budget neutrality
target to equal 90 percent of estimated FY 1994 capital costs per case.
Since section 1886(g)(1)(A) of the Act requires that estimated payments
equal 90 percent of estimated reasonable costs for capital-related
expenses, payments under the capital prospective payment system can be
expected to increase as capital costs per case increase. The increase
in payments per case from FY 1994 to FY 1995 (2.24 percent) is less
than the total estimated increase in capital costs per case between FY
1994 and FY 1995 (5.70 percent) because estimated FY 1994 payments were
3.39 percent higher than the FY 1994 budget neutrality target. As a
result, payments must increase less than the full increase in costs to
prevent estimated payments for FY 1995 from exceeding 90 percent of
reasonable cost. Specifically, the increase in payments from FY 1994 to
FY 1995 is determined by dividing the increase in cost per case by the
excess of FY 1994 payments over the budget neutrality target (that is,
1.0570/1.0339 = 1.0224, an increase of 2.24 percent). We discuss the
determination of the budget neutrality target in section III.A.3 below.
Finally, it should be noted that total payments to hospitals under
the prospective payment system will be relatively insensitive to
changes in the Federal rate even after the expiration of the budget
neutrality provision in FY 1996. Since capital payments constitute
about 10 percent of hospital payments, a 1 percent change in the
Federal rate yields only about a 0.1 percent change in actual payments
to hospitals.
1. Standard Federal Rate Update
Section 412.308(c)(1)(i) provides that for FY 1993 through FY 1995,
the standard Federal rate is updated on the basis of a lagged 2-year
moving average of the actual increase, adjusted for case-mix index
change, in Medicare inpatient capital-related costs per case for the
fiscal years 3 and 4 years before the fiscal year in question. For FY
1995, the increase is based on the increase in Medicare inpatient
capital-related costs per case from FY 1990 through FY 1992. These are
the most recent fiscal years for which cost report data are available.
To determine the amount of the increase, we apportioned a hospital's
costs and discharges to each fiscal year based on the number of months
in the hospital's cost reporting period that occurred during the
applicable fiscal year. Thus, an individual hospital may have more than
one cost report included in the calculation.
We are proposing that the FY 1995 update factor for the Federal
rate be 2.22 percent. The following chart, based on the December 1993
update of HCRIS, shows how this figure was computed:

Capital Costs Per Case Increase From Cost Report Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Update
Average 2- (average
Increase Increase year 2-year
No. Unadj. in cost Audit in increase Observed CMI increase
No. hospitals capital per case adjusted adjusted in CMI adjusted of CMI
Fiscal year hospitals 2nd cost per (unadj.) capital cost per adjusted (percent) increase adjusted
1st HCR HCR\1\ case (percent) cost per case cost per (percent) rate of
case\2\ (percent) case increase)
(percent) (percent)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1990........................................ 4251 5412 $543.27 ......... $540.05 ......... ......... ......... ......... .........
1991........................................ 4171 5323 584.69 7.62 567.92 5.16 ......... 2.52 2.57 .........
1992........................................ 4098 4733 633.80 8.40 587.53 3.45 4.30 1.55 1.87 2.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Columns 1 and 2 represent the numbers of hospital cost reports used in developing capital costs per case figures in column 3. Since hospital cost
reporting periods do not all coincide with the Federal fiscal year, data for a given Federal fiscal year must be derived from more than one hospital
cost report, allocated proportionately to the Federal fiscal year. For example, for a hospital with a cost reporting period beginning January 1, one
quarter of its cost report for the period ending December 31, 1987 would be allocated to Federal fiscal year 1988, and three quarters of its cost
report for the period ending December 31, 1988 would be allocated to Federal fiscal year 1987. Column 1 represents the number of cost reports used
that ended in the Federal fiscal year in question. Column 2 represents the number of cost reports used that began in the Federal fiscal year in
question. Column 2 is greater than Column 1 because Column 2 includes cost reports for hospitals whose cost reporting period coincides with the
Federal year along with cost reports for those hospitals whose cost reporting periods do not coincide with the Federal fiscal year. Column 1 includes
only cost reports for hospitals whose cost reporting periods do not coincide with the Federal fiscal year.
\2\Figures in column 5 represent capital costs per case, adjusted for the anticipated effects of cost report audits and reopenings, from the December
1993 update of HCRIS. For settled cost reports, and audit adjustment factor of 1.0043 was used in each fiscal year for adjusting capital costs per
case figures from column 3 for the effects of audits and reopenings. For as-submitted cost reports, the adjustment factors were as follows: FY 1990--
0.9256, FY 1991--0.9172, FY 1992--0.9250.
The costs per case figures that result after the application of these audit adjustments to submitted and settled cost reports, respectively, are entered
in Column 5.

For the final rule, we will recalculate the FY 1995 update factor
on the basis of the June 1994 update of HCRIS.
We note that the effect of the update on the Federal rate is
limited by the requirement of budget neutrality until FY 1996. Thus,
although the update factor for inflation is 2.22 percent, the FY 1995
Federal rate is lower than the FY 1994 Federal rate because of the
effects of the budget neutrality adjustment. We also note that the FY
1995 budget neutrality target is determined by the estimate of FY 1995
capital costs, not by the 2-year average update factor applied to the
FY 1995 Federal rate. We further discuss the basis for the budget
neutrality target in section III.A.4 below.
2. Outlier Payment Adjustment Factor
Section 412.312(c) establishes a unified outlier methodology for
inpatient operating and inpatient capital-related costs. A single set
of thresholds is used to identify outlier cases for both inpatient
operating and inpatient capital-related payments. Outlier payments are
made only on the portion of the Federal rate that is used to calculate
the hospital's inpatient capital-related payments (for example, 40
percent for cost reporting periods beginning in FY 1995 for hospitals
paid under the fully prospective methodology). Section 412.308(c)(2)
provides that the standard Federal rate for inpatient capital-related
costs be reduced by an adjustment factor equal to the estimated
additional payments under the Federal rate for outlier cases,
determined as a proportion of inpatient capital-related payments under
the Federal rate. The outlier thresholds are set so that estimated
outlier payments are 5.1 percent of estimated inpatient operating
payments. The inpatient capital-related outlier reduction factor is
then set according to the estimated inpatient capital-related outlier
payments that would be made if all hospitals were paid according to 100
percent of the Federal rate. For purposes of calculating the outlier
thresholds and the outlier reduction factor, we model all hospitals as
if paid 100 percent of the Federal rate because, as explained above,
outlier payments are made only on the portion of the Federal rate that
is included in the hospital's inpatient capital-related payments.
In the September 1, 1993 final rule, we estimated that outlier
payments for FY 1994 would equal 5.46 percent of inpatient capital-
related payments based on the Federal rate. Accordingly, we applied an
outlier adjustment factor of 0.9454 to the Federal rate. Based on the
thresholds as set forth in section II.A.4.d of the addendum, we
estimate that outlier payments will equal 6.28 percent of inpatient
capital-related payments based on the Federal rate in FY 1995. We are
therefore proposing an outlier adjustment factor of 0.9372 to the
Federal rate. When we modeled the combined operating and capital
outlier payments, we found that using a common set of thresholds
resulted in a higher percentage of outlier payments for capital-related
costs than for operating costs. We believe the increase in capital-
related outlier payments for FY 1995 results from a combination of the
lower proposed capital standard payment amount and the change to a
fixed loss threshold for cost outlier payments. As a result, estimated
capital outlier payments for FY 1995 represent a higher percentage of
total capital standard payments than in FY 1994.
The outlier reduction factors are not built permanently into the
rates; that is, they are not applied cumulatively in determining the
Federal rate. Therefore, the net change in the outlier adjustment to
the Federal rate for FY 1995 is .9913 (.9372/.9454). Thus, the proposed
outlier adjustment would reduce the FY 1995 Federal rate by 0.87
percent (.9913-1) compared with the FY 1994 outlier adjustment.
3. Budget Neutrality Adjustment Factor for Changes in DRG Weights and
the Geographic Adjustment Factor
Section 412.308(c)(4)(ii) requires that the Federal rate be
adjusted so that estimated aggregate payments for the fiscal year based
on the Federal rate after any changes resulting from the annual
reclassification and recalibration of the DRG weights and changes in
the geographic adjustment factor equal estimated aggregate payments
that would have been made on the basis of the Federal rate without such
changes. We used the actuarial model described in Appendix B to
estimate the aggregate payments that would have been made on the basis
of the Federal rate without changes in the DRG classifications and
weights and in the geographic adjustment factor. We also used the model
to estimate aggregate payments that would be made on the basis of the
Federal rate as a result of those changes. We then used these figures
to compute the adjustment required to maintain budget neutrality for
changes in DRG weights and in the geographic adjustment factor.
For FY 1994, we calculated a GAF/DRG budget neutrality factor of
1.0053. In this proposed rule, we are applying a factor of 1.00115. The
GAF/DRG budget neutrality factors are built permanently into the rates;
that is, they are applied cumulatively in determining the Federal rate.
This follows from the requirement that aggregate payments each year be
no more than it is estimated that they would have been in the absence
of the changes from the annual DRG reclassification and recalibration
and in the geographic adjustment factor. The incremental change in the
adjustment from FY 1994 to FY 1995 is 1.00115.
We note that this factor accounts for DRG reclassifications and
recalibration and changes in the geographic adjustment factor. It also
incorporates the effects on the geographic adjustment factor of FY 1995
geographic reclassification decisions made by the MGCRB compared to FY
1994 decisions. However, it does not account for changes in payments
due to changes in the disproportionate share and indirect medical
education adjustment factors or in the large urban add-on.
4. Budget Neutrality Adjustment Factor to Assure Aggregate Payments
Equal 90 Percent of Reasonable Cost Payments
Section 1886(g)(1)(A) of the Act requires that aggregate payments
made each year in FY 1992 through FY 1995 for hospital inpatient
services be reduced in a manner that results in payments equal to 90
percent of the amount the Secretary estimates would have been payable
on a reasonable cost basis for inpatient capital-related costs in that
year. No retroactive increase or decrease is made if aggregate payments
are greater than or less than 90 percent of actual Medicare inpatient
capital-related costs for that year.
Section 412.352 of the regulations provides that HCFA determines an
adjustment to the hospital-specific rate and the Federal rate
proportionately, so that the estimated payments for capital in each
year from FY 1992 through FY 1995 will equal 90 percent of what would
have been payable that year on a reasonable cost basis. The effect of
this provision is that the reduction required under section
1886(g)(1)(A) of the Act is realized entirely through a reduction in
the prospective payments for capital costs (that is, no reduction is
made for this purpose in the reasonable cost payments for old capital)
in FY 1992 through FY 1995.
For FY 1994, we determined that a budget neutrality factor of
0.8947 was required so that estimated aggregate payments for inpatient
capital-related costs would equal 90 percent of what would have been
payable on a reasonable cost basis in that year. For FY 1995, we are
proposing a budget neutrality factor of 0.7986.
As we explain in Appendix B, we determine the budget neutrality
adjustment factor on the basis of a projected FY 1995 capital costs per
case budget neutrality target. We develop this target from available
data on average Medicare capital costs per case for all short-term
acute care hospitals subject to the capital prospective payment system
(that is, data from excluded and waiver hospitals were eliminated). For
the FY 1995 proposed rule, we have actual data for FY 1992 from the
December 1993 HCRIS update. We also have revised estimates of the rates
of increase in Medicare capital costs per case for the years FY 1993
through FY 1995.
At the time of the final rule for FY 1994, we had estimated that
there would be a 30.53 percent increase in Medicare inpatient capital
cost per case between FY 1992 and FY 1995. In this proposed rule for FY
1995, we estimate that there will be a 12.83 percent increase in
Medicare inpatient capital cost per case between FY 1992 and FY 1994, a
decline of 13.56 percent (1.1283/1.3053=.8644, or -13.56 percent) in
the estimated rate of increase since the final rule for FY 1995. The
following chart shows how the rate-of-increase estimates for FY 1992
through FY 1995 were calculated in the final rule for FY 1994 and in
this proposed rule for FY 1995.

Comparison of Factors for Medicare Inpatient Capital Cost Per Case Increases--FY 1994 Final Rule (FR) and FY 1995 Proposed Rule (PR)
[In percentages]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total inpatient Medicare share (2) Medicare inpatient Medicare enrollment Admissions incidence Medicare admissions Estimated increases
capital (1) ---------------------- capital (1) x (2)=(3) --------------------------------------------- (4) x (5)=(6) in medicare inpatient
----------------------- ----------------------- ---------------------- capital cost per case
Estimate for FY (3)/(6)=(7)
FY94 FY95 FY94 FY95 Change FY94 FY95 FY94 FY95 Change FY94 FY95 Change FY94 FY95 ----------------------
FR PR Change FR PR FR PR Change FR PR FR PR FR PR Change FY94 FY95
FR PR Change
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1993.............................. 8.00 5.23 -2.56 3.30 0.52 -2.69 11.56 5.77 -5.19 2.03 2.67 0.63 1.02 1.00 -0.02 3.07 3.70 0.61 8.24 2.00 -5.77
1994.............................. 9.00 7.00 -1.83 3.60 1.00 -2.51 12.92 8.07 -4.30 2.11 2.13 0.02 1.03 1.11 0.08 3.16 3.26 0.10 9.46 4.65 -4.39
1995.............................. 10.00 8.00 -1.82 3.50 1.00 -2.42 13.85 9.08 -4.19 2.04 1.83 -0.21 -1.27 1.34 0.07 3.34 3.19 -0.14 10.17 5.70 -4.06
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The chart shows the causes of the decline in the rate-of-increase
projections since the final rule for FY 1994. As the chart shows, the
decline in the rate of increase projections is due almost entirely to a
decline in the rate of increase projections for Medicare inpatient
capital. (As the chart also shows, the rate of increase projections for
Medicare enrollment, Medicare admissions incidence, and Medicare
admissions, have changed only marginally.) In turn, the decline in the
rate of increase projections for Medicare inpatient capital is the
result of declines in the rate of increase projections for total
inpatient capital and Medicare share. For FY 1993, the panel survey
data that we use to develop the projected rate of increase for total
inpatient capital shows a decline in actual interest payments compared
to FY 1992. We believe that this decline in interest payments is due to
refinancing of debt instruments by hospitals to take advantage of lower
interest rates. For FY 1994 and FY 1995, we are projecting that total
inpatient capital cost increases will return to the level at which
increases for depreciation costs alone have been running (i.e., 7-8
percent) as the number of refinancings declines. The projection of the
rate of increase in Medicare share for FY 1993 is similarly grounded in
panel survey data. The panel survey data for that year show that,
contrary to our previous assumption, Medicare day share has not been
increasing in proportion to the increase in Medicare admissions. We
have accordingly reduced the FY 1994 and FY 1995 rate of increase
projections for Medicare share to account for that fact.
In addition to the decline in the rate of increase estimates since
the FY 1994 final rule, there has been a slight (-0.54 percent)
decrease in the FY 1992 cost per case in the December 1993 HCRIS data,
compared to the June 1993 HCRIS data that we used for FY 1994. The
following chart shows the combined effect of the reduced rates of
increase estimates and the reduced FY 1992 cost per case by comparing
the projections from FY 1992 to FY 1995 at the time of the FY 1994
final rule and in this proposed rule.

Effect of Revised Rate of Increase Estimates on Calculation of Fiscal
Year 1995 Budget Neutrality Target
------------------------------------------------------------------------
Percent
Capital Percent change in
cost per change in capital
case rate of cost per
increase case
------------------------------------------------------------------------
Fiscal year 1992 cost per case:
Final FY 94: 6/93 HCRIS................ \1\$594.0
9 N/A -.054
Proposed FY 95: 3/94 HCRIS............. \2\590.87 ......... .........
Fiscal year 1993 adjusted cost:
Final FY 94: 8.24%..................... 643.05 -5.77 -6.27
Proposed FY 95: 2.00%.................. 602.72 ......... .........
Fiscal year 1994 adjusted cost:
Final FY 94: 9.45%..................... 703.85 -4.39 -10.38
Proposed FY 95: 4.65%.................. 630.78 ......... .........
Fiscal year 1995 adjusted cost:
Final FY 94: 10.17%.................... 775.43 -4.06 -14.01
Proposed FY 95: 5.70%.................. 666.75 ......... .........
Cumulative............................. ......... -13.56.
------------------------------------------------------------------------
\1\Fiscal year 1992 cost per case based on June 1993 HCRIS data, audit-
adjusted, excluding waiver hospitals and PPS-excluded hospitals.
\2\Fiscal year 1992 cost per case based on December 1993 HCRIS data,
audit-adjusted, excluding waiver hospitals and PPS-excluded hospitals.

The chart shows that the cumulative effect of the revised rates of
increase is to lower the FY 1994 budget neutrality target by 13.56
percent. Together with the 0.54 percent decline due to updated HCRIS
data, this accounts for the 14.01 percent reduction in the FY 1995
capital cost per case budget neutrality target compared to the level
estimated at the time of the FY 1994 final rule.
For FY 1994, we employed a budget neutrality factor of 0.8947 to
realize the 90 percent target. In this proposed rule for FY 1995, the
budget neutrality adjustment factor is 0.7986. The budget neutrality
factors are not built permanently into the rates; that is, the factors
are not applied cumulatively in determining the Federal rate. The net
adjustment to the FY 1994 Federal rate would therefore be .7986/.8947
or 0.8926. For the final rule, we will recalculate the budget
neutrality factor on the basis of the most recent data available.
5. Exceptions Payment Adjustment Factor
Section 412.308(c)(3) requires that the standard Federal rate for
inpatient capital-related costs be reduced by an adjustment factor
equal to the estimated additional payments for exceptions under
Sec. 412.348 determined as a proportion of total payments under the
hospital-specific rate and Federal rate. The model developed for
determining the budget neutrality adjustment factor is also used to
estimate payments under the exceptions payment process and to determine
the exceptions payment adjustment factor.
For FY 1994, we estimated that exceptions payments would equal 5.15
percent of aggregate payments based on the Federal rate and the
hospital-specific rate. Therefore, we applied an exceptions reduction
factor of 0.9485 (1-.0515) in determining the Federal rate. For FY
1995, we estimate that exceptions payments will equal 2.03 percent of
aggregate payments based on the Federal rate and the hospital-specific
rate. Therefore, we propose to apply an exceptions reduction factor of
0.9797 (1-.0203) to determine the FY 1995 Federal rate.
The exceptions reductions factors are not built permanently into
the rates; that is, the factors are not applied cumulatively in
determining the Federal rate. The net adjustment to the FY 1995 Federal
rate is therefore .9797/.9485, or 1.0329. The proposed exceptions
reduction factor for FY 1995 is thus 3.29 percent higher than the
factor for FY 1994.
6. Standard Federal Rate for FY 1995
For FY 1994, the Federal rate was $378.34. With the changes we are
proposing to the factors used to establish the Federal rate, the FY
1995 Federal rate would be $353.87. The proposed changes are as
follows:
The FY 1995 update factor would be 1.0222.
The FY 1995 outlier adjustment factor would be 0.9372.
The FY 1995 budget neutrality adjustment factor that is
applied to the standard Federal payment rate for changes in the DRG
relative weights and in the geographic adjustment factor would be
1.00115.
The FY 1995 budget neutrality adjustment factor that is
applied to the standard Federal payment rate and the hospital-specific
rate to assure that aggregate payments equal 90 percent of payments
that would have been made on a reasonable cost basis would be 0.7986.
The FY 1995 exceptions payments adjustment factor would be
0.9797.
Since the Federal rate has already been adjusted for differences in
case mix, wages, cost of living, indirect medical education costs, and
payments to hospitals serving a disproportionate share of low-income
patients, we propose to make no additional adjustments in the standard
Federal rate for these factors other than the budget neutrality factors
for changes in the DRG relative weights and the geographic adjustment
factor.
We are providing a chart that shows how each of the factors and
adjustments for FY 1995 affected the computation of the proposed FY
1995 Federal rate in comparison to the FY 1994 Federal rate. The FY
1995 update factor has the effect of increasing the Federal rate 2.22
percent compared to the rate in FY 1994, while the geographic and DRG
budget neutrality factor has the effect of increasing the Federal rate
by 0.12 percent. The FY 1995 exceptions reduction factor has the effect
of increasing the Federal rate by 3.29 percent compared to the
exceptions reduction for FY 1994. The proposed FY 1995 budget
neutrality adjustment factor has the effect of reducing the final FY
1994 rate by 10.74 percent compared to the budget neutrality reduction
in FY 1994. The combined effect of all the proposed changes is to
decrease the proposed Federal rate by 6.47 percent compared to the
Federal rate for FY 1994.

Comparison of Factors and Adjustments--Fiscal Year 1994 Federal Rate and
Proposed Fiscal Year 1995 Federal Rate
------------------------------------------------------------------------
Percent
Change Change
------------------------------------------------------------------------
Update factor\1\:
Fiscal year 1994:...................... 1.0304
Proposed Fiscal year 1995:............. 1.0222 1.0222 2.22
GAF/DRG adjustment factor\1\:
Fiscal year 1994:...................... 1.0053
Proposed Fiscal year 1995:............. 1.00115 1.00115 0.12
Outlier adjustment factor\2\:
Fiscal year 1994:...................... 0.9454
Proposed Fiscal year 1995:............. 0.9372 0.9913 -0.87
Exceptions adjustment factor:
Fiscal year 19942:..................... 0.9485
Proposed Fiscal year 1995:............. 0.9797 1.0329 3.29
Budget neutrality adjustment factor\2\:
Fiscal year 1994:...................... 0.8947
Proposed Fiscal year 1995:............. 0.7986 0.8926 -10.74
Federal rate:
Fiscal year 1994:...................... $378.34
Proposed Fiscal year 1995:............. 353.87 0.9353 -6.47
------------------------------------------------------------------------
\1\The update factor and the GAF/DRG budget neutrality factors are built
permanently into the rates. Thus, for example, the incremental change
from FY 1994 to FY 1995 resulting from the application of the 1.00115
GAF/DRG budget neutrality factor for FY 1995 is 1.00115.
\2\The outlier reduction factor, the exceptions reduction factor, and
the budget neutrality factor to assure that payments do not exceed 90
percent of what it is estimated would have been paid on the basis of
reasonable cost are not built permanently into the rates; that is,
these factors are not applied cumulatively in determining the rates.
Thus, for example, the net change resulting from the application of
the FY 1995 exceptions reduction factor is 0.9797/0.9485, or 1.0329.

We have refined our proposed budget neutrality and exceptions
reduction factors for FY 1995 on the basis of the best available data.
We have not retroactively adjusted the Federal rate for FY 1994 in
determining the rate for FY 1995.
7. Special Rate for Puerto Rico Hospitals
For FY 1994, the special rate for Puerto Rico hospitals was
$291.03. With the changes we are proposing to the factors used to
determine the rate, we are proposing that the FY 1995 special rate for
Puerto Rico will be $272.20.

B. Determination of Hospital-Specific Rate Update

Section 412.328(e) of the regulations provides that the hospital-
specific rate for FY 1995 be determined by adjusting the FY 1994
hospital-specific rate by the following factors:
1. Hospital-Specific Rate Update Factor
The hospital-specific rate is updated in accordance with the update
factor for the standard Federal rate determined under
Sec. 412.308(c)(1). For FY 1995, we are proposing that the hospital-
specific rate be updated by a factor of 1.0222.
2. Exceptions Payment Adjustment Factor
For FY 1992 through FY 2001, the updated hospital-specific rate is
multiplied by an adjustment factor equal to the estimated additional
payments for capital-related costs for exceptions under Sec. 412.348,
determined as a proportion of the total amount of payments under the
hospital-specific rate and the Federal rate. For FY 1995, we estimate
that exceptions payments will be 2.03 percent of aggregate payments
based on the Federal rate and the hospital-specific rate. We therefore
propose that the updated hospital-specific rate be reduced by a factor
of 0.9797. The exceptions reductions factors are not built permanently
into the rates; that is, the factors are not applied cumulatively in
determining the hospital-specific rate. The net adjustment to the FY
1995 hospital-specific rate is therefore .9797/.9485, or 1.0329.
3. Budget Neutrality Adjustment Factor
For FY 1992 through FY 1995, the updated hospital-specific rate is
adjusted by a budget neutrality adjustment factor determined under
Sec. 412.352, so that estimated aggregate payments under the capital
prospective payment system will equal 90 percent of what would have
been payable on a reasonable cost basis. (The budget neutrality
adjustment for changes in the DRG relative weights and in the
geographic adjustment factor is not applied to the hospital-specific
rate.) For FY 1995, we are proposing a budget neutrality factor of
0.7986. The budget neutrality factor is not built permanently into the
rates; that is, the factor is not applied cumulatively in determining
the hospital-specific rate. The net adjustment to the FY 1995 hospital-
specific rate is therefore .7986/.8947, or 0.8926.
4. Net Change to Hospital-Specific Rate
We are providing a chart below to show the proposed net change to
the hospital-specific rate. The chart shows the factors for FY 1994 and
FY 1995 and the net adjustment for each factor. It also shows that the
proposed cumulative net adjustment from FY 1994 to FY 1995 is 0.9424,
which represents a decrease of 5.76 percent to the hospital-specific
rate. The proposed FY 1995 hospital-specific rate for each hospital is
determined by multiplying the FY 1994 hospital-specific rate by the
cumulative net adjustment of 0.9424.

Proposed Fiscal Year 1995 Update and Adjustments to Hospital-Specific
Rates
------------------------------------------------------------------------
Net
adjustment Percent
change
------------------------------------------------------------------------
Update factor:
Fiscal year 94........................ 1.0304 .......... .........
Proposed fiscal year 95............... 1.0222 1.0222 2.22
Exceptions payment adjustment factor:
Fiscal year 94........................ 0.9485 .......... .........
Proposed fiscal year 95............... 0.9797 1.0329 3.29
Budget neutrality factor:
Fiscal year 94........................ 0.8947 .......... .........
Proposed fiscal year 95............... 0.7986 0.8926 -10.74
Cumulative adjustments:
Fiscal year 94........................ 0.8744 .......... .........
Proposed fiscal year 95............... 0.8241 0.9424 -5.76
------------------------------------------------------------------------
Note: The update factor for the hospital-specific rate is applied
cumulatively in determining the rates. Thus, the incremental increase
in the update factor from fiscal year 1994 to fiscal year 1995 is
1.0222. In contrast, the exceptions payment adjustment factor and the
budget neutrality factor are not applied cumulatively. Thus, for
example, the incremental increase in the budget neutrality factor from
fiscal year 1994 to fiscal year 1995 is .7986/.8947, or .8926.

C. Calculation of Inpatient Capital-Related Prospective Payments for FY
1995

During the capital prospective payment system transition period, a
hospital is paid for the inpatient capital-related costs under one of
two alternative payment methodologies: the fully prospective payment
methodology or the hold-harmless methodology. The payment methodology
applicable to a particular hospital is determined when a hospital comes
under the prospective payment system for capital-related costs by
comparing its hospital-specific rate to the Federal rate applicable to
the hospital's first cost reporting period under the prospective
payment system. The applicable Federal rate is determined by adjusting:
For outliers by dividing the standard Federal rate by the
outlier reduction factor for that fiscal year; and,
For the payment adjustment factors applicable to the
hospital (that is, the hospital's geographic adjustment factor, the
disproportionate share adjustment factor, and the indirect medical
education adjustment factor, when appropriate). If the hospital-
specific rate is above the applicable Federal rate, the hospital is
paid under the hold-harmless methodology. If the hospital-specific rate
is below the applicable Federal rate, the hospital is paid under the
fully prospective methodology. For purposes of calculating payments for
each discharge under both the hold-harmless payment methodology and the
fully prospective payment methodology, the standard Federal rate is
adjusted as follows: (Standard Federal Rate) x (DRG weight) x
(Geographic Adjustment Factor) x (Large Urban Add-on, if applicable)
x (COLA adjustment for hospitals located in Alaska and Hawaii) x (1
+ Disproportionate Share Adjustment Factor + Indirect Medical Education
Adjustment Factor, if applicable).
The result is termed the adjusted Federal rate.
Payments under the hold-harmless methodology are determined under
one of two formulas. A hold-harmless hospital is paid the higher of:
100 percent of the adjusted Federal rate for each
discharge; or
An old capital payment equal to 85 percent (100 percent
for sole community hospitals) of the hospital's allowable Medicare
inpatient old capital costs per discharge for the cost reporting period
plus a new capital payment based on a percentage of the adjusted
Federal rate for each discharge. The percentage of the adjusted Federal
rate equals the ratio of the hospital's allowable Medicare new capital
costs to its total Medicare inpatient capital-related costs in the cost
reporting period.
Once a hospital receives payment based on 100 percent of the
adjusted Federal rate in a cost-reporting period beginning on or after
October 1, 1994 (or the first cost reporting period after obligated
capital that is recognized as old capital under Sec. 412.302(c) is put
in use for patient care, if later), the hospital continues to receive
capital prospective payment system payments on that basis for the
remainder of the transition period.
Payment for each discharge under the fully prospective methodology
is the sum of:
The hospital-specific rate multiplied by the DRG relative
weight for the discharge and by the applicable hospital-specific
transition blend percentage for the cost reporting period; and
The adjusted Federal rate multiplied by the Federal
transition blend percentage.
The blend percentages for cost reporting periods beginning in FY
1995 are 40 percent of the adjusted Federal rate and 60 percent of the
hospital-specific rate.
Hospitals may also receive outlier payments for those cases that
qualify under the thresholds established for each fiscal year. Section
412.312(c) provides for a single set of thresholds to identify outlier
cases for both inpatient operating and inpatient capital-related
payments. Outlier payments are made only on that portion of the Federal
rate that is used to calculate the hospital's inpatient capital-related
payments. For fully prospective hospitals, that will be 40 percent of
the Federal rate for discharges occurring in cost reporting periods
beginning during FY 1995. Thus, a fully prospective hospital will
receive 40 percent of the capital-related outlier payment calculated
for the case for discharges occurring in cost reporting periods
beginning in FY 1995. For hold-harmless hospitals paid 85 percent of
their reasonable costs for old inpatient capital, the portion of the
Federal rate that is included in the hospital's outlier payments is
based on the hospital's ratio of Medicare inpatient costs for new
capital to total Medicare inpatient capital costs. For hold-harmless
hospitals that are paid 100 percent of the Federal rate, 100 percent of
the Federal rate is included in the hospital's outlier payments.
The proposed rules to establish outlier thresholds for FY 1995 are
published in section II.A.4.c of the Addendum to this proposed rule.
For FY 1995 we are proposing that a case qualifies as a cost outlier if
the cost for the case (after standardization for the indirect teaching
adjustment and disproportionate share adjustment) is greater than the
prospective payment rate for the DRG plus $23,300. We are also
proposing that a case qualifies as a day outlier for FY 1995 if the
length of stay is greater than the geometric mean length of stay for
the DRG plus the lesser of three standard deviations of the length of
stay or 22 days.
During the capital prospective payment system transition period,
any hospital may also receive an additional payment under an exceptions
process if its total inpatient capital-related payments are less than a
minimum percentage of its allowable Medicare inpatient capital-related
costs. The minimum payment level is established by class of hospital
under Sec. 412.348. The minimum payment levels for portions of cost
reporting periods occurring in FY 1995 are:
Sole community hospitals (located in either an urban or
rural area), 90 percent;
Urban hospitals with at least 100 beds and a
disproportionate share patient percentage of at least 20.2 percent and
urban hospitals with at least 100 beds that qualify for
disproportionate share payments under Sec. 412.106(c)(2), 80 percent;
and,
All other hospitals, 70 percent.
Under Sec. 412.348(d), the amount of the exceptions payment is
determined by comparing the cumulative payments made to the hospital
under the capital prospective payment system to the cumulative minimum
payment levels applicable to the hospital for each cost reporting
period subject to that system. Any amount by which the hospital's
cumulative payments exceed its cumulative minimum payment is deducted
from the additional payment that would otherwise be payable for a cost
reporting period.
New hospitals are exempted from the capital prospective payment
system for their first 2 years of operation and are paid 85 percent of
their reasonable costs during that period. A new hospital's old capital
costs are its allowable costs for capital assets that were put in use
for patient care on or before the later of December 31, 1990 or the
last day of the hospital's base year cost reporting period, and are
subject to the rules pertaining to old capital and obligated capital as
of the applicable date. Effective with the third year of operation, we
will pay the hospital under either the fully prospective methodology,
using the appropriate transition blend in that Federal fiscal year, or
the hold-harmless methodology. If the hold-harmless methodology is
applicable, the hold-harmless payment for assets in use during the base
period would extend for 8 years, even if the hold-harmless payments
extend beyond the normal transition period.

IV. Proposed Rate-of-Increase Percentages for Hospitals and
Hospital Units Excluded From the Prospective Payment System

The inpatient operating costs of hospitals and hospital units
excluded from the prospective payment system are subject to rate-of-
increase limits established under the authority of section 1886(b) of
the Act, which is implemented in Sec. 413.40 of the regulations. Under
these limits, an annual target amount (expressed in terms of the
inpatient operating cost per discharge) is set for each hospital, based
on the hospital's own historical cost experience trended forward by the
applicable rate-of-increase percentages (update factors). The target
amount is multiplied by the number of Medicare discharges in a
hospital's cost reporting period, yielding the ceiling on aggregate
Medicare inpatient operating costs for the cost reporting period.
Effective with cost reporting periods beginning on or after October
1, 1991, a hospital that has Medicare inpatient operating costs in
excess of its ceiling is paid its ceiling plus 50 percent of its costs
in excess of the ceiling. Total payment may not exceed 110 percent of
the ceiling. A hospital that has inpatient operating costs less than
its ceiling will continue to be paid its costs plus the lower of--
Fifty percent of the difference between the inpatient
operating costs and the ceiling; or
Five percent of the ceiling.
Each hospital's target amount is adjusted annually, at the
beginning of its cost reporting period, by an applicable rate-of-
increase percentage. For cost reporting periods beginning on or after
October 1, 1993 and before October 1, 1994, section 1886(b)(3)(B) of
the Act provides that the applicable rate-of-increase percentage is the
market basket percentage increase minus the lesser of one percentage
point or the percentage point difference between 10 percent and the
hospital's ``update adjustment percentage'' except for hospitals with
an ``update adjustment percentage'' of at least 10 percent. The rate-
of-increase percentage for hospitals in the latter case will be the
market basket percentage increase. The ``update adjustment percentage''
is the percentage by which a hospital's allowable inpatient operation
costs exceeds the hospital's ceiling for the cost reporting period
beginning in Federal fiscal year 1990. For cost reporting periods
beginning on or after October 1, 1994 and before October 1, 1997, the
update adjustment percentage is the update adjustment percentage from
the previous year plus the previous year's applicable reduction. The
applicable reduction and applicable percentage are then determined in
the same manner as for FY 1994. The most recent forecasted market
basket increase for FY 1995 for hospitals and hospital units excluded
from the prospective payment system is 3.7 percent.

V. Tables

This section contains the tables referred to throughout the
preamble to this proposed rule and in this addendum. For purposes of
this proposed rule, and to avoid confusion, we have retained the
designations of Tables 1 through 5 that were first used in the
September 1, 1983 initial prospective payment final rule (48 FR 39844).
Tables 1a, 1b, 1c, 1d, 3C, 4a, 4b, 4c, 4d, 4e, 5, 6a, 6b, 6c, 6d, 6e,
6f, 6g, 7A, 7B, 8a, 8b, and 9 are presented below. The tables presented
below are as follows:

Table 1a--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor
Table 1b--Regional Adjusted Operating Standardized Amounts, Labor/
Nonlabor
Table 1c--Adjusted Operating Standardized Amounts for Puerto Rico,
Labor/Nonlabor
Table 1d--Capital Standard Federal Payment Rate
Table 3C--Hospital Case Mix Indexes for Discharges Occurring in Federal
Fiscal Year 1993 and Hospital Average Hourly Wage for Federal Fiscal
Year 1995 Wage Index
Table 4a--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Urban Areas
Table 4b--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Rural Areas
Table 4c--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Hospitals That Are Reclassified
Table 4d--Average Hourly Wage for Urban Areas
Table 4e--Average Hourly Wage for Rural Areas
Table 5--List of Diagnosis Related Groups (DRGs), Relative Weighting
Factors, Geometric Mean Length of Stay, and Length of Stay Outlier
Cutoff Points Used in the Prospective Payment System
Table 6a--New Diagnosis Codes
Table 6b--New Procedure Codes
Table 6c--Invalid Diagnosis Codes
Table 6d--Revised Diagnosis Code Titles
Table 6e--Revised Procedure Code Titles
Table 6f--Additions to the CC Exclusions List
Table 6g--Deletions to the CC Exclusions List
Table 7A--Medicare Prospective Payment System Selected Percentile
Lengths of Stay FY 93 MEDPAR Update 12/93 GROUPER V11.0
Table 7B--Medicare Prospective Payment System Selected Percentile
Lengths of Stay FY 93 MEDPAR Update 12/93 GROUPER V12.0
Table 8a--Statewide Average Operating Cost-to-Charge Ratios for Urban
and Rural Hospitals (Case Weighted) April 1994
Table 8b--Statewide Average Capital Cost-to-Charge Ratios for Urban and
Rural Hospitals (Case Weighted) April 1994
Table 9--1993 Transfer Adjusted Case-Mix Index and Transfer Adjustment
to Discharges for Capital Hospital-Specific Rate Redeterminations

Table 1a.--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor
------------------------------------------------------------------------
Large urban areas Other areas
------------------------------------------------------------------------
Labor-related Nonlabor-related Labor-related Nonlabor-related
------------------------------------------------------------------------
$2,707.19........... $1,084.39 $2,664.33 $1,067.23
------------------------------------------------------------------------

Table 1b.--Regional Adjusted Operating Standardized Amounts, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
Large Urban Other Urban Rural
-----------------------------------------------------------------------------
Labor- Nonlabor Labor- Nonlabor- Labor- Nonlabor-
related related related related related related
----------------------------------------------------------------------------------------------------------------
1. New England (CT, ME, MA, NH,
RI, VT).......................... 2,838.28 1,136.90 2,793.33 1,118.90 2,793.33 1,118.90
2. Middle Atlantic (PA, NJ, NY)... 2,590.32 1,037.58 2,549.32 1,021.16 2,549.32 1,021.16
3. South Atlantic (DE, DC, FL, GA,
MD, NC, SC, VA, WV).............. 2,652.11 1,062.33 2,610.13 1,045.51 2,610.13 1,045.51
4. East North Central (IL, IN, MI
OH, WI).......................... 2,889.93 1,157.60 2,844.18 1,139.26 2,844.18 1,139.26
5. East South Central (AL, KY, MS,
TN).............................. 2,506.18 1,003.88 2,466.50 987.98 2,466.50 987.98
6. West North Central (IA, KS, MN,
MO, NE, ND, SD).................. 2,708.96 1,085.10 2,666.07 1,067.92 2,666.07 1,067.92
7. West South Central (AR, LA, OK,
TX).............................. 2,636.66 1,056.14 2,594.92 1,039.42 2,594.92 1,039.42
8. Mountain (AZ, CO, ID, MT, NV,
NM, UT, WY)...................... 2,619.72 1,049.35 2,578.25 1,032.74 2,578.25 1,032.74
9. Pacific (AK, CA, HI, OR, WA)... 2,678.36 1,072.84 2,635.96 1,055.86 2,635.96 1,055.86
----------------------------------------------------------------------------------------------------------------

Table 1c.--Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
Large Urban Areas Other Areas
---------------------------------------------------------------
Nonlabor- Nonlabor-
Labor-related related Labor-related related
----------------------------------------------------------------------------------------------------------------
National........................................ $2,680.76 $1,073.81 $2,680.76 $1,073.81
Puerto Rico..................................... 2,415.12 502.29 2,376.88 494.33
----------------------------------------------------------------------------------------------------------------

Table 1d.--Capital Standard Federal Payment Rate
------------------------------------------------------------------------
RATE
------------------------------------------------------------------------
National..................................................... $353.87
Puerto Rico.................................................. $272.20
------------------------------------------------------------------------

Table 3C.--Hospital Case Mix Indexes for Discharges Occurring in Federal Fiscal Year 1993; Hospital Average Hourly Wage for Federal Fiscal Year 1995 Wage Index
Page 1 of 16
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
010001........... 01.3420 15.05 010095........... 01.0740 09.76 020027........... 00.9447 ............ 030095........... 01.1907 ............ 040091.......... 01.3688 19.00
010004........... 01.0476 10.14 010096........... 01.0307 ............ 030001........... 01.3709 18.78 040001........... 01.1219 11.01 040093.......... 00.9667 10.76
010005........... 01.1175 13.17 010097........... 00.9013 11.13 030002........... 01.7652 19.83 040002........... 01.1970 13.30 040095.......... 00.8495 10.35
010006........... 01.3879 13.78 010098........... 00.9474 12.29 030003........... 01.3771 19.56 040003........... 00.9783 12.33 040100.......... 01.1202 13.79
010007........... 01.0771 11.93 010099........... 01.0412 11.87 030004........... 01.0291 11.84 040004........... 01.2751 15.36 040105.......... 01.0229 11.32
010008........... 00.9887 09.72 010100........... 01.2293 13.10 030006........... 01.5829 16.65 040005........... 00.9361 10.85 040106.......... 01.1842 09.69
010009........... 01.0696 14.73 010101........... 01.0924 13.51 030007........... 01.2297 14.86 040007........... 01.6608 16.45 040107.......... 01.1705 15.19
010010........... 01.1143 11.37 010102........... 00.8939 11.19 030008........... 01.9721 19.55 040008........... 01.0900 10.26 040109.......... 01.0816 11.14
010011........... 01.4690 17.34 010103........... 01.6296 14.09 030009........... 01.2268 14.70 040010........... 01.2161 12.51 040114.......... 01.7750 15.03
010012........... 01.3013 13.75 010104........... 01.5973 14.71 030010........... 01.3951 17.87 040011........... 00.9919 10.61 040116.......... 01.3746 17.22
010015........... 01.0334 12.39 010108........... 01.2484 12.94 030011........... 01.4456 18.72 040013........... 00.9019 10.97 040118.......... 01.1411 12.62
010016........... 01.1878 12.69 010109........... 01.0713 12.62 030012........... 01.2298 15.25 040014........... 01.2065 14.27 040119.......... 01.1532 12.83
010018........... 00.8714 14.94 010110........... 00.9980 10.56 030013........... 01.2248 16.12 040015........... 01.1017 11.30 040124.......... 01.1966 12.65
010019........... 01.2433 12.48 010112........... 01.1608 12.89 030014........... 01.4715 18.10 040016........... 01.6758 14.44 040126.......... 00.9911 10.09
010021........... 01.2801 13.82 010113........... 01.6215 12.67 030016........... 01.3387 21.17 040017........... 01.3327 11.19 050002.......... 01.3608 24.36
010022........... 00.9848 14.35 010114........... 01.2590 14.30 030017........... 01.4178 16.52 040018........... 01.2814 15.40 050006.......... 01.3545 18.51
010023........... 01.3947 14.63 010115........... 00.8736 13.94 030018........... 01.7499 19.61 040019........... 01.1968 11.70 050007.......... 01.5316 24.12
010024........... 01.3212 14.19 010117........... 00.9040 17.92 030019........... 01.2389 19.51 040020........... 01.4919 12.24 050008.......... 01.5692 24.13
010025........... 01.2142 11.22 010118........... 01.2169 14.55 030022........... 01.5013 17.29 040021........... 01.2687 13.19 050009.......... 01.5115 22.22
010027........... 00.8693 12.83 010119........... 01.0976 14.41 030023........... 01.2798 15.17 040022........... 01.8431 12.85 050013.......... 01.9538 21.58
010029........... 01.4511 13.86 010120........... 00.9957 13.31 030024........... 01.6683 18.15 040024........... 01.0205 10.84 050014.......... 01.0954 19.15
010031........... 01.2743 12.35 010121........... 01.1816 12.93 030025........... 01.1226 13.58 040025........... 00.9309 10.28 050015.......... 01.3226 20.74
010032........... 00.9122 13.01 010122........... 00.8442 ............ 030027........... 01.1406 14.27 040026........... 01.5721 14.46 050016.......... 01.1459 19.69
010033........... 01.9025 17.10 010123........... 01.2703 15.56 030030........... 01.6899 21.32 040027........... 01.3041 11.24 050017.......... 02.0516 22.91
010034........... 01.0487 12.98 010124........... 01.2775 14.78 030033........... 01.2468 14.70 040028........... 01.0211 08.78 050018.......... 01.3060 16.74
010035........... 01.1925 13.41 010125........... 01.0384 11.83 030034........... 01.1108 15.82 040029........... 01.1563 13.43 050019.......... 00.8715 ............
010036........... 01.1288 14.33 010126........... 01.0658 11.19 030035........... 01.2902 18.75 040030........... 00.9032 11.23 050021.......... 01.3029 19.57
010038........... 01.2377 14.62 010127........... 01.5502 15.59 030036........... 01.1810 17.67 040031........... 00.8130 10.74 050022.......... 01.4834 21.23
010039........... 01.6339 14.65 010128........... 00.9523 11.41 030037........... 01.9369 20.11 040032........... 00.9855 09.75 050024.......... 01.4206 22.43
010040........... 01.4400 16.28 010129........... 01.0844 10.44 030038........... 01.5192 18.07 040035........... 00.9250 09.29 050025.......... 01.6169 21.40
010043........... 01.0176 12.49 010130........... 01.0868 13.73 030040........... 01.0077 16.22 040036........... 01.3628 14.75 050026.......... 01.4947 20.53
010044........... 01.0350 14.66 010131........... 01.2385 16.21 030041........... 00.9257 16.66 040037........... 01.1689 10.55 050028.......... 01.3246 15.49
010045........... 01.1157 11.53 010134........... 00.8763 10.46 030043........... 01.1903 19.23 040039........... 01.2340 11.05 050029.......... 01.2621 24.70
010046........... 01.3949 12.45 010136........... 00.8956 13.02 030044........... 01.0476 13.44 040040........... 01.1168 14.85 050030.......... 01.3462 17.25
010047........... 00.9809 08.62 010137........... 01.2463 14.66 030046........... 00.9874 17.75 040041........... 01.3478 12.64 050032.......... 01.2648 20.61
010049........... 01.0941 13.78 010138........... 00.9621 11.08 030047........... 00.9435 16.97 040042........... 01.2495 12.86 050033.......... 01.4525 24.11
010050........... 00.9541 10.19 010139........... 01.6340 19.91 030049........... 00.9657 14.22 040044........... 00.9053 09.86 050036.......... 01.7641 21.61
010051........... 00.8938 07.25 010143........... 01.1684 14.49 030054........... 00.8935 12.19 040045........... 01.0369 13.67 050038.......... 01.4514 27.19
010052........... 00.9459 12.78 010144........... 01.3170 15.09 030055........... 01.2526 15.39 040047........... 00.9986 12.83 050039.......... 01.6270 20.18
010053........... 01.0696 12.36 010145........... 01.2440 16.15 030059........... 01.3014 18.17 040048........... 01.2044 12.62 050040.......... 01.2672 22.53
010054........... 01.1993 13.64 010146........... 01.1200 15.02 030060........... 01.0476 13.68 040050........... 01.1348 10.29 050041.......... 01.2871 23.30
010055........... 01.3844 14.09 010148........... 00.9561 11.17 030061........... 01.5819 16.15 040051........... 01.0615 11.86 050042.......... 01.2658 17.72
010056........... 01.3818 16.34 010149........... 01.4268 15.65 030062........... 01.3433 14.98 040053........... 01.1476 13.70 050043.......... 01.4999 25.99
010058........... 01.0025 07.49 010150........... 01.0421 13.50 030064........... 01.5451 16.64 040054........... 01.0561 10.02 050045.......... 01.2470 17.59
010059........... 01.0580 13.64 010152........... 01.3659 14.13 030065........... 01.5203 18.30 040055........... 01.3698 13.50 050046.......... 01.1624 21.80
010061........... 01.0054 14.30 010153........... 02.7788 18.16 030067........... 01.0966 14.05 040058........... 01.1385 12.39 050047.......... 01.7578 27.86
010062........... 00.9869 10.43 010155........... 01.0043 09.32 030068........... 00.9690 13.73 040060........... 00.9459 12.62 050051.......... 01.1101 15.76
010064........... 01.8446 14.55 020001........... 01.4478 24.33 030069........... 01.3048 18.16 040062........... 01.5107 14.60 050052.......... 01.8867 ............
010065........... 01.4383 13.58 020002........... 00.9554 21.71 030071........... 00.8846 ............ 040063........... 01.5592 14.49 050054.......... 01.2707 17.87
010066........... 00.9167 08.90 020004........... 01.0549 23.25 030072........... 00.8577 ............ 040064........... 00.9000 09.17 050055.......... 01.2716 25.35
010068........... 01.2901 17.41 020005........... 00.8748 22.74 030073........... 01.1491 ............ 040066........... 01.1047 12.97 050056.......... 01.4274 21.51
010069........... 01.1443 12.42 020006........... 01.0673 22.50 030074........... 01.0145 ............ 040067........... 01.0706 10.71 050057.......... 01.4671 18.64
010072........... 01.1737 11.43 020007........... 00.9203 18.20 030075........... 00.9415 ............ 040069........... 01.0147 11.34 050058.......... 01.4160 21.51
010073........... 00.9141 08.91 020008........... 01.0488 24.76 030076........... 00.9714 ............ 040070........... 00.9926 10.66 050060.......... 01.4775 17.76
010078........... 01.2195 14.43 020009........... 01.0479 19.58 030077........... 00.9788 ............ 040071........... 01.3838 15.71 050061.......... 01.2809 19.57
010079........... 01.1299 11.88 020010........... 01.0530 26.51 030078........... 01.0573 ............ 040072........... 01.1024 12.66 050063.......... 01.4005 19.94
010080........... 00.9871 11.70 020011........... 01.0005 21.11 030079........... 00.6048 ............ 040074........... 01.2110 13.36 050065.......... 01.5209 22.66
010081........... 01.8425 16.28 020012........... 01.2989 22.42 030080........... 01.6490 18.80 040075........... 01.1243 10.83 050066.......... 01.2423 22.96
010083........... 01.0472 15.00 020013........... 00.9887 28.18 030083........... 01.2864 19.53 040076........... 01.0898 12.49 050067.......... 01.3622 21.76
010084........... 01.3987 16.55 020014........... 01.0902 23.36 030084........... 01.1305 ............ 040077........... 00.9152 09.81 050068.......... 01.0968 16.17
010085........... 01.2018 14.98 020017........... 01.3908 22.51 030085........... 01.4462 17.81 040078........... 01.2594 14.24 050069.......... 01.6106 22.39
010086........... 01.0069 11.41 020018........... 00.9955 ............ 030086........... 01.1425 17.91 040080........... 01.0441 14.19 050070.......... 01.2341 27.81
010087........... 01.8189 13.54 020019........... 00.8069 ............ 030087........... 01.6225 16.84 040081........... 00.8897 09.28 050071.......... 01.2940 27.45
010089........... 01.1427 14.71 020020........... 00.8059 ............ 030088........... 01.3583 17.48 040082........... 01.2362 14.75 050072.......... 01.3291 27.78
010090........... 01.5674 15.24 020021........... 00.7674 ............ 030089........... 01.4020 17.92 040084........... 01.0794 12.59 050073.......... 01.2413 27.89
010091........... 00.9618 11.17 020024........... 01.0985 21.11 030092........... 01.4797 16.73 040085........... 01.2333 13.67 050074.......... 01.1081 26.44
010092........... 01.3537 14.56 020025........... 00.9424 21.76 030093........... 01.3608 16.81 040088........... 01.3005 13.30 050075.......... 01.3725 27.54
010094........... 01.1717 16.12 020026........... 01.3206 ............ 030094........... 01.2937 17.50 040090........... 00.9091 11.44 050076.......... 01.5761 28.16
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Page 2 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
050077........... 01.5888 21.33 050172........... 01.3184 19.50 050278........... 01.4113 20.78 050391........... 01.3501 18.94 050503.......... 01.2838 21.76
050078........... 01.3429 23.69 050173........... 01.2800 21.21 050279........... 01.2214 18.52 050392........... 00.9938 14.75 050506.......... 01.4404 24.03
050079........... 01.4659 29.24 050174........... 01.6603 24.97 050280........... 01.5529 20.37 050393........... 01.4112 23.29 050510.......... 01.3259 27.75
050080........... 01.3017 23.23 050175........... 01.3332 22.08 050281........... 01.4099 19.38 050394........... 01.4900 19.55 050512.......... 01.3095 28.18
050081........... 01.6255 19.94 050177........... 01.2291 17.98 050282........... 01.3130 21.41 050396........... 01.5505 22.84 050515.......... 01.3002 28.20
050082........... 01.5067 22.06 050179........... 01.2486 17.01 050283........... 01.2409 25.87 050397........... 01.0685 18.46 050516.......... 01.6453 22.41
050084........... 01.5688 21.41 050180........... 01.5089 28.43 050286........... 00.9236 20.24 050401........... 01.2124 16.24 050517.......... 01.2752 19.39
050088........... 01.1161 22.27 050181........... 01.2434 22.67 050289........... 01.7583 25.03 050404........... 01.2031 15.52 050522.......... 01.3951 25.98
050089........... 01.3890 17.98 050183........... 01.2199 18.72 050290........... 01.6125 24.11 050406........... 01.1134 14.52 050523.......... 01.2343 24.38
050090........... 01.2810 20.35 050186........... 01.5126 22.72 050291........... 01.2418 22.82 050407........... 01.2727 22.69 050526.......... 01.3692 23.17
050091........... 01.2021 24.16 050188........... 01.4071 23.46 050292........... 01.0899 20.59 050410........... 01.0230 24.20 050528.......... 01.2460 15.17
050092........... 00.9137 17.43 050189........... 00.9779 19.77 050293........... 01.1454 19.45 050411........... 01.3083 27.43 050531.......... 01.3634 20.08
050093........... 01.5318 19.94 050191........... 01.4374 22.19 050295........... 01.4479 19.53 050414........... 01.2959 24.31 050534.......... 01.4949 22.13
050095........... 01.2160 29.20 050192........... 01.2147 18.02 050296........... 01.2165 23.31 050417........... 01.2310 14.24 050535.......... 01.3594 22.44
050096........... 01.2536 20.89 050193........... 01.3657 20.72 050298........... 01.1893 18.06 050418........... 01.3350 22.55 050537.......... 01.3233 20.44
050097........... 01.4638 16.38 050194........... 01.2171 23.28 050299........... 01.2957 22.08 050419........... 01.3458 16.62 050539.......... 01.1707 21.36
050099........... 01.5707 21.78 050195........... 01.5808 28.26 050300........... 01.3000 17.35 050420........... 01.4446 21.82 050541.......... 01.5404 27.82
050100........... 01.8059 23.83 050196........... 01.3418 17.36 050301........... 01.3553 16.92 050421........... 01.4212 22.08 050542.......... 01.1191 13.71
050101........... 01.3948 22.78 050197........... 01.9405 25.14 050302........... 01.3664 23.01 050423........... 00.9847 16.65 050543.......... 00.9021 21.03
050102........... 01.3802 19.71 050199........... 01.3409 18.65 050305........... 01.5587 27.33 050424........... 01.7253 ............ 050545.......... 00.8636 20.90
050103........... 01.6487 19.35 050204........... 01.3590 21.05 050307........... 01.4328 16.76 050425........... 01.2768 25.74 050546.......... 00.8588 21.22
050104........... 01.3975 20.54 050205........... 01.3860 17.92 050308........... 01.5305 30.21 050426........... 01.3363 22.67 050547.......... 00.9978 22.15
050107........... 01.2997 19.86 050207........... 01.2834 18.15 050309........... 01.3553 17.39 050427........... 00.8642 21.11 050549.......... 01.7500 24.00
050108........... 01.4869 22.51 050208........... 01.2820 23.14 050310........... 01.2482 19.13 050430........... 01.0378 14.73 050550.......... 02.3752 21.19
050109........... 02.1024 23.09 050211........... 01.3048 26.33 050312........... 01.8372 20.46 050431........... 01.1481 21.80 050551.......... 01.3686 22.23
050110........... 01.2300 18.29 050213........... 01.3361 18.97 050313........... 01.1905 20.49 050432........... 01.5702 21.41 050552.......... 01.2522 19.17
050111........... 01.3371 18.50 050214........... 01.5530 20.85 050315........... 01.3130 20.06 050433........... 01.2087 13.93 050557.......... 01.5951 20.11
050112........... 01.4563 22.04 050215........... 01.5201 24.70 050317........... 01.2464 22.00 050434........... 01.0841 18.98 050559.......... 01.3602 23.50
050113........... 01.1277 26.39 050217........... 01.2348 15.90 050320........... 01.3742 27.40 050435........... 01.2208 16.54 050560.......... 01.4461 22.18
050114........... 01.4083 27.65 050219........... 01.3050 19.43 050324........... 01.8379 22.28 050436........... 01.0234 15.83 050561.......... 01.1552 27.90
050115........... 01.5724 20.93 050220........... 01.6373 18.06 050325........... 01.2822 20.26 050438........... 01.5703 22.52 050564.......... 01.2896 26.82
050116........... 01.5110 21.77 050222........... 01.5416 19.26 050327........... 01.5963 20.41 050440........... 01.3051 17.95 050565.......... 01.2043 19.30
050117........... 01.2909 18.00 050224........... 01.5769 20.63 050328........... 01.4331 25.87 050441........... 01.8336 25.65 050566.......... 00.9537 15.29
050118........... 01.2111 22.47 050225........... 01.3867 19.07 050329........... 01.2272 20.16 050443........... 00.9414 11.92 050567.......... 01.6119 17.35
050121........... 01.4281 18.50 050226........... 01.3703 19.25 050331........... 01.3813 28.94 050444........... 01.2662 19.12 050568.......... 01.3214 19.87
050122........... 01.5309 22.28 050228........... 01.3574 28.38 050333........... 00.9543 17.59 050446........... 00.9121 17.49 050569.......... 01.2319 21.62
050124........... 01.1949 22.67 050230........... 01.3971 23.56 050334........... 01.5605 27.46 050447........... 01.0660 19.33 050570.......... 01.7230 24.72
050125........... 01.3559 23.19 050231........... 01.4915 21.30 050335........... 01.2485 18.97 050448........... 01.1675 21.09 050571.......... 01.4640 22.91
050126........... 01.3906 22.84 050232........... 01.8417 24.76 050336........... 01.3208 18.34 050449........... 01.3221 20.80 050573.......... 01.6776 22.60
050127........... 01.3033 22.13 050233........... 01.2555 26.78 050337........... 01.3970 24.13 050451........... 00.8860 16.91 050575.......... 01.2563 21.28
050128........... 01.5335 20.01 050234........... 01.2753 18.69 050342........... 01.4351 15.53 050454........... 01.8239 24.08 050577.......... 01.2346 20.65
050129........... 01.4961 20.29 050235........... 01.4825 24.01 050343........... 01.0576 15.51 050455........... 01.8556 21.40 050578.......... 01.3664 23.75
050131........... 01.2653 23.99 050236........... 01.5336 22.42 050345........... 01.4979 19.74 050456........... 01.3067 22.43 050579.......... 01.3955 24.73
050132........... 01.3960 21.23 050238........... 01.4985 23.50 050348........... 01.5558 24.59 050457........... 01.9297 27.09 050580.......... 01.4070 21.12
050133........... 01.3169 19.07 050239........... 01.4936 21.81 050349........... 00.9553 14.35 050458........... 00.8608 22.37 050581.......... 01.4767 22.03
050135........... 01.2049 24.37 050240........... 01.4862 25.19 050350........... 01.3982 21.96 050459........... 01.2485 29.05 050583.......... 01.6915 20.33
050136........... 01.3894 21.51 050241........... 01.3108 27.24 050351........... 01.5038 26.10 050464........... 01.8722 21.87 050584.......... 01.3064 20.35
050137........... 01.2685 28.56 050242........... 01.4019 25.08 050352........... 01.3180 21.27 050468........... 01.4071 13.23 050585.......... 01.3335 25.78
050138........... 01.7806 29.95 050243........... 01.5391 21.44 050353........... 01.5294 21.82 050469........... 01.1161 17.38 050586.......... 01.3292 22.31
050139........... 01.3319 28.23 050245........... 01.4078 23.48 050355........... 00.9418 12.78 050470........... 01.1282 16.91 050587.......... 01.2915 19.72
050140........... 01.3405 28.60 050248........... 01.1352 22.92 050357........... 01.9560 21.24 050471........... 01.7664 23.28 050588.......... 01.2571 26.65
050144........... 01.5703 21.85 050251........... 01.1011 15.38 050359........... 01.0668 18.20 050476........... 01.2760 14.66 050589.......... 01.3244 22.33
050145........... 01.3480 23.97 050253........... 00.9026 14.33 050360........... 01.4403 27.20 050477........... 01.4080 24.42 050590.......... 01.2877 20.82
050146........... 01.3134 ............ 050254........... 01.1834 18.88 050363........... 02.0568 20.97 050478........... 01.0122 20.41 050591.......... 01.2159 19.81
050147........... 00.6839 16.46 050256........... 01.7804 20.44 050366........... 01.3064 18.50 050481........... 01.4379 23.28 050592.......... 01.2442 19.32
050148........... 01.0960 14.81 050257........... 01.0788 15.23 050367........... 01.2722 24.59 050482........... 00.9607 14.95 050593.......... 01.4496 24.80
050149........... 01.3550 21.03 050258........... 01.3469 20.82 050369........... 01.2917 22.10 050483........... 01.1758 19.39 050594.......... 02.0996 23.13
050150........... 01.3002 21.08 050260........... 00.9852 18.54 050373........... 01.3104 22.71 050485........... 01.6348 21.08 050597.......... 01.2906 22.04
050152........... 01.3969 24.04 050261........... 01.1831 16.58 050376........... 01.3833 23.30 050486........... 01.3887 22.96 050598.......... 01.4691 27.45
050153........... 01.6374 26.51 050262........... 01.7785 24.23 050377........... 00.8593 15.28 050488........... 01.3346 24.28 050599.......... 01.6386 16.11
050154........... 01.3031 24.09 050263........... 01.3131 23.85 050378........... 01.0643 24.65 050489........... 01.0503 23.76 050601.......... 01.3012 27.93
050155........... 01.1490 22.21 050264........... 01.4286 20.69 050379........... 01.1506 16.12 050491........... 01.3654 22.42 050603.......... 01.4450 20.02
050158........... 01.5261 27.23 050267........... 01.5610 23.58 050380........... 01.6344 25.52 050492........... 01.1875 19.19 050604.......... 01.4080 26.67
050159........... 01.3367 19.16 050270........... 01.3528 21.37 050382........... 01.4210 21.49 050494........... 01.0804 21.35 050607.......... 01.2383 19.43
050167........... 01.3826 21.03 050272........... 01.3906 17.78 050385........... 01.3893 23.35 050496........... 01.7873 27.58 050608.......... 01.1536 16.21
050168........... 01.5785 22.94 050274........... 01.1350 20.00 050387........... 00.9157 12.76 050497........... 00.9525 11.97 050609.......... 01.3281 29.05
050169........... 01.5337 22.37 050276........... 01.2419 27.73 050388........... 00.8750 15.42 050498........... 01.3025 20.21 050613.......... 01.0145 22.54
050170........... 01.4515 20.26 050277........... 01.4520 21.98 050390........... 01.3121 20.66 050502........... 01.6475 21.63 050615.......... 01.4462 21.07
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Page 3 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
050616........... 01.2668 20.14 060018........... 01.2478 14.35 070018........... 01.3461 25.96 100044........... 01.4385 17.59 100129.......... 01.3576 17.02
050618........... 01.2205 15.89 060020........... 01.5148 13.63 070019........... 01.2546 21.49 100045........... 01.4586 14.39 100130.......... 01.1735 17.79
050619........... 01.3454 19.03 060022........... 01.6489 17.08 070020........... 01.4090 22.14 100046........... 01.3491 16.46 100131.......... 01.3011 18.69
050622........... 01.2594 21.36 060023........... 01.4618 16.23 070021........... 01.1805 22.73 100047........... 01.7883 16.54 100132.......... 01.4678 14.76
050623........... 01.2415 21.16 060024........... 01.6545 22.87 070022........... 01.6425 22.82 100048........... 00.9941 11.41 100135.......... 01.4981 14.49
050624........... 01.2593 23.39 060026........... 01.4360 18.06 070023........... 01.2170 20.41 100049........... 01.2745 16.51 100137.......... 01.2378 15.05
050625........... 01.5187 22.82 060027........... 01.4463 18.37 070024........... 01.3190 19.55 100050........... 01.1777 14.96 100138.......... 00.9841 10.25
050630........... 01.2840 23.63 060028........... 01.3973 18.91 070025........... 01.6812 22.92 100051........... 01.2637 14.91 100139.......... 01.0354 16.00
050633........... 01.3224 20.24 060029........... 00.9745 13.15 070026........... 01.1737 22.90 100052........... 01.4135 14.15 100140.......... 01.1950 16.26
050635........... 01.3005 27.91 060030........... 01.3474 16.34 070027........... 01.2102 22.98 100053........... 01.3040 17.73 100142.......... 01.1735 15.12
050636........... 01.3914 21.83 060031........... 01.5041 16.92 070028........... 01.4587 21.83 100054........... 01.3343 16.83 100143.......... 02.0179 ............
050637........... 01.1286 21.41 060032........... 01.4297 19.33 070029........... 01.2280 19.44 100055........... 01.3835 15.30 100144.......... 01.2923 12.10
050638........... 00.9629 24.33 060033........... 01.0659 11.58 070030........... 01.2106 22.70 100056........... 01.4682 21.01 100145.......... 01.3601 13.45
050641........... 01.1445 12.65 060034........... 01.4734 17.45 070031........... 01.2886 18.49 100057........... 01.3224 15.19 100146.......... 01.1054 15.35
050643........... 00.9463 ............ 060036........... 01.1802 13.52 070033........... 01.2662 22.64 100059........... 01.6370 16.57 100147.......... 01.1178 12.08
050644........... 00.9876 21.63 060037........... 01.0016 12.14 070034........... 01.3205 23.33 100060........... 01.6849 17.02 100150.......... 01.3137 15.58
050660........... 01.1294 ............ 060038........... 01.0138 11.55 070035........... 01.3536 21.55 100061........... 01.5760 20.45 100151.......... 01.8123 17.47
050661........... 00.9004 17.84 060041........... 00.9757 12.12 070036........... 01.2995 25.17 100062........... 01.7345 15.56 100154.......... 01.6034 16.55
050662........... 00.8162 20.98 060042........... 00.9336 13.29 080001........... 01.5955 20.42 100063........... 01.2715 14.64 100156.......... 01.1648 16.74
050663........... 01.1104 20.81 060043........... 01.0173 10.83 080002........... 01.2126 15.45 100067........... 01.4192 14.72 100157.......... 01.5925 17.06
050666........... 00.9587 23.34 060044........... 01.2606 14.53 080003........... 01.3146 18.22 100068........... 01.4448 15.32 100159.......... 01.0454 15.40
050667........... 01.0628 23.63 060046........... 01.0839 14.51 080004........... 01.3343 16.62 100069........... 01.3373 15.97 100160.......... 01.2104 16.10
050668........... 01.1227 23.59 060047........... 00.9059 12.30 080005........... 01.3780 15.58 100070........... 01.4119 16.41 100161.......... 01.4468 18.23
050671........... 01.1408 25.26 060049........... 01.0436 16.46 080006........... 01.2292 14.99 100071........... 01.2555 14.91 100162.......... 01.4019 16.66
050672........... 00.6536 19.59 060050........... 01.2061 12.70 080007........... 01.2443 15.70 100072........... 01.2274 14.14 100165.......... 01.2153 16.85
050674........... 01.1806 26.59 060052........... 01.1046 12.22 090001........... 01.4395 18.92 100073........... 01.7772 18.60 100166.......... 01.4564 18.62
050675........... 01.5233 13.30 060053........... 00.9701 12.72 090002........... 01.1469 16.35 100074........... 01.2353 17.34 100167.......... 01.3520 20.21
050676........... 01.0310 12.91 060054........... 01.2556 14.73 090003........... 01.3337 22.14 100075........... 01.6602 16.96 100168.......... 01.3310 17.37
050677........... 01.3039 29.81 060056........... 00.9390 12.62 090004........... 01.5440 22.25 100076........... 01.4829 18.32 100169.......... 01.8247 17.12
050678........... 01.1010 24.06 060057........... 00.9491 20.55 090005........... 01.2751 20.28 100077........... 01.3344 15.68 100170.......... 01.4798 15.72
050680........... 01.2170 22.47 060058........... 00.9388 10.75 090006........... 01.3492 19.65 100078........... 01.1773 16.18 100172.......... 01.3807 13.20
050682........... 00.9485 10.78 060060........... 01.0545 11.33 090007........... 01.3332 19.75 100079........... 01.1808 14.43 100173.......... 01.6413 15.21
050684........... 01.2065 22.04 060062........... 00.9885 11.79 090008........... 01.5360 23.18 100080........... 01.5561 17.32 100174.......... 01.4223 18.01
050685........... 01.1498 24.19 060063........... 01.1531 10.58 090010........... 00.9704 24.67 100081........... 01.1438 11.05 100175.......... 00.9507 15.25
050686........... 01.3521 27.79 060064........... 01.4240 19.02 090011........... 01.9539 22.57 100082........... 01.5130 16.68 100176.......... 01.9273 22.43
050688........... 01.2100 25.21 060065........... 01.3963 18.91 100001........... 01.4755 16.11 100083........... 01.2907 14.73 100177.......... 01.3233 16.58
050689........... 01.4361 25.57 060066........... 00.9247 10.92 100002........... 01.4477 17.78 100084........... 01.4897 15.78 100179.......... 01.6567 17.36
050690........... 01.3430 27.92 060068........... 01.2113 14.39 100004........... 01.0426 11.37 100085........... 01.3162 18.81 100180.......... 01.4305 17.00
050693........... 01.2805 28.69 060070........... 01.0193 15.33 100005........... 01.1676 10.61 100086........... 01.3967 20.75 100181.......... 01.6785 15.78
050694........... 01.3233 21.34 060071........... 01.2363 14.78 100006........... 01.5872 17.22 100087........... 01.7516 19.08 100183.......... 01.3645 17.97
050695........... 01.2523 25.38 060072........... 00.9067 ............ 100007........... 01.8626 17.77 100088........... 01.6031 16.52 100186.......... 01.3873 15.09
050696........... 02.1294 26.65 060073........... 01.0035 15.52 100008........... 01.6722 18.69 100089........... 01.2394 15.39 100187.......... 01.3648 20.35
050697........... 01.1817 ............ 060075........... 01.2510 16.15 100009........... 01.5732 19.14 100090........... 01.3507 15.49 100189.......... 01.2844 20.80
050698........... 01.0828 23.39 060076........... 01.4167 14.58 100010........... 01.3922 18.78 100092........... 01.5228 15.54 100191.......... 01.3365 17.44
050699........... 00.8397 ............ 060085........... 00.9715 08.89 100012........... 01.5330 17.48 100093........... 01.4605 13.19 100196.......... 01.5278 15.84
050700........... 01.3721 ............ 060087........... 01.6124 18.10 100014........... 01.2841 16.40 100098........... 01.2636 16.57 100199.......... 01.2095 18.69
050701........... 01.2544 ............ 060088........... 01.0255 13.60 100015........... 01.2998 17.02 100099........... 01.2457 14.53 100200.......... 01.3761 21.17
050702........... 01.2301 ............ 060090........... 00.9595 11.72 100017........... 01.6648 15.75 100100........... 01.4537 16.89 100203.......... 01.1543 18.05
050703........... 00.8584 ............ 060096........... 01.0163 18.00 100018........... 01.3502 17.76 100102........... 01.0628 15.90 100204.......... 01.5521 16.81
050704........... 01.1767 ............ 060100........... 01.3718 20.86 100019........... 01.4523 17.17 100103........... 01.0168 15.39 100206.......... 01.3816 21.64
050705........... 02.8281 ............ 060103........... 01.2629 18.66 100020........... 01.3567 17.23 100105........... 01.3999 16.60 100207.......... 01.3831 19.04
050706........... 00.9345 ............ 060104........... 01.3353 18.64 100022........... 01.7086 21.32 100106........... 01.0493 13.29 100208.......... 01.7426 18.61
050707........... 00.8718 ............ 070001........... 01.7491 21.77 100023........... 01.3279 14.40 100107........... 01.2660 18.22 100209.......... 01.5360 19.87
050708........... 00.8707 ............ 070002........... 01.8085 23.72 100024........... 01.3809 19.06 100108........... 01.0548 15.87 100210.......... 01.7022 15.54
060001........... 01.4811 19.15 070003........... 01.1494 21.97 100025........... 01.5786 14.73 100109........... 01.3304 15.27 100211.......... 01.2770 17.28
060003........... 01.2871 17.53 070004........... 01.1568 21.82 100026........... 01.5007 13.18 100110........... 01.4363 16.61 100212.......... 01.6217 16.73
060004........... 01.0753 17.28 070005........... 01.3284 23.96 100027........... 00.8567 11.51 100112........... 00.9782 10.90 100213.......... 01.6398 17.36
060006........... 01.2663 15.07 070006........... 01.3028 25.81 100028........... 01.2753 15.02 100113........... 02.0716 15.79 100217.......... 01.1813 17.84
060007........... 01.2642 12.50 070007........... 01.3876 22.29 100029........... 01.4463 18.08 100114........... 01.4901 17.00 100220.......... 01.8037 17.82
060008........... 01.0108 13.26 070008........... 01.2477 20.66 100030........... 01.2726 16.73 100117........... 01.2942 16.44 100221.......... 01.4528 17.64
060009........... 01.4433 18.59 070009........... 01.2619 21.54 100032........... 01.8944 16.62 100118........... 01.1782 15.44 100222.......... 01.2534 17.00
060010........... 01.5626 18.49 070010........... 01.4558 21.31 100034........... 01.6897 17.25 100121........... 01.2318 12.92 100223.......... 01.4309 16.46
060011........... 01.2311 20.96 070011........... 01.2121 21.19 100035........... 01.5541 15.75 100122........... 01.3611 14.84 100224.......... 01.4390 18.78
060012........... 01.4222 14.56 070012........... 01.1724 22.67 100038........... 01.6487 18.93 100124........... 01.3583 16.19 100225.......... 01.3933 19.07
060013........... 01.3011 16.63 070013........... 01.3356 22.91 100039........... 01.7033 20.12 100125........... 01.1450 15.06 100226.......... 01.3664 17.05
060014........... 01.6988 20.85 070015........... 01.3013 22.09 100040........... 01.6908 16.07 100126........... 01.4583 17.85 100227.......... 00.9833 17.48
060015........... 01.5477 17.63 070016........... 01.2496 22.14 100042........... 01.2013 20.82 100127........... 01.6130 16.84 100228.......... 01.2300 18.52
060016........... 01.1622 10.83 070017........... 01.3625 22.45 100043........... 01.4167 16.03 100128........... 02.1646 18.67 100229.......... 01.3900 16.27
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Page 4 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
100230........... 01.3263 18.30 110030........... 01.2645 16.95 110115........... 01.6528 17.83 120002........... 01.2217 15.87 140010.......... 01.3101 18.77
100231........... 01.7128 17.42 110031........... 01.2900 20.89 110117........... 00.9252 11.64 120003........... 00.9686 20.59 140011.......... 01.1180 12.97
100232........... 01.2625 16.44 110032........... 01.1290 13.22 110118........... 01.0460 10.01 120004........... 01.3006 18.29 140012.......... 01.2087 15.31
100234........... 01.3611 17.94 110033........... 01.4228 18.34 110120........... 01.0429 10.51 120005........... 01.2765 17.03 140013.......... 01.5994 14.68
100235........... 01.3838 15.58 110034........... 01.4418 15.64 110121........... 01.1441 11.37 120006........... 01.1577 21.83 140014.......... 01.0948 15.12
100236........... 01.4843 15.80 110035........... 01.3123 17.12 110122........... 01.2847 14.70 120007........... 01.6191 20.22 140015.......... 01.2255 12.74
100237........... 02.1485 22.04 110036........... 01.6990 18.05 110124........... 01.0975 14.20 120009........... 00.9941 18.32 140016.......... 00.9811 10.62
100238........... 01.3721 17.27 110037........... 01.0668 09.10 110125........... 01.1846 14.60 120010........... 01.7086 20.04 140018.......... 01.3993 17.67
100239........... 01.4964 17.74 110038........... 01.3932 12.03 110127........... 00.9029 09.56 120011........... 01.2355 26.59 140019.......... 00.9331 11.96
100240........... 00.7985 14.20 110039........... 01.3483 16.87 110128........... 01.1445 15.46 120012........... 00.9017 16.54 140024.......... 01.0133 12.34
100241........... 00.9439 11.33 110040........... 01.0515 12.16 110129........... 01.5341 12.01 120014........... 01.2144 19.14 140025.......... 01.1030 15.27
100242........... 01.3147 14.92 110041........... 01.1478 14.35 110130........... 01.0852 09.68 120015........... 00.7376 19.23 140026.......... 01.1244 13.42
100243........... 01.4253 16.65 110042........... 01.0563 13.66 110132........... 01.1502 12.20 120016........... 00.9880 18.55 140027.......... 01.2037 14.63
100244........... 01.3604 16.21 110043........... 01.5753 13.73 110134........... 00.8603 10.02 120018........... 00.9138 17.94 140029.......... 01.3194 16.19
100246........... 01.3451 19.50 110044........... 01.1396 12.22 110135........... 01.1047 13.78 120019........... 01.2284 17.90 140030.......... 01.5352 19.79
100248........... 01.6651 17.89 110045........... 01.1248 19.62 110136........... 01.1607 13.15 120021........... 00.8779 19.14 140031.......... 01.0307 11.46
100249........... 01.2753 16.66 110046........... 01.2166 14.30 110140........... 00.8308 13.51 120022........... 01.6508 20.55 140032.......... 01.2858 14.20
100252........... 01.2002 17.43 110048........... 01.0990 13.14 110141........... 00.8985 09.72 120024........... 01.0150 15.72 140033.......... 01.2505 17.22
100253........... 01.3611 16.33 110049........... 01.0655 14.55 110142........... 01.0156 10.29 120026........... 01.2780 20.12 140034.......... 01.1750 14.54
100254........... 01.6064 17.14 110050........... 01.0814 11.33 110143........... 01.2843 17.24 120027........... 01.3586 19.59 140035.......... 01.1563 09.85
100255........... 01.3252 20.39 110051........... 00.9789 15.64 110144........... 01.1674 12.74 130001........... 01.0148 13.17 140036.......... 01.1223 14.22
100256........... 01.8452 18.38 110052........... 00.9264 14.74 110146........... 00.9386 11.89 130002........... 01.3673 14.35 140037.......... 01.0229 11.74
100258........... 01.7064 17.96 110054........... 01.2709 15.38 110149........... 01.0758 11.01 130003........... 01.2239 16.63 140038.......... 01.1479 13.82
100259........... 01.4448 16.66 110056........... 00.8858 12.63 110150........... 01.2959 14.47 130005........... 01.3647 16.13 140039.......... 01.0245 11.51
100260........... 01.3841 17.08 110059........... 01.3072 12.94 110152........... 01.1655 11.82 130006........... 01.7673 16.81 140040.......... 01.2480 13.79
100262........... 01.3971 18.96 110061........... 01.0258 08.05 110153........... 00.9827 15.92 130007........... 01.5351 16.38 140041.......... 01.1585 14.31
100263........... 01.3560 17.78 110062........... 00.9617 10.81 110154........... 00.9834 11.86 130008........... 00.9305 12.71 140042.......... 01.1053 12.72
100264........... 01.3747 15.50 110063........... 01.0889 11.47 110155........... 01.0504 12.55 130009........... 00.9680 13.18 140043.......... 01.2469 15.68
100265........... 01.3078 16.66 110064........... 01.2603 15.82 110156........... 00.9625 11.50 130010........... 00.9419 15.53 140045.......... 01.0057 12.10
100266........... 01.3057 15.42 110065........... 00.9738 11.47 110157........... 01.1062 15.28 130011........... 01.3629 13.99 140046.......... 01.2869 14.33
100267........... 01.3075 18.95 110066........... 01.3014 15.59 110161........... 01.2406 18.47 130012........... 00.9957 16.65 140047.......... 01.2210 11.40
100268........... 01.2432 21.03 110069........... 01.1733 14.92 110162........... 00.8551 ............ 130013........... 01.2686 16.91 140048.......... 01.3075 19.73
100269........... 01.3512 21.42 110070........... 00.9992 11.51 110163........... 01.4226 16.50 130014........... 01.3483 16.35 140049.......... 01.3583 17.97
100270........... 00.8848 11.94 110071........... 01.0202 09.41 110164........... 01.3721 17.39 130015........... 00.8789 11.45 140051.......... 01.3491 18.90
100271........... 01.5981 16.88 110072........... 01.0029 12.37 110165........... 01.2814 15.93 130016........... 00.8534 15.89 140052.......... 01.2829 14.67
100273........... 01.0658 16.49 110073........... 01.2832 12.22 110166........... 01.4919 15.76 130017........... 01.0063 12.65 140053.......... 01.7736 16.02
100275........... 01.3391 20.17 110074........... 01.4458 16.63 110168........... 01.6681 17.53 130018........... 01.5841 19.65 140054.......... 01.3068 22.11
100276........... 01.3211 20.62 110075........... 01.1310 13.64 110169........... 00.7635 17.87 130019........... 01.1681 14.07 140055.......... 00.9319 11.82
100277........... 01.0745 12.90 110076........... 01.3167 16.41 110171........... 01.3480 19.39 130021........... 00.9239 10.63 140058.......... 01.1573 14.34
100278........... 00.8454 16.01 110078........... 01.5683 21.62 110172........... 01.2274 25.10 130022........... 01.1192 15.42 140059.......... 01.0737 11.39
100279........... 01.4267 21.86 110079........... 01.3817 19.60 110174........... 01.0087 12.79 130024........... 01.1025 14.66 140061.......... 01.1005 15.08
100280........... 01.4186 ............ 110080........... 01.1821 14.65 110176........... 01.1874 18.24 130025........... 01.1127 15.36 140062.......... 01.2328 20.99
100281........... 01.2150 ............ 110082........... 02.0157 23.13 110177........... 01.3898 18.41 130026........... 01.1130 15.59 140063.......... 01.3452 19.00
110001........... 01.2556 15.46 110083........... 01.6420 20.82 110178........... 01.4860 17.06 130027........... 00.8925 16.13 140064.......... 01.1804 15.21
110002........... 01.2481 14.41 110086........... 01.0577 14.40 110179........... 01.1708 19.22 130028........... 01.1858 15.29 140065.......... 01.4131 21.65
110003........... 01.3332 12.00 110087........... 01.2668 17.61 110181........... 01.0329 08.35 130029........... 01.0240 14.26 140066.......... 01.1807 13.05
110004........... 01.2190 15.29 110088........... 00.8756 12.27 110183........... 01.2881 18.73 130030........... 01.0332 12.46 140067.......... 01.7219 16.34
110005........... 01.1837 15.96 110089........... 01.2054 14.65 110184........... 01.0935 18.56 130031........... 01.0192 11.69 140068.......... 01.4082 15.54
110006........... 01.2858 16.38 110091........... 01.3779 19.15 110185........... 01.1329 12.31 130034........... 01.0509 14.13 140069.......... 01.0752 13.61
110007........... 01.4541 15.97 110092........... 01.0729 11.21 110186........... 01.3360 15.53 130035........... 00.9959 13.66 140070.......... 01.2902 14.49
110008........... 01.1034 14.16 110093........... 00.9706 08.54 110187........... 01.1704 16.81 130036........... 01.2485 08.52 140074.......... 01.0194 14.20
110009........... 01.0167 14.23 110094........... 01.0195 11.02 110188........... 01.4346 17.33 130037........... 01.1261 14.67 140075.......... 01.4173 18.23
110010........... 02.0011 20.95 110095........... 01.2492 13.02 110189........... 01.0969 19.00 130043........... 01.0444 13.65 140077.......... 01.2251 13.35
110011........... 01.1821 14.71 110096........... 01.0935 12.76 110190........... 01.0867 12.93 130044........... 00.9725 12.73 140079.......... 01.2689 21.34
110013........... 01.1076 13.50 110097........... 01.1032 16.29 110191........... 01.2378 17.33 130045........... 00.9056 11.43 140080.......... 01.7910 17.20
110014........... 01.1944 11.39 110098........... 01.0389 13.41 110192........... 01.3453 19.60 130048........... 01.1126 10.87 140081.......... 01.1106 10.92
110015........... 01.1391 15.78 110100........... 01.0995 11.22 110193........... 01.1414 16.99 130049........... 01.2253 15.55 140082.......... 01.4026 19.71
110016........... 01.2956 13.84 110101........... 01.0725 09.49 110194........... 00.9753 12.31 130054........... 00.9348 14.10 140083.......... 01.2849 15.35
110017........... 00.9338 10.40 110103........... 00.9623 08.82 110195........... 01.2032 10.66 130056........... 00.9454 11.94 140084.......... 01.2094 17.72
110018........... 01.1783 15.88 110104........... 01.1365 12.86 110198........... 01.3710 21.77 130058........... 00.9163 11.59 140086.......... 01.1079 11.72
110020........... 01.2001 16.49 110105........... 01.1331 13.47 110200........... 01.9920 14.43 130060........... 01.1839 ............ 140087.......... 01.4134 13.47
110023........... 01.2550 17.01 110107........... 01.6426 17.03 110201........... 01.3910 14.99 140001........... 01.2552 14.19 140088.......... 01.5041 21.90
110024........... 01.3810 15.58 110108........... 01.0257 10.19 110203........... 00.9973 15.78 140002........... 01.2503 15.22 140089.......... 01.2489 13.84
110025........... 01.3110 15.02 110109........... 01.1223 11.30 110204........... 00.8082 13.88 140003........... 01.0438 13.21 140090.......... 01.4535 26.53
110026........... 01.1592 12.82 110111........... 01.1291 12.36 110205........... 01.0556 11.10 140004........... 00.9869 13.64 140091.......... 01.6832 15.96
110027........... 01.0364 15.43 110112........... 00.9915 15.95 110207........... 01.1408 ............ 140005........... 00.9628 09.64 140093.......... 01.1907 14.60
110028........... 01.6330 14.95 110113........... 01.0259 13.67 110208........... 00.9511 12.61 140007........... 01.4628 19.18 140094.......... 01.3196 15.67
110029........... 01.3254 16.69 110114........... 01.0579 14.00 120001........... 01.7407 22.04 140008........... 01.4351 19.25 140095.......... 01.2220 17.48
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Page 5 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
140097........... 00.9791 13.23 140184........... 01.1712 12.95 150007........... 01.2318 16.00 150084........... 01.8372 20.84 160034.......... 00.9808 12.48
140098........... 01.2746 18.87 140185........... 01.4027 14.80 150008........... 01.3200 17.15 150085........... 00.9594 10.27 160035.......... 00.9182 10.60
140100........... 01.4568 18.43 140186........... 01.1937 17.96 150009........... 01.2890 15.82 150086........... 01.2674 14.97 160036.......... 01.1018 12.62
140101........... 01.1878 16.70 140187........... 01.4084 14.44 150010........... 01.1625 16.81 150088........... 01.1619 16.44 160037.......... 01.1005 13.20
140102........... 01.0169 13.47 140188........... 00.9954 10.46 150011........... 01.2281 16.35 150089........... 01.3818 17.35 160039.......... 01.0959 13.56
140103........... 01.3066 15.26 140189........... 01.1429 14.82 150012........... 01.6231 17.37 150090........... 01.3008 18.44 160040.......... 01.3003 14.92
140105........... 01.3383 18.62 140190........... 01.1585 12.46 150013........... 01.1922 12.66 150091........... 01.0805 14.68 160041.......... 01.1337 10.87
140107........... 01.1328 11.58 140191........... 01.4009 22.19 150014........... 01.3802 17.11 150092........... 01.0350 13.77 160043.......... 01.0150 11.81
140108........... 01.3305 19.18 140192........... 01.0739 16.18 150015........... 01.2578 14.80 150094........... 01.0092 15.63 160044.......... 01.1775 12.06
140109........... 01.0517 11.80 140193........... 01.0185 12.72 150017........... 01.7801 16.19 150095........... 01.0820 13.62 160045.......... 01.6657 15.84
140110........... 01.2889 12.82 140197........... 01.3049 18.59 150018........... 01.3147 15.79 150096........... 01.0517 17.17 160046.......... 01.0096 11.17
140112........... 01.0816 12.81 140199........... 01.0385 13.34 150019........... 01.0784 14.92 150097........... 01.0921 15.62 160047.......... 01.3667 14.34
140113........... 01.4240 16.37 140200........... 01.3994 20.01 150020........... 01.0988 11.59 150098........... 01.1536 11.43 160048.......... 01.0676 12.01
140114........... 01.2753 17.35 140202........... 01.2611 18.76 150021........... 01.6021 16.77 150099........... 01.2551 15.68 160049.......... 00.9371 11.45
140115........... 01.1709 16.67 140203........... 01.2234 15.95 150022........... 01.1271 17.24 150100........... 01.7076 17.00 160050.......... 01.0221 12.47
140116........... 01.2906 17.61 140205........... 00.8429 11.22 150023........... 01.4118 15.52 150101........... 01.1150 13.32 160051.......... 01.2040 12.25
140117........... 01.2995 18.69 140206........... 01.0688 17.10 150024........... 01.2090 13.89 150102........... 01.0600 13.18 160052.......... 01.0482 12.05
140118........... 01.6000 20.68 140207........... 01.3987 18.78 150025........... 01.5400 16.21 150103........... 01.0248 13.14 160054.......... 01.1041 12.01
140119........... 01.6599 20.07 140208........... 01.4899 22.91 150026........... 01.1922 16.04 150104........... 01.0818 13.64 160055.......... 00.9470 11.27
140120........... 01.4135 13.85 140209........... 01.6465 14.84 150027........... 01.0151 14.08 150105........... 01.1638 15.14 160056.......... 01.0686 12.76
140121........... 01.5618 08.74 140210........... 01.0426 11.29 150029........... 01.2539 17.48 150106........... 01.0490 17.80 160057.......... 01.3496 13.92
140122........... 01.4707 20.02 140211........... 01.1981 17.90 150030........... 01.0811 15.16 150109........... 01.3696 14.70 160058.......... 01.7009 16.69
140123........... 01.2304 15.10 140212........... 01.1686 20.58 150031........... 01.0977 14.78 150110........... 00.9317 13.42 160059.......... 01.2637 16.34
140124........... 01.1384 19.67 140213........... 01.2004 19.50 150032........... 01.7458 17.72 150111........... 01.0977 12.33 160060.......... 01.0314 12.31
140125........... 01.2373 13.29 140215........... 01.1466 10.48 150033........... 01.5916 18.01 150112........... 01.2074 16.18 160061.......... 00.9508 13.54
140127........... 01.2957 15.43 140217........... 01.2331 19.16 150034........... 01.2852 17.20 150113........... 01.1462 15.45 160062.......... 00.9618 10.53
140128........... 01.0440 15.50 140218........... 00.9554 13.96 150035........... 01.4059 17.05 150114........... 00.9923 12.31 160063.......... 01.1404 10.67
140129........... 01.0657 12.58 140220........... 01.1751 13.57 150036........... 01.0196 16.08 150115........... 01.3254 13.92 160064.......... 01.5961 15.57
140130........... 01.1624 19.25 140223........... 01.5048 22.80 150037........... 01.1976 17.77 150122........... 01.1137 17.31 160065.......... 01.0734 13.89
140132........... 01.5296 17.61 140224........... 01.3260 19.20 150038........... 01.1996 15.85 150123........... 01.0974 12.57 160066.......... 01.0808 13.35
140133........... 01.3520 19.24 140228........... 01.6052 16.14 150039........... 00.9143 12.82 150124........... 01.1228 14.04 160067.......... 01.3100 15.77
140135........... 01.2363 14.27 140229........... 00.9407 09.86 150042........... 01.1860 14.72 150125........... 01.3770 16.98 160068.......... 00.9997 13.07
140137........... 01.0275 12.24 140230........... 00.9519 13.17 150043........... 01.0836 15.00 150126........... 01.5072 18.30 160069.......... 01.3779 13.62
140138........... 01.0230 11.15 140231........... 01.5344 19.84 150044........... 01.2715 14.96 150127........... 01.2073 11.94 160070.......... 01.0467 11.90
140139........... 01.0515 12.47 140233........... 01.7207 14.89 150045........... 01.1628 15.40 150128........... 01.2183 17.22 160072.......... 01.1165 11.93
140140........... 01.1266 11.90 140234........... 01.2036 14.46 150046........... 01.5483 16.63 150129........... 01.2138 18.69 160073.......... 01.0381 11.15
140141........... 00.9828 12.26 140236........... 01.0093 12.56 150047........... 01.6825 17.65 150130........... 01.1189 13.18 160074.......... 01.0287 14.05
140143........... 01.0752 14.62 140239........... 01.5754 16.58 150048........... 01.1687 15.11 150132........... 01.3674 19.15 160075.......... 01.0542 13.37
140144........... 00.9982 13.14 140240........... 01.4164 20.64 150049........... 01.1209 12.76 150133........... 01.1742 14.00 160076.......... 01.0078 13.71
140145........... 01.1474 14.17 140242........... 01.5349 19.78 150050........... 01.1417 13.85 150134........... 01.1513 15.65 160077.......... 00.9898 09.72
140146........... 00.9718 14.22 140245........... 01.0567 12.26 150051........... 01.3401 15.58 150136........... 00.8476 18.39 160079.......... 01.3235 13.50
140147........... 01.1893 12.55 140246........... 01.0445 11.22 150052........... 01.0967 10.31 150137........... 03.5965 ............ 160080.......... 01.1524 14.09
140148........... 01.6523 16.06 140250........... 01.2052 19.71 150053........... 01.0011 16.74 150897........... 04.9520 ............ 160081.......... 01.1063 13.36
140150........... 01.4667 20.76 140251........... 01.3102 16.26 150054........... 01.0911 12.38 160001........... 01.1851 15.08 160082.......... 01.6689 15.84
140151........... 01.1067 15.02 140252........... 01.3435 20.39 150056........... 01.7030 18.99 160002........... 01.1626 12.09 160083.......... 01.5067 16.06
140152........... 01.0760 21.93 140253........... 01.3680 24.54 150057........... 02.3835 13.49 160003........... 01.0532 11.80 160085.......... 01.0135 11.42
140155........... 01.1692 15.83 140258........... 01.3897 19.92 150058........... 01.6377 18.17 160005........... 01.0842 12.28 160086.......... 00.9890 11.97
140158........... 01.4052 19.65 140271........... 00.9892 12.27 150059........... 01.1917 17.35 160007........... 00.9470 11.53 160088.......... 01.1125 12.79
140159........... 01.2391 14.82 140275........... 01.2742 14.62 150060........... 01.1339 15.24 160008........... 01.1458 13.05 160089.......... 01.2182 15.64
140160........... 01.1842 14.33 140276........... 02.0641 18.92 150061........... 01.1944 12.43 160009........... 01.2457 13.34 160090.......... 01.0496 13.51
140161........... 01.1034 15.66 140280........... 01.2359 15.41 150062........... 01.0306 12.77 160012........... 01.1231 12.70 160091.......... 01.0971 11.91
140162........... 01.6836 15.64 140281........... 01.5894 19.47 150063........... 01.0814 13.91 160013........... 01.2460 13.60 160092.......... 00.9912 13.58
140164........... 01.2776 13.78 140285........... 01.3046 14.03 150064........... 01.0623 15.32 160014........... 00.9484 11.72 160093.......... 01.1434 11.33
140165........... 01.0581 12.51 140286........... 01.1259 15.67 150065........... 01.0835 15.64 160016........... 01.2668 14.26 160094.......... 01.1070 14.65
140166........... 01.2118 14.64 140288........... 01.6350 20.42 150066........... 01.0441 12.68 160018........... 00.8947 11.86 160095.......... 01.1374 14.50
140167........... 01.1182 12.82 140289........... 01.2672 14.49 150067........... 01.0977 13.31 160020........... 01.0939 12.14 160097.......... 01.1379 12.11
140168........... 01.1811 14.17 140290........... 01.3143 19.19 150069........... 01.2295 14.39 160021........... 01.0810 12.04 160098.......... 00.9934 12.47
140170........... 01.0149 10.98 140291........... 01.3049 20.19 150070........... 01.0205 13.03 160023........... 01.0726 12.61 160099.......... 01.0448 10.99
140171........... 00.9273 12.22 140292........... 01.1654 19.76 150071........... 01.1204 12.39 160024........... 01.5235 15.43 160101.......... 01.1499 15.34
140172........... 01.4866 18.33 140294........... 01.1318 14.61 150072........... 01.2197 14.26 160025........... 01.8369 15.04 160102.......... 01.4216 15.23
140173........... 01.0401 13.57 140297........... 01.2311 20.74 150073........... 00.9874 16.29 160026........... 01.1259 13.21 160103.......... 00.9621 12.62
140174........... 01.4906 16.75 140299........... 00.8525 22.50 150074........... 01.5503 19.36 160027........... 01.1481 12.49 160104.......... 01.2144 15.40
140176........... 01.2723 18.62 150001........... 01.0574 15.39 150075........... 01.2023 12.67 160028........... 01.2129 16.44 160106.......... 01.0838 12.86
140177........... 01.5162 15.14 150002........... 01.3527 16.25 150076........... 01.0757 15.74 160029........... 01.5220 15.57 160107.......... 01.2059 12.64
140179........... 01.2505 18.13 150003........... 01.6861 15.65 150077........... 01.2356 14.59 160030........... 01.3263 14.98 160108.......... 01.0881 12.98
140180........... 01.5116 19.11 150004........... 01.4976 18.00 150078........... 01.1053 15.23 160031........... 01.1528 12.06 160109.......... 00.9666 09.86
140181........... 01.2713 17.32 150005........... 01.1840 17.30 150079........... 01.1046 12.83 160032........... 01.1889 13.93 160110.......... 01.4793 16.07
140182........... 01.2655 18.80 150006........... 01.2392 14.67 150082........... 01.4669 16.73 160033........... 01.4596 14.99 160111.......... 01.0547 09.59
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
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160112........... 01.4113 13.17 170051........... 00.9991 13.38 170134........... 01.0170 11.44 180049........... 01.3997 13.11 190010.......... 01.0796 14.19
160113........... 01.0156 11.03 170052........... 01.0907 10.94 170137........... 01.1563 15.62 180050........... 01.2711 14.68 190011.......... 01.1174 12.19
160114........... 01.0339 13.68 170053........... 00.8734 10.41 170139........... 01.0590 11.31 180051........... 01.3043 12.81 190013.......... 01.2335 13.20
160115........... 01.0563 12.36 170054........... 01.0950 11.90 170140........... 01.0446 11.09 180053........... 01.2874 13.26 190014.......... 01.0883 12.69
160116........... 01.1445 12.61 170055........... 00.9663 13.55 170142........... 01.3007 15.41 180054........... 01.0039 12.50 190015.......... 01.1613 16.30
160117........... 01.2812 14.07 170056........... 00.9755 10.54 170143........... 01.1380 11.86 180055........... 01.0488 12.65 190017.......... 01.2184 12.10
160118........... 01.0402 12.14 170057........... 01.0704 13.53 170144........... 01.4733 14.19 180056........... 01.0708 15.74 190018.......... 01.2776 14.25
160120........... 00.9891 08.34 170058........... 01.0792 13.89 170145........... 01.1872 13.04 180058........... 00.8952 12.36 190019.......... 01.4676 15.85
160122........... 01.1598 13.40 170060........... 01.0608 11.99 170146........... 01.3467 16.72 180059........... 00.8662 12.17 190020.......... 01.1858 14.53
160123........... 01.0397 13.08 170061........... 01.1210 11.60 170147........... 01.1342 16.47 180063........... 01.0480 09.78 190025.......... 01.2411 11.69
160124........... 01.2475 13.81 170062........... 00.9459 11.58 170148........... 01.4002 17.53 180064........... 01.0967 10.97 190026.......... 01.3902 15.09
160126........... 01.0582 11.21 170063........... 00.9011 10.43 170150........... 01.0802 12.81 180065........... 00.9647 09.28 190027.......... 01.4599 15.99
160129........... 01.0286 12.08 170064........... 00.9869 11.33 170151........... 01.0014 10.84 180066........... 01.2927 16.62 190029.......... 01.1633 13.12
160130........... 01.0393 11.62 170066........... 00.9312 11.45 170152........... 00.9702 12.21 180067........... 01.8619 15.59 190033.......... 00.9144 07.96
160131........... 01.1439 11.67 170067........... 00.8618 12.46 170159........... 00.9310 ............ 180069........... 01.0208 14.41 190034.......... 01.2090 13.01
160133........... 01.0977 16.39 170068........... 01.2512 14.20 170160........... 00.9845 10.63 180070........... 01.0470 12.77 190035.......... 01.4040 17.47
160134........... 01.0733 10.74 170069........... 01.0356 12.27 170164........... 00.9554 13.38 180072........... 01.0754 14.38 190036.......... 01.6426 17.28
160135........... 00.9879 10.91 170070........... 00.9728 11.79 170166........... 01.0100 13.17 180075........... 00.9831 10.68 190037.......... 01.0946 17.85
160138........... 01.1152 12.46 170072........... 00.9193 10.58 170168........... 00.9152 08.28 180078........... 01.0778 15.71 190039.......... 01.4726 16.44
160140........... 01.0691 13.24 170073........... 01.1042 12.78 170171........... 01.0976 10.91 180079........... 00.9809 12.61 190040.......... 01.4131 17.30
160141........... 00.8389 10.05 170074........... 01.0966 11.30 170172........... 00.9710 ............ 180080........... 01.1033 12.85 190041.......... 01.5242 16.54
160142........... 01.0835 11.71 170075........... 00.8448 09.47 170174........... 00.8374 10.81 180081........... 01.5083 17.66 190043.......... 01.0969 10.44
160143........... 01.0662 12.59 170076........... 01.1225 10.14 170175........... 01.2775 15.08 180085........... 01.3138 16.18 190044.......... 01.0850 15.51
160145........... 01.0361 11.04 170077........... 00.9366 11.31 170176........... 01.4835 18.26 180087........... 01.0826 12.45 190045.......... 01.2844 17.63
160146........... 01.3598 14.81 170079........... 01.0751 09.81 180001........... 01.2077 15.10 180088........... 01.6481 18.61 190046.......... 01.5064 16.01
160147........... 01.1838 13.17 170080........... 01.0304 11.45 180002........... 01.0572 14.95 180092........... 01.1071 13.45 190047.......... 01.1529 15.23
160151........... 01.1023 12.32 170081........... 01.0284 10.30 180004........... 01.1815 12.90 180093........... 01.3857 14.17 190048.......... 01.0974 13.35
160152........... 00.9977 12.73 170082........... 01.0264 10.91 180005........... 01.0416 14.66 180094........... 00.9476 11.59 190049.......... 01.0517 13.59
160153........... 01.6467 16.13 170084........... 00.8766 10.03 180006........... 00.9024 11.80 180095........... 01.1208 11.81 190050.......... 01.0986 13.67
170001........... 01.2086 14.25 170085........... 00.9608 11.57 180007........... 01.4578 13.73 180099........... 01.0748 10.13 190053.......... 01.0891 11.08
170004........... 01.0588 12.68 170086........... 01.7002 17.38 180009........... 01.2762 16.51 180101........... 01.2300 19.85 190054.......... 01.4422 12.13
170006........... 01.1783 13.00 170087........... 01.3951 18.90 180010........... 01.8129 15.34 180102........... 01.4438 12.80 190059.......... 00.9497 17.29
170008........... 01.0815 11.61 170088........... 00.8815 08.09 180011........... 01.2037 14.69 180103........... 01.9626 16.39 190060.......... 01.4071 14.77
170009........... 01.2528 15.16 170089........... 01.0410 13.16 180012........... 01.3631 15.91 180104........... 01.4442 14.71 190064.......... 01.5049 16.13
170010........... 01.2140 14.80 170090........... 01.0886 09.53 180013........... 01.3290 14.46 180105........... 00.9250 15.54 190065.......... 01.4841 15.65
170011........... 01.4358 14.07 170092........... 00.8092 11.32 180014........... 01.5180 17.45 180106........... 00.8972 11.57 190071.......... 00.8860 11.25
170012........... 01.3653 15.44 170093........... 00.9266 11.25 180015........... 01.1322 14.27 180108........... 00.8945 12.67 190075.......... 01.4394 19.38
170013........... 01.3310 14.02 170094........... 01.0829 13.06 180016........... 01.2643 12.65 180115........... 01.0928 13.33 190077.......... 00.9570 10.49
170014........... 01.0483 14.36 170095........... 01.1164 12.20 180017........... 01.3054 12.52 180116........... 01.3606 14.86 190078.......... 01.2344 10.47
170015........... 01.0032 12.48 170097........... 00.9929 12.19 180018........... 01.1545 12.82 180117........... 01.1925 12.53 190079.......... 01.2564 14.38
170016........... 01.5902 18.86 170098........... 01.0691 13.99 180019........... 01.3038 15.60 180118........... 01.0348 10.98 190081.......... 00.8959 09.79
170017........... 01.1823 15.65 170099........... 01.2531 10.05 180020........... 01.0551 14.24 180120........... 00.9608 11.55 190083.......... 00.9142 11.31
170018........... 01.0319 11.85 170100........... 00.9230 13.52 180021........... 01.2226 12.05 180121........... 01.1327 12.12 190086.......... 01.2979 13.80
170019........... 01.1689 14.86 170101........... 00.9627 12.60 180023........... 00.8355 10.45 180122........... 01.0105 12.03 190088.......... 01.2466 15.55
170020........... 01.2793 14.70 170102........... 01.0024 12.59 180024........... 01.3175 14.92 180123........... 01.4820 17.52 190089.......... 01.0499 09.57
170022........... 01.2493 11.71 170103........... 01.2729 14.43 180025........... 01.1234 13.86 180124........... 01.3518 14.80 190090.......... 01.2115 14.18
170023........... 01.3878 15.44 170104........... 01.4209 18.83 180026........... 01.1979 10.47 180125........... 01.0243 14.88 190092.......... 01.2831 16.62
170024........... 01.1864 11.73 170105........... 00.9760 14.10 180027........... 01.1238 12.56 180126........... 01.0141 10.88 190095.......... 01.0352 12.77
170025........... 01.2580 13.63 170106........... 00.9172 12.06 180028........... 01.0343 15.42 180127........... 01.2163 16.76 190098.......... 01.4296 16.69
170026........... 01.0138 14.25 170108........... 00.9109 10.27 180029........... 01.2894 14.35 180128........... 01.1231 14.91 190099.......... 01.1067 14.71
170027........... 01.1819 15.09 170109........... 01.0816 13.77 180030........... 01.1328 11.60 180129........... 01.1161 11.56 190102.......... 01.5012 14.99
170030........... 00.9624 13.61 170110........... 00.9250 12.28 180031........... 00.9982 11.68 180130........... 01.4178 16.58 190103.......... 00.8566 09.80
170031........... 00.9049 11.54 170112........... 00.8893 11.19 180032........... 01.0611 13.47 180132........... 01.2001 15.26 190106.......... 01.1654 15.56
170032........... 01.0373 13.75 170113........... 01.1303 13.45 180033........... 01.0621 10.45 180133........... 01.2501 17.98 190109.......... 01.1975 13.91
170033........... 01.2529 14.38 170114........... 01.0938 12.12 180034........... 00.9942 13.98 180134........... 00.9838 11.34 190110.......... 00.9443 10.81
170034........... 00.9688 13.48 170115........... 01.0470 11.25 180035........... 01.5181 16.43 180136........... 01.3850 15.97 190111.......... 01.5566 15.92
170035........... 00.9068 12.55 170116........... 01.0983 12.83 180036........... 01.1636 16.05 180137........... 01.6298 17.11 190112.......... 01.3948 16.41
170036........... 00.8756 11.84 170117........... 01.0056 11.90 180037........... 01.2600 17.97 180138........... 01.2788 17.78 190113.......... 01.3192 16.22
170037........... 01.1326 14.83 170119........... 00.9699 10.40 180038........... 01.3309 14.34 180139........... 01.0598 13.66 190114.......... 00.9444 12.67
170038........... 00.9529 11.73 170120........... 01.3053 14.99 180040........... 01.9474 18.16 190001........... 00.9125 14.98 190115.......... 01.3570 21.52
170039........... 01.0578 12.85 170121........... 00.9078 10.42 180041........... 01.0430 13.18 190002........... 01.5696 14.50 190116.......... 01.2136 12.23
170040........... 01.4622 16.84 170122........... 01.8175 19.22 180042........... 01.0832 11.66 190003........... 01.4246 17.42 190118.......... 01.0406 11.05
170041........... 01.0467 10.30 170123........... 01.7339 18.31 180043........... 01.1218 13.52 190004........... 01.3225 13.12 190120.......... 00.9204 14.66
170043........... 00.9950 12.13 170124........... 00.9306 12.74 180044........... 01.0438 12.64 190005........... 01.4287 14.98 190122.......... 01.2237 13.84
170044........... 01.1498 14.13 170126........... 00.9080 10.31 180045........... 01.1992 15.05 190006........... 01.1812 13.93 190124.......... 01.4596 18.09
170045........... 01.0100 12.52 170128........... 00.9733 12.98 180046........... 01.0799 16.50 190007........... 01.0342 12.14 190125.......... 01.3178 13.88
170049........... 01.3269 17.19 170131........... 01.1254 10.65 180047........... 01.0479 12.20 190008........... 01.5379 16.58 190127.......... 01.4309 16.72
170050........... 00.8093 10.65 170133........... 01.1814 13.81 180048........... 01.1443 14.45 190009........... 01.3008 13.82 190128.......... 00.9169 15.49
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
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190130........... 00.9897 11.19 190227........... 00.7615 ............ 210032........... 01.2550 17.31 220066........... 01.3017 18.54 230020.......... 01.6500 18.94
190131........... 01.2764 13.59 200001........... 01.2675 15.09 210033........... 01.1890 16.07 220067........... 01.2488 19.66 230021.......... 01.5772 15.00
190133........... 01.0466 09.24 200002........... 01.0959 15.46 210034........... 01.3009 17.26 220068........... 00.5948 16.26 230022.......... 01.3002 17.34
190134........... 00.9962 09.28 200003........... 01.0709 15.05 210035........... 01.1828 15.47 220070........... 01.1592 18.15 230024.......... 01.5266 22.55
190135........... 01.3864 16.54 200006........... 01.1750 14.04 210036........... 01.2958 16.68 220071........... 01.8244 23.03 230027.......... 01.0726 15.36
190136........... 01.0609 12.04 200007........... 01.0252 15.37 210037........... 01.2408 15.64 220073........... 01.3051 22.39 230029.......... 01.5346 20.32
190138........... 00.7180 19.68 200008........... 01.2642 17.07 210038........... 01.4206 17.33 220074........... 01.2412 20.16 230030.......... 01.2303 16.73
190140........... 00.9940 11.25 200009........... 01.6710 17.96 210039........... 01.1657 16.17 220075........... 01.1906 20.08 230031.......... 01.4695 17.50
190142........... 00.9929 12.54 200012........... 01.1446 14.30 210040........... 01.3354 21.10 220076........... 01.2112 22.33 230032.......... 01.7017 17.85
190144........... 01.1616 13.35 200013........... 01.0867 14.12 210043........... 01.2498 20.01 220077........... 01.6390 20.92 230034.......... 01.1727 14.38
190145........... 00.9367 14.48 200015........... 01.2450 16.17 210044........... 01.2682 19.24 220079........... 01.1467 20.12 230035.......... 01.1001 14.84
190146........... 01.5476 16.85 200016........... 00.9875 14.92 210045........... 01.0188 09.60 220080........... 01.2307 17.63 230036.......... 01.2610 17.94
190147........... 00.9814 12.33 200017........... 01.2677 16.81 210046........... 01.1376 11.93 220081........... 00.9648 19.63 230037.......... 01.2239 15.86
190148........... 00.9413 11.58 200018........... 01.1585 13.98 210048........... 01.1728 20.49 220082........... 01.2081 19.86 230038.......... 01.5850 18.78
190149........... 00.9773 10.49 200019........... 01.2640 16.59 210049........... 01.1489 15.63 220083........... 01.1173 18.96 230040.......... 01.2358 15.59
190151........... 01.0878 11.17 200020........... 01.1411 18.32 210051........... 01.2971 12.97 220084........... 01.2129 21.51 230041.......... 01.1836 17.06
190152........... 01.3442 19.19 200021........... 01.1384 16.13 210054........... 01.2295 19.77 220086........... 01.5645 22.71 230042.......... 01.1251 16.23
190155........... 00.9496 10.29 200023........... 00.8734 15.51 210055........... 01.2336 20.46 220088........... 01.5483 20.65 230043.......... 00.5585 ............
190156........... 00.8924 11.29 200024........... 01.1932 17.76 210056........... 01.4385 16.01 220089........... 01.2499 21.71 230046.......... 01.8358 26.35
190158........... 01.2691 20.28 200025........... 01.1765 17.84 210057........... 01.3054 21.17 220090........... 01.1879 20.89 230047.......... 01.2912 18.15
190160........... 01.1628 14.70 200026........... 01.0475 14.44 210058........... 01.7964 17.16 220092........... 01.2699 19.93 230053.......... 01.4884 23.31
190161........... 00.8949 13.49 200027........... 01.2543 15.03 210059........... 01.3202 20.43 220094........... 01.2251 18.24 230054.......... 01.7259 17.38
190162........... 01.2766 15.63 200028........... 00.9586 13.99 210060........... 01.0637 19.25 220095........... 01.1906 18.77 230055.......... 01.1914 15.21
190164........... 01.1569 14.42 200031........... 01.2786 14.27 210061........... 00.8578 ............ 220097........... 01.0471 21.81 230056.......... 00.9578 13.41
190165........... 01.0022 10.72 200032........... 01.2741 16.82 220001........... 01.1827 19.03 220098........... 01.2248 17.36 230058.......... 01.0944 15.65
190166........... 01.0303 11.98 200033........... 01.6726 18.43 220002........... 01.4300 16.57 220099........... 01.1587 19.90 230059.......... 01.5400 18.06
190167........... 01.2759 15.31 200034........... 01.2041 17.47 220003........... 01.0791 15.29 220100........... 01.2435 17.81 230060.......... 01.2781 15.46
190170........... 01.0698 12.52 200037........... 01.1788 15.05 220004........... 01.2327 18.34 220101........... 01.3953 22.74 230062.......... 01.1739 13.45
190173........... 01.4218 17.94 200038........... 01.0132 17.44 220006........... 01.3008 21.22 220102........... 00.7873 19.91 230063.......... 01.3800 17.52
190175........... 01.4664 ............ 200039........... 01.2823 15.86 220008........... 01.1506 17.96 220104........... 01.2287 22.48 230065.......... 01.4772 17.15
190176........... 01.5220 17.76 200040........... 01.1005 14.71 220010........... 01.2155 19.85 220105........... 01.1442 19.59 230066.......... 01.3538 17.72
190177........... 01.5268 19.77 200041........... 01.1612 16.52 220011........... 01.1546 25.18 220106........... 01.1348 21.34 230068.......... 01.3848 18.28
190178........... 00.9760 10.27 200043........... 00.6566 15.00 220012........... 01.3073 26.56 220107........... 01.1137 17.08 230069.......... 01.1102 16.62
190182........... 00.9989 20.51 200050........... 01.1424 15.39 220015........... 01.1856 18.89 220108........... 01.1463 19.07 230070.......... 01.4860 18.10
190183........... 01.1795 11.91 200051........... 00.9948 17.08 220016........... 01.2527 19.03 220110........... 01.9872 28.62 230071.......... 00.6183 19.34
190184........... 00.9823 12.28 200052........... 01.0217 13.98 220017........... 01.2575 22.56 220111........... 01.1924 18.46 230072.......... 01.2490 17.07
190185........... 01.2328 22.78 200055........... 01.0681 12.93 220019........... 01.0807 18.15 220114........... 01.0005 18.76 230075.......... 01.4762 17.70
190186........... 00.9004 10.73 200062........... 00.9713 14.24 220020........... 01.1744 17.95 220116........... 01.8113 21.93 230076.......... 01.2725 19.48
190187........... 00.8000 14.06 200063........... 01.2064 16.48 220021........... 01.2659 20.16 220118........... 02.0692 23.05 230077.......... 02.0043 17.19
190189........... 00.4826 15.10 200066........... 01.1903 14.22 220023........... 01.1615 16.29 220119........... 01.3216 22.92 230078.......... 01.1477 14.20
190190........... 00.9966 19.64 210001........... 01.3288 16.34 220024........... 01.1729 18.19 220120........... 01.1817 18.85 230080.......... 01.1819 16.42
190191........... 01.2358 18.16 210002........... 01.9936 14.40 220025........... 01.1064 17.74 220123........... 01.0259 22.50 230081.......... 01.2169 15.62
190193........... 01.2713 21.05 210003........... 01.5027 20.58 220026........... 01.3902 18.69 220126........... 01.2271 19.48 230082.......... 01.1432 14.70
190194........... 01.1266 17.88 210004........... 01.3025 23.87 220028........... 01.3945 19.70 220128........... 01.0800 21.45 230085.......... 01.1131 16.73
190196........... 00.8076 16.52 210005........... 01.2264 15.89 220029........... 01.1478 19.55 220131........... 01.1501 18.18 230086.......... 01.0034 12.96
190197........... 01.2713 16.76 210006........... 01.1117 15.52 220030........... 01.0895 18.23 220133........... 00.8252 30.62 230087.......... 01.0416 14.20
190198........... 01.1387 19.92 210007........... 01.5136 17.96 220031........... 01.6518 24.26 220135........... 01.1525 22.28 230089.......... 01.3534 21.44
190199........... 01.3032 12.07 210008........... 01.3465 19.28 220033........... 01.3347 19.44 220153........... 01.0148 16.24 230092.......... 01.2721 17.03
190200........... 01.5343 18.43 210009........... 01.6689 17.62 220035........... 01.2166 18.93 220154........... 00.9255 19.73 230093.......... 01.2452 16.96
190201........... 01.4033 17.53 210010........... 01.2350 14.61 220036........... 01.5874 22.48 220156........... 01.3006 19.03 230095.......... 01.2160 15.30
190202........... 01.4866 18.80 210011........... 01.2708 18.56 220038........... 01.2392 23.00 220162........... 01.4332 ............ 230096.......... 01.2437 16.62
190203........... 01.5366 19.83 210012........... 01.5499 19.80 220041........... 01.1767 16.08 220163........... 01.8442 19.92 230097.......... 01.5407 17.27
190204........... 01.4977 19.33 210013........... 01.2868 21.55 220042........... 01.2723 22.59 220171........... 01.6777 20.19 230099.......... 01.2429 17.18
190205........... 01.7938 16.25 210015........... 01.1959 18.69 220045........... 01.2586 19.58 220173........... 00.6310 ............ 230100.......... 01.2155 14.52
190206........... 01.4388 22.87 210016........... 01.8110 17.94 220046........... 01.3809 22.07 220897........... 04.7767 ............ 230101.......... 01.1076 16.09
190207........... 01.1993 19.24 210017........... 01.1038 13.97 220049........... 01.2332 21.24 230001........... 01.1929 16.33 230103.......... 01.0302 14.19
190208........... 00.8106 09.75 210018........... 01.2813 19.36 220050........... 00.9715 16.18 230002........... 01.2720 18.31 230104.......... 01.6323 19.80
190211........... 00.5662 11.07 210019........... 01.4084 16.07 220051........... 01.1967 19.14 230003........... 01.1335 16.51 230105.......... 01.5472 17.41
190212........... 00.7211 09.55 210022........... 01.4223 18.96 220052........... 01.1996 20.35 230004........... 01.6992 18.57 230106.......... 01.0964 16.22
190213........... 02.8663 10.83 210023........... 01.3443 22.25 220053........... 01.2845 20.22 230005........... 01.3330 16.98 230107.......... 00.8899 10.39
190214........... 00.4476 11.33 210024........... 01.3323 19.78 220055........... 01.1986 17.22 230006........... 01.0594 14.61 230108.......... 01.1687 14.76
190216........... 00.7557 ............ 210025........... 01.3092 15.79 220057........... 01.2909 17.18 230007........... 01.1017 16.37 230110.......... 01.2701 14.49
190217........... 00.9124 ............ 210026........... 01.3090 18.97 220058........... 01.1254 18.61 230012........... 00.7063 14.26 230111.......... 00.9755 14.47
190218........... 00.9222 ............ 210027........... 01.2362 14.83 220060........... 01.1411 22.02 230013........... 01.3023 19.75 230113.......... 01.0302 17.37
190219........... 00.4818 ............ 210028........... 01.0907 14.70 220062........... 00.7215 18.20 230014........... 01.2674 13.29 230114.......... 00.6567 20.83
190220........... 01.9951 ............ 210029........... 01.3210 17.16 220063........... 01.2126 17.96 230015........... 01.2414 17.21 230115.......... 00.9755 14.26
190222........... 01.7805 ............ 210030........... 01.0931 18.05 220064........... 01.1936 19.68 230017........... 01.5027 19.59 230116.......... 00.9372 13.79
190223........... 00.4818 ............ 210031........... 01.7294 21.38 220065........... 01.2442 18.79 230019........... 01.4980 20.62 230117.......... 01.9255 20.87
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
230118........... 01.2338 15.27 230227........... 01.4185 18.92 240061........... 01.5618 19.51 240143........... 00.9224 09.58 250043.......... 00.8798 11.24
230119........... 01.2396 19.41 230228........... 01.3352 17.04 240063........... 01.5302 19.77 240144........... 00.9453 14.36 250044.......... 01.0316 11.99
230120........... 01.1168 16.19 230230........... 01.3544 18.21 240064........... 01.1880 17.45 240145........... 01.0421 10.47 250045.......... 01.1840 14.86
230121........... 01.2757 17.52 230232........... 01.0272 15.35 240065........... 00.9609 11.40 240146........... 00.9853 13.78 250047.......... 00.9729 09.06
230122........... 01.2990 17.18 230235........... 00.9284 12.87 240066........... 01.3773 17.16 240148........... 00.9416 10.13 250048.......... 01.4259 13.20
230124........... 01.1103 15.55 230236........... 01.3262 18.37 240069........... 01.1320 16.35 240150........... 00.9284 10.19 250049.......... 00.9219 10.78
230125........... 01.3711 13.28 230237........... 01.1209 18.78 240071........... 01.1271 16.43 240152........... 00.9627 15.64 250050.......... 01.2364 11.37
230128........... 01.3686 19.81 230239........... 01.1761 15.59 240072........... 01.0464 14.61 240153........... 01.0299 13.43 250051.......... 00.9057 09.10
230129........... 01.9341 19.47 230241........... 01.1425 15.34 240073........... 00.9857 11.34 240154........... 00.9839 14.51 250057.......... 01.1363 11.55
230130........... 01.6172 19.75 230244........... 01.4433 19.18 240075........... 01.2239 17.19 240155........... 00.9697 13.26 250058.......... 01.1767 11.42
230132........... 01.4457 19.35 230253........... 01.2208 16.09 240076........... 01.0824 17.80 240157........... 01.0301 13.38 250059.......... 01.0248 10.92
230133........... 01.2087 14.69 230254........... 01.2122 20.53 240077........... 00.9540 12.78 240160........... 01.0309 13.52 250060.......... 00.8100 10.54
230134........... 01.2076 14.24 230257........... 01.0270 16.29 240078........... 01.3948 20.24 240161........... 00.9932 12.77 250061.......... 00.8715 09.07
230135........... 01.2866 17.71 230259........... 01.1927 18.24 240079........... 01.0466 12.37 240162........... 01.0422 14.61 250063.......... 00.8593 09.85
230137........... 01.1486 16.37 230264........... 01.2970 17.31 240080........... 01.4242 19.24 240163........... 00.9293 12.90 250065.......... 00.8981 10.30
230141........... 01.6035 19.10 230269........... 01.2248 19.90 240082........... 01.1763 13.75 240166........... 01.1619 14.56 250066.......... 00.9727 09.70
230142........... 01.1774 23.19 230270........... 01.2471 18.35 240083........... 01.3177 15.80 240169........... 00.9598 13.10 250067.......... 00.9676 11.74
230143........... 01.1740 13.64 230273........... 01.6899 18.16 240084........... 01.3442 15.28 240170........... 01.0625 13.78 250068.......... 00.8957 14.73
230144........... 01.1892 19.77 230275........... 00.8457 15.29 240085........... 00.8891 12.80 240171........... 00.9856 13.00 250069.......... 01.2046 12.20
230145........... 01.1500 14.34 230276........... 00.9638 14.84 240086........... 01.1768 14.11 240172........... 01.1054 14.02 250071.......... 01.0549 10.98
230146........... 01.2775 18.56 230277........... 01.2066 18.72 240087........... 01.0607 13.50 240173........... 00.9813 14.21 250072.......... 01.3410 15.41
230147........... 01.5686 18.29 230278........... 01.9299 ............ 240088........... 01.4600 16.70 240176........... 00.9959 11.09 250073.......... 00.9807 09.92
230149........... 01.2338 14.09 240001........... 01.5708 19.57 240089........... 01.0397 14.41 240179........... 00.9847 13.73 250076.......... 00.9532 09.20
230150........... 01.5566 19.01 240002........... 01.6587 18.05 240090........... 01.0952 13.05 240180........... 00.9750 10.20 250077.......... 00.9320 10.22
230151........... 01.3761 18.80 240003........... 01.2291 22.55 240091........... 01.0392 10.83 240184........... 00.9999 10.98 250078.......... 01.3952 13.04
230153........... 01.0546 14.86 240004........... 01.4562 19.95 240093........... 01.2787 15.33 240187........... 01.2830 17.00 250079.......... 00.8734 12.23
230154........... 01.0176 12.31 240005........... 00.9197 12.75 240094........... 00.9699 15.34 240192........... 01.0375 12.40 250081.......... 01.2182 14.37
230155........... 01.1241 12.02 240006........... 01.1567 18.19 240096........... 01.1091 13.37 240193........... 01.1307 14.01 250082.......... 01.2190 11.07
230156........... 01.6575 20.20 240007........... 01.0728 13.16 240097........... 01.1124 16.27 240196........... 00.6068 18.87 250083.......... 00.9395 12.40
230157........... 01.3277 18.63 240008........... 01.0418 13.25 240098........... 01.0163 13.46 240200........... 00.8798 12.53 250084.......... 01.1255 13.12
230159........... 01.3269 17.40 240009........... 01.1476 12.81 240099........... 01.0461 11.38 240205........... 00.9147 ............ 250085.......... 01.0526 11.04
230162........... 00.9652 13.97 240010........... 01.9857 18.94 240100........... 01.2725 16.95 240206........... 00.8253 ............ 250086.......... 00.9820 12.08
230165........... 01.7368 18.96 240011........... 01.1006 14.62 240101........... 01.2197 15.26 240207........... 01.1892 21.20 250088.......... 00.9881 11.97
230167........... 01.2135 18.27 240013........... 01.2257 15.49 240102........... 01.0627 12.97 240210........... 01.3000 21.21 250089.......... 01.0414 10.86
230169........... 01.3466 19.72 240014........... 01.0882 16.06 240103........... 01.1331 14.27 250001........... 01.5439 13.55 250091.......... 00.9638 10.48
230171........... 01.0397 12.36 240016........... 01.3880 14.67 240104........... 01.1691 18.89 250002........... 00.8123 11.80 250093.......... 01.1498 11.71
230172........... 01.2647 17.17 240017........... 01.1279 14.24 240105........... 00.9306 13.40 250003........... 00.9311 12.12 250094.......... 01.2734 13.27
230173........... 01.2687 17.18 240018........... 01.2097 15.09 240106........... 01.2295 21.48 250004........... 01.4300 13.66 250095.......... 01.0353 11.93
230174........... 01.2969 16.15 240019........... 01.2969 18.63 240107........... 00.9025 13.16 250005........... 00.9925 08.99 250096.......... 01.1196 14.83
230175........... 02.5647 14.97 240020........... 01.1770 15.82 240108........... 01.0177 10.01 250006........... 00.9777 12.45 250097.......... 01.2122 12.30
230176........... 01.2071 20.13 240021........... 01.1178 13.32 240109........... 00.9590 13.51 250007........... 01.2267 15.01 250098.......... 00.8720 09.46
230178........... 01.0559 14.99 240022........... 01.0736 15.34 240110........... 00.9597 15.43 250008........... 00.9902 11.21 250099.......... 01.2539 12.00
230180........... 01.0827 14.16 240023........... 01.0969 15.19 240111........... 01.0346 11.74 250009........... 01.1391 10.70 250100.......... 01.2467 11.80
230184........... 01.1328 14.57 240025........... 01.1515 14.16 240112........... 00.9898 12.95 250010........... 01.0724 10.06 250101.......... 00.8793 08.70
230186........... 01.0965 14.08 240027........... 01.0245 11.62 240114........... 01.0412 10.60 250012........... 00.9567 11.79 250102.......... 01.4922 13.33
230188........... 01.1139 15.94 240028........... 01.1006 14.99 240115........... 01.6079 21.44 250015........... 01.0553 09.37 250104.......... 01.3327 14.08
230189........... 00.9190 13.54 240029........... 01.2108 14.23 240116........... 00.9269 12.14 250017........... 00.9426 13.08 250105.......... 00.8970 11.28
230190........... 01.3785 18.04 240030........... 01.3302 15.33 240117........... 01.1176 15.35 250018........... 00.9031 10.20 250107.......... 00.9562 13.72
230191........... 00.8901 13.06 240031........... 01.0538 13.01 240119........... 00.8906 14.25 250019........... 01.3868 14.82 250109.......... 00.9654 10.30
230193........... 01.2619 16.40 240036........... 01.4905 17.88 240121........... 00.9077 16.37 250020........... 00.9789 09.05 250112.......... 00.9612 11.79
230194........... 01.1975 13.91 240037........... 01.1006 15.67 240122........... 01.0992 15.27 250021........... 00.9398 07.83 250117.......... 01.0646 12.06
230195........... 01.2950 18.03 240038........... 01.4951 21.20 240123........... 01.0605 13.47 250023........... 00.8531 09.86 250119.......... 01.0949 10.32
230197........... 01.2615 19.21 240040........... 01.2596 16.06 240124........... 01.0520 14.28 250024........... 00.9885 07.74 250120.......... 00.9976 10.44
230199........... 01.1365 15.53 240041........... 01.2683 13.37 240125........... 00.9045 10.46 250025........... 01.0232 13.92 250122.......... 01.2226 15.54
230201........... 01.0721 12.87 240043........... 01.2178 15.65 240127........... 01.0109 11.10 250027........... 01.0456 10.39 250123.......... 01.2141 18.71
230204........... 01.2769 19.02 240044........... 01.1996 15.06 240128........... 01.1626 15.73 250029........... 00.9632 10.16 250124.......... 00.9096 10.51
230205........... 01.0741 14.68 240045........... 01.0166 16.58 240129........... 01.0191 12.94 250030........... 00.9960 10.01 250125.......... 01.3020 14.95
230207........... 01.2234 18.62 240047........... 01.4088 15.84 240130........... 00.9815 13.39 250031........... 01.2568 16.18 250126.......... 01.0613 11.53
230208........... 01.1985 13.74 240048........... 01.3250 20.23 240132........... 01.1821 22.17 250032........... 01.2296 14.64 250127.......... 00.7846 ............
230211........... 00.9788 12.38 240049........... 01.7175 19.30 240133........... 01.1217 15.04 250033........... 00.9742 11.82 250128.......... 00.9391 11.77
230212........... 01.0550 18.73 240050........... 01.1360 18.32 240135........... 00.9377 11.11 250034........... 01.4973 11.58 250131.......... 01.0142 09.78
230213........... 01.0806 11.66 240051........... 00.9231 15.59 240136........... 00.8433 12.11 250035........... 00.8641 12.15 250134.......... 00.9954 13.69
230216........... 01.3347 15.22 240052........... 01.2111 15.63 240137........... 01.1811 14.41 250036........... 01.0005 10.69 250136.......... 00.8317 14.79
230217........... 01.1540 16.17 240053........... 01.4962 18.22 240138........... 00.8843 09.63 250037........... 00.9018 10.43 250138.......... 01.2888 16.00
230219........... 01.0239 11.59 240056........... 01.2453 19.37 240139........... 00.9723 14.31 250038........... 00.9987 09.69 250140.......... 00.9049 08.90
230221........... 01.2870 20.08 240057........... 01.7395 20.10 240140........... 00.9074 11.48 250039........... 00.9788 08.23 250141.......... 01.2795 14.72
230222........... 01.3017 16.28 240058........... 01.0076 09.62 240141........... 00.9912 18.54 250040........... 01.2974 14.79 250144.......... 00.9225 ............
230223........... 01.3383 18.13 240059........... 01.2110 17.26 240142........... 01.0446 13.02 250042........... 01.1616 13.22 250145.......... 00.7146 ............
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Page 9 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
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250146........... 01.0102 ............ 260091........... 01.6253 18.26 270006........... 00.9746 10.56 280023........... 01.3516 13.27 280110.......... 00.9955 10.65
260001........... 01.6634 14.89 260092........... 01.0280 13.62 270007........... 00.9529 11.48 280024........... 00.9846 11.66 280111.......... 01.2922 14.82
260002........... 01.3747 18.64 260094........... 01.0736 12.66 270009........... 01.0671 18.52 280025........... 01.0234 10.02 280114.......... 00.9900 10.45
260003........... 01.0260 12.20 260095........... 01.3807 15.45 270011........... 01.1025 14.76 280026........... 01.0493 12.16 280115.......... 01.0191 12.67
260004........... 01.0538 12.77 260096........... 01.4959 19.36 270012........... 01.4698 16.27 280028........... 01.0097 11.92 280117.......... 01.0875 13.19
260005........... 01.5572 17.00 260097........... 01.1380 14.13 270013........... 01.2727 15.02 280029........... 00.8928 09.58 280118.......... 01.0483 14.77
260006........... 01.5091 15.71 260100........... 01.0571 12.23 270014........... 01.6079 14.95 280030........... 01.8599 21.75 280119.......... 00.8992 ............
260007........... 01.3639 15.19 260102........... 01.0839 14.83 270016........... 00.8118 09.83 280031........... 01.0550 12.06 280123.......... 00.8286 13.91
260008........... 01.2405 14.14 260103........... 01.3972 16.34 270017........... 01.2367 15.69 280032........... 01.2476 14.22 290001.......... 01.6571 20.33
260009........... 01.2538 14.91 260104........... 01.6549 17.70 270019........... 00.9646 11.57 280033........... 01.1094 13.61 290002.......... 00.9120 16.20
260011........... 01.5681 16.81 260105........... 01.8607 17.57 270021........... 01.1244 13.12 280034........... 01.1968 13.55 290003.......... 01.6607 20.74
260012........... 01.0775 10.76 260107........... 01.4024 16.71 270023........... 01.3326 16.04 280035........... 00.9251 11.06 290005.......... 01.2603 18.60
260013........... 01.1781 13.00 260108........... 01.7807 17.07 270024........... 00.9937 12.25 280037........... 00.9898 10.57 290006.......... 01.0426 17.56
260014........... 01.7028 17.03 260109........... 01.0318 10.83 270026........... 00.9270 14.52 280038........... 01.0970 12.32 290007.......... 01.8614 19.49
260015........... 01.1463 13.06 260110........... 01.6186 13.38 270027........... 01.0071 11.19 280039........... 01.1476 11.46 290008.......... 01.2834 19.77
260017........... 01.2235 13.75 260111........... 00.9193 10.33 270028........... 01.0211 14.70 280040........... 01.5884 17.67 290009.......... 01.5081 20.23
260018........... 00.9472 08.71 260112........... 01.4051 17.17 270029........... 01.0373 14.41 280041........... 01.0365 10.18 290010.......... 01.1540 16.04
260019........... 01.0163 12.36 260113........... 01.1657 11.99 270030........... 00.7612 ............ 280042........... 01.0350 12.45 290011.......... 00.8320 11.94
260020........... 01.6650 18.13 260115........... 01.1918 13.38 270031........... 00.9295 10.86 280043........... 01.1274 13.48 290012.......... 01.3572 18.72
260021........... 01.4522 16.18 260116........... 01.1505 12.40 270032........... 01.0832 15.20 280045........... 01.1318 12.49 290013.......... 00.9998 15.06
260022........... 01.3955 12.21 260119........... 01.2584 13.25 270033........... 00.9110 15.18 280046........... 01.0010 10.16 290014.......... 01.0364 15.84
260023........... 01.2384 14.14 260120........... 01.2393 14.57 270035........... 01.0121 13.97 280047........... 01.0944 14.84 290015.......... 00.9331 14.63
260024........... 01.0522 11.04 260122........... 01.1817 12.00 270036........... 00.9135 11.20 280048........... 01.0423 10.70 290016.......... 01.2080 13.62
260025........... 01.2423 13.10 260123........... 01.0260 10.37 270039........... 00.9348 17.94 280049........... 01.0269 12.20 290018.......... 01.2956 17.15
260027........... 01.5736 17.97 260127........... 00.9731 13.39 270040........... 01.0844 15.30 280050........... 00.9529 11.49 290019.......... 01.2279 17.04
260029........... 01.1928 16.54 260128........... 00.9679 08.66 270041........... 00.9693 10.47 280051........... 00.9747 12.15 290020.......... 01.2483 16.81
260030........... 01.1710 10.05 260129........... 01.0667 12.87 270044........... 01.2568 12.26 280052........... 01.0435 10.45 290021.......... 01.5747 20.63
260031........... 01.4919 17.49 260131........... 01.2852 13.97 270046........... 00.9215 14.21 280054........... 01.2397 15.23 290022.......... 01.6050 20.10
260032........... 01.6994 18.87 260134........... 01.2865 13.25 270047........... 01.1692 09.98 280055........... 00.9080 11.10 290027.......... 01.0024 16.54
260033........... 01.3247 14.53 260137........... 01.1776 13.58 270048........... 01.1014 13.40 280056........... 01.0481 09.44 290029.......... 00.9610 ............
260034........... 01.0205 13.13 260138........... 01.8672 18.90 270049........... 01.7111 15.71 280057........... 01.0131 15.03 290032.......... 01.3954 19.64
260035........... 01.1365 11.06 260141........... 01.9446 15.87 270050........... 01.0065 15.42 280058........... 01.2678 12.49 300001.......... 01.3414 19.02
260036........... 01.0804 14.55 260142........... 01.2021 13.51 270051........... 01.3094 18.46 280060........... 01.5767 17.64 300003.......... 01.7495 19.71
260037........... 01.2511 13.74 260143........... 01.0398 10.03 270052........... 01.0258 19.34 280061........... 01.3436 15.01 300005.......... 01.2775 17.05
260039........... 01.1978 10.70 260146........... 01.5255 14.81 270053........... 01.1220 08.14 280062........... 01.1863 11.55 300006.......... 01.1299 15.08
260040........... 01.4880 14.03 260147........... 01.0243 11.64 270055........... 00.7016 ............ 280064........... 01.0380 11.38 300007.......... 01.1477 19.46
260042........... 01.1845 15.65 260148........... 00.9980 14.12 270057........... 01.1710 15.06 280065........... 01.2349 15.65 300008.......... 01.2673 15.50
260044........... 01.0654 13.62 260158........... 01.0835 10.90 270058........... 00.9576 10.74 280066........... 01.0717 10.40 300009.......... 01.1600 16.54
260047........... 01.2900 13.30 260159........... 01.1822 18.22 270059........... 00.8646 12.91 280068........... 00.8976 08.61 300010.......... 01.2410 16.90
260048........... 01.2923 16.57 260160........... 01.1296 12.91 270060........... 00.9063 11.63 280070........... 01.0418 11.22 300011.......... 01.2872 20.39
260050........... 01.0960 12.53 260162........... 01.1213 16.85 270063........... 00.8744 13.29 280073........... 00.9927 13.90 300012.......... 01.2920 20.73
260051........... 01.0852 13.22 260163........... 01.1730 12.84 270067........... 01.1181 ............ 280074........... 01.0971 10.62 300013.......... 01.2094 15.98
260052........... 01.2549 15.53 260164........... 01.0734 11.11 270068........... 00.8749 11.69 280075........... 01.2244 11.19 300014.......... 01.2542 16.93
260053........... 01.1330 09.80 260166........... 01.2098 17.16 270072........... 00.8859 15.52 280076........... 01.0942 13.66 300015.......... 01.1507 16.69
260054........... 01.2850 15.62 260172........... 00.9893 11.99 270073........... 01.1510 10.27 280077........... 01.2977 16.26 300016.......... 01.2369 17.23
260055........... 01.0642 12.73 260173........... 00.9923 10.22 270074........... 00.8805 ............ 280079........... 00.9809 09.48 300017.......... 01.1841 18.38
260057........... 01.2088 13.64 260175........... 01.1918 13.15 270075........... 00.9436 ............ 280080........... 01.2379 10.27 300018.......... 01.2221 18.26
260059........... 01.1065 11.93 260176........... 01.5465 15.91 270076........... 00.7562 ............ 280081........... 01.4820 16.98 300019.......... 01.2495 17.09
260061........... 01.1426 09.82 260177........... 01.2941 18.12 270079........... 00.9326 12.66 280082........... 01.3050 09.86 300020.......... 01.2377 18.13
260062........... 01.1629 15.45 260178........... 01.5048 19.22 270080........... 01.1032 13.60 280083........... 01.0240 11.97 300021.......... 01.1597 14.84
260063........... 01.1454 13.06 260179........... 01.5311 20.18 270081........... 00.9698 10.11 280084........... 01.0470 09.83 300022.......... 01.1177 15.00
260064........... 01.3850 15.64 260180........... 01.5518 17.26 270082........... 00.9072 14.85 280085........... 00.8963 13.22 300023.......... 01.2391 19.05
260065........... 01.6779 14.32 260183........... 01.6363 15.05 270083........... 01.0378 12.97 280088........... 01.6710 17.18 300024.......... 01.2318 15.72
260066........... 01.1342 12.00 260186........... 01.1638 14.14 270084........... 00.9212 13.03 280089........... 01.0477 12.85 300028.......... 01.2081 16.12
260067........... 00.9175 12.05 260188........... 01.3866 15.00 280001........... 01.0391 12.18 280090........... 00.9980 11.70 300029.......... 01.3292 20.57
260068........... 01.7836 17.91 260189........... 00.8964 09.49 280003........... 01.8969 16.43 280091........... 01.0899 13.49 300033.......... 01.0766 13.25
260070........... 01.2315 10.32 260190........... 01.2049 20.62 280005........... 01.4381 16.26 280092........... 00.9157 11.14 300034.......... 01.7999 20.13
260073........... 01.0263 10.98 260191........... 01.2302 17.70 280009........... 01.5328 15.40 280094........... 01.1517 12.59 310001.......... 01.6349 21.91
260074........... 01.2177 13.00 260193........... 01.2600 16.35 280011........... 00.9727 10.71 280097........... 00.9588 12.01 310002.......... 01.7714 22.69
260077........... 01.5203 15.46 260195........... 01.1426 14.93 280012........... 01.2184 12.69 280098........... 00.9679 09.84 310003.......... 01.2152 20.51
260078........... 01.1311 13.62 260197........... 01.2209 20.81 280013........... 01.9819 20.17 280101........... 01.1395 12.16 310005.......... 01.1891 19.16
260079........... 01.0080 10.71 260198........... 01.2177 14.62 280014........... 01.0454 10.76 280102........... 00.9735 10.22 310006.......... 01.2276 18.73
260080........... 01.0833 09.00 260200........... 01.2017 19.15 280015........... 01.1047 13.75 280104........... 01.0008 11.74 310008.......... 01.3004 18.98
260081........... 01.4061 17.40 260202........... 01.2953 16.81 280017........... 01.1113 12.92 280105........... 01.2967 14.83 310009.......... 01.1509 20.10
260082........... 01.1213 13.27 260204........... 00.8499 ............ 280018........... 00.9974 12.01 280106........... 01.0583 12.09 310010.......... 01.2746 19.78
260085........... 01.5101 17.37 270002........... 01.1900 12.64 280020........... 01.4359 16.53 280107........... 01.0335 10.56 310011.......... 01.2395 18.15
260086........... 01.0323 12.04 270003........... 01.1873 16.85 280021........... 01.1348 13.34 280108........... 01.0946 12.16 310012.......... 01.5444 21.45
260089........... 01.0034 12.53 270004........... 01.6495 16.14 280022........... 00.9490 10.53 280109........... 00.8511 11.14 310013.......... 01.2946 17.62
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Page 10 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
310014........... 01.5742 22.63 310111........... 01.2869 17.58 330016........... 01.0329 14.50 330119........... 01.7325 27.28 330224.......... 01.2544 19.24
310015........... 01.6880 23.19 310112........... 01.2792 17.81 330019........... 01.2647 22.42 330121........... 01.0030 14.55 330225.......... 01.1937 23.33
310016........... 01.2138 20.50 310113........... 01.2522 18.18 330020........... 01.0867 14.84 330122........... 01.2333 19.59 330226.......... 01.2657 17.69
310017........... 01.3453 20.51 310115........... 01.1820 18.75 330023........... 01.1973 19.85 330125........... 01.6953 18.97 330229.......... 01.3237 13.56
310018........... 01.2142 23.43 310116........... 01.2895 19.88 330024........... 01.8216 26.75 330126........... 01.2041 18.28 330230.......... 01.5357 24.76
310019........... 01.6478 19.13 310118........... 01.2904 23.38 330025........... 01.1062 14.30 330127........... 01.3851 24.83 330231.......... 01.1533 25.13
310020........... 01.2427 17.60 310119........... 01.5696 29.88 330027........... 01.5206 28.98 330128........... 01.3925 25.66 330232.......... 01.2537 14.83
310021........... 01.3396 18.25 310120........... 01.0901 17.21 330028........... 01.3460 22.68 330132........... 01.1420 12.27 330233.......... 01.5248 27.01
310022........... 01.2335 18.31 310121........... 01.1334 18.72 330029........... 01.1440 15.76 330133........... 01.3637 26.33 330234.......... 02.0302 25.92
310024........... 01.2387 20.69 310898........... 00.4649 ............ 330030........... 01.1835 14.98 330135........... 01.2408 16.49 330235.......... 01.1396 16.14
310025........... 01.1841 19.58 320001........... 01.4496 16.86 330033........... 01.1756 13.16 330136........... 01.2608 21.77 330236.......... 01.3256 25.41
310026........... 01.3100 20.16 320002........... 01.3049 20.26 330034........... 01.0216 28.07 330140........... 01.6509 16.38 330238.......... 01.1250 14.95
310027........... 01.3074 17.63 320003........... 01.2595 13.22 330036........... 01.2544 20.09 330141........... 01.3081 22.13 330239.......... 01.2379 13.84
310028........... 01.1817 18.28 320004........... 01.1589 15.58 330037........... 01.0940 13.75 330144........... 01.0838 12.78 330240.......... 01.3051 26.44
310029........... 01.7744 19.95 320005........... 01.2295 16.12 330038........... 01.1633 14.14 330148........... 00.9882 13.44 330241.......... 01.8399 20.10
310031........... 02.5295 22.82 320006........... 01.3783 13.69 330039........... 00.8375 13.46 330151........... 01.0959 12.81 330242.......... 01.3653 19.96
310032........... 01.2728 19.09 320009........... 01.5035 15.54 330041........... 01.3278 24.26 330152........... 01.4062 26.09 330245.......... 01.2087 15.62
310034........... 01.2211 18.59 320011........... 00.9916 15.22 330043........... 01.2506 23.92 330153........... 01.6330 16.75 330246.......... 01.2171 22.26
310036........... 01.2241 17.56 320012........... 01.0247 14.52 330044........... 01.1678 16.27 330154........... 01.4949 ............ 330247.......... 00.6914 24.34
310037........... 01.2154 23.45 320013........... 01.0743 15.84 330045........... 01.4026 22.01 330157........... 01.2590 15.89 330249.......... 01.2322 15.40
310038........... 01.7502 21.86 320014........... 00.9564 13.73 330046........... 01.5346 25.92 330158........... 01.3171 21.63 330250.......... 01.2624 16.08
310039........... 01.2946 18.56 320016........... 01.1382 14.59 330047........... 01.2742 15.31 330159........... 01.3197 17.11 330252.......... 00.9602 14.59
310040........... 01.2409 20.49 320017........... 01.1782 17.22 330048........... 01.2382 14.59 330160........... 01.4179 24.63 330254.......... 01.0002 16.38
310041........... 01.2753 20.49 320018........... 01.4560 16.07 330049........... 01.2828 16.98 330161........... 00.9685 15.29 330258.......... 01.3281 23.94
310042........... 01.1661 21.01 320019........... 01.3960 17.39 330053........... 01.1361 13.82 330162........... 01.3003 22.13 330259.......... 01.4208 21.72
310043........... 01.1877 19.14 320021........... 01.6877 17.70 330055........... 01.4198 27.67 330163........... 01.1410 15.59 330261.......... 01.2805 22.00
310044........... 01.3090 18.52 320022........... 01.2569 16.29 330056........... 01.4146 24.73 330164........... 01.3323 17.75 330263.......... 01.0476 15.05
310045........... 01.2948 22.96 320023........... 01.0783 11.67 330057........... 01.6239 16.34 330166........... 00.9793 13.39 330264.......... 01.1805 17.85
310047........... 01.2846 20.40 320030........... 01.0596 15.83 330058........... 01.2707 14.94 330167........... 01.5606 24.15 330265.......... 01.2982 15.23
310048........... 01.2237 15.96 320031........... 00.9342 12.53 330059........... 01.5561 26.37 330169........... 01.4148 28.56 330267.......... 01.3094 21.01
310049........... 01.3131 19.63 320032........... 00.9508 15.92 330061........... 01.3472 21.49 330171........... 01.2972 22.03 330268.......... 01.1150 14.37
310050........... 01.1859 19.96 320033........... 01.1065 17.04 330062........... 01.0602 14.93 330175........... 01.0774 13.20 330270.......... 01.9180 28.30
310051........... 01.2774 21.27 320035........... 01.3382 13.24 330064........... 01.4069 25.74 330177........... 00.9995 13.24 330273.......... 01.3518 20.59
310052........... 01.2121 20.20 320037........... 01.1481 13.11 330065........... 01.1926 16.20 330179........... 00.8930 12.97 330275.......... 01.2238 16.62
310054........... 01.2732 21.24 320038........... 01.2389 14.38 330066........... 01.2273 17.39 330180........... 01.1892 14.87 330276.......... 01.2167 16.70
310056........... 01.1774 17.32 320046........... 01.0729 15.91 330067........... 01.3189 19.22 330181........... 01.2261 27.37 330277.......... 01.1777 15.22
310057........... 01.2768 16.38 320048........... 01.2320 13.09 330072........... 01.3404 26.08 330182........... 02.3673 25.86 330279.......... 01.2864 16.73
310058........... 01.1326 20.45 320056........... 00.9285 ............ 330073........... 01.2135 12.91 330183........... 01.3603 17.43 330281.......... 00.5686 20.00
310060........... 01.1741 15.89 320057........... 01.0146 ............ 330074........... 01.2478 15.68 330184........... 01.3576 22.64 330285.......... 01.7443 20.83
310061........... 01.1664 18.01 320058........... 00.7388 ............ 330075........... 01.0779 15.62 330185........... 01.1944 22.90 330286.......... 01.3377 21.72
310062........... 01.3059 24.81 320059........... 01.0347 ............ 330078........... 01.3808 15.94 330186........... 01.0663 19.28 330288.......... 01.0510 15.73
310063........... 01.3360 20.38 320060........... 00.9396 ............ 330079........... 01.2508 14.89 330188........... 01.2364 16.63 330290.......... 01.7023 26.56
310064........... 01.2505 20.41 320061........... 01.3158 ............ 330080........... 01.3156 23.40 330189........... 00.7710 13.00 330293.......... 01.1870 13.94
310067........... 01.2732 18.65 320062........... 00.8686 ............ 330082........... 01.2583 16.58 330191........... 01.2972 16.96 330304.......... 01.2664 25.07
310069........... 01.1770 18.53 320063........... 01.2972 15.07 330084........... 00.9774 15.00 330193........... 01.3641 24.94 330306.......... 01.4010 23.49
310070........... 01.3208 20.67 320065........... 01.1953 15.47 330085........... 01.3537 17.17 330194........... 01.8095 25.78 330307.......... 01.2200 16.06
310072........... 01.2416 18.95 320067........... 00.9079 10.33 330086........... 01.2408 22.49 330195........... 01.5594 26.38 330308.......... 01.2840 24.28
310073........... 01.4691 19.99 320068........... 00.9861 15.10 330088........... 01.1075 22.93 330196........... 01.3816 24.47 330309.......... 01.2121 22.70
310074........... 01.2527 19.27 320069........... 01.0207 12.54 330090........... 01.6337 15.36 330197........... 01.0421 14.66 330314.......... 01.2931 21.13
310075........... 01.3011 20.64 320070........... 00.8934 ............ 330091........... 01.3710 17.28 330198........... 01.3539 26.02 330315.......... 01.1666 21.49
310076........... 01.3398 24.98 320074........... 01.1252 17.10 330092........... 01.0355 13.86 330199........... 01.2781 23.00 330316.......... 01.3004 23.18
310077........... 01.5661 20.65 320076........... 01.1991 14.58 330094........... 01.1760 14.68 330201........... 01.4416 24.55 330327.......... 00.9282 14.93
310078........... 01.2659 21.69 320079........... 01.1341 18.51 330095........... 01.1924 15.53 330202........... 01.4057 25.07 330331.......... 01.2040 24.79
310081........... 01.2485 18.24 320080........... 00.5832 ............ 330096........... 01.0555 13.82 330203........... 01.3473 18.97 330332.......... 01.2508 22.24
310083........... 01.2342 20.23 330001........... 01.1730 19.91 330097........... 01.1752 14.78 330204........... 01.3366 23.41 330333.......... 01.3186 23.12
310084........... 01.2000 18.73 330002........... 01.4515 22.56 330100........... 00.7012 22.60 330205........... 01.1999 17.97 330336.......... 01.3713 26.05
310085........... 01.1170 17.90 330003........... 01.2833 17.47 330101........... 01.7094 30.13 330208........... 01.2026 21.83 330338.......... 01.1705 20.43
310086........... 01.1935 18.94 330004........... 01.3082 17.83 330102........... 01.3047 15.59 330209........... 01.2335 18.89 330339.......... 00.8063 17.43
310087........... 01.2476 18.41 330005........... 01.7510 18.22 330103........... 01.1854 15.52 330211........... 01.1957 15.21 330340.......... 01.1799 24.08
310088........... 01.1615 19.42 330006........... 01.3413 21.67 330104........... 01.3488 23.56 330212........... 01.2172 18.85 330350.......... 01.7967 26.28
310090........... 01.2313 20.13 330007........... 01.3744 15.51 330106........... 01.5771 29.39 330213........... 01.1345 15.33 330353.......... 01.2966 24.84
310091........... 01.2164 18.22 330008........... 01.1638 15.29 330107........... 01.1838 21.23 330214........... 01.7319 27.58 330354.......... 01.4081 ............
310092........... 01.3774 18.31 330009........... 01.2724 26.03 330108........... 01.2091 16.18 330215........... 01.1507 15.94 330357.......... 01.3654 29.57
310093........... 01.1869 18.84 330010........... 01.2299 13.72 330111........... 01.1419 13.22 330218........... 01.2015 15.84 330359.......... 00.9245 19.30
310096........... 01.8732 21.76 330011........... 01.2145 16.37 330114........... 00.9960 15.08 330219........... 01.6161 18.33 330372.......... 01.2703 20.79
310105........... 01.3449 19.82 330012........... 01.5853 26.43 330115........... 01.2293 13.79 330221........... 01.2905 25.37 330381.......... 01.2390 23.70
310108........... 01.3067 20.29 330013........... 01.9866 16.97 330116........... 00.9653 16.94 330222........... 01.2073 14.02 330383.......... 01.5122 ............
310110........... 01.1782 17.88 330014........... 01.3938 25.19 330118........... 01.5909 16.14 330223........... 01.0720 13.45 330385.......... 01.4133 29.11
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Page 11 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
330386........... 01.1675 17.11 340069........... 01.7588 16.62 340166........... 01.3189 17.47 360018........... 01.5088 17.63 360094.......... 01.1823 16.44
330387........... 00.8490 23.22 340070........... 01.2708 15.30 340168........... 00.5454 14.80 360019........... 01.2284 17.21 360095.......... 01.2750 14.92
330389........... 01.8866 27.58 340071........... 01.0354 13.49 350001........... 01.0250 10.83 360020........... 01.4276 16.47 360096.......... 01.0974 14.95
330390........... 01.2979 24.47 340072........... 01.1017 13.40 350002........... 01.6920 16.15 360021........... 01.2159 16.31 360098.......... 01.3840 17.84
330393........... 01.6149 22.41 340073........... 01.4658 18.47 350003........... 01.1473 14.23 360024........... 01.2408 17.03 360099.......... 01.0579 15.49
330394........... 01.4095 16.96 340075........... 01.1544 14.80 350004........... 01.8625 17.07 360025........... 01.1873 17.00 360100.......... 01.2965 13.69
330395........... 01.3571 25.96 340080........... 01.1430 09.88 350005........... 01.1031 11.21 360026........... 01.1842 15.01 360101.......... 01.7545 19.63
330396........... 01.2335 26.91 340084........... 01.0572 13.62 350006........... 01.2701 17.95 360027........... 01.5365 17.37 360102.......... 01.2631 17.18
330397........... 01.5073 26.69 340085........... 01.1941 14.33 350007........... 01.0067 09.21 360028........... 01.3755 15.02 360103.......... 01.3973 17.82
330398........... 01.2600 24.07 340087........... 01.1721 14.86 350008........... 01.0632 13.30 360029........... 01.1183 14.74 360104.......... 00.9613 16.76
330399........... 01.3657 28.62 340088........... 01.1241 14.92 350009........... 01.1441 14.36 360030........... 01.1725 14.51 360106.......... 01.1505 12.63
340001........... 01.3622 17.90 340089........... 00.9772 10.77 350010........... 01.0950 11.07 360031........... 01.2762 16.00 360107.......... 01.1847 15.07
340002........... 01.8205 16.29 340090........... 01.0761 13.47 350011........... 01.7147 16.96 360032........... 01.0787 15.27 360108.......... 01.0229 13.97
340003........... 01.1762 14.86 340091........... 01.6470 17.60 350012........... 01.0658 11.31 360034........... 01.1989 12.84 360109.......... 01.0473 16.12
340004........... 01.4821 15.33 340093........... 01.1219 11.99 350013........... 01.1213 13.52 360035........... 01.4870 18.47 360112.......... 01.7694 18.73
340005........... 01.1959 12.35 340094........... 01.3299 15.81 350014........... 01.1292 10.67 360036........... 01.1943 16.47 360113.......... 01.3410 17.59
340006........... 01.2424 13.41 340096........... 01.2368 14.57 350015........... 01.6105 15.84 360037........... 02.1138 18.67 360114.......... 01.0941 14.97
340007........... 01.1646 13.78 340097........... 01.1140 11.48 350016........... 00.9573 11.10 360038........... 01.4851 16.89 360115.......... 01.1422 16.96
340008........... 01.1839 15.73 340098........... 01.6430 16.25 350017........... 01.3380 14.02 360039........... 01.2839 14.64 360116.......... 01.0719 14.50
340009........... 01.5128 18.76 340099........... 01.1396 11.89 350018........... 01.1529 09.40 360040........... 01.2237 16.01 360118.......... 01.2795 15.25
340010........... 01.3154 14.82 340100........... 01.2221 ............ 350019........... 01.5841 17.16 360041........... 01.3393 16.68 360119.......... 01.2610 17.14
340011........... 01.0675 12.63 340101........... 01.0400 09.36 350020........... 01.3945 16.19 360042........... 01.1077 14.26 360120.......... 00.7566 17.54
340012........... 01.1415 14.03 340104........... 01.0198 07.49 350021........... 01.0545 10.29 360044........... 01.0741 14.22 360121.......... 01.2385 11.33
340013........... 01.2007 14.24 340105........... 01.3476 17.54 350023........... 01.0159 11.13 360045........... 01.4664 19.21 360122.......... 01.3830 16.72
340014........... 01.6077 18.79 340106........... 01.1342 15.13 350024........... 01.1481 09.39 360046........... 01.1350 16.35 360123.......... 01.2420 16.80
340015........... 01.2384 14.74 340107........... 01.2490 15.74 350025........... 00.9853 11.59 360047........... 01.0819 12.46 360124.......... 01.2029 16.36
340016........... 01.1034 13.82 340109........... 01.2985 14.37 350027........... 00.9928 12.22 360048........... 01.8354 20.28 360125.......... 01.1368 14.91
340017........... 01.2648 13.87 340111........... 01.1297 12.76 350029........... 00.8784 09.62 360049........... 01.3167 17.96 360126.......... 01.3162 15.84
340018........... 01.1897 13.17 340112........... 01.0327 13.95 350030........... 01.0248 14.92 360050........... 01.1898 12.14 360127.......... 01.0841 14.17
340019........... 01.1047 13.32 340113........... 01.9015 18.50 350033........... 00.9363 13.57 360051........... 01.5031 18.53 360128.......... 01.1327 13.72
340020........... 01.1829 18.53 340114........... 01.4419 18.30 350034........... 00.9722 13.40 360052........... 01.7019 16.61 360129.......... 01.0239 13.03
340021........... 01.3146 13.89 340115........... 01.5012 16.01 350035........... 00.9150 09.26 360054........... 01.2843 14.56 360130.......... 01.0624 13.04
340022........... 01.0912 13.65 340116........... 01.7630 19.73 350036........... 00.9025 09.81 360055........... 01.1905 16.33 360131.......... 01.2098 15.01
340023........... 01.3148 16.32 340119........... 01.2906 13.80 350038........... 01.0242 15.62 360056........... 01.3100 15.51 360132.......... 01.2464 17.42
340024........... 01.2490 13.00 340120........... 01.0998 12.06 350039........... 01.0200 12.62 360057........... 01.0694 12.44 360133.......... 01.4563 16.50
340025........... 01.1582 13.18 340121........... 01.0676 12.96 350041........... 01.0757 11.57 360058........... 01.1471 15.01 360134.......... 01.5554 17.39
340027........... 01.2180 13.68 340122........... 01.0174 10.85 350042........... 01.0638 12.64 360059........... 01.4852 18.80 360135.......... 01.2248 14.57
340028........... 01.3895 15.42 340123........... 01.1561 13.69 350043........... 01.5311 14.64 360062........... 01.5744 17.01 360136.......... 01.1219 13.65
340030........... 01.8664 17.35 340124........... 01.1012 13.00 350044........... 00.8323 08.90 360063........... 01.1006 14.42 360137.......... 01.5660 18.00
340031........... 01.0154 11.45 340125........... 01.4070 16.81 350047........... 01.1836 15.32 360064........... 01.4720 17.53 360139.......... 00.9743 12.05
340032........... 01.2730 15.54 340126........... 01.3373 15.32 350049........... 01.1917 09.83 360065........... 01.2478 15.01 360140.......... 01.0793 14.54
340034........... 01.2689 15.97 340127........... 01.2591 15.55 350050........... 01.0212 11.38 360066........... 01.2254 14.92 360141.......... 01.4062 18.14
340035........... 01.1578 15.17 340129........... 01.2608 17.74 350051........... 00.9812 12.48 360067........... 01.1037 11.39 360142.......... 01.0047 13.89
340036........... 01.1863 15.00 340130........... 01.3277 14.86 350053........... 00.8979 11.10 360068........... 01.5770 18.67 360143.......... 01.2457 16.82
340037........... 01.2307 15.38 340131........... 01.3162 14.95 350055........... 00.9022 11.18 360069........... 01.0222 15.61 360144.......... 01.2686 18.65
340038........... 01.1338 13.31 340132........... 01.2929 12.54 350056........... 00.9607 11.87 360070........... 01.5500 15.73 360145.......... 01.5316 15.26
340039........... 01.2821 16.55 340133........... 01.1581 14.11 350058........... 01.0392 11.33 360071........... 01.2514 13.91 360147.......... 01.1993 14.87
340040........... 01.8095 16.34 340136........... 00.9621 16.24 350060........... 00.9417 07.24 360072........... 01.1888 14.87 360148.......... 01.1771 14.28
340041........... 01.2477 14.67 340137........... 01.4470 12.18 350061........... 00.9998 12.32 360074........... 01.4126 16.37 360149.......... 01.1016 15.84
340042........... 01.1520 13.14 340138........... 01.2082 14.43 350063........... 00.9056 ............ 360075........... 01.4333 19.23 360150.......... 01.2634 16.63
340044........... 01.0454 10.39 340141........... 01.5716 17.23 350064........... 00.7266 ............ 360076........... 01.3244 15.95 360151.......... 01.3429 15.61
340045........... 01.0313 09.87 340142........... 01.2183 14.37 350065........... 00.9497 10.34 360077........... 01.4127 16.81 360152.......... 01.4841 16.22
340047........... 01.9026 16.64 340143........... 01.3561 17.58 350066........... 00.6282 ............ 360078........... 01.2640 17.46 360153.......... 01.1808 12.99
340048........... 01.2550 07.91 340144........... 01.2940 17.53 360001........... 01.2323 15.84 360079........... 01.6740 17.96 360154.......... 01.0409 11.51
340049........... 00.6445 15.08 340145........... 01.2767 17.27 360002........... 01.1529 14.33 360080........... 01.1344 14.11 360155.......... 01.3273 17.47
340050........... 01.1725 14.78 340146........... 01.0482 12.21 360003........... 01.6359 18.41 360081........... 01.3213 17.76 360156.......... 01.1358 16.04
340051........... 01.2111 15.20 340147........... 01.3460 15.44 360006........... 01.7533 18.70 360082........... 01.3202 17.76 360159.......... 01.2120 16.45
340052........... 01.0041 16.81 340148........... 01.4350 15.52 360007........... 01.0844 15.64 360083........... 01.3047 15.91 360161.......... 01.2557 18.08
340053........... 01.5889 17.14 340151........... 01.2065 13.47 360008........... 01.2054 14.53 360084........... 01.6037 16.81 360162.......... 01.2704 15.67
340054........... 01.0834 12.08 340153........... 01.9187 19.72 360009........... 01.3296 17.41 360085........... 01.7484 18.24 360163.......... 01.7580 18.19
340055........... 01.2149 15.33 340154........... 00.7709 14.62 360010........... 01.1670 14.28 360086........... 01.4146 15.83 360164.......... 00.8498 13.58
340060........... 01.1259 14.49 340155........... 01.4503 20.53 360011........... 01.2510 16.40 360087........... 01.3180 15.92 360165.......... 01.1135 13.53
340061........... 01.6405 17.49 340156........... 00.8069 ............ 360012........... 01.2347 17.96 360088........... 01.1443 14.18 360166.......... 01.1827 15.77
340063........... 01.0337 11.52 340158........... 01.1022 15.90 360013........... 01.1008 15.33 360089........... 01.0927 15.10 360169.......... 01.0869 16.28
340064........... 01.1706 14.10 340159........... 01.1219 14.10 360014........... 01.1323 14.98 360090........... 01.2451 17.34 360170.......... 01.1039 16.93
340065........... 01.1413 13.03 340160........... 01.1180 11.94 360015........... 01.4740 17.62 360091........... 01.2659 17.38 360172.......... 01.3416 15.90
340067........... 01.1663 12.63 340162........... 01.1545 16.42 360016........... 01.5331 17.03 360092........... 01.1827 16.42 360174.......... 01.2014 14.63
340068........... 01.3545 12.17 340164........... 01.3555 17.07 360017........... 01.7120 18.91 360093........... 01.2196 15.15 360175.......... 01.1433 15.64
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
360176........... 01.2248 12.33 370037........... 01.5493 15.41 370158........... 01.0610 12.52 380069........... 01.1795 15.99 390059.......... 01.3066 15.15
360177........... 01.2818 16.76 370038........... 00.9813 10.14 370159........... 01.3940 14.16 380070........... 01.1738 18.67 390060.......... 01.0939 14.69
360178........... 01.2340 14.42 370039........... 01.3153 17.35 370161........... 01.1890 16.35 380071........... 01.2559 21.69 390061.......... 01.3822 17.33
360179........... 01.2719 17.36 370040........... 01.0392 09.92 370163........... 00.8707 09.85 380072........... 01.0025 13.01 390062.......... 01.1696 14.09
360180........... 02.2227 20.03 370041........... 00.9755 12.74 370165........... 01.1611 10.92 380075........... 01.4450 17.91 390063.......... 01.6600 17.69
360184........... 00.6849 14.70 370042........... 00.8848 10.79 370166........... 01.1740 16.00 380078........... 01.1599 16.41 390064.......... 01.4458 15.00
360185........... 01.2022 15.85 370043........... 00.9379 10.62 370169........... 01.0425 10.00 380081........... 01.0894 15.77 390065.......... 01.2254 17.69
360186........... 01.2431 14.82 370045........... 01.0427 10.20 370170........... 00.9535 ............ 380082........... 01.2182 18.63 390066.......... 01.2539 16.74
360187........... 01.3438 16.03 370046........... 00.9964 12.64 370171........... 00.9910 ............ 380083........... 01.1281 16.57 390067.......... 01.7108 17.24
360188........... 01.0378 14.70 370047........... 01.2319 12.34 370172........... 00.8426 ............ 380084........... 01.2184 19.45 390068.......... 01.3492 16.97
360189........... 01.0691 14.46 370048........... 01.1252 11.45 370173........... 01.3753 ............ 380087........... 01.0448 12.17 390069.......... 01.2992 16.98
360192........... 01.3491 17.97 370049........... 01.3454 14.08 370176........... 01.2616 17.68 380088........... 00.9570 14.76 390070.......... 01.2744 18.70
360193........... 01.2861 12.74 370051........... 01.0287 10.47 370177........... 00.9702 09.39 380089........... 01.2714 19.78 390071.......... 01.0925 11.99
360194........... 01.1410 14.46 370054........... 01.2711 14.68 370178........... 01.0643 11.44 380090........... 01.2971 18.73 390072.......... 01.0780 14.85
360195........... 01.1565 16.45 370056........... 01.4481 14.44 370179........... 00.9595 12.90 380091........... 01.1836 22.18 390073.......... 01.5312 17.40
360197........... 01.1633 15.43 370057........... 01.1433 13.92 370180........... 01.0329 ............ 380897........... 05.0667 ............ 390074.......... 01.2080 15.50
360200........... 01.1548 10.65 370059........... 01.2120 12.34 370183........... 01.1452 11.67 390001........... 01.3135 16.25 390075.......... 01.3115 14.60
360203........... 01.1407 14.52 370060........... 01.1721 11.89 370186........... 00.9872 09.16 390002........... 01.3144 16.65 390076.......... 01.2674 18.93
360204........... 01.2206 15.73 370063........... 01.1624 11.88 370189........... 01.0572 09.26 390003........... 01.2008 15.23 390078.......... 01.0362 15.47
360210........... 01.1403 17.25 370064........... 01.0040 08.92 370190........... 01.7487 18.02 390004........... 01.4013 15.76 390079.......... 01.7080 15.49
360211........... 01.1989 15.45 370065........... 01.0748 13.47 380001........... 01.2783 17.45 390005........... 01.0346 13.42 390080.......... 01.2068 17.66
360212........... 01.4239 17.91 370069........... 01.0292 12.62 380002........... 01.1869 16.54 390006........... 01.7576 16.22 390081.......... 01.2676 18.98
360213........... 01.0787 14.45 370071........... 01.0867 10.25 380003........... 01.1786 16.59 390007........... 01.1965 17.30 390083.......... 01.1644 20.49
360218........... 01.2594 15.21 370072........... 00.9446 11.20 380004........... 01.7910 20.49 390008........... 01.1377 15.38 390084.......... 01.1687 14.93
360230........... 01.2992 18.07 370076........... 01.2250 10.80 380005........... 01.2181 17.60 390009........... 01.6017 16.14 390086.......... 01.0781 14.19
360231........... 01.0940 13.85 370077........... 01.2835 16.00 380006........... 01.3041 16.06 390010........... 01.2448 16.77 390088.......... 01.2592 18.26
360232........... 01.1276 19.54 370078........... 01.6119 15.06 380007........... 01.7992 20.52 390011........... 01.2140 15.72 390090.......... 01.7237 18.51
360234........... 01.3202 17.45 370079........... 00.8642 11.46 380008........... 01.1223 16.10 390012........... 01.1716 17.94 390091.......... 01.1489 17.98
360236........... 01.2249 16.91 370080........... 00.9664 10.78 380009........... 01.7368 21.31 390013........... 01.2016 15.66 390093.......... 01.1614 14.74
360238........... 00.9391 12.13 370082........... 01.1372 11.98 380010........... 01.0468 19.43 390014........... 01.2126 12.81 390095.......... 01.2000 12.94
360239........... 01.1661 18.03 370083........... 01.0324 10.50 380011........... 01.2304 13.31 390015........... 01.1710 11.85 390096.......... 01.2556 15.43
360240........... 00.5874 13.30 370084........... 01.0576 09.02 380013........... 01.2228 18.80 390016........... 01.1682 14.81 390097.......... 01.3062 19.40
360241........... 00.5767 16.05 370085........... 00.9076 12.29 380014........... 01.3457 17.78 390017........... 01.1837 13.52 390098.......... 01.7393 18.83
360242........... 01.4531 ............ 370086........... 01.1849 09.55 380017........... 01.7410 20.25 390018........... 01.2111 17.81 390100.......... 01.6734 17.60
360243........... 00.8587 15.30 370089........... 01.2783 11.60 380018........... 01.7734 17.51 390019........... 01.1287 14.54 390101.......... 01.2779 15.00
360244........... 00.8677 15.00 370091........... 01.6317 14.59 380019........... 01.3337 17.00 390022........... 01.3757 19.40 390102.......... 01.3177 19.48
360245........... 00.9312 ............ 370092........... 01.1097 11.69 380020........... 01.4100 17.79 390023........... 01.2541 18.52 390103.......... 01.0523 14.93
360246........... 00.7017 ............ 370093........... 01.7807 18.82 380021........... 01.2025 18.54 390024........... 00.7674 19.86 390104.......... 01.0682 14.28
370001........... 01.6742 15.99 370094........... 01.4221 16.65 380022........... 01.1506 18.26 390025........... 00.8488 14.06 390106.......... 00.9776 14.65
370002........... 01.2432 12.02 370095........... 00.9134 10.73 380023........... 01.2567 17.05 390026........... 01.2268 18.67 390107.......... 01.1971 17.38
370004........... 01.3488 12.31 370097........... 01.3486 18.53 380025........... 01.2654 19.95 390027........... 01.8595 21.14 390108.......... 01.3358 19.07
370005........... 01.0848 10.63 370099........... 01.1990 12.08 380026........... 01.3532 15.93 390028........... 01.7396 17.66 390109.......... 01.1643 13.33
370006........... 01.1965 14.06 370100........... 01.0402 11.67 380027........... 01.2557 18.02 390029........... 01.6963 20.55 390110.......... 01.5632 17.01
370007........... 01.0943 12.64 370103........... 00.9220 10.13 380029........... 01.1864 15.62 390030........... 01.2227 15.45 390111.......... 01.7371 24.12
370008........... 01.3601 15.20 370105........... 02.0584 13.71 380031........... 01.0185 15.90 390031........... 01.1572 15.91 390112.......... 01.1465 11.94
370011........... 01.1202 12.74 370106........... 01.4756 16.09 380033........... 01.6644 19.92 390032........... 01.1998 16.58 390113.......... 01.2458 15.48
370012........... 00.8876 10.18 370108........... 01.1799 09.27 380035........... 01.3248 16.28 390035........... 01.2755 16.49 390114.......... 01.0999 19.32
370013........... 01.6766 17.44 370110........... 00.9905 12.01 380036........... 01.0851 16.10 390036........... 01.2422 16.78 390115.......... 01.2944 20.16
370014........... 01.2974 16.19 370112........... 01.0396 12.14 380037........... 01.2723 18.94 390037........... 01.2070 17.47 390116.......... 01.1704 19.33
370015........... 01.2134 13.44 370113........... 01.0878 12.37 380038........... 01.2241 20.37 390039........... 01.1191 15.31 390117.......... 01.1667 14.44
370016........... 01.3670 13.98 370114........... 01.5707 14.55 380039........... 01.2874 17.76 390040........... 00.9433 12.20 390118.......... 01.2335 15.42
370017........... 01.0433 10.30 370121........... 01.3274 12.36 380040........... 01.2957 17.85 390041........... 01.2547 17.32 390119.......... 01.3588 16.18
370018........... 01.3079 15.58 370122........... 01.2328 08.56 380042........... 01.1274 15.46 390042........... 01.3011 18.62 390121.......... 01.2671 16.71
370019........... 01.2293 10.56 370123........... 01.2574 13.79 380047........... 01.6528 16.43 390043........... 01.0180 13.85 390122.......... 01.0577 14.83
370020........... 01.2820 11.37 370125........... 01.0120 10.72 380048........... 01.0343 13.09 390044........... 01.5507 16.77 390123.......... 01.2262 18.61
370021........... 00.9875 09.49 370126........... 01.1444 08.72 380050........... 01.2490 15.78 390045........... 01.4345 16.03 390125.......... 01.2525 13.82
370022........... 01.3014 13.75 370131........... 00.9852 11.32 380051........... 01.5054 17.52 390046........... 01.4391 16.75 390126.......... 01.2662 19.95
370023........... 01.3318 13.57 370133........... 01.1343 09.86 380052........... 01.2264 15.01 390047........... 01.6983 19.69 390127.......... 01.1644 19.24
370025........... 01.3973 13.86 370138........... 01.1207 14.59 380055........... 01.1956 22.55 390048........... 01.1614 14.69 390128.......... 01.1296 16.84
370026........... 01.3731 15.30 370139........... 01.0268 11.63 380056........... 01.1050 14.28 390049........... 01.5118 18.00 390130.......... 01.1441 15.37
370028........... 01.6725 15.88 370140........... 01.0131 10.01 380060........... 01.4528 20.35 390050........... 02.0235 19.37 390131.......... 01.2126 16.10
370029........... 01.2138 11.58 370141........... 01.3868 19.42 380061........... 01.5793 19.88 390051........... 02.0975 21.73 390132.......... 01.1890 19.58
370030........... 01.2942 12.91 370146........... 01.1216 10.05 380062........... 01.1231 12.73 390052........... 01.1504 15.00 390133.......... 01.7108 19.44
370032........... 01.3970 14.59 370148........... 01.3444 17.30 380063........... 01.2107 21.13 390054........... 01.1256 12.61 390135.......... 01.2409 19.50
370033........... 01.1186 10.55 370149........... 01.1819 13.75 380064........... 01.3004 18.01 390055........... 01.6914 19.09 390136.......... 01.2243 15.15
370034........... 01.1527 11.98 370153........... 01.1515 13.77 380065........... 01.0301 17.02 390056........... 01.1092 15.26 390137.......... 01.1478 15.60
370035........... 01.4806 14.39 370154........... 00.9920 11.80 380066........... 01.3889 15.59 390057........... 01.2594 17.71 390138.......... 01.1888 17.08
370036........... 00.9836 08.68 370156........... 01.1498 12.70 380068........... 01.0179 18.42 390058........... 01.3011 16.54 390139.......... 01.4318 22.12
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Page 13 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
390142........... 01.6493 23.01 390229........... 01.5597 17.58 400106........... 01.1979 07.10 420062........... 01.4210 16.13 430062.......... 00.8312 10.11
390145........... 01.2560 18.61 390231........... 01.3301 21.13 400109........... 01.5773 08.48 420064........... 01.1426 12.08 430064.......... 01.1215 10.40
390146........... 01.2364 15.78 390233........... 01.3497 16.52 400110........... 01.1538 07.68 420065........... 01.3385 15.64 430065.......... 01.0568 10.46
390147........... 01.2439 17.19 390235........... 01.8225 22.16 400111........... 01.1355 07.53 420066........... 00.9695 13.59 430066.......... 00.9866 11.12
390148........... 01.0515 16.31 390236........... 01.2383 15.25 400112........... 01.1379 06.25 420067........... 01.2428 14.80 430073.......... 01.1130 12.81
390149........... 01.1993 16.23 390237........... 01.5130 18.07 400113........... 01.1794 06.20 420068........... 01.2142 14.59 430076.......... 01.0582 08.32
390150........... 01.2176 17.11 390238........... 01.1068 16.03 400114........... 01.0547 07.18 420069........... 01.1241 12.28 430077.......... 01.5249 14.81
390151........... 01.2336 16.00 390242........... 01.3050 17.49 400115........... 00.9663 06.66 420070........... 01.2769 14.64 430079.......... 00.9633 10.06
390152........... 01.0868 15.09 390244........... 00.8984 12.14 400117........... 01.1815 07.29 420071........... 01.3506 15.13 430080.......... 01.2387 09.20
390153........... 01.2563 20.26 390245........... 01.3528 21.26 400118........... 01.1587 07.27 420072........... 00.9383 09.89 430081.......... 00.9166 ............
390154........... 01.1597 13.46 390246........... 01.1839 15.09 400120........... 01.3397 08.45 420073........... 01.3086 17.03 430082.......... 00.8013 ............
390155........... 01.2563 20.35 390247........... 01.0549 17.29 400122........... 01.0084 ............ 420074........... 00.9685 10.42 430083.......... 00.8691 ............
390156........... 01.3401 20.05 390249........... 01.0228 11.44 400123........... 01.1291 ............ 420075........... 00.9846 12.37 430084.......... 00.8696 ............
390157........... 01.2131 16.84 390256........... 01.7580 18.11 400124........... 02.9908 ............ 420076........... 01.2141 20.07 430085.......... 00.8846 ............
390158........... 01.2801 17.26 390258........... 01.2812 19.11 410001........... 01.3209 21.02 420078........... 01.7180 18.78 430086.......... 00.8381 ............
390159........... 01.3236 19.13 390260........... 01.2477 16.81 410002........... 01.1232 18.61 420079........... 01.4689 15.84 430087.......... 00.9519 08.98
390160........... 01.1792 17.04 390262........... 01.8522 16.06 410004........... 01.4044 18.86 420080........... 01.2119 16.23 430088.......... 00.8629 10.78
390161........... 01.1996 13.09 390263........... 01.4942 18.36 410005........... 01.3453 20.92 420081........... 00.8155 17.83 440001.......... 01.0939 11.94
390162........... 01.2775 17.98 390265........... 01.2981 16.95 410006........... 01.2029 19.91 420082........... 01.4336 16.58 440002.......... 01.5976 14.74
390163........... 01.1488 16.57 390266........... 01.0921 15.78 410007........... 01.6612 19.87 420083........... 01.2220 16.12 440003.......... 01.0925 13.69
390164........... 02.0047 18.51 390267........... 01.2074 18.58 410008........... 01.1993 19.67 420084........... 01.0603 11.81 440006.......... 01.3803 16.17
390166........... 01.1007 16.02 390268........... 01.2848 18.08 410009........... 01.3191 19.81 420085........... 01.2760 16.15 440007.......... 01.0239 10.86
390167........... 01.2698 19.78 390270........... 01.3114 15.08 410010........... 01.0205 23.33 420086........... 01.4183 16.19 440008.......... 00.9799 13.98
390168........... 01.1845 16.49 390272........... 00.5336 21.19 410011........... 01.2089 20.92 420087........... 01.6085 15.15 440009.......... 01.0384 11.29
390169........... 01.1987 16.06 390275........... 00.4818 ............ 410012........... 01.6430 18.11 420088........... 01.2268 14.81 440010.......... 00.9658 11.46
390170........... 01.8123 19.75 390277........... 00.5117 17.31 410013........... 01.2305 22.52 420089........... 01.3309 19.45 440011.......... 01.2416 14.86
390171........... 01.1326 15.68 390278........... 00.8304 15.98 420002........... 01.3547 19.58 420091........... 00.5427 ............ 440012.......... 01.3028 15.12
390172........... 01.2496 18.70 390279........... 01.0851 ............ 420004........... 01.8499 16.90 430004........... 01.0743 13.84 440014.......... 01.0875 11.29
390173........... 01.1593 16.62 400001........... 01.1960 06.55 420005........... 01.1442 12.82 430005........... 01.2615 13.13 440015.......... 01.5121 14.85
390174........... 01.6015 22.20 400002........... 01.3854 07.95 420006........... 01.2264 15.90 430007........... 01.1788 11.22 440016.......... 00.9771 10.44
390176........... 01.1440 15.39 400003........... 01.1694 07.81 420007........... 01.5334 15.37 430008........... 01.2466 13.24 440017.......... 01.5485 16.57
390178........... 01.2716 16.67 400004........... 01.2066 07.64 420009........... 01.2458 14.71 430009........... 01.1238 10.57 440018.......... 01.3789 16.57
390179........... 01.2340 21.06 400005........... 01.0590 05.93 420010........... 01.0673 13.19 430010........... 01.1450 08.61 440019.......... 01.5427 17.86
390180........... 01.4641 21.46 400006........... 01.1799 06.55 420011........... 01.0843 13.76 430011........... 01.3361 12.88 440020.......... 01.1773 16.04
390181........... 01.0502 19.17 400007........... 01.1932 06.70 420014........... 01.0055 11.42 430012........... 01.3001 13.57 440022.......... 01.1406 12.73
390183........... 01.1202 26.56 400008........... 01.2303 06.13 420015........... 01.3023 16.41 430013........... 01.2229 14.39 440023.......... 00.9996 10.57
390184........... 01.1498 16.80 400009........... 00.9715 06.80 420016........... 01.0885 15.23 430014........... 01.3163 15.40 440024.......... 01.2947 14.98
390185........... 01.1490 15.23 400010........... 00.9391 07.03 420018........... 01.5734 16.53 430015........... 01.2045 13.41 440025.......... 01.1006 12.43
390186........... 00.9995 15.14 400011........... 01.0323 07.66 420019........... 01.1590 13.94 430016........... 01.7269 16.10 440026.......... 00.8359 15.50
390189........... 01.1284 20.06 400012........... 01.1224 07.74 420020........... 01.2261 14.85 430018........... 00.9470 12.97 440029.......... 01.2470 14.99
390191........... 01.0646 13.79 400013........... 01.0683 07.16 420022........... 00.9928 15.20 430022........... 00.9728 09.90 440030.......... 01.1284 12.38
390192........... 01.1099 15.96 400014........... 01.3430 07.16 420023........... 01.3542 17.43 430023........... 00.9374 08.41 440031.......... 01.0313 12.09
390193........... 01.1706 14.51 400015........... 01.2899 09.68 420026........... 01.8584 17.53 430024........... 00.9749 11.02 440032.......... 00.9747 10.65
390194........... 01.1110 17.87 400016........... 01.3243 09.18 420027........... 01.3190 14.02 430025........... 01.0084 09.69 440033.......... 01.0762 16.12
390195........... 01.7079 20.83 400017........... 01.1462 ............ 420028........... 01.1146 11.11 430026........... 00.9364 10.09 440034.......... 01.4203 17.40
390196........... 01.2085 ............ 400018........... 01.2633 09.43 420029........... 01.7580 13.19 430027........... 01.7464 15.94 440035.......... 01.2694 14.46
390197........... 01.2695 18.10 400019........... 01.5561 08.81 420030........... 01.2053 16.33 430028........... 01.0483 11.61 440039.......... 01.5723 17.12
390198........... 01.2348 13.92 400021........... 01.3612 07.76 420031........... 01.0216 10.68 430029........... 01.0118 12.71 440040.......... 00.9616 13.60
390199........... 01.2443 14.43 400022........... 01.3135 08.22 420033........... 01.1545 17.58 430031........... 00.9741 10.28 440041.......... 00.8480 13.66
390200........... 01.0160 14.23 400024........... 01.0605 07.19 420035........... 00.7681 11.27 430033........... 01.0813 12.29 440046.......... 01.3210 13.16
390201........... 01.2887 17.68 400026........... 00.9117 06.70 420036........... 01.2337 14.65 430034........... 01.0273 10.85 440047.......... 00.9167 11.74
390203........... 01.2616 19.27 400027........... 01.1374 07.31 420037........... 01.2435 18.15 430036........... 00.9902 08.36 440048.......... 01.7468 15.49
390204........... 01.2898 17.68 400028........... 01.0796 06.70 420038........... 01.2236 12.41 430037........... 00.9860 11.79 440049.......... 01.6463 15.50
390205........... 01.2590 21.76 400029........... 01.1194 06.21 420039........... 01.1026 13.26 430038........... 00.9967 08.43 440050.......... 01.1715 14.53
390206........... 01.3254 18.69 400031........... 01.0063 07.72 420040........... 01.1984 13.54 430039........... 01.0133 09.15 440051.......... 00.9327 12.36
390209........... 01.0000 13.32 400032........... 01.1308 07.65 420042........... 01.2081 11.67 430040........... 00.9164 11.35 440052.......... 01.1899 13.51
390211........... 01.2337 16.85 400044........... 01.1772 08.60 420043........... 01.2471 15.44 430041........... 00.9265 11.35 440053.......... 01.2499 14.72
390213........... 00.9994 13.22 400048........... 01.0208 07.77 420044........... 01.2187 14.95 430042........... 01.1139 15.25 440054.......... 01.0354 13.96
390215........... 01.1305 18.84 400061........... 01.6026 11.46 420048........... 01.1489 13.91 430043........... 01.1531 13.05 440056.......... 01.0828 11.91
390217........... 01.2153 17.46 400079........... 01.2889 08.92 420049........... 01.2240 14.11 430044........... 00.9339 11.74 440057.......... 01.0210 12.82
390219........... 01.2176 16.47 400087........... 01.2064 06.69 420051........... 01.5558 16.53 430047........... 01.1189 11.70 440058.......... 01.1717 14.16
390220........... 01.1618 17.74 400088........... 00.5413 06.59 420053........... 01.0975 14.06 430048........... 01.2329 14.21 440059.......... 01.1602 12.81
390222........... 01.2537 18.22 400094........... 01.0019 06.74 420054........... 01.2228 16.05 430049........... 00.9176 10.80 440060.......... 01.2069 12.90
390223........... 01.6707 20.96 400098........... 01.2598 07.55 420055........... 01.0796 13.01 430051........... 00.9670 11.03 440061.......... 01.2179 13.93
390224........... 00.9309 12.60 400102........... 01.1275 07.49 420056........... 01.0988 12.61 430054........... 00.9900 11.56 440063.......... 01.5118 16.27
390225........... 01.2201 15.00 400103........... 01.4683 08.79 420057........... 01.1818 12.00 430056........... 00.8828 09.09 440064.......... 01.0944 13.98
390226........... 01.6953 20.96 400104........... 01.2502 07.79 420059........... 01.0068 12.84 430057........... 00.9116 10.70 440065.......... 01.1869 15.06
390228........... 01.2050 17.13 400105........... 01.1836 07.14 420061........... 01.2152 14.38 430060........... 00.9919 08.54 440067.......... 01.0942 15.26
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Page 14 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
440068........... 01.1924 15.49 440184........... 01.4333 18.42 450081........... 01.1267 13.12 450188........... 01.0305 11.94 450337.......... 01.1915 13.85
440069........... 01.1352 13.16 440185........... 01.0961 16.67 450082........... 00.9950 11.00 450190........... 01.1301 18.27 450340.......... 01.3291 14.37
440070........... 00.9900 12.32 440186........... 01.1356 18.57 450083........... 01.6364 16.12 450191........... 01.1551 15.56 450341.......... 00.9969 14.42
440071........... 01.4078 14.54 440187........... 01.1848 15.17 450085........... 01.1237 12.96 450192........... 01.0660 16.37 450346.......... 01.3618 15.28
440072........... 01.3492 11.32 440189........... 01.4962 16.74 450087........... 01.5071 19.75 450193........... 02.0687 18.20 450347.......... 01.1741 15.06
440073........... 01.3062 15.18 440192........... 01.1121 13.88 450090........... 01.1174 11.65 450194........... 01.2573 15.44 450348.......... 01.0163 10.55
440074........... 00.8046 12.15 440193........... 01.2591 17.17 450092........... 01.1998 13.55 450195........... 01.3166 17.30 450349.......... 01.1022 23.66
440078........... 01.0167 11.32 440194........... 01.3015 18.28 450094........... 01.3927 19.86 450196........... 01.4344 14.92 450351.......... 01.2671 22.84
440079........... 00.7294 ............ 440196........... 00.9419 14.86 450096........... 01.4510 16.16 450197........... 01.1705 16.99 450352.......... 01.2159 15.55
440081........... 01.1648 12.12 440197........... 01.3731 19.01 450097........... 01.4266 17.31 450200........... 01.4866 14.68 450353.......... 01.2255 15.17
440082........... 01.8422 19.28 440200........... 01.1180 16.36 450098........... 01.2099 12.67 450201........... 00.9941 13.72 450355.......... 01.0862 12.14
440083........... 01.2565 09.96 440203........... 00.9907 13.79 450099........... 01.2034 17.78 450203........... 01.2823 14.24 450358.......... 02.0362 17.60
440084........... 01.1792 09.97 440205........... 01.2429 12.39 450101........... 01.3505 14.37 450209........... 01.4285 15.63 450362.......... 01.0606 10.60
440087........... 01.0550 12.47 440206........... 00.9048 07.60 450102........... 01.6868 17.28 450210........... 01.1085 13.40 450365.......... 00.9335 ............
440090........... 01.0419 12.38 450002........... 01.4879 15.52 450104........... 01.2728 12.51 450211........... 01.2519 13.86 450366.......... 01.4727 17.50
440091........... 01.5427 15.71 450004........... 01.1356 11.11 450107........... 01.5365 16.38 450213........... 01.3483 13.57 450369.......... 01.1119 11.81
440095........... 01.0850 19.37 450005........... 01.1437 14.76 450108........... 00.9963 11.41 450214........... 01.4106 17.51 450370.......... 01.2054 12.06
440100........... 01.1012 12.24 450007........... 01.2579 12.30 450109........... 01.2270 13.96 450217........... 01.0888 10.11 450371.......... 01.1528 10.89
440102........... 01.0848 12.02 450008........... 01.3856 14.03 450110........... 01.2151 12.04 450219........... 01.0391 11.49 450372.......... 01.3496 16.37
440103........... 01.2255 16.56 450010........... 01.3304 13.63 450111........... 01.2528 17.62 450221........... 01.0170 13.07 450373.......... 01.1627 11.09
440104........... 01.5383 16.76 450011........... 01.5514 15.71 450112........... 01.2586 12.44 450222........... 01.6899 22.10 450374.......... 00.9156 11.01
440105........... 01.2990 16.68 450014........... 01.1780 12.60 450113........... 01.2399 13.96 450224........... 01.3712 18.01 450376.......... 01.4802 10.63
440109........... 01.1312 11.86 450015........... 01.5222 13.57 450118........... 01.4704 15.64 450229........... 01.4656 14.60 450378.......... 01.1188 17.92
440110........... 00.9537 13.67 450016........... 01.7132 15.62 450119........... 01.3313 14.65 450231........... 01.5167 14.06 450379.......... 01.6128 19.58
440111........... 01.2061 18.15 450018........... 01.5558 18.40 450121........... 01.4436 16.93 450233........... 00.9975 12.70 450381.......... 00.9521 10.67
440114........... 01.0382 11.65 450020........... 01.0126 13.75 450123........... 01.0926 19.97 450234........... 00.9638 10.46 450388.......... 01.6247 16.36
440115........... 01.0509 13.80 450021........... 01.9184 17.59 450124........... 01.4947 16.86 450235........... 00.9574 11.12 450389.......... 01.2064 15.73
440120........... 01.4669 15.49 450023........... 01.3907 13.94 450126........... 01.4006 16.17 450236........... 01.1383 15.95 450393.......... 01.2687 18.35
440121........... 01.0316 11.93 450024........... 01.3103 12.06 450127........... 00.9875 09.55 450237........... 01.4890 14.79 450395.......... 01.0503 15.15
440125........... 01.4769 15.68 450025........... 01.4786 11.79 450128........... 01.2492 12.38 450239........... 01.1694 12.14 450399.......... 01.0567 12.15
440130........... 01.1033 13.75 450027........... 01.4255 18.45 450130........... 01.5034 14.99 450241........... 00.8571 13.09 450400.......... 01.1692 14.98
440131........... 01.0620 12.90 450028........... 01.4594 16.21 450131........... 01.2609 18.39 450243........... 00.8654 10.77 450403.......... 01.2576 18.67
440132........... 01.1099 12.72 450029........... 01.4332 11.79 450132........... 01.4818 14.53 450246........... 00.9884 13.87 450410.......... 01.1329 17.45
440133........... 01.4574 17.01 450031........... 01.6847 16.35 450133........... 01.5462 15.33 450249........... 00.9242 ............ 450411.......... 00.9858 11.22
440135........... 01.4142 18.36 450032........... 01.2429 12.31 450135........... 01.7045 16.49 450250........... 01.0123 15.96 450417.......... 01.0278 12.26
440136........... 01.0699 15.73 450033........... 01.6427 14.59 450137........... 01.4311 18.08 450253........... 01.1356 10.67 450418.......... 01.3519 15.53
440137........... 01.0092 11.19 450034........... 01.5016 15.36 450140........... 00.7344 16.53 450258........... 01.1194 10.75 450419.......... 01.2387 16.21
440141........... 01.1491 11.96 450035........... 01.4607 16.70 450142........... 01.3693 18.81 450259........... 01.1507 17.45 450422.......... 00.6548 24.82
440142........... 01.0856 09.45 450037........... 01.5301 16.15 450143........... 01.0250 10.41 450264........... 00.8415 11.39 450423.......... 01.3000 ............
440143........... 01.0555 15.56 450039........... 01.4291 16.82 450144........... 01.1483 14.30 450269........... 01.0799 13.62 450424.......... 01.2537 15.64
440144........... 01.1983 16.68 450040........... 01.5737 16.30 450145........... 00.8845 14.64 450270........... 01.0762 08.60 450429.......... 01.0341 12.10
440145........... 01.0552 10.86 450042........... 01.6099 15.48 450146........... 00.9848 15.24 450271........... 01.1226 14.20 450431.......... 01.5897 15.79
440146........... 01.0442 11.21 450043........... 01.4581 12.46 450147........... 01.3446 17.43 450272........... 01.2134 15.57 450438.......... 01.0859 16.17
440147........... 00.8996 14.36 450044........... 01.5896 21.42 450148........... 01.2058 17.15 450276........... 01.0078 08.60 450446.......... 00.9648 11.85
440148........... 01.2042 17.31 450046........... 01.3861 12.38 450149........... 01.3434 16.64 450278........... 01.0542 10.91 450447.......... 01.3192 16.08
440149........... 01.2333 14.70 450047........... 01.1028 10.47 450150........... 00.9529 12.20 450280........... 01.2975 15.07 450450.......... 01.0270 12.30
440150........... 01.2405 16.92 450050........... 01.2011 13.96 450151........... 01.1434 12.24 450283........... 01.0786 11.56 450451.......... 01.0230 15.22
440151........... 01.2866 15.49 450051........... 01.5610 17.57 450152........... 01.2882 14.74 450286........... 01.0253 12.11 450457.......... 01.6927 16.01
440152........... 01.5898 15.64 450052........... 01.1106 12.62 450153........... 01.5697 16.68 450288........... 01.2285 12.61 450460.......... 01.0146 13.30
440153........... 01.2676 14.17 450053........... 01.0770 12.87 450154........... 01.1375 11.46 450289........... 01.3342 15.80 450462.......... 01.8283 16.43
440154........... 00.7750 ............ 450054........... 01.6860 18.29 450155........... 01.0677 14.52 450292........... 01.3450 15.96 450464.......... 00.9906 16.00
440156........... 01.4968 18.20 450055........... 01.1119 10.81 450157........... 01.0367 12.65 450293........... 00.9793 14.15 450465.......... 01.2348 15.09
440157........... 01.0510 11.50 450056........... 01.6735 16.56 450160........... 00.8887 16.83 450296........... 01.2606 18.17 450467.......... 01.0235 12.74
440159........... 01.2081 15.33 450058........... 01.5112 13.63 450162........... 01.2822 16.42 450297........... 01.1630 12.08 450469.......... 01.3055 15.75
440160........... 00.8975 12.59 450059........... 01.3682 12.34 450163........... 01.0860 15.46 450299........... 01.4736 16.11 450473.......... 00.9937 14.40
440161........... 01.5956 18.01 450060........... 01.3953 20.85 450164........... 01.0303 12.98 450303........... 00.8890 09.86 450475.......... 01.1083 12.45
440166........... 01.4674 16.87 450063........... 01.0644 09.22 450165........... 01.0299 13.46 450306........... 01.0605 11.18 450484.......... 01.5565 18.13
440168........... 01.0251 13.13 450064........... 01.5477 15.22 450166........... 01.0477 10.59 450307........... 00.9588 12.42 450488.......... 01.2262 17.64
440170........... 01.2996 17.76 450065........... 01.0185 14.74 450169........... 00.8598 13.97 450309........... 01.0837 10.76 450489.......... 00.9447 14.79
440173........... 01.4961 15.39 450068........... 01.7485 17.99 450170........... 01.0853 11.40 450315........... 01.2025 18.72 450497.......... 01.1794 10.99
440174........... 00.9329 13.46 450070........... 01.1750 15.54 450176........... 01.2765 12.94 450320........... 01.4029 15.82 450498.......... 01.0338 11.09
440175........... 01.1863 16.89 450072........... 01.2483 16.10 450177........... 01.1260 12.07 450321........... 00.8595 11.25 450508.......... 01.5985 14.80
440176........... 01.2955 16.07 450073........... 01.1646 11.84 450178........... 01.1507 14.80 450322........... 00.9685 16.67 450514.......... 01.1152 16.87
440178........... 01.2240 18.45 450074........... 01.2961 15.77 450179........... 00.9483 12.39 450324........... 01.5439 15.52 450517.......... 00.9483 11.05
440180........... 01.0623 15.48 450076........... 01.4760 ............ 450181........... 00.9540 13.38 450325........... 01.2659 08.99 450518.......... 01.4148 16.16
440181........... 01.0116 10.47 450078........... 01.0118 12.03 450184........... 01.4931 19.38 450327........... 01.0095 10.48 450523.......... 01.5408 19.98
440182........... 00.9546 14.12 450079........... 01.4836 19.22 450185........... 01.0401 08.32 450330........... 01.1748 15.70 450530.......... 01.3057 23.01
440183........... 01.5116 16.14 450080........... 01.2476 14.23 450187........... 01.3040 14.52 450334........... 00.9993 11.28 450534.......... 00.9862 13.79
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Page 15 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
450535........... 01.2010 14.83 450666........... 01.2579 17.39 450775........... 01.2483 15.68 490001........... 01.1080 17.17 490095.......... 01.2300 15.14
450537........... 01.3977 16.04 450668........... 01.5902 16.93 450776........... 00.8654 ............ 490002........... 01.0324 13.41 490097.......... 01.1434 12.72
450538........... 01.1933 19.68 450669........... 01.2433 18.67 450777........... 01.0252 ............ 490003........... 00.6498 15.73 490098.......... 01.3158 10.87
450539........... 01.2074 15.30 450670........... 01.2989 15.92 450778........... 00.8639 ............ 490004........... 01.2172 15.40 490099.......... 00.9645 13.59
450544........... 01.2983 19.62 450672........... 01.6454 18.49 450779........... 01.2592 ............ 490005........... 01.4575 15.40 490100.......... 01.3164 14.13
450545........... 01.2482 16.20 450673........... 01.0977 09.93 450780........... 01.8496 ............ 490006........... 01.1436 11.75 490101.......... 01.1140 20.90
450546........... 01.2735 ............ 450674........... 00.8239 19.25 450781........... 01.4437 ............ 490007........... 02.0141 15.29 490104.......... 00.9634 14.01
450547........... 00.9882 12.78 450675........... 01.3922 18.32 450782........... 01.3920 ............ 490008........... 01.0542 20.97 490105.......... 00.7030 14.74
450550........... 01.0579 19.47 450677........... 01.3392 14.89 450783........... 01.1159 ............ 490009........... 01.6730 17.21 490106.......... 00.8216 15.97
450551........... 01.1708 12.60 450678........... 01.5634 19.52 450785........... 00.7492 ............ 490010........... 01.0901 15.40 490107.......... 01.2613 19.56
450558........... 01.7522 17.98 450681........... 01.5777 14.98 450786........... 00.8128 ............ 490011........... 01.3316 16.08 490108.......... 00.8199 15.00
450559........... 00.8813 11.92 450682........... 01.2617 17.46 450787........... 01.0967 ............ 490012........... 01.1120 13.90 490109.......... 00.8839 14.56
450561........... 01.6573 14.93 450683........... 01.3232 19.60 450897........... 04.8995 ............ 490013........... 01.1674 13.67 490110.......... 01.1808 16.61
450563........... 01.2560 19.54 450684........... 01.2661 17.89 460001........... 01.6448 19.60 490014........... 01.6098 19.87 490111.......... 01.1888 14.35
450565........... 01.3346 13.56 450686........... 01.5852 15.83 460003........... 01.5819 17.26 490015........... 01.4066 13.85 490112.......... 01.6083 18.29
450570........... 01.0642 11.27 450688........... 01.3813 17.47 460004........... 01.7181 17.97 490017........... 01.3796 15.60 490113.......... 01.2904 19.16
450571........... 01.4774 13.89 450690........... 01.3717 13.94 460005........... 01.3773 17.46 490018........... 01.2066 15.56 490114.......... 01.0637 13.79
450573........... 00.9893 11.89 450691........... 01.5282 17.57 460006........... 01.2694 17.06 490019........... 01.1141 13.78 490115.......... 01.2172 12.44
450574........... 01.0190 13.95 450694........... 01.2157 16.02 460007........... 01.3061 16.89 490020........... 01.1569 13.14 490116.......... 01.1712 16.25
450575........... 00.9800 20.31 450696........... 01.6328 19.75 460008........... 01.4546 15.99 490021........... 01.4360 15.75 490117.......... 01.0851 11.43
450578........... 00.9339 14.41 450697........... 01.3803 13.76 460009........... 01.6705 16.97 490022........... 01.2403 15.68 490118.......... 01.6553 19.99
450580........... 01.1564 12.24 450698........... 00.9347 10.48 460010........... 02.0520 19.06 490023........... 01.2259 15.65 490119.......... 01.3118 15.33
450583........... 00.9535 11.81 450700........... 00.9252 11.65 460011........... 01.4141 15.56 490024........... 01.6081 15.30 490120.......... 01.3684 15.93
450584........... 01.1623 10.95 450702........... 01.4902 18.26 460013........... 01.5193 14.87 490027........... 01.1680 12.49 490122.......... 01.2882 20.07
450586........... 01.0132 12.39 450703........... 01.4734 19.40 460014........... 01.0277 11.67 490028........... 01.3351 17.29 490123.......... 01.1184 14.53
450587........... 01.2756 17.28 450704........... 01.4047 17.61 460015........... 01.2618 17.61 490030........... 01.2464 10.92 490124.......... 01.1835 15.29
450591........... 01.1456 13.04 450705........... 00.7935 15.32 460016........... 00.8759 12.40 490031........... 01.0948 11.91 490126.......... 01.2574 13.61
450596........... 01.2553 16.69 450706........... 01.2186 21.01 460017........... 01.3138 15.18 490032........... 01.6856 19.11 490127.......... 01.0440 13.33
450597........... 01.0363 14.80 450709........... 01.1486 17.85 460018........... 00.9460 11.56 490033........... 01.1445 14.76 490130.......... 01.1862 14.96
450603........... 00.8683 13.23 450711........... 01.6880 16.47 460019........... 00.9390 13.93 490035........... 01.1308 11.43 490131.......... 00.9698 12.94
450604........... 01.2527 12.31 450712........... 00.9634 12.74 460020........... 00.9137 12.14 490037........... 01.1560 11.92 500001.......... 01.2923 18.93
450605........... 01.2779 18.23 450713........... 01.4156 17.31 460021........... 01.3933 17.13 490038........... 01.2779 12.36 500002.......... 01.4081 17.35
450607........... 00.9751 14.12 450715........... 01.2985 21.28 460022........... 00.9647 17.88 490040........... 01.3651 19.78 500003.......... 01.2750 18.17
450609........... 00.9018 09.27 450716........... 01.2054 16.91 460023........... 01.1799 18.70 490041........... 01.2138 14.32 500005.......... 01.7725 21.33
450610........... 01.4548 16.20 450717........... 01.2345 20.68 460024........... 00.9251 13.00 490042........... 01.3575 14.34 500007.......... 01.3302 18.70
450614........... 01.0623 11.94 450718........... 01.2043 19.69 460025........... 00.7849 11.54 490043........... 01.2384 17.27 500008.......... 01.9158 20.34
450615........... 00.9587 09.07 450723........... 01.2865 17.31 460026........... 00.9363 17.49 490044........... 01.3124 15.46 500009.......... 01.2950 19.68
450617........... 01.3526 17.98 450724........... 01.2186 18.65 460027........... 00.9938 16.41 490045........... 01.1795 16.83 500011.......... 01.3334 18.64
450620........... 01.1012 08.97 450725........... 01.0629 17.55 460029........... 01.0725 16.94 490046........... 01.4632 16.26 500012.......... 01.5003 18.44
450623........... 01.1697 16.27 450726........... 00.9058 11.21 460030........... 01.1697 18.98 490047........... 01.0849 14.15 500014.......... 01.7367 20.69
450626........... 01.0495 14.93 450727........... 00.8975 08.79 460032........... 01.0006 15.30 490048........... 01.4870 15.77 500015.......... 01.3113 20.68
450628........... 00.9443 11.42 450728........... 00.9029 15.06 460033........... 00.9457 20.50 490050........... 01.3532 19.03 500016.......... 01.3509 20.11
450630........... 01.5457 23.91 450730........... 01.4172 19.15 460035........... 00.9211 15.04 490052........... 01.5250 14.03 500019.......... 01.2904 18.38
450631........... 01.6436 16.75 450732........... 01.1630 16.76 460036........... 00.9040 17.97 490053........... 01.2464 12.69 500021.......... 01.4452 18.44
450632........... 01.0114 09.73 450733........... 01.3782 16.49 460037........... 00.9987 15.82 490054........... 01.0612 16.12 500023.......... 01.1885 17.72
450633........... 01.5528 16.84 450734........... 01.5058 15.76 460039........... 00.9376 19.39 490057........... 01.4240 15.34 500024.......... 01.6275 20.14
450634........... 01.3909 20.07 450735........... 00.7508 10.25 460041........... 01.2069 17.85 490059........... 01.5158 16.77 500025.......... 01.8013 20.57
450637........... 01.4227 18.37 450742........... 01.3086 20.55 460042........... 01.5113 14.35 490060........... 01.0745 17.38 500026.......... 01.3592 20.11
450638........... 01.5903 21.27 450743........... 01.4084 18.11 460043........... 01.4203 19.43 490063........... 01.5913 21.01 500027.......... 01.5284 20.29
450639........... 01.4527 19.59 450745........... 00.9400 17.81 460044........... 01.1393 18.06 490066........... 01.2265 16.33 500028.......... 01.1173 13.44
450641........... 00.9828 09.51 450746........... 00.9637 12.33 460046........... 01.3442 10.37 490067........... 01.2791 13.99 500029.......... 00.9711 11.90
450643........... 01.1399 16.08 450747........... 01.3086 15.66 460047........... 01.6639 17.76 490069........... 01.4013 13.22 500030.......... 01.3182 20.51
450644........... 01.6088 20.13 450749........... 01.0677 12.76 460049........... 01.9514 ............ 490071........... 01.4827 17.01 500031.......... 01.3004 18.25
450646........... 01.5824 18.06 450750........... 00.9694 10.69 470001........... 01.1507 16.20 490073........... 01.3370 22.24 500033.......... 01.2651 16.60
450647........... 02.0219 20.54 450751........... 01.2764 15.02 470003........... 01.9342 18.36 490074........... 01.3077 15.49 500035.......... 01.4790 20.14
450648........... 01.0880 10.99 450754........... 01.0882 10.22 470004........... 01.0472 13.47 490075........... 01.2757 14.78 500036.......... 01.2636 16.85
450649........... 01.0221 14.87 450755........... 01.1710 14.46 470005........... 01.1866 17.44 490077........... 01.1984 16.35 500037.......... 01.1272 16.09
450651........... 01.8225 19.22 450757........... 00.9495 13.00 470006........... 01.1352 12.40 490079........... 01.3414 13.39 500039.......... 01.2969 17.66
450652........... 00.9740 12.60 450758........... 01.7735 18.93 470008........... 01.1864 15.30 490083........... 00.6505 13.89 500041.......... 01.2711 20.31
450653........... 01.2219 16.37 450760........... 01.2035 18.66 470010........... 01.0838 16.66 490084........... 01.2007 14.87 500042.......... 01.3457 18.95
450654........... 00.9870 11.17 450761........... 01.1076 12.48 470011........... 01.1222 18.12 490085........... 01.1274 11.80 500043.......... 01.1929 16.80
450656........... 01.3287 15.64 450763........... 01.0949 13.74 470012........... 01.2087 15.18 490088........... 01.2401 13.15 500044.......... 01.9294 19.80
450658........... 01.0107 11.01 450765........... 00.9207 16.55 470013........... 01.1467 18.22 490089........... 01.0498 14.04 500045.......... 01.0758 17.06
450659........... 01.4488 18.74 450766........... 01.9990 20.12 470015........... 01.1414 18.87 490090........... 01.1883 13.06 500048.......... 00.9024 14.27
450660........... 01.6132 18.85 450769........... 00.9496 09.57 470018........... 01.1288 18.12 490091........... 01.1775 18.85 500049.......... 01.3098 17.10
450661........... 01.2530 18.21 450770........... 01.0683 12.57 470020........... 01.0126 12.85 490092........... 01.1790 13.48 500050.......... 01.4162 19.09
450662........... 01.3966 17.00 450771........... 01.7335 15.16 470023........... 01.2355 16.33 490093........... 01.2851 14.13 500051.......... 01.6664 20.33
450665........... 00.9821 10.88 450774........... 00.7194 ............ 470024........... 01.1330 16.23 490094........... 01.2223 15.14 500052.......... 01.2459 ............
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 16 of 16
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Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage Provider Casemixindex Avg.hourwage
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
500053........... 01.2011 17.77 510016........... 01.0306 ............ 520029........... 00.9356 13.66 520120........... 01.0549 16.55
500054........... 01.8414 19.04 510018........... 01.0635 13.12 520030........... 01.6630 17.90 520121........... 00.9566 13.17
500055........... 01.0545 17.78 510020........... 01.0645 09.18 520031........... 01.0977 13.75 520122........... 00.9921 12.50
500057........... 01.3022 14.98 510022........... 01.6731 16.04 520032........... 01.1459 13.19 520123........... 01.0355 14.99
500058........... 01.5191 17.59 510023........... 01.0358 15.15 520033........... 01.2335 15.10 520124........... 01.1686 13.76
500059........... 01.1318 18.35 510024........... 01.3729 16.07 520034........... 01.1894 16.57 520130........... 01.0130 11.54
500060........... 01.3448 19.19 510025........... 00.9358 10.47 520035........... 01.2608 14.62 520131........... 01.0285 14.68
500061........... 01.0334 17.95 510026........... 00.9756 11.32 520037........... 01.6206 16.75 520132........... 01.1499 12.68
500062........... 00.9969 13.74 510027........... 01.0578 14.24 520038........... 01.3648 16.08 520134........... 01.0816 13.78
500064........... 01.5477 19.70 510028........... 01.1631 15.98 520039........... 00.9879 15.17 520135........... 00.9958 12.99
500065........... 01.3263 16.39 510029........... 01.2526 15.30 520040........... 01.4142 16.73 520136........... 01.5003 17.75
500068........... 01.0253 14.82 510030........... 01.1206 15.72 520041........... 01.2128 13.13 520138........... 01.8382 18.83
500069........... 01.0526 16.11 510031........... 01.3039 14.14 520042........... 01.1115 15.88 520139........... 01.2251 16.83
500071........... 01.3303 18.34 510033........... 01.2757 13.57 520044........... 01.3413 15.51 520140........... 01.4922 17.20
500072........... 01.1532 18.80 510035........... 00.9763 15.60 520045........... 01.6487 16.77 520141........... 01.1391 15.13
500073........... 00.9973 17.71 510036........... 00.9689 11.73 520047........... 01.0137 13.50 520142........... 00.9776 11.46
500074........... 01.1769 13.37 510038........... 01.0385 13.95 520048........... 01.3805 15.97 520144........... 01.0601 14.49
500075........... 01.1943 18.49 510039........... 01.3985 14.67 520049........... 01.9376 15.82 520145........... 01.0163 14.95
500076........... 01.3655 ............ 510043........... 01.0483 10.44 520051........... 01.8682 17.94 520146........... 01.1569 12.32
500077........... 01.2935 20.09 510046........... 01.2254 15.91 520053........... 01.0616 14.07 520148........... 01.1022 13.98
500079........... 01.2866 17.92 510047........... 01.1675 15.81 520054........... 01.0524 15.31 520149........... 00.9330 11.73
500080........... 00.8630 11.55 510048........... 01.0785 14.71 520056........... 01.3233 17.02 520151........... 01.1306 13.59
500084........... 01.1285 17.71 510050........... 01.2940 13.72 520057........... 01.0868 14.88 520152........... 01.1344 15.70
500085........... 01.0811 15.46 510053........... 01.0201 12.16 520058........... 01.0839 16.79 520153........... 00.9402 11.67
500086........... 01.4099 16.28 510055........... 01.2071 16.99 520059........... 01.2503 16.21 520154........... 01.1091 14.96
500088........... 01.2684 20.73 510058........... 01.2183 15.08 520060........... 01.2999 14.92 520156........... 01.0589 15.29
500089........... 01.0373 13.23 510059........... 01.3416 12.59 520062........... 01.2041 14.41 520157........... 00.9530 12.75
500090........... 00.9397 13.62 510060........... 01.0623 12.88 520063........... 01.1849 15.91 520159........... 00.8973 15.47
500092........... 01.1574 13.51 510061........... 01.0467 12.53 520064........... 01.6355 18.60 520160........... 01.7831 16.13
500094........... 00.8988 13.52 510062........... 01.2592 14.06 520066........... 01.2646 16.81 520161........... 01.0448 14.06
500096........... 00.9675 16.16 510063........... 01.0303 11.09 520068........... 00.9547 14.38 520170........... 01.2356 17.02
500097........... 01.1526 14.74 510065........... 00.9731 12.11 520069........... 01.2078 15.49 520171........... 01.0174 12.53
500098........... 00.8519 14.51 510066........... 01.1091 12.88 520070........... 01.4142 15.29 520173........... 01.1189 17.29
500101........... 00.9811 14.48 510067........... 01.1612 16.64 520071........... 01.0992 15.10 520174........... 01.4126 19.12
500102........... 00.9767 14.87 510068........... 01.0710 13.52 520074........... 01.1149 14.32 520176........... 00.7496 14.08
500104........... 01.2490 18.17 510070........... 01.1784 14.68 520075........... 01.4699 16.16 520177........... 01.5483 17.91
500106........... 01.0010 12.54 510071........... 01.2712 14.60 520076........... 01.0966 14.78 520178........... 01.0875 13.06
500107........... 01.1098 13.54 510072........... 01.0450 12.56 520077........... 00.9945 13.17 520180........... 00.9439 ............
500108........... 01.6208 19.87 510076........... 01.0756 ............ 520078........... 01.4355 14.81 530001........... 01.4675 13.50
500110........... 01.2003 17.29 510077........... 01.1413 13.24 520082........... 01.2824 14.80 530002........... 01.1585 15.32
500118........... 01.1182 18.17 510080........... 01.1329 10.16 520083........... 01.5777 19.35 530003........... 00.9243 08.81
500119........... 01.3361 19.79 510081........... 00.9920 12.98 520084........... 01.0819 15.01 530004........... 00.9555 12.56
500122........... 01.2703 17.54 510082........... 01.0732 10.95 520087........... 01.5706 15.92 530005........... 01.0749 12.06
500123........... 00.9858 13.48 510084........... 00.9838 11.17 520088........... 01.2564 16.27 530006........... 01.1664 14.95
500124........... 01.2764 19.76 510085........... 01.2731 17.35 520089........... 01.5021 17.22 530007........... 01.0341 11.54
500125........... 00.9817 11.02 510086........... 01.0079 11.50 520090........... 01.1723 14.69 530008........... 01.1909 16.73
500127........... 00.5815 14.25 520002........... 01.2811 15.62 520091........... 01.2647 15.62 530009........... 01.0330 14.78
500129........... 01.6456 19.35 520003........... 01.1372 13.96 520092........... 01.1141 15.12 530010........... 01.2997 15.83
500132........... 00.9544 15.33 520004........... 01.1943 15.11 520094........... 01.0966 15.78 530011........... 01.1438 14.63
500134........... 00.7358 16.03 520006........... 01.0362 15.92 520095........... 01.3727 16.94 530012........... 01.6828 15.20
500137........... 00.6391 16.87 520007........... 01.0592 12.43 520096........... 01.5421 15.50 530014........... 01.2755 13.73
500138........... 11.7584 ............ 520008........... 01.4746 17.90 520097........... 01.2858 16.40 530015........... 01.1352 15.80
500139........... 01.4083 21.58 520009........... 01.6341 16.23 520098........... 01.7645 18.16 530016........... 01.1970 11.83
500140........... 00.7623 14.50 520010........... 01.1246 16.81 520100........... 01.2513 14.73 530017........... 00.9299 13.78
500141........... 01.3002 19.75 520011........... 01.1700 16.58 520101........... 01.1174 14.26 530018........... 01.0116 13.10
500143........... 00.9927 17.55 520013........... 01.3238 16.24 520102........... 01.2034 16.89 530019........... 00.9962 15.03
500898........... 00.7881 ............ 520014........... 01.2286 14.17 520103........... 01.2829 16.41 530022........... 01.1654 15.74
510001........... 01.6358 16.68 520015........... 01.1845 15.42 520107........... 01.2809 15.17 530023........... 01.0053 15.88
510002........... 01.3741 16.27 520016........... 01.1159 13.09 520109........... 01.0403 14.86 530024........... 01.0512 12.11
510004........... 00.9722 10.17 520017........... 01.2080 15.10 520110........... 01.1018 15.27 530025........... 01.2788 16.17
510005........... 00.9383 13.99 520018........... 01.0659 14.58 520111........... 01.1017 12.09 530026........... 01.1205 13.08
510006........... 01.2076 15.75 520019........... 01.2888 14.27 520112........... 01.1632 16.29 530027........... 00.9454 09.41
510007........... 01.4198 15.97 520021........... 01.2952 16.83 520113........... 01.1975 15.62 530029........... 00.9396 13.04
510008........... 01.1015 15.33 520024........... 01.0655 11.87 520114........... 01.1537 12.45 530031........... 00.8884 13.78
510009........... 00.9452 10.45 520025........... 01.1316 14.34 520115........... 01.3141 14.47
510012........... 01.0842 14.87 520026........... 01.0683 15.67 520116........... 01.2563 16.13
510013........... 01.1873 14.27 520027........... 01.1591 17.08 520117........... 01.0813 14.87
510015........... 00.9551 11.69 520028........... 01.3516 16.26 520118........... 00.9872 09.46
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Case mix indexes do not include discharges from PPS-exempt units.
Note: Case mix indexes include cases received in HCFA central office through Dec. 1993.

Table 4a.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Urban Areas
------------------------------------------------------------------------
Urban area (constituent counties or county Wage
equivalents) index GAF
------------------------------------------------------------------------
Abilene, TX......................................... 0.8624 0.9036
Taylor, TX
Aguadilla, PR....................................... 0.4662 0.5930
Aguada, PR
Aguadilla, PR
Moca, PR
Akron, OH........................................... 0.9694 0.9789
Portage, OH
Summit, OH
Albany, GA.......................................... 0.8861 0.9205
Dougherty, GA
Lee, GA
Albany-Schenectady-Troy, NY......................... 0.8908 0.9239
Albany, NY
Montgomery, NY
Rensselaer, NY
Saratoga, NY
Schenectady, NY
Schoharie, NY
Albuquerque, NM..................................... 0.9362 0.9559
Bernalillo, NM
Sandoval, NM
Valencia, NM
Alexandria, LA...................................... 0.8313 0.8812
Rapides, LA
Allentown-Bethlehem-Easton, PA...................... 1.0158 1.0108
Carbon, PA
Lehigh, PA
Northampton, PA
Altoona, PA......................................... 0.9244 0.9476
Blair, PA
Amarillo, TX........................................ 0.8084 0.8645
Potter, TX
Randall, TX
Anchorage, AK....................................... 1.3147 1.2061
Anchorage, AK
Ann Arbor, MI....................................... 1.2661 1.1754
Lenawee, MI
Livingston, MI
Washtenaw, MI
Anniston, AL........................................ 0.7990 0.8576
Calhoun, AL
Appleton-Oshkosh-Neenah, WI......................... 0.8882 0.9220
Calumet, WI
Outagamie, WI
Winnebago, WI
Arecibo, PR......................................... 0.3815 0.5169
Arecibo, PR
Camuy, PR
Hatillo, PR
Asheville, NC....................................... 0.9212 0.9453
Buncombe, NC
Madison, NC
Athens, GA.......................................... 0.9093 0.9370
Clarke, GA
Madison, GA
Oconee, GA
*Atlanta, GA........................................ 1.0289 1.0197
Barrow, GA
Bartow, GA
Carroll, GA
Cherokee, GA
Clayton, GA
Cobb, GA
Coweta, GA
De Kalb, GA
Douglas, GA
Fayette, GA
Forsyth, GA
Fulton, GA
Gwinnett, GA
Henry, GA
Newton, GA
Paulding, GA
Pickens, GA
Rockdale, GA
Spalding, GA
Walton, GA
Atlantic City-Cape May, NJ.......................... 1.0919 1.0621
Atlantic City, NJ
Cape May, NJ
Augusta-Aiken, GA-SC................................ 0.8649 0.9054
Columbia, GA
McDuffie, GA
Richmond, GA
Aiken, SC
Edgefield, SC
Austin-San Marcos, TX............................... 0.9031 0.9326
Bastrop, TX
Caldwell, TX
Hays, TX
Travis, TX
Williamson, TX
Bakersfield, CA..................................... 1.0966 1.0652
Kern, CA
*Baltimore, MD...................................... 0.9912 0.9940
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Carroll, MD
Harford, MD
Howard, MD
Queen Annes, MD
Bangor, ME.......................................... 0.9527 0.9674
Penobscot, ME
Barnstable-Yarmouth, MA............................. 1.3875 1.2514
Barnstable, MA
Baton Rouge, LA..................................... 0.8656 0.9059
Ascension, LA
East Baton Rouge, LA
Livingston, LA
West Baton Rouge, LA
Beaumont-Port Arthur, TX............................ 0.8673 0.9071
Hardin, TX
Jefferson, TX
Orange, TX
Bellingham, WA...................................... 1.1282 1.0861
Whatcom, WA
Benton Harbor, MI................................... 0.8209 0.8736
Berrien, MI
*Bergen-Passaic, NJ................................. 1.1316 1.0884
Bergen, NJ
Passaic, NJ
Billings, MT........................................ 0.8758 0.9132
Yellowstone, MT
Biloxi-Gulfport-Pascagoula, MS...................... 0.8282 0.8789
Hancock, MS
Harrison, MS
Jackson, MS
Binghamton, NY...................................... 0.9220 0.9459
Broome, NY
Tioga, NY
Birmingham, AL...................................... 0.8772 0.9142
Blount, AL
Jefferson, AL
St. Clair, AL
Shelby, AL
Bismarck, ND........................................ 0.8684 0.9079
Burleigh, ND
Morton, ND
Bloomington, IN..................................... 0.8567 0.8995
Monroe, IN
Bloomington-Normal, IL.............................. 0.8528 0.8967
McLean, IL
Boise City, ID...................................... 0.9067 0.9351
Ada, ID
Canyon, ID
*Boston-Brockton-Nashua, MA-NH...................... 1.1564 1.1046
Bristol, MA
Essex, MA
Middlesex, MA
Norfolk, MA
Plymouth, MA
Suffolk, MA
Worcester, MA
Hillsborough, NH
Merrimack, NH
Rockingham, NH
Strafford, NH
Boulder-Longmont, CO................................ 0.8020 0.8598
Boulder, CO
Brazoria, TX........................................ 0.8300 0.8802
Brazoria, TX
Bremerton, WA....................................... 0.9666 0.9770
Kitsap, WA
Brownsville-Harlingen-San Benito, TX................ 0.8288 0.8793
Cameron, TX
Bryan-College Station, TX........................... 0.8712 0.9099
Brazos, TX
*Buffalo-Niagara Falls, NY.......................... 0.9184 0.9434
Erie, NY
Niagara, NY
Burlington, VT...................................... 0.9983 0.9988
Chittenden, VT
Franklin, VT
Grand Isle, VT
Caguas, PR.......................................... 0.4392 0.5692
Caguas, PR
Cayey, PR
Cidra, PR
Gurabo, PR
San Lorenzo, PR
Canton-Massillon, OH................................ 0.8683 0.9078
Carroll, OH
Stark, OH
Casper, WY.......................................... 0.8431 0.8897
Natrona, WY
Cedar Rapids, IA.................................... 0.8165 0.8704
Linn, IA
Champaign-Urbana, IL................................ 0.8888 0.9224
Champaign, IL
Charleston-North Charleston, SC..................... 0.8885 0.9222
Berkeley, SC
Charleston, SC
Dorchester, SC
Charleston, WV...................................... 0.8622 0.9035
Kanawha, WV
Putnam, WV
*Charlotte-Gastonia-Rock Hill, NC-SC................ 0.9593 0.9719
Cabarrus, NC
Gaston, NC
Lincoln, NC
Mecklenburg, NC
Rowan, NC
Union, NC
York, SC
Charlottesville, VA................................. 0.9402 0.9587
Albemarle, VA
Charlottesville City, VA
Fluvanna, VA
Greene, VA
Chattanooga, TN-GA.................................. 0.8998 0.9302
Catoosa, GA
Dade, GA
Walker, GA
Hamilton, TN
Marion, TN
Cheyenne, WY........................................ 0.7490 0.8204
Laramie, WY
*Chicago, IL........................................ 1.0716 1.0485
Cook, IL
De Kalb, IL
Du Page, IL
Grundy, IL
Kane, IL
Kendall, IL
Lake, IL
McHenry, IL
Will, IL
Chico-Paradise, CA.................................. 1.0302 1.0206
Butte, CA
*Cincinnati, OH-KY-IN............................... 0.9469 0.9633
Dearborn, IN
Ohio, IN
Boone, KY
Campbell, KY
Gallatin, KY
Grant, KY
Kenton, KY
Pendleton, KY
Brown, OH
Clermont, OH
Hamilton, OH
Warren, OH
Clarksville-Hopkinsville, TN-KY..................... 0.7542 0.8243
Christian, KY
Montgomery, TN
*Cleveland-Lorain-Elyria, OH........................ 0.9870 0.9911
Ashtabula, OH
Cuyahoga, OH
Geauga, OH
Lake, OH
Lorain, OH
Medina, OH
Colorado Springs, CO................................ 0.9338 0.9542
El Paso, CO
Columbia, MO........................................ 0.9254 0.9483
Boone, MO
Columbia, SC........................................ 0.8999 0.9303
Lexington, SC
Richland, SC
Columbus, GA-AL..................................... 0.7797 0.8433
Russell, AL
Chattanoochee, GA
Harris, GA
Muscogee, GA
*Columbus, OH....................................... 0.9807 0.9867
Delaware, OH
Fairfield, OH
Franklin, OH
Licking, OH
Madison, OH
Pickaway, OH
Corpus Christi, TX.................................. 0.8366 0.8850
Nueces, TX
San Patricio, TX
Cumberland, MD-WV................................... 0.8280 0.8788
Allegany, MD
Mineral, WV
*Dallas, TX......................................... 0.9600 0.9724
Collin, TX
Dallas, TX
Denton, TX
Ellis, TX
Henderson, TX
Hunt, TX
Kaufman, TX
Rockwall, TX
Danville, VA........................................ 0.8129 0.8677
Danville City, VA
Pittsylvania, VA
Davenport-Rock Island-Moline, IA-IL................. 0.8263 0.8775
Scott, IA
Henry, IL
Rock Island, IL
Dayton-Springfield, OH.............................. 0.9199 0.9444
Clark, OH
Greene, OH
Miami, OH
Montgomery, OH
Daytona Beach, FL................................... 0.8642 0.9049
Flagler, FL
Volusia, FL
Decatur, AL......................................... 0.8029 0.8604
Lawrence, AL
Morgan, AL
Decatur, IL......................................... 0.7948 0.8545
Macon, IL
*Denver, CO......................................... 1.0659 1.0447
Adams, CO
Arapahoe, CO
Denver, CO
Douglas, CO
Jefferson, CO
Des Moines, IA...................................... 0.8669 0.9068
Dallas, IA
Polk, IA
Warren, IA
*Detroit, MI........................................ 1.0871 1.0589
Lapeer, MI
Macomb, MI
Monroe, MI
Oakland, MI
St. Clair, MI
Wayne, MI
Dothan, AL.......................................... 0.8010 0.8590
Dale, AL
Houston, AL
Dover, DE........................................... 0.9143 0.9405
Kent, DE
Dubuque, IA......................................... 0.7573 0.8267
Dubuque, IA
Duluth-Superior, MN-WI.............................. 0.9303 0.9517
St. Louis, MN
Douglas, WI
Dutchess County, NY................................. 1.0586 1.0398
Dutchess, NY
Eau Claire, WI...................................... 0.8516 0.8958
Chippewa, WI
Eau Claire, WI
El Paso, TX......................................... 0.8518 0.8960
El Paso, TX
Elkhart-Goshen, IN.................................. 0.8730 0.9112
Elkhart, IN
Elmira, NY.......................................... 0.8615 0.9029
Chemung, NY
Enid, OK............................................ 0.8250 0.8766
Garfield, OK
Erie, PA............................................ 0.8969 0.9282
Erie, PA
Eugene-Springfield, OR.............................. 1.0632 1.0429
Lane, OR
Evansville-Henderson, IN-KY......................... 0.9071 0.9354
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
Fargo-Moorhead, ND-MN............................... 0.9259 0.9486
Clay, MN
Cass, ND
Fayetteville, NC.................................... 0.8694 0.9086
Cumberland, NC
Fayetteville-Springdale-Rogers, AR.................. 0.7274 0.8042
Benton, AR
Washington, AR
Flint, MI........................................... 1.0411 1.0280
Genesee, MI
Florence, AL........................................ 0.7916 0.8521
Colbert, AL
Lauderdale, AL
Florence, SC........................................ 0.8565 0.8994
Florence, SC
Fort Collins-Loveland, CO........................... 0.9772 0.9843
Larimer, CO
*Ft. Lauderdale, FL................................. 1.0637 1.0432
Broward, FL
Fort Myers-Cape Coral, FL........................... 0.9613 0.9733
Lee, FL
Fort Pierce-Port St. Lucie, FL...................... 1.0118 1.0081
Martin, FL
St. Lucie, FL
Fort Smith, AR-OK................................... 0.7716 0.8373
Crawford, AR
Sebastian, AR
Sequoyah, OK
Fort Walton Beach, FL............................... 0.8895 0.9229
Okaloosa, FL
Fort Wayne, IN...................................... 0.8875 0.9215
Adams, IN
Allen, IN
De Kalb, IN
Huntington, IN
Wells, IN
Whitley, IN
*Forth Worth-Arlington, TX.......................... 0.9169 0.9423
Hood, TX
Johnson, TX
Parker, TX
Tarrant, TX
Fresno, CA.......................................... 1.0368 1.0251
Fresno, CA
Madera, CA
Gadsden, AL......................................... 0.8196 0.8726
Etowah, AL
Gainesville, FL..................................... 0.8867 0.9210
Alachua, FL
Galveston-Texas City, TX............................ 1.0133 1.0091
Galveston, TX
Gary, IN............................................ 0.9376 0.9568
Lake, IN
Porter, IN
Glens Falls, NY..................................... 0.9309 0.9521
Warren, NY
Washington, NY
Goldsboro, NC....................................... 0.8491 0.8940
Wayne, NC
Grand Forks, ND-MN.................................. 0.9038 0.9331
Polk, MN
Grand Forks, ND
Grand Rapids-Muskegon-Holland, MI................... 0.9863 0.9906
Allegan, MI
Kent, MI
Muskegon, MI
Ottawa, MI
Great Falls, MT..................................... 0.9018 0.9317
Cascade, MT
Greeley, CO......................................... 1.0531 1.0361
Weld, CO
Green Bay, WI....................................... 0.8857 0.9202
Brown, WI
*Greensboro-Winston-Salem-High Point, NC............ 0.9206 0.9449
Alamance, NC
Davidson, NC
Davie, NC
Forsyth, NC
Guilford, NC
Randolph, NC
Stokes, NC
Yadkin, NC
Greenville, NC...................................... 0.8988 0.9295
Pitt, NC
Greenville-Spartanburg-Anderson, SC................. 0.9149 0.9409
Cherokee, SC
Greenville, SC
Pickens, SC
Spartanburg, SC
Hagerstown, MD...................................... 0.8987 0.9295
Washington, MD
Hamilton-Middletown, OH............................. 0.8137 0.8683
Butler, OH
Harrisburg-Lebanon-Carlisle, PA..................... 0.9667 0.9771
Cumberland, PA
Dauphin, PA
Lebanon, PA
Perry, PA
*Hartford, CT....................................... 1.2429 1.1606
Hartford, CT
Litchfield, CT
Middlesex, CT
Tolland, CT
Hickory-Morganton, NC............................... 0.7827 0.8455
Alexander, NC
Burke, NC
Caldwell, NC
Catawba, NC
Honolulu, HI........................................ 1.1736 1.1159
Honolulu, HI
Houma, LA........................................... 0.7732 0.8385
Lafourche, LA
Terrebonne, LA
*Houston, TX........................................ 0.9829 0.9883
Chambers, TX
Fort Bend, TX
Harris, TX
Liberty, TX
Montgomery, TX
Waller, TX
Huntington-Ashland, WV-KY-OH........................ 0.8989 0.9296
Boyd, KY
Carter, KY
Greenup, KY
Lawrence, OH
Cabell, WV
Wayne, WV
Huntsville, AL...................................... 0.8118 0.8669
Limestone, AL
Madison, AL
*Indianapolis, IN................................... 0.9865 0.9907
Boone, IN
Hamilton, IN
Hancock, IN
Hendricks, IN
Johnson, IN
Madison, IN
Marion, IN
Morgan, IN
Shelby, IN
Iowa City, IA....................................... 0.9100 0.9375
Johnson, IA
Jackson, MI......................................... 0.9211 0.9453
Jackson, MI
Jackson, MS......................................... 0.7669 0.8338
Hinds, MS
Madison, MS
Rankin, MS
Jackson, TN......................................... 0.8299 0.8801
Madison, TN
Jacksonville, FL.................................... 0.9043 0.9334
Clay, FL
Duval, FL
Nassau, FL
St. Johns, FL
Jacksonville, NC.................................... 0.7229 0.8007
Onslow, NC
Jamestown, NY....................................... 0.7565 0.8261
Chautaqua, NY
Janesville-Beloit, WI............................... 0.8638 0.9046
Rock, WI
Jersey City, NJ..................................... 1.1100 1.0741
Hudson, NJ
Johnson City-Kingsport-Bristol, TN-VA............... 0.8667 0.9067
Carter, TN
Hawkins, TN
Sullivan, TN
Unicoi, TN
Washington, TN
Bristol City, VA
Scott, VA
Washington, VA
Johnstown, PA....................................... 0.8654 0.9057
Cambria, PA
Somerset, PA
Joplin, MO.......................................... 0.7828 0.8456
Jasper, MO
Newton, MO
Kalamazoo-Battlecreek, MI........................... 1.0507 1.0344
Calhoun, MI
Kalamazoo, MI
Van Buren, MI
Kankakee, IL........................................ 0.9423 0.9601
Kankakee, IL
*Kansas City, KS-MO................................. 0.9513 0.9664
Johnson, KS
Leavenworth, KS
Miami, KS
Wyandotte, KS
Cass, MO
Clay, MO
Clinton, MO
Jackson, MO
Lafayette, MO
Platte, MO
Ray, MO
Kenosha, WI......................................... 0.8849 0.9197
Kenosha, WI
Killeen-Temple, TX.................................. 0.9711 0.9801
Bell, TX
Coryell, TX
Knoxville, TN....................................... 0.8588 0.9010
Anderson, TN
Blount, TN
Knox, TN
Loudon, TN
Sevier, TN
Union, TN
Kokomo, IN.......................................... 0.9075 0.9357
Howard, IN
Tipton, IN
La Crosse, WI-MN.................................... 0.8552 0.8984
Houston, MN
La Crosse, WI
Lafayette, LA....................................... 0.8011 0.8591
Acadia, LA
Lafayette, LA
St. Landry, LA
St. Martin, LA
Lafayette, IN....................................... 0.8348 0.8837
Clinton, IN
Tippecanoe, IN
Lake Charles, LA.................................... 0.8274 0.8783
Calcasieu, LA
Lakeland-Winter Haven, FL........................... 0.8137 0.8683
Polk, FL
Lancaster, PA....................................... 0.9387 0.9576
Lancaster, PA
Lansing-East Lansing, MI............................ 1.0067 1.0046
Clinton, MI
Eaton, MI
Ingham, MI
Laredo, TX.......................................... 0.6998 0.7831
Webb, TX
Las Cruces, NM...................................... 0.8837 0.9188
Dona Ana, NM
Las Vegas, NV-AZ.................................... 1.0723 1.0490
Mohave, AZ
Clark, NV
Nye, NV
Lawrence, KS........................................ 0.8593 0.9014
Douglas, KS
Lawton, OK.......................................... 0.8532 0.8970
Comanche, OK
Lewiston-Auburn, ME................................. 0.9705 0.9797
Androscoggin, ME
Lexington, KY....................................... 0.8471 0.8926
Bourbon, KY
Clark, KY
Fayette, KY
Jessamine, KY
Madison, KY
Scott, KY
Woodford, KY
Lima, OH............................................ 0.8703 0.9093
Allen, OH
Auglaize, OH
Lincoln, NE......................................... 0.9026 0.9322
Lancaster, NE
Little Rock-North Little Rock, AR................... 0.8327 0.8822
Faulkner, AR
Lonoke, AR
Pulaski, AR
Saline, AR
Longview-Marshall, TX............................... 0.8752 0.9128
Gregg, TX
Harrison, TX
Upshur, TX
*Los Angeles-Long Beach, CA......................... 1.2592 1.1710
Los Angeles, CA
Louisville, KY-IN................................... 0.9474 0.9637
Clark, IN
Floyd, IN
Harrison, IN
Scott, IN
Bullitt, KY
Jefferson, KY
Oldham, KY
Lubbock, TX......................................... 0.8717 0.9103
Lubbock, TX
Lynchburg, VA....................................... 0.8347 0.8836
Amherst, VA
Bedford City, VA
Bedford, VA
Campbell, VA
Lynchburg City, VA
Macon, GA........................................... 0.9032 0.9327
Bibb, GA
Houston, GA
Jones, GA
Peach, GA
Twiggs, GA
Madison, WI......................................... 0.9954 0.9968
Dane, WI
Mansfield, OH....................................... 0.8238 0.8757
Crawford, OH
Richland, OH
Mayaguez, PR........................................ 0.4472 0.5763
Anasco, PR
Cabo Rojo, PR
Hormigueros, PR
Mayaguez, PR
Sabana Grande, PR
San German, PR
McAllen-Edinburg-Mission, TX........................ 0.8059 0.8626
Hidalgo, TX
Medford-Ashland, OR................................. 0.9944 0.9962
Jackson, OR
Melbourne-Titusville-Palm Bay FL.................... 0.8994 0.9300
Brevard, FL
*Memphis, TN-AR-MS.................................. 0.8519 0.8960
Crittenden, AR
De Soto, MS
Fayette, TN
Shelby, TN
Tipton, TN
Merced, CA.......................................... 1.0250 1.0171
Merced, CA
*Miami, FL.......................................... 0.8543 0.8978
Dade, FL
*Middlesex-Somerset-Hunterdon, NJ................... 1.0743 1.0503
Hunterdon, NJ
Middlesex, NJ
Somerset, NJ
*Milwaukee, WI...................................... 0.9649 0.9758
Milwaukee, WI
Ozaukee, WI
Washington, WI
Waukesha, WI
*Minneapolis-St Paul, MN-WI......................... 1.0889 1.0601
Anoka, MN
Carver, MN
Chisago, MN
Dakota, MN
Hennepin, MN
Isanti, MN
Ramsey, MN
Scott, MN
Sherburne, MN
Washington, MN
Wright, MN
Pierce, WI
St. Croix, WI
Mobile, AL.......................................... 0.7383 0.8124
Baldwin, AL
Mobile, AL
Modesto, CA......................................... 1.1292 1.0868
Stanislaus, CA
Monmouth-Ocean, NJ.................................. 1.0724 1.0490
Monmouth, NJ
Ocean, NJ
Monroe, LA.......................................... 0.7758 0.8404
Ouachita, LA
Montgomery, AL...................................... 0.8082 0.8643
Autauga, AL
Elmore, AL
Montgomery, AL
Muncie, IN.......................................... 0.9543 0.9685
Delaware, IN
Myrtle Beach, SC.................................... 0.7976 0.8565
Horry, SC
Naples, FL.......................................... 0.9770 0.9842
Collier, FL
*Nashville, TN...................................... 0.9379 0.9570
Cheatham, TN
Davidson, TN
Dickson, TN
Robertson, TN
Rutherford TN
Sumner, TN
Williamson, TN
Wilson, TN
*Nassau-Suffolk, NY................................. 1.2908 1.1910
Nassau, NY
Suffolk, NY
*New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT 1.2289 1.1516
Fairfield, CT
New Haven, CT
New London-Norwich, CT.............................. 1.1752 1.1169
New London, CT
*New Orleans, LA.................................... 0.9532 0.9677
Jefferson, LA
Orleans, LA
Plaquemines, LA
St. Bernard, LA
St. Charles, LA
St. James, LA
St. John The Baptist, LA
St. Tammany, LA
*New York, NY....................................... 1.4200 1.2714
Bronx, NY
Kings, NY
New York, NY
Putnam, NY
Queens, NY
Richmond, NY
Rockland, NY
Westchester, NY
*Newark, NJ......................................... 1.1146 1.0771
Essex, NJ
Morris, NJ
Sussex, NJ
Union, NJ
Warren, NJ
Newburgh, NY-PA..................................... 0.8759 0.9133
Orange, NY
Pike, PA
*Norfolk-Virginia Beach-Newport News, VA-NC......... 0.8313 0.8812
Currituck, NC
Chesapeake City, VA
Gloucester, VA
Hampton City, VA
Isle of Wight, VA
James City, VA
Mathews, VA
Newport News City, VA
Norfolk City, VA
Poquoson City, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City VA
Williamsburg City, VA
York, VA
*Oakland, CA........................................ 1.4690 1.3013
Alameda, CA
Contra Costa, CA
Ocala, FL........................................... 0.8820 0.9176
Marion, FL
Odessa-Midland, TX.................................. 0.8436 0.8901
Ector, TX
Midland, TX
Oklahoma City, OK................................... 0.8499 0.8946
Canadian, OK
Cleveland, OK
Logan, OK
McClain, OK
Oklahoma, OK
Pottawatomie, OK
Olympia, WA......................................... 1.1179 1.0793
Thurston, WA
Omaha, NE-IA........................................ 0.9825 0.9880
Pottawattamie, IA
Cass, NE
Douglas, NE
Sarpy, NE
Washington, NE
*Orange County, CA.................................. 1.4029 1.2609
Orange, CA
*Orlando, FL........................................ 0.9472 0.9635
Lake, FL
Orange, FL
Osceola, FL
Seminole, FL
Owensboro, KY....................................... 0.7877 0.8492
Daviess, KY
Panama City, FL..................................... 0.7543 0.8244
Bay, FL
Parkersburg-Marietta, WV-OH......................... 0.7957 0.8551
Washington, OH
Wood, WV
Pensacola, FL....................................... 0.8248 0.8764
Escambia, FL
Santa Rosa, FL
Peoria-Pekin, IL.................................... 0.8447 0.8909
Peoria, IL
Tazewell, IL
Woodford, IL
*Philadelphia, PA-NJ................................ 1.1115 1.0751
Burlington, NJ
Camden, NJ
Gloucester, NJ
Salem, NJ
Bucks, PA
Chester, PA
Delaware, PA
Montgomery, PA
Philadelphia, PA
*Phoenix-Mesa, AZ................................... 1.0125 1.0085
Maricopa, AZ
Pinal, AZ
Pine Bluff, AR...................................... 0.8643 0.9050
Jefferson, AR
*Pittsburgh, PA..................................... 0.9847 0.9895
Allegheny, PA
Beaver, PA
Butler, PA
Fayette, PA
Washington, PA
Westmoreland, PA
Pittsfield, MA...................................... 1.1383 1.0928
Berkshire, MA
Ponce, PR........................................... 0.4415 0.5713
Guayanilla, PR
Juana Diaz, PR
Penuelas, PR
Ponce, PR
Villalba, PR
Yauco, PR
Portland, ME........................................ 0.9487 0.9646
Cumberland, ME
Sagadahoc, ME
York, ME
*Portland-Vancouver, OR-WA.......................... 1.1231 1.0827
Clackamas, OR
Columbia, OR
Multnomah, OR
Washington, OR
Yamhill, OR
Clark, WA
*Providence-Warwick, RI............................. 1.1143 1.0769
Bristol, RI
Kent, RI
Newport, RI
Providence, RI
Washington, RI
Provo-Orem, UT...................................... 1.0334 1.0228
Utah, UT
Pueblo, CO.......................................... 0.7805 0.8439
Pueblo, CO
Punta Gorda, FL..................................... 0.8656 0.9059
Charlotte, FL
Racine, WI.......................................... 0.8366 0.8850
Racine, WI
Raleigh-Durham-Chapel Hill, NC...................... 0.9596 0.9722
Chatham, NC
Durham, NC
Franklin, NC
Johnston, NC
Orange, NC
Wake, NC
Rapid City, SD...................................... 0.8147 0.8691
Pennington, SD
Reading, PA......................................... 0.9199 0.9444
Berks, PA
Redding, CA......................................... 1.1045 1.0704
Shasta, CA
Reno, NV............................................ 1.1129 1.0760
Washoe, NV
Richland-Kennewick-Pasco, WA........................ 0.9691 0.9787
Benton, WA
Franklin, WA
Richmond-Petersburg, VA............................. 0.9381 0.9572
Charles City County, VA
Chesterfield, VA
Colonial Heights City, VA
Dinwiddie, VA
Goochland, VA
Hanover, VA
Henrico, VA
Hopewell City, VA
New Kent, VA
Petersburg City, VA
Powhatan, VA
Prince George, VA
Richmond City, VA
*Riverside-San Bernardino, CA....................... 1.1661 1.1110
Riverside, CA
San Bernardino, CA
Roanoke, VA......................................... 0.8398 0.8873
Botetourt, VA
Roanoke, VA
Roanoke City, VA
Salem City, VA
Rochester, MN....................................... 1.0500 1.0340
Olmsted, MN
*Rochester, NY...................................... 0.9850 0.9897
Genesee, NY
Livingston, NY
Monroe, NY
Ontario, NY
Orleans, NY
Wayne, NY
Rockford, IL........................................ 0.8709 0.9097
Boone, IL
Ogle, IL
Winnebago, IL
Rocky Mount, NC..................................... 0.8576 0.9001
Edgecombe, NC
Nash, NC
*Sacramento, CA..................................... 1.1330 1.0893
El Dorado, CA
Placer, CA
Sacramento, CA
Saginaw-Bay City-Midland, MI........................ 0.9419 0.9598
Bay, MI
Midland, MI
Saginaw, MI
St. Cloud, MN....................................... 0.9591 0.9718
Benton, MN
Stearns, MN
St. Joseph, MO...................................... 0.8641 0.9048
Andrews, MO
Buchanan, MO
*St. Louis, MO-IL................................... 0.9150 0.9410
Clinton, IL
Jersey, IL
Madison, IL
Monroe, IL
St. Clair, IL
Franklin, MO
Jefferson, MO
Lincoln, MO
St. Charles, MO
St. Louis, MO
St. Louis City, MO
Warren, MO
Salem, OR........................................... 0.9595 0.9721
Marion, OR
Polk, OR
Salinas, CA......................................... 1.3746 1.2434
Monterey, CA
*Salt Lake City-Ogden, UT........................... 0.9645 0.9756
Davis, UT
Salt Lake, UT
Weber, UT
San Angelo, TX...................................... 0.7164 0.7958
Tom Green, TX
*San Antonio, TX.................................... 0.8083 0.8644
Bexar, TX
Comal, TX
Guadalupe, TX
Wilson, TX
*San Diego, CA...................................... 1.2094 1.1391
San Diego, CA
*San Francisco, CA.................................. 1.4103 1.2655
Marin, CA
San Francisco, CA
San Mateo, CA
*San Jose, CA....................................... 1.4353 1.2808
Santa Clara, CA
*San Juan-Bayamon, PR............................... 0.4379 0.5681
Aguas Buenas, PR
Barceloneta, PR
Bayamon, PR
Canovanas, PR
Carolina, PR
Catano, PR
Ceiba, PR
Comerio, PR
Corozal, PR
Dorado, PR
Fajardo, PR
Florida, PR
Guaynabo, PR
Humacao, PR
Juncos, PR
Los Piedras, PR
Loiza, PR
Luguillo, PR
Manati, PR
Naranjito, PR
Rio Grande, PR
San Juan, PR
Toa Alta, PR
Toa Baja, PR
Trujillo Alto, PR
Vega Alta, PR
Vega Baja, PR
Yabucoa, PR
San Luis Obispo-Atascadero-Paso Robles, CA.......... 1.2308 1.1528
San Luis Obispo, CA
Santa Barbara-Santa Maria-Lompoc, CA................ 1.1669 1.1115
Santa Barbara, CA
Santa Cruz-Watsonville, CA.......................... 0.9788 0.9854
Santa Cruz, CA
Santa Fe, NM........................................ 1.0830 1.0561
Los Alamos, NM
Santa Fe, NM
Santa Rosa, CA...................................... 1.3020 1.1981
Sonoma, CA
Sarasota-Bradenton, FL.............................. 0.9717 0.9805
Manatee, FL
Sarasota, FL
Savannah, GA........................................ 0.8880 0.9219
Bryan, GA
Chatham, GA
Effingham, GA
Scranton--Wilkes-Barre--Hazleton, PA................ 0.8668 0.9067
Columbia, PA
Lackawanna, PA
Luzerne, PA
Wyoming, PA
*Seattle-Bellevue-Everett, WA....................... 1.1026 1.0692
Island, WA
King, WA
Snohomish, WA
Sharon, PA.......................................... 0.8965 0.9279
Mercer, PA
Sheboygan, WI....................................... 0.8082 0.8643
Sheboygan, WI
Sherman-Denison, TX................................. 0.8876 0.9216
Grayson, TX
Shreveport-Bossier City, LA......................... 0.9077 0.9358
Bossier, LA
Caddo, LA
Webster, LA
Sioux City, IA-NE................................... 0.8530 0.8968
Woodbury, IA
Dakota, NE
Sioux Falls, SD..................................... 0.8697 0.9088
Lincoln, SD
Minnehaha, SD
South Bend, IN...................................... 0.9664 0.9769
St. Joseph, IN
Spokane, WA......................................... 1.0665 1.0451
Spokane, WA
Springfield, IL..................................... 0.8764 0.9136
Menard, IL
Sangamon, IL
Springfield, MO..................................... 0.7922 0.8526
Christian, MO
Greene, MO
Webster, MO
Springfield, MA..................................... 1.0600 1.0407
Hampden, MA
Hampshire, MA
State College, PA................................... 0.9947 0.9964
Centre, PA
Steubenville-Weirton, OH-WV......................... 0.8511 0.8955
Jefferson, OH
Brooke, WV
Hancock, WV
Stockton-Lodi, CA................................... 1.1653 1.1104
San Joaquin, CA
Sumter, SC.......................................... 0.8052 0.8621
Sumter, SC
Syracuse, NY........................................ 0.9736 0.9818
Cayuga, NY
Madison, NY
Onondaga, NY
Oswego, NY
Tacoma, WA.......................................... 0.9666 0.9770
Pierce, WA
Tallahassee, FL..................................... 0.8244 0.8761
Gadsden, FL
Leon, FL
*Tampa-St. Petersburg-Clearwater, FL................ 0.9319 0.9528
Hernando, FL
Hillsborough, FL
Pasco, FL
Pinellas, FL
Terre Haute, IN..................................... 0.8619 0.9032
Clay, IN
Vermillion, IN
Vigo, IN
Texarkana, AR-Texarkana, TX......................... 0.8336 0.8828
Miller, AR
Bowie, TX
Toledo, OH.......................................... 0.9812 0.9871
Fulton, OH
Lucas, OH
Wood, OH
Topeka, KS.......................................... 0.9928 0.9951
Shawnee, KS
Trenton, NJ......................................... 1.0257 1.0175
Mercer, NJ
Tucson, AZ.......................................... 0.9435 0.9610
Pima, AZ
Tulsa, OK........................................... 0.8253 0.8768
Creek, OK
Osage, OK
Rogers, OK
Tulsa, OK
Wagoner, OK
Tuscaloosa, AL...................................... 0.8197 0.8727
Tuscaloosa, AL
Tyler, TX........................................... 0.8594 0.9014
Smith, TX
Utica-Rome, NY...................................... 0.8506 0.8951
Herkimer, NY
Oneida, NY
Vallejo-Fairfield-Napa, CA.......................... 1.2590 1.1708
Napa, CA
Solano, CA
Ventura, CA......................................... 0.9788 0.9854
Ventura, CA
Victoria, TX........................................ 0.8743 0.9121
Victoria, TX
Vineland-Millville-Bridgeton, NJ.................... 1.0340 1.0232
Cumberland, NJ
Visalia-Tulare-Porterville, CA...................... 1.0344 1.0234
Tulare, CA
Waco, TX............................................ 0.8055 0.8623
McLennan, TX
*Washington, DC-MD-VA-WV............................ 1.1010 1.0681
District of Columbia, DC
Calvert, MD
Charles, MD
Frederick, MD
Montgomery, MD
Prince Georges, MD
Alexandria City, VA
Arlington, VA
Clarke, VA
Culpepper, VA
Fairfax, VA
Fairfax City, VA
Falls Church City, VA
Fauquier, VA
Fredericksburg City, VA
King George, VA
Loudoun, VA
Manassas City, VA
Manassas Park City, VA
Prince William, VA
Spotsylvania, VA
Stafford, VA
Warren, VA
Berkeley, WV
Jefferson, WV
Waterloo-Cedar Falls, IA............................ 0.8681 0.9077
Black Hawk, IA
Wausau, WI.......................................... 0.9847 0.9895
Marathon, WI
West Palm Beach-Boca Raton, FL...................... 0.9868 0.9909
Palm Beach, FL
Wheeling, OH-WV..................................... 0.7633 0.8311
Belmont, OH
Marshall, WV
Ohio, WV
Wichita, KS......................................... 1.0037 1.0025
Butler, KS
Harvey, KS
Sedgwick, KS
Wichita Falls, TX................................... 0.6885 0.7745
Archer, TX
Wichita, TX
Williamsport, PA.................................... 0.8463 0.8920
Lycoming, PA
Wilmington-Newark, DE-MD............................ 1.0764 1.0517
New Castle, DE
Cecil, MD
Wilmington, NC...................................... 0.9179 0.9430
New Hanover, NC
Brunswick, NC
Yakima, WA.......................................... 0.9538 0.9681
Yakima, WA
Yolo, CA............................................ 1.1897 1.1263
Yolo, CA
York, PA............................................ 0.9044 0.9335
York, PA
Youngstown-Warren, OH............................... 0.9405 0.9589
Columbiana, OH
Mahoning, OH
Trumbull, OH
Yuba City, CA....................................... 1.0238 1.0162
Sutter, CA
Yuba, CA
Yuma, AZ............................................ 0.8714 0.9100
Yuma, AZ
------------------------------------------------------------------------

Table 4b.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Rural Areas
------------------------------------------------------------------------
Wageindex
Nonurban area GAF
------------------------------------------------------------------------
Alabama............................................ 0.7051 0.7872
Alaska............................................. 1.2556 1.1687
Arizona............................................ 0.8315 0.8813
Arkansas........................................... 0.6817 0.7692
California......................................... 0.9788 0.9854
Colorado........................................... 0.8020 0.8598
Connecticut........................................ 1.2289 1.1516
Delaware........................................... 0.8468 0.8924
Florida............................................ 0.8543 0.8978
Georgia............................................ 0.7555 0.8253
Hawaii............................................. 0.9563 0.9699
Idaho.............................................. 0.8406 0.8879
Illinois........................................... 0.7444 0.8170
Indiana............................................ 0.7963 0.8556
Iowa............................................... 0.7325 0.8080
Kansas............................................. 0.7286 0.8051
Kentucky........................................... 0.7520 0.8227
Louisiana.......................................... 0.7349 0.8098
Maine.............................................. 0.8429 0.8896
Maryland........................................... 0.8504 0.8950
Massachusetts...................................... 1.0818 1.0553
Michigan........................................... 0.8732 0.9113
Minnesota.......................................... 0.8154 0.8696
Mississippi........................................ 0.6689 0.7593
Missouri........................................... 0.7250 0.8023
Montana............................................ 0.8191 0.8723
Nebraska........................................... 0.7334 0.8087
Nevada............................................. 0.9119 0.9388
New Hampshire...................................... 0.9809 0.9869
New Jersey\1\
New Mexico......................................... 0.8107 0.8661
New York........................................... 0.8759 0.9133
North Carolina..................................... 0.7827 0.8455
North Dakota....................................... 0.7322 0.8078
Ohio............................................... 0.8137 0.8683
Oklahoma........................................... 0.6876 0.7738
Oregon............................................. 0.9270 0.9494
Pennsylvania....................................... 0.8625 0.9037
Puerto Rico........................................ 0.4402 0.5701
Rhode Island\1\
South Carolina..................................... 0.7644 0.8320
South Dakota....................................... 0.6981 0.7818
Tennessee.......................................... 0.7413 0.8147
Texas.............................................. 0.7485 0.8201
Utah............................................... 0.8840 0.9190
Vermont............................................ 0.8934 0.9257
Virginia........................................... 0.7832 0.8459
Washington......................................... 0.9666 0.9770
West Virginia...................................... 0.8138 0.8684
Wisconsin.......................................... 0.8366 0.8850
Wyoming............................................ 0.8014 0.8593
------------------------------------------------------------------------
\1\All counties within the State are classified urban.

Table 4c.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
Hospitals That are Reclassified
------------------------------------------------------------------------
Wageindex
Area Reclassified to GAF
------------------------------------------------------------------------
Albuquerque, NM.................................... 0.9362 0.9559
Alexandria, LA..................................... 0.8313 0.8812
Amarillo, TX....................................... 0.8084 0.8645
Anchorage, AK...................................... 1.3147 1.2061
Appleton-Oshkosh-Neenah, WI........................ 0.8882 0.9220
Asheville, NC...................................... 0.9212 0.9453
Atlanta, GA........................................ 1.0289 1.0197
Baton Rouge, LA.................................... 0.8656 0.9059
Benton Harbor, MI.................................. 0.8209 0.8736
Benton Harbor, MI (Rural Michigan Hosp.)........... 0.8732 0.9133
Bergen-Passaic, NJ................................. 1.1316 1.0884
Biloxi-Gulfport, MS................................ 0.7968 0.8559
Birmingham, AL..................................... 0.8772 0.9142
Bismarck, ND....................................... 0.8684 0.9079
Boise City, ID..................................... 0.9067 0.9351
Boston-Brockton-Nashua, MA-NH...................... 1.1564 1.1046
Brazoria, TX....................................... 0.8300 0.8802
Bremerton, WA...................................... 0.7557 0.8255
Bremerton, WA (Rural Wahington Hosp.).............. 0.9666 0.9770
Bryan-College Station, TX.......................... 0.8712 0.9099
Casper, WY......................................... 0.8431 0.8897
Charlotte-Gastonia-Rock Hill, NC-SC................ 0.9593 0.9719
Charlottesville, VA................................ 0.9242 0.9475
Chattanooga, TN-GA................................. 0.8998 0.9302
Chicago, IL........................................ 1.0716 1.0485
Cincinnati, OH-KY-IN............................... 0.9469 0.9633
Cleveland-Lorain-Elyria, OH........................ 0.9870 0.9911
Columbia, MO....................................... 0.8950 0.9268
Columbus, GA-AL.................................... 0.7797 0.8433
Columbus, OH....................................... 0.9807 0.9867
Cumberland, MD-WV.................................. 0.8280 0.8788
Dallas, TX......................................... 0.9600 0.9724
Davenport-Rock Island-Moline, IA-IL................ 0.8263 0.8775
Dayton-Springfield, OH............................. 0.9199 0.9444
Denver, CO......................................... 1.0659 1.0447
Des Moines, IA..................................... 0.8669 0.9068
Detroit, MI........................................ 1.0871 1.0589
Dothan, AL......................................... 0.8010 0.8590
Duluth-Superior, MN-WI............................. 0.9303 0.9517
Dutchess County, NY................................ 1.0470 1.0320
Eau Claire, WI..................................... 0.8516 0.8958
El Paso, TX........................................ 0.8518 0.8960
Eugene-Springfield, OR............................. 1.0632 1.0429
Fargo-Moorhead, ND-MN.............................. 0.9091 0.9368
Fayetteville, NC................................... 0.8423 0.8891
Flint, MI.......................................... 1.0411 1.0280
Florence, AL....................................... 0.7916 0.8521
Fort Lauderdale, FL................................ 1.0361 1.0246
Fort Pierce-Port St. Lucie, FL..................... 1.0118 1.0081
Fort Smith, AR..................................... 0.7716 0.8373
Fort Walton Beach, FL.............................. 0.8747 0.9124
Fort Wayne, IN..................................... 0.8875 0.9215
Fort Worth-Arlington, TX........................... 0.9169 0.9423
Gadsden, AL........................................ 0.8196 0.8726
Gainesville, FL.................................... 0.8867 0.9210
Glens Falls, NY.................................... 0.9309 0.9521
Grand Forks, ND-MN................................. 0.9038 0.9331
Great Falls, MT.................................... 0.9018 0.9317
Greenville-Spartanburg-Anderson, SC................ 0.9149 0.9409
Harrisburg-Lebanon-Carlisle, PA.................... 0.9667 0.9771
Hartford, CT....................................... 1.2269 1.1503
Houston, TX........................................ 0.9829 0.9883
Huntington-Ashland, WV-KY-OH....................... 0.8989 0.9296
Huntsville, AL..................................... 0.7933 0.8534
Indianapolis, IN................................... 0.9865 0.9907
Jackson, MS........................................ 0.7669 0.8338
Jackson, TN........................................ 0.8299 0.8801
Johnson City-Kingsport-Bristol, TN-VA.............. 0.8667 0.9067
Joplin, MO......................................... 0.7828 0.8456
Kalamazoo-Battlecreek, MI.......................... 1.0507 1.0344
Kansas City, KS-MO................................. 0.9513 0.9664
Knoxville, TN...................................... 0.8588 0.9010
Lafayette, LA...................................... 0.8011 0.8591
Lansing-East Lansing, MI........................... 1.0067 1.0046
Las Cruces, NM..................................... 0.8837 0.9188
Las Vegas, NV-AZ................................... 1.0723 1.0490
Lexington, KY...................................... 0.8471 0.8926
Lima, OH........................................... 0.8703 0.9093
Lincoln, NE........................................ 0.8790 0.9155
Little Rock-North Little Rock, AR.................. 0.8327 0.8822
Longview-Marshall, TX.............................. 0.8546 0.8980
Los Angeles-Long Beach, CA......................... 1.2592 1.1710
Louisville, KY-IN.................................. 0.9474 0.9637
Lubbock, TX........................................ 0.8717 0.9103
Macon, GA.......................................... 0.8639 0.9047
Madison, WI........................................ 0.9954 0.9968
Mansfield, OH...................................... 0.8238 0.8757
Medford-Ashland, OR................................ 0.9944 0.9962
Memphis, TN-AR-MS.................................. 0.8412 0.8883
Merced, CA......................................... 1.0250 1.0171
Middlesex-Somerset-Hunterdon, NJ................... 1.0579 1.0393
Milwaukee, WI...................................... 0.9537 0.9681
Minneapolis-St. Paul, MN-WI........................ 1.0889 1.0601
Modesto, CA........................................ 1.1292 1.0868
Monroe, LA......................................... 0.7758 0.8404
Montgomery, AL..................................... 0.8082 0.8643
Nashville, TN...................................... 0.9235 0.9470
New London-Norwich, CT............................. 1.1752 1.1169
New Orleans, LA.................................... 0.9532 0.9677
New York, NY....................................... 1.4200 1.2714
Newark, NJ......................................... 1.0936 1.0632
Newburgh, NY-PA.................................... 0.9496 0.9652
Oakland, CA........................................ 1.4690 1.3013
Oklahoma City, OK.................................. 0.8499 0.8946
Omaha, NE-IA....................................... 0.9825 0.9880
Orange County, CA.................................. 1.4029 1.2609
Peoria-Pekin, IL................................... 0.8447 0.8909
Philadelphia, PA-NJ................................ 1.1115 1.0751
Pittsburgh, PA..................................... 0.9847 0.9895
Portland-Vancouver, OR-WA.......................... 1.1231 1.0827
Provo-Orem, UT..................................... 0.9858 0.9903
Raleigh-Durham-Chapel Hill, NC..................... 0.9596 0.9722
Roanoke, VA........................................ 0.8398 0.8873
Rochester, MN...................................... 1.0363 1.0247
Rockford, IL....................................... 0.8709 0.9097
Rocky Mount, NC.................................... 0.8576 0.9001
Saginaw-Bay City-Midland, MI,...................... 0.9419 0.9598
St. Cloud, MN...................................... 0.9591 0.9718
St. Louis, MO-IL................................... 0.9150 0.9410
Salem, OR.......................................... 0.9595 0.9721
Salt Lake City-Ogden, UT........................... 0.9645 0.9756
San Antonio, TX.................................... 0.8083 0.8644
San Francisco, CA.................................. 1.4103 1.2655
San Jose, CA....................................... 1.4353 1.2808
Sarasota-Bradenton, FL............................. 0.9717 0.9805
Scranton-Wilkes-Barre-Hazelton, PA................. 0.8668 0.9067
Seattle-Bellevue-Everett, WA....................... 1.0839 1.0567
Sherman-Denison, TX................................ 0.8876 0.9216
Sioux City, IA-NE.................................. 0.8377 0.8858
Sioux Falls, SD.................................... 0.8697 0.9088
South Bend, IN..................................... 0.9664 0.9769
Springfield, IL.................................... 0.8764 0.9136
Syracuse, NY....................................... 0.9736 0.9818
Tampa-St. Petersburg-Clearwater, FL................ 0.9319 0.9528
Texarkana, TX-Texarkana, AR........................ 0.8336 0.8828
Topeka, KS......................................... 0.9928 0.9951
Trenton, NJ........................................ 1.2552 1.1684
Tucson, AZ......................................... 0.9435 0.9610
Tulsa, OK.......................................... 0.8253 0.8768
Tyler, TX.......................................... 0.8594 0.9014
Ventura, CA........................................ 1.2864 1.1882
Waco, TX........................................... 0.8055 0.8623
Washington, DC-MD-VA-WV............................ 1.1010 1.0681
Waterloo-Cedar Falls, IA........................... 0.8681 0.9077
Wausau, WI......................................... 0.9427 0.9604
Wichita, KS........................................ 0.9742 0.9823
Rural Alabama...................................... 0.7051 0.7872
Rural Louisiana.................................... 0.7349 0.8098
Rural Missouri..................................... 0.7250 0.8023
Rural New Hampshire................................ 0.9809 0.9869
Rural Ohio......................................... 0.8137 0.8683
Rural Virginia..................................... 0.7832 0.8459
Rural West Virginia................................ 0.8138 0.8684
Rural Wyoming...................................... 0.8014 0.8593
------------------------------------------------------------------------

Table 4d.--Average Hourly Wage for Urban Areas
------------------------------------------------------------------------
Average
Urban area hourly
wage
------------------------------------------------------------------------
Abilene, TX.................................................. 15.6799
Aguadilla, PR................................................ 8.4764
Akron, OH.................................................... 17.2298
Albany, GA................................................... 16.1099
Albany-Schenectady-Troy, NY.................................. 16.1957
Albuquerque, NM.............................................. 17.0208
Alexandria, LA............................................... 15.1130
Allentown-Bethlehem-Easton, PA-NJ............................ 18.4674
Altoona, PA.................................................. 16.8070
Amarillo, TX................................................. 14.6970
Anchorage, AK................................................ 23.8324
Ann Arbor, MI................................................ 23.0180
Anniston, AL................................................. 14.5274
Appleton-Oshkosh-Neenah, WI.................................. 16.1474
Arecibo, PR.................................................. 6.9358
Asheville, NC................................................ 16.7477
Athens, GA................................................... 16.5317
Atlanta, GA.................................................. 18.7055
Atlantic City-Cape May, NJ................................... 19.8522
Augusta-Aiken, GA-SC......................................... 15.7238
Austin-San Marcos, TX........................................ 16.4196
Bakersfield, CA.............................................. 19.9373
Baltimore, MD................................................ 18.0216
Bangor, ME................................................... 17.3217
Barnstable-Yarmouth, MA...................................... 25.2260
Baton Rouge, LA.............................................. 15.7376
Beaumont-Port Arthur, TX..................................... 15.7684
Bellingham, WA............................................... 20.5119
Benton Harbor, MI............................................ 14.8759
Bergen-Passaic, NJ........................................... 20.5959
Billings, MT................................................. 15.9221
Biloxi-Gulfport-Pascagoula, MS............................... 15.0572
Binghamton, NY............................................... 16.7629
Birmingham, AL............................................... 15.9479
Bismarck, ND................................................. 15.7880
Bloomington, IN.............................................. 15.5760
Bloomington-Normal, IL....................................... 15.5045
Boise City, ID............................................... 16.4848
Boston-Boston-Nashua, MA-NH.................................. 21.0242
Boulder-Longmont, CO......................................... 18.1601
Brazoria, TX................................................. 15.9482
Bremerton, WA................................................ 17.6611
Brownsville-Harlingen-San Benito, TX......................... 15.0688
Bryan-College Station, TX.................................... 15.8389
Buffalo-Niagara Falls, NY.................................... 16.6972
Burlington, VT............................................... 18.1503
Caguas, PR................................................... 7.9854
Canton-Massillon, OH......................................... 15.7864
Casper, WY................................................... 15.1989
Cedar Rapids, IA............................................. 14.8441
Champaign-Urbana, IL......................................... 16.1590
Charleston-North Charleston, SC.............................. 16.1537
Charleston, WV............................................... 15.6757
Charlotte-Gastonia-Rock Hill, NC-SC.......................... 17.3740
Charlottesville, VA.......................................... 17.0943
Chattanooga, TN-GA........................................... 16.3584
Cheyenne, WY................................................. 13.6175
Chicago, IL.................................................. 19.4830
Chico-Paradise, CA........................................... 18.7297
Cincinnati, OH-KY-IN......................................... 17.2034
Clarksville-Hopkinsville, TN-KY.............................. 13.7119
Cleveland-Lorain-Elyria, OH.................................. 17.9437
Colorado Springs, CO......................................... 16.9767
Columbia, MO................................................. 16.8243
Columbia, SC................................................. 16.3607
Columbus, GA-AL.............................................. 14.1755
Columbus, OH................................................. 17.8306
Corpus Christi, TX........................................... 15.2095
Cumberland, MD-WV............................................ 14.9137
Dallas, TX................................................... 17.4528
Danville, VA................................................. 14.7798
Davenport-Moline-Rock Island, IA-IL.......................... 15.0227
Dayton-Springfield, OH....................................... 17.0612
Daytona Beach, FL............................................ 15.7116
Decatur, AL.................................................. 14.5969
Decatur, IL.................................................. 14.4506
Denver, CO................................................... 19.3789
Des Moines, IA............................................... 15.7603
Detroit, MI.................................................. 19.7641
Dothan, AL................................................... 14.5621
Dover, DE.................................................... 16.6236
Dubuque, IA.................................................. 13.7683
Duluth-Superior, MN-WI....................................... 16.8727
Dutchess County, NY.......................................... 19.2454
Eau Claire, WI............................................... 15.3631
El Paso, TX.................................................. 15.4859
Elkhart-Goshen, IN........................................... 15.8724
Elmira, NY................................................... 15.6636
Enid, OK..................................................... 14.9984
Erie, PA..................................................... 16.3068
Eugene-Springfield, OR....................................... 19.3300
Evansville, Henderson, IN-KY................................. 16.4926
Fargo-Moorhead, ND-MN........................................ 16.8334
Fayetteville, NC............................................. 15.8069
Fayetteville-Springdale-Rogers, AR........................... 13.2254
Flint, MI.................................................... 18.9698
Florence, AL................................................. 13.9337
Florence, SC................................................. 15.5718
Fort Collins-Loveland, CO.................................... 17.7671
Fort Lauderdale, FL.......................................... 19.3381
Fort Myers-Cape Coral, FL.................................... 17.4771
Fort Pierce-Fort St. Lucie, FL............................... 18.1523
Fort Smith, AR-OK............................................ 14.0151
Fort Walton Beach, FL........................................ 16.1725
Fort Wayne, IN............................................... 16.1351
Fort Worth-Arlington, TX..................................... 16.6281
Fresno, CA................................................... 18.8501
Gadsden, AL.................................................. 14.9006
Gainesville, FL.............................................. 16.1053
Galveston-Texas City, TX..................................... 18.4232
Gary, IN..................................................... 17.5613
Glens Falls, NY.............................................. 16.6860
Goldsboro, NC................................................ 15.4377
Grand Forks, ND-MN........................................... 16.2914
Grand Rapids-Muskegon-Holland, MI............................ 17.9324
Great Falls, MT.............................................. 15.7732
Greeley, CO.................................................. 19.1455
Green Bay, WI................................................ 16.1023
Greensboro-Winston-Salem-High Point, NC...................... 16.7368
Greenville, NC............................................... 16.3414
Greenville-Spartanburg-Anderson, SC.......................... 16.6335
Hagerstown, MD............................................... 16.3387
Hamilton-Middletown, OH...................................... 16.1746
Harrisburg-Lebanon-Carlisle, PA.............................. 17.5461
Hartford, CT................................................. 22.5979
Hickory-Morganton, NC........................................ 15.9128
Honolulu, HI................................................. 21.3363
Houma, LA.................................................... 14.0576
Houston, TX.................................................. 17.8660
Huntington-Ashland, WV-KY-OH................................. 16.3419
Huntsville, AL............................................... 14.7596
Indianapolis, IN............................................. 17.9355
Iowa City, IA................................................ 16.5438
Jackson, MI.................................................. 16.7467
Jackson, MS.................................................. 13.8228
Jackson, TN.................................................. 15.0882
Jacksonville, FL............................................. 16.4406
Jacksonville, NC............................................. 13.1433
Jamestown, NY................................................ 13.7544
Janesville-Beloit, WI........................................ 15.7055
Jersey City, NJ.............................................. 20.1808
Johnson City-Kingsport-Bristol, TN-VA........................ 15.7582
Johnstown, PA................................................ 15.7335
Joplin, MO................................................... 14.1473
Kalamazoo-Battle Creek, MI................................... 19.1022
Kankakee, IL................................................. 17.1314
Kansas City, KS-MO........................................... 17.2955
Kenosha, WI.................................................. 16.0882
Killeen-Temple, TX........................................... 17.6560
Knoxville, TN................................................ 15.6051
Kokomo, IN................................................... 16.4989
LaCrosse, WI................................................. 15.5484
Lafayette, LA................................................ 14.4264
Lafayette, IN................................................ 15.1766
Lake Charles, LA............................................. 15.0433
Lakeland-Winter Haven, FL.................................... 14.7941
Lancaster, PA................................................ 17.0658
Lansing-East Lansing, MI..................................... 18.3031
Laredo, TX................................................... 12.7235
Las Cruces, NM............................................... 16.0660
Las Vegas, NV-AZ............................................. 19.4913
Lawrence, KS................................................. 15.6222
Lawton, OK................................................... 15.5118
Lewiston-Auburn, ME.......................................... 17.6436
Lexington, KY................................................ 15.3463
Lima, OH..................................................... 15.8233
Lincoln, NE.................................................. 16.4101
Little Rock-North Little Rock, AR............................ 15.1390
Longview-Marshall, TX........................................ 15.9127
Los Angeles-Long Beach, CA................................... 22.8969
Louisville, KY-IN............................................ 17.2240
Lubbock, TX.................................................. 15.8490
Lynchburg, VA................................................ 15.1754
Macon, GA.................................................... 16.4206
Madison, WI.................................................. 18.0981
Mansfield, OH................................................ 14.9778
Mayaguez, PR................................................. 8.1304
McAllen-Edinburg-Mission, TX................................. 14.6517
Medford-Ashland, OR.......................................... 17.6432
Melbourne-Titusville-Palm Bay, FL............................ 16.3510
Memphis, TN-AR-MS............................................ 15.4887
Merced, CA................................................... 17.9930
Miami, FL.................................................... 18.5575
Middlesex-Somerset-Hunterdon, NJ............................. 19.5314
Milwaukee-Waukesha, WI....................................... 17.5426
Minneapolis-St. Paul, MN-WI.................................. 19.7966
Mobile, AL................................................... 13.7051
Modesto, CA.................................................. 20.4129
Monmouth-Ocean, NJ........................................... 19.4962
Monroe, LA................................................... 13.9777
Montgomery, AL............................................... 14.6928
Muncie, IN................................................... 17.3507
Myrtle Beach, SC............................................. 14.5015
Naples, FL................................................... 17.7633
Nashville, TN................................................ 17.0518
Nassau-Suffolk, NY........................................... 24.6970
New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT.......... 22.5646
New London-Norwich, CT....................................... 21.1702
New Orleans, LA.............................................. 17.3291
New York, NY................................................. 25.6447
Newark, NJ................................................... 21.7897
Newburgh, NY-PA.............................................. 18.6043
Norfolk-Virginia Beach-Newport News, VA...................... 15.1146
Oakland, CA.................................................. 26.6653
Ocala, FL.................................................... 16.0357
Odessa-Midland, TX........................................... 15.3382
Oklahoma City, OK............................................ 15.4527
Olympia, WA.................................................. 20.3246
Omaha, NE-IA................................................. 17.8621
Orange County, CA............................................ 22.2936
Orlando, FL.................................................. 17.2217
Owensboro, KY................................................ 14.3219
Panama City, FL.............................................. 13.7129
Parkersburg-Marietta, WV-OH.................................. 14.4674
Pensacola, FL................................................ 14.9950
Peoria-Pekin, IL............................................. 15.3566
Philadelphia, PA-NJ.......................................... 20.2418
Phoenix-Mesa, AZ............................................. 18.4081
Pine Bluff, AR............................................... 15.7140
Pittsburgh, PA............................................... 17.9035
Pittsfield, MA............................................... 20.6961
Ponce, PR.................................................... 8.0275
Portland, ME................................................. 17.2961
Portland-Vancouver, OR-WA.................................... 20.4183
Providence-Warwick, RI....................................... 20.2583
Provo-Orem, UT............................................... 18.7888
Pueblo, CO................................................... 14.1899
Punta Gorda, FL.............................................. 15.9683
Racine, WI................................................... 15.7220
Raleigh-Durham-Chapel Hill, NC............................... 17.4465
Rapid City, SD............................................... 14.8116
Reading, PA.................................................. 16.7253
Redding, CA.................................................. 20.0800
Reno, NV..................................................... 20.2340
Richland-Kennewick-Pasco, WA................................. 17.6183
Richmond-Petersburg, VA...................................... 17.0553
Riverside-San Bernardino, CA................................. 21.3851
Roanoke, VA.................................................. 15.0995
Rochester, MN................................................ 19.0900
Rochester, NY................................................ 17.9083
Rockford, IL................................................. 15.8339
Rocky Mount, NC.............................................. 15.5922
Sacramento, CA............................................... 20.5987
Saginaw-Bay City-Midland, MI................................. 17.0890
St. Cloud, MN................................................ 17.4372
St. Joseph, MO............................................... 15.7097
St. Louis, MO-IL............................................. 16.6361
Salem, OR.................................................... 17.4562
Salinas, CA.................................................. 24.9907
Salt Lake City-Ogden, UT..................................... 17.5358
San Angelo, TX............................................... 13.0251
San Antonio, TX.............................................. 14.6955
San Diego, CA................................................ 21.9881
San Francisco, CA............................................ 25.6122
San Jose, CA................................................. 26.0941
San Juan-Bayamon, PR......................................... 7.9610
San Luis Obispo-Atascadero-Paso Robles, CA................... 22.3764
Santa Barbara-Santa Maria-Lompoc, CA......................... 21.2153
Santa Cruz-Watsonville, CA................................... 24.5190
Santa Fe, NM................................................. 19.6904
Santa Rosa, CA............................................... 23.4906
Sarasota-Bradenton, FL....................................... 17.6658
Savannah, GA................................................. 16.1442
Scranton-Wilkes Barre-Hazleton, PA........................... 15.5977
Seattle-Bellevue-Everett, WA................................. 20.0458
Sharon, PA................................................... 16.2992
Sheboygan, WI................................................ 14.6933
Sherman-Denison, TX.......................................... 16.1308
Shreveport-Bossier City, LA.................................. 16.5027
Sioux City, IA-NE............................................ 15.5079
Sioux Falls, SD.............................................. 15.8117
South Bend, IN............................................... 17.5707
Spokane, WA.................................................. 19.3897
Springfield, IL.............................................. 15.9339
Springfield, MO.............................................. 14.4034
Springfield, MA.............................................. 19.2715
State College, PA............................................ 18.0846
Steubenville-Weirton, OH-WV.................................. 15.4737
Stockton-Lodi, CA............................................ 21.2618
Sumter, SC................................................... 14.6395
Syracuse, NY................................................. 17.7012
Tacoma, WA................................................... 18.9982
Tallahassee, FL.............................................. 14.9889
Tampa-St. Petersburg-Clearwater, FL.......................... 16.9475
Terre Haute, IN.............................................. 15.6697
Texarkana, TX-Texarkana, AR.................................. 14.8819
Toledo, OH................................................... 18.1171
Topeka, KS................................................... 18.0500
Trenton, NJ.................................................. 18.6489
Tucson, AZ................................................... 17.1274
Tulsa, OK.................................................... 15.0046
Tuscaloosa, AL............................................... 14.9033
Tyler, TX.................................................... 15.6242
Utica-Rome, NY............................................... 15.4642
Vallejo-Fairfield-Napa, CA................................... 23.8150
Ventura, CA.................................................. 21.2819
Victoria, TX................................................. 15.8948
Vineland-Millville-Bridgeton, NJ............................. 18.7995
Visalia-Tulare-Porterville, CA............................... 18.8058
Waco, TX..................................................... 14.6442
Washington, DC-MD-VA-WV...................................... 20.0174
Waterloo-Cedar Falls, IA..................................... 15.7836
Wausau, WI................................................... 17.9018
West Palm Beach-Boca Raton, FL............................... 18.3519
Wheeling, WV-OH.............................................. 13.8778
Wichita, KS.................................................. 18.2479
Wichita Falls, TX............................................ 12.5172
Williamsport, PA............................................. 15.3868
Wilmington-Newark, DE-MD..................................... 19.5698
Wilmington, NC............................................... 16.6887
Yakima, WA................................................... 17.3416
Yolo, CA..................................................... 21.6301
York, PA..................................................... 16.4426
Youngstown-Warren, OH........................................ 17.0986
Yuba City, CA................................................ 18.6136
Yuma, AZ..................................................... 15.8434
------------------------------------------------------------------------

Table 4e.--Average Hourly Wage for Rural Areas
------------------------------------------------------------------------
Average
Nonurban area hourly
wage
------------------------------------------------------------------------
Alabama...................................................... 12.7907
Alaska....................................................... 22.8273
Arizona...................................................... 15.1182
Arkansas..................................................... 12.3940
California................................................... 17.7961
Colorado..................................................... 14.5806
Connecticut.................................................. 22.3424
Delaware..................................................... 15.3947
Florida...................................................... 15.5317
Georgia...................................................... 13.7365
Hawaii....................................................... 17.3871
Idaho........................................................ 15.2823
Illinois..................................................... 13.5345
Indiana...................................................... 14.4777
Iowa......................................................... 13.3171
Kansas....................................................... 13.2473
Kentucky..................................................... 13.6720
Louisiana.................................................... 13.3198
Maine........................................................ 15.3246
Maryland..................................................... 15.4619
Massachusetts................................................ 19.6679
Michigan..................................................... 15.8762
Minnesota.................................................... 14.8248
Mississippi.................................................. 12.1611
Missouri..................................................... 13.1806
Montana...................................................... 14.8911
Nebraska..................................................... 13.3346
Nevada....................................................... 16.5787
New Hampshire................................................ 17.8203
New Jersey\1\................................................
New Mexico................................................... 14.7398
New York..................................................... 15.9245
North Carolina............................................... 14.2303
North Dakota................................................. 13.3117
Ohio......................................................... 14.7840
Oklahoma..................................................... 12.5019
Oregon....................................................... 16.8541
Pennsylvania................................................. 15.6802
Puerto Rico.................................................. 8.0041
Rhode Island\1\
South Carolina............................................... 13.8973
South Dakota................................................. 12.6925
Tennessee.................................................... 13.4771
Texas........................................................ 13.6078
Utah......................................................... 16.0721
Vermont...................................................... 16.2419
Virginia..................................................... 14.2279
Washington................................................... 17.5732
West Virginia................................................ 14.7082
Wisconsin.................................................... 15.2103
Wyoming...................................................... 14.4787
------------------------------------------------------------------------
\1\All counties within the State are classified urban.

Table 5.--List of Diagnosis Related Groups (DRGS), Relative Weighting Factors, Geometric Mean Length of Stay,
and Length of Stay Outlier Cutoff Points Used in the Prospective Payment System
----------------------------------------------------------------------------------------------------------------
Relative Geometric Arithmetic Outlier
weights mean LOS mean LOS threshold
----------------------------------------------------------------------------------------------------------------
1....... 01 SURG CRANIOTOMY AGE >17 EXCEPT FOR 3.1583 9.6 13.5 32
TRAUMA.
2....... 01 SURG CRANIOTOMY FOR TRAUMA AGE >17.. 3.0986 9.8 13.9 32
3....... 01 SURG *CRANIOTOMY AGE 0-17........... 3.0370 12.7 12.7 35
4....... 01 SURG SPINAL PROCEDURES.............. 2.3196 7.2 11.0 29
5....... 01 SURG EXTRACRANIAL VASCULAR 1.5615 4.4 5.6 26
PROCEDURES.
6....... 01 SURG CARPAL TUNNEL RELEASE.......... .6360 2.2 3.2 24
7....... 01 SURG PERIPH & CRANIAL NERVE & OTHER 2.3641 9.6 16.7 32
NERV SYST PROC WITH CC.
8....... 01 SURG PERIPH & CRANIAL NERVE & OTHER .8845 2.8 4.5 25
NERV SYST PROC W/O CC.
9....... 01 MED SPINAL DISORDERS & INJURIES.... 1.2468 6.0 8.8 28
10...... 01 MED NERVOUS SYSTEM NEOPLASMS WITH 1.2626 6.7 9.6 29
CC.
11...... 01 MED NERVOUS SYSTEM NEOPLASMS W/O CC .7736 3.8 5.5 26
12...... 01 MED DEGENERATIVE NERVOUS SYSTEM .9576 6.3 9.0 28
DISORDERS.
13...... 01 MED MULTIPLE SCLEROSIS & CEREBELLAR .7846 5.7 7.2 28
ATAXIA.
14...... 01 MED SPECIFIC CEREBROVASCULAR 1.1962 6.4 8.7 28
DISORDERS EXCEPT TIA.
15...... 01 MED TRANSIENT ISCHEMIC ATTACK & .6915 3.8 4.9 26
PRECEREBRAL OCCLUSIONS.
16...... 01 MED NONSPECIFIC CEREBROVASCULAR 1.0468 5.8 7.7 28
DISORDERS W CC.
17...... 01 MED NONSPECIFIC CEREBROVASCULAR .6197 3.5 4.6 26
DISORDERS W/O CC.
18...... 01 MED CRANIAL & PERIPHERAL NERVE .9138 5.5 7.2 27
DISORDERS WITH CC.
19...... 01 MED CRANIAL & PERIPHERAL NERVE .5941 3.7 4.8 26
DISORDERS W/O CC.
20...... 01 MED NERVOUS SYSTEM INFECTION EXCEPT 2.0898 8.3 11.7 30
VIRAL MENINGITIS.
21...... 01 MED VIRAL MENINGITIS............... 1.4489 6.5 8.7 28
22...... 01 MED HYPERTENSIVE ENCEPHALOPATHY.... .7809 4.2 5.4 26
23...... 01 MED NONTRAUMATIC STUPOR & COMA..... .8018 4.0 5.6 26
24...... 01 MED SEIZURE & HEADACHE AGE >17 WITH .9661 4.8 6.6 27
CC.
25...... 01 MED SEIZURE & HEADACHE AGE >17 W/O .5524 3.2 4.1 25
CC.
26...... 01 MED SEIZURE & HEADACHE AGE 0-17.... .6294 2.8 4.4 25
27...... 01 MED TRAUMATIC STUPOR & COMA, COMA 1.3456 4.0 7.1 26
>1 HR.
28...... 01 MED TRAUMATIC STUPOR & COMA, COMA 1.2155 5.5 8.2 27
<1 HR AGE >17 WITH CC.
29...... 01 MED TRAUMATIC STUPOR & COMA, COMA .6215 3.3 4.6 25
<1 HR AGE >17 W/O CC.
30...... 01 MED *TRAUMATIC STUPOR & COMA, COMA .3684 2.0 2.0 17
<1 HR AGE 0-17.
31...... 01 MED CONCUSSION AGE >17 WITH CC..... .7551 3.9 5.6 26
32...... 01 MED CONCUSSION AGE >17 W/O CC...... .4598 2.5 3.4 23
33...... 01 MED *CONCUSSION AGE 0-17........... .2556 1.6 1.6 9
34...... 01 MED OTHER DISORDERS OF NERVOUS 1.0876 5.3 7.4 28
SYSTEM WITH CC.
35...... 01 MED OTHER DISORDERS OF NERVOUS .5857 3.5 4.9 27
SYSTEM W/O CC.
36...... 02 SURG RETINAL PROCEDURES............. .6000 1.5 1.8 8
37...... 02 SURG ORBITAL PROCEDURES............. .8124 2.7 3.9 25
38...... 02 SURG PRIMARY IRIS PROCEDURES........ .3997 2.0 2.7 16
39...... 02 SURG LENS PROCEDURES WITH OR WITHOUT .5079 1.5 1.9 9
VITRECTOMY.
40...... 02 SURG EXTRAOCULAR PROCEDURES EXCEPT .6020 2.3 3.6 24
ORBIT AGE >17.
41...... 02 SURG *EXTRAOCULAR PROCEDURES EXCEPT .3806 1.6 1.6 7
ORBIT AGE 0-17.
42...... 02 SURG INTRAOCULAR PROCEDURES EXCEPT .5783 1.7 2.3 13
RETINA, IRIS & LENS.
43...... 02 MED HYPHEMA........................ .3405 3.0 3.6 20
44...... 02 MED ACUTE MAJOR EYE INFECTIONS..... .5780 5.0 6.0 27
45...... 02 MED NEUROLOGICAL EYE DISORDERS..... .6214 3.5 4.3 25
46...... 02 MED OTHER DISORDERS OF THE EYE AGE .7573 4.5 6.0 26
>17 W CC.
47...... 02 MED OTHER DISORDERS OF THE EYE AGE .4330 3.0 3.9 25
>17 W/O CC.
48...... 02 MED *OTHER DISORDERS OF THE EYE AGE .4182 2.9 2.9 25
0-17.
49...... 03 SURG MAJOR HEAD & NECK PROCEDURES... 1.7155 4.9 6.8 27
50...... 03 SURG SIALOADENECTOMY................ .7151 1.9 2.3 11
51...... 03 SURG SALIVARY GLAND PROCEDURES .6850 2.0 3.0 22
EXCEPT SIALOADENECTOMY.
52...... 03 SURG CLEFT LIP & PALATE REPAIR...... .9160 2.3 3.0 20
53...... 03 SURG SINUS & MASTOID PROCEDURES AGE .8624 2.2 3.4 24
>17.
54...... 03 SURG *SINUS & MASTOID PROCEDURES AGE .7170 3.2 3.2 22
0-17.
55...... 03 SURG MISCELLANEOUS EAR, NOSE, MOUTH .6451 1.8 2.8 20
& THROAT PROCEDURES.
56...... 03 SURG RHINOPLASTY.................... .7719 2.2 3.1 24
57...... 03 SURG T&A PROC, EXCEPT TONSILLECTOMY 1.0215 3.4 5.2 25
&/OR ADENOIDECTOMY ONLY, AGE
>17.
58...... 03 SURG *T&A PROC, EXCEPT TONSILLECTOMY .3224 1.5 1.5 4
&/OR ADENOIDECTOMY ONLY, AGE 0-
17.
59...... 03 SURG TONSILLECTOMY &/OR .4603 1.5 1.9 9
ADENOIDECTOMY ONLY, AGE >17.
60...... 03 SURG *TONSILLECTOMY &/OR .2721 1.5 1.5 4
ADENOIDECTOMY ONLY, AGE 0-17.
61...... 03 SURG MYRINGOTOMY W TUBE INSERTION 1.0048 2.9 5.1 25
AGE >17.
62...... 03 SURG *MYRINGOTOMY W TUBE INSERTION .3215 1.3 1.3 5
AGE 0-17.
63...... 03 SURG OTHER EAR, NOSE, MOUTH & THROAT 1.1087 3.4 5.1 25
O.R. PROCEDURES.
64...... 03 MED EAR, NOSE, MOUTH & THROAT 1.1440 5.0 8.4 27
MALIGNANCY.
65...... 03 MED DYSEQUILIBRIUM................. .5066 3.0 3.8 22
66...... 03 MED EPISTAXIS...................... .5070 3.1 3.9 24
67...... 03 MED EPIGLOTTITIS................... .8395 3.8 4.8 26
68...... 03 MED OTITIS MEDIA & URI AGE >17 WITH .7109 4.4 5.4 26
CC.
69...... 03 MED OTITIS MEDIA & URI AGE >17 W/O .5137 3.5 4.2 22
CC.
70...... 03 MED OTITIS MEDIA & URI AGE 0-17.... .5674 3.5 4.3 25
71...... 03 MED LARYNGOTRACHEITIS.............. .6500 3.5 4.2 22
72...... 03 MED NASAL TRAUMA & DEFORMITY....... .6037 3.1 4.3 25
73...... 03 MED OTHER EAR, NOSE, MOUTH & THROAT .7607 4.1 5.5 26
DIAGNOSES AGE >17.
74...... 03 MED *OTHER EAR, NOSE, MOUTH & .3568 2.1 2.1 20
THROAT DIAGNOSES AGE 0-17.
75...... 04 SURG MAJOR CHEST PROCEDURES......... 3.0728 9.9 12.4 32
76...... 04 SURG OTHER RESP SYSTEM O.R. 2.5091 10.0 13.8 32
PROCEDURES W CC.
77...... 04 SURG OTHER RESP SYSTEM O.R. 1.0561 4.0 6.0 26
PROCEDURES W/O CC.
78...... 04 MED PULMONARY EMBOLISM............. 1.4217 7.8 9.2 30
79...... 04 MED RESPIRATORY INFECTIONS & 1.6968 8.3 10.7 30
INFLAMMATIONS AGE >17 WITH CC.
80...... 04 MED RESPIRATORY INFECTIONS & .9243 5.9 7.3 28
INFLAMMATIONS AGE >17 W/O CC.
81...... 04 MED RESPIRATORY INFECTIONS & 1.1138 5.6 7.0 28
INFLAMMATIONS AGE 0-17.
82...... 04 MED RESPIRATORY NEOPLASMS.......... 1.3249 6.3 8.9 28
83...... 04 MED MAJOR CHEST TRAUMA WITH CC..... .9473 5.5 7.2 28
84...... 04 MED MAJOR CHEST TRAUMA W/O CC...... .4934 3.2 4.3 25
85...... 04 MED PLEURAL EFFUSION WITH CC....... 1.1910 6.2 8.2 28
86...... 04 MED PLEURAL EFFUSION W/O CC........ .6744 3.8 4.9 26
87...... 04 MED PULMONARY EDEMA & RESPIRATORY 1.3319 5.5 7.5 27
FAILURE.
88...... 04 MED CHRONIC OBSTRUCTIVE PULMONARY 1.0062 5.6 6.9 28
DISEASE.
89...... 04 MED SIMPLE PNEUMONIA & PLEURISY AGE 1.1325 6.5 8.0 29
>17 WITH CC.
90...... 04 MED SIMPLE PNEUMONIA & PLEURISY AGE .6923 4.9 5.7 26
>17 W/O CC.
91...... 04 MED SIMPLE PNEUMONIA & PLEURISY AGE .5790 3.6 4.2 18
0-17.
92...... 04 MED INTERSTITIAL LUNG DISEASE WITH 1.2097 6.4 8.1 28
CC.
93...... 04 MED INTERSTITIAL LUNG DISEASE W/O .7706 4.5 5.7 26
CC.
94...... 04 MED PNEUMOTHORAX WITH CC........... 1.2406 6.5 8.5 28
95...... 04 MED PNEUMOTHORAX W/O CC............ .6191 4.0 5.0 26
96...... 04 MED BRONCHITIS & ASTHMA AGE >17 .8494 5.2 6.2 27
WITH CC.
97...... 04 MED BRONCHITIS & ASTHMA AGE >17 W/O .6122 4.1 4.8 24
CC.
98...... 04 MED BRONCHITIS & ASTHMA AGE 0-17... .5396 3.1 4.1 25
99...... 04 MED RESPIRATORY SIGNS & SYMPTOMS .7034 3.2 4.1 25
WITH CC.
100..... 04 MED RESPIRATORY SIGNS & SYMPTOMS W/ .5052 2.3 2.8 15
O CC.
101..... 04 MED OTHER RESPIRATORY SYSTEM .9052 4.6 6.2 27
DIAGNOSES WITH CC.
102..... 04 MED OTHER RESPIRATORY SYSTEM .5320 3.0 3.9 25
DIAGNOSES W/O CC.
103..... 05 SURG HEART TRANSPLANT............... 13.0713 24.3 34.2 46
104..... 05 SURG CARDIAC VALVE PROCEDURES W 7.6122 15.1 17.9 37
CARDIAC CATH.
105..... 05 SURG CARDIAC VALVE PROCEDURES W/O 5.7785 11.0 13.0 33
CARDIAC CATH.
106..... 05 SURG CORONARY BYPASS W CARDIAC CATH. 5.6745 12.1 13.6 34
107..... 05 SURG CORONARY BYPASS W/O CARDIAC 4.2105 9.3 10.4 31
CATH.
108..... 05 SURG OTHER CARDIOTHORACIC PROCEDURES 6.1158 11.4 14.7 33
109..... ....... ............ NO LONGER VALID................ .0000 .0 .0 0
110..... 05 SURG MAJOR CARDIOVASCULAR PROCEDURES 4.0832 9.1 12.2 31
WITH CC.
111..... 05 SURG MAJOR CARDIOVASCULAR PROCEDURES 2.3065 6.5 7.5 28
W/O CC.
112..... 05 SURG PERCUTANEOUS CARDIOVASCULAR 1.9910 3.9 5.3 26
PROCEDURES.
113..... 05 SURG AMPUTATION FOR CIRC SYSTEM 2.7751 12.7 17.1 35
DISORDERS EXCEPT UPPER LIMB &
TOE.
114..... 05 SURG UPPER LIMB & TOE AMPUTATION FOR 1.5388 7.9 10.9 30
CIRC SYSTEM DISORDERS.
115..... 05 SURG PERM CARDIAC PACEMAKER IMPLANT 3.5971 10.4 12.7 32
W AMI, HEART FAILURE OR SHOCK.
116..... 05 SURG OTH PERM CARDIAC PACEMAKER 2.4510 4.7 6.5 27
IMPLANT OR AICD LEAD OR GEN
PROC.
117..... 05 SURG CARDIAC PACEMAKER REVISION 1.1670 3.3 4.8 25
EXCEPT DEVICE REPLACEMENT.
118..... 05 SURG CARDIAC PACEMAKER DEVICE 1.5643 2.3 3.5 24
REPLACEMENT.
119..... 05 SURG VEIN LIGATION & STRIPPING...... .9981 3.3 5.6 25
120..... 05 SURG OTHER CIRCULATORY SYSTEM O.R. 1.9541 6.2 10.6 28
PROCEDURES.
121..... 05 MED CIRCULATORY DISORDERS W AMI & 1.6042 7.0 8.6 29
C.V. COMP DISCH ALIVE.
122..... 05 MED CIRCULATORY DISORDERS W AMI W/O 1.1310 4.9 6.0 27
C.V. COMP DISCH ALIVE.
123..... 05 MED CIRCULATORY DISORDERS W AMI, 1.4292 2.9 5.1 25
EXPIRED.
124..... 05 MED CIRCULATORY DISORDERS EXCEPT 1.2680 4.2 5.5 26
AMI, W CARD CATH & COMPLEX
DIAG.
125..... 05 MED CIRCULATORY DISORDERS EXCEPT .8460 2.4 3.2 23
AMI, W CARD CATH W/O COMPLEX
DIAG.
126..... 05 MED ACUTE & SUBACUTE ENDOCARDITIS.. 2.7676 13.6 18.3 36
127..... 05 MED HEART FAILURE & SHOCK.......... 1.0244 5.5 7.1 27
128..... 05 MED DEEP VEIN THROMBOPHLEBITIS..... .7814 6.7 7.5 29
129..... 05 MED CARDIAC ARREST, UNEXPLAINED.... 1.1312 2.1 3.8 24
130..... 05 MED PERIPHERAL VASCULAR DISORDERS .9089 5.8 7.4 28
WITH CC.
131..... 05 MED PERIPHERAL VASCULAR DISORDERS W/ .5871 4.6 5.6 27
O CC.
132..... 05 MED ATHEROSCLEROSIS WITH CC........ .7295 3.6 4.7 26
133..... 05 MED ATHEROSCLEROSIS W/O CC......... .5369 2.7 3.5 21
134..... 05 MED HYPERTENSION................... .5765 3.5 4.4 25
135..... 05 MED CARDIAC CONGENITAL & VALVULAR .8488 4.2 5.8 26
DISORDERS AGE >17 WITH CC.
136..... 05 MED CARDIAC CONGENITAL & VALVULAR .5616 3.0 3.7 23
DISORDERS AGE >17 W/O CC.
137..... 05 MED *CARDIAC CONGENITAL & VALVULAR .6572 3.3 3.3 25
DISORDERS AGE 0-17.
138..... 05 MED CARDIAC ARRHYTHMIA & CONDUCTION .7971 3.9 5.2 26
DISORDERS WITH CC.
139..... 05 MED CARDIAC ARRHYTHMIA & CONDUCTION .4942 2.6 3.3 20
DISORDERS W/O CC.
140..... 05 MED ANGINA PECTORIS................ .6267 3.2 4.0 23
141..... 05 MED SYNCOPE & COLLAPSE WITH CC..... .7028 3.9 5.1 26
142..... 05 MED SYNCOPE & COLLAPSE W/O CC...... .5178 2.9 3.6 21
143..... 05 MED CHEST PAIN..................... .5173 2.4 3.0 16
144..... 05 MED OTHER CIRCULATORY SYSTEM 1.0667 4.5 6.4 27
DIAGNOSES W CC.
145..... 05 MED OTHER CIRCULATORY SYSTEM .6230 2.8 3.7 25
DIAGNOSES W/O CC.
146..... 06 SURG RECTAL RESECTION WITH CC....... 2.5374 10.7 12.2 33
147..... 06 SURG RECTAL RESECTION W/O CC........ 1.5514 7.4 8.0 28
148..... 06 SURG MAJOR SMALL & LARGE BOWEL 3.2219 12.2 14.6 34
PROCEDURES WITH CC.
149..... 06 SURG MAJOR SMALL & LARGE BOWEL 1.5038 7.6 8.2 26
PROCEDURES W/O CC.
150..... 06 SURG PERITONEAL ADHESIOLYSIS WITH CC 2.5637 10.5 12.7 32
151..... 06 SURG PERITONEAL ADHESIOLYSIS W/O CC. 1.1849 5.5 6.8 27
152..... 06 SURG MINOR SMALL & LARGE BOWEL 1.7740 8.2 9.6 30
PROCEDURES WITH CC.
153..... 06 SURG MINOR SMALL & LARGE BOWEL 1.1154 6.0 6.7 26
PROCEDURES W/O CC.
154..... 06 SURG STOMACH, ESOPHAGEAL & DUODENAL 4.1774 13.3 17.0 35
PROCEDURES AGE >17 WITH CC.
155..... 06 SURG STOMACH, ESOPHAGEAL & DUODENAL 1.3927 6.1 7.2 28
PROCEDURES AGE >17 W/O CC.
156..... 06 SURG *STOMACH, ESOPHAGEAL & DUODENAL .8724 6.0 6.0 28
PROCEDURES AGE 0-17.
157..... 06 SURG ANAL & STOMAL PROCEDURES WITH 1.0322 4.4 6.1 26
CC.
158..... 06 SURG ANAL & STOMAL PROCEDURES W/O CC .5446 2.3 3.0 18
159..... 06 SURG HERNIA PROCEDURES EXCEPT 1.1081 4.3 5.6 26
INGUINAL & FEMORAL AGE >17
WITH CC.
160..... 06 SURG HERNIA PROCEDURES EXCEPT .6582 2.5 3.1 18
INGUINAL & FEMORAL AGE >17 W/O
CC.
161..... 06 SURG INGUINAL & FEMORAL HERNIA .9060 3.2 4.6 25
PROCEDURES AGE >17 WITH CC.
162..... 06 SURG INGUINAL & FEMORAL HERNIA .5169 1.8 2.2 11
PROCEDURES AGE >17 W/O CC.
163..... 06 SURG HERNIA PROCEDURES AGE 0-17..... .7290 3.9 4.8 24
164..... 06 SURG APPENDECTOMY W COMPLICATED 2.1664 8.8 10.2 31
PRINCIPAL DIAG WITH CC.
165..... 06 SURG APPENDECTOMY W COMPLICATED 1.2002 5.7 6.3 24
PRINCIPAL DIAG W/O CC.
166..... 06 SURG APPENDECTOMY W/O COMPLICATED 1.3522 5.2 6.3 27
PRINCIPAL DIAG WITH CC.
167..... 06 SURG APPENDECTOMY W/O COMPLICATED .7843 3.2 3.7 16
PRINCIPAL DIAG W/O CC.
168..... 03 SURG MOUTH PROCEDURES WITH CC....... 1.0920 3.5 5.4 26
169..... 03 SURG MOUTH PROCEDURES W/O CC........ .6176 2.1 2.7 16
170..... 06 SURG OTHER DIGESTIVE SYSTEM O.R. 2.7634 9.7 14.4 32
PROCEDURES WITH CC.
171..... 06 SURG OTHER DIGESTIVE SYSTEM O.R. 1.0576 4.3 5.8 26
PROCEDURES W/O CC.
172..... 06 MED DIGESTIVE MALIGNANCY WITH CC... 1.3010 6.5 9.4 29
173..... 06 MED DIGESTIVE MALIGNANCY W/O CC.... .6325 3.2 4.6 25
174..... 06 MED G.I. HEMORRHAGE WITH CC........ .9735 4.9 6.2 27
175..... 06 MED G.I. HEMORRHAGE W/O CC......... .5366 3.3 3.9 19
176..... 06 MED COMPLICATED PEPTIC ULCER....... 1.0447 5.3 6.9 27
177..... 06 MED UNCOMPLICATED PEPTIC ULCER WITH .8070 4.6 5.6 27
CC.
178..... 06 MED UNCOMPLICATED PEPTIC ULCER W/O .5829 3.3 3.9 19
CC.
179..... 06 MED INFLAMMATORY BOWEL DISEASE..... 1.1147 6.4 8.2 28
180..... 06 MED G.I. OBSTRUCTION WITH CC....... .9134 5.2 6.8 27
181..... 06 MED G.I. OBSTRUCTION W/O CC........ .4978 3.4 4.2 23
182..... 06 MED ESOPHAGITIS, GASTROENT & MISC .7687 4.3 5.6 26
DIGEST DISORDERS AGE >17 WITH
CC.
183..... 06 MED ESOPHAGITIS, GASTROENT & MISC .5360 3.1 3.8 22
DIGEST DISORDERS AGE >17 W/O
CC.
184..... 06 MED ESOPHAGITIS, GASTROENT & MISC .4135 2.6 3.2 18
DIGEST DISORDERS AGE 0-17.
185..... 03 MED DENTAL & ORAL DIS EXCEPT .8339 4.1 5.7 26
EXTRACTIONS & RESTORATIONS,
AGE >17.
186..... 03 MED *DENTAL & ORAL DIS EXCEPT .4278 2.9 2.9 23
EXTRACTIONS & RESTORATIONS,
AGE 0-17.
187..... 03 MED DENTAL EXTRACTIONS & .6465 2.8 3.8 25
RESTORATIONS.
188..... 06 MED OTHER DIGESTIVE SYSTEM 1.0203 4.9 6.8 27
DIAGNOSES AGE >17 WITH CC.
189..... 06 MED OTHER DIGESTIVE SYSTEM .5025 2.7 3.7 25
DIAGNOSES AGE >17 W/O CC.
190..... 06 MED OTHER DIGESTIVE SYSTEM .6263 3.1 4.4 25
DIAGNOSES AGE 0-17.
191..... 07 SURG PANCREAS, LIVER & SHUNT 4.4048 13.6 18.1 36
PROCEDURES WITH CC..
192..... 07 SURG PANCREAS, LIVER & SHUNT 1.7647 6.8 8.8 29
PROCEDURES W/O CC.
193..... 07 SURG BILIARY TRACT PROC W CC EXCEPT 3.1449 12.9 15.6 35
ONLY CHOLECYST W OR W/O C.D.E..
194..... 07 SURG BILIARY TRACT PROC W/O CC 1.6602 7.3 9.2 29
EXCEPT ONLY CHOLECYST W OR W/O
C.D.E.
195..... 07 SURG CHOLECYSTECTOMY W C.D.E. WITH 2.4631 9.7 11.4 32
CC.
196..... 07 SURG CHOLECYSTECTOMY W C.D.E. W/O CC 1.4811 6.5 7.4 28
197..... 07 SURG CHOLECYSTECTOMY EXCEPT BY 2.0800 8.1 9.7 30
LAPAROSCOPE W/O C.D.E. WITH CC.
198..... 07 SURG CHOLECYSTECTOMY EXCEPT BY 1.0967 4.6 5.3 24
LAPAROSCOPE W/O C.D.E. W/O CC.
199..... 07 SURG HEPATOBILIARY DIAGNOSTIC 2.3638 9.8 13.2 32
PROCEDURE FOR MALIGNANCY.
200..... 07 SURG HEPATOBILIARY DIAGNOSTIC 2.9766 8.4 13.1 30
PROCEDURE FOR NON-MALIGNANCY.
201..... 07 SURG OTHER HEPATOBILIARY OR PANCREAS 3.2257 12.1 17.0 34
O.R. PROCEDURES.
202..... 07 MED CIRRHOSIS & ALCOHOLIC HEPATITIS 1.3126 6.4 8.7 28
203..... 07 MED MALIGNANCY OF HEPATOBILIARY 1.2401 6.3 8.8 28
SYSTEM OR PANCREAS.
204..... 07 MED DISORDERS OF PANCREAS EXCEPT 1.1365 5.6 7.3 28
MALIGNANCY.
205..... 07 MED DISORDERS OF LIVER EXCEPT 1.2275 6.1 8.4 28
MALIG, CIRR, ALC HEPA WITH CC.
206..... 07 MED DISORDERS OF LIVER EXCEPT .6075 3.4 4.6 25
MALIG, CIRR, ALC HEPA W/O CC.
207..... 07 MED DISORDERS OF THE BILIARY TRACT 1.0081 4.9 6.4 27
WITH CC.
208..... 07 MED DISORDERS OF THE BILIARY TRACT .5661 2.9 3.7 23
W/O CC.
209..... 08 SURG MAJOR JOINT & LIMB REATTACHMENT 2.3181 7.7 8.6 29
PROCEDURES - LOWER EXTREMITY.
210..... 08 SURG HIP & FEMUR PROCEDURES EXCEPT 1.8427 9.0 10.6 31
MAJOR JOINT AGE >17 WITH CC.
211..... 08 SURG HIP & FEMUR PROCEDURES EXCEPT 1.3000 7.0 7.8 29
MAJOR JOINT AGE >17 W/O CC.
212..... 08 SURG HIP & FEMUR PROCEDURES EXCEPT .8759 3.4 3.8 17
MAJOR JOINT AGE 0-17.
213..... 08 SURG AMPUTATION FOR MUSCULOSKELETAL 1.7182 8.2 11.2 30
SYSTEM & CONN TISSUE DISORDERS.
214..... 08 SURG BACK & NECK PROCEDURES WITH CC. 1.9223 6.5 8.2 28
215..... 08 SURG BACK & NECK PROCEDURES W/O CC.. 1.0974 3.9 4.8 24
216..... 08 SURG BIOPSIES OF MUSCULOSKELETAL 2.1005 9.2 13.2 31
SYSTEM & CONNECTIVE TISSUE.
217..... 08 SURG WND DEBRID & SKN GRFT EXCEPT 2.9904 12.2 18.7 34
HAND, FOR MUSCSKELET & CONN
TISS DIS.
218..... 08 SURG LOWER EXTREM & HUMER PROC 1.3959 5.7 7.4 28
EXCEPT HIP, FOOT, FEMUR AGE
>17 WITH CC.
219..... 08 SURG LOWER EXTREM & HUMER PROC .9120 3.6 4.4 23
EXCEPT HIP, FOOT, FEMUR AGE
>17 W/O CC.
220..... 08 SURG *LOWER EXTREM & HUMER PROC .9618 5.3 5.3 27
EXCEPT HIP, FOOT, FEMUR AGE 0-
17.
221..... 08 SURG KNEE PROCEDURES WITH CC........ 1.7897 6.6 9.3 29
222..... 08 SURG KNEE PROCEDURES W/O CC......... .9898 3.5 4.7 25
223..... 08 SURG MAJOR SHOULDER/ELBOW PROC, OR .8163 2.5 3.2 18
OTHER UPPER EXTREMITY PROC W
CC.
224..... 08 SURG SHOULDER, ELBOW OR FOREARM .6923 2.2 2.7 13
PROC, EXC MAJOR JOINT PROC, W/
O CC.
225..... 08 SURG FOOT PROCEDURES................ .9056 3.4 5.1 25
226..... 08 SURG SOFT TISSUE PROCEDURES WITH CC. 1.3345 5.0 7.6 27
227..... 08 SURG SOFT TISSUE PROCEDURES W/O CC.. .6994 2.4 3.2 19
228..... 08 SURG MAJOR THUMB OR JOINT PROC, OR .8431 2.3 3.5 24
OTH HAND OR WRIST PROC W CC.
229..... 08 SURG HAND OR WRIST PROC, EXCEPT .5991 1.9 2.5 15
MAJOR JOINT PROC, W/O CC.
230..... 08 SURG LOCAL EXCISION & REMOVAL OF INT .9155 3.5 5.5 26
FIX DEVICES OF HIP & FEMUR.
231..... 08 SURG LOCAL EXCISION & REMOVAL OF INT 1.1300 3.5 5.4 25
FIX DEVICES EXCEPT HIP & FEMUR.
232..... 08 SURG ARTHROSCOPY.................... 1.1591 3.2 5.8 25
233..... 08 SURG OTHER MUSCULOSKELET SYS & CONN 1.9004 7.4 10.6 29
TISS O.R. PROC WITH CC.
234..... 08 SURG OTHER MUSCULOSKELET SYS & CONN .9497 3.5 4.8 26
TISS O.R. PROC W/O CC.
235..... 08 MED FRACTURES OF FEMUR............. .8958 5.7 8.8 28
236..... 08 MED FRACTURES OF HIP & PELVIS...... .7760 5.5 7.6 27
237..... 08 MED SPRAINS, STRAINS, & .5538 3.7 5.0 26
DISLOCATIONS OF HIP, PELVIS &
THIGH.
238..... 08 MED OSTEOMYELITIS.................. 1.4971 9.1 12.4 31
239..... 08 MED PATHOLOGICAL FRACTURES & 1.0333 6.8 9.0 29
MUSCULOSKELETAL & CONN TISS
MALIGNANCY.
240..... 08 MED CONNECTIVE TISSUE DISORDERS 1.1883 6.4 8.7 28
WITH CC.
241..... 08 MED CONNECTIVE TISSUE DISORDERS W/O .5835 4.0 5.2 26
CC.
242..... 08 MED SEPTIC ARTHRITIS............... 1.1433 7.0 9.3 29
243..... 08 MED MEDICAL BACK PROBLEMS.......... .7120 4.9 6.4 27
244..... 08 MED BONE DISEASES & SPECIFIC .7334 4.9 6.6 27
ARTHROPATHIES WITH CC.
245..... 08 MED BONE DISEASES & SPECIFIC .4814 3.4 4.7 25
ARTHROPATHIES W/O CC.
246..... 08 MED NON-SPECIFIC ARTHROPATHIES..... .5531 3.8 4.8 26
247..... 08 MED SIGNS & SYMPTOMS OF .5544 3.3 4.5 25
MUSCULOSKELETAL SYSTEM & CONN
TISSUE.
248..... 08 MED TENDONITIS, MYOSITIS & BURSITIS .7124 4.4 5.8 26
249..... 08 MED AFTERCARE, MUSCULOSKELETAL .6485 3.4 5.0 25
SYSTEM & CONNECTIVE TISSUE.
250..... 08 MED FX, SPRN, STRN & DISL OF .6922 4.1 5.7 26
FOREARM, HAND, FOOT AGE >17
WITH CC.
251..... 08 MED FX, SPRN, STRN & DISL OF .4521 2.5 3.4 23
FOREARM, HAND, FOOT AGE >17 W/
O CC.
252..... 08 MED *FX, SPRN, STRN & DISL OF .3638 1.8 1.8 15
FOREARM, HAND, FOOT AGE 0-17.
253..... 08 MED FX, SPRN, STRN & DISL OF UPARM, .7615 5.0 7.0 27
LOWLEG EX FOOT AGE >17 WITH CC.
254..... 08 MED FX, SPRN, STRN & DISL OF UPARM, .4314 3.2 4.3 25
LOWLEG EX FOOT AGE >17 W/O CC.
255..... 08 MED *FX, SPRN, STRN & DISL OF .4827 2.9 2.9 25
UPARM, LOWLEG EX FOOT AGE 0-17.
256..... 08 MED OTHER MUSCULOSKELETAL SYSTEM & .6418 3.4 4.7 25
CONNECTIVE TISSUE DIAGNOSES.
257..... 09 SURG TOTAL MASTECTOMY FOR MALIGNANCY .8842 3.5 4.2 20
WITH CC.
258..... 09 SURG TOTAL MASTECTOMY FOR MALIGNANCY .6992 2.7 3.1 12
W/O CC.
259..... 09 SURG SUBTOTAL MASTECTOMY FOR .8270 2.8 4.1 25
MALIGNANCY WITH CC.
260..... 09 SURG SUBTOTAL MASTECTOMY FOR .5841 1.9 2.2 10
MALIGNANCY W/O CC.
261..... 09 SURG BREAST PROC FOR NON-MALIGNANCY .7428 2.0 2.5 12
EXCEPT BIOPSY & LOCAL EXCISION.
262..... 09 SURG BREAST BIOPSY & LOCAL EXCISION .6475 2.5 3.9 25
FOR NON-MALIGNANCY.
263..... 09 SURG SKIN GRAFT &/OR DEBRID FOR SKN 2.3497 12.5 17.5 34
ULCER OR CELLULITIS WITH CC.
264..... 09 SURG SKIN GRAFT &/OR DEBRID FOR SKN 1.1657 7.1 9.6 29
ULCER OR CELLULITIS W/O CC.
265..... 09 SURG SKIN GRAFT &/OR DEBRID EXCEPT 1.3926 5.3 8.3 27
FOR SKIN ULCER OR CELLULITIS W
CC.
266..... 09 SURG SKIN GRAFT &/OR DEBRID EXCEPT .7371 2.9 4.0 25
FOR SKIN ULCER OR CELLULITIS W/
O CC.
267..... 09 SURG PERIANAL & PILONIDAL PROCEDURES .6903 2.6 4.2 25
268..... 09 SURG SKIN, SUBCUTANEOUS TISSUE & .8341 2.5 3.9 25
BREAST PLASTIC PROCEDURES.
269..... 09 SURG OTHER SKIN, SUBCUT TISS & 1.7009 7.4 10.9 29
BREAST PROCEDURE WITH CC.
270..... 09 SURG OTHER SKIN, SUBCUT TISS & .6619 2.5 3.6 25
BREAST PROCEDURE W/O CC.
271..... 09 MED SKIN ULCERS.................... 1.1340 7.6 9.9 30
272..... 09 MED MAJOR SKIN DISORDERS WITH CC... 1.0050 6.3 8.2 28
273..... 09 MED MAJOR SKIN DISORDERS W/O CC.... .6315 4.6 6.1 27
274..... 09 MED MALIGNANT BREAST DISORDERS WITH 1.1070 5.9 9.2 28
CC.
275..... 09 MED MALIGNANT BREAST DISORDERS W/O .4950 2.6 4.0 25
CC.
276..... 09 MED NON-MALIGANT BREAST DISORDERS.. .6132 4.0 5.4 26
277..... 09 MED CELLULITIS AGE >17 WITH CC..... .8806 6.2 7.6 28
278..... 09 MED CELLULITIS AGE >17 W/O CC...... .5853 4.8 5.7 27
279..... 09 MED CELLULITIS AGE 0-17............ .6514 3.7 4.3 24
280..... 09 MED TRAUMA TO THE SKIN, SUBCUT TISS .6734 4.2 5.8 26
& BREAST AGE >17 WITH CC.
281..... 09 MED TRAUMA TO THE SKIN, SUBCUT TISS .4345 3.0 3.9 25
& BREAST AGE >17 W/O CC.
282..... 09 MED *TRAUMA TO THE SKIN, SUBCUT .3563 2.2 2.2 19
TISS & BREAST AGE 0-17.
283..... 09 MED MINOR SKIN DISORDERS WITH CC... .7142 4.8 6.3 27
284..... 09 MED MINOR SKIN DISORDERS W/O CC.... .4358 3.3 4.3 25
285..... 10 SURG AMPUTAT OF LOWER LIMB FOR 2.5371 12.6 17.5 35
ENDOCRINE, NUTRIT, & METABOL
DISORDERS.
286..... 10 SURG ADRENAL & PITUITARY PROCEDURES. 2.2668 7.6 9.3 30
287..... 10 SURG SKIN GRAFTS & WOUND DEBRID FOR 2.1030 11.4 16.3 33
ENDOC, NUTRIT & METAB
DISORDERS.
288..... 10 SURG O.R. PROCEDURES FOR OBESITY.... 1.9349 5.8 8.1 28
289..... 10 SURG PARATHYROID PROCEDURES......... 1.0017 3.1 4.6 25
290..... 10 SURG THYROID PROCEDURES............. .7926 2.4 3.0 15
291..... 10 SURG THYROGLOSSAL PROCEDURES........ .5115 1.6 2.0 9
292..... 10 SURG OTHER ENDOCRINE, NUTRIT & METAB 2.7349 10.3 15.0 32
O.R. PROC WITH CC.
293..... 10 SURG OTHER ENDOCRINE, NUTRIT & METAB 1.1756 4.7 6.7 27
O.R. PROC W/O CC.
294..... 10 MED DIABETES AGE >35............... .7458 5.2 6.5 27
295..... 10 MED DIABETES AGE 0-35.............. .7494 4.0 5.2 26
296..... 10 MED NUTRITIONAL & MISC METABOLIC .9182 5.4 7.3 27
DISORDERS AGE >17 WITH CC.
297..... 10 MED NUTRITIONAL & MISC METABOLIC .5300 3.7 4.7 26
DISORDERS AGE >17 W/O CC.
298..... 10 MED NUTRITIONAL & MISC METABOLIC .5367 2.7 4.3 25
DISORDERS AGE 0-17.
299..... 10 MED INBORN ERRORS OF METABOLISM.... .8087 4.3 6.1 26
300..... 10 MED ENDOCRINE DISORDERS WITH CC.... 1.0989 6.3 8.3 28
301..... 10 MED ENDOCRINE DISORDERS W/O CC..... .6044 3.7 5.0 26
302..... 11 SURG KIDNEY TRANSPLANT.............. 4.1738 12.6 14.6 35
303..... 11 SURG KIDNEY, URETER & MAJOR BLADDER 2.5762 9.7 11.6 32
PROCEDURES FOR NEOPLASM.
304..... 11 SURG KIDNEY, URETER & MAJOR BLADDER 2.3271 8.7 11.6 31
PROC FOR NON-NEOPL WITH CC.
305..... 11 SURG KIDNEY, URETER & MAJOR BLADDER 1.1348 4.5 5.6 26
PROC FOR NON-NEOPL W/O CC.
306..... 11 SURG PROSTATECTOMY WITH CC.......... 1.2108 5.4 7.3 27
307..... 11 SURG PROSTATECTOMY W/O CC........... .6609 3.0 3.6 18
308..... 11 SURG MINOR BLADDER PROCEDURES WITH 1.4472 5.4 8.1 27
CC.
309..... 11 SURG MINOR BLADDER PROCEDURES W/O CC .7978 2.6 3.4 22
310..... 11 SURG TRANSURETHRAL PROCEDURES WITH .9169 3.5 5.0 25
CC.
311..... 11 SURG TRANSURETHRAL PROCEDURES W/O CC .5395 2.0 2.5 13
312..... 11 SURG URETHRAL PROCEDURES, AGE >17 .8451 3.5 5.2 26
WITH CC.
313..... 11 SURG URETHRAL PROCEDURES, AGE >17 W/ .4775 1.9 2.6 16
O CC.
314..... 11 SURG *URETHRAL PROCEDURES, AGE 0-17. .4499 2.3 2.3 24
315..... 11 SURG OTHER KIDNEY & URINARY TRACT 2.0361 6.0 10.7 28
O.R. PROCEDURES.
316..... 11 MED RENAL FAILURE.................. 1.2859 5.9 8.4 28
317..... 11 MED ADMIT FOR RENAL DIALYSIS....... .5151 2.8 3.9 25
318..... 11 MED KIDNEY & URINARY TRACT 1.1169 5.5 8.1 28
NEOPLASMS WITH CC.
319..... 11 MED KIDNEY & URINARY TRACT .5531 2.4 3.3 24
NEOPLASMS W/O CC.
320..... 11 MED KIDNEY & URINARY TRACT .9452 5.9 7.4 28
INFECTIONS AGE >17 WITH CC.
321..... 11 MED KIDNEY & URINARY TRACT .6109 4.4 5.2 26
INFECTIONS AGE >17 W/O CC.
322..... 11 MED KIDNEY & URINARY TRACT .5438 3.8 4.6 25
INFECTIONS AGE 0-17.
323..... 11 MED URINARY STONES WITH CC, &/OR .7218 2.9 3.9 25
ESW LITHOTRIPSY.
324..... 11 MED URINARY STONES W/O CC.......... .3869 1.9 2.3 11
325..... 11 MED KIDNEY & URINARY TRACT SIGNS & .6490 3.9 5.2 26
SYMPTOMS AGE >17 WITH CC.
326..... 11 MED KIDNEY & URINARY TRACT SIGNS & .4191 2.6 3.4 22
SYMPTOMS AGE >17 W/O CC.
327..... 11 MED *KIDNEY & URINARY TRACT SIGNS & .7215 3.1 3.1 25
SYMPTOMS AGE 0-17.
328..... 11 MED URETHRAL STRICTURE AGE >17 WITH .6741 3.5 4.8 26
CC.
329..... 11 MED URETHRAL STRICTURE AGE >17 W/O .4317 1.9 2.5 15
CC.
330..... 11 MED *URETHRAL STRICTURE AGE 0-17... .2901 1.6 1.6 9
331..... 11 MED OTHER KIDNEY & URINARY TRACT .9950 5.1 7.0 27
DIAGNOSES AGE >17 WITH CC.
332..... 11 MED OTHER KIDNEY & URINARY TRACT .5587 2.9 4.1 25
DIAGNOSES AGE >17 W/O CC.
333..... 11 MED OTHER KIDNEY & URINARY TRACT 1.0095 4.8 7.0 27
DIAGNOSES AGE 0-17.
334..... 12 SURG MAJOR MALE PELVIC PROCEDURES W 1.7203 6.8 7.5 24
CC.
335..... 12 SURG MAJOR MALE PELVIC PROCEDURES W/ 1.3462 5.6 6.1 19
O CC.
336..... 12 SURG TRANSURETHRAL PROSTATECTOMY .8537 4.0 4.8 23
WITH CC.
337..... 12 SURG TRANSURETHRAL PROSTATECTOMY W/O .6142 3.0 3.3 12
CC.
338..... 12 SURG TESTES PROCEDURES, FOR .9747 3.7 5.6 26
MALIGNANCY.
339..... 12 SURG TESTES PROCEDURES, NON- .8266 3.1 4.4 25
MALIGNANCY AGE >17.
340..... 12 SURG *TESTES PROCEDURES, NON- .4512 2.4 2.4 13
MALIGNANCY AGE 0-17.
341..... 12 SURG PENIS PROCEDURES............... 1.0214 2.9 3.8 24
342..... 12 SURG CIRCUMCISION AGE >17........... .6732 2.7 4.2 25
343..... 12 SURG *CIRCUMCISION AGE 0-17......... .3941 1.7 1.7 6
344..... 12 SURG OTHER MALE REPRODUCTIVE SYSTEM .9940 2.7 3.6 25
O.R. PROCEDURES FOR MALIGNANCY.
345..... 12 SURG OTHER MALE REPRODUCTIVE SYSTEM .7528 3.1 4.5 25
O.R. PROC EXCEPT FOR
MALIGNANCY.
346..... 12 MED MALIGNANCY, MALE REPRODUCTIVE .9616 5.3 7.7 27
SYSTEM, WITH CC.
347..... 12 MED MALIGNANCY, MALE REPRODUCTIVE .4931 2.6 3.7 25
SYSTEM, W/O CC.
348..... 12 MED BENIGN PROSTATIC HYPERTROPHY .6740 3.7 5.1 26
WITH CC.
349..... 12 MED BENIGN PROSTATIC HYPERTROPHY W/ .4112 2.4 3.2 23
O CC.
350..... 12 MED INFLAMMATION OF THE MALE .6793 4.5 5.4 27
REPRODUCTIVE SYSTEM.
351..... 12 MED *STERILIZATION, MALE........... .3469 1.3 1.3 5
352..... 12 MED OTHER MALE REPRODUCTIVE SYSTEM .5835 3.2 4.3 25
DIAGNOSES.
353..... 13 SURG PELVIC EVISCERATION, RADICAL 1.8885 8.0 9.8 30
HYSTERECTOMY & RADICAL
VULVECTOMY.
354..... 13 SURG UTERINE & ADNEXA PROC FOR NON- 1.3744 5.9 6.9 28
OVARIAN/ADNEXAL MALIG WITH CC.
355..... 13 SURG UTERINE & ADNEXA PROC FOR NON- .8790 4.0 4.3 12
OVARIAN/ADNEXAL MALIG W/O CC.
356..... 13 SURG FEMALE REPRODUCTIVE SYSTEM .7168 3.2 3.6 14
RECONSTRUCTIVE PROCEDURES.
357..... 13 SURG UTERINE & ADNEXA PROC FOR 2.2838 8.9 10.9 31
OVARIAN OR ADNEXAL MALIG.
358..... 13 SURG UTERINE & ADNEXA PROC FOR NON- 1.1045 4.7 5.4 20
MALIGNANCY WITH CC.
359..... 13 SURG UTERINE & ADNEXA PROC FOR NON- .7993 3.5 3.8 11
MALIGNANCY W/O CC.
360..... 13 SURG VAGINA, CERVIX & VULVA .8205 3.5 4.3 22
PROCEDURES.
361..... 13 SURG LAPAROSCOPY & INCISIONAL TUBAL 1.1147 3.2 4.9 25
INTERRUPTION.
362..... 13 SURG *ENDOSCOPIC TUBAL INTERRUPTION. .5184 1.4 1.4 5
363..... 13 SURG D&C, CONIZATION & RADIO- .6472 2.8 3.7 21
IMPLANT, FOR MALIGNANCY.
364..... 13 SURG D&C, CONIZATION EXCEPT FOR .6260 2.6 3.7 25
MALIGNANCY.
365..... 13 SURG OTHER FEMALE REPRODUCTIVE 1.7149 6.3 9.1 28
SYSTEM O.R. PROCEDURES.
366..... 13 MED MALIGNANCY, FEMALE REPRODUCTIVE 1.2085 5.9 9.1 28
SYSTEM WITH CC.
367..... 13 MED MALIGNANCY, FEMALE REPRODUCTIVE .4488 2.3 3.3 24
SYSTEM W/O CC.
368..... 13 MED INFECTIONS, FEMALE REPRODUCTIVE .9716 5.6 7.3 28
SYSTEM.
369..... 13 MED MENSTRUAL & OTHER FEMALE .5119 2.9 4.0 25
REPRODUCTIVE SYSTEM DISORDERS.
370..... 14 SURG CESAREAN SECTION W CC.......... .9020 4.9 5.8 24
371..... 14 SURG CESAREAN SECTION W/O CC........ .6323 3.6 3.8 9
372..... 14 MED VAGINAL DELIVERY W COMPLICATING .4798 2.7 3.3 16
DIAGNOSES.
373..... 14 MED VAGINAL DELIVERY W/O .3378 1.9 2.1 8
COMPLICATING DIAGNOSES.
374..... 14 SURG VAGINAL DELIVERY W .6135 2.4 3.2 17
STERILIZATION &/OR D&C.
375..... 14 SURG *VAGINAL DELIVERY W O.R. PROC .7094 4.4 4.4 26
EXCEPT STERIL &/OR D&C.
376..... 14 MED POSTPARTUM & POST ABORTION .3286 2.3 3.2 19
DIAGNOSES W/O O.R. PROCEDURE.
377..... 14 SURG POSTPARTUM & POST ABORTION .9805 3.4 5.8 25
DIAGNOSES W O.R. PROCEDURE.
378..... 14 MED ECTOPIC PREGNANCY.............. .7065 2.6 3.0 15
379..... 14 MED THREATENED ABORTION............ .3197 2.0 2.8 18
380..... 14 MED ABORTION W/O D&C............... .3515 1.6 2.1 11
381..... 14 SURG ABORTION W D&C, ASPIRATION .4061 1.7 2.2 12
CURETTAGE OR HYSTEROTOMY.
382..... 14 MED FALSE LABOR.................... .1860 1.2 1.4 5
383..... 14 MED OTHER ANTEPARTUM DIAGNOSES W .4039 3.0 4.0 25
MEDICAL COMPLICATIONS.
384..... 14 MED OTHER ANTEPARTUM DIAGNOSES W/O .2947 1.9 2.6 15
MEDICAL COMPLICATIONS.
385..... 15 MED *NEONATES, DIED OR TRANSFERRED 1.2729 1.8 1.8 24
TO ANOTHER ACUTE CARE FACILITY.
386..... 15 MED *EXTREME IMMATURITY OR 3.7965 17.9 17.9 40
RESPIRATORY DISTRESS SYNDROME,
NEONATE.
387..... 15 MED *PREMATURITY W MAJOR PROBLEMS.. 1.9011 13.3 13.3 35
388..... 15 MED *PREMATURITY W/O MAJOR PROBLEMS 1.2042 8.6 8.6 31
389..... 15 MED FULL TERM NEONATE W MAJOR 1.2894 5.6 7.7 28
PROBLEMS.
390..... 15 MED NEONATE W OTHER SIGNIFICANT .5396 3.1 4.8 25
PROBLEMS.
391..... 15 MED *NORMAL NEWBORN................ .2309 3.1 3.1 11
392..... 16 SURG SPLENECTOMY AGE >17............ 3.2008 10.2 13.2 32
393..... 16 SURG *SPLENECTOMY AGE 0-17.......... 1.5824 9.1 9.1 31
394..... 16 SURG OTHER O.R. PROCEDURES OF THE 1.5735 5.0 8.7 27
BLOOD AND BLOOD FORMING ORGANS.
395..... 16 MED RED BLOOD CELL DISORDERS AGE .8123 4.3 6.0 26
>17.
396..... 16 MED RED BLOOD CELL DISORDERS AGE 0- .2697 1.6 2.1 13
17.
397..... 16 MED COAGULATION DISORDERS.......... 1.2487 5.0 6.9 27
398..... 16 MED RETICULOENDOTHELIAL & IMMUNITY 1.2141 5.8 7.4 28
DISORDERS WITH CC.
399..... 16 MED RETICULOENDOTHELIAL & IMMUNITY .6756 3.8 4.8 26
DISORDERS W/O CC.
400..... 17 SURG LYMPHOMA & LEUKEMIA W MAJOR 2.5572 7.6 11.7 30
O.R. PROCEDURE.
401..... 17 SURG LYMPHOMA & NON-ACUTE LEUKEMIA W 2.4034 9.2 13.6 31
OTHER O.R. PROC W CC.
402..... 17 SURG LYMPHOMA & NON-ACUTE LEUKEMIA W .9229 3.2 4.8 25
OTHER O.R. PROC W/O CC.
403..... 17 MED LYMPHOMA & NON-ACUTE LEUKEMIA W 1.6925 7.4 10.7 29
CC.
404..... 17 MED LYMPHOMA & NON-ACUTE LEUKEMIA W/ .7567 3.7 5.2 26
O CC.
405..... 17 MED *ACUTE LEUKEMIA W/O MAJOR O.R. 1.0830 4.9 4.9 27
PROCEDURE AGE 0-17.
406..... 17 SURG MYELOPROLIF DISORD OR POORLY 2.6478 9.4 12.8 31
DIFF NEOPL W MAJ O.R.PROC W CC.
407..... 17 SURG MYELOPROLIF DISORD OR POORLY 1.1314 4.1 5.3 26
DIFF NEOPL W MAJ O.R.PROC W/O
CC.
408..... 17 SURG MYELOPROLIF DISORD OR POORLY 1.5561 5.0 8.4 27
DIFF NEOPL W OTHER O.R.PROC.
409..... 17 MED RADIOTHERAPY................... .9823 5.4 7.7 27
410..... 17 MED CHEMOTHERAPY WITHOUT ACUTE .6762 2.7 3.3 20
LEUKEMIA AS SECONDARY
DIAGNOSIS.
411..... 17 MED HISTORY OF MALIGNANCY W/O .4503 2.7 3.7 25
ENDOSCOPY.
412..... 17 MED HISTORY OF MALIGNANCY W .4497 2.1 3.0 21
ENDOSCOPY.
413..... 17 MED OTHER MYELOPROLIF DIS OR POORLY 1.3591 6.8 9.9 29
DIFF NEOPL DIAG WITH CC.
414..... 17 MED OTHER MYELOPROLIF DIS OR POORLY .6645 3.7 5.4 26
DIFF NEOPL DIAG W/O CC.
415..... 18 SURG O.R. PROCEDURE FOR INFECTIOUS & 3.5035 13.4 18.6 35
PARASITIC DISEASES.
416..... 18 MED SEPTECEMIA AGE >17............. 1.4936 6.9 9.5 29
417..... 18 MED SEPTECEMIA AGE 0-17............ 1.4510 5.2 7.5 27
418..... 18 MED POSTOPERATIVE & POST-TRAUMATIC .9619 6.0 7.6 28
INFECTIONS.
419..... 18 MED FEVER OF UNKNOWN ORIGIN AGE >17 .9263 5.2 6.6 27
WITH CC.
420..... 18 MED FEVER OF UNKNOWN ORIGIN AGE >17 .6390 4.0 4.9 26
W/O CC.
421..... 18 MED VIRAL ILLNESS AGE >17.......... .6860 4.0 5.1 26
422..... 18 MED VIRAL ILLNESS & FEVER OF .5893 3.4 4.3 25
UNKNOWN ORIGIN AGE 0-17.
423..... 18 MED OTHER INFECTIOUS & PARASITIC 1.5811 7.1 9.9 29
DISEASES DIAGNOSES.
424..... 19 SURG O.R. PROCEDURE W PRINCIPAL 2.5481 13.5 22.3 35
DIAGNOSES OF MENTAL ILLNESS.
425..... 19 MED ACUTE ADJUST REACT & .7092 4.1 5.7 26
DISTURBANCES OF PSYCHOSOCIAL
DYSFUNCTION.
426..... 19 MED DEPRESSIVE NEUROSES............ .5956 4.6 6.5 27
427..... 19 MED NEUROSES EXCEPT DEPRESSIVE..... .5939 4.4 6.4 26
428..... 19 MED DISORDERS OF PERSONALITY & .7355 5.7 9.2 28
IMPULSE CONTROL.
429..... 19 MED ORGANIC DISTURBANCES & MENTAL .9239 7.0 10.3 29
RETARDATION.
430..... 19 MED PSYCHOSES...................... .8977 8.0 11.4 30
431..... 19 MED CHILDHOOD MENTAL DISORDERS..... .6358 5.3 7.7 27
432..... 19 MED OTHER MENTAL DISORDER DIAGNOSES .7580 4.7 7.3 27
433..... 20 MED ALCOHOL/DRUG ABUSE OR .3350 2.8 4.1 25
DEPENDENCE, LEFT AMA.
434..... 20 MED ALC/DRUG ABUSE OR DEPENDENCE, .7210 4.9 6.6 27
DETOX OR OTHER SYMPT TRT WITH
CC.
435..... 20 MED ALC/DRUG ABUSE OR DEPENDENCE, .4364 4.1 5.5 26
DETOX OR OTHER SYMPT TRT W/O
CC.
436..... 20 MED ALC/DRUG DEPENDENCE W .9175 14.5 17.2 36
REHABILITATION THERAPY.
437..... 20 MED ALC/DRUG DEPENDENCE, COMBINED .9003 11.5 13.6 33
REHAB & DETOX THERAPY.
438..... ....... ............ NO LONGER VALID................ .0000 .0 .0 0
439..... 21 SURG SKIN GRAFTS FOR INJURIES....... 1.3129 5.6 8.8 28
440..... 21 SURG WOUND DEBRIDEMENTS FOR INJURIES 1.7578 7.0 11.2 29
441..... 21 SURG HAND PROCEDURES FOR INJURIES... .7762 2.3 3.4 24
442..... 21 SURG OTHER O.R. PROCEDURES FOR 2.0112 5.8 9.4 28
INJURIES WITH CC.
443..... 21 SURG OTHER O.R. PROCEDURES FOR .7544 2.4 3.3 24
INJURIES W/O CC.
444..... 21 MED TRAUMATIC INJURY AGE >17 W CC.. .7379 4.6 6.2 27
445..... 21 MED TRAUMATIC INJURY AGE >17 W/O CC .4621 3.1 4.0 25
446..... 21 MED *TRAUMATIC INJURY AGE 0-17..... .4991 2.4 2.4 22
447..... 21 MED ALLERGIC REACTIONS AGE >17..... .4693 2.3 3.1 20
448..... 21 MED *ALLERGIC REACTIONS AGE 0-17... .3611 2.9 2.9 17
449..... 21 MED POISONING & TOXIC EFFECTS OF .7798 3.5 5.1 26
DRUGS AGE >17 WITH CC.
450..... 21 MED POISONING & TOXIC EFFECTS OF .4155 2.0 2.7 17
DRUGS AGE >17 W/O CC.
451..... 21 MED *POISONING & TOXIC EFFECTS OF 1.0332 2.1 2.1 17
DRUGS AGE 0-17.
452..... 21 MED COMPLICATIONS OF TREATMENT WITH .8584 4.0 5.6 26
CC.
453..... 21 MED COMPLICATIONS OF TREATMENT W/O .4343 2.6 3.4 22
CC.
454..... 21 MED OTHER INJURY, POISONING & TOXIC .8879 4.1 6.4 26
EFF DIAG WITH CC.
455..... 21 MED OTHER INJURY, POISONING & TOXIC .4404 2.3 3.3 24
EFF DIAG W/O CC.
456..... 22 MED BURNS, TRANSFERRED TO ANOTHER 2.0638 5.3 10.2 27
ACUTE CARE FACILITY.
457..... 22 MED EXTENSIVE BURNS W/O O.R. 1.7231 3.1 5.6 25
PROCEDURE.
458..... 22 SURG NON-EXTENSIVE BURNS W SKIN 3.5371 14.0 19.8 36
GRAFT.
459..... 22 SURG NON-EXTENSIVE BURNS W WOUND 1.7448 8.4 12.3 30
DEBRIDEMENT OR OTHER O.R. PROC.
460..... 22 MED NON-EXTENSIVE BURNS W/O O.R. 1.0164 5.6 8.0 28
PROCEDURE.
461..... 23 SURG O.R. PROC W DIAGNOSES OF OTHER .9430 2.5 5.2 24
CONTACT W HEALTH SERVICES.
462..... 23 MED REHABILITATION................. 1.6505 13.3 16.6 35
463..... 23 MED SIGNS & SYMPTOMS W CC.......... .7167 4.5 6.0 26
464..... 23 MED SIGNS & SYMPTOMS W/O CC........ .4746 3.1 4.1 25
465..... 23 MED AFTERCARE W HISTORY OF .4421 2.0 3.2 23
MALIGNANCY AS SECONDARY
DIAGNOSIS.
466..... 23 MED AFTERCARE W/O HISTORY OF .5346 2.3 4.8 24
MALIGNANCY AS SECONDARY
DIAGNOSIS.
467..... 23 MED OTHER FACTORS INFLUENCING .3726 2.6 5.0 25
HEALTH STATUS.
468..... ....... ............ EXTENSIVE O.R. PROCEDURE 3.5712 12.4 17.7 34
UNRELATED TO PRINCIPAL
DIAGNOSIS.
469..... ....... ............ **PRINCIPAL DIAGNOSIS INVALID .0000 .0 .0 0
AS DISCHARGE DIAGNOSIS.
470..... ....... ............ **UNGROUPABLE.................. .0000 .0 .0 0
471..... 08 SURG BILATERAL OR MULTIPLE MAJOR 3.7407 9.3 10.9 31
JOINT PROCS OF LOWER EXTREMITY.
472..... 22 SURG EXTENSIVE BURNS W O.R. 11.9304 16.2 30.5 38
PROCEDURE.
473..... 17 MED ACUTE LEUKEMIA W/O MAJOR O.R. 3.5993 9.3 16.2 31
PROCEDURE AGE >17.
474..... 04 NO LONGER VALID................ .0000 .0 .0 0
475..... 04 MED RESPIRATORY SYSTEM DIAGNOSIS 3.6978 9.5 13.7 31
WITH VENTILATOR SUPPORT.
476..... ....... ............ PROSTATIC O.R. PROCEDURE 2.2306 12.3 15.5 34
UNRELATED TO PRINCIPAL
DIAGNOSIS.
477..... ....... ............ NON-EXTENSIVE O.R. PROCEDURE 1.5262 5.9 9.5 28
UNRELATED TO PRINCIPAL
DIAGNOSIS.
478..... 05 SURG OTHER VASCULAR PROCEDURES W CC. 2.2254 6.3 9.5 28
479..... 05 SURG OTHER VASCULAR PROCEDURES W/O 1.3496 3.9 5.1 26
CC.
480..... ....... SURG LIVER TRANSPLANT............... 17.2203 26.3 33.3 48
481..... ....... SURG BONE MARROW TRANSPLANT......... 15.0471 34.9 38.7 57
482..... ....... SURG TRACHEOSTOMY FOR FACE, MOUTH 3.6765 13.0 17.3 35
AND NECK DIAGNOSES.
483..... ....... SURG TRACHEOSTOMY EXCEPT FOR FACE, 16.7255 41.5 53.1 63
MOUTH AND NECK DIAGNOSES.
484..... 24 SURG CRANIOTOMY FOR MULTIPLE 5.8382 12.7 20.2 35
SIGNIFICANT TRAUMA.
485..... 24 SURG LIMB REATTACH., HIP AND FEMUR 3.0833 11.3 14.2 33
PROCS FOR MULTI SIGN TRAUMA.
486..... 24 SURG OTHER O.R. PROCEDURES FOR 5.0175 10.7 16.9 33
MULTIPLE SIGNIFICANT TRAUMA.
487..... 24 MED OTHER MULTIPLE SIGNIFICANT 1.9044 6.9 10.1 29
TRAUMA.
488..... 25 SURG HIV W EXTENSIVE O.R. PROCEDURE. 4.3726 15.0 21.1 37
489..... 25 MED HIV W MAJOR RELATED CONDITION.. 1.8234 8.3 12.4 30
490..... 25 MED HIV W OR W/O OTHER RELATED 1.0610 5.1 8.0 27
CONDITION.
491..... 08 SURG MAJOR JOINT & LIMB REATTACHMENT 1.6254 4.4 5.3 24
PROCEDURES--UPPER EXTREMITY.
492..... 17 MED CHEMOTHERAPY WITH ACUTE 3.6498 10.7 16.8 33
LEUKEMIA AS SECONDARY
DIAGNOSIS.
493..... 07 SURG LAPAROSCOPIC CHOLECYSTECTOMY W/ 1.5832 4.3 6.1 26
O C.D.E. WITH CC.
494..... 07 SURG LAPAROSCOPIC CHOLECYSTECTOMY W/ .8466 1.7 2.3 14
O C.D.E. W/O CC.
----------------------------------------------------------------------------------------------------------------
* Medicare data have been supplemented by data from Maryland and Michigan for low volume DRGS.
** DRGS 469 and 470 contain cases which could not be assigned to valid DRGS.
Note: Geometric mean is used only to determine payment for transfer cases.
Note: Arithmetic mean is used only to determine payment for outlier cases.
Note: Relative weights are based on Medicare patient data and may not be appropriate for other patients.

Table 6a.--New Diagnosis Codes
----------------------------------------------------------------------------------------------------------------
Diagnosis code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
042........... Human immunodeficiency virus [HIV] disease Y 25 489, 490
070.22........ Chronic viral hepatitis B with hepatic Y 07 205, 206
coma without mention of hepatitis delta. 15 387, 389\1\
070.23........ Chronic viral hepatitis B with hepatic Y 07 205, 206
coma with hepatitis delta. 15 387, 389\1\
070.32........ Chronic viral hepatitis B without mention Y 07 205, 206
of hepatic coma without mention of 15 387, 389\1\
hepatitis delta.
070.33........ Chronic viral hepatitis B without mention Y 07 205, 206
of hepatic coma with hepatitis delta. 15 387, 389\1\
070.44........ Chronic hepatitis C with hepatic coma..... Y 07 205, 206
15 387, 389\1\
070.54........ Chronic hepatitis C without mention of Y 07 205, 206
hepatic coma. 15 387, 389\1\
312.81........ Conduct disorder, childhood onset type.... N 19 431
312.82........ Conduct disorder, adolescent onset type... N 19 431
312.89........ Other specified conduct disorder, not N 19 431
elsewhere classified.
333.92........ Neuroleptic malignant syndrome............ N 01 34, 35
333.93........ Benign shuddering attacks................. N 01 34, 35
342.00........ Flaccid hemiplegia and hemiparesis N 01 12
affecting unspecified side.
342.01........ Flaccid hemiplegia and hemiparesis N 01 12
affecting dominant side.
342.02........ Flaccid hemiplegia and hemiparesis N 01 12
affecting nondominant side.
342.10........ Spastic hemiplegia and hemiparesis N 01 12
affecting unspecified side.
342.11........ Spastic hemiplegia and hemiparesis N 01 12
affecting dominant side.
342.12........ Spastic hemiplegia and hemiparesis N 01 12
affecting nondominant side.
342.80........ Other specified hemiplegia and hemiparesis N 01 12
affecting unspecified side.
342.81........ Other specified hemiplegia and hemiparesis N 01 12
affecting dominant side.
342.82........ Other specified hemiplegia and hemiparesis N 01 12
affecting nondominant side.
342.90........ Unspecified hemiplegia and hemiparesis N 01 12
affecting unspecified side.
342.91........ Unspecified hemiplegia and hemiparesis N 01 12
affecting dominant side.
342.92........ Unspecified hemiplegia and hemiparesis N 01 12
affecting nondominant side.
344.00........ Quadriplegia, unspecified................. Y 01 9
344.01........ Quadriplegia, C1-C4, complete............. Y 01 9
344.02........ Quadriplegia, C1-C4, incomplete........... Y 01 9
344.03........ Quadriplegia, C5-C7, complete............. Y 01 9
344.04........ Quadriplegia, C5-C7, incomplete........... Y 01 9
344.09........ Other quadriplegia........................ Y 01 9
344.30........ Monoplegia of lower limb affecting N 01 34, 35
unspecified side.
344.31........ Monoplegia of lower limb affecting N 01 34, 35
dominant side.
344.32........ Monoplegia of lower limb affecting N 01 34, 35
nondominant side.
344.40........ Monoplegia of upper limb affecting N 01 34, 35
unspecified side.
344.41........ Monoplegia of upper limb affecting N 01 34, 35
dominant side.
344.42........ Monoplegia of upper limb affecting N 01 34, 35
nondominant side.
414.00........ Coronary atherosclerosis of unspecified N 05 132, 133
vessel.
414.01........ Coronary atherosclerosis of native N 05 132, 133
coronary vessel.
414.02........ Coronary atherosclerosis of autologous N 05 132, 133
vein bypass graft.
414.03........ Coronary atherosclerosis of nonautologous N 05 132, 133
biological bypass graft.
440.30........ Atherosclerosis of unspecified bypass N 05 130, 131
graft of the extremities.
440.31........ Atherosclerosis of autologous vein bypass N 05 130, 131
graft of the extremities.
440.32........ Atherosclerosis of nonautologous N 05 130, 131
biological bypass graft of the
extremities.
441.00........ Dissecting aortic aneurysm of unspecified Y 05 121, 130, 131
site.
441.01........ Dissecting thoracic aortic aneurysm....... Y 05 121, 130, 131
441.02........ Dissecting abdominal aortic aneurysm...... Y 05 121, 130, 131
441.03........ Dissecting thoracoabdominal aortic Y 05 121, 130, 131
aneurysm.
512.1......... Iatrogenic pneumothorax................... Y 04 94, 95
536.3......... Gastroparesis............................. N 06 182, 183, 184
556.0......... Ulcerative enterocolitis.................. N 06 179
556.1......... Ulcerative ileocolitis.................... N 06 179
556.2......... Ulcerative proctitis...................... N 06 179
556.3......... Ulcerative proctosigmoiditis.............. N 06 179
556.4......... Pseudopolyposis of colon.................. N 06 179
556.5......... Left-sided ulcerative colitis............. N 06 179
556.6......... Universal ulcerative colitis.............. N 06 179
556.8......... Other ulcerative colitis.................. N 06 179
556.9......... Ulcerative colitis, unspecified........... N 06 179
593.70........ Vesicoureteral reflux unspecified or N 11 331, 332, 333
without reflux nephropathy.
593.71........ Vesicoureteral reflux with reflux N 11 331, 332, 333
nephropathy, unilateral.
593.72........ Vesicoureteral reflux with reflux N 11 331, 332, 333
nephropathy, bilateral.
593.73........ Other vesicoureteral reflux with reflux N 11 331, 332, 333
nephropathy.
669.43........ Other complications of obstetrical surgery N 14 383, 384
and procedures, antepartum condition or
complication.
677........... Late effect of complication of pregnancy, N 14 469
childbirth, the puerperium.
702.11........ Inflamed seborrheic keratosis............. N 09 283, 284
702.19........ Other seborrheic keratosis................ N 09 283, 284
709.00........ Dyschromia, unspecified................... N 09 283, 284
709.01........ Vitiglio.................................. N 09 283, 284
709.09........ Other dyschromia.......................... N 09 283, 284
759.83........ Fragile X syndrome........................ N 15 390
760.76........ Diethylstilbestrol (DES) exposure N 15 390
affecting fetus or newborn via placenta
or breast milk.
781.8......... Neurologic neglect syndrome............... N 01 34, 35
787.01........ Nausea with vomiting...................... N 06 182, 183, 184
787.02........ Nausea alone.............................. N 06 182, 183, 184
787.03........ Vomiting alone............................ N 06 182, 183, 184
789.00........ Abdominal pain, unspecified site.......... N 06 182, 183, 184
789.01........ Abdominal pain, right upper quadrant...... N 06 182, 183, 184
789.02........ Abdominal pain, left upper quadrant....... N 06 182, 183, 184
789.03........ Abdominal pain, right lower quadrant...... N 06 182, 183, 184
789.04........ Abdominal pain, left lower quadrant....... N 06 182, 183, 184
789.05........ Abdominal pain, periumbilic............... N 06 182, 183, 184
789.06........ Abdominal pain, epigastric................ N 06 182, 183, 184
789.07........ Abdominal pain, generalized............... N 06 182, 183, 184
789.09........ Abdominal pain, other specified site...... N 06 182, 183, 184
789.30........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, unspecified site.
789.31........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, right upper quadrant.
789.32........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, left upper quadrant.
789.33........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, right lower quadrant.
789.34........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, left lower quadrant.
789.35........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, periumbilic.
789.36........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, epigastric.
789.37........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, generalized.
789.39........ Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump, other specified site.
789.40........ Abdominal rigidity, unspecified site...... N 06 188, 189, 190
789.41........ Abdominal rigidity, right upper quadrant.. N 06 188, 189, 190
789.42........ Abdominal rigidity, left upper quadrant... N 06 188, 189, 190
789.43........ Abdominal rigidity, right lower quadrant.. N 06 188, 189, 190
789.44........ Abdominal rigidity, left lower quadrant... N 06 188, 189, 190
789.45........ Abdominal rigidity, periumbilic........... N 06 188, 189, 190
789.46........ Abdominal rigidity, epigastric............ N 06 188, 189, 190
789.47........ Abdominal rigidity, generalized........... N 06 188, 189, 190
789.49........ Abdominal rigidity, other specified site.. N 06 188, 189, 190
789.60........ Abdominal tenderness, unspecified site.... N 06 182, 183, 184
789.61........ Abdominal tenderness, right upper quadrant N 06 182, 183, 184
789.62........ Abdominal tenderness, left upper quadrant. N 06 182, 183, 184
789.63........ Abdominal tenderness, right lower quadrant N 06 182, 183, 184
789.64........ Abdominal tenderness, left lower quadrant. N 06 182, 183, 184
789.65........ Abdominal tenderness, periumbilic......... N 06 182, 183, 184
789.66........ Abdominal tenderness, epigastric.......... N 06 182, 183, 184
789.67........ Abdominal tenderness, generalized......... N 06 182, 183, 184
789.69........ Abdominal tenderness, other specified site N 06 182, 183, 184
795.71........ Nonspecific serologic evidence of human N 16 398, 399
immunodeficiency virus [HIV].
795.79........ Other and unspecified nonspecific N 16 398, 399
immunological findings.
909.5......... Late effect of adverse effect of drug, N 21 454, 455
medicinal or biological substance.
996.04........ Complications due to automatic implantable Y 05 138, 139
cardiac defibrillator.
998.81........ Emphysema (subcutaneous) resulting from N 21 452, 453
procedure.
998.82........ Cataract fragments in eye following N 02 46, 47, 48
cataract surgery.
998.89........ Other specified complications of Y 21 452, 453
procedures not elsewhere classified.
V03.81........ Prophylactic vaccination against N 23 467
Hemophilus influenza, type B [Hib].
V03.82........ Prophylactic vaccination against N 23 467
Streptococcus pneumoniae.
V03.89........ Other specified prophylactic vaccination N 23 467
against single bacterial disease.
V06.5......... Prophylactic vaccination against Tetanus- N 23 467
diphtheria [Td].
V06.6......... Prophylactic vaccination against N 23 467
Streptococcus pneumoniae and influenza.
V07.31........ Prophylactic fluoride administration...... N 23 467
V07.39........ Other prophylactic chemotherapy........... N 23 467
V08........... Asymptomatic human immunodeficiency virus N 18 421, 422
[HIV] infection status.
V12.00........ Personal history of other unspecified N 23 467
infectious and parasitic disease.
V12.01........ Personal history of tuberculosis.......... N 23 467
V12.02........ Personal history of poliomyelitis......... N 23 467
V12.03........ Personal history of malaria............... N 23 467
V12.09........ Personal history of other specified N 23 467
infectious and parasitic disease.
V12.70........ Personal history of unspecified digestive N 23 467
disease.
V12.71........ Personal history of peptic ulcer disease.. N 23 467
V12.72........ Personal history of colonic polyps........ N 23 467
V12.79........ Personal history of other specified N 23 467
digestive system diseases.
V13.00........ Personal history of unspecified urinary N 23 467
disorder.
V13.01........ Personal history of urinary calculi....... N 23 467
V13.09........ Personal history of other specified N 23 467
urinary system disorders.
V15.82........ History of tobacco use.................... N 23 467
V29.2......... Observation and evaluation of newborn for N 23 467
suspected respiratory condition.
V43.60........ Unspecified joint replacement status...... N 08 256
V43.61........ Shoulder joint replacement status......... N 08 256
V43.62........ Elbow joint replacement status............ N 08 256
V43.63........ Wrist joint replacement status............ N 08 256
V43.64........ Hip joint replacement status.............. N 08 256
V43.65........ Knee joint replacement status............. N 08 256
V43.66........ Ankle joint replacement status............ N 08 256
V43.69........ Other joint replacement status............ N 08 256
V45.00........ Unspecified cardiac device in situ........ N 23 467
V45.01........ Cardiac pacemaker in situ................. N 23 467
V45.02........ Automatic implantable cardiac N 23 467
defibrillator in situ.
V45.09........ Other specified cardiac device in situ.... N 23 467
V45.51........ Presence of intrauterine contraceptive N 23 467
device.
V45.52........ Presence of subdermal contraceptive N 23 467
implant.
V45.59........ Presence of other contraceptive device.... N 23 467
V45.82........ Percutaneous transluminal coronary N 23 467
angioplasty status.
V49.60........ Unspecified level upper limb amputation N 23 467
status.
V49.61........ Thumb amputation status................... N 23 467
V49.62........ Other finger(s) amputation status......... N 23 467
V49.63........ Hand amputation status.................... N 23 467
V49.64........ Wrist amputation status................... N 23 467
V49.65........ Below elbow amputation status............. N 23 467
V49.66........ Above elbow amputation status............. N 23 467
V49.67........ Shoulder amputation status................ N 23 467
V49.70........ Unspecified level lower limb amputation N 23 467
status.
V49.71........ Great toe amputation status............... N 23 467
V49.72........ Other toe(s) amputation status............ N 23 467
V49.73........ Foot amputation status.................... N 23 467
V49.74........ Ankle amputation status................... N 23 467
V49.75........ Below knee amputation status.............. N 23 467
V49.76........ Above knee amputation status.............. N 23 467
V49.77........ Hip amputation status..................... N 23 467
V50.41........ Prophylactic breast removal............... N 09 276
V50.42........ Prophylactic ovary removal................ N 13 358, 359, 369
V50.49........ Other prophylactic organ removal.......... N 23 467
V53.31........ Fitting and adjustment of cardiac N 05 144, 145
pacemaker.
V53.32........ Fitting and adjustment of automatic N 05 144, 145
implantable cardiac defibrillator.
V53.39........ Fitting and adjustment of other cardiac N 05 144, 145
device.
V57.21........ Encounter for occupational therapy........ N 23 462
V57.22........ Encounter to vocational therapy........... N 23 462
V58.41........ Encounter for planned post-operative wound N 23 465, 466
closure.
V58.49........ Other specified aftercare following N 23 465, 466
surgery.
V58.81........ Encounter for removal of vascular catheter N 23 465, 466
V58.89........ Other specified aftercare................. N 23 465, 466
V65.40........ Other unspecified counseling.............. N 23 467
V65.41........ Exercise counseling....................... N 23 467
V65.42........ Counseling on substance use and abuse..... N 23 467
V65.43........ Counseling on injury prevention........... N 23 467
V65.44........ Human immunodeficiency virus [HIV] N 23 467
counseling.
V65.45........ Counseling on other sexually transmitted N 23 467
diseases.
V65.49........ Other specified counseling................ N 23 467
V69.0......... Lack of physical exercise................. N 23 467
V69.1......... Inappropriate diet and eating habits...... N 23 467
V69.2......... High-risk sexual behavior................. N 23 467
V69.3......... Gambling and betting...................... N 23 467
V69.8......... Other problems related to lifestyle....... N 23 467
V69.9......... Unspecified problem related to lifestyle.. N 23 467
----------------------------------------------------------------------------------------------------------------
\1\Diagnosis code is classified as a ``major problem'' in these DRGs.

Table 6b.--New Procedure Codes
----------------------------------------------------------------------------------------------------------------
Procedure code Description OR MDC DRG
----------------------------------------------------------------------------------------------------------------
34.05......... Creation of pleuroperitoneal shunt........ N
41.04......... Autologous hematopoietic stem cell N Pre 481
transplant.
99.28......... Injection or infusion of biological N
response modifier [BRM] as an
antineoplastic agent.
----------------------------------------------------------------------------------------------------------------

Table 6c.--Invalid Diagnosis Codes\1\
----------------------------------------------------------------------------------------------------------------
Diagnosis code Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
042.0......... Human immunodeficiency virus infection Y 25 489, 490
with specified infections.
042.1......... Human immunodeficiency virus infection Y 25 489, 490
causing other specified infections.
042.2......... Human immunodeficiency virus infection Y 25 489, 490
with specified malignant neoplasms.
042.9......... Human immunodeficiency virus infection Y 25 489, 490
with acquired immunodeficiency syndrome,
unspecified.
043.0......... Human immunodeficiency virus infection Y 25 489, 490
causing lymphadenopathy.
043.1......... Human immunodeficiency virus infection Y 25 489, 490
causing specified diseases of the central
nervous system.
043.2......... Human immunodeficiency virus infection Y 25 489, 490
causing other disorders involving the
immune mechanism.
043.3......... Human immunodeficiency virus infection Y 25 489, 490
causing other specified conditions.
043.9......... Human immunodeficiency virus infection Y 25 489, 490
causing acquired immunodeficiency
syndrome-related complex, unspecified.
044.0......... Other human immunodeficiency virus Y 25 489, 490
infection causing specified acute
infections.
044.9......... Human immunodeficiency virus infection, Y 25 489, 490
unspecified.
312.8......... Other specified disturbances of conduct, N 19 431
not elsewhere classified.
342.0......... Flaccid hemiplegia........................ N 01 12
342.1......... Spastic hemiplegia........................ N 01 12
342.9......... Hemiplegia, unspecified................... N 01 12
344.0......... Quadriplegia, unspecified................. Y 01 9
344.3......... Monoplegia of lower limb.................. N 01 34, 35
344.4......... Monoplegia of upper limb.................. N 01 34, 35
414.0......... Coronary atherosclerosis.................. N 05 132, 133
441.0......... Dissecting aortic aneurysm................ Y 05 121, 144, 145
556........... Idiopathic proctocolitis.................. N 06 179
593.7......... Vesicoureteral reflux..................... N 11 331, 332, 333
702.1......... Seborrheic keratosis...................... N 09 283, 284
709.0......... Dyschromia................................ N 09 283, 284
787.0......... Nausea and vomiting....................... N 06 182, 183, 184
789.0......... Abdominal pain............................ N 06 182, 183, 184
789.3......... Abdominal or pelvic swelling, mass, or N 06 182, 183, 184
lump.
789.4......... Abdominal rigidity........................ N 06 188, 189, 190
795.7......... Other nonspecific immunological findings.. N 16 398, 399
795.8......... Positive serological or viral culture N 18 421, 422
findings for human immunodeficiency virus
(HIV).
998.8......... Other specified complications of Y 21 452, 453
procedures, not elsewhere classified.
V03.8......... Other specified vaccinations against N 23 467
single bacterial diseases.
V07.3......... Other prophylactic chemotherapy........... N 23 467
V12.0......... Personal history of infectious and N 23 467
parasitic diseases.
V12.7......... Personal history of diseases of the N 23 467
digestive system.
V13.0......... Personal history of disorders of the N 23 467
urinary system.
V43.6......... Joint replacement status.................. N 08 256
V45.0......... Cardiac pacemaker in situ................. N 23 467
V45.5......... Presence of intrauterine contraceptive N 23 467
device.
V53.3......... Fitting and adjustment of cardiac N 05 144, 145
pacemaker.
V57.2......... Occupational therapy and vocational N 23 462
rehabilitation.
V58.4......... Other aftercare following surgery......... N 23 465, 466
V58.8......... Other specified aftercare................. N 23 465, 466
V65.4......... Other counseling.......................... N 23 467
----------------------------------------------------------------------------------------------------------------
\1\See Table 6a for new diagnosis codes that will be considered valid by the FY 1995 GROUPER.

Table 6d.--Revised Diagnosis Code Titles
----------------------------------------------------------------------------------------------------------------
Diagnosiscode Description CC MDC DRG
----------------------------------------------------------------------------------------------------------------
070.20........ Viral hepatitis B with hepatic coma, acute Y 07 205, 206
or unspecified, without mention of 15 387, 389\1\
hepatitis delta.
070.21........ Viral hepatitis B with hepatic coma, acute Y 07 205, 206
or unspecified, with hepatitis delta. 15 387, 389\1\
070.30........ Viral hepatitis B without mention of Y 07 205, 206
hepatic coma, acute or unspecified, 15 387, 389\1\
without mention of hepatitis delta.
070.31........ Viral hepatitis B without mention of Y 07 205, 206
hepatic coma, acute or unspecified, with 15 387, 389\1\
hepatitis delta.
070.41........ Acute or unspecified hepatitis C with Y 07 205, 206
hepatic coma. 15 387, 389\1\
070.42........ Hepatitis delta without mention of active Y 07 205, 206
hepatitis B disease with hepatic coma. 15 387, 389\1\
070.43........ Hepatitis E with hepatic coma............. Y 07 205, 206
15 387, 389\1\
070.49........ Other specified viral hepatitis with Y 07 205, 206
hepatic coma. 15 387, 389\1\
070.51........ Acute or unspecified hepatitis C without Y 07 205, 206
mention of hepatic coma. 15 387 389\1\
070.52........ Hepatitis delta without mention of active Y 07 205, 206
hepatitis B disease or hepatic coma. 15 387, 389\1\
070.53........ Hepatitis E without mention of hepatic Y 07 205, 206
coma. 15 387, 389\1\
070.59........ Other specified viral hepatitis without Y 07 205, 206
mention of hepatic coma. 15 387, 389\1\
440.20........ Atherosclerosis of native arteries of N 05 130, 131
extremities, unspecified.
440.21........ Atherosclerosis of native arteries of N 05 130, 131
extremities with intermittent
claudication.
440.22........ Atherosclerosis of native arteries of N 05 130, 131
extremities with rest pain.
440.23........ Atherosclerosis of native arteries of N 05 130, 131
extremities with ulceration.
440.24........ Atherosclerosos of native arteries of Y 05 130, 131
extremities with gangrene.
440.29........ Other atherosclerosos of native arteries N 05 130, 131
of extremities.
770.1......... Meconium aspiration syndrome.............. Y 15 387, 389\1\
----------------------------------------------------------------------------------------------------------------
\1\Diagnosis code is classified as a ``major problem'' in these DRGs.

Table 6e.--Revised Procedure Code Titles
----------------------------------------------------------------------------------------------------------------
Procedure code Description OR MDC DRG
----------------------------------------------------------------------------------------------------------------
36.01......... Single vessel percutaneous transluminal Y 05 106, 112
coronary angioplasty [PTCA] or coronary
atherectomy without mention of
thrombolytic agent.
36.02......... Single vessel percutaneous transluminal Y 05 106, 112
coronary angioplasty [PTCA] or coronary
atherectomy with mention of thrombolytic
agent.
36.05......... Multiple vessel percutaneous transluminal Y 05 106, 112
coronary angioplasty [PTCA] or coronary
atherectomy performed during the same
operation with or without mention of
thrombolytic agent.
----------------------------------------------------------------------------------------------------------------

Table 6f.--Additions to the CC Exclusions List
Page 1 of 3 Pages
CCs that are added to the list are in Table 6f--Additions to the CC
Exclusions List. Each of the principal diagnoses is shown with an
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.
*042 07052 *07041 07032 07054 *25072 34402 29583
042 07053 07022 07033 *07989 44100 34403 29584
*0700 07054 07023 07044 07022 44101 34404 29590
07022 07059 07032 07054 07023 44102 34409 29591
07023 0706 07033 *07054 07032 44103 44100 29592
07032 0709 07044 07020 07033 *25073 44101 29593
07033 78001 07054 07021 07044 44100 44102 29594
07044 78003 *07042 07022 07054 44101 44103 29604
07054 *07030 07022 07023 *07998 44102 *25092 29614
*0701 07022 07023 07030 07022 44103 34400 29634
07022 07023 07032 07031 07023 *25080 34401 29644
07023 07032 07033 07032 07032 34400 34402 29654
07032 07033 07044 07033 07033 34401 34403 29664
07033 07044 07054 07041 07044 34402 34404 2980
07044 07054 *07043 07042 07054 34403 34409 2983
07054 *07031 07022 07043 *07999 34404 44100 2984
*07020 07022 07023 07044 07022 34409 44101 29900
07022 07023 07032 07049 07023 44100 44102 29910
07023 07032 07033 07051 07032 44101 44103 29980
07032 07033 07044 07052 07033 44102 *25093 29990
07033 07044 07054 07053 07044 44103 34400 *31282
07044 07054 *07044 07054 07054 *25081 34401 29500
07054 *07032 07020 07059 *1398 34400 34402 29501
*07021 07020 07021 0706 042 34401 34403 29502
07022 07021 07022 0709 07022 34402 34404 29503
07023 07022 07023 78001 07023 34403 34409 29504
07032 07023 07030 78003 07032 34404 44100 29510
07033 07030 07031 *07059 07033 34409 44101 29511
07044 07031 07032 07022 07044 44100 44102 29512
07054 07032 07033 07023 07054 44101 44103 29513
*07022 07033 07041 07032 *25060 44102 *31281 29514
07020 07041 07042 07033 34400 44103 29500 29521
07021 07042 07043 07044 34401 *25082 29501 29522
07022 07043 07044 07054 34402 34400 29502 29523
07023 07044 07049 *0706 34403 34401 29503 29524
07030 07049 07051 07022 34404 34402 29504 29530
07031 07051 07052 07023 34409 34403 29510 29531
07032 07052 07053 07032 *25061 34404 29511 29532
07033 07053 07054 07033 34400 34409 29512 29533
07041 07054 07059 07044 34401 44100 29513 29534
07042 07059 0706 07054 34402 44101 29514 29540
07043 0706 0709 *0709 34403 44102 29521 29541
07044 0709 78001 07022 34404 44103 29522 29542
07049 78001 78003 07023 34409 *25083 29523 29543
07051 78003 *07049 07032 *25062 34400 29524 29544
07052 *07033 07022 07033 34400 34401 29530 29560
07053 07020 07023 07044 34401 34402 29531 29561
07054 07021 07032 07054 34402 34403 29532 29562
07059 07022 07033 *07888 34403 34404 29533 29563
0706 07023 07044 07022 34404 34409 29534 29564
0709 07030 07054 07023 34409 44100 29540 29570
78001 07031 *07051 07032 *25063 44101 29541 29571
78003 07032 07022 07033 34400 44102 29542 29572
*07023 07033 07023 07044 34401 44103 29543 29573
07020 07041 07032 07054 34402 *25090 29544 29574
07021 07042 07033 *07889 34403 34400 29560 29580
07022 07043 07044 07022 34404 34401 29561 29581
07023 07044 07054 07023 34409 34402 29562 29582
07030 07049 *07052 07032 *25070 34403 29563 29583
07031 07051 07022 07033 44100 34404 29564 29584
07032 07052 07023 07044 44101 34409 29570 29590
07033 07053 07032 07054 44102 44100 29571 29591
07041 07054 07033 *07988 44103 44101 29572 29592
07042 07059 07044 07022 *25071 44102 29573 29593
07043 0706 07054 07023 44100 44103 29574 29594
07044 0709 *07053 07032 44101 *25091 29580 29604
07049 78001 07022 07033 44102 34400 29581 29614
07051 78003 07023 07044 44103 34401 29582 29634

Page 2 of 3 Pages
29644 3432 34409 34409 34400 *3449 *4411 63411
29654 34400 *34290 *34400 34401 34400 44100 63412
29664 34401 3432 3432 34402 34401 44101 63420
2980 34402 34400 34400 34403 34402 44102 63421
2983 34403 34401 34401 34404 34403 44103 63422
2984 34404 34402 34402 34409 34404 *4412 63430
29900 34409 34403 34403 *34432 34409 44100 63431
29910 *34201 34404 34404 3432 *3488 44101 63432
29980 3432 34409 34409 34400 34400 44102 63440
29990 34400 *34291 *34401 34401 34401 44103 63441
*31289 34401 3432 3432 34402 34402 *4413 63442
29500 34402 34400 34400 34403 34403 44100 63450
29501 34403 34401 34401 34404 34404 44101 63451
29502 34404 34402 34402 34409 34409 44102 63452
29503 34409 34403 34403 *34440 *3489 44103 63460
29504 *34202 34404 34404 3432 34400 *4414 63461
29510 3432 34409 34409 34400 34401 44100 63462
29511 34400 *34292 *34402 34401 34402 44101 63470
29512 34401 3432 3432 34402 34403 44102 63471
29513 34402 34400 34400 34403 34404 44103 63472
29514 34403 34401 34401 34404 34409 *4415 63480
29521 34404 34402 34402 34409 *34989 44100 63481
29522 34409 34403 34403 *34441 34400 44101 63482
29523 *34210 34404 34404 3432 34401 44102 63490
29524 3432 34409 34409 34400 34402 44103 63491
29530 34400 *3430 *34403 34401 34403 *4416 63492
29531 34401 34400 3432 34402 34404 44100 6390
29532 34402 34401 34400 34403 34409 44101 6391
29533 34403 34402 34401 34404 *3499 44102 6392
29534 34404 34403 34402 34409 34400 44103 6393
29540 34409 34404 34403 *34442 34401 *4417 6394
29541 7817 34409 34404 3432 34402 44100 6395
29542 *34211 *3431 34409 34400 34403 44101 6396
29543 3432 34400 *34404 34401 34404 44102 6398
29544 34400 34401 3432 34402 34409 44103 6399
29560 34401 34402 34400 34403 *44023 *4419 64000
29561 34402 34403 34401 34404 7071 44100 64001
29562 34403 34404 34402 34409 *44100 44101 64003
29563 34404 34409 34403 *3445 44100 44102 64080
29564 34409 *3432 34404 34400 44101 44103 64081
29570 7817 34400 34409 34401 44102 *45989 64083
29571 *34212 34401 *34409 34402 44103 44100 64090
29572 3432 34402 3432 34403 4411 44101 64091
29573 34400 34403 34400 34404 4413 44102 64093
29574 34401 34404 34401 34409 4415 44103 64100
29580 34402 34409 34402 *34460 4416 *4599 64101
29581 34403 *3433 34403 34400 *44101 44100 64103
29582 34404 34400 34404 34401 44100 44101 64110
29583 34409 34401 34409 34402 44101 44102 64111
29584 7817 34402 *3441 34403 44102 44103 64113
29590 *34280 34403 34400 34404 44103 *5120 64130
29591 3432 34404 34401 34409 4411 5121 64131
29592 34400 34409 34402 *34461 4413 *5121 64133
29593 34401 *3434 34403 34400 4415 5120 64180
29594 34402 34400 34404 34401 4416 5121 64181
29604 34403 34401 34409 34402 *44102 5128 64183
29614 34404 34402 *3442 34403 44100 *5128 64190
29634 34409 34403 34400 34404 44101 5121 64191
29644 *34281 34404 34401 34409 44102 *5178 64193
29654 3432 34409 34402 *34481 44103 5121 64240
29664 34400 *3438 34403 34400 4411 *51889 64241
2980 34401 34400 34404 34401 4413 5121 64242
2983 34402 34401 34409 34402 4415 *5198 64243
2984 34403 34402 *34430 34403 4416 5121 64244
29900 34404 34403 3432 34404 *44103 *5199 64250
29910 34409 34404 34400 34409 44100 5121 64251
29980 *34282 34409 34401 *34489 44101 *5363 64252
29990 3432 *3439 34402 34400 44102 5370 64253
*33392 34400 34400 34403 34401 44103 *66943 64254
7817 34401 34401 34404 34402 4411 63400 64260
*33393 34402 34402 34409 34403 4413 63401 64261
7817 34403 34403 *34431 34404 4415 63402 64262
*34200 34404 34404 3432 34409 4416 63410 64263

Page 3 of 3 Pages
64264 66820 67511 *78931 9582 99602
64270 66821 67512 7895 9583 99603
64271 66822 *7100 *78932 9584 99604
64272 66823 7100 7895 9585 99609
64273 66824 *7101 *78933 9587 9961
64274 66880 7101 7895 9954 9962
64400 66881 *7103 *78934 99600 99630
64403 66882 7103 7895 99601 99639
64410 66883 *7104 *78935 99602 9964
64413 66884 7104 7895 99603 99660
64660 66890 *7108 *78936 99604 99661
64661 66891 7108 7895 99609 99662
64662 66892 *74259 *78937 9961 99663
64663 66893 34400 7895 9962 99664
64664 66894 34401 *78939 99630 99665
64670 66910 34402 7895 99639 99666
64671 66911 34403 *78940 9964 99667
64673 66912 34404 7895 99660 99669
64730 66913 34409 *78941 99661 99670
64731 66914 *7428 7895 99662 99671
64732 66930 34400 *78942 99663 99672
64733 66932 34401 7895 99664 99673
64734 66934 34402 *78943 99665 99674
64740 67000 34403 7895 99666 99675
64741 67002 34404 *78944 99667 99676
64742 67004 34409 7895 99669 99677
64743 67120 *7429 *78945 99670 99678
64744 67121 34400 7895 99671 99679
64800 67122 34401 *78946 99672 99690
64801 67123 34402 7895 99673 99691
64802 67124 34403 *78947 99674 99692
64803 67130 34404 7895 99675 99693
64804 67131 34409 *78949 99676 99694
64820 67133 *75983 7895 99677 99695
64821 67140 42971 *99604 99678 99696
64822 67142 42979 99600 99679 99699
64823 67144 74100 99604 99690 9970
64824 67300 74101 99660 99691 9971
64830 67301 74102 99661 99692 9972
64831 67302 74103 99662 99693 9973
64832 67303 74190 99669 99694 9974
64833 67304 74191 99670 99695 9975
64834 67310 74192 99672 99696 99762
64850 67311 74193 99674 99699 9979
64851 67312 7450 99679 9970 9980
64852 67313 74510 *99671 9971 9981
64853 67314 74511 V422 9972 9982
64854 67320 74512 *99680 9973 9983
64860 67321 74519 V420 9974 9984
64861 67322 7452 V421 9975 9985
64862 67323 7453 V426 99762 9986
64863 67324 7454 V427 9979 9987
64864 67330 74560 V428 9980 99889
65930 67331 74569 V432 9981 9989
65931 67332 7457 *99681 9982 *9989
65933 67333 74601 V420 9983 99604
66500 67334 74602 *99682 9984 99889
66501 67380 7461 V427 9985 *V421
66503 67381 7462 *99683 9986 V432
66510 67382 7463 V421 9987
66511 67383 7464 V432 99889
66632 67384 7465 *99684 9989
66634 67400 7466 V426 *99889
66800 67401 7467 *99686 9580
66801 67402 74681 V428 9581
66802 67403 74682 *99689 9582
66803 67404 74683 V428 9583
66804 67410 74684 *9979 9584
66810 67412 74686 99604 9585
66811 67420 74711 99889 9587
66812 67422 74722 *99881 9954
66813 67424 *78930 9580 99600
66814 67510 7895 9581 99601

Table 6g.--Deletions to the CC Exclusions List
Page 1 of 1 Pages
CCs that are deleted from the list are in Table 6G-Deletions to the CC
Exclusions List. Each of the principal diagnoses is shown with an
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.

*0420 0433 0429 29540 3440 9582
0420 0439 0430 29541 *3443 9583
0421 0440 0431 29542 3432 9584
0422 0449 0432 29543 3440 9585
0429 *0432 0433 29544 *3444 9587
0430 0420 0439 29560 3432 9954
0431 0421 0440 29561 3440 99600
0432 0422 0449 29562 *3445 99601
0433 0429 *25060 29563 3440 99602
0439 0430 3440 29564 *34460 99603
0440 0431 *25061 29570 3440 99609
0449 0432 3440 29571 *34461 9961
*0421 0433 *25062 29572 3440 9962
0420 0439 3440 29573 *34481 99630
0421 0440 *25063 29574 3440 99639
0422 0449 3440 29580 *34489 9964
0429 *0433 *25070 29581 3440 99660
0430 0420 4410 29582 *3449 99661
0431 0421 *25071 29583 3440 99662
0432 0422 4410 29584 *3488 99663
0433 0429 *25072 29590 3440 99664
0439 0430 4410 29591 *3489 99665
0440 0431 *25073 29592 3440 99666
0449 0432 4410 29593 *34989 99667
*0422 0433 *25080 29594 3440 99669
0420 0439 3440 29604 *3499 99670
0421 0440 4410 29614 3440 99671
0422 0449 *25081 29634 *4410 99672
0429 *0439 3440 29644 4410 99673
0430 0420 4410 29654 4411 99674
0431 0421 *25082 29664 4413 99675
0432 0422 3440 2980 4415 99676
0433 0429 4410 2983 4416 99677
0439 0430 *25083 2984 *4411 99678
0440 0431 3440 29900 4410 99679
0449 0432 4410 29910 *4412 99690
*0429 0433 *25090 29980 4410 99691
0420 0439 3440 29990 *4413 99692
0421 0440 4410 *3420 4410 99693
0422 0449 *25091 3432 *4414 99694
0429 *0440 3440 3440 4410 99695
0430 0420 4410 *3421 *4415 99696
0431 0421 *25092 3432 4410 99699
0432 0422 3440 3440 *4416 9970
0433 0429 4410 7817 4410 9971
0439 0430 *25093 *3429 *4417 9972
0440 0431 3440 3432 4410 9973
0449 0432 4410 3440 *4419 9974
*0430 0433 *3128 *3430 4410 9975
0420 0439 29500 3440 *45989 99762
0421 0440 29501 *3431 4410 9979
0422 0449 29502 3440 *4599 9980
0429 *0449 29503 *3432 4410 9981
0430 0420 29504 3440 *74259 9982
0431 0421 29510 *3433 3440 9983
0432 0422 29511 3440 *7428 9984
0433 0429 29512 *3434 3440 9985
0439 0430 29513 3440 *7429 9986
0440 0431 29514 *3438 3440 9987
0449 0432 29521 3440 *7893 9988
*0431 0433 29522 *3439 7895 9989
0420 0439 29523 3440 *7894 *9989
0421 0440 29524 *3440 7895 9988
0422 0449 29530 3432 *9979
0429 *1398 29531 3440 9988
0430 0420 29532 *3441 *9988
0431 0421 29533 3440 9580
0432 0422 29534 *3442 9581

Table 7a.--Medicare Prospective Payment System Selected Percentile Lengths of Stay
[FY93 Medpar Update 12/93 Grouper V11.0]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Arithmetic 10th 25th 50th 75th 90th
DRG discharges mean LOS percentile percentile percentile percentile percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
001..................................... 30373 13.5498 3 6 10 17 27
002..................................... 5861 13.9686 4 6 10 17 27
003..................................... 2 41.5000 17 17 66 66 66
004..................................... 5387 11.0787 2 4 7 14 23
005..................................... 64233 5.8124 2 3 4 7 11
006..................................... 517 3.2128 1 1 2 4 7
007..................................... 6847 17.1151 2 5 10 18 35
008..................................... 2226 4.5022 1 1 3 5 10
009..................................... 1605 9.2299 2 4 6 11 17
010..................................... 20587 9.6795 2 4 7 12 20
011..................................... 3219 5.5902 1 2 4 7 11
012..................................... 21670 9.2853 2 4 6 11 17
013..................................... 6125 7.5703 3 4 6 9 13
014..................................... 353384 8.9247 2 4 7 11 17
015..................................... 131428 5.0837 2 2 4 6 9
016..................................... 11066 8.2622 2 4 6 10 15
017..................................... 3630 4.7063 1 2 4 6 9
018..................................... 18584 7.2969 2 3 6 9 14
019..................................... 7122 4.8655 1 2 4 6 9
020..................................... 7553 11.7304 3 5 9 15 23
021..................................... 1026 8.7320 2 4 7 11 17
022..................................... 3809 5.5547 2 3 4 7 10
023..................................... 4708 5.8180 1 2 4 7 11
024..................................... 55140 6.8617 2 3 5 8 13
025..................................... 21162 4.2204 1 2 3 5 8
026..................................... 40 4.3750 1 1 2 4 9
027..................................... 2974 7.5790 1 1 4 9 17
028..................................... 8995 8.4404 2 3 6 10 18
029..................................... 3289 4.6722 1 2 3 6 9
031..................................... 3616 5.8462 1 2 4 7 12
032..................................... 2071 3.4843 1 1 2 4 7
034..................................... 14911 7.7272 2 3 5 9 15
035..................................... 3437 4.9674 1 2 4 6 9
036..................................... 16091 1.8704 1 1 1 2 3
037..................................... 2305 4.0638 1 1 3 5 8
038..................................... 477 2.7317 1 1 2 3 5
039..................................... 5224 2.0312 1 1 1 2 4
040..................................... 2126 3.6350 1 1 2 4 8
042..................................... 13425 2.3924 1 1 1 3 5
043..................................... 145 4.2552 1 2 3 5 8
044..................................... 1684 6.0653 2 3 5 8 11
045..................................... 2423 4.3120 1 2 4 6 8
046..................................... 2954 6.1852 1 3 5 8 12
047..................................... 1485 3.8774 1 2 3 5 8
049..................................... 2255 6.9929 2 3 5 8 13
050..................................... 4034 2.3406 1 1 2 3 4
051..................................... 409 3.0831 1 1 2 3 6
052..................................... 97 3.3402 1 1 2 4 7
053..................................... 4556 3.5435 1 1 2 4 8
054..................................... 1 1.0000 1 1 1 1 1
055..................................... 2531 3.0217 1 1 1 3 7
056..................................... 826 3.1695 1 1 2 4 7
057..................................... 617 5.3485 1 2 3 6 11
059..................................... 124 2.3468 1 1 1 2 4
060..................................... 2 2.5000 2 2 3 3 3
061..................................... 297 5.2256 1 1 2 7 12
063..................................... 4419 5.3220 1 2 3 6 10
064..................................... 3707 8.3663 1 2 5 10 18
065..................................... 34105 3.8732 1 2 3 5 7
066..................................... 7569 4.0285 1 2 3 5 7
067..................................... 458 4.7576 2 3 4 6 9
068..................................... 12495 5.4854 2 3 4 7 10
069..................................... 3688 4.2573 2 2 4 5 7
070..................................... 35 4.2571 1 2 4 5 8
071..................................... 138 4.2174 2 2 3 5 8
072..................................... 600 4.3200 1 2 3 5 8
073..................................... 6282 5.6492 1 2 4 7 11
075..................................... 36514 12.6075 5 7 9 15 24
076..................................... 38214 14.1313 3 6 11 17 27
077..................................... 2808 5.9822 1 2 4 8 13
078..................................... 26921 9.2896 4 6 8 11 15
079..................................... 174836 10.7988 3 5 8 13 20
080..................................... 8572 7.4425 3 4 6 9 13
081..................................... 10 7.0000 1 4 6 10 13
082..................................... 68268 8.9293 2 4 7 11 18
083..................................... 7079 7.4091 2 3 6 9 14
084..................................... 1576 4.3331 1 2 3 5 8
085..................................... 17127 8.2495 2 4 7 10 16
086..................................... 1510 4.9192 1 2 4 6 10
087..................................... 51460 7.5282 1 3 6 10 14
088..................................... 332295 7.0044 3 4 6 8 12
089..................................... 410720 8.0987 3 4 7 10 14
090..................................... 40769 5.7490 2 3 5 7 10
091..................................... 38 4.2105 2 3 4 4 7
092..................................... 10341 8.1339 3 4 6 10 15
093..................................... 1377 5.9092 2 3 5 7 11
094..................................... 9789 8.6530 3 4 7 11 17
095..................................... 1095 4.9726 2 3 4 6 9
096..................................... 78494 6.3363 2 4 5 8 11
097..................................... 28088 4.8754 2 3 4 6 8
098..................................... 29 4.1034 1 2 3 4 7
099..................................... 27359 4.2464 1 2 3 5 8
100..................................... 10912 2.8235 1 1 2 3 5
101..................................... 18549 6.3481 2 3 5 8 12
102..................................... 3083 4.0642 1 2 3 5 8
103..................................... 348 35.3218 9 14 22 43 77
104..................................... 20448 18.0558 8 11 15 22 31
105..................................... 17984 13.3331 7 8 10 15 23
106..................................... 85552 13.8702 7 9 12 16 22
107..................................... 56763 10.6400 6 7 9 12 17
108..................................... 6318 14.6399 5 8 12 18 27
110..................................... 55626 12.2737 3 7 10 15 23
111..................................... 5508 7.5882 3 6 7 9 11
112..................................... 165207 5.3375 1 2 4 7 11
113..................................... 41056 17.3678 5 8 13 21 35
114..................................... 8732 11.0470 3 5 8 14 22
115..................................... 9395 12.7986 5 7 11 16 23
116..................................... 73442 6.5117 2 3 5 8 13
117..................................... 3705 4.9970 1 2 3 6 10
118..................................... 7591 3.5381 1 1 2 4 8
119..................................... 2413 5.7791 1 1 3 7 14
120..................................... 36642 10.6624 1 3 6 14 24
121..................................... 159546 8.7209 3 5 7 11 15
122..................................... 94506 6.0345 2 3 6 8 10
123..................................... 53142 5.0944 1 1 3 6 12
124..................................... 133965 5.5625 1 2 4 7 11
125..................................... 68339 3.2111 1 1 2 4 7
126..................................... 4359 18.2292 5 8 14 25 38
127..................................... 679157 7.1974 2 4 6 9 14
128..................................... 22137 7.6946 4 5 7 9 12
129..................................... 5385 3.8375 1 1 1 4 10
130..................................... 78977 7.5326 2 4 6 9 13
131..................................... 24242 5.6644 1 3 5 7 9
132..................................... 16994 4.8000 1 2 4 6 9
133..................................... 3780 3.5124 1 2 3 4 6
134..................................... 30568 4.4913 1 2 3 5 8
135..................................... 6195 5.9711 2 3 4 7 11
136..................................... 1205 3.8556 1 2 3 5 7
138..................................... 196966 5.3070 2 2 4 6 10
139..................................... 67986 3.3770 1 2 3 4 6
140..................................... 318042 4.0906 1 2 3 5 7
141..................................... 76022 5.2772 2 2 4 6 10
142..................................... 35107 3.6827 1 2 3 4 7
143..................................... 133200 3.0817 1 2 2 4 6
144..................................... 60798 6.5142 1 3 5 8 13
145..................................... 7253 3.7740 1 2 3 5 7
146..................................... 8127 12.3116 6 8 10 14 20
147..................................... 1471 7.9844 4 6 8 9 11
148..................................... 145108 14.9089 7 8 12 17 27
149..................................... 14666 8.3034 5 6 8 9 12
150..................................... 22651 12.8981 5 7 11 15 23
151..................................... 4308 6.8271 2 4 6 9 12
152..................................... 4894 9.8733 4 6 8 11 16
153..................................... 1760 6.7545 3 5 6 8 10
154..................................... 36532 17.1556 6 9 13 21 33
155..................................... 3705 7.3665 3 4 7 9 12
156..................................... 4 11.5000 2 2 9 13 22
157..................................... 12499 6.3625 2 3 4 8 13
158..................................... 7092 3.0451 1 1 2 4 6
159..................................... 17371 5.7938 2 3 4 7 11
160..................................... 10912 3.1574 1 2 3 4 6
161..................................... 18202 4.8049 1 2 3 6 10
162..................................... 11663 2.2115 1 1 2 3 4
163..................................... 16 4.7500 2 2 3 6 8
164..................................... 4964 10.3342 5 6 9 12 17
165..................................... 1512 6.2890 3 4 6 8 10
166..................................... 3190 6.4994 2 3 5 8 12
167..................................... 2206 3.7040 2 2 3 5 6
168..................................... 1851 5.6018 1 2 3 7 12
169..................................... 1185 2.6962 1 1 2 3 6
170..................................... 12853 14.7068 3 6 10 18 30
171..................................... 1199 5.8507 1 3 5 8 11
172..................................... 30862 9.4698 2 4 7 12 19
173..................................... 2449 4.6991 1 2 3 6 9
174..................................... 225891 6.3539 2 3 5 8 12
175..................................... 25401 3.9307 2 2 3 5 7
176..................................... 14812 7.0485 2 3 5 8 13
177..................................... 12916 5.6722 2 3 5 7 10
178..................................... 4944 3.9606 2 2 3 5 7
179..................................... 9686 8.3931 3 4 6 10 16
180..................................... 77950 6.9772 2 3 5 8 13
181..................................... 20494 4.2234 1 2 4 5 7
182..................................... 231480 5.7533 2 3 4 7 11
183..................................... 71521 3.8393 1 2 3 5 7
184..................................... 67 3.8358 1 2 3 4 5
185..................................... 3615 5.9422 1 2 4 7 12
186..................................... 5 4.0000 1 1 3 6 8
187..................................... 860 3.8558 1 1 3 5 8
188..................................... 53223 6.9469 2 3 5 8 14
189..................................... 7789 3.7621 1 1 3 5 8
190..................................... 54 4.4074 1 2 3 4 6
191..................................... 10304 18.2203 6 8 14 22 35
192..................................... 820 8.8305 2 5 8 11 16
193..................................... 10321 15.8257 6 9 13 19 28
194..................................... 904 9.1040 3 5 8 11 16
195..................................... 12380 11.7961 5 7 10 14 20
196..................................... 1026 7.3899 4 5 7 9 12
197..................................... 33963 9.9541 4 6 8 12 17
198..................................... 10346 5.2905 2 3 5 7 9
199..................................... 2660 13.3534 4 6 10 17 26
200..................................... 1683 13.2133 2 5 10 17 28
201..................................... 1677 17.0030 4 7 12 22 35
202..................................... 20872 8.7625 2 4 7 11 17
203..................................... 29280 8.8699 2 4 7 11 18
204..................................... 44310 7.5089 2 4 6 9 14
205..................................... 21520 8.4757 2 4 6 10 17
206..................................... 1779 4.6549 1 2 4 6 9
207..................................... 36615 6.5464 2 3 5 8 12
208..................................... 11419 3.6754 1 2 3 5 7
209..................................... 303651 8.7652 5 6 8 10 13
210..................................... 129230 10.9177 5 6 9 12 18
211..................................... 25020 7.9683 4 5 7 9 12
212..................................... 10 3.8000 1 3 4 5 5
213..................................... 6329 11.6949 3 5 8 14 23
214..................................... 48908 8.3508 3 4 6 10 15
215..................................... 39409 4.7896 2 3 4 6 8
216..................................... 6597 13.2759 3 6 10 17 26
217..................................... 17833 18.9865 4 7 13 23 40
218..................................... 21393 7.6410 2 4 6 9 14
219..................................... 18645 4.4635 2 2 4 5 8
220..................................... 5 6.2000 2 2 6 7 10
221..................................... 4727 9.4007 2 4 7 11 19
222..................................... 3985 4.6979 1 2 4 6 9
223..................................... 18602 3.3396 1 2 2 4 6
224..................................... 8372 2.6646 1 1 2 3 5
225..................................... 7483 5.2232 1 2 3 6 12
226..................................... 5574 7.8281 2 3 5 9 17
227..................................... 5634 3.2157 1 1 2 4 6
228..................................... 3492 3.6904 1 1 2 4 8
229..................................... 1775 2.5228 1 1 2 3 5
230..................................... 2838 5.8439 1 2 3 7 12
231..................................... 10537 5.6445 1 2 3 7 13
232..................................... 775 5.9277 1 1 3 6 16
233..................................... 4860 10.7298 2 4 8 13 22
234..................................... 2420 4.8157 1 2 4 6 10
235..................................... 6120 8.9845 2 3 6 10 18
236..................................... 38386 7.8166 2 3 6 9 15
237..................................... 1605 5.3234 1 2 4 6 10
238..................................... 6734 12.7251 3 6 9 15 26
239..................................... 60904 9.1849 3 4 7 11 18
240..................................... 11208 8.9697 2 4 7 11 17
241..................................... 3260 5.2215 1 3 4 6 10
242..................................... 2281 9.4638 3 4 7 11 18
243..................................... 88697 6.5167 2 3 5 8 12
244..................................... 11351 6.8297 2 3 5 8 13
245..................................... 4564 4.9634 1 2 3 6 9
246..................................... 1431 4.8595 2 2 4 6 9
247..................................... 9989 4.6786 1 2 3 6 9
248..................................... 6510 6.0246 2 3 4 7 11
249..................................... 9415 5.2349 1 2 3 6 11
250..................................... 3290 6.1280 1 2 4 7 12
251..................................... 2507 3.5548 1 1 2 4 7
252..................................... 2 6.0000 2 2 10 10 10
253..................................... 17261 7.2853 2 3 5 8 14
254..................................... 10298 4.4081 1 2 3 5 8
255..................................... 1 10.0000 10 10 10 10 10
256..................................... 9475 4.7850 1 2 3 6 9
257..................................... 26630 4.2972 2 2 3 5 7
258..................................... 21946 3.1009 1 2 3 4 5
259..................................... 4351 4.3691 1 2 2 4 9
260..................................... 5570 2.2197 1 1 2 3 4
261..................................... 2585 2.5455 1 1 2 3 4
262..................................... 868 3.9124 1 1 2 5 8
263..................................... 30392 17.7629 5 7 12 21 36
264..................................... 3875 9.7752 3 4 7 12 20
265..................................... 4819 8.6777 1 3 6 10 18
266..................................... 3324 4.0884 1 1 3 5 8
267..................................... 232 4.1595 1 1 2 5 10
268..................................... 1219 4.2231 1 1 2 5 9
269..................................... 11374 11.0770 2 4 8 14 23
270..................................... 4423 3.6878 1 1 2 4 8
271..................................... 20737 10.3003 3 5 8 12 19
272..................................... 6755 8.3843 3 4 6 10 16
273..................................... 1752 6.0736 2 3 5 7 12
274..................................... 2582 9.1971 2 3 6 11 18
275..................................... 251 4.0956 1 1 2 5 9
276..................................... 859 5.7334 1 2 4 7 10
277..................................... 74776 7.8329 3 4 6 9 14
278..................................... 26182 5.7631 2 3 5 7 10
279..................................... 10 4.3000 1 3 4 6 7
280..................................... 13247 6.0380 1 3 4 7 11
281..................................... 6270 4.0675 1 2 3 5 8
282..................................... 1 1.0000 1 1 1 1 1
283..................................... 5385 6.5441 2 3 5 8 13
284..................................... 1955 4.4123 1 2 3 5 8
285..................................... 4930 17.6406 4 8 13 21 34
286..................................... 1891 9.7324 4 5 7 11 18
287..................................... 6466 16.6157 4 7 11 19 33
288..................................... 653 8.3629 3 4 6 8 15
289..................................... 4563 4.9001 1 2 3 4 10
290..................................... 9202 3.1564 1 2 2 3 5
291..................................... 111 1.9730 1 1 1 2 4
292..................................... 5170 15.1474 3 6 11 19 31
293..................................... 395 6.8557 1 2 5 9 14
294..................................... 80666 6.7243 2 3 5 8 12
295..................................... 3224 5.4100 2 2 4 6 10
296..................................... 227107 7.5655 2 3 5 9 15
297..................................... 40135 4.8183 2 2 4 6 9
298..................................... 81 4.2963 1 1 2 4 10
299..................................... 905 6.3901 1 2 4 8 13
300..................................... 12698 8.5099 2 4 6 10 16
301..................................... 1891 4.9804 1 2 4 6 10
302..................................... 6980 14.9606 7 9 12 18 26
303..................................... 18216 11.8073 5 7 9 14 21
304..................................... 13382 11.8629 3 5 9 14 23
305..................................... 2692 5.6118 2 3 5 7 10
306..................................... 11838 7.5201 2 3 5 10 15
307..................................... 3299 3.7014 1 2 3 4 6
308..................................... 9917 8.2603 2 3 6 10 17
309..................................... 3783 3.4335 1 2 3 4 7
310..................................... 32915 5.1680 1 2 3 6 10
311..................................... 14111 2.5038 1 1 2 3 5
312..................................... 2543 5.3917 1 2 4 7 11
313..................................... 1154 2.6023 1 1 2 3 5
314..................................... 1 8.0000 8 8 8 8 8
315..................................... 29182 10.9542 1 3 7 14 24
316..................................... 57588 8.4956 2 3 6 11 17
317..................................... 690 4.3174 1 2 3 4 8
318..................................... 6220 8.2323 2 3 6 10 17
319..................................... 544 3.2831 1 1 2 4 7
320..................................... 168207 7.5966 3 4 6 9 14
321..................................... 26158 5.3687 2 3 4 6 9
322..................................... 72 4.5833 2 2 4 5 9
323..................................... 19232 4.0182 1 2 3 5 8
324..................................... 10858 2.3119 1 1 2 3 4
325..................................... 8572 5.3898 1 2 4 6 10
326..................................... 2823 3.4307 1 2 3 4 7
327..................................... 3 3.0000 1 1 4 4 4
328..................................... 1023 5.0205 1 2 4 6 10
329..................................... 197 2.6701 1 1 2 3 5
331..................................... 33508 7.1297 2 3 5 9 14
332..................................... 4698 4.1350 1 2 3 5 8
333..................................... 299 7.0368 1 3 5 10 15
334..................................... 28600 7.6310 4 5 7 8 11
335..................................... 12704 6.0778 4 5 6 7 9
336..................................... 81940 4.9549 2 3 4 6 9
337..................................... 58596 3.3036 2 2 3 4 5
338..................................... 8839 5.8370 1 2 4 7 13
339..................................... 3107 4.7023 1 2 3 5 10
340..................................... 3 2.3333 1 1 2 4 4
341..................................... 9209 4.0488 1 2 3 4 7
342..................................... 307 4.1564 1 1 2 5 10
344..................................... 6604 3.8139 1 1 3 4 7
345..................................... 1808 4.8623 1 2 3 6 10
346..................................... 6645 7.7943 2 3 5 9 16
347..................................... 554 3.7365 1 1 3 5 8
348..................................... 3661 5.1478 1 2 4 6 10
349..................................... 1010 3.3426 1 1 2 4 6
350..................................... 7431 5.5438 2 3 5 7 10
352..................................... 756 4.6019 1 2 3 6 9
353..................................... 2445 10.1877 4 5 8 12 19
354..................................... 9943 7.2639 3 4 6 8 12
355..................................... 5537 4.3150 3 3 4 5 6
356..................................... 34772 3.7010 2 2 3 4 6
357..................................... 6736 11.1651 4 6 9 13 21
358..................................... 26416 5.5984 3 4 4 6 9
359..................................... 26404 3.7891 2 3 4 4 5
360..................................... 9475 4.5882 2 3 3 5 8
361..................................... 511 5.0431 1 2 3 5 11
362..................................... 3 1.3333 1 1 1 2 2
363..................................... 5120 3.9785 1 2 3 4 7
364..................................... 2078 3.7671 1 1 2 5 8
365..................................... 2643 9.4813 2 3 6 12 20
366..................................... 4656 9.1016 2 3 6 11 19
367..................................... 625 3.3776 1 1 2 4 7
368..................................... 1750 7.3937 2 4 6 9 15
369..................................... 2330 4.0159 1 1 3 5 8
370..................................... 857 6.1680 3 3 4 6 10
371..................................... 864 3.9699 3 3 3 4 5
372..................................... 586 3.5256 1 2 3 4 6
373..................................... 3116 2.2073 1 1 2 2 3
374..................................... 120 3.2167 1 2 2 3 5
375..................................... 4 51.5000 2 2 3 11 190
376..................................... 173 3.3410 1 2 2 3 7
377..................................... 32 5.7813 1 1 3 10 13
378..................................... 137 3.0438 1 2 3 4 5
379..................................... 338 2.8639 1 1 2 3 6
380..................................... 67 2.1045 1 1 1 3 4
381..................................... 225 2.6578 1 1 1 3 5
382..................................... 48 1.4167 1 1 1 1 2
383..................................... 1178 4.1061 1 2 3 5 8
384..................................... 126 2.7619 1 1 2 3 5
385..................................... 2 2.5000 1 1 4 4 4
389..................................... 12 7.6667 1 2 7 10 15
390..................................... 11 4.8182 1 1 3 4 8
391..................................... 1 4.0000 4 4 4 4 4
392..................................... 2421 13.2978 5 6 10 16 26
393..................................... 1 3.0000 3 3 3 3 3
394..................................... 1845 9.3176 1 2 6 11 20
395..................................... 66925 6.0837 1 3 4 7 12
396..................................... 14 2.0714 1 1 1 4 5
397..................................... 13735 6.9771 2 3 5 9 14
398..................................... 16149 7.4775 3 4 6 9 14
399..................................... 1442 4.7961 1 2 4 6 9
400..................................... 8087 11.8312 2 4 8 15 26
401..................................... 6407 13.6969 3 5 10 17 29
402..................................... 1880 4.7899 1 2 3 6 10
403..................................... 31756 10.7486 2 4 8 14 22
404..................................... 4324 5.1859 1 2 4 7 10
406..................................... 3656 13.0126 3 6 9 16 26
407..................................... 816 5.3223 1 2 4 7 10
408..................................... 3620 8.5298 1 2 5 10 20
409..................................... 6885 7.9063 2 4 5 8 17
410..................................... 115896 3.4291 1 2 3 4 6
411..................................... 89 3.7079 1 1 3 4 6
412..................................... 87 3.2299 1 1 2 4 6
413..................................... 8628 9.9350 2 4 7 12 20
414..................................... 1111 5.4851 1 2 4 7 11
415..................................... 34634 18.7088 5 8 14 23 37
416..................................... 165302 9.5625 2 5 8 12 18
417..................................... 34 7.5294 2 3 5 7 17
418..................................... 15792 7.7252 3 4 6 9 14
419..................................... 16751 6.7324 2 3 5 8 12
420..................................... 3070 4.9896 2 3 4 6 9
421..................................... 13327 5.2403 2 3 4 6 10
422..................................... 92 4.3261 1 2 3 5 8
423..................................... 8045 10.0675 3 4 7 12 20
424..................................... 2342 23.0478 3 8 15 26 46
425..................................... 17532 5.9067 1 2 4 7 12
426..................................... 5260 6.6293 2 3 5 8 13
427..................................... 1916 6.4541 1 2 4 8 13
428..................................... 1022 9.3875 1 3 6 11 20
429..................................... 32989 10.9768 2 4 7 12 21
430..................................... 55906 11.5219 2 5 8 15 23
431..................................... 185 7.6595 2 3 5 9 17
432..................................... 473 7.4038 1 3 5 9 16
433..................................... 6970 4.1164 1 1 3 5 9
434..................................... 19096 6.8571 2 3 5 8 13
435..................................... 13108 5.5738 1 3 4 6 11
436..................................... 2435 17.0119 5 10 16 24 28
437..................................... 12492 13.5556 5 8 12 18 25
439..................................... 862 9.5186 1 3 6 12 21
440..................................... 4409 11.5321 2 4 7 14 25
441..................................... 660 3.8167 1 1 2 4 7
442..................................... 12872 9.6969 1 3 6 12 20
443..................................... 4362 3.3304 1 1 2 4 7
444..................................... 3259 6.5170 2 3 5 8 12
445..................................... 1547 4.1261 1 2 3 5 8
447..................................... 3349 3.1400 1 1 2 4 6
448..................................... 1 2.0000 2 2 2 2 2
449..................................... 28599 5.3042 1 2 4 6 11
450..................................... 6390 2.7858 1 1 2 3 5
451..................................... 6 2.0000 1 1 1 3 3
452..................................... 18951 5.8673 1 2 4 7 12
453..................................... 4193 3.4226 1 2 2 4 7
454..................................... 4519 6.5499 1 2 4 7 14
455..................................... 1093 3.6075 1 1 2 4 7
456..................................... 180 10.2056 1 2 5 12 25
457..................................... 126 5.6032 1 1 3 8 13
458..................................... 1603 19.8047 5 9 15 25 39
459..................................... 573 12.2792 3 5 9 15 27
460..................................... 2269 8.3486 2 3 6 10 16
461..................................... 4302 5.4547 1 1 2 4 14
462..................................... 10139 16.5278 6 8 14 21 30
463..................................... 9139 6.2674 2 3 5 7 12
464..................................... 2247 4.1081 1 2 3 5 8
465..................................... 313 3.1502 1 1 2 3 6
466..................................... 2816 5.3612 1 1 2 4 9
467..................................... 2945 5.0156 1 1 2 5 9
468..................................... 64052 17.6626 4 8 13 22 35
471..................................... 8311 11.2860 5 7 9 13 18
472..................................... 149 30.5101 2 8 21 39 63
473..................................... 8348 16.2351 2 4 9 25 39
475..................................... 80231 13.6842 2 6 11 18 27
476..................................... 8720 15.5812 5 9 13 19 27
477..................................... 35266 9.8103 1 3 7 12 20
478..................................... 111354 9.6146 2 4 7 12 20
479..................................... 16210 5.1031 1 2 4 7 10
480..................................... 269 33.8141 12 15 25 44 66
481..................................... 115 38.1304 21 26 35 43 58
482..................................... 7201 17.6463 6 8 13 20 34
483..................................... 35287 52.6801 17 27 42 64 97
484..................................... 296 20.1284 3 8 14 26 42
485..................................... 2791 14.4643 6 7 11 17 26
486..................................... 1960 16.8240 2 7 12 22 34
487..................................... 3242 10.1875 2 4 8 13 20
488..................................... 876 21.1039 6 9 15 25 39
489..................................... 9289 12.4757 3 5 8 15 25
490..................................... 3042 8.1190 2 3 5 9 16
491..................................... 8218 5.3304 2 3 4 6 9
492..................................... 1545 16.7851 3 5 8 27
493..................................... 49835 6.2719 1 2 5 8 13
494..................................... 31647 2.3298 1 1 1 3 5
----------------
10544650 .............. .............. .............. .............. .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 7b.--Medicare Prospective Payment System Selected Percentile Lengths of Stay
[FY93 Medpar Update 12/93 Grouper V12.0]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arithmetic 10th 25th 50th 75th 90th
DRG Numberdischarges mean LOS percentile percentile percentile percentile percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
001................................... 30373 13.5498 3 6 10 17 27
002................................... 5861 13.9686 4 6 10 17 27
003................................... 2 41.5000 17 17 66 66 66
004................................... 5387 11.0787 2 4 7 14 23
005................................... 64233 5.8124 2 3 4 7 11
006................................... 517 3.2128 1 1 2 4 7
007................................... 6847 17.1151 2 5 10 18 35
008................................... 2226 4.5022 1 1 3 5 10
009................................... 1605 9.2299 2 4 6 11 17
010................................... 20587 9.6795 2 4 7 12 20
011................................... 3219 5.5902 1 2 4 7 11
012................................... 21670 9.2853 2 4 6 11 17
013................................... 6125 7.5703 3 4 6 9 13
014................................... 353384 8.9247 2 4 7 11 17
015................................... 131428 5.0837 2 2 4 6 9
016................................... 11066 8.2622 2 4 6 10 15
017................................... 3630 4.7063 1 2 4 6 9
018................................... 18584 7.2969 2 3 6 9 14
019................................... 7122 4.8655 1 2 4 6 9
020................................... 7553 11.7304 3 5 9 15 23
021................................... 1026 8.7320 2 4 7 11 17
022................................... 3809 5.5547 2 3 4 7 10
023................................... 4708 5.8180 1 2 4 7 11
024................................... 55140 6.8617 2 3 5 8 13
025................................... 21162 4.2204 1 2 3 5 8
026................................... 40 4.3750 1 1 2 4 9
027................................... 2974 7.5790 1 1 4 9 17
028................................... 8995 8.4404 2 3 6 10 18
029................................... 3289 4.6722 1 2 3 6 9
031................................... 3616 5.8462 1 2 4 7 12
032................................... 2071 3.4843 1 1 2 4 7
034................................... 14911 7.7272 2 3 5 9 15
035................................... 3437 4.9674 1 2 4 6 9
036................................... 16091 1.8704 1 1 1 2 3
037................................... 2305 4.0638 1 1 3 5 8
038................................... 477 2.7317 1 1 2 3 5
039................................... 5224 2.0312 1 1 1 2 4
040................................... 2126 3.6350 1 1 2 4 8
042................................... 13425 2.3924 1 1 1 3 5
043................................... 145 4.2552 1 2 3 5 8
044................................... 1684 6.0653 2 3 5 8 11
045................................... 2423 4.3120 1 2 4 6 8
046................................... 2944 6.1695 1 3 5 7 12
047................................... 1480 3.8770 1 2 3 5 8
049................................... 2255 6.9929 2 3 5 8 13
050................................... 4034 2.3406 1 1 2 3 4
051................................... 409 3.0831 1 1 2 3 6
052................................... 97 3.3402 1 1 2 4 7
053................................... 4556 3.5435 1 1 2 4 8
054................................... 1 1.0000 1 1 1 1 1
055................................... 2531 3.0217 1 1 1 3 7
056................................... 826 3.1695 1 1 2 4 7
057................................... 617 5.3485 1 2 3 6 11
059................................... 124 2.3468 1 1 1 2 4
060................................... 2 2.5000 2 2 3 3 3
061................................... 297 5.2256 1 1 2 7 12
063................................... 4419 5.3220 1 2 3 6 10
064................................... 3707 8.3663 1 2 5 10 18
065................................... 34105 3.8732 1 2 3 5 7
066................................... 7569 4.0285 1 2 3 5 7
067................................... 458 4.7576 2 3 4 6 9
068................................... 12495 5.4854 2 3 4 7 10
069................................... 3688 4.2573 2 2 4 5 7
070................................... 35 4.2571 1 2 4 5 8
071................................... 138 4.2174 2 2 3 5 8
072................................... 600 4.3200 1 2 3 5 8
073................................... 6282 5.6492 1 2 4 7 11
075................................... 36514 12.6075 5 7 9 15 24
076................................... 38214 14.1313 3 6 11 17 27
077................................... 2808 5.9822 1 2 4 8 13
078................................... 26921 9.2896 4 6 8 11 15
079................................... 174836 10.7988 3 5 8 13 20
080................................... 8572 7.4425 3 4 6 9 13
081................................... 10 7.0000 1 4 6 10 13
082................................... 68268 8.9293 2 4 7 11 18
083................................... 7079 7.4091 2 3 6 9 14
084................................... 1576 4.3331 1 2 3 5 8
085................................... 17127 8.2495 2 4 7 10 16
086................................... 1510 4.9192 1 2 4 6 10
087................................... 51460 7.5282 1 3 6 10 14
088................................... 332295 7.0044 3 4 6 8 12
089................................... 410720 8.0987 3 4 7 10 14
090................................... 40769 5.7490 2 3 5 7 10
091................................... 38 4.2105 2 3 4 4 7
092................................... 10341 8.1339 3 4 6 10 15
093................................... 1377 5.9092 2 3 5 7 11
094................................... 9789 8.6530 3 4 7 11 17
095................................... 1095 4.9726 2 3 4 6 9
096................................... 78494 6.3363 2 4 5 8 11
097................................... 28088 4.8754 2 3 4 6 8
098................................... 29 4.1034 1 2 3 4 7
099................................... 27359 4.2464 1 2 3 5 8
100................................... 10912 2.8235 1 1 2 3 5
101................................... 18549 6.3481 2 3 5 8 12
102................................... 3083 4.0642 1 2 3 5 8
103................................... 348 35.3218 9 14 22 43 77
104................................... 20448 18.0558 8 11 15 22 31
105................................... 17984 13.3331 7 8 10 15 23
106................................... 85552 13.8702 7 9 12 16 22
107................................... 56763 10.6400 6 7 9 12 17
108................................... 6318 14.6399 5 8 12 18 27
110................................... 55626 12.2737 3 7 10 15 23
111................................... 5508 7.5882 3 6 7 9 11
112................................... 165207 5.3375 1 2 4 7 11
113................................... 41056 17.3678 5 8 13 21 35
114................................... 8732 11.0470 3 5 8 14 22
115................................... 9395 12.7986 5 7 11 16 23
116................................... 73442 6.5117 2 3 5 8 13
117................................... 3705 4.9970 1 2 3 6 10
118................................... 7591 3.5381 1 1 2 4 8
119................................... 2413 5.7791 1 1 3 7 14
120................................... 39194 10.8284 1 3 7 14 24
121................................... 159547 8.7209 3 5 7 11 15
122................................... 94506 6.0345 2 3 6 8 10
123................................... 53142 5.0944 1 1 3 6 12
124................................... 133965 5.5625 1 2 4 7 11
125................................... 68339 3.2111 1 1 2 4 7
126................................... 4359 18.2292 5 8 14 25 38
127................................... 679158 7.1974 2 4 6 9 14
128................................... 22137 7.6946 4 5 7 9 12
129................................... 5385 3.8375 1 1 1 4 10
130................................... 78977 7.5326 2 4 6 9 13
131................................... 24242 5.6644 1 3 5 7 9
132................................... 16994 4.8000 1 2 4 6 9
133................................... 3780 3.5124 1 2 3 4 6
134................................... 30568 4.4913 1 2 3 5 8
135................................... 6195 5.9711 2 3 4 7 11
136................................... 1205 3.8556 1 2 3 5 7
138................................... 196966 5.3070 2 2 4 6 10
139................................... 67986 3.3770 1 2 3 4 6
140................................... 318042 4.0906 1 2 3 5 7
141................................... 76022 5.2772 2 2 4 6 10
142................................... 35107 3.6827 1 2 3 4 7
143................................... 133200 3.0817 1 2 2 4 6
144................................... 60798 6.5142 1 3 5 8 13
145................................... 7253 3.7740 1 2 3 5 7
146................................... 8127 12.3116 6 8 10 14 20
147................................... 1471 7.9844 4 6 8 9 11
148................................... 145108 14.9089 7 8 12 17 27
149................................... 14666 8.3034 5 6 8 9 12
150................................... 22651 12.8981 5 7 11 15 23
151................................... 4308 6.8271 2 4 6 9 12
152................................... 4894 9.8733 4 6 8 11 16
153................................... 1760 6.7545 3 5 6 8 10
154................................... 36532 17.1556 6 9 13 21 33
155................................... 3705 7.3665 3 4 7 9 12
156................................... 4 11.5000 2 2 9 13 22
157................................... 12499 6.3625 2 3 4 8 13
158................................... 7092 3.0451 1 1 2 4 6
159................................... 17371 5.7938 2 3 4 7 11
160................................... 10912 3.1574 1 2 3 4 6
161................................... 18202 4.8049 1 2 3 6 10
162................................... 11663 2.2115 1 1 2 3 4
163................................... 16 4.7500 2 2 3 6 8
164................................... 4964 10.3342 5 6 9 12 17
165................................... 1512 6.2890 3 4 6 8 10
166................................... 3190 6.4994 2 3 5 8 12
167................................... 2206 3.7040 2 2 3 5 6
168................................... 1851 5.6018 1 2 3 7 12
169................................... 1185 2.6962 1 1 2 3 6
170................................... 12853 14.7068 3 6 10 18 30
171................................... 1199 5.8507 1 3 5 8 11
172................................... 30862 9.4698 2 4 7 12 19
173................................... 2449 4.6991 1 2 3 6 9
174................................... 225891 6.3539 2 3 5 8 12
175................................... 25401 3.9307 2 2 3 5 7
176................................... 14812 7.0485 2 3 5 8 13
177................................... 12916 5.6722 2 3 5 7 10
178................................... 4944 3.9606 2 2 3 5 7
179................................... 9686 8.3931 3 4 6 10 16
180................................... 77950 6.9772 2 3 5 8 13
181................................... 20494 4.2234 1 2 4 5 7
182................................... 231480 5.7533 2 3 4 7 11
183................................... 71521 3.8393 1 2 3 5 7
184................................... 67 3.8358 1 2 3 4 5
185................................... 3615 5.9422 1 2 4 7 12
186................................... 5 4.0000 1 1 3 6 8
187................................... 860 3.8558 1 1 3 5 8
188................................... 53223 6.9469 2 3 5 8 14
189................................... 7789 3.7621 1 1 3 5 8
190................................... 54 4.4074 1 2 3 4 6
191................................... 10304 18.2203 6 8 14 22 35
192................................... 820 8.8305 2 5 8 11 16
193................................... 10321 15.8257 6 9 13 19 28
194................................... 904 9.1040 3 5 8 11 16
195................................... 12380 11.7961 5 7 10 14 20
196................................... 1026 7.3899 4 5 7 9 12
197................................... 33963 9.9541 4 6 8 12 17
198................................... 10346 5.2905 2 3 5 7 9
199................................... 2660 13.3534 4 6 10 17 26
200................................... 1683 13.2133 2 5 10 17 28
201................................... 1677 17.0030 4 7 12 22 35
202................................... 20872 8.7625 2 4 7 11 17
203................................... 29280 8.8699 2 4 7 11 18
204................................... 44310 7.5089 2 4 6 9 14
205................................... 21520 8.4757 2 4 6 10 17
206................................... 1779 4.6549 1 2 4 6 9
207................................... 36615 6.5464 2 3 5 8 12
208................................... 11419 3.6754 1 2 3 5 7
209................................... 303651 8.7652 5 6 8 10 13
210................................... 129230 10.9177 5 6 9 12 18
211................................... 25020 7.9683 4 5 7 9 12
212................................... 10 3.8000 1 3 4 5 5
213................................... 6329 11.6949 3 5 8 14 23
214................................... 48908 8.3508 3 4 6 10 15
215................................... 39409 4.7896 2 3 4 6 8
216................................... 6597 13.2759 3 6 10 17 26
217................................... 17833 18.9865 4 7 13 23 40
218................................... 21393 7.6410 2 4 6 9 14
219................................... 18645 4.4635 2 2 4 5 8
220................................... 5 6.2000 2 2 6 7 10
221................................... 4727 9.4007 2 4 7 11 19
222................................... 3985 4.6979 1 2 4 6 9
223................................... 18602 3.3396 1 2 2 4 6
224................................... 8372 2.6646 1 1 2 3 5
225................................... 7483 5.2232 1 2 3 6 12
226................................... 5574 7.8281 2 3 5 9 17
227................................... 5634 3.2157 1 1 2 4 6
228................................... 3492 3.6904 1 1 2 4 8
229................................... 1775 2.5228 1 1 2 3 5
230................................... 2838 5.8439 1 2 3 7 12
231................................... 10537 5.6445 1 2 3 7 13
232................................... 775 5.9277 1 1 3 6 16
233................................... 4860 10.7298 2 4 8 13 22
234................................... 2420 4.8157 1 2 4 6 10
235................................... 6120 8.9845 2 3 6 10 18
236................................... 38386 7.8166 2 3 6 9 15
237................................... 1605 5.3234 1 2 4 6 10
238................................... 6734 12.7251 3 6 9 15 26
239................................... 60904 9.1849 3 4 7 11 18
240................................... 11208 8.9697 2 4 7 11 17
241................................... 3260 5.2215 1 3 4 6 10
242................................... 2281 9.4638 3 4 7 11 18
243................................... 88697 6.5167 2 3 5 8 12
244................................... 11351 6.8297 2 3 5 8 13
245................................... 4564 4.9634 1 2 3 6 9
246................................... 1431 4.8595 2 2 4 6 9
247................................... 9989 4.6786 1 2 3 6 9
248................................... 6510 6.0246 2 3 4 7 11
249................................... 9415 5.2349 1 2 3 6 11
250................................... 3290 6.1280 1 2 4 7 12
251................................... 2507 3.5548 1 1 2 4 7
252................................... 2 6.0000 2 2 10 10 10
253................................... 17261 7.2853 2 3 5 8 14
254................................... 10298 4.4081 1 2 3 5 8
255................................... 1 10.0000 10 10 10 10 10
256................................... 9475 4.7850 1 2 3 6 9
257................................... 26630 4.2972 2 2 3 5 7
258................................... 21946 3.1009 1 2 3 4 5
259................................... 4351 4.3691 1 2 2 4 9
260................................... 5570 2.2197 1 1 2 3 4
261................................... 2585 2.5455 1 1 2 3 4
262................................... 868 3.9124 1 1 2 5 8
263................................... 30392 17.7629 5 7 12 21 36
264................................... 3875 9.7752 3 4 7 12 20
265................................... 4819 8.6777 1 3 6 10 18
266................................... 3324 4.0884 1 1 3 5 8
267................................... 232 4.1595 1 1 2 5 10
268................................... 1219 4.2231 1 1 2 5 9
269................................... 11374 11.0770 2 4 8 14 23
270................................... 4423 3.6878 1 1 2 4 8
271................................... 20737 10.3003 3 5 8 12 19
272................................... 6755 8.3843 3 4 6 10 16
273................................... 1752 6.0736 2 3 5 7 12
274................................... 2582 9.1971 2 3 6 11 18
275................................... 251 4.0956 1 1 2 5 9
276................................... 859 5.7334 1 2 4 7 10
277................................... 74776 7.8329 3 4 6 9 14
278................................... 26182 5.7631 2 3 5 7 10
279................................... 10 4.3000 1 3 4 6 7
280................................... 13247 6.0380 1 3 4 7 11
281................................... 6270 4.0675 1 2 3 5 8
282................................... 1 1.0000 1 1 1 1 1
283................................... 5395 6.5520 2 3 5 8 13
284................................... 1960 4.4112 1 2 3 5 8
285................................... 4930 17.6406 4 8 13 21 34
286................................... 1891 9.7324 4 5 7 11 18
287................................... 6466 16.6157 4 7 11 19 33
288................................... 653 8.3629 3 4 6 8 15
289................................... 4563 4.9001 1 2 3 4 10
290................................... 9202 3.1564 1 2 2 3 5
291................................... 111 1.9730 1 1 1 2 4
292................................... 5170 15.1474 3 6 11 19 31
293................................... 395 6.8557 1 2 5 9 14
294................................... 80666 6.7243 2 3 5 8 12
295................................... 3224 5.4100 2 2 4 6 10
296................................... 227107 7.5655 2 3 5 9 15
297................................... 40135 4.8183 2 2 4 6 9
298................................... 81 4.2963 1 1 2 4 10
299................................... 905 6.3901 1 2 4 8 13
300................................... 12698 8.5099 2 4 6 10 16
301................................... 1891 4.9804 1 2 4 6 10
302................................... 6980 14.9606 7 9 12 18 26
303................................... 18216 11.8073 5 7 9 14 21
304................................... 13382 11.8629 3 5 9 14 23
305................................... 2692 5.6118 2 3 5 7 10
306................................... 11838 7.5201 2 3 5 10 15
307................................... 3299 3.7014 1 2 3 4 6
308................................... 9917 8.2603 2 3 6 10 17
309................................... 3783 3.4335 1 2 3 4 7
310................................... 32915 5.1680 1 2 3 6 10
311................................... 14111 2.5038 1 1 2 3 5
312................................... 2543 5.3917 1 2 4 7 11
313................................... 1154 2.6023 1 1 2 3 5
314................................... 1 8.0000 8 8 8 8 8
315................................... 29182 10.9542 1 3 7 14 24
316................................... 57588 8.4956 2 3 6 11 17
317................................... 690 4.3174 1 2 3 4 8
318................................... 6220 8.2323 2 3 6 10 17
319................................... 544 3.2831 1 1 2 4 7
320................................... 168207 7.5966 3 4 6 9 14
321................................... 26158 5.3687 2 3 4 6 9
322................................... 72 4.5833 2 2 4 5 9
323................................... 19232 4.0182 1 2 3 5 8
324................................... 10858 2.3119 1 1 2 3 4
325................................... 8572 5.3898 1 2 4 6 10
326................................... 2823 3.4307 1 2 3 4 7
327................................... 3 3.0000 1 1 4 4 4
328................................... 1023 5.0205 1 2 4 6 10
329................................... 197 2.6701 1 1 2 3 5
331................................... 33508 7.1297 2 3 5 9 14
332................................... 4698 4.1350 1 2 3 5 8
333................................... 299 7.0368 1 3 5 10 15
334................................... 28600 7.6310 4 5 7 8 11
335................................... 12704 6.0778 4 5 6 7 9
336................................... 81940 4.9549 2 3 4 6 9
337................................... 58596 3.3036 2 2 3 4 5
338................................... 8839 5.8370 1 2 4 7 13
339................................... 3107 4.7023 1 2 3 5 10
340................................... 3 2.3333 1 1 2 4 4
341................................... 9209 4.0488 1 2 3 4 7
342................................... 307 4.1564 1 1 2 5 10
344................................... 6604 3.8139 1 1 3 4 7
345................................... 1808 4.8623 1 2 3 6 10
346................................... 6645 7.7943 2 3 5 9 16
347................................... 554 3.7365 1 1 3 5 8
348................................... 3661 5.1478 1 2 4 6 10
349................................... 1010 3.3426 1 1 2 4 6
350................................... 7431 5.5438 2 3 5 7 10
352................................... 756 4.6019 1 2 3 6 9
353................................... 2445 10.1877 4 5 8 12 19
354................................... 9943 7.2639 3 4 6 8 12
355................................... 5537 4.3150 3 3 4 5 6
356................................... 34772 3.7010 2 2 3 4 6
357................................... 6736 11.1651 4 6 9 13 21
358................................... 26416 5.5984 3 4 4 6 9
359................................... 26404 3.7891 2 3 4 4 5
360................................... 9475 4.5882 2 3 3 5 8
361................................... 511 5.0431 1 2 3 5 11
362................................... 3 1.3333 1 1 1 2 2
363................................... 5120 3.9785 1 2 3 4 7
364................................... 2078 3.7671 1 1 2 5 8
365................................... 2643 9.4813 2 3 6 12 20
366................................... 4656 9.1016 2 3 6 11 19
367................................... 625 3.3776 1 1 2 4 7
368................................... 1750 7.3937 2 4 6 9 15
369................................... 2330 4.0159 1 1 3 5 8
370................................... 857 6.1680 3 3 4 6 10
371................................... 864 3.9699 3 3 3 4 5
372................................... 586 3.5256 1 2 3 4 6
373................................... 3116 2.2073 1 1 2 2 3
374................................... 120 3.2167 1 2 2 3 5
375................................... 4 51.5000 2 2 3 11 190
376................................... 173 3.3410 1 2 2 3 7
377................................... 32 5.7813 1 1 3 10 13
378................................... 137 3.0438 1 2 3 4 5
379................................... 338 2.8639 1 1 2 3 6
380................................... 67 2.1045 1 1 1 3 4
381................................... 225 2.6578 1 1 1 3 5
382................................... 48 1.4167 1 1 1 1 2
383................................... 1178 4.1061 1 2 3 5 8
384................................... 126 2.7619 1 1 2 3 5
385................................... 2 2.5000 1 1 4 4 4
389................................... 12 7.6667 1 2 7 10 15
390................................... 11 4.8182 1 1 3 4 8
391................................... 1 4.0000 4 4 4 4 4
392................................... 2421 13.2978 5 6 10 16 26
393................................... 1 3.0000 3 3 3 3 3
394................................... 1845 9.3176 1 2 6 11 20
395................................... 66925 6.0837 1 3 4 7 12
396................................... 14 2.0714 1 1 1 4 5
397................................... 13735 6.9771 2 3 5 9 14
398................................... 16149 7.4775 3 4 6 9 14
399................................... 1442 4.7961 1 2 4 6 9
400................................... 8087 11.8312 2 4 8 15 26
401................................... 6407 13.6969 3 5 10 17 29
402................................... 1880 4.7899 1 2 3 6 10
403................................... 31756 10.7486 2 4 8 14 22
404................................... 4324 5.1859 1 2 4 7 10
406................................... 3656 13.0126 3 6 9 16 26
407................................... 816 5.3223 1 2 4 7 10
408................................... 3620 8.5298 1 2 5 10 20
409................................... 6885 7.9063 2 4 5 8 17
410................................... 115896 3.4291 1 2 3 4 6
411................................... 89 3.7079 1 1 3 4 6
412................................... 87 3.2299 1 1 2 4 6
413................................... 8628 9.9350 2 4 7 12 20
414................................... 1111 5.4851 1 2 4 7 11
415................................... 34634 18.7088 5 8 14 23 37
416................................... 165302 9.5625 2 5 8 12 18
417................................... 34 7.5294 2 3 5 7 17
418................................... 15792 7.7252 3 4 6 9 14
419................................... 16751 6.7324 2 3 5 8 12
420................................... 3070 4.9896 2 3 4 6 9
421................................... 13327 5.2403 2 3 4 6 10
422................................... 92 4.3261 1 2 3 5 8
423................................... 8045 10.0675 3 4 7 12 20
424................................... 2342 23.0478 3 8 15 26 46
425................................... 17532 5.9067 1 2 4 7 12
426................................... 5260 6.6293 2 3 5 8 13
427................................... 1916 6.4541 1 2 4 8 13
428................................... 1022 9.3875 1 3 6 11 20
429................................... 32989 10.9768 2 4 7 12 21
430................................... 55906 11.5219 2 5 8 15 23
431................................... 185 7.6595 2 3 5 9 17
432................................... 473 7.4038 1 3 5 9 16
433................................... 6970 4.1164 1 1 3 5 9
434................................... 19096 6.8571 2 3 5 8 13
435................................... 13108 5.5738 1 3 4 6 11
436................................... 2435 17.0119 5 10 16 24 28
437................................... 12492 13.5556 5 8 12 18 25
439................................... 862 9.5186 1 3 6 12 21
440................................... 4409 11.5321 2 4 7 14 25
441................................... 660 3.8167 1 1 2 4 7
442................................... 12872 9.6969 1 3 6 12 20
443................................... 4362 3.3304 1 1 2 4 7
444................................... 3259 6.5170 2 3 5 8 12
445................................... 1547 4.1261 1 2 3 5 8
447................................... 3349 3.1400 1 1 2 4 6
448................................... 1 2.0000 2 2 2 2 2
449................................... 28599 5.3042 1 2 4 6 11
450................................... 6390 2.7858 1 1 2 3 5
451................................... 6 2.0000 1 1 1 3 3
452................................... 18951 5.8673 1 2 4 7 12
453................................... 4193 3.4226 1 2 2 4 7
454................................... 4519 6.5499 1 2 4 7 14
455................................... 1093 3.6075 1 1 2 4 7
456................................... 180 10.2056 1 2 5 12 25
457................................... 126 5.6032 1 1 3 8 13
458................................... 1603 19.8047 5 9 15 25 39
459................................... 573 12.2792 3 5 9 15 27
460................................... 2269 8.3486 2 3 6 10 16
461................................... 4302 5.4547 1 1 2 4 14
462................................... 10139 16.5278 6 8 14 21 30
463................................... 9139 6.2674 2 3 5 7 12
464................................... 2247 4.1081 1 2 3 5 8
465................................... 313 3.1502 1 1 2 3 6
466................................... 2816 5.3612 1 1 2 4 9
467................................... 2945 5.0156 1 1 2 5 9
468................................... 61688 17.8246 4 8 14 22 35
471................................... 8311 11.2860 5 7 9 13 18
472................................... 149 30.5101 2 8 21 39 63
473................................... 8348 16.2351 2 4 9 25 39
475................................... 80231 13.6842 2 6 11 18 27
476................................... 8720 15.5812 5 9 13 19 27
477................................... 35078 9.8071 1 3 7 12 20
478................................... 111354 9.6146 2 4 7 12 20
479................................... 16210 5.1031 1 2 4 7 10
480................................... 269 33.8141 12 15 25 44 66
481................................... 115 38.1304 21 26 35 43 58
482................................... 7201 17.6463 6 8 13 20 34
483................................... 35287 52.6801 17 27 42 64 97
484................................... 296 20.1284 3 8 14 26 42
485................................... 2791 14.4643 6 7 11 17 26
486................................... 1960 16.8240 2 7 12 22 34
487................................... 3242 10.1875 2 4 8 13 20
488................................... 876 21.1039 6 9 15 25 39
489................................... 9289 12.4757 3 5 8 15 25
490................................... 3042 8.1190 2 3 5 9 16
491................................... 8218 5.3304 2 3 4 6 9
492................................... 1545 16.7851 3 5 8 27 37
493................................... 49835 6.2719 1 2 5 8 13
494................................... 31647 2.3298 1 1 1 3 5
------------------
10544652
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 8a.--Statewide Average Operating Cost-To-Charge Ratios for Urban
and Rural Hospitals (Case Weighted) April 1994
------------------------------------------------------------------------
State Urban Rural
------------------------------------------------------------------------
ALABAMA............................................... 0.447 0.518
ALASKA................................................ 0.515 0.801
ARIZONA............................................... 0.484 0.637
ARKANSAS.............................................. 0.585 0.516
CALIFORNIA............................................ 0.458 0.566
COLORADO.............................................. 0.549 0.619
CONNECTICUT........................................... 0.574 0.596
DELAWARE.............................................. 0.603 0.527
DISTRICT OF COLUMBIA.................................. 0.533
FLORIDA............................................... 0.462 0.464
GEORGIA............................................... 0.555 0.553
HAWAII................................................ 0.547 0.632
IDAHO................................................. 0.599 0.667
ILLINOIS.............................................. 0.537 0.613
INDIANA............................................... 0.615 0.677
IOWA.................................................. 0.573 0.741
KANSAS................................................ 0.549 0.702
KENTUCKY.............................................. 0.541 0.573
LOUISIANA............................................. 0.506 0.561
MAINE................................................. 0.688 0.605
MARYLAND.............................................. 0.764 0.807
MASSACHUSETTS......................................... 0.702 0.602
MICHIGAN.............................................. 0.546 0.668
MINNESOTA............................................. 0.597 0.686
MISSISSIPPI........................................... 0.578 0.547
MISSOURI.............................................. 0.498 0.555
MONTANA............................................... 0.553 0.659
NEBRASKA.............................................. 0.559 0.711
NEVADA................................................ 0.423 0.521
NEW HAMPSHIRE......................................... 0.610 0.644
NEW JERSEY............................................ 0.691
NEW MEXICO............................................ 0.549 0.556
NEW YORK.............................................. 0.635 0.730
NORTH CAROLINA........................................ 0.579 0.536
NORTH DAKOTA.......................................... 0.660 0.693
OHIO.................................................. 0.616 0.656
OKLAHOMA.............................................. 0.529 0.583
OREGON................................................ 0.601 0.663
PENNSYLVANIA.......................................... 0.469 0.598
PUERTO RICO........................................... 0.554 0.876
RHODE ISLAND.......................................... 0.606
SOUTH CAROLINA........................................ 0.537 0.537
SOUTH DAKOTA.......................................... 0.569 0.653
TENNESSEE............................................. 0.545 0.568
TEXAS................................................. 0.509 0.609
UTAH.................................................. 0.596 0.655
VERMONT............................................... 0.619 0.616
VIRGINIA.............................................. 0.553 0.575
WASHINGTON............................................ 0.663 0.759
WEST VIRGINIA......................................... 0.585 0.528
WISCONSIN............................................. 0.655 0.705
WYOMING............................................... 0.616 0.760
------------------------------------------------------------------------

Table 8b.--Statewide Average Capital Cost-To-Charge Ratios (Case
Weighted) April 1994
------------------------------------------------------------------------
State Ratio
------------------------------------------------------------------------
ALABAMA........................................................ 0.059
ALASKA......................................................... 0.093
ARIZONA........................................................ 0.063
ARKANSAS....................................................... 0.050
CALIFORNIA..................................................... 0.045
COLORADO....................................................... 0.055
CONNECTICUT.................................................... 0.046
DELAWARE....................................................... 0.055
DISTRICT OF COLUMBIA........................................... 0.043
FLORIDA........................................................ 0.059
GEORGIA........................................................ 0.050
HAWAII......................................................... 0.056
IDAHO.......................................................... 0.074
ILLINOIS....................................................... 0.049
INDIANA........................................................ 0.065
IOWA........................................................... 0.060
KANSAS......................................................... 0.067
KENTUCKY....................................................... 0.055
LOUISIANA...................................................... 0.076
MAINE.......................................................... 0.043
MASSACHUSETTS.................................................. 0.065
MICHIGAN....................................................... 0.060
MINNESOTA...................................................... 0.056
MISSISSIPPI.................................................... 0.057
MISSOURI....................................................... 0.058
MONTANA........................................................ 0.073
NEBRASKA....................................................... 0.060
NEVADA......................................................... 0.036
NEW HAMPSHIRE.................................................. 0.064
NEW JERSEY..................................................... 0.058
NEW MEXICO..................................................... 0.062
NEW YORK....................................................... 0.062
NORTH CAROLINA................................................. 0.050
NORTH DAKOTA................................................... 0.073
OHIO........................................................... 0.063
OKLAHOMA....................................................... 0.062
OREGON......................................................... 0.054
PENNSYLVANIA................................................... 0.050
PUERTO RICO.................................................... 0.090
RHODE ISLAND................................................... 0.027
SOUTH CAROLINA................................................. 0.068
SOUTH DAKOTA................................................... 0.068
TENNESSEE...................................................... 0.061
TEXAS.......................................................... 0.065
UTAH........................................................... 0.052
VERMONT........................................................ 0.052
VIRGINIA....................................................... 0.064
WASHINGTON..................................................... 0.072
WEST VIRGINIA.................................................. 0.058
WISCONSIN...................................................... 0.048
WYOMING........................................................ 0.075
------------------------------------------------------------------------

Table 9.--1993 Transfer Adjusted Case Mix Index and Transfer Adjustment
to Discharges for Capital Hospital-Specific Rate Redeterminations
------------------------------------------------------------------------
Cost reporting Transfer Transfer
period adjusted adjustment
Provider No. ---------------------- case mix to
Begin End index discharges
------------------------------------------------------------------------
010006...................... 07/01/92 06/30/93 1.3887 0.9953
010011...................... 07/01/92 06/30/93 1.4491 0.9986
010012...................... 07/01/92 06/30/93 1.3102 0.9590
010015...................... 04/01/92 04/01/93 1.0044 0.9386
010018...................... 07/01/92 06/30/93 0.8498 0.9956
010022...................... 07/01/92 06/30/93 0.9653 0.9655
010023...................... 07/01/92 06/30/93 1.3674 0.9923
010024...................... 07/01/92 06/30/93 1.3014 0.9908
010025...................... 07/01/92 06/30/93 1.2180 0.9727
010031...................... 07/01/92 06/30/93 1.2311 0.9952
010034...................... 07/01/92 06/30/93 1.0516 0.9721
010036...................... 04/01/92 03/31/93 1.1597 0.9715
010038...................... 07/01/92 06/30/93 1.2305 0.9861
010039...................... 07/01/92 06/30/93 1.6295 0.9982
010050...................... 07/01/92 06/30/93 0.9415 0.9667
010054...................... 07/01/92 06/30/93 1.2386 0.9738
010055...................... 06/01/92 06/30/93 1.3649 0.9986
010056...................... 07/01/92 06/30/93 1.3739 0.9986
010058...................... 07/01/92 06/30/93 1.0171 0.9494
010064...................... 07/01/92 06/30/93 1.7873 0.9987
010066...................... 07/01/92 06/30/93 0.9014 0.9384
010068...................... 07/01/92 06/30/93 1.2743 0.9755
010072...................... 07/01/92 06/30/93 1.1717 0.9653
010078...................... 07/01/92 06/30/93 1.2109 0.9900
010080...................... 04/01/92 03/31/93 1.0051 0.9715
010085...................... 07/01/92 06/30/93 1.2290 0.9756
010086...................... 07/01/92 06/30/93 1.0039 0.9665
010089...................... 07/01/92 06/30/93 1.1344 0.9836
010090...................... 07/01/92 06/30/93 1.5855 0.9987
010091...................... 07/01/92 06/30/93 0.9824 0.9367
010098...................... 07/01/92 06/30/93 0.9434 0.9763
010101...................... 07/01/92 06/30/93 1.0809 0.9737
010103...................... 07/01/92 06/30/93 1.6520 0.9994
010104...................... 07/01/92 06/30/93 1.5769 0.9988
010113...................... 04/01/92 03/31/93 1.6265 0.9990
010114...................... 07/01/92 06/30/93 1.2621 0.9827
010118...................... 07/01/92 06/30/93 1.2150 0.9772
010121...................... 07/01/92 06/30/93 1.1506 0.9790
010128...................... 07/01/92 06/30/93 0.9296 0.9451
010131...................... 07/01/92 06/30/93 1.2393 0.9827
010134...................... 04/01/92 03/31/93 0.8266 0.9450
010136...................... 05/01/92 04/30/93 0.9613 1.0000
010138...................... 07/01/92 06/30/93 0.9694 0.9343
010148...................... 07/01/92 06/30/93 0.9598 0.9457
010150...................... 04/01/92 03/31/93 1.0504 0.9834
020002...................... 06/30/92 06/30/93 0.9910 0.9426
020004...................... 06/30/92 06/30/93 1.0881 0.9726
020007...................... 06/30/92 06/30/93 0.9008 0.8928
020008...................... 06/30/92 06/30/93 1.0836 0.9619
020009...................... 06/30/92 06/30/93 1.0013 0.9389
020010...................... 06/30/92 06/30/93 1.0549 1.0000
020011...................... 06/30/92 06/30/93 1.0259 0.8910
020013...................... 06/30/92 06/30/93 1.0187 0.9821
020014...................... 06/30/92 06/30/93 1.0401 0.9811
020024...................... 06/30/92 06/30/93 1.0609 0.9645
030003...................... 07/01/92 06/30/93 1.3932 0.9787
030006...................... 07/01/92 06/30/93 1.5915 0.9982
030007...................... 07/01/92 06/30/93 1.2449 0.9747
030009...................... 07/01/92 06/30/93 1.2010 0.9849
030010...................... 07/01/92 06/30/93 1.4099 0.9981
030011...................... 07/01/92 06/30/93 1.4530 0.9959
030016...................... 07/01/92 06/30/93 1.3142 0.9904
030017...................... 07/01/92 06/30/93 1.4177 0.9994
030019...................... 07/01/92 06/30/93 1.2348 0.9905
030022...................... 07/01/92 06/30/93 1.5141 0.9925
030024...................... 07/01/92 06/30/93 1.6643 0.9991
030027...................... 07/01/92 06/30/93 1.1036 0.9684
030033...................... 07/01/92 06/30/93 1.2370 0.9570
030034...................... 04/01/92 03/31/93 1.1662 0.9722
030037...................... 07/01/92 06/30/93 1.9171 0.9953
030040...................... 07/01/92 06/30/93 0.9815 0.9335
030043...................... 07/01/92 06/30/93 1.2198 0.9486
030049...................... 07/01/92 06/30/93 0.9968 0.9659
030054...................... 07/01/92 06/30/93 0.8844 0.9126
030055...................... 07/01/92 06/30/93 1.2598 0.9767
030059...................... 07/01/92 06/30/93 1.2755 0.9894
030064...................... 07/01/92 06/30/93 1.5156 0.9905
040001...................... 04/01/92 03/31/93 1.1441 0.9669
040002...................... 07/01/92 06/30/93 1.2325 0.9818
040003...................... 07/01/92 06/30/93 0.9818 0.9762
040008...................... 07/01/92 06/30/93 1.0941 0.9700
040011...................... 07/01/92 06/30/93 0.9698 0.9681
040015...................... 07/01/92 06/30/93 1.1194 0.9441
040016...................... 07/01/92 06/30/93 1.5806 0.9978
040017...................... 04/01/92 04/01/93 1.3143 0.9754
040019...................... 07/01/92 06/30/93 1.2152 0.9544
040022...................... 07/01/92 06/30/93 1.7959 0.9925
040025...................... 07/01/92 06/30/93 0.9581 0.9780
040026...................... 07/01/92 06/30/93 1.5925 0.9966
040030...................... 07/01/92 06/30/93 0.8883 0.9489
040032...................... 07/01/92 06/30/93 0.9579 0.9684
040035...................... 07/01/92 06/30/93 0.9364 0.9695
040039...................... 07/01/92 06/30/93 1.2626 0.9800
040040...................... 07/01/92 06/30/93 1.1053 0.9558
040047...................... 07/01/92 06/30/93 1.0086 0.9851
040048...................... 07/01/92 06/30/93 1.1903 0.9820
040051...................... 04/01/92 03/31/93 1.0813 0.9654
040053...................... 07/01/92 06/30/93 1.1473 0.9264
040054...................... 07/01/92 06/30/93 1.0399 0.9742
040055...................... 07/01/92 06/30/93 1.3618 0.9994
040058...................... 07/01/92 06/30/93 1.1303 0.9797
040060...................... 02/01/92 01/31/93 0.9352 0.9203
040062...................... 07/01/92 06/30/93 1.4976 0.9981
040063...................... 07/01/92 06/30/93 1.5569 0.9953
040069...................... 07/01/92 06/30/93 1.0296 0.9580
040070...................... 07/01/92 06/30/93 0.9996 0.9413
040071...................... 07/01/92 06/30/93 1.3957 0.9964
040074...................... 07/01/92 06/30/93 1.2156 0.9894
040076...................... 07/01/92 06/30/93 1.1169 0.9528
040077...................... 07/01/92 06/30/93 0.9376 0.9517
040080...................... 07/01/92 06/30/93 1.0356 0.9475
040082...................... 04/01/92 03/31/93 1.2767 0.9604
040084...................... 07/01/92 06/30/93 1.0897 0.9782
040088...................... 07/01/92 06/30/93 1.2869 0.9857
040091...................... 07/01/92 06/30/93 1.3335 0.9582
040093...................... 07/01/92 06/30/93 0.9728 0.9497
040095...................... 07/01/92 06/30/93 0.8456 0.9644
040109...................... 07/01/92 06/30/93 1.0851 0.9714
040116...................... 03/01/92 02/28/93 1.4142 0.9969
040124...................... 07/01/92 06/30/93 1.1749 0.9699
040126...................... 07/01/92 06/30/93 0.9786 0.9552
050006...................... 07/01/92 06/30/93 1.3219 0.9869
050009...................... 07/01/92 06/30/93 1.5026 0.9919
050015...................... 07/01/92 06/30/93 1.3137 0.9808
050017...................... 04/01/92 03/31/93 2.0390 0.9985
050025...................... 07/01/92 06/30/93 1.5989 0.9973
050026...................... 07/01/92 06/30/93 1.4759 0.9923
050028...................... 07/01/92 06/30/93 1.3235 0.9846
050029...................... 07/01/92 06/30/93 1.2636 0.9813
050033...................... 07/01/92 06/30/93 1.4640 0.9956
050036...................... 07/01/92 06/30/93 1.7510 0.9907
050038...................... 07/01/92 06/30/93 1.4405 0.9905
050039...................... 07/01/92 06/30/93 1.6376 0.9962
050040...................... 07/01/92 06/30/93 1.2973 0.9744
050041...................... 06/01/92 06/01/93 1.2922 0.9596
050042...................... 07/01/92 06/30/93 1.2613 0.9801
050045...................... 07/01/92 06/30/93 1.2888 0.9802
050046...................... 05/01/92 04/30/93 1.1699 0.9734
050051...................... 07/01/92 06/30/93 1.0882 0.9748
050054...................... 07/01/92 06/30/93 1.3047 0.9791
050055...................... 07/01/92 06/30/93 1.2551 0.9897
050056...................... 07/01/92 06/30/93 1.4266 0.9955
050057...................... 07/01/92 06/30/93 1.4707 0.9929
050063...................... 07/01/92 06/30/93 1.3880 0.9886
050065...................... 04/01/92 03/31/93 1.6010 0.9950
050066...................... 04/01/92 03/31/93 1.2635 0.9967
050067...................... 07/01/92 06/30/93 1.3440 0.9821
050068...................... 07/01/92 06/30/93 1.0850 0.9925
050069...................... 07/01/92 06/30/93 1.6511 0.9987
050077...................... 07/01/92 06/30/93 1.6054 0.9973
050079...................... 07/01/92 06/30/93 1.4330 0.9952
050082...................... 07/01/92 06/30/93 1.4949 0.9980
050088...................... 07/01/92 06/30/93 1.1183 0.9908
050089...................... 07/01/92 06/30/93 1.3358 0.9899
050090...................... 07/01/92 06/30/93 1.2798 0.9795
050092...................... 07/01/92 06/30/93 0.8834 0.9638
050093...................... 06/01/92 05/31/93 1.5283 0.9991
050095...................... 07/01/92 06/30/93 1.0690 0.9058
050104...................... 07/01/92 06/30/93 1.3920 0.9961
050110...................... 07/01/92 06/30/93 1.2016 0.9633
050113...................... 07/01/92 06/30/93 1.1460 0.9826
050114...................... 05/01/92 04/30/93 1.4470 0.9810
050115...................... 07/01/92 06/30/93 1.5445 0.9986
050116...................... 07/01/92 06/30/93 1.4447 0.9955
050118...................... 06/01/92 06/01/93 1.1834 0.9791
050124...................... 07/01/92 06/30/93 1.2043 0.9865
050128...................... 07/01/92 06/30/93 1.5394 0.9953
050129...................... 07/01/92 06/30/93 1.4937 0.9953
050133...................... 07/01/92 06/30/93 1.2980 0.9682
050136...................... 07/01/92 06/30/93 1.4183 0.9898
050147...................... 06/01/92 06/01/93 0.7090 0.9619
050148...................... 07/01/92 06/30/93 1.0925 0.9700
050152...................... 07/01/92 06/30/93 1.3928 0.9952
050153...................... 07/01/92 06/30/93 1.6196 0.9977
050159...................... 07/01/92 06/30/93 1.3053 0.9928
050167...................... 07/01/92 06/30/93 1.3960 0.9950
050168...................... 07/01/92 06/30/93 1.6246 0.9938
050170...................... 07/01/92 06/30/93 1.4427 0.9937
050172...................... 07/01/92 06/30/93 1.3713 0.9838
050174...................... 07/01/92 06/30/93 1.6712 0.9972
050175...................... 07/01/92 06/30/93 1.3284 0.9927
050177...................... 04/01/92 03/31/93 1.2171 0.9960
050179...................... 02/01/92 01/31/93 1.2380 0.9811
050181...................... 07/01/92 06/30/93 1.2282 0.9663
050183...................... 07/01/92 06/30/93 1.1831 0.9925
050188...................... 06/01/92 06/01/93 1.4088 0.9894
050191...................... 07/01/92 06/30/93 1.4382 0.9903
050192...................... 07/01/92 06/30/93 1.2205 0.9823
050193...................... 07/01/92 06/30/93 1.3554 0.9845
050194...................... 07/01/92 06/30/93 1.2223 0.9848
050195...................... 07/01/92 06/30/93 1.6004 0.9969
050196...................... 01/01/92 01/31/93 1.3659 0.9837
050197...................... 07/01/92 06/30/93 1.9446 0.9976
050199...................... 07/01/92 06/30/93 1.0950 0.9936
050207...................... 07/01/92 06/30/93 1.2976 0.9907
050213...................... 07/01/92 06/30/93 1.3163 0.9856
050215...................... 07/01/92 06/30/93 1.5123 0.9987
050228...................... 07/01/92 06/30/93 1.3447 0.9777
050230...................... 03/01/92 02/28/93 1.4256 0.9610
050232...................... 07/01/92 06/30/93 1.8463 0.9970
050240...................... 07/01/92 06/30/93 1.5014 0.9885
050242...................... 07/01/92 06/30/93 1.4062 0.9971
050243...................... 07/01/92 06/30/93 1.5181 0.9915
050245...................... 07/01/92 06/30/93 1.4081 0.9929
050248...................... 07/01/92 06/30/93 1.1376 0.9706
050258...................... 07/01/92 06/30/93 1.3360 0.9873
050260...................... 07/01/92 06/30/93 1.0049 0.9487
050261...................... 07/01/92 06/30/93 1.1734 0.9890
050262...................... 07/01/92 06/30/93 1.7774 0.9960
050263...................... 05/01/92 04/30/93 1.2593 0.9862
050267...................... 07/01/92 06/30/93 1.5506 0.9970
050274...................... 07/01/92 06/30/93 1.1300 0.9675
050276...................... 07/01/92 06/30/93 1.2055 0.9872
050277...................... 07/01/92 06/30/93 1.3938 0.9941
050278...................... 06/01/92 05/31/93 1.4379 0.9855
050279...................... 07/01/92 06/30/93 1.2385 0.9851
050280...................... 07/01/92 06/30/93 1.5586 0.9979
050283...................... 07/01/92 06/30/93 1.2721 0.9794
050289...................... 07/01/92 06/30/93 1.7713 0.9965
050290...................... 06/01/92 05/31/93 1.6454 0.9975
050291...................... 07/01/92 06/30/93 1.2432 0.9914
050292...................... 07/01/92 06/30/93 1.0866 0.9921
050293...................... 07/01/92 06/30/93 1.2437 0.8748
050295...................... 07/01/92 06/30/93 1.4227 0.9943
050296...................... 07/01/92 06/30/93 1.1787 0.9682
050298...................... 01/01/92 01/13/93 1.2101 0.9724
050299...................... 04/01/92 03/31/93 1.3082 0.9932
050307...................... 06/01/92 05/31/93 1.4722 0.9911
050312...................... 06/01/92 06/01/93 1.8112 0.9973
050315...................... 07/01/92 06/30/93 1.3059 0.9872
050320...................... 07/01/92 06/30/93 1.4047 0.9959
050325...................... 07/01/92 06/30/93 1.2668 0.9737
050331...................... 03/01/92 02/28/93 1.3679 0.9798
050333...................... 07/01/92 06/30/93 0.9448 0.9491
050334...................... 07/01/92 06/30/93 1.5545 0.9995
050337...................... 05/01/92 04/30/93 1.3333 0.9663
050342...................... 07/01/92 06/30/93 1.4699 0.9891
050343...................... 07/01/92 06/30/93 1.0441 0.9994
050348...................... 07/01/92 06/30/93 1.5973 0.9975
050349...................... 07/01/92 06/30/93 0.9337 0.9761
050350...................... 07/01/92 06/30/93 1.4012 0.9946
050353...................... 07/01/92 06/30/93 1.5474 0.9977
050355...................... 07/01/92 06/30/93 0.9592 0.9460
050359...................... 07/01/92 06/30/93 1.0815 0.9975
050373...................... 07/01/92 06/30/93 1.3025 0.9778
050376...................... 07/01/92 06/30/93 1.3313 0.9904
050377...................... 07/01/92 06/30/93 0.8532 0.9797
050378...................... 05/01/92 04/30/93 1.1442 0.9867
050379...................... 07/01/92 06/30/93 1.1120 0.9594
050380...................... 07/01/92 06/30/93 1.6360 0.9980
050382...................... 07/01/92 06/30/93 1.4092 0.9999
050388...................... 07/01/92 06/30/93 0.8767 0.8843
050390...................... 07/01/92 06/30/93 1.3113 0.9918
050392...................... 07/01/92 06/30/93 0.9971 0.9728
050393...................... 07/01/92 06/30/93 1.4216 0.9963
050397...................... 07/01/92 06/30/93 1.0700 0.9926
050401...................... 05/01/92 04/30/93 1.1840 0.9969
050406...................... 07/01/92 06/30/93 1.1086 0.9819
050414...................... 04/01/92 03/31/93 1.3348 0.9595
050418...................... 06/01/92 05/31/93 1.3255 0.9890
050419...................... 07/01/92 06/30/93 1.3320 0.9736
050430...................... 07/01/92 06/30/93 0.9840 0.9563
050432...................... 06/01/92 06/01/93 1.5102 0.9938
050433...................... 07/01/92 06/30/93 1.0371 0.9742
050434...................... 04/01/92 03/31/93 1.0993 0.9438
050435...................... 07/01/92 06/30/93 1.2445 0.9848
050436...................... 07/01/92 06/30/93 1.0137 0.9635
050443...................... 07/01/92 06/30/93 0.9322 0.9607
050444...................... 07/01/92 06/30/93 1.2646 0.9896
050446...................... 07/01/92 06/30/93 0.9086 0.9235
050448...................... 02/01/92 01/31/93 1.2446 0.9783
050449...................... 07/01/92 06/30/93 1.2948 0.9916
050454...................... 07/01/92 06/30/93 1.8566 0.9960
050457...................... 07/01/92 06/30/93 1.8974 0.9953
050459...................... 07/01/92 06/30/93 1.2253 0.9784
050464...................... 06/01/92 06/01/93 1.8761 0.9985
050470...................... 07/01/92 06/30/93 1.1447 0.9580
050476...................... 07/01/92 06/30/93 1.2985 0.9738
050477...................... 07/01/92 06/30/93 1.3934 0.9923
050482...................... 07/01/92 06/30/93 0.9619 0.9722
050485...................... 07/01/92 06/30/93 1.6529 0.9994
050488...................... 07/01/92 06/30/93 1.3094 0.9875
050491...................... 07/01/92 06/30/93 1.3725 1.0000
050494...................... 07/01/92 06/30/93 1.0640 0.9623
050496...................... 07/01/92 06/30/93 1.7850 0.9970
050497...................... 07/01/92 06/30/93 0.8830 0.9483
050502...................... 07/01/92 06/30/93 1.6628 0.9991
050516...................... 04/01/92 03/31/93 1.6488 0.9951
050522...................... 06/01/92 06/01/93 1.3492 0.9917
050528...................... 07/01/92 06/30/93 1.2203 0.9832
050534...................... 06/01/92 06/01/93 1.4091 0.9864
050535...................... 05/01/92 04/30/93 1.3630 0.9800
050539...................... 07/01/92 06/30/93 1.1774 0.9663
050542...................... 07/01/92 06/30/93 1.1053 0.9565
050545...................... 07/01/92 06/30/93 0.8775 0.9761
050546...................... 07/01/92 06/30/93 0.9002 1.0000
050547...................... 07/01/92 06/30/93 0.9777 0.9858
050551...................... 06/01/92 06/01/93 1.3227 0.9891
050559...................... 07/01/92 06/30/93 1.3525 0.9679
050560...................... 05/01/92 04/30/93 1.3589 0.9926
050565...................... 07/01/92 06/30/93 1.2083 0.9864
050566...................... 07/01/92 06/30/93 0.9220 0.9718
050568...................... 07/01/92 06/30/93 1.3413 0.9889
050569...................... 07/01/92 06/30/93 1.1891 0.9691
050573...................... 07/01/92 06/30/93 1.6729 0.9978
050577...................... 07/01/92 06/30/93 1.2490 0.9935
050578...................... 07/01/92 06/30/93 1.3816 0.9722
050579...................... 06/01/92 06/01/93 1.3668 0.9880
050581...................... 06/01/92 06/01/93 1.4450 0.9703
050583...................... 06/01/92 06/01/93 1.7185 0.9962
050584...................... 06/01/92 06/01/93 1.2628 0.9681
050589...................... 06/01/92 06/01/93 1.3041 0.9778
050594...................... 07/01/92 06/30/93 2.0107 0.9835
050599...................... 07/01/92 06/30/93 1.6233 0.9967
050603...................... 07/01/92 06/30/93 1.4287 0.9951
050613...................... 07/01/92 06/30/93 1.0557 0.9687
050615...................... 05/01/92 04/30/93 1.4088 0.9983
050618...................... 07/01/92 06/30/93 1.2387 0.9742
050623...................... 07/01/92 06/30/93 1.2689 1.0000
050625...................... 04/01/92 04/01/93 1.5100 0.9980
050633...................... 06/01/92 06/01/93 1.2686 0.9857
050636...................... 07/01/92 06/30/93 1.3734 0.9709
050637...................... 05/01/92 04/30/93 1.1883 0.9990
050638...................... 07/01/92 06/30/93 0.9394 1.0000
050641...................... 07/01/92 06/30/93 1.1739 0.9919
050661...................... 02/01/92 01/31/93 0.9010 0.9830
050662...................... 07/01/92 06/30/93 0.8019 0.9925
050666...................... 07/01/92 06/30/93 1.1122 0.9796
050667...................... 07/01/92 06/30/93 1.0778 0.8992
050668...................... 07/01/92 06/30/93 1.1637 0.9715
050671...................... 07/01/92 06/30/93 1.1480 1.0000
050672...................... 07/01/92 06/30/93 0.6476 0.9937
050675...................... 02/01/92 01/31/93 1.5323 0.9929
050676...................... 07/01/92 06/30/93 1.0095 0.8493
050678...................... 07/01/92 06/30/93 1.1000 0.9936
050682...................... 07/01/92 06/30/93 0.9150 0.9781
050684...................... 07/01/92 06/30/93 1.2051 0.9878
050685...................... 07/01/92 06/30/93 1.1556 0.9796
050688...................... 07/01/92 06/30/93 1.2475 0.9833
050689...................... 06/01/92 06/01/93 1.4617 0.9742
050694...................... 07/01/92 06/30/93 1.3062 0.9754
050700...................... 07/01/92 06/30/93 1.3902 0.9868
060008...................... 06/30/92 06/30/93 1.0146 0.9731
060012...................... 06/30/92 06/30/93 1.4368 0.9969
060013...................... 06/30/92 06/30/93 1.2758 0.9888
060015...................... 06/30/92 06/30/93 1.5408 0.9952
060016...................... 06/30/92 06/30/93 1.1932 0.9711
060020...................... 06/30/92 06/30/93 1.5386 0.9952
060023...................... 05/31/92 05/31/93 1.4694 0.9972
060024...................... 06/30/92 06/30/93 1.6441 0.9914
060026...................... 07/01/92 06/30/93 1.4552 0.9962
060028...................... 05/31/92 05/31/93 1.3930 0.9980
060031...................... 06/30/92 06/30/93 1.4921 0.9970
060032...................... 06/30/92 06/30/93 1.4334 0.9968
060036...................... 04/01/92 03/31/93 1.1897 0.9816
060054...................... 05/01/92 04/30/93 1.2515 0.9872
060104...................... 06/30/92 06/30/93 1.2690 0.9802
080001...................... 07/01/92 06/30/93 1.6160 0.9995
080002...................... 07/01/92 06/30/93 1.1956 0.9871
080003...................... 07/01/92 06/30/93 1.3182 0.9906
080004...................... 07/01/92 06/30/93 1.3426 0.9880
080006...................... 07/01/92 06/30/93 1.1986 0.9837
080007...................... 07/01/92 06/30/93 1.2274 0.9838
090001...................... 07/01/92 06/30/93 1.4054 0.9992
090003...................... 07/01/92 06/30/93 1.3516 0.9990
090004...................... 07/01/92 06/30/93 1.5368 0.9996
090010...................... 07/01/92 06/30/93 0.9566 0.9972
090011...................... 07/01/92 06/30/93 1.9483 0.9987
100001...................... 07/01/92 06/30/93 1.4829 0.9980
100010...................... 07/01/92 06/30/93 1.4149 0.9951
100027...................... 06/01/92 05/31/93 0.8377 0.9815
100032...................... 07/01/92 06/30/93 1.8719 0.9979
100038...................... 05/01/92 04/30/93 1.6635 0.9990
100039...................... 07/01/92 06/30/93 1.6848 0.9932
100060...................... 01/01/92 01/03/93 1.7598 0.9969
100067...................... 07/01/92 06/30/93 1.4262 0.9964
100068...................... 04/01/92 03/31/93 1.5047 0.9985
100070...................... 07/01/92 06/30/93 1.4039 0.9815
100075...................... 07/01/92 06/30/93 1.6701 0.9992
100076...................... 04/01/92 03/31/93 1.4902 0.9953
100079...................... 06/01/92 05/31/93 1.0775 0.9805
100084...................... 07/01/92 06/30/93 1.4791 0.9788
100086...................... 07/01/92 06/30/93 1.3997 0.9917
100106...................... 05/15/92 05/31/93 1.0240 0.9656
100113...................... 07/01/92 06/30/93 2.0728 0.9979
100114...................... 04/01/92 03/31/93 1.4689 0.9946
100122...................... 07/01/92 06/30/93 1.3765 0.9853
100126...................... 06/01/92 06/01/93 1.4760 0.9935
100129...................... 07/01/92 06/30/93 1.3626 0.9846
100160...................... 07/01/92 06/30/93 1.2342 0.9533
100161...................... 06/01/92 05/31/93 1.4640 0.9909
100168...................... 07/01/92 06/30/93 1.3185 0.9856
100172...................... 06/01/92 05/31/93 1.3486 1.0000
100179...................... 05/01/92 04/30/93 1.6536 0.9980
100191...................... 07/01/92 06/30/93 1.3251 0.9895
100200...................... 07/01/92 06/30/93 1.3297 0.9913
100204...................... 03/01/92 02/28/93 1.5702 0.9987
100207...................... 04/01/92 03/31/93 1.4361 0.9911
100213...................... 05/01/92 04/30/93 1.6340 0.9974
100225...................... 06/01/92 06/01/93 1.3288 0.9926
100231...................... 06/01/92 05/31/93 1.7343 0.9991
100240...................... 06/01/92 05/31/93 0.8139 1.0000
100242...................... 02/01/92 01/31/93 1.3248 0.9928
100244...................... 07/01/92 06/30/93 1.3628 0.9853
100249...................... 06/01/92 06/01/93 1.2782 0.9815
100252...................... 02/01/92 01/31/93 1.2137 0.9827
100254...................... 05/01/92 04/30/93 1.6057 0.9995
100256...................... 03/01/92 02/28/93 1.9054 0.9977
100258...................... 06/01/92 06/01/93 1.7092 0.9860
100264...................... 03/01/92 02/28/93 1.4358 0.9742
100268...................... 06/01/92 06/01/93 1.2440 0.9733
100270...................... 06/01/92 05/31/93 0.8651 0.9601
100271...................... 07/01/92 06/30/93 1.5784 0.9977
100276...................... 07/01/92 06/30/93 1.3458 0.9898
100277...................... 07/01/92 06/30/93 1.0666 0.9925
110003...................... 03/01/92 02/28/93 1.3332 0.9810
110008...................... 04/01/92 03/31/93 1.1237 0.9794
110011...................... 07/01/92 06/30/93 1.1562 0.9885
110015...................... 07/01/92 06/30/93 1.0947 0.9648
110017...................... 07/01/92 06/30/93 0.9512 0.9598
110026...................... 07/01/92 06/30/93 1.1392 0.9717
110027...................... 07/01/92 06/30/93 1.0310 0.9809
110031...................... 04/01/92 03/31/93 1.2713 0.9902
110034...................... 07/01/92 06/30/93 1.4742 0.9973
110035...................... 07/01/92 06/30/93 1.3192 0.9845
110039...................... 07/01/92 06/30/93 1.3681 0.9905
110040...................... 07/01/92 06/30/93 1.0531 0.9815
110041...................... 07/01/92 06/30/93 1.1271 0.9670
110042...................... 07/01/92 06/30/93 1.0619 0.9796
110043...................... 07/01/92 06/30/93 1.5408 0.9991
110051...................... 05/01/92 04/30/93 0.9895 0.9610
110052...................... 07/01/92 06/30/93 0.9219 0.9650
110054...................... 07/01/92 06/30/93 1.2399 0.9905
110056...................... 07/01/92 06/30/93 0.8805 0.9393
110062...................... 04/01/92 03/31/93 0.9656 0.9331
110064...................... 07/01/92 06/30/93 1.2624 0.9924
110066...................... 07/01/92 06/30/93 1.2997 0.9905
110069...................... 03/01/92 02/28/93 1.1982 0.9854
110071...................... 07/01/92 06/30/93 1.0206 0.9707
110093...................... 07/01/92 06/30/93 0.9423 0.9789
110094...................... 07/01/92 06/30/93 1.0000 0.9633
110098...................... 07/01/92 06/30/93 1.0274 0.9618
110101...................... 07/01/92 06/30/93 1.0655 0.9778
110103...................... 07/01/92 06/30/93 0.9505 0.9422
110104...................... 07/01/92 06/30/93 1.1358 0.9764
110108...................... 07/01/92 06/30/93 0.9785 0.9296
110109...................... 07/01/92 06/30/93 1.1235 0.9750
110113...................... 06/01/92 05/31/93 1.0279 0.9778
110124...................... 07/01/92 06/30/93 1.0887 0.9798
110125...................... 05/01/92 04/30/93 1.1888 0.9829
110127...................... 07/01/92 06/30/93 0.8709 0.9567
110128...................... 07/01/92 06/30/93 1.1518 0.9856
110132...................... 04/01/92 03/31/93 1.0981 0.9695
110134...................... 07/01/92 06/30/93 0.8493 0.9689
110135...................... 05/01/92 04/30/93 1.0841 0.9769
110136...................... 07/01/92 06/30/93 1.1815 0.9946
110141...................... 07/01/92 06/30/93 0.8829 0.9659
110143...................... 06/01/92 05/31/93 1.2715 0.9895
110149...................... 07/01/92 06/30/93 1.0546 0.9878
110152...................... 07/01/92 06/30/93 1.1233 0.9707
110153...................... 03/01/92 02/28/93 1.0190 0.9709
110154...................... 07/01/92 06/30/93 0.9686 0.9729
110155...................... 04/01/92 03/31/93 1.1090 0.9760
110156...................... 07/01/92 06/30/93 0.9236 0.9507
110157...................... 04/01/92 03/31/93 1.0901 0.9921
110163...................... 05/01/92 04/30/93 1.3806 0.9933
110164...................... 04/01/92 03/31/93 1.3352 0.9962
110168...................... 07/01/92 06/30/93 1.6688 0.9988
110169...................... 07/01/92 06/30/93 0.7823 0.9974
110174...................... 07/01/92 06/30/93 1.0370 0.9567
110176...................... 07/01/92 06/30/93 1.1320 0.9894
110178...................... 07/01/92 06/30/93 1.5789 0.9913
110181...................... 04/01/92 03/31/93 1.0083 0.9755
110183...................... 02/01/92 01/31/93 1.3175 0.9914
110184...................... 04/01/92 03/31/93 1.1037 0.9749
110185...................... 07/01/92 06/30/93 1.0728 0.9688
110188...................... 04/01/92 03/31/93 1.3897 0.9938
110191...................... 07/01/92 06/30/93 1.2703 0.9880
110194...................... 07/01/92 06/30/93 0.9879 0.9568
110204...................... 07/01/92 06/30/93 0.7727 0.9675
110205...................... 07/01/92 06/30/93 1.0314 0.9637
110208...................... 04/01/92 03/31/93 0.9881 0.9885
120001...................... 06/28/92 06/26/93 1.7092 0.9906
120002...................... 07/01/92 06/30/93 1.2330 0.9734
120003...................... 07/01/92 06/30/93 0.9867 0.9444
120004...................... 07/01/92 06/30/93 1.3034 0.9904
120005...................... 07/01/92 06/30/93 1.2975 0.9920
120007...................... 07/01/92 06/30/93 1.6118 0.9988
120009...................... 06/28/92 06/26/93 1.0000 0.9226
120010...................... 07/01/92 06/30/93 1.6902 0.9992
120012...................... 07/01/92 06/30/93 0.9123 0.9785
120014...................... 07/01/92 06/30/93 1.2188 0.9796
120015...................... 07/01/92 06/30/93 0.7376 1.0000
120016...................... 07/01/92 06/30/93 1.0103 0.9231
120018...................... 07/01/92 06/30/93 0.8888 0.9195
120019...................... 07/01/92 06/30/93 1.1844 0.9709
120021...................... 07/01/92 06/30/93 0.9131 0.9682
120024...................... 07/01/92 06/30/93 1.0150 1.0000
120026...................... 07/01/92 06/30/93 1.2967 0.9910
120027...................... 07/01/92 06/30/93 1.4104 0.9886
130003...................... 07/01/92 06/30/93 1.2129 0.9844
130007...................... 06/01/92 05/31/93 1.5029 0.9915
130008...................... 07/01/92 06/30/93 0.9360 0.9643
130013...................... 07/01/92 06/30/93 1.2825 0.9841
130017...................... 07/01/92 06/30/93 1.0174 0.9347
130022...................... 07/01/92 06/30/93 1.1228 0.9644
130029...................... 07/01/92 06/30/93 1.0360 0.9486
130035...................... 07/01/92 06/30/93 0.9833 0.9476
130048...................... 07/01/92 06/30/93 1.0838 0.9569
140001...................... 07/01/92 06/30/93 1.2746 0.9795
140003...................... 03/01/92 02/28/93 1.0204 0.9438
140005...................... 04/01/92 03/31/93 0.9191 0.9736
140011...................... 04/01/92 03/31/93 1.0792 0.9752
140014...................... 07/01/92 06/30/93 1.1164 0.9655
140016...................... 03/01/92 02/28/93 0.9979 0.9608
140018...................... 07/01/92 06/30/93 1.4274 0.9954
140024...................... 07/01/92 06/30/93 1.0095 0.9769
140025...................... 04/01/92 03/31/93 1.1226 0.9759
140026...................... 07/01/92 06/30/93 1.1211 0.9804
140027...................... 05/01/92 04/30/93 1.1363 0.9826
140030...................... 05/01/92 04/30/93 1.5206 0.9966
140032...................... 07/01/92 06/30/93 1.3006 0.9745
140035...................... 07/01/92 06/30/93 1.1300 0.9770
140037...................... 07/01/92 06/30/93 1.0244 0.9534
140038...................... 05/01/92 04/30/93 1.1015 0.9781
140040...................... 05/01/92 04/30/93 1.2499 0.9793
140041...................... 06/01/92 05/31/93 1.1589 0.9803
140042...................... 04/01/92 03/31/93 1.0532 0.9692
140043...................... 05/01/92 04/30/93 1.2634 0.9794
140045...................... 07/01/92 06/30/93 0.9957 0.9664
140047...................... 05/01/92 04/30/93 1.2064 0.9693
140053...................... 07/01/92 06/30/93 1.7775 0.9988
140055...................... 05/01/92 04/30/93 0.9066 0.9600
140059...................... 07/01/92 06/30/93 1.0718 0.9751
140061...................... 07/01/92 06/30/93 1.1241 0.9609
140068...................... 04/01/92 03/31/93 1.3897 0.9904
140069...................... 05/01/92 04/30/93 1.0697 0.9574
140070...................... 05/01/92 04/30/93 1.3186 0.9810
140077...................... 05/01/92 04/30/93 1.1646 0.9856
140081...................... 07/01/92 06/30/93 1.1405 0.9515
140082...................... 07/01/92 06/30/93 1.3525 0.9956
140083...................... 07/01/92 06/30/93 1.2786 0.9921
140086...................... 07/01/92 06/30/93 1.1195 0.9560
140088...................... 07/01/92 06/30/93 1.4810 0.9974
140089...................... 07/01/92 06/30/93 1.2304 0.9720
140091...................... 07/01/92 06/30/93 1.6710 0.9938
140100...................... 07/01/92 06/30/93 1.3850 0.9874
140102...................... 07/01/92 06/30/93 1.0073 0.9572
140109...................... 07/01/92 06/30/93 1.0849 0.9572
140110...................... 05/01/92 04/30/93 1.2910 0.9750
140114...................... 02/01/92 01/31/93 1.3010 0.9944
140115...................... 07/01/92 06/30/93 1.2133 0.9952
140116...................... 07/01/92 06/30/93 1.3128 0.9896
140117...................... 07/01/92 06/30/93 1.2829 0.9925
140119...................... 07/01/92 06/30/93 1.6534 0.9971
140120...................... 05/01/92 04/30/93 1.4041 0.9869
140121...................... 07/01/92 06/30/93 1.5159 0.9900
140127...................... 07/01/92 06/30/93 1.2954 0.9854
140133...................... 07/01/92 06/30/93 1.3612 0.9887
140138...................... 07/01/92 06/30/93 1.0364 0.9522
140140...................... 07/01/92 06/30/93 1.0876 0.9811
140144...................... 04/01/92 03/31/93 1.0275 0.9762
140145...................... 07/01/92 06/30/93 1.1482 0.9750
140146...................... 05/01/92 04/30/93 0.9843 0.9353
140150...................... 07/01/92 06/30/93 1.4534 0.9990
140151...................... 07/01/92 06/30/93 1.0973 0.9988
140158...................... 07/01/92 06/30/93 1.3970 0.9979
140164...................... 04/01/92 03/31/93 1.2625 0.9854
140165...................... 04/01/92 03/31/93 1.0784 0.9528
140166...................... 07/01/92 06/30/93 1.2057 0.9793
140168...................... 07/01/92 06/30/93 1.1798 0.9622
140170...................... 07/01/92 06/30/93 0.9756 0.9729
140171...................... 07/01/92 06/30/93 0.9552 0.9748
140172...................... 07/01/92 06/30/93 1.4750 0.9902
140173...................... 07/01/92 06/30/93 1.0277 0.9410
140174...................... 07/01/92 06/30/93 1.4701 0.9965
140176...................... 07/01/92 06/30/93 1.2771 0.9877
140177...................... 04/01/92 03/31/93 1.4408 0.9905
140179...................... 07/01/92 06/30/93 1.2653 0.9928
140184...................... 05/01/92 04/30/93 1.1662 0.9677
140187...................... 07/01/92 06/30/93 1.3984 0.9920
140189...................... 07/01/92 06/30/93 1.1338 0.9825
140190...................... 05/01/92 04/30/93 1.1182 0.9588
140193...................... 07/01/92 06/30/93 1.0145 0.9656
140199...................... 07/01/92 06/30/93 1.0483 0.9647
140200...................... 07/01/92 06/30/93 1.4022 0.9982
140205...................... 06/01/92 05/31/93 0.8890 0.9526
140210...................... 05/01/92 04/30/93 1.0522 0.9774
140213...................... 04/01/92 03/31/93 1.1911 0.9881
140215...................... 07/01/92 06/30/93 1.1272 0.9843
140218...................... 07/01/92 06/30/93 0.9415 0.9792
140223...................... 07/01/92 06/30/93 1.5070 0.9974
140224...................... 07/01/92 06/30/93 1.3175 0.9988
140228...................... 06/01/92 05/31/93 1.5758 0.9981
140229...................... 05/01/92 04/30/93 0.9146 0.9321
140230...................... 07/01/92 06/30/93 0.9576 0.9579
140231...................... 07/01/92 06/30/93 1.5479 0.9949
140234...................... 07/01/92 06/30/93 1.2225 0.9828
140239...................... 03/01/92 02/28/93 1.5959 0.9988
140242...................... 07/01/92 06/30/93 1.5165 0.9965
140245...................... 07/01/92 06/30/93 1.0639 0.9657
140246...................... 07/01/92 06/30/93 1.0438 0.9689
140250...................... 05/01/92 04/30/93 1.1929 0.9915
140251...................... 07/01/92 06/30/93 1.3057 0.9917
140275...................... 04/01/92 03/31/93 1.2335 0.9932
140276...................... 07/01/92 06/30/93 2.0541 0.9990
140286...................... 05/01/92 04/30/93 1.1350 0.9679
140297...................... 06/01/92 05/31/93 1.2604 0.9914
140299...................... 07/01/92 06/30/93 0.8625 0.8291
150011...................... 07/01/92 06/30/93 1.2124 0.9855
150012...................... 06/01/92 05/31/93 1.6088 0.9926
150019...................... 07/01/92 06/30/93 1.0902 0.9746
150025...................... 07/01/92 06/30/93 1.5465 0.9974
150032...................... 07/01/92 06/30/93 1.7618 0.9968
150043...................... 07/01/92 06/30/93 1.1048 0.9568
150056...................... 03/01/92 02/28/93 1.7098 0.9993
150076...................... 06/01/92 05/31/93 1.0727 0.9757
150077...................... 07/01/92 06/30/93 1.2517 0.9790
150082...................... 05/01/92 04/30/93 1.4578 0.9995
150084...................... 07/01/92 06/30/93 1.8344 0.9998
150085...................... 06/01/92 05/31/93 0.9754 0.9886
150088...................... 06/01/92 05/31/93 1.1451 0.9803
150089...................... 07/01/92 06/30/93 1.3676 0.9998
150099...................... 07/01/92 06/30/93 1.2253 0.9939
150100...................... 07/01/92 06/30/93 1.7098 0.9929
150103...................... 07/01/92 06/30/93 1.0148 0.9555
150110...................... 05/01/92 04/30/93 0.8928 0.9601
150115...................... 07/01/92 06/30/93 1.3451 0.9871
150125...................... 07/01/92 06/30/93 1.3714 0.9982
150126...................... 07/01/92 06/30/93 1.5227 0.9954
150130...................... 07/01/92 06/30/93 1.1604 0.9841
160005...................... 07/01/92 06/30/93 1.0906 0.9738
160007...................... 07/01/92 06/30/93 0.9553 0.9420
160009...................... 07/01/92 06/30/93 1.2723 0.9542
160012...................... 07/01/92 06/30/93 1.1126 0.9658
160013...................... 07/01/92 06/30/93 1.2513 0.9819
160014...................... 07/01/92 06/30/93 0.9294 0.9589
160016...................... 07/01/92 06/30/93 1.2660 0.9784
160018...................... 07/01/92 06/30/93 0.8704 0.9494
160020...................... 07/01/92 06/30/93 1.1080 0.9854
160021...................... 07/01/92 06/30/93 1.0546 0.9670
160023...................... 07/01/92 06/30/93 1.0868 0.9655
160025...................... 07/01/92 06/30/93 1.8610 0.9972
160026...................... 07/01/92 06/30/93 1.1397 0.9656
160027...................... 07/01/92 06/30/93 1.1263 0.9447
160028...................... 07/01/92 06/30/93 1.2226 0.9802
160029...................... 07/01/92 06/30/93 1.5142 0.9974
160030...................... 07/01/92 06/30/93 1.3394 0.9878
160031...................... 07/01/92 06/30/93 1.1329 0.9526
160032...................... 07/01/92 06/30/93 1.1616 0.9705
160033...................... 07/01/92 06/30/93 1.4688 0.9900
160034...................... 07/01/92 06/30/93 0.9717 0.9415
160035...................... 07/01/92 06/30/93 0.9060 0.9519
160036...................... 07/01/92 06/30/93 1.0741 0.9577
160037...................... 07/01/92 06/30/93 1.1075 0.9699
160039...................... 07/01/92 06/30/93 1.0768 0.9524
160040...................... 07/01/92 06/30/93 1.2978 0.9802
160041...................... 07/01/92 06/30/93 1.1383 0.9590
160043...................... 07/01/92 06/30/93 1.0192 0.9609
160046...................... 07/01/92 06/30/93 1.0308 0.9576
160048...................... 07/01/92 06/30/93 1.0747 0.9601
160049...................... 07/01/92 06/30/93 0.9325 0.9585
160050...................... 07/01/92 06/30/93 1.0246 0.9595
160052...................... 07/01/92 06/30/93 1.0144 0.9540
160054...................... 07/01/92 06/30/93 1.1122 0.9637
160055...................... 07/01/92 06/30/93 0.9604 0.9294
160056...................... 07/01/92 06/30/93 1.0295 0.9508
160057...................... 07/01/92 06/30/93 1.3597 0.9849
160058...................... 07/01/92 06/30/93 1.6921 0.9992
160059...................... 07/01/92 06/30/93 1.2827 0.9749
160060...................... 07/01/92 06/30/93 1.0190 0.9474
160061...................... 07/01/92 06/30/93 0.9606 0.9721
160062...................... 07/01/92 06/30/93 0.9648 0.9364
160063...................... 07/01/92 06/30/93 1.1306 0.9841
160064...................... 07/01/92 06/30/93 1.6260 0.9976
160066...................... 07/01/92 06/30/93 1.0987 0.9533
160067...................... 07/01/92 06/30/93 1.3107 0.9897
160068...................... 07/01/92 06/30/93 1.0002 0.9463
160069...................... 07/01/92 06/30/93 1.3957 0.9956
160070...................... 07/01/92 06/30/93 1.0579 0.9657
160073...................... 07/01/92 06/30/93 0.9694 0.9477
160074...................... 07/01/92 06/30/93 1.0148 0.9690
160075...................... 07/01/92 06/30/93 1.0625 0.9662
160076...................... 07/01/92 06/30/93 1.0028 0.9716
160077...................... 07/01/92 06/30/93 0.9863 0.9500
160079...................... 07/01/92 06/30/93 1.3509 0.9938
160080...................... 07/01/92 06/30/93 1.1602 0.9772
160081...................... 07/01/92 06/30/93 1.1022 0.9617
160083...................... 07/01/92 06/30/93 1.5011 0.9992
160085...................... 07/01/92 06/30/93 1.0764 0.9645
160086...................... 07/01/92 06/30/93 0.9801 0.9713
160088...................... 07/01/92 06/30/93 1.1179 0.9284
160089...................... 04/01/92 03/31/93 1.1702 0.9824
160090...................... 07/01/92 06/30/93 1.0557 0.9665
160091...................... 07/01/92 06/30/93 1.0738 0.9682
160093...................... 07/01/92 06/30/93 1.0676 0.9631
160094...................... 07/01/92 06/30/93 1.1235 0.9619
160095...................... 07/01/92 06/30/93 1.0834 0.9539
160097...................... 07/01/92 06/30/93 1.1226 0.9654
160098...................... 07/01/92 06/30/93 1.0186 0.9432
160101...................... 07/01/92 06/30/93 1.0908 0.9698
160102...................... 07/01/92 06/30/93 1.4131 0.9973
160103...................... 07/01/92 06/30/93 0.9646 0.9672
160106...................... 07/01/92 06/30/93 1.0670 0.9647
160107...................... 07/01/92 06/30/93 1.1944 0.9504
160108...................... 07/01/92 06/30/93 1.1254 0.9500
160109...................... 07/01/92 06/30/93 0.9733 0.9508
160112...................... 07/01/92 06/30/93 1.4173 0.9742
160113...................... 07/01/92 06/30/93 0.9989 0.9672
160114...................... 07/01/92 06/30/93 0.9976 0.9666
160115...................... 07/01/92 06/30/93 1.0502 0.9657
160116...................... 07/01/92 06/30/93 1.1957 0.9772
160117...................... 07/01/92 06/30/93 1.2994 0.9952
160118...................... 07/01/92 06/30/93 1.0073 0.9692
160120...................... 07/01/92 06/30/93 0.9889 0.9595
160123...................... 07/01/92 06/30/93 1.0528 0.9733
160124...................... 07/01/92 06/30/93 1.2288 0.9666
160126...................... 05/01/92 04/30/93 1.0915 0.9662
160134...................... 07/01/92 06/30/93 1.0239 0.9163
160135...................... 07/01/92 06/30/93 0.9839 0.9674
160140...................... 07/01/92 06/30/93 1.0374 0.9550
160142...................... 07/01/92 06/30/93 1.0478 0.9359
160143...................... 07/01/92 06/30/93 1.0786 0.9478
160145...................... 07/01/92 06/30/93 1.0124 0.9488
160146...................... 07/01/92 06/30/93 1.3758 0.9927
160151...................... 07/01/92 06/30/93 1.1261 0.9924
160152...................... 07/01/92 06/30/93 0.9949 0.9388
160153...................... 07/01/92 06/30/93 1.6632 0.9980
170009...................... 06/01/92 05/31/93 1.1910 0.9680
170010...................... 07/01/92 06/30/93 1.1979 0.9659
170011...................... 07/01/92 06/30/93 1.4290 0.9876
170013...................... 07/01/92 06/30/93 1.2943 0.9859
170015...................... 04/01/92 03/31/93 0.9484 0.9770
170016...................... 06/01/92 05/31/93 1.6015 0.9977
170020...................... 07/01/92 06/30/93 1.2509 0.9794
170025...................... 07/01/92 06/30/93 1.2481 0.9926
170037...................... 07/01/92 06/30/93 1.1325 0.9626
170040...................... 07/01/92 06/30/93 1.4352 0.9950
170044...................... 07/01/92 06/30/93 1.1346 0.9888
170045...................... 07/01/92 06/30/93 1.0349 0.9609
170051...................... 05/01/92 04/30/93 0.9916 0.9282
170052...................... 05/01/92 04/30/93 1.0721 0.9745
170053...................... 04/01/92 03/31/93 0.8402 0.9537
170056...................... 04/01/92 03/31/93 0.9708 0.9722
170057...................... 07/01/92 06/30/93 1.0341 0.9650
170058...................... 07/01/92 06/30/93 1.0917 0.9783
170061...................... 04/01/92 03/31/93 1.1704 0.9599
170067...................... 07/01/92 06/30/93 0.8778 0.8856
170069...................... 07/01/92 06/30/93 0.9886 0.9728
170072...................... 04/01/92 03/31/93 0.9719 0.9656
170074...................... 05/01/92 04/30/93 1.0960 0.9921
170084...................... 07/01/92 06/30/93 0.8706 0.9711
170085...................... 07/01/92 06/30/93 0.8833 0.9222
170089...................... 07/01/92 06/30/93 1.0005 0.9599
170093...................... 04/01/92 03/31/93 0.9303 0.9554
170095...................... 07/01/92 06/30/93 1.1447 0.9827
170100...................... 05/01/92 04/30/93 0.8854 0.9557
170103...................... 07/01/92 06/30/93 1.2695 0.9752
170105...................... 07/01/92 06/30/93 0.9734 0.9482
170115...................... 07/01/92 06/30/93 1.0182 0.9769
170133...................... 07/01/92 06/30/93 1.1577 0.9790
170140...................... 07/01/92 06/30/93 1.0322 0.9821
170142...................... 07/01/92 06/30/93 1.3252 0.9799
170171...................... 06/01/92 05/31/93 1.1737 0.9614
180002...................... 06/30/92 06/30/93 1.0800 0.9799
180005...................... 06/30/92 06/30/93 1.0410 0.9766
180006...................... 04/30/92 04/30/93 0.9102 0.9860
180007...................... 06/30/92 06/30/93 1.4712 0.9934
180012...................... 06/30/92 06/30/93 1.3442 0.9900
180013...................... 03/31/92 03/31/93 1.3186 0.9935
180018...................... 06/30/92 06/30/93 1.1516 0.9888
180020...................... 06/30/92 06/30/93 1.0576 0.9752
180021...................... 06/30/92 06/30/93 1.2329 0.9786
180024...................... 06/30/92 06/30/93 1.3193 0.9633
180027...................... 03/31/92 03/31/93 1.1578 0.9816
180028...................... 06/30/92 06/30/93 1.0586 0.9431
180029...................... 06/30/92 06/30/93 1.3030 0.9863
180032...................... 06/30/92 06/30/93 1.0285 0.9621
180033...................... 04/30/92 04/30/93 1.0399 0.9388
180034...................... 06/30/92 06/30/93 0.9945 0.9682
180038...................... 05/31/92 05/31/93 1.3356 0.9961
180042...................... 06/30/92 06/30/93 1.0899 0.9710
180046...................... 06/30/92 06/30/93 1.0670 0.9667
180047...................... 06/30/92 06/30/93 1.0224 0.9322
180049...................... 06/30/92 06/30/93 1.3710 0.9742
180050...................... 06/30/92 06/30/93 1.3148 0.9635
180053...................... 06/30/92 06/30/93 1.2756 0.9688
180054...................... 06/30/92 06/30/93 1.0134 0.9767
180055...................... 06/30/92 06/30/93 1.0387 0.9720
180056...................... 06/30/92 06/30/93 1.0840 0.9832
180065...................... 06/30/92 06/30/93 0.9510 0.9735
180067...................... 06/30/92 06/30/93 1.8683 0.9942
180069...................... 06/30/92 06/30/93 1.0467 0.9795
180070...................... 06/30/92 06/30/93 1.0467 0.9826
180075...................... 04/30/92 04/30/93 0.9790 0.9856
180087...................... 06/30/92 06/30/93 1.0665 0.9750
180092...................... 06/30/92 06/30/93 1.1258 0.9782
180101...................... 02/29/92 02/28/93 1.2598 0.9737
180105...................... 02/29/92 02/28/93 0.9336 0.9773
180108...................... 06/30/92 06/30/93 0.9174 0.9738
180117...................... 05/19/92 05/31/93 1.1621 0.9830
180118...................... 06/30/92 06/30/93 0.9970 0.9772
180122...................... 06/30/92 06/30/93 0.9805 0.9525
180125...................... 06/30/92 06/30/93 0.9949 0.9467
180129...................... 04/30/92 04/30/93 1.0956 0.9549
180134...................... 06/30/92 06/30/93 0.9960 0.9472
190001...................... 07/01/92 06/30/93 0.8982 0.9904
190007...................... 07/01/92 06/30/93 1.0510 0.9714
190008...................... 04/01/92 03/31/93 1.5377 0.9992
190009...................... 07/01/92 06/30/93 1.2843 0.9975
190010...................... 07/01/92 06/30/93 1.0161 0.9927
190015...................... 07/01/92 06/30/93 1.1620 0.9950
190017...................... 07/01/92 06/30/93 1.2184 0.9857
190019...................... 07/01/92 06/30/93 1.4775 0.9984
190020...................... 07/01/92 06/30/93 1.1977 0.9843
190027...................... 07/01/92 06/30/93 1.4563 0.9974
190029...................... 07/01/92 06/30/93 1.2305 0.9599
190033...................... 06/01/92 05/31/93 0.9134 0.9773
190036...................... 05/01/92 04/30/93 1.6749 0.9985
190037...................... 07/01/92 06/30/93 1.0618 0.9510
190041...................... 07/01/92 06/30/93 1.5466 0.9989
190045...................... 07/01/92 06/30/93 1.2729 0.9903
190047...................... 07/01/92 06/30/93 1.1397 0.9707
190048...................... 07/01/92 06/30/93 1.1169 0.9615
190064...................... 07/01/92 06/30/93 1.5051 0.9984
190071...................... 07/01/92 06/30/93 0.8723 0.9805
190075...................... 07/01/92 06/30/93 1.4181 0.9989
190081...................... 07/01/92 06/30/93 0.8873 0.9291
190086...................... 05/01/92 04/30/93 1.3069 0.9843
190098...................... 07/01/92 06/30/93 1.4155 0.9997
190102...................... 07/01/92 06/30/93 1.5231 0.9978
190110...................... 07/01/92 06/30/93 0.9222 0.9718
190112...................... 06/01/92 05/31/93 1.3659 0.9854
190114...................... 07/01/92 06/30/93 0.9428 0.9791
190124...................... 07/01/92 06/30/93 1.4849 1.0000
190125...................... 07/01/92 06/30/93 1.3422 0.9976
190138...................... 05/01/92 04/30/93 0.6983 0.9945
190140...................... 05/01/92 04/30/93 1.0316 0.9767
190148...................... 06/01/92 05/31/93 0.9498 0.9765
190152...................... 06/01/92 05/31/93 1.3474 0.9918
190155...................... 07/01/92 06/30/93 0.9280 0.9810
190156...................... 07/01/92 06/30/93 0.8642 0.9711
190158...................... 06/01/92 05/31/93 1.2631 0.9984
190161...................... 07/01/92 06/30/93 0.8860 0.9956
190164...................... 07/01/92 06/30/93 1.1555 0.9823
190165...................... 05/01/92 05/31/93 1.0039 0.9549
190166...................... 07/01/92 06/30/93 1.0353 0.9629
190170...................... 04/01/92 03/31/93 1.0189 0.9752
190173...................... 06/01/92 05/31/93 1.4031 0.9944
190176...................... 07/01/92 06/30/93 1.5290 0.9976
190182...................... 03/01/92 02/28/93 1.0443 1.0000
190196...................... 05/01/92 04/30/93 0.8641 1.0000
190199...................... 07/01/92 06/30/93 1.2198 0.9541
190204...................... 06/01/92 05/31/93 1.5161 0.9967
200002...................... 04/30/92 04/30/93 1.0876 0.9641
200008...................... 06/30/92 06/30/93 1.2598 0.9958
200012...................... 06/30/92 06/30/93 1.1625 0.9869
200013...................... 06/30/92 06/30/93 1.0847 0.9824
200015...................... 06/30/92 06/30/93 1.2462 0.9884
200016...................... 06/30/92 06/30/93 0.9845 0.9502
200019...................... 04/30/92 04/30/93 1.2423 0.9825
200020...................... 06/30/92 06/30/93 1.1301 0.9819
200023...................... 03/31/92 03/31/93 0.8445 0.9811
200024...................... 06/30/92 06/30/93 1.1864 0.9851
200037...................... 06/30/92 06/30/93 1.1980 0.9697
200038...................... 04/30/92 04/30/93 1.0131 0.9863
200039...................... 03/31/92 03/31/93 1.3095 0.9921
200040...................... 05/31/92 05/31/93 1.0575 0.9719
200050...................... 06/30/92 06/30/93 1.1318 0.9773
200051...................... 06/30/92 06/30/93 0.9970 0.9579
200063...................... 03/31/92 03/31/93 1.2171 0.9841
210001...................... 07/01/92 06/30/93 1.3159 0.9883
210002...................... 07/01/92 06/30/93 1.9614 0.9988
210003...................... 07/01/92 06/30/93 1.5118 0.9952
210004...................... 07/01/92 06/30/93 1.2997 0.9921
210005...................... 07/01/92 06/30/93 1.2135 0.9845
210007...................... 07/01/92 06/30/93 1.5117 1.0000
210008...................... 07/01/92 06/30/93 1.3395 0.9961
210009...................... 07/01/92 06/30/93 1.6879 0.9974
210010...................... 07/01/92 06/30/93 1.2358 0.9830
210012...................... 07/01/92 06/30/93 1.5520 0.9962
210013...................... 07/01/92 06/30/93 1.2745 0.9965
210015...................... 07/01/92 06/30/93 1.2021 0.9936
210016...................... 07/01/92 06/30/93 1.8524 0.9978
210017...................... 07/01/92 06/30/93 1.1037 0.9806
210018...................... 07/01/92 06/30/93 1.2695 0.9879
210019...................... 07/01/92 06/30/93 1.4117 0.9973
210022...................... 07/01/92 06/30/93 1.4108 0.9910
210023...................... 07/01/92 06/30/93 1.3535 0.9825
210024...................... 07/01/92 06/30/93 1.3235 0.9947
210025...................... 07/01/92 06/30/93 1.3010 0.9943
210026...................... 07/01/92 06/30/93 1.3218 0.9915
210027...................... 07/01/92 06/30/93 1.2215 0.9941
210028...................... 07/01/92 06/30/93 1.0700 0.9696
210029...................... 07/01/92 06/30/93 1.3210 0.9833
210030...................... 07/01/92 06/30/93 1.0716 0.9881
210031...................... 07/01/92 06/30/93 1.7487 0.9989
210032...................... 07/01/92 06/30/93 1.2557 0.9923
210033...................... 07/01/92 06/30/93 1.1706 0.9995
210034...................... 07/01/92 06/30/93 1.2674 0.9959
210035...................... 07/01/92 06/30/93 1.1768 0.9930
210037...................... 07/01/92 06/30/93 1.2369 0.9911
210038...................... 07/01/92 06/30/93 1.3975 0.9956
210039...................... 07/01/92 06/30/93 1.1742 0.9867
210040...................... 07/01/92 06/30/93 1.3177 0.9931
210043...................... 07/01/92 06/30/93 1.2663 0.9946
210044...................... 07/01/92 06/30/93 1.2581 0.9953
210045...................... 07/01/92 06/30/93 1.0172 0.9713
210048...................... 07/01/92 06/30/93 1.1730 0.9894
210051...................... 07/01/92 06/30/93 1.2849 0.9934
210054...................... 07/01/92 06/30/93 1.2401 0.9871
210055...................... 07/01/92 06/30/93 1.2299 0.9911
210056...................... 07/01/92 06/30/93 1.4479 0.9850
210057...................... 07/01/92 06/30/93 1.2920 0.9950
210058...................... 07/01/92 06/30/93 1.8195 0.9773
210059...................... 07/01/92 06/30/93 1.3155 0.9930
220011...................... 07/01/92 06/30/93 1.1433 0.9945
220041...................... 07/01/92 06/30/93 1.1638 0.9928
220083...................... 07/01/92 06/30/93 1.1315 0.9899
220133...................... 07/01/92 06/30/93 0.8219 0.9543
220153...................... 07/01/92 06/30/93 1.0036 0.9671
220154...................... 07/01/92 06/30/93 0.9156 0.9654
220163...................... 07/01/92 06/30/93 1.8781 0.9990
230001...................... 07/01/92 06/30/93 1.1711 0.9650
230002...................... 07/01/92 06/30/93 1.2684 0.9874
230004...................... 07/01/92 06/30/93 1.6987 0.9968
230005...................... 07/01/92 06/30/93 1.2847 0.9660
230006...................... 04/01/92 03/31/93 1.0471 0.9668
230019...................... 07/01/92 06/30/93 1.5147 0.9987
230024...................... 07/01/92 06/30/93 1.5146 0.9987
230027...................... 07/01/92 06/30/93 1.0650 0.9817
230029...................... 07/01/92 06/30/93 1.5466 0.9989
230030...................... 07/01/92 06/30/93 1.2279 0.9718
230031...................... 07/01/92 06/30/93 1.4553 0.9882
230032...................... 07/01/92 06/30/93 1.7423 0.9967
230034...................... 04/01/92 03/31/93 1.1637 0.9792
230035...................... 07/01/92 06/30/93 1.1612 0.9677
230036...................... 07/01/92 06/30/93 1.2684 0.9794
230037...................... 07/01/92 06/30/93 1.2282 0.9747
230038...................... 07/01/92 06/30/93 1.5807 0.9992
230041...................... 07/01/92 06/30/93 1.1962 0.9966
230046...................... 07/01/92 06/30/93 1.8310 0.9994
230054...................... 07/01/92 06/30/93 1.7246 0.9974
230058...................... 07/01/92 06/30/93 1.0843 0.9590
230059...................... 07/01/92 06/30/93 1.5298 0.9973
230060...................... 07/01/92 06/30/93 1.1834 0.9924
230062...................... 07/01/92 06/30/93 1.1577 0.9338
230066...................... 04/01/92 03/31/93 1.3459 0.9895
230068...................... 07/01/92 06/30/93 1.3720 0.9981
230069...................... 07/01/92 06/30/93 1.1250 0.9714
230070...................... 07/01/92 06/30/93 1.4443 0.9940
230072...................... 04/01/92 03/31/93 1.2301 0.9919
230075...................... 07/01/92 06/30/93 1.4437 0.9872
230077...................... 07/01/92 06/30/93 2.0371 0.9972
230081...................... 07/01/92 06/30/93 1.2221 0.9912
230082...................... 07/01/92 06/30/93 1.1657 0.9735
230085...................... 07/01/92 06/30/93 1.1080 0.9744
230086...................... 07/01/92 06/30/93 1.0134 0.9655
230092...................... 07/01/92 06/30/93 1.2768 0.9831
230093...................... 07/01/92 06/30/93 1.2125 0.9678
230095...................... 04/01/92 03/31/93 1.2099 0.9716
230097...................... 07/01/92 06/30/93 1.5235 0.9989
230099...................... 07/01/92 06/30/93 1.2303 0.9886
230100...................... 07/01/92 06/30/93 1.2060 0.9684
230106...................... 07/01/92 06/30/93 1.1123 0.9806
230108...................... 07/01/92 06/30/93 1.1609 0.9695
230111...................... 07/01/92 06/30/93 0.9743 0.9536
230113...................... 07/01/92 06/30/93 0.9994 0.9463
230116...................... 04/01/92 03/31/93 0.9012 0.9554
230117...................... 07/01/92 06/30/93 1.9259 0.9987
230124...................... 04/01/92 03/31/93 1.0817 0.9791
230132...................... 07/01/92 06/30/93 1.4465 0.9970
230133...................... 07/01/92 06/30/93 1.2163 0.9614
230147...................... 07/01/92 06/30/93 1.5527 0.9965
230153...................... 07/01/92 06/30/93 1.0579 0.9611
230154...................... 07/01/92 06/30/93 1.0167 0.9677
230156...................... 07/01/92 06/30/93 1.6562 0.9995
230157...................... 07/01/92 06/30/93 1.3351 0.9927
230159...................... 04/01/92 03/31/93 1.2687 0.9969
230162...................... 04/01/92 03/31/93 1.0075 0.8302
230172...................... 04/01/92 03/31/93 1.2020 0.9772
230174...................... 07/01/92 06/30/93 1.3192 0.9866
230178...................... 04/01/92 03/31/93 1.0435 0.9625
230180...................... 07/01/92 06/30/93 1.0952 0.9875
230188...................... 04/01/92 03/31/93 1.1123 0.9745
230189...................... 07/01/92 06/30/93 0.9108 0.9679
230199...................... 07/01/92 06/30/93 1.1519 0.9804
230201...................... 07/01/92 06/30/93 1.0435 0.9794
230207...................... 07/01/92 06/30/93 1.2446 0.9939
230212...................... 07/01/92 06/30/93 1.0641 0.9751
230219...................... 04/01/92 03/31/93 0.9656 0.9520
230221...................... 04/01/92 03/31/93 1.2799 0.9974
230222...................... 07/01/92 06/30/93 1.3153 0.9939
230232...................... 07/01/92 06/30/93 1.0226 0.9575
230241...................... 04/01/92 03/31/93 1.1993 0.9736
230264...................... 07/01/92 06/30/93 1.1922 0.9743
240002...................... 07/01/92 06/30/93 1.6643 0.9928
240005...................... 07/01/92 06/30/93 0.9198 0.9331
240009...................... 07/01/92 06/30/93 1.1490 0.9429
240017...................... 05/01/92 04/30/93 1.1185 0.9694
240036...................... 07/01/92 06/30/93 1.4719 0.9960
240037...................... 07/01/92 06/30/93 1.0881 0.9672
240040...................... 07/01/92 06/30/93 1.2540 0.9625
240044...................... 05/01/92 04/30/93 1.1919 0.9711
240049...................... 07/01/92 06/30/93 1.7207 0.9976
240075...................... 07/01/92 06/30/93 1.2324 0.9807
240077...................... 07/01/92 06/30/93 0.9704 0.9447
240089...................... 04/01/92 03/31/93 1.0887 0.9768
240099...................... 06/01/92 05/31/93 1.0278 0.9617
240101...................... 07/01/92 06/30/93 1.2726 0.9647
240104...................... 07/01/92 06/30/93 1.1736 0.9733
240110...................... 07/01/92 06/30/93 1.0189 0.9510
240125...................... 06/01/92 05/31/93 0.8969 0.9673
240129...................... 06/01/92 05/31/93 1.0200 0.9544
240137...................... 04/01/92 03/31/93 1.1594 0.9574
240145...................... 03/01/92 02/28/93 0.9962 0.9326
240160...................... 07/01/92 06/30/93 0.9996 0.9702
240171...................... 05/01/92 04/30/93 0.9866 0.9269
250001...................... 07/01/92 06/30/93 1.5537 0.9971
250006...................... 07/01/92 06/30/93 0.9840 0.9802
250017...................... 07/01/92 06/30/93 0.9604 0.9662
250031...................... 06/01/92 05/31/93 1.2012 0.9938
250032...................... 07/01/92 06/30/93 1.2320 0.9925
250033...................... 04/01/92 03/31/93 0.9808 0.9335
250034...................... 07/01/92 06/30/93 1.4846 0.9960
250044...................... 07/01/92 06/30/93 1.0228 0.9842
250094...................... 04/01/92 03/31/93 1.2505 0.9913
250102...................... 07/01/92 06/30/93 1.4815 0.9993
250123...................... 03/01/92 02/28/93 1.2418 0.9954
250126...................... 04/01/92 03/31/93 1.0522 0.9611
250128...................... 05/01/92 04/30/93 0.9637 0.9540
250134...................... 07/01/92 06/30/93 0.9584 0.9964
250138...................... 05/01/92 04/30/93 1.2494 0.9974
250141...................... 07/01/92 06/30/93 1.2507 0.9865
260001...................... 07/01/92 06/30/93 1.6185 0.9990
260002...................... 06/01/92 06/01/93 1.3868 0.9861
260006...................... 07/01/92 06/30/93 1.5103 0.9953
260007...................... 04/01/92 03/31/93 1.3530 0.9928
260008...................... 07/01/92 06/30/93 1.2444 0.9978
260009...................... 06/01/92 05/31/93 1.2463 0.9802
260013...................... 05/01/92 04/30/93 1.1793 0.9930
260020...................... 07/01/92 06/30/93 1.6679 0.9985
260022...................... 06/01/92 06/01/93 1.4172 0.9856
260037...................... 02/01/92 01/31/93 1.2465 0.9899
260042...................... 07/01/92 06/30/93 1.1939 0.9919
260048...................... 05/01/92 04/30/93 1.3108 0.9954
260051...................... 06/01/92 06/01/93 1.0678 0.9989
260052...................... 07/01/92 06/30/93 1.2382 0.9813
260055...................... 07/01/92 06/30/93 1.0799 0.9565
260059...................... 07/01/92 06/30/93 1.0945 0.9725
260061...................... 07/01/92 06/30/93 1.1782 0.9814
260065...................... 07/01/92 06/30/93 1.6805 0.9989
260066...................... 07/01/92 06/30/93 1.1133 0.9723
260067...................... 07/01/92 06/30/93 0.9187 0.9341
260077...................... 07/01/92 06/30/93 1.5023 0.9933
260079...................... 07/01/92 06/30/93 1.0157 0.9570
260081...................... 07/01/92 06/30/93 1.4241 0.9983
260082...................... 04/01/92 03/31/93 1.1231 0.9735
260085...................... 07/01/92 06/30/93 1.5508 0.9978
260086...................... 04/01/92 03/31/93 1.0914 0.9716
260094...................... 05/01/92 04/30/93 1.1018 0.9781
260095...................... 07/01/92 06/30/93 1.3783 0.9970
260096...................... 07/01/92 06/30/93 1.4791 0.9989
260104...................... 07/01/92 06/30/93 1.6872 0.9983
260105...................... 07/01/92 06/30/93 1.9174 0.9974
260108...................... 07/01/92 06/30/93 1.7827 0.9989
260109...................... 04/01/92 03/31/93 1.0219 0.9091
260112...................... 05/01/92 04/30/93 1.4241 0.9995
260115...................... 07/01/92 06/30/93 1.1610 0.9444
260127...................... 07/01/92 06/30/93 0.9732 0.9691
260128...................... 07/01/92 06/30/93 0.9836 0.9695
260129...................... 06/01/92 05/31/93 1.0649 0.9869
260131...................... 04/01/92 03/31/93 1.2287 0.9788
260137...................... 06/01/92 05/31/93 1.1816 0.9956
260141...................... 07/01/92 06/30/93 2.0078 0.9957
260142...................... 05/01/92 04/30/93 1.1816 0.9858
260143...................... 07/01/92 06/30/93 1.0365 0.9508
260146...................... 07/01/92 06/30/93 1.5485 0.9929
260147...................... 07/01/92 06/30/93 1.0168 0.9763
260164...................... 05/01/92 04/30/93 1.1337 0.9801
260172...................... 07/01/92 06/30/93 0.9953 0.9777
260173...................... 07/01/92 06/30/93 1.0036 0.9424
260175...................... 04/01/92 03/31/93 1.1435 0.9775
260177...................... 07/01/92 06/30/93 1.2867 0.9897
260183...................... 07/01/92 06/30/93 1.6066 0.9962
260186...................... 05/01/92 04/30/93 1.1777 0.9713
260189...................... 07/01/92 06/30/93 0.8986 0.9625
260197...................... 02/01/92 01/31/93 1.2084 0.9876
270003...................... 06/01/92 05/31/93 1.1685 0.9860
270004...................... 07/01/92 06/30/93 1.6598 0.9991
270009...................... 06/01/92 05/31/93 1.0707 0.9581
270011...................... 07/01/92 06/30/93 1.0779 0.9476
270012...................... 07/01/92 06/30/93 1.4717 0.9975
270016...................... 07/01/92 06/30/93 0.8515 0.9738
270017...................... 06/01/92 05/31/93 1.2325 0.9796
270023...................... 07/01/92 06/30/93 1.3435 0.9919
270024...................... 07/01/92 06/30/93 0.9706 0.9772
270026...................... 07/01/92 06/30/93 0.9522 0.9490
270027...................... 07/01/92 06/30/93 0.9947 0.9785
270028...................... 07/01/92 06/30/93 1.0445 0.9711
270031...................... 07/01/92 06/30/93 0.9487 0.9407
270032...................... 07/01/92 06/30/93 1.1274 0.9582
270035...................... 04/01/92 03/31/93 1.0040 0.9756
270036...................... 07/01/92 06/30/93 0.9006 0.9763
270040...................... 07/01/92 06/30/93 1.1161 0.9791
270041...................... 07/01/92 06/30/93 0.9374 0.9476
270044...................... 07/01/92 06/30/93 1.2216 0.9739
270046...................... 05/01/92 04/30/93 0.9138 0.9626
270049...................... 06/01/92 05/31/93 1.6721 0.9979
270050...................... 07/01/92 06/30/93 1.0259 0.9506
270051...................... 04/01/92 03/31/93 1.2706 0.9821
270052...................... 07/01/92 06/30/93 1.0091 0.9772
270053...................... 07/01/92 06/30/93 1.0513 0.9547
270055...................... 07/01/92 06/30/93 0.6625 0.9910
270058...................... 07/01/92 06/30/93 0.9352 0.9902
270060...................... 07/01/92 06/30/93 0.9392 0.9623
270068...................... 07/01/92 06/30/93 0.8829 0.9324
270072...................... 07/01/92 06/30/93 0.8541 0.9525
270073...................... 07/01/92 06/30/93 1.1727 0.9559
270079...................... 07/01/92 06/30/93 0.9214 0.9562
270080...................... 07/01/92 06/30/93 1.0836 0.9672
270081...................... 07/01/92 06/30/93 0.9391 0.9678
270082...................... 07/01/92 06/30/93 0.9112 0.9792
280003...................... 06/01/92 05/31/93 1.9252 0.9989
280009...................... 07/01/92 06/30/93 1.4789 0.9879
280011...................... 07/01/92 06/30/93 0.9932 0.9785
280013...................... 07/01/92 06/30/93 1.9595 0.9964
280014...................... 07/01/92 06/30/93 1.0682 0.9700
280018...................... 07/01/92 06/30/93 0.9823 0.9841
280020...................... 07/01/92 06/30/93 1.4512 0.9893
280021...................... 07/01/92 06/30/93 1.1094 0.9606
280022...................... 07/01/92 06/30/93 0.9502 0.9543
280023...................... 07/01/92 06/30/93 1.3389 0.9786
280024...................... 07/01/92 06/30/93 0.9477 0.9797
280026...................... 07/01/92 06/30/93 1.1405 0.9516
280028...................... 05/01/92 04/30/93 1.0078 0.9697
280029...................... 07/01/92 06/30/93 0.9316 0.9755
280033...................... 07/01/92 06/30/93 1.1245 0.9738
280035...................... 07/01/92 06/30/93 0.9331 0.9536
280037...................... 07/01/92 06/30/93 0.9727 0.9545
280042...................... 05/01/92 04/30/93 0.9349 0.9715
280043...................... 07/01/92 06/30/93 1.1269 0.9685
280045...................... 07/01/92 06/30/93 1.1421 0.9836
280049...................... 05/01/92 04/30/93 1.0441 0.9715
280050...................... 07/01/92 06/30/93 0.9936 0.9746
280051...................... 07/01/92 06/30/93 0.9720 0.9915
280052...................... 07/01/92 06/30/93 1.0553 0.9595
280055...................... 07/01/92 06/30/93 0.9297 0.9762
280056...................... 07/01/92 06/30/93 1.0227 0.9821
280060...................... 07/01/92 06/30/93 1.5731 0.9994
280062...................... 07/01/92 06/30/93 1.1412 0.9742
280064...................... 05/01/92 04/30/93 1.0629 0.9643
280066...................... 07/01/92 06/30/93 1.1077 0.9026
280068...................... 04/01/92 03/31/93 0.9310 0.9240
280070...................... 05/01/92 04/30/93 1.1207 0.9620
280073...................... 07/01/92 06/30/93 1.0316 0.9634
280075...................... 07/01/92 06/30/93 1.2022 0.9807
280077...................... 07/01/92 06/30/93 1.2984 0.9824
280080...................... 07/01/92 06/30/93 1.1971 0.9218
280082...................... 03/01/92 02/28/93 1.4528 0.9867
280084...................... 07/01/92 06/30/93 1.0239 0.9663
280090...................... 07/01/92 06/30/93 0.9978 0.9907
280091...................... 07/01/92 06/30/93 1.0909 0.9669
280092...................... 07/01/92 06/30/93 0.9065 0.9200
280094...................... 04/01/92 03/31/93 1.0786 0.9779
280097...................... 07/01/92 06/30/93 0.9617 0.9430
280098...................... 07/01/92 06/30/93 0.9681 0.9616
280104...................... 07/01/92 06/30/93 1.0033 0.9172
280105...................... 07/01/92 06/30/93 1.2791 0.9859
280110...................... 07/01/92 06/30/93 0.9830 0.9581
280111...................... 05/01/92 04/30/93 1.2500 0.9732
280117...................... 07/01/92 06/30/93 1.1003 0.9749
280118...................... 07/01/92 06/30/93 1.0522 0.9831
290001...................... 07/01/92 06/30/93 1.6528 0.9995
290002...................... 04/01/92 03/31/93 0.9373 0.9446
290007...................... 07/01/92 06/30/93 1.8723 0.9931
290008...................... 07/01/92 06/30/93 1.3094 0.9751
290011...................... 07/01/92 06/30/93 0.8714 0.9731
290012...................... 07/01/92 06/30/93 1.3328 0.9776
290013...................... 07/01/92 06/30/93 0.9745 0.8662
290014...................... 07/01/92 06/30/93 1.0135 0.9693
290015...................... 07/01/92 06/30/93 0.9335 0.9512
290016...................... 07/01/92 06/30/93 1.1854 0.9815
290019...................... 07/01/92 06/30/93 1.2347 0.9884
290020...................... 07/01/92 06/30/93 1.3102 0.9526
290027...................... 07/01/92 06/30/93 1.0704 0.9639
300003...................... 06/30/92 06/30/93 1.7362 0.9950
300010...................... 06/30/92 06/30/93 1.2483 0.9631
300015...................... 06/30/92 06/30/93 1.1486 0.9691
300019...................... 06/30/92 06/30/93 1.2454 0.9875
300029...................... 02/29/92 02/28/93 1.2868 0.9841
300034...................... 06/30/92 06/30/93 1.8268 0.9972
310119...................... 07/01/92 06/30/93 1.5219 0.9980
320001...................... 06/30/92 06/30/93 1.4686 0.9895
320002...................... 06/30/92 06/30/93 1.2753 0.9911
320003...................... 06/30/92 06/30/93 1.2376 0.9760
320004...................... 06/30/92 06/30/93 1.1610 0.9826
320005...................... 06/30/92 06/30/93 1.2493 0.9766
320006...................... 06/30/92 06/30/93 1.3841 0.9883
320009...................... 06/30/92 06/30/93 1.5059 0.9967
320011...................... 03/31/92 03/31/93 0.9680 0.9681
320012...................... 03/31/92 03/31/93 1.0149 0.9695
320013...................... 05/31/92 05/31/93 1.0601 0.9646
320014...................... 06/30/92 06/30/93 0.9392 0.9606
320016...................... 06/30/92 06/30/93 1.1359 0.9673
320017...................... 06/30/92 06/30/93 1.2042 0.9791
320018...................... 06/30/92 06/30/93 1.4326 0.9923
320021...................... 03/31/92 03/31/93 1.7378 0.9946
320022...................... 03/31/92 03/31/93 1.2852 0.9686
320030...................... 07/01/92 06/30/93 1.0282 0.9533
320031...................... 06/30/92 06/30/93 0.9178 0.9920
320032...................... 04/01/92 03/31/93 0.9760 0.9440
320037...................... 06/30/92 06/30/93 1.1064 0.9044
320046...................... 03/31/92 03/31/93 1.0802 0.9558
320065...................... 04/01/92 03/31/93 1.1911 0.9721
320068...................... 06/30/92 06/30/93 0.9798 0.9432
320069...................... 06/30/92 06/30/93 1.0300 0.9444
320074...................... 06/30/92 06/30/93 1.1289 0.9824
320076...................... 03/31/92 03/31/93 1.2042 0.9872
320079...................... 03/31/92 03/31/93 1.1822 0.9856
320080...................... 06/01/92 06/01/93 0.6077 0.9811
330080...................... 07/01/92 06/30/93 1.2835 0.9920
330127...................... 07/01/92 06/30/93 1.3479 0.9780
330128...................... 07/01/92 06/30/93 1.4632 0.9892
330196...................... 07/01/92 06/30/93 1.3875 0.9952
330199...................... 07/01/92 06/30/93 1.2686 0.9973
330202...................... 07/01/92 06/30/93 1.3911 0.9650
330204...................... 07/01/92 06/30/93 1.3488 0.9972
330231...................... 07/01/92 06/30/93 1.1203 0.9923
330240...................... 07/01/92 06/30/93 1.3268 0.9965
330385...................... 07/01/92 06/30/93 1.3892 0.9821
330396...................... 07/01/92 06/30/93 1.2395 0.9956
340014...................... 07/01/92 06/30/93 1.6448 0.9996
340020...................... 06/01/92 05/31/93 1.1836 0.9743
340030...................... 07/01/92 06/30/93 1.8932 0.9980
340032...................... 07/01/92 06/30/93 1.2821 0.9878
340047...................... 07/01/92 06/30/93 1.8979 0.9989
340052...................... 07/01/92 06/30/93 1.0331 0.9733
340061...................... 07/01/92 06/30/93 1.6531 0.9994
340073...................... 07/01/92 06/30/93 1.4410 0.9905
340116...................... 05/01/92 04/30/93 1.7855 0.9940
340136...................... 07/01/92 06/30/93 0.9395 0.9847
340137...................... 07/01/92 06/30/93 1.3521 0.9970
340138...................... 07/01/92 06/30/93 1.2125 0.9858
340143...................... 07/01/92 06/30/93 1.3619 0.9853
340144...................... 03/01/92 02/28/93 1.3009 0.9842
340148...................... 07/01/92 06/30/93 1.4328 0.9958
340153...................... 03/01/92 02/28/93 1.8547 0.9922
340154...................... 07/01/92 06/30/93 0.8184 0.9096
340155...................... 07/01/92 06/30/93 1.4549 0.9973
340158...................... 07/01/92 06/30/93 1.0785 0.9681
340160...................... 07/01/92 06/30/93 1.0984 0.9703
340164...................... 06/01/92 05/31/93 1.3438 0.9945
350001...................... 07/01/92 06/30/93 1.0514 0.9757
350002...................... 07/01/92 06/30/93 1.7127 0.9986
350003...................... 07/01/92 06/30/93 1.1517 0.9806
350005...................... 07/01/92 06/30/93 1.1014 0.9550
350006...................... 07/01/92 06/30/93 1.2565 0.9843
350008...................... 07/01/92 06/30/93 1.0572 0.9612
350009...................... 07/01/92 06/30/93 1.1496 0.9754
350010...................... 04/01/92 03/31/93 1.0668 0.9888
350011...................... 07/01/92 06/30/93 1.7301 0.9998
350012...................... 07/01/92 06/30/93 1.0846 0.9788
350013...................... 07/01/92 06/30/93 1.1304 0.9783
350014...................... 07/01/92 06/30/93 1.0976 0.9952
350017...................... 07/01/92 06/30/93 1.3269 0.9884
350021...................... 07/01/92 06/30/93 1.0627 0.9876
350025...................... 07/01/92 06/30/93 0.9811 0.9573
350029...................... 07/01/92 06/30/93 0.9055 0.9685
350030...................... 07/01/92 06/30/93 1.0165 0.9791
350034...................... 07/01/92 06/30/93 0.9431 0.9814
350035...................... 07/01/92 06/30/93 0.9575 0.9347
350036...................... 07/01/92 06/30/93 0.9062 0.9573
350039...................... 07/01/92 06/30/93 1.0077 0.9616
350043...................... 07/01/92 06/30/93 1.5640 0.9978
350044...................... 07/01/92 06/30/93 0.8428 0.9818
350047...................... 07/01/92 06/30/93 1.2006 0.9689
350049...................... 07/01/92 06/30/93 1.1705 0.9849
350050...................... 07/01/92 06/30/93 1.0334 0.9748
350053...................... 07/01/92 06/30/93 0.9177 0.9503
350056...................... 07/01/92 06/30/93 0.9388 0.9407
350058...................... 04/01/92 03/31/93 1.0556 0.9548
350060...................... 07/01/92 06/30/93 0.9732 0.9437
350061...................... 04/01/92 03/31/93 0.9773 0.9809
350065...................... 03/01/92 02/28/93 0.9930 0.9132
360003...................... 06/30/92 06/30/93 1.6387 0.9984
360006...................... 06/30/92 06/30/93 1.7618 0.9993
360008...................... 06/30/92 06/30/93 1.2175 0.9745
360011...................... 06/30/92 06/30/93 1.2324 0.9830
360014...................... 06/30/92 06/30/93 1.1551 0.9670
360017...................... 07/01/92 06/30/93 1.7054 0.9986
360028...................... 07/01/92 06/30/93 1.3681 0.9889
360029...................... 06/30/92 06/30/93 1.1280 0.9862
360035...................... 05/31/92 05/31/93 1.4862 0.9984
360040...................... 06/30/92 06/30/93 1.2404 0.9732
360048...................... 06/30/92 06/30/93 1.8617 0.9973
360050...................... 06/30/92 06/30/93 1.1901 0.9429
360052...................... 07/01/92 06/30/93 1.6911 0.9984
360054...................... 06/30/92 06/30/93 1.2883 0.9778
360058...................... 04/01/92 03/31/93 1.1324 0.9759
360085...................... 07/01/92 06/30/93 1.7255 0.9960
360090...................... 06/30/92 06/30/93 1.2526 0.9920
360134...................... 07/01/92 06/30/93 1.5733 0.9991
360161...................... 06/30/92 06/30/93 1.2240 0.9874
360178...................... 06/30/92 06/30/93 1.2489 0.9758
360185...................... 06/30/92 06/30/93 1.2036 0.9878
360187...................... 06/30/92 06/30/93 1.3570 0.9889
360238...................... 06/30/92 06/30/93 0.8991 0.9719
360243...................... 06/30/92 06/30/93 0.8598 0.9718
360244...................... 05/31/92 05/31/93 0.8028 1.0000
360245...................... 06/30/92 06/30/93 0.9667 0.9637
370004...................... 07/01/92 06/30/93 1.3255 0.9771
370005...................... 07/01/92 06/30/93 1.0698 0.9769
370008...................... 07/01/92 06/30/93 1.3876 0.9984
370011...................... 07/01/92 06/30/93 1.0771 0.9694
370012...................... 07/01/92 06/30/93 0.8856 0.9436
370013...................... 07/01/92 06/30/93 1.6748 0.9997
370015...................... 07/01/92 06/30/93 1.2197 0.9690
370016...................... 07/01/92 06/30/93 1.3893 0.9961
370019...................... 07/01/92 06/30/93 1.2653 0.9823
370022...................... 07/01/92 06/30/93 1.3011 0.9839
370023...................... 07/01/92 06/30/93 1.3601 0.9762
370026...................... 07/01/92 06/30/93 1.4078 0.9874
370028...................... 07/01/92 06/30/93 1.6764 0.9985
370029...................... 07/01/92 06/30/93 1.2087 0.9389
370030...................... 07/01/92 06/30/93 1.2752 0.9644
370034...................... 07/01/92 06/30/93 1.1381 0.9840
370035...................... 07/01/92 06/30/93 1.4667 0.9983
370036...................... 07/01/92 06/30/93 0.9581 0.9620
370038...................... 07/01/92 06/30/93 0.9680 0.9620
370041...................... 07/01/92 06/30/93 1.0112 0.9704
370042...................... 07/01/92 06/30/93 0.8783 0.9609
370043...................... 07/01/92 06/30/93 0.9371 0.9719
370045...................... 07/01/92 06/30/93 1.0500 0.9671
370046...................... 07/01/92 06/30/93 1.0085 0.9089
370047...................... 07/01/92 06/30/93 1.2211 0.9918
370048...................... 07/01/92 06/30/93 1.1440 0.9438
370056...................... 07/01/92 06/30/93 1.4542 0.9957
370059...................... 07/01/92 06/30/93 1.2405 0.9757
370060...................... 07/01/92 06/30/93 1.1472 0.9690
370063...................... 07/01/92 06/30/93 1.1109 0.9908
370064...................... 05/01/92 04/30/93 0.9992 0.9533
370065...................... 07/01/92 06/30/93 1.0637 0.9603
370072...................... 07/01/92 06/30/93 0.9402 0.9647
370076...................... 07/01/92 06/30/93 1.2432 0.9720
370079...................... 07/01/92 06/30/93 0.8918 0.9770
370080...................... 07/01/92 06/30/93 0.9759 0.9499
370082...................... 07/01/92 06/30/93 1.0867 0.9608
370083...................... 04/01/92 03/31/93 1.0187 0.9826
370084...................... 07/01/92 06/30/93 1.0427 0.9570
370085...................... 04/01/92 03/31/93 0.9027 0.9711
370086...................... 07/01/92 06/30/93 1.1989 0.9786
370089...................... 07/01/92 06/30/93 1.2758 0.9752
370091...................... 07/01/92 06/30/93 1.6171 0.9993
370097...................... 04/01/92 03/31/93 1.3427 0.9951
370099...................... 07/01/92 06/30/93 1.1751 0.9792
370100...................... 07/01/92 06/30/93 1.0380 0.9617
370103...................... 07/01/92 06/30/93 0.9206 0.9554
370112...................... 04/01/92 03/31/93 1.0238 0.9618
370113...................... 07/01/92 06/30/93 1.0897 0.9806
370122...................... 04/01/92 03/31/93 1.1641 0.9543
370123...................... 07/01/92 06/30/93 1.2660 0.9923
370125...................... 07/01/92 06/30/93 0.9998 0.9732
370126...................... 07/01/92 06/30/93 1.1368 0.9738
370131...................... 05/01/92 04/30/93 1.0006 0.9792
370133...................... 07/01/92 06/30/93 1.1415 0.9460
370138...................... 07/01/92 06/30/93 1.1038 0.9719
370139...................... 07/01/92 06/30/93 1.0054 0.9845
370140...................... 07/01/92 06/30/93 1.0293 0.9675
370153...................... 07/01/92 06/30/93 1.1787 0.9636
370154...................... 07/01/92 06/30/93 0.9905 0.9424
370156...................... 07/01/92 06/30/93 1.1328 0.9468
370158...................... 07/01/92 06/30/93 1.0416 0.9474
370163...................... 07/01/92 06/30/93 0.8611 0.9537
370166...................... 02/01/92 01/31/93 1.1306 0.9749
370178...................... 07/01/92 06/30/93 1.0305 0.9454
370183...................... 07/01/92 06/30/93 1.1166 0.9635
370186...................... 07/01/92 06/30/93 0.9621 0.9591
380001...................... 07/01/92 06/30/93 1.2869 0.9761
380002...................... 07/01/92 06/30/93 1.1920 0.9778
380003...................... 07/01/92 06/30/93 1.1764 0.9685
380005...................... 07/01/92 06/30/93 1.1703 0.9685
380007...................... 04/01/92 03/31/93 1.7673 0.9951
380008...................... 04/01/92 03/31/93 1.0775 0.9755
380009...................... 07/01/92 06/30/93 1.6977 0.9962
380011...................... 07/01/92 06/30/93 1.2002 0.9900
380013...................... 07/01/92 06/30/93 1.2882 0.9526
380017...................... 04/01/92 03/31/93 1.7694 0.9968
380023...................... 07/01/92 06/30/93 1.2982 0.9719
380025...................... 04/01/92 03/31/93 1.2571 0.9805
380027...................... 07/01/92 06/30/93 1.2605 0.9831
380031...................... 07/01/92 06/30/93 1.0279 0.9841
380033...................... 07/01/92 06/30/93 1.6523 0.9985
380035...................... 05/01/92 04/30/93 1.2898 0.9757
380037...................... 07/01/92 06/30/93 1.2941 0.9667
380040...................... 07/01/92 06/30/93 1.3225 0.9671
380048...................... 07/02/92 06/30/93 1.0469 0.9374
380062...................... 07/01/92 06/30/93 1.0837 0.9014
380063...................... 07/01/92 06/30/93 1.2123 0.9891
380065...................... 07/01/92 06/30/93 1.0024 0.9367
380066...................... 07/01/92 06/30/93 1.3532 0.9659
380069...................... 07/01/92 06/30/93 1.2363 1.0000
380071...................... 05/01/92 04/30/93 1.2746 0.9602
380072...................... 07/01/92 06/30/93 0.9778 0.9510
380078...................... 07/01/92 06/30/93 1.2209 0.9442
380081...................... 07/01/92 06/30/93 1.1384 0.9568
380083...................... 07/01/92 06/30/93 1.1293 0.9751
380084...................... 05/01/92 04/30/93 1.2451 0.9648
380087...................... 07/01/92 06/30/93 1.0345 0.9330
380088...................... 07/01/92 06/30/93 0.9602 0.9762
380089...................... 04/01/92 03/31/93 1.2756 0.9883
380090...................... 07/01/92 06/30/93 1.3049 0.9812
390001...................... 07/01/92 06/30/93 1.3158 0.9937
390002...................... 07/01/92 06/30/93 1.3254 0.9972
390003...................... 07/01/92 06/30/93 1.1874 0.9900
390004...................... 07/01/92 06/30/93 1.3731 0.9966
390005...................... 07/01/92 06/30/93 1.0259 0.9579
390006...................... 07/01/92 06/30/93 1.7515 0.9995
390007...................... 07/01/92 06/30/93 1.2186 0.9871
390008...................... 07/01/92 06/30/93 1.1426 0.9672
390009...................... 07/01/92 06/30/93 1.5933 0.9980
390010...................... 07/01/92 06/30/93 1.2406 0.9878
390011...................... 07/01/92 06/30/93 1.2049 0.9928
390012...................... 07/01/92 06/30/93 1.1965 0.9899
390013...................... 07/01/92 06/30/93 1.1910 0.9911
390014...................... 07/01/92 06/30/93 1.2126 1.0000
390015...................... 07/01/92 06/30/93 1.1682 0.9564
390016...................... 07/01/92 06/30/93 1.1726 0.9914
390017...................... 07/01/92 06/30/93 1.1914 0.9854
390018...................... 07/01/92 06/30/93 1.2140 0.9893
390019...................... 07/01/92 06/30/93 1.1170 0.9789
390022...................... 07/01/92 06/30/93 1.3655 0.9855
390023...................... 07/01/92 06/30/93 1.2347 0.9954
390024...................... 07/01/92 06/30/93 0.7668 0.9962
390025...................... 07/01/92 06/30/93 0.8310 1.0000
390026...................... 07/01/92 06/30/93 1.2454 0.9891
390027...................... 07/01/92 06/30/93 1.8758 0.9967
390029...................... 07/01/92 06/30/93 1.7372 0.9974
390030...................... 07/01/92 06/30/93 1.2064 0.9867
390031...................... 07/01/92 06/30/93 1.1617 0.9864
390032...................... 07/01/92 06/30/93 1.2017 0.9907
390035...................... 07/01/92 06/30/93 1.2954 0.9899
390036...................... 07/01/92 06/30/93 1.2432 0.9893
390037...................... 07/01/92 06/30/93 1.2067 0.9884
390039...................... 07/01/92 06/30/93 1.1414 0.9720
390040...................... 07/01/92 06/30/93 0.9423 0.9892
390041...................... 07/01/92 06/30/93 1.2454 0.9748
390042...................... 07/01/92 06/30/93 1.2906 0.9823
390043...................... 07/01/92 06/30/93 1.0379 0.9802
390044...................... 07/01/92 06/30/93 1.5769 0.9994
390045...................... 07/01/92 06/30/93 1.4113 0.9921
390046...................... 07/01/92 06/30/93 1.4413 0.9987
390047...................... 07/01/92 06/30/93 1.6752 0.9951
390048...................... 07/01/92 06/30/93 1.1553 0.9889
390049...................... 07/01/92 06/30/93 1.5229 0.9988
390050...................... 07/01/92 06/30/93 2.0247 0.9978
390051...................... 07/01/92 06/30/93 2.1329 0.9987
390052...................... 07/01/92 06/30/93 1.1557 0.9740
390055...................... 07/01/92 06/30/93 1.6897 0.9988
390056...................... 07/01/92 06/30/93 1.0886 0.9813
390057...................... 07/01/92 06/30/93 1.2812 0.9916
390058...................... 07/01/92 06/30/93 1.3074 0.9800
390061...................... 07/01/92 06/30/93 1.3415 0.9914
390062...................... 07/01/92 06/30/93 1.1464 0.9870
390063...................... 07/01/92 06/30/93 1.6702 0.9984
390064...................... 07/01/92 06/30/93 1.4676 0.9986
390065...................... 07/01/92 06/30/93 1.2253 0.9789
390066...................... 07/01/92 06/30/93 1.2485 0.9891
390067...................... 07/01/92 06/30/93 1.7101 0.9990
390068...................... 07/01/92 06/30/93 1.3035 0.9911
390069...................... 07/01/92 06/30/93 1.2848 0.9902
390070...................... 07/01/92 06/30/93 1.2512 0.9903
390071...................... 07/01/92 06/30/93 1.0718 0.9811
390072...................... 07/01/92 06/30/93 1.0750 0.9768
390073...................... 07/01/92 06/30/93 1.5510 0.9967
390074...................... 07/01/92 06/30/93 1.1962 0.9917
390075...................... 07/01/92 06/30/93 1.3071 0.9915
390076...................... 07/01/92 06/30/93 1.2633 0.9928
390078...................... 07/01/92 06/30/93 1.0587 0.9872
390079...................... 07/01/92 06/30/93 1.6864 0.9989
390080...................... 07/01/92 06/30/93 1.2043 0.9886
390081...................... 07/01/92 06/30/93 1.2499 0.9942
390083...................... 07/01/92 06/30/93 1.1671 0.9880
390084...................... 07/01/92 06/30/93 1.1506 0.9947
390086...................... 07/01/92 06/30/93 1.1057 0.9657
390088...................... 07/01/92 06/30/93 1.2720 0.9951
390090...................... 07/01/92 06/30/93 1.7434 0.9981
390091...................... 07/01/92 06/30/93 1.1383 0.9889
390093...................... 07/01/92 06/30/93 1.1884 0.9829
390095...................... 07/01/92 06/30/93 1.2039 0.9901
390096...................... 07/01/92 06/30/93 1.2121 0.9919
390097...................... 07/01/92 06/30/93 1.2872 0.9873
390098...................... 07/01/92 06/30/93 1.7055 0.9990
390100...................... 07/01/92 06/30/93 1.6822 0.9983
390101...................... 07/01/92 06/30/93 1.2718 0.9930
390102...................... 07/01/92 06/30/93 1.3139 0.9901
390103...................... 07/01/92 06/30/93 1.0711 0.9902
390104...................... 07/01/92 06/30/93 1.0524 0.9751
390106...................... 07/01/92 06/30/93 0.9731 0.9787
390107...................... 07/01/92 06/30/93 1.1853 0.9878
390108...................... 07/01/92 06/30/93 1.3330 0.9885
390109...................... 07/01/92 06/30/93 1.1771 0.9856
390110...................... 07/01/92 06/30/93 1.5573 0.9955
390111...................... 07/01/92 06/30/93 1.7255 0.9984
390112...................... 07/01/92 06/30/93 1.1518 0.9856
390113...................... 07/01/92 06/30/93 1.2535 0.9889
390114...................... 07/01/92 06/30/93 1.0698 0.9988
390115...................... 07/01/92 06/30/93 1.2912 0.9831
390116...................... 07/01/92 06/30/93 1.1817 0.9872
390117...................... 07/01/92 06/30/93 1.1704 0.9759
390118...................... 07/01/92 06/30/93 1.2138 0.9920
390119...................... 07/01/92 06/30/93 1.3431 0.9975
390121...................... 07/01/92 06/30/93 1.2155 0.9964
390122...................... 07/01/92 06/30/93 1.0559 0.9633
390123...................... 07/01/92 06/30/93 1.2329 0.9910
390125...................... 07/01/92 06/30/93 1.2175 0.9920
390126...................... 07/01/92 06/30/93 1.2517 0.9897
390127...................... 07/01/92 06/30/93 1.1743 0.9927
390130...................... 07/01/92 06/30/93 1.1382 0.9611
390131...................... 07/01/92 06/30/93 1.2000 0.9933
390132...................... 07/01/92 06/30/93 1.1819 0.9953
390133...................... 07/01/92 06/30/93 1.7159 0.9983
390135...................... 07/01/92 06/30/93 1.2360 0.9938
390136...................... 07/01/92 06/30/93 1.2006 0.9934
390137...................... 07/01/92 06/30/93 1.1607 0.9956
390138...................... 07/01/92 06/30/93 1.1752 0.9753
390139...................... 07/01/92 06/30/93 1.4335 0.9977
390142...................... 07/01/92 06/30/93 1.6545 0.9997
390145...................... 07/01/92 06/30/93 1.2364 0.9923
390146...................... 07/01/92 06/30/93 1.2349 0.9798
390147...................... 07/01/92 06/30/93 1.2353 0.9900
390148...................... 07/01/92 06/30/93 1.0990 0.9932
390149...................... 07/01/92 06/30/93 1.1934 0.9839
390150...................... 07/01/92 06/30/93 1.1865 0.9737
390151...................... 07/01/92 06/30/93 1.2403 0.9920
390152...................... 07/01/92 06/30/93 1.0836 0.9936
390153...................... 07/01/92 06/30/93 1.2394 0.9899
390154...................... 07/01/92 06/30/93 1.1601 0.9766
390155...................... 07/01/92 06/30/93 1.2085 0.9821
390156...................... 07/01/92 06/30/93 1.3432 0.9920
390157...................... 07/01/92 06/30/93 1.2125 0.9912
390158...................... 07/01/92 06/30/93 1.2654 0.9908
390159...................... 07/01/92 06/30/93 1.3033 0.9838
390160...................... 07/01/92 06/30/93 1.1741 0.9834
390161...................... 07/01/92 06/30/93 1.2248 0.9752
390162...................... 07/01/92 06/30/93 1.2829 0.9963
390163...................... 07/01/92 06/30/93 1.1542 0.9879
390164...................... 07/01/92 06/30/93 2.1777 0.9916
390166...................... 07/01/92 06/30/93 1.1112 0.9761
390167...................... 07/01/92 06/30/93 1.2712 0.9908
390168...................... 07/01/92 06/30/93 1.1686 0.9843
390170...................... 07/01/92 06/30/93 1.7674 0.9989
390171...................... 07/01/92 06/30/93 1.1298 0.9861
390172...................... 07/01/92 06/30/93 1.2168 0.9880
390173...................... 07/01/92 06/30/93 1.1585 0.9830
390174...................... 07/01/92 06/30/93 1.6330 0.9986
390176...................... 07/01/92 06/30/93 1.1420 0.9904
390178...................... 07/01/92 06/30/93 1.2913 0.9886
390179...................... 07/01/92 06/30/93 1.2548 0.9940
390180...................... 07/01/92 06/30/93 1.4527 0.9955
390181...................... 07/01/92 06/30/93 1.0497 0.9853
390183...................... 07/01/92 06/30/93 1.1095 0.9709
390184...................... 07/01/92 06/30/93 1.1507 0.9767
390185...................... 07/01/92 06/30/93 1.1334 0.9772
390189...................... 07/01/92 06/30/93 1.1572 0.9791
390191...................... 07/01/92 06/30/93 1.0685 0.9766
390192...................... 07/01/92 06/30/93 1.1040 0.9779
390193...................... 07/01/92 06/30/93 1.1559 0.9955
390194...................... 07/01/92 06/30/93 1.1247 0.9810
390195...................... 07/01/92 06/30/93 1.7174 0.9990
390197...................... 07/01/92 06/30/93 1.2667 0.9937
390198...................... 07/01/92 06/30/93 1.2078 0.9952
390199...................... 07/01/92 06/30/93 1.2579 0.9800
390200...................... 07/01/92 06/30/93 1.0244 0.9554
390201...................... 07/01/92 06/30/93 1.2861 0.9852
390203...................... 07/01/92 06/30/93 1.2389 0.9916
390204...................... 07/01/92 06/30/93 1.2899 0.9887
390205...................... 07/01/92 06/30/93 1.2691 0.9811
390206...................... 07/01/92 06/30/93 1.3436 0.9935
390209...................... 07/01/92 06/30/93 0.9599 0.9509
390211...................... 07/01/92 06/30/93 1.2153 0.9880
390213...................... 07/01/92 06/30/93 1.0399 0.9892
390215...................... 07/01/92 06/30/93 1.1271 0.9861
390217...................... 07/01/92 06/30/93 1.2120 0.9838
390219...................... 07/01/92 06/30/93 1.2197 0.9767
390220...................... 07/01/92 06/30/93 1.1666 0.9877
390222...................... 07/01/92 06/30/93 1.2312 0.9919
390223...................... 07/01/92 06/30/93 1.7151 0.9969
390225...................... 07/01/92 06/30/93 1.2323 0.9800
390226...................... 07/01/92 06/30/93 1.6795 0.9987
390228...................... 07/01/92 06/30/93 1.2042 0.9931
390229...................... 07/01/92 06/30/93 1.4986 0.9944
390231...................... 07/01/92 06/30/93 1.3378 0.9946
390233...................... 07/01/92 06/30/93 1.3214 0.9917
390235...................... 07/01/92 06/30/93 1.8300 0.9969
390236...................... 07/01/92 06/30/93 1.2787 0.9826
390238...................... 07/01/92 06/30/93 1.0505 0.9616
390242...................... 07/01/92 06/30/93 1.3191 0.9910
390244...................... 07/01/92 06/30/93 0.8874 0.9454
390245...................... 07/01/92 06/30/93 1.3451 0.9920
390246...................... 07/01/92 06/30/93 1.2021 0.9785
390247...................... 07/01/92 06/30/93 1.0646 0.9865
390249...................... 04/01/92 04/01/93 1.0138 0.9810
390252...................... 07/01/92 06/30/93 0.4732 1.0000
390256...................... 07/01/92 06/30/93 1.7536 0.9983
390258...................... 07/01/92 06/30/93 1.2830 0.9938
390260...................... 07/01/92 06/30/93 1.2642 0.9889
390261...................... 07/01/92 06/30/93 2.9828 0.7079
390262...................... 07/01/92 06/30/93 1.8488 0.9966
390263...................... 07/01/92 06/30/93 1.5023 0.9920
390265...................... 07/01/92 06/30/93 1.2943 0.9905
390266...................... 07/01/92 06/30/93 1.1197 0.9815
390267...................... 07/01/92 06/30/93 1.1940 0.9908
390268...................... 07/01/92 06/30/93 1.2930 0.9887
390270...................... 07/01/92 06/30/93 1.3133 0.9892
390275...................... 07/01/92 06/30/93 0.4866 1.0000
390277...................... 07/01/92 06/30/93 0.5078 0.9911
390278...................... 07/01/92 06/30/93 0.8636 0.9790
400001...................... 07/01/92 06/30/93 1.1794 0.9988
400003...................... 07/01/92 06/30/93 1.1670 0.9984
400004...................... 07/01/92 06/30/93 1.1947 0.9989
400006...................... 07/01/92 06/30/93 1.2191 0.9980
400009...................... 07/01/92 06/30/93 0.9768 0.9993
400012...................... 07/01/92 06/30/93 1.0846 0.9989
400013...................... 04/01/92 03/31/93 1.0349 0.9979
400015...................... 07/01/92 06/30/93 1.2595 0.9993
400018...................... 04/01/92 03/31/93 1.2494 0.9971
400021...................... 06/01/92 05/31/93 1.3496 0.9992
400026...................... 07/01/92 06/30/93 0.9066 0.9865
400027...................... 04/01/92 03/31/93 1.1394 0.9991
400028...................... 07/01/92 06/30/93 1.0538 1.0000
400031...................... 07/01/92 06/30/93 1.0346 0.9803
400044...................... 07/01/92 06/30/93 1.1728 0.9962
400048...................... 07/01/92 06/30/93 1.0302 0.9968
400061...................... 07/01/92 06/30/93 1.6316 0.9982
400079...................... 07/01/92 06/30/93 1.2840 0.9969
400088...................... 05/01/92 04/30/93 0.5187 1.0000
400102...................... 07/01/92 06/30/93 1.1382 0.9970
400103...................... 07/01/92 06/30/93 1.4768 0.9986
400104...................... 07/01/92 06/30/93 1.2669 0.9986
400105...................... 07/01/92 06/30/93 1.1923 0.9983
400110...................... 07/01/92 06/30/93 1.1652 0.9963
400114...................... 07/01/92 06/30/93 1.0306 0.9981
400121...................... 07/01/92 06/30/93 0.5303 1.0000
400123...................... 06/01/92 06/30/93 1.1224 0.9951
420002...................... 05/01/92 04/30/93 1.3307 0.9861
420004...................... 07/01/92 06/30/93 1.9096 0.9975
420006...................... 07/01/92 06/30/93 1.2234 0.9846
420035...................... 07/01/92 06/30/93 0.7510 0.9824
420053...................... 07/01/92 06/30/93 1.0757 0.9710
420062...................... 03/01/92 02/28/93 1.4748 0.9643
420079...................... 04/01/92 03/31/93 1.5133 0.9991
420080...................... 07/01/92 06/30/93 1.2817 0.9644
420082...................... 03/01/92 02/28/93 1.3818 0.9928
420083...................... 07/01/92 06/30/93 1.2119 0.9930
420084...................... 07/01/92 06/30/93 1.2160 1.0000
420085...................... 05/01/92 04/30/93 1.2855 0.9678
430004...................... 03/01/92 02/28/93 1.1441 0.9718
430005...................... 06/01/92 05/31/93 1.2176 0.9706
430007...................... 07/01/92 06/30/93 1.1774 0.9523
430010...................... 07/01/92 06/30/93 1.1655 0.9843
430011...................... 07/01/92 06/30/93 1.3364 0.9701
430012...................... 07/01/92 06/30/93 1.3191 0.9832
430018...................... 07/01/92 06/30/93 0.9192 0.9502
430022...................... 03/01/92 02/28/93 0.9614 0.9330
430025...................... 03/01/92 02/28/93 0.9854 0.9421
430027...................... 05/01/92 04/30/93 1.7075 0.9982
430029...................... 05/01/92 04/30/93 1.0371 0.9550
430033...................... 07/01/92 06/30/93 1.0833 0.9717
430037...................... 07/01/92 06/30/93 0.9511 0.9742
430039...................... 06/01/92 05/31/93 1.0682 0.9918
430042...................... 02/01/92 01/31/93 1.0647 0.9741
430054...................... 05/01/92 04/30/93 0.9771 0.9601
430062...................... 06/01/92 05/31/93 0.8533 0.9719
430066...................... 07/01/92 06/30/93 0.9785 0.9694
430077...................... 07/01/92 06/30/93 1.5036 0.9971
440001...................... 07/01/92 06/30/93 1.0915 0.9766
440002...................... 07/01/92 06/30/93 1.6048 0.9983
440003...................... 06/01/92 05/31/93 1.0884 0.9871
440006...................... 07/01/92 06/30/93 1.3765 0.9978
440007...................... 07/01/92 06/30/93 1.0196 0.9665
440009...................... 07/01/92 06/30/93 1.0404 0.9718
440010...................... 07/01/92 06/30/93 0.9436 0.9474
440011...................... 07/01/92 06/30/93 1.2341 0.9873
440012...................... 07/01/92 06/30/93 1.3046 0.9983
440014...................... 07/01/92 06/30/93 1.0571 0.9538
440015...................... 07/02/92 06/30/93 1.5169 0.9992
440016...................... 07/01/92 06/30/93 0.9759 0.9825
440017...................... 07/01/92 06/30/93 1.5511 0.9991
440019...................... 07/01/92 06/30/93 1.5567 0.9996
440022...................... 07/01/92 06/30/93 1.1395 0.9677
440023...................... 07/01/92 06/30/93 0.9822 0.9635
440024...................... 07/01/92 06/30/93 1.3110 0.9815
440025...................... 07/01/92 06/30/93 1.1388 0.9832
440029...................... 07/01/92 06/30/93 1.2412 0.9900
440030...................... 07/01/92 06/30/93 1.1445 0.9627
440031...................... 07/01/92 06/30/93 1.0411 0.9732
440032...................... 07/01/92 06/30/93 0.9645 0.9682
440033...................... 07/01/92 06/30/93 1.0660 0.9687
440035...................... 07/01/92 06/30/93 1.2612 0.9866
440038...................... 07/01/92 06/30/93 1.0009 0.9369
440039...................... 07/01/92 06/30/93 1.5805 0.9968
440040...................... 07/01/92 06/30/93 0.9473 0.9616
440051...................... 07/01/92 06/30/93 0.9295 0.9836
440052...................... 07/01/92 06/30/93 1.1913 0.9783
440053...................... 07/01/92 06/30/93 1.2054 0.9794
440054...................... 07/01/92 06/30/93 1.0314 0.9846
440056...................... 07/01/92 06/30/93 1.0915 0.9703
440057...................... 07/01/92 06/30/93 1.0077 0.9791
440059...................... 07/01/92 06/30/93 1.1741 0.9641
440060...................... 07/01/92 06/30/93 1.2047 0.9788
440063...................... 07/01/92 06/30/93 1.5053 0.9974
440065...................... 07/01/92 06/30/93 1.1591 0.9703
440069...................... 07/01/92 06/30/93 1.1398 0.9964
440070...................... 07/01/92 06/30/93 0.9806 0.9282
440073...................... 07/01/92 06/30/93 1.3145 0.9863
440082...................... 07/01/92 06/30/93 1.8562 0.9994
440084...................... 07/01/92 06/30/93 1.1718 0.9778
440090...................... 07/01/92 06/30/93 1.0750 0.9611
440102...................... 07/01/92 06/30/93 1.0764 0.9717
440104...................... 07/01/92 06/30/93 1.5395 0.9989
440109...................... 07/01/92 06/30/93 1.1185 0.9452
440111...................... 07/01/92 06/30/93 1.2333 0.9885
440114...................... 07/01/92 06/30/93 1.0445 0.9732
440115...................... 07/01/92 06/30/93 1.0482 0.9743
440121...................... 07/01/92 06/30/93 1.0026 0.9839
440130...................... 07/01/92 06/30/93 1.1325 0.9840
440131...................... 07/01/92 06/30/93 1.0631 0.9661
440132...................... 07/01/92 06/30/93 1.1203 0.9618
440133...................... 07/01/92 06/30/93 1.4404 0.9987
440135...................... 07/01/92 06/30/93 1.4303 0.9877
440137...................... 07/01/92 06/30/93 1.0117 0.9667
440141...................... 07/01/92 06/30/93 1.1723 0.9761
440142...................... 07/01/92 06/30/93 1.0742 0.9772
440143...................... 06/01/92 06/01/93 1.0227 0.9668
440144...................... 06/01/92 06/01/93 1.2084 0.9678
440147...................... 07/01/92 06/30/93 1.0362 1.0000
440151...................... 05/01/92 04/30/93 1.2788 0.9627
440152...................... 07/01/92 06/30/93 1.5562 0.9942
440153...................... 07/01/92 06/30/93 1.2164 0.9693
440156...................... 04/01/92 03/31/93 1.5440 0.9970
440160...................... 07/01/92 06/30/93 0.8799 0.9809
440166...................... 07/01/92 06/30/93 1.4280 0.9985
440170...................... 06/01/92 06/01/93 1.3149 0.9890
440175...................... 03/01/92 02/28/93 1.1675 0.9506
440176...................... 03/01/92 02/28/93 1.2951 0.9934
440180...................... 07/01/92 06/30/93 1.0799 0.9629
440183...................... 03/01/92 02/28/93 1.5257 0.9993
440187...................... 06/01/92 06/01/93 1.1850 0.9666
440192...................... 05/01/92 04/30/93 1.1088 0.9263
440193...................... 06/01/92 05/31/93 1.2509 0.9815
440197...................... 06/01/92 05/31/93 1.3517 0.9878
440206...................... 07/01/92 06/30/93 0.9041 0.9558
450004...................... 07/01/92 06/30/93 1.1536 0.9905
450007...................... 07/01/92 06/30/93 1.2710 0.9788
450008...................... 04/01/92 03/31/93 1.3600 0.9893
450021...................... 07/01/92 06/30/93 1.8807 0.9992
450023...................... 07/01/92 06/30/93 1.3891 0.9977
450029...................... 07/01/92 06/30/93 1.4218 0.9957
450031...................... 04/01/92 03/31/93 1.7666 0.9949
450034...................... 07/01/92 06/30/93 1.5010 0.9989
450035...................... 07/01/92 06/30/93 1.4778 0.9992
450040...................... 07/01/92 06/30/93 1.5594 0.9989
450042...................... 07/01/92 06/30/93 1.6063 0.9962
450043...................... 07/01/92 06/30/93 1.4497 0.9985
450044...................... 07/01/92 06/30/93 1.5926 0.9985
450051...................... 07/01/92 06/30/93 1.5383 0.9988
450052...................... 07/01/92 06/30/93 1.1133 0.9811
450056...................... 07/01/92 06/30/93 1.6473 0.9992
450060...................... 07/01/92 06/30/93 1.3819 0.9890
450064...................... 06/01/92 05/31/93 1.5531 0.9990
450078...................... 04/01/92 03/31/93 0.9998 0.9849
450079...................... 07/01/92 06/30/93 1.4714 0.9974
450090...................... 07/01/92 06/30/93 1.1003 0.9837
450092...................... 07/01/92 06/30/93 1.1585 0.9781
450096...................... 07/01/92 06/30/93 1.4190 0.9975
450099...................... 05/01/92 04/30/93 1.2020 0.9831
450102...................... 07/01/92 06/30/93 1.6760 0.9971
450109...................... 07/01/92 06/30/93 1.1462 0.9888
450113...................... 06/01/92 05/31/93 1.2476 0.9897
450115...................... 04/01/92 03/31/93 1.0520 0.9824
450126...................... 03/01/92 02/28/93 1.3964 0.9704
450128...................... 07/01/92 06/30/93 1.2333 0.9797
450143...................... 07/01/92 06/30/93 1.0248 0.9524
450147...................... 07/01/92 06/30/93 1.3569 0.9958
450157...................... 03/01/92 02/28/93 1.0234 0.9783
450170...................... 07/01/92 06/30/93 1.1074 0.9740
450177...................... 07/01/92 06/30/93 1.1283 0.9712
450184...................... 07/01/92 06/30/93 1.4709 0.9958
450188...................... 04/01/92 03/31/93 1.0314 0.9639
450190...................... 07/01/92 06/30/93 1.1661 0.9903
450192...................... 06/01/92 05/31/93 1.0854 0.9690
450217...................... 07/01/92 06/30/93 1.1092 0.9542
450219...................... 06/01/92 05/31/93 1.0746 0.9641
450221...................... 07/01/92 06/30/93 1.0233 0.9837
450222...................... 04/01/92 03/31/93 1.7222 0.9959
450235...................... 07/01/92 06/30/93 0.9603 0.9701
450241...................... 06/01/92 05/31/93 0.8591 0.9336
450258...................... 06/01/92 05/31/93 1.1491 0.9532
450269...................... 05/01/92 04/30/93 1.0450 0.9543
450270...................... 04/01/92 03/31/93 1.0889 0.9201
450278...................... 07/01/92 06/30/93 1.0790 0.9728
450288...................... 04/01/92 03/31/93 1.1797 0.9807
450289...................... 04/01/92 03/31/93 1.3291 0.9958
450307...................... 05/01/92 04/30/93 1.0674 0.9313
450309...................... 06/01/92 05/31/93 1.0568 0.9369
450324...................... 07/01/92 06/30/93 1.5651 0.9968
450325...................... 07/01/92 06/30/93 1.2791 0.9739
450341...................... 04/01/92 03/31/93 0.9691 0.9596
450349...................... 07/01/92 06/30/93 1.1059 0.9719
450362...................... 07/01/92 06/30/93 1.0115 0.9528
450365...................... 07/01/92 06/30/93 0.8899 0.9805
450372...................... 07/01/92 06/30/93 1.3187 0.9695
450376...................... 07/01/92 06/30/93 1.4758 0.9966
450379...................... 06/01/92 05/31/93 1.5684 0.9953
450381...................... 04/01/92 03/31/93 0.9276 0.9707
450393...................... 03/01/92 02/28/93 1.2805 0.9932
450395...................... 07/01/92 06/30/93 1.0546 0.9566
450400...................... 02/01/92 01/31/93 1.0925 0.9695
450411...................... 07/01/92 06/30/93 0.9917 0.9469
450447...................... 05/01/92 04/30/93 1.3034 0.9735
450451...................... 07/01/92 06/30/93 1.0099 0.9515
450457...................... 06/01/92 05/31/93 1.6648 0.9996
450460...................... 07/01/92 06/30/93 1.0118 0.9677
450467...................... 07/01/92 06/30/93 1.0175 0.9819
450469...................... 07/01/92 06/30/93 1.2687 0.9951
450489...................... 04/01/92 03/31/93 0.9594 0.9315
450497...................... 07/01/92 06/30/93 1.1800 0.9834
450498...................... 07/01/92 06/30/93 1.0240 0.9627
450508...................... 07/01/92 06/30/93 1.5649 0.9956
450517...................... 07/01/92 06/30/93 0.9498 0.9863
450537...................... 06/01/92 05/31/93 1.3479 0.9827
450539...................... 05/16/92 05/31/93 1.1952 0.9579
450545...................... 07/01/92 06/30/93 1.2387 0.9911
450551...................... 04/01/92 03/31/93 1.0443 0.9747
450563...................... 07/01/92 06/30/93 1.2322 0.9864
450573...................... 07/01/92 06/30/93 0.9766 0.9506
450586...................... 07/01/92 06/30/93 1.0357 0.9867
450603...................... 04/01/92 03/31/93 0.7893 0.9303
450610...................... 04/01/92 03/31/93 1.4347 0.9970
450630...................... 05/01/92 04/30/93 1.5186 0.9976
450638...................... 06/01/92 05/31/93 1.5470 0.9973
450641...................... 07/01/92 06/30/93 0.9676 0.9796
450643...................... 07/01/92 06/30/93 1.1223 0.9933
450649...................... 07/01/92 06/30/93 1.0213 0.9434
450651...................... 04/01/92 03/31/93 1.8800 0.9972
450653...................... 05/01/92 04/30/93 1.2438 0.9642
450658...................... 07/01/92 06/30/93 1.0017 0.9797
450660...................... 03/01/92 02/28/93 1.6422 0.9964
450665...................... 07/01/92 06/30/93 0.9885 0.9778
450668...................... 06/01/92 06/01/93 1.5576 0.9960
450669...................... 07/01/92 06/30/93 1.2616 0.9860
450670...................... 07/01/92 06/30/93 1.2937 0.9943
450674...................... 03/01/92 02/28/93 0.8404 0.9908
450675...................... 04/01/92 03/31/93 1.3580 0.9976
450678...................... 06/01/92 06/01/93 1.5359 0.9974
450681...................... 07/01/92 06/30/93 1.5801 0.9984
450683...................... 05/01/92 04/30/93 1.3217 0.9745
450684...................... 07/01/92 06/30/93 1.2727 0.9866
450688...................... 06/01/92 05/31/93 1.3938 0.9845
450691...................... 07/01/92 06/30/93 1.5692 0.9841
450704...................... 07/01/92 06/30/93 1.3992 0.9858
450709...................... 07/01/92 06/30/93 1.1264 0.9956
450723...................... 07/01/92 06/30/93 1.2706 0.9913
450730...................... 06/01/92 06/01/93 1.4356 0.9930
450732...................... 07/01/92 06/30/93 1.1813 0.9651
450743...................... 07/01/92 06/30/93 1.3875 0.9890
450749...................... 07/01/92 06/30/93 1.0661 0.9742
450750...................... 07/01/92 06/30/93 0.9770 0.9799
450755...................... 06/01/92 05/31/93 1.1608 0.9720
450758...................... 06/01/92 06/01/93 1.9720 0.9459
450765...................... 01/01/92 01/07/93 0.9849 0.9858
450768...................... 02/01/92 01/30/93 0.9866 0.9561
450770...................... 07/01/92 06/30/93 1.0799 0.9963
450777...................... 05/01/92 04/30/93 0.9897 0.9629
460003...................... 06/01/92 05/31/93 1.5671 0.9974
460005...................... 06/01/92 05/31/93 1.3665 0.9832
460008...................... 03/01/92 02/28/93 1.3637 0.9765
460009...................... 07/01/92 06/30/93 1.6864 0.9970
460030...................... 02/01/92 01/31/93 1.1552 0.9708
460032...................... 07/01/92 06/30/93 0.9708 0.9444
460035...................... 07/01/92 06/30/93 0.9262 0.9665
460037...................... 07/01/92 06/30/93 0.9978 0.9747
490007...................... 05/01/92 04/30/93 2.0064 0.9987
490009...................... 07/01/92 06/30/93 1.6661 0.9974
490010...................... 06/30/92 06/30/93 1.0830 0.9734
490022...................... 07/01/92 06/30/93 1.2419 0.9896
490028...................... 04/01/92 03/31/93 1.3215 0.9912
490032...................... 07/01/92 06/30/93 1.6777 0.9980
490035...................... 07/01/92 06/30/93 1.1231 0.9911
490043...................... 07/01/92 06/30/93 1.2379 0.9886
490046...................... 05/01/92 04/30/93 1.4315 0.9886
490053...................... 07/01/92 06/30/93 1.2728 0.9687
490090...................... 07/01/92 06/30/93 1.2207 0.9874
490093...................... 05/01/92 04/30/93 1.2643 0.9964
490094...................... 05/01/92 04/30/93 1.2157 0.9983
490098...................... 07/01/92 06/30/93 1.3142 0.9800
490104...................... 07/01/92 06/30/93 0.9386 0.9832
490105...................... 07/01/92 06/30/93 0.6961 1.0000
490106...................... 07/01/92 06/30/93 0.8337 0.9874
490108...................... 07/01/92 06/30/93 0.8341 0.9798
490109...................... 07/01/92 06/30/93 0.8459 0.9903
490111...................... 07/01/92 06/30/93 1.1800 0.9752
490114...................... 07/01/92 06/30/93 1.0656 0.9806
490118...................... 04/01/92 03/31/93 1.6885 0.9993
490119...................... 05/01/92 04/30/93 1.3510 0.9881
490120...................... 07/01/92 06/30/93 1.3402 0.9882
490123...................... 04/01/92 03/31/93 1.1586 0.9662
490124...................... 07/01/92 06/30/93 1.1936 0.9958
490127...................... 07/01/92 06/30/93 1.0392 0.9828
490131...................... 07/01/92 06/30/93 0.9756 0.9578
500008...................... 07/01/92 06/30/93 1.9026 0.9968
500021...................... 06/30/92 06/30/93 1.4523 0.9743
500023...................... 06/30/92 06/30/93 1.2184 0.9738
500030...................... 07/01/92 06/30/93 1.3254 0.9898
500039...................... 04/30/92 04/30/93 1.2836 0.9930
500041...................... 07/01/92 06/30/93 1.2695 0.9824
500064...................... 06/30/92 06/30/93 1.5758 0.9852
500086...................... 07/01/92 06/30/93 1.3654 0.9875
500104...................... 04/01/92 03/31/93 1.2517 0.9747
500108...................... 06/30/92 06/30/93 1.6495 0.9976
500127...................... 07/01/92 06/30/93 0.6565 0.9917
500137...................... 05/31/92 05/31/93 0.7430 0.9842
500139...................... 02/01/92 01/31/93 1.3796 0.9802
500141...................... 06/30/92 06/30/93 1.3345 0.9851
510015...................... 07/01/92 06/30/93 0.9473 0.9613
510020...................... 07/01/92 06/30/93 1.0912 0.9765
510023...................... 07/01/92 06/30/93 1.0458 0.9886
510024...................... 07/01/92 06/30/93 1.3772 0.9970
510025...................... 07/01/92 06/30/93 0.9382 0.9591
510026...................... 07/01/92 06/30/93 0.9843 0.9722
510027...................... 07/01/92 06/30/93 1.0453 0.9606
510035...................... 06/30/92 06/30/93 0.9781 0.9602
510036...................... 07/01/92 06/30/93 0.9717 0.9456
510043...................... 07/01/92 06/30/93 1.0250 0.9721
510046...................... 07/01/92 06/30/93 1.2387 0.9936
510058...................... 07/01/92 06/30/93 1.2040 0.9941
510061...................... 07/01/92 06/30/93 1.0451 0.9662
510062...................... 06/30/92 06/30/93 1.2588 0.9789
510070...................... 06/01/92 05/31/93 1.1771 0.9895
510071...................... 07/01/92 06/30/93 1.2677 0.9883
510072...................... 07/01/92 06/30/93 1.0404 0.9784
510080...................... 07/01/92 06/30/93 1.0998 0.9741
510086...................... 07/01/92 06/30/93 1.0268 0.9817
520004...................... 07/01/92 06/30/93 1.2064 0.9952
520006...................... 02/29/92 02/28/93 1.0614 0.9635
520007...................... 07/01/92 06/30/93 1.0769 0.9773
520009...................... 07/01/92 06/30/93 1.6359 0.9975
520011...................... 03/31/92 03/31/93 1.1708 0.9771
520013...................... 07/01/92 06/30/93 1.3203 0.9896
520015...................... 07/01/92 06/30/93 1.1714 0.9576
520016...................... 07/01/92 06/30/93 1.0954 0.9568
520017...................... 07/01/92 06/30/93 1.2136 0.9805
520025...................... 07/01/92 06/30/93 1.1169 0.9771
520027...................... 07/01/92 06/30/93 1.1780 0.9706
520028...................... 07/01/92 06/30/93 1.3518 0.9867
520030...................... 07/01/92 06/30/93 1.6482 0.9950
520040...................... 07/01/92 06/30/93 1.3951 0.9949
520041...................... 07/01/92 06/30/93 1.2040 0.9606
520044...................... 07/01/92 06/30/93 1.3641 0.9842
520047...................... 03/31/92 03/31/93 0.9911 0.9423
520051...................... 07/01/92 06/30/93 1.9318 0.9991
520063...................... 07/01/92 06/30/93 1.1796 0.9754
520066...................... 07/01/92 06/30/93 1.2811 0.9883
520068...................... 07/01/92 06/30/93 0.9665 0.9626
520074...................... 07/01/92 06/30/93 1.1130 0.9379
520075...................... 07/01/92 06/30/93 1.4633 0.9965
520076...................... 07/01/92 06/30/93 1.1256 0.9816
520087...................... 04/12/92 04/11/93 1.5710 0.9988
520088...................... 07/01/92 06/30/93 1.2548 0.9640
520091...................... 03/31/92 03/31/93 1.2669 0.9686
520092...................... 04/30/92 04/30/93 1.1171 0.9635
520094...................... 07/01/92 06/30/93 1.1033 0.9756
520096...................... 07/01/92 06/30/93 1.5581 0.9973
520097...................... 07/01/92 06/30/93 1.3035 0.9884
520098...................... 07/01/92 06/30/93 1.7623 0.9963
520111...................... 07/01/92 06/30/93 1.1029 0.9636
520112...................... 07/01/92 06/30/93 1.1911 0.9584
520114...................... 07/01/92 06/30/93 1.1236 0.9674
520120...................... 07/01/92 06/30/93 1.0263 0.9769
520121...................... 07/01/92 06/30/93 0.9624 0.9611
520122...................... 07/01/92 06/30/93 1.0255 0.9772
520124...................... 03/31/92 03/31/93 1.1282 0.9533
520134...................... 07/01/92 06/30/93 1.0756 0.9643
520136...................... 07/01/92 06/30/93 1.5163 0.9979
520141...................... 07/01/92 06/30/93 1.1473 0.9573
520142...................... 07/01/92 06/30/93 0.9741 0.9726
520151...................... 02/29/92 02/28/93 1.1121 0.9570
520159...................... 03/31/92 03/31/93 0.8914 0.9376
520161...................... 03/31/92 03/31/93 1.0449 0.9532
520170...................... 07/01/92 06/30/93 1.2388 0.9838
520176...................... 07/01/92 06/30/93 0.7693 0.9956
520178...................... 07/01/92 06/30/93 1.1122 0.9777
530001...................... 06/01/92 06/01/93 1.4372 0.9965
530002...................... 07/01/92 06/30/93 1.1496 0.9787
530003...................... 07/01/92 06/30/93 0.8946 0.9557
530004...................... 07/01/92 06/30/93 0.9446 0.9597
530005...................... 07/01/92 06/30/93 1.0813 0.9601
530006...................... 07/01/92 06/30/93 1.1766 0.9805
530009...................... 07/01/92 06/30/93 1.0409 0.9861
530011...................... 07/01/92 06/30/93 1.1362 0.9732
530012...................... 07/01/92 06/30/93 1.6426 0.9980
530014...................... 07/01/92 06/30/93 1.2638 0.9942
530015...................... 07/01/92 06/30/93 1.1491 0.9822
530016...................... 07/01/92 06/30/93 1.1933 0.9675
530017...................... 07/01/92 06/30/93 0.9340 0.9600
530018...................... 07/01/92 06/30/93 0.9974 0.9544
530019...................... 07/01/92 06/30/93 1.0261 0.9833
530022...................... 07/01/92 06/30/93 1.1367 0.9395
530025...................... 07/01/92 06/30/93 1.2699 0.9846
530026...................... 07/01/92 06/30/93 1.0857 0.9567
530027...................... 07/01/92 06/30/93 0.9347 0.9304
530029...................... 07/01/92 06/30/93 0.9317 0.8996
530031...................... 07/01/92 06/30/93 0.8887 0.9511
------------------------------------------------------------------------

Appendix A--Regulatory Impact Analysis

I. Introduction

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 proposed rule would
not have a significant economic impact on a substantial number of small
entities. For purposes of the RFA, we consider all hospitals to be
small entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis for any proposed rule that 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 603 of the RFA. With the exception of hospitals located in
certain New England counties, for purposes of section 1102(b) of the
Act, we define a small rural hospital as a hospital with fewer than 100
beds that is located outside of a Metropolitan Statistical Area or New
England County Metropolitan Area.
Section 601(g) of the Social Security Amendments of 1983 (Pub. L.
98-21) designated hospitals in certain New England counties as
belonging to the adjacent New England County Metropolitan Area. Thus,
for purposes of the prospective payment system, we classified these
hospitals as urban hospitals.
It is clear that the changes being proposed in this document would
affect both a substantial number of small rural hospitals as well as
other classes of hospitals, and the effects on some may be significant.
Therefore, the discussion below, in combination with the rest of this
proposed rule, constitutes a combined regulatory impact analysis and
regulatory flexibility analysis.

II. Objectives

The primary objective of the prospective payment system is to
create incentives for hospitals to operate efficiently and minimize
unnecessary costs and at the same time ensure that payments are
sufficient to adequately compensate hospitals for their legitimate
costs. In addition, we share national goals of deficit reduction and
restraints on government spending in general.
We believe the proposed changes would further each of these goals
while maintaining the financial viability of the hospital industry and
ensuring access to high quality care for beneficiaries. We expect that
these proposed changes would ensure that the outcomes of this payment
system are, in general, reasonable and equitable while avoiding or
minimizing unintended adverse consequences.

III. Limitations of Our Analysis

As has been the case in previously published regulatory impact
analyses, the following quantitative analysis presents the projected
effects of our proposed policy changes, as well as statutory changes
effective for FY 1995, on various hospital groups. We estimate the
effects of each policy change by estimating payments while holding all
other payment variables constant. We use the best data available, but
we do not attempt to predict behavioral responses to our policy
changes, and we do not make adjustments for future changes in such
variables as admissions, lengths of stay, or case mix.
As we have done in previous proposed rules, we are soliciting
comments and information about the anticipated effects of these changes
on the prospective payment system, and our methodology for estimating
them.

IV. Hospitals Included In and Excluded From the Prospective Payment
System

The prospective payment systems for hospital inpatient operating
and capital-related costs encompass nearly all general, short-term,
acute care hospitals that participate in the Medicare program. We have
included in our analysis only hospitals paid under these systems. There
were 47 Indian Health Service Hospitals in our database, which we
excluded from the analysis due to the special characteristics of the
payment method for these hospitals. Only 55 short-term, acute care
hospitals remain excluded from the prospective payment system under
section 1814(b)(3) of the Act (in Maryland) or a demonstration project
(in the Finger Lakes region of New York State). Thus, as of April 1994,
just over 5,200 hospitals were receiving prospectively based payments
for furnishing inpatient services. This represents about 81 percent of
all Medicare-participating hospitals. The majority of this impact
analysis focuses on this set of hospitals.
The remaining 19 percent are specialty hospitals that are excluded
from the prospective payment system and continue to be paid on the
basis of their reasonable costs, subject to a rate-of-increase ceiling
on their inpatient operating costs per discharge. These hospitals
include psychiatric, rehabilitation, long-term care, children's
hospitals, and cancer hospitals. The impacts of our proposed policy
changes on these hospitals is discussed below.

V. Impact on Excluded Hospitals and Units

As of April 1994, just under 2,000 specialty hospitals are excluded
from the prospective payment system and are instead paid on a
reasonable cost basis subject to the rate-of-increase ceiling under
Sec. 413.40. In addition, 1,932 psychiatric and rehabilitation units in
hospitals that are subject to the prospective payment system and 9
hospitals extensively involved either in the treatment of cancer or in
cancer research are also excluded from the prospective payment system
and paid in accordance with Sec. 413.40.
In accordance with section 13502 of Public Law 103-66, the update
factor applicable to the rate-of-increase limit for excluded hospitals
and units for FY 1995 would be the hospital market basket minus 1.0
percentage point, adjusted to account for the relationship between the
hospital's allowable operating cost per case and its target amounts. We
are projecting an increase in the excluded hospital market basket of
3.7 percent.
The impact on excluded hospitals and units of the proposed update
in the rate-of-increase limit depends on the cumulative cost increases
experienced by each excluded hospital and excluded unit since its
applicable base period. For excluded hospitals and units that have
maintained their cost increases at a level below the percentage
increases in the rate-of-increase limits since their base period, the
major effect will be on the level of incentive payments these hospitals
and units receive. Conversely, for excluded hospitals and units with
per-case cost increases above the cumulative update in their rate-of-
increase limit, the major effect will be the amount of excess costs
that the hospitals would have to absorb.
In this context, we note that Sec. 413.40(d)(3) allows an excluded
hospital or unit whose costs exceed the rate-of-increase limit to
receive the lower of its rate-of-increase ceiling plus 50 percent of
reasonable costs in excess of the ceiling, or 110 percent of its
ceiling. In addition, under the various provisions set forth in
Sec. 413.40, excluded hospitals and units can obtain substantial relief
from the rate-of-increase limit for significant, yet justifiable,
increases in operating costs that exceed the limit. At the same time,
however, by generally limiting payment increases to the growth rate in
the hospital market basket, we continue to provide an incentive for
excluded hospitals and units to restrain the growth in their spending
for patient services.
In this proposed rule, we would establish new exclusion criteria
for long-term care hospitals that define a minimum level of
independence a new hospital must have to qualify for exclusion from the
prospective payment system (see section VI.A. of the preamble). We
anticipate that this change would slow the proliferation of such
hospitals in the future. The likely result of this change is that some
patients who might otherwise have been treated in long-term care
hospitals that are excluded from the prospective payment system will
instead be treated in prospective payment hospitals. Thus, their care
will be paid for under the prospective payment system rather than under
the TEFRA provisions of section 1886(b) of the Act. Although we cannot
quantify the impact of this change on Medicare payments to hospitals,
we anticipate that it would result in a small decrease in aggregate
payment levels.
We are proposing to remove from the regulations the ``1986
malpractice rule'' as explained in section VI.B of the preamble. This
proposal is a technical change that is necessary to conform the
codified Medicare regulations to the various authorities that have
previously established that the malpractice rule is invalid. This
proposed conforming change would not, standing alone, have significant
economic effects.

VI. Quantitative Impact Analysis of the Proposed Policy Changes Under
Prospective Payment System for Operating Costs

A. Basis and Methodology of Estimates

In this proposed rule, we are announcing policy changes and payment
rate updates for the prospective payment systems for operating and
capital-related costs. We have prepared separate analyses of the
proposed changes to each system, beginning with changes to the
operating prospective payment system.
The data used in developing the quantitative analyses presented
below are taken from the FY 1993 MedPAR file and the most current
provider-specific file that is used for payment purposes. Although the
analyses of the changes to the operating prospective payment system do
not incorporate any actual cost data, the most recently available
hospital cost report data were used to create some of the variables by
which hospitals are categorized. Our analysis has several
qualifications. First, we do not make adjustments for behavioral
changes that hospitals may adopt in response to these proposed policy
changes. Second, due to the interdependent nature of the prospective
payment system, it is very difficult to precisely quantify the impact
associated with each proposed change. Third, we draw upon various
sources for the data used to categorize hospitals in the tables. In
some cases, particularly the number of beds, there is a fair degree of
variation in the data from different sources. We have attempted to
construct these variables with the best available source overall. For
individual hospitals, however, some miscategorizations are possible.
The simulations estimate total payments under the operating
prospective payment system given various combinations of payment
parameters. Any short-term, acute care hospitals not paid under the
general prospective payment systems (Indian Health Service Hospitals,
hospitals in the New York Finger Lakes demonstration project, and
hospitals in Maryland) are excluded from the simulations. Payments
under the capital prospective payment system, or payments for costs
other than inpatient operating costs, are not estimated here. Estimated
payment impacts of proposed FY 1995 changes to the capital prospective
payment system are discussed later in this impact analysis.
The proposed changes discussed separately below are the following:
The effects of eliminating the separate rural standardized
amount by setting it equal to the other urban amount, as required by
section 1886(b)(3)(B)(i)(X) of the Act.
The effects of the annual reclassification of diagnoses
and procedures and the recalibration of the DRG relative weights
required by section 1886(d)(4)(C) of the Act.
The effects of changes in hospitals' wage index values
reflecting the FY 1991 wage data.
The effects of changing the transfer payment policy to a
graduated per diem and revising the definition of transfers to include
cases going from hospitals or units paid under the prospective payment
system to hospitals or units that are excluded from the prospective
payment system.
The effects of geographic reclassifications by the
Medicare Geographic Classification Review Board that are effective in
FY 1995.
The effects of phasing out payments for extraordinarily
lengthy cases (day outlier cases) by 25 percent (with a corresponding
increase in payments for extraordinarily costly cases (cost outliers))
and establishing a fixed-loss threshold for cost outliers, in
accordance with section 13501(c) of Public Law 103-66, as well as the
effects of increasing the marginal cost factor applicable to cost
outlier payments from 75 to 80 percent.
The total change in payments based on estimated FY 1995
total payments relative to estimated FY 1994 total payments.
To illustrate the impacts of the FY 1995 proposed changes, our FY
1995 baseline simulation model uses: the FY 1994 GROUPER (version
11.0); wage indexes based on FY 1990 wage data; the current transfer
payment policy; no effects of FY 1995 reclassifications; and current
outlier policy. To illustrate the effects of eliminating the rural
standardized amount, the rural amount in the FY 1995 baseline is
updated by the same update applied to the urban amounts (1.1 percent),
to maintain the current differential. The FY 1995 baseline also
includes the higher disproportionate share hospital (DSH) payments as
described above and the elimination of the special protection for
Medicare-dependent, small rural hospitals (MDHs). Outliers are
estimated to be 5.1 percent of total DRG payments.
Each policy change is then added incrementally to this baseline,
finally arriving at an FY 1995 model incorporating all of the proposed
changes. This analysis then compares the percent changes in payments
per case due to each change. This allows us to isolate the effects of
each change from the overall change in payments from FY 1994 to FY
1995.
Several policy changes that would occur during FY 1995 are not
modeled separately but are shown as combined changes from FY 1994 to FY
1995. These changes are:
The proposed update factor applied to the standardized
amounts (other than the differential update to the rural amount that is
modeled in Column 1).
Effective for discharges occurring on or after October 1,
1994, section 1886(d)(5)(F)(vii)(I)(d) of the Act requires an increase
in the DSH payment adjustment to urban hospitals with 100 or more beds
and for rural hospitals with 500 or more beds, that have a DSH patient
percentage greater than 20.2.
The special payment protection for MDHs is not applicable
after FY 1994. (Section 1886(d)(5)(G)(i) of the Act as amended by
section 13501(e) of Pub. L. 103-66).
Finally, when comparing our estimated FY 1994 payments to FY 1995
payments, another significant consideration is that we currently
estimate that outlier payments during FY 1994 will be 4.0 percent of
total DRG payments. When the FY 1994 final rules were published
September 1, 1993 (58 FR 46270), we estimated FY 1994 outlier payments
would be 5.1 percent of total DRG payments. The effects of the lower
than expected outlier payments during FY 1994 are reflected in the
analyses below comparing our current estimates of FY 1994 total
payments to estimated FY 1995 payments.
Finally, we also compare the changes in payments from FY 1994 to FY
1995. In this comparison, our FY 1994 baseline reflects payment
policies during the current year. The FY 1995 simulation similarly
reflects the combination of the statutory and proposed changes to go
into effect during FY 1995.
Table I demonstrates the results of our analysis. The table
categorizes hospitals by various geographic and special payment
consideration groups to illustrate the varying impacts on different
types of hospitals. The top row of the table shows the overall impact
on the 5,248 hospitals included in the analysis. This is 54 fewer
hospitals than were included in the impact analysis in the FY 1994
final rule (58 FR 46270). (Data for 80 hospitals that were included in
last year's analysis were not available for analysis this year;
however, data were available this year for 26 hospitals for which data
were not available last year.) The next four rows of Table I contain
hospitals categorized according to their geographic location (all
urbans as well as large urban and other urban or rural). There are
2,947 hospitals located in urban areas (MSAs) included in our analysis.
Among these, there are 1,616 hospitals located in large urban areas
(populations over 1 million), and 1,331 hospitals in other urban areas
(populations of 1 million or fewer). In addition, there are 2,301
hospitals in rural areas. The next two groupings are by bed size
categories, shown separately for urban and rural hospitals. The final
groupings by geographic location are by census divisions, also shown
separately for urban and rural hospitals.
The second part of Table I shows changes in payments based on
hospitals' FY 1995 payment classifications, including any
reclassifications under sections 1886(d)(10) of the Act. For example,
the rows labeled urban, large urban, other urban, and rural, show the
numbers of hospitals being paid based on these categorizations, after
consideration of geographic reclassifications, are 3,252, 1,830, 1,422,
and 1,996, respectively.
The next three groupings examine the impacts of the proposed
changes on hospitals grouped by whether or not they have residency
programs (teaching hospitals that receive an indirect medical education
(IME) adjustment), receive DSH payments, or some combination of these
two adjustments. There are 4,197 nonteaching hospitals in our analysis,
829 with fewer than 100 residents, and 222 with 100 or more residents.
In the DSH categories, hospitals are grouped according to their DSH
payment status based on how they will be paid during FY 1995. That is,
hospitals located in rural counties that have been reclassified as
urban by the MGCRB for purposes of assigning the standardized amount
are categorized here as urban, since they are considered urban in
determining the amount of their DSH adjustment. The rural DSH
hospitals, therefore, including those in the rural referral center and
sole community hospital categories, represent hospitals that were not
reclassified for purposes of the standardized amount. The next category
groups hospitals paid on the basis of the urban standardized amount in
terms of whether they receive the IME adjustment, the DSH adjustment,
both, or neither.
The next six rows examine the impacts of the proposed changes on
rural hospitals by special payment groups (sole community hospitals,
rural referral centers, and MDHs). Rural hospitals reclassified for FY
1995 for purposes of the standardized amount are not included here with
the exception of the MDH row. This row includes all hospitals that were
paid under the MDH provision during FY 1994 in order to isolate the
impact of ending this provision. Of the 415 hospitals shown in this
row, 3 are located in a county now designated as urban under the 1993
MSA definitions, and 39 others have been reclassified for either the
standardized amount, the wage index, or both.
The rural referral centers (138), sole community hospitals (578),
and rural referral center/sole community hospitals (54) shown here were
not reclassified for purposes of the standardized amount. There are 19
rural referral centers and 27 sole community hospitals that would be
reclassified for the standardized amount in FY 1995 and are therefore
not included in these columns. In addition, one hospital that is both a
rural referral center and a sole community hospital will be
reclassified for the standardized amount.
The next two groupings are based on type of ownership and the
hospital's Medicare utilization expressed as a percent of total patient
days. These data are taken from the Medicare cost report files, the
latest available being FY 1992. Data needed to calculate Medicare
utilization percentages were unavailable for 66 hospitals. For the most
part, these are either new hospitals or hospitals filing manual cost
reports that are not yet entered into the data base.
The next series of groupings concern the geographic
reclassification status of hospitals. The first three rows display
hospitals that were reclassified by the MGCRB for either FY 1994 or FY
1995, or for both years. One effect of eliminating the separate rural
standardized amount in FY 1995 is to reduce the number of standardized
amount reclassifications. The next rows illustrate the overall number
of reclassifications, as well as the numbers of reclassified hospitals
grouped by urban and rural location. The final row in Table I contains
hospitals located in rural counties but deemed to be urban under
section 1886(d)(8)(B) of the Act.

Table I.--Impact Analysis of Proposed Changes for FY 1995 Operating Prospective Payment System
[Percent Changes in Payments per case]

Eliminate
No. of rural DRG New wage Transfer MGCRB OBRA 93 All FY95
hosps.\1\ standard recalibration\3\ data\4\ policy reclassification\6\ outlier changes\8\
amount\2\ changes\5\ changes\7\
(1) (2) (3) (4) (5) (6) (7)

--------------------------------------------------------------------------------------------------------------------------------------------------------
By Geographic Location

All hospitals............................... 5,248 0.7 0.0 0.0 0.0 0.0 0.0 3.0
Urban hospitals............................. 2,947 0.4 0.1 -0.1 -0.1 -0.4 0.0 2.9
Large urban............................. 1,616 0.4 0.0 0.0 -0.2 -0.6 -0.1 2.9
Other urban............................. 1,331 0.3 0.1 -0.1 -0.1 -0.1 0.1 3.0
Rural areas................................. 2,301 2.9 -0.1 0.0 0.5 2.3 -0.1 3.8

Bed Size (urban)

0-99 beds................................... 733 0.4 -0.1 -0.4 0.3 -0.4 -0.1 2.4
100-199 beds................................ 922 0.4 0.0 -0.3 0.0 -0.4 -0.1 2.6
200-299 beds................................ 610 0.4 0.0 -0.2 -0.1 -0.3 0.0 2.7
300-499 beds................................ 493 0.4 0.1 0.0 -0.2 -0.5 0.1 3.0
500 or more beds............................ 189 0.4 0.1 0.2 -0.2 -0.3 0.0 3.4

Bed Size (rural)

0-49 beds................................... 1,187 4.6 -0.2 -0.1 0.9 -0.1 0.0 4.5
50-99 beds.................................. 687 4.1 -0.1 -0.1 0.6 0.7 -0.1 4.1
100-149 beds................................ 227 3.0 -0.1 -0.1 0.4 3.2 -0.1 3.5
150-199 beds................................ 106 1.8 0.0 0.0 0.2 3.6 -0.1 3.6
200 or more beds............................ 94 1.0 0.1 0.1 0.1 4.7 -0.1 3.3

Urban by Region

New England................................. 170 0.4 0.1 1.0 -0.2 -0.3 -0.2 3.3
Middle Atlantic............................. 440 0.4 0.1 0.3 -0.2 -0.5 -0.5 2.8
South Atlantic.............................. 436 0.3 0.1 0.1 0.0 -0.4 0.0 3.3
East North Central.......................... 491 0.3 0.0 0.2 -0.1 -0.2 0.1 3.2
East South Central.......................... 167 0.3 0.1 -0.1 0.0 -0.5 0.3 3.2
West North Central.......................... 198 0.3 0.1 -0.2 -0.2 -0.5 0.1 2.6
West South Central.......................... 383 0.3 0.0 -1.1 -0.3 -0.5 0.4 2.3
Mountain.................................... 120 0.3 0.1 -1.1 -0.3 -0.4 0.2 1.5
Pacific..................................... 493 0.4 0.0 -0.3 0.0 -0.2 0.1 3.0
Puerto Rico................................. 49 0.8 0.1 -7.7 0.1 -0.5 0.3 -4.7

Rural by Region

New England................................. 53 1.8 0.1 0.0 0.4 1.6 -0.2 2.9
Middle Atlantic............................. 85 1.6 0.1 0.2 0.2 0.8 -0.3 1.9
South Atlantic.............................. 298 3.2 -0.1 0.1 0.5 3.2 -0.1 5.4
East North Central.......................... 310 3.1 0.0 0.3 0.5 1.8 -0.1 3.1
East South Central.......................... 286 3.5 -0.1 -0.4 0.5 3.4 -0.1 5.3
West North Central.......................... 536 3.2 -0.1 0.0 0.6 2.5 0.0 3.6
West South Central.......................... 359 3.5 -0.1 -0.3 0.5 2.4 0.0 2.4
Mountain.................................... 224 1.7 -0.1 -0.2 0.4 0.6 0.0 3.3
Pacific..................................... 145 2.1 -0.1 0.1 0.4 1.8 0.0 3.6
Puerto Rico................................. 5 18.0 -0.2 -10.7 0.1 -0.6 0.1 -0.8

By Payment Categories

Urban hospitals............................. 3,252 0.4 0.1 0.0 -0.1 -0.2 0.0 2.9
Large urban............................. 1,830 0.5 0.0 0.0 -0.1 -0.2 -0.1 3.0
Other urban............................. 1,422 0.4 0.1 -0.2 -0.1 -0.2 0.1 2.8
Rural hospitals............................. 1,996 2.8 -0.1 -0.1 0.5 1.6 -0.1 3.7

Teaching Status

Non-teaching................................ 4,197 1.0 0.0 -0.2 0.1 0.3 0.0 3.1
Less than 100 res........................... 829 0.4 0.1 0.0 -0.2 -0.3 0.0 2.8
100+ residents.............................. 222 0.4 0.1 0.3 -0.2 -0.3 -0.1 3.3

Disproportionate Share Hospitals (DSH)

Non-DSH..................................... 3,341 0.8 0.0 -0.1 0.0 0.0 0.1 3.0
Urban DSH:
100 beds or more........................ 1,355 0.4 0.0 0.0 -0.1 -0.1 -0.1 3.0
Fewer than 100 beds..................... 143 1.6 -0.3 -0.4 0.4 0.3 0.0 3.1
Rural DSH:
Sole Community (SCH).................... 133 3.3 -0.2 -0.4 0.8 -0.2 -0.1 3.8
Referral Centers (RRC).................. 47 0.1 0.0 0.0 0.2 3.4 -0.1 3.0

Other Rural DSH Hosp:
100 beds or more........................ 66 5.9 -0.1 -0.3 0.6 0.6 -0.1 4.4
Fewer than 100 beds..................... 163 6.0 -0.2 -0.3 0.8 0.2 0.0 6.4

Urban teaching and DSH:
Both teaching and DSH....................... 645 0.4 0.1 0.1 -0.2 -0.4 -0.1 3.0
Teaching and no DSH......................... 361 0.4 0.1 0.1 -0.2 -0.4 0.2 3.1
No teaching and DSH......................... 853 0.5 0.0 -0.3 0.0 0.3 0.0 3.0
No teaching and no DSH...................... 1,393 0.5 0.0 -0.3 0.0 -0.2 0.0 2.7

Rural Hospital Types:
Nonspecial status hospitals................. 845 5.7 -0.1 -0.2 0.6 0.7 -0.1 5.3
RRC......................................... 138 0.2 0.1 0.1 0.1 4.3 -0.1 2.7
SCH......................................... 578 1.8 -0.2 -0.3 0.7 0.1 0.0 3.9
Medicare-dependent hospital................. 415 5.7 -0.1 -0.1 0.8 0.1 -0.1 0.9
SCH and RRC................................. 54 0.0 -0.1 0.0 0.2 1.9 -0.1 2.9

Type of Ownership:
Voluntary................................... 3,282 0.6 0.1 0.0 -0.1 -0.1 0.0 3.0
Proprietary................................. 753 0.7 -0.1 -0.6 0.0 0.2 0.1 3.0
Government.................................. 1,213 1.2 0.0 0.0 0.1 0.1 -0.1 3.3

Medicare Utilization as a Percent of
Inpatient Days

0-25........................................ 305 0.5 0.0 -0.3 0.0 -0.3 0.0 2.9
25-50....................................... 1,471 0.5 0.1 0.0 -0.1 -0.2 0.0 3.1
50-65....................................... 2,244 0.8 0.0 -0.1 0.0 0.2 0.0 3.1
Over 65..................................... 1,162 1.1 0.0 -0.1 0.1 -0.2 -0.1 2.7
Unknown..................................... 66 0.6 -0.1 0.3 -0.6 -0.2 -1.4 2.2

Hospitals Reclassified by the Medicare
Geographic Review Board

Reclassification Status During FY 94 and FY
95:
Reclassified during both FY 94 and FY 95.... 484 1.2 0.0 -0.1 0.1 4.3 0.1 2.9
Urban................................... 189 0.4 0.0 -0.3 0.0 2.3 0.1 3.0
Rural................................... 295 3.0 0.0 0.1 0.3 8.5 -0.1 2.7
Reclassified during FY 95 only.............. 215 1.2 0.1 0.1 0.2 4.1 0.1 9.3
Urban................................... 47 0.4 0.1 0.1 0.1 2.5 0.3 8.4
Rural................................... 168 2.1 0.0 0.0 0.3 6.0 -0.1 10.3
Reclassified during FY 94 only.............. 209 1.4 0.0 0.0 0.1 -0.8 -0.3 -2.1
Urban................................... 60 0.4 0.1 0.1 0.0 -1.1 -0.4 -0.9
Rural................................... 149 2.6 -0.1 -0.2 0.4 -0.5 -0.1 -3.6
FY 95 Reclassifications:
All reclassified hosp....................... 699 1.2 0.0 -0.1 0.1 4.2 0.1 4.5
Urban................................... 236 0.4 0.1 -0.2 0.0 2.3 0.2 4.2
Rural................................... 463 2.7 0.0 0.1 0.3 7.7 -0.1 5.0
All nonreclassified hospitals............... 4,522 0.6 0.0 0.0 -0.1 -0.6 0.0 2.8
Urban................................... 2,711 0.4 0.1 0.0 -0.1 -0.6 0.0 2.8
Rural................................... 1,811 3.1 -0.1 -0.1 0.5 -0.5 -0.1 3.2
Other reclassified hospitals (Section
1886(d)(8)(B))............................. 27 0.5 0.0 -0.6 0.3 0.4 -0.2 2.1
\1\Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the national
total. Hospital-specific data and discharges data are from FY 1993, and hospital cost report data are from reporting periods beginning in FY 1992.
\2\This column illustrates the changes in FY 1995 payments due to the elimination of the separate rural standardized amount by adjusting the rural
amount to equal the other urban amount, in accordance with section 1886(d)(3)(A) of the Act.
\3\This column displays the payment impacts of the recalibration of the DRG weights and classification changes, based on FY 1993 MedPAR data, in
accordance with section 1886(d)(4)(C) of the Act.
\4\This column shows the payment effects of updating the data used to calculate the wage index with data from the FY 1991 cost reports.
\5\This column displays the effects of the changes to transfer policy. It compares payments under our current policy with those resulting by changing
the per diem methodology and revising the definition of transfers to include cases going to excluded hospitals or units.
\6\Shown here are the combined effects of geographic reclassification by the Medicare Geographic Classification Review Board (MGCRB). The effects shown
here are exclusive of payment changes from FY 1994 to FY 1995, and therefore do not factor into the percent changes shown in Column 7.
\7\This column displays the impacts of the outlier change in accordance with section 13501(c) of Pub. L. 103-66.
\8\This column shows changes in payments from FY 1994 to FY 1995. It incorporates all of the changes displayed in columns 1 through 6. It also displays
the updates to the FY 1995 standardized amounts, change in hospitals' reclassification status in FY 1995 compared to FY 1994, the effects of the
higher DSH payments for urban hospitals with 100 or more beds and rural hospitals with 500 or more beds, the elimination of the Medicare-dependent,
small rural hospital provision, and the difference in projected outlier payments from FY 1994 to FY 1995. The sum of the first six columns plus these
effects may be slightly different from the percentage changes shown here, due to rounding errors and interactive effects.

B. The Elimination of the Separate Rural Standardized Amount (Column 1)

Section 1886(d)(3)(A) of the Act provides that, beginning in FY
1995, the rural standardized amount is equal to the other urban
standardized amount. Section 1886(b)(3)(B)(i)(X) of the Act, as amended
by section 13501(a)(1) of Public Law 103-66, provides that the update
to the urban standardized amounts for FY 1995 will equal the market
basket rate of increase minus 2.5 percentage points, and the update to
the rural standardized amount is the amount necessary to set the rural
amount equal to the other urban amount. We project the market basket
increase to be 3.6 percent, so the proposed update to the large and
other urban standardized amounts is 1.1 percent and the proposed update
to the rural standardized amount is 8.4 percent (the market basket rate
of increase of 3.6 percent plus 4.8 percent).
The process undertaken to set the rural amount equal to the other
urban amount, as well as the overall methodology used to determine the
FY 1995 proposed standardized payment amounts, is described in the
Addendum to this proposed rule. As described there, the net increase in
rural hospitals' FY 1995 standardized payment amount compared to FY
1994 is less than 8.4 percent. The difference between the proposed FY
1995 payment rate for rural hospitals and their FY 1994 amount is 4.6
percent. This smaller net increase can be attributed to changing from
separate urban and rural outlier offsets (applicable to the previously
separate rates) to a single offset after the rural rate is eliminated.
To illustrate, for FY 1994, the difference between the other urban
and rural final standardized amounts was 3.0 percent. These amounts
reflected the differential outlier adjustment factors applied to the
urban and rural standardized amounts of 0.945960 and 0.977157,
respectively (See the September 1, 1993 final rule (58 FR 46349.)
Similarly, section 1886(d)(8)(D) of the Act necessitated different
urban and rural budget neutrality factors for geographic
reclassification. Removing these differential adjustments from the FY
1994 standardized amounts, and updating the urban amounts by 1.1
percent, increases the difference between the other urban and rural
amounts from 3.0 percent to 8.4 percent.
Section 1886(d)(3)(B) requires the Secretary to adjust both the
large urban and other national standardized amounts by the same outlier
adjustment factor beginning in FY 1995. Estimated outlier payments
equal 5.1 percent of estimated total DRG payments, so a 5.1 percent
offset is applied to the standardized amounts. For FY 1994, the rural
outlier offset was 2.3 percent, 2.8 percent smaller than the 5.1
percent offset for FY 1995. For FY 1995, the increase in the size of
the outlier offset for rural hospitals reduces the effect of the higher
standardized amount.
The FY 1995 baseline employs differential outlier offsets to the
separate urban and rural amounts. The net difference between the rural
and other urban amounts after applying these differential offsets to
the FY 1995 baseline rates (without any of the other budget neutrality
factors) is 4.3 percent. Because the urban amount increases by 0.3
percent when the 5.1 national outlier offset is applied rather than the
larger urban outlier offset, the net increase in the rural standardized
amount to bring it up to the other urban amount is 4.6 percent.
Finally, in addition to equating the other urban and rural amounts
through a higher rural update and a single outlier offset, a national
labor share (the portion of the standardized amounts adjusted by the
wage index) is necessary to maintain the elimination of the separate
amounts. For FY 1994, the rural labor share represents 75.6 percent of
the rural standardized amount, while the urban labor share comprises
about 70.8 percent of the large and other urban amounts. For FY 1995,
we are proposing to determine the labor portion of the standardized
amounts based on a national average labor share of 71.4 percent.
Column 1 displays the payment changes resulting from eliminating
the rural amount, modeled by comparing payments simulated using our FY
1995 baseline model described earlier to simulated payments after
eliminating the separate rural amount. The impacts of the higher update
to the standardized amount for rural hospitals are evident. Overall,
hospitals located in rural counties experience a 2.9 percent increase
in payments from this change, compared to a 0.4 percent rise in
payments to urban hospitals. Nationally, payments per case are
estimated to rise 0.7 percent as a result of this change.
The 2.9 percent increase for hospitals in rural areas is below the
4.6 percent increase in the standardized amount for several reasons.
First, this row includes all hospitals that are located in rural areas,
but some rural hospitals receive a higher urban payment rate. This is
reflected in the ``Rural Hospital Types'' rows. Rural referral centers
(RRCs) have only a 0.2 percent payment effect resulting from this
change. These hospitals currently receive the other urban amount and,
therefore, do not gain directly from the elimination of the rural
amount. They do apparently benefit slightly from the smaller outlier
offset applied to the urban standardized amounts. Another rural
hospital group experiencing only a relatively small impact from this
change is sole community hospitals (SCHs). Their payments rise 1.8
percent, well below that for most other rural hospital groups. Because
these hospitals are paid based on the greater of their applicable
Federal rate or their hospital-specific rate, increasing the Federal
rate has an impact upon only those SCHs that would be paid based on
that rate. Of the 578 SCHs in this row, 435 are paid on the basis of
their hospital-specific rate in our FY 1995 baseline model. When the
rural amount is eliminated by making it equal to the other urban
amount, only 66 SCHs switch from their hospital-specific rate to the
Federal rate. This explains the below average payment change compared
to other rural hospitals.
Conversely, nonspecial status rural hospitals, and rural hospitals
receiving DSH all experience above average payment gains (between 5.7
percent and 6.0 percent). This effect appears to be primarily
attributable to the decrease in the labor share of the standardized
amount. In fact, substituting the current higher rural labor share on
both models in this comparison reduces the payment gains for these
hospital groups to 4.6 percent (except for MDHs, which fall to 4.4
percent).
The row demonstrating the largest benefit from this change is rural
Puerto Rico, with an 18.0 percent increase. This stems from the
calculation of separate payment rates for Puerto Rico's hospitals,
which are equal to 75 percent of the Puerto Rico rate plus 25 percent
of the discharge-weighted average of the urban and rural national
prospective payment system rates. For FY 1994, for example, the Puerto
Rico rate for other urban areas was 26.6 percent greater than the
Puerto Rico rural rate. The increase in the national Puerto Rico amount
is much smaller, however, so that the payment effect is less than the
full increase in the rural Puerto Rico rate. Urban hospitals in Puerto
Rico also receive an added increase in payments above those of other
urban hospitals, due to the higher national portion. It is far below
the rural Puerto Rico increase, however.
For urban hospitals nationally, the change in payments is slightly
above the percentage change in the outlier offsets when moving to a
single 5.1 percent offset. The FY 1994 urban outlier adjustment factor
was 0.945960, which results in a 5.404 percent offset. To lower the
offset to 5.1 percent, an adjustment factor of 0.949 is applied to the
standardized amounts. The difference between these two factors is 0.3
percent. The increase in the labor share also has a generally favorable
impact on urban hospitals due to their above average wage index values.
Eliminating the separate rural amount also has the effect of
redistributing outlier payments, primarily due to the higher
standardized amount paid to rural hospitals. The average rural outlier
payment per case falls by 3.0 percent after eliminating the separate
rural amount, and the average urban outlier payment per case rises by
0.4 percent. This occurs because fewer rural cases qualify for outlier
payments due to the higher DRG payments per case; thus, the outlier
thresholds must be revised to maintain the outlier pool at 5.1 percent
of total DRG and outlier payments. This leads to additional outlier
payments going to outlier cases in urban hospitals.
The fact that many of these cases are also in teaching hospitals
and DSH hospitals leads to what we consider an anomalous impact on
total payments. Pursuant to section 1886(d)(5)(A)(iv) of the Act, we
set outlier payment policies so that estimated outlier payments are 5.1
percent of estimated total DRG payments. Under the statute, estimated
outlier payments do not encompass IME and DSH payments made for outlier
cases. The amounts of IME and DSH payments are affected by the level of
outlier payments so a redistribution of outlier payments to teaching
and DSH hospitals has the effect of generating a net increase in total
payments.

C. The Impact of the Proposed Changes to the DRG Weights (Column 2)

In column 2 of Table I, we present the combined effects of the
revised DRG classification system, and the subsequent recalibration of
the DRG weights incorporating these revised DRGs, as discussed in
section II of the preamble to this proposed rule. Section
1886(d)(4)(C)(i) of the Act requires us each year to make appropriate
classification changes and to recalibrate the DRG weights in order to
reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources. The
impact of reclassification and recalibration on aggregate payments is
required by section 1886(d)(4)(C)(iii) of the Act to be budget neutral.
The first row of Table I shows that the overall effect of these
proposed changes is budget neutral. That is, the percentage change when
adding the proposed FY 1995 GROUPER (version 12.0) to the FY 1995
baseline is 0.0. Since the changes illustrated in the columns of Table
I are cumulative, this column reflects the elimination of the separate
rural amount in both simulations. Only the version of the GROUPER is
different.
Consistent with the minor changes we are proposing for the FY 1995
GROUPER, the redistributional impacts across hospital groups are very
small (an increase of 0.1 for urban hospitals and a decrease of 0.1 for
rural hospitals). Among other hospital categories, the net effects are
slightly negative changes for small hospitals and slightly positive
changes for larger hospitals. The largest single effect on any of the
hospital categories examined is a 0.3 percent decrease in payments for
rural DSH hospitals with fewer than 100 beds.

D. The Impact of Updating the Wage Data (Column 3)

Section 1886(d)(3)(E) of the Act requires that, beginning October
1, 1993, we annually update the wage data used to calculate the wage
index. In accordance with this requirement, the wage index for FY 1995
is based on data submitted for hospital cost reporting periods
beginning on or after October 1, 1990 and before October 1, 1991.
As with the previous two columns, the impact of the new data on
hospital payments is isolated by holding the other payment parameters
constant in the two simulations. That is, the table shows the
percentage changes in payments when going from our FY 1995 baseline--
using the FY 1994 wage index before geographic reclassifications based
on 1990 wage survey data, eliminating the separate rural rate and
incorporating the FY 1995 GROUPER--to a model substituting the FY 1995
pre-reclassification wage index based on 1991 data as described above.
Section 1886(d)(3)(E) of the Act also requires that any updates or
adjustments to the wage index be made in a manner that ensures that
aggregate payments to hospitals are not affected by the change in the
wage index. To comply with the requirements that the DRG and wage index
changes must be implemented in a budget neutral manner, we compute a
budget neutrality adjustment factor to apply to the standardized
amounts. For the FY 1995 proposed amounts, this adjustment factor is
0.997647. This factor is applied to the standardized amounts in this
column to ensure that the overall effect of the wage index changes are
budget neutral.
The results indicate that the new wage data do not have a
significant overall impact on urban and rural hospitals. As discussed
in section III of the preamble to this proposed rule, 86.4 percent of
all prospective payment system hospitals would experience a change in
their wage index of less than 5 percent. This column demonstrates that
hospitals with significant changes in their wage indexes are not
concentrated within any particular hospital group. In contrast, the
impact analysis of the final FY 1994 operating prospective payment
system changes displayed numerous hospital groups with payment changes
in excess of 2.0 percent due to the new wage survey data (58 FR 46459).
For FY 1995, some of the largest changes are evident among urban
hospitals grouped by census division. New England urban hospitals'
payments rise 1.0 percent, while payments per case for urban hospitals
in the West North Central and Mountain census divisions fall by 1.1
percent. The most dramatic shifts occur in Puerto Rico, where payments
decline by 10.7 percent in rural hospitals and 7.7 percent in urban
hospitals. These effects are attributable to data corrections. We note
that the FY 1994 payment effect of the new wage data was an 11.6
percent increase for rural Puerto Rico hospitals.
This decline in the wage index values for Puerto Rico hospitals
also appears to be the main cause for the 0.6 percent drop in payments
among proprietary hospitals. The 20 hospitals with the greatest drop in
their wage index within this category are all located in Puerto Rico.
Also experiencing a 0.6 percent decline in payments per case are
hospitals in rural counties deemed to be urban under section
1886(d)(8)(B) of the Act. This impact appears to be primarily related
to 2 hospitals experiencing nearly 20 percent declines in their wage
index values.

E. Transfer Changes (Column 4)

In column 4 of Table I, the impacts of the changes we are proposing
in transfer payment policy are shown. These changes would revise our
methodology for payment for transfer cases under the prospective
payment system to more appropriately compensate transferring hospitals
for the higher costs they incur, on average, on the first day of a
hospital stay prior to transfer. Our current transfer policy pays a
flat per diem amount for each day prior to transfer up to the full DRG
amount. The per diem is calculated by dividing the amount that would be
paid for a patient assigned to the same DRG who is discharged from the
hospital, and dividing that amount by the geometric mean length of stay
for that DRG. Our proposal is to replace this flat per diem methodology
with a graduated methodology that would pay twice the per diem amount
for the first day, and the per diem amount for each day beyond the
first.
In addition, we are proposing to expand our definition of transfer
cases to include patients transferred from a hospital or unit paid
under the prospective payment system to a hospital or unit excluded
from the prospective payment system. Currently, these case are
considered to be discharges. Under this proposed change, these cases
would be paid in accordance with our transfer policy, including the
proposed change to the graduated payment methodology described above.
The payment impacts shown in column 4 illustrate the combined
effects of these two changes, relative to the baseline simulation based
on current policy (a flat per diem transfer payment methodology and
cases transferred to excluded hospitals and units are paid as
discharges). In order to simulate the effects of the proposed changes,
it was necessary to identify current transfer cases, as well as current
discharges going to an excluded hospital or unit. Current transfers are
identifiable by the discharge destination code on the patient bill (see
``Transfers of Medicare Hospital Patients Under the Prospective Payment
System'', RAND, PM-191-HCFA, January 1994, for a thorough discussion of
identifying transfer cases on the MedPAR file).
Next, to determine whether payment would be made under the per diem
methodology, we compared the actual length of stay prior to transfer to
the geometric mean length of stay for the DRG to which the case is
assigned. A full discharge or a transfer case that received the full
discharge payment would be counted as 1.0, while, under our current
transfer policy, a transfer case that stayed 2 days in a DRG with a
geometric mean length of stay of 5 days would count as 0.4 of a
discharge. To determine the transfer adjustment factor, we then added
together these adjusted discharges and divided by total discharges,
including transfers. In this manner, transfer cases are counted only to
the extent that the transferring hospital received payment for them. To
simulate our proposed change to the per diem payment methodology, we
added 1 day to the actual length of stay for transfer cases, thereby
replicating paying double the per diem for the first stay and the flat
per diem, up to the full DRG amount, for subsequent days.
Finally, we calculated transfer-adjusted case-mix indexes for each
hospital. The adjusted case-mix indexes are calculated by summing the
transfer-adjusted DRG weights and dividing by the transfer-adjusted
number of cases. The transfer-adjusted DRG weights are calculated by
multiplying the DRG weight by the lesser of 1 or the fraction of the
length of stay for the case divided by the geometric mean length of
stay for the DRG. By adjusting the DRG weights, nontransfer cases and
transfer cases that have a length of stay at least as long as the
geometric mean length of stay will be represented by the full DRG
weight, while transfer cases with lengths of stay below the geometric
mean length of stay for the DRG will be represented by a lower number,
reflective of their payment.
The FY 1995 baseline model reflected in columns 1 through 3
incorporates transfer-adjusted discharges and case-mix indexes based on
current law. That is, cases transferred prior to reaching the geometric
mean length of stay received payments based on the flat per diem and
cases discharged to excluded hospitals and units received the full DRG
amount. In column 4, our model substitutes transfer-adjusted discharges
and case-mix indexes that reflect our proposed policy changes.
The first row in column 4 shows that the net effect of our proposed
changes is budget neutral compared to total payments under current
transfer policy. RAND estimated the number of transfers under the
prospective payment system during FY 1991 to be about 230,000. Our
analysis indicates that, applying current policy, the number of cases
during FY 1993 counted as discharges to excluded hospitals or units is
approximately 190,000. Our preliminary analysis indicates that these
latter cases are more likely to be surgical cases, and thus are more
expensive on average than cases that are currently defined as
transfers. Thus, redefining discharges to excluded hospitals as
transfers and paying them accordingly generates savings sufficient to
offset the higher per diem payments for the first day of all transfer
cases.
The distributional effects of theses changes are to increase
payments to rural hospitals by 0.5 percent and decrease urban
hospitals' payments by 0.1 percent (that is, -0.2 percent for large
urban and -0.1 percent for other urban). Rural hospitals clearly
benefit from changing the per diem payment methodology. RAND found that
rural hospitals as a whole transfer 4.5 percent of their patients,
compared to 1.7 percent in large urban hospitals and 1.6 percent in
other urban hospitals. Therefore, one would expect rural hospitals to
benefit disproportionately from the change to the per diem payment
methodology.
The impact on small hospitals is also positive, consistent with
RAND's finding that hospitals with fewer than 50 beds transfer 6.1
percent of their cases, and hospitals with 50 to 99 beds transfer 4.9
percent of cases. These groups also benefit relative to larger
hospitals. Rural hospitals with fewer than 50 beds receive a 0.9
percent increase in per case payments, and rural hospitals with 50 to
99 beds receive a 0.6 percent increase. Urban hospitals with fewer than
100 beds experience a 0.3 percent rise in payments. Among rural
hospital groups, SCHs and current MDHs realize increases of 0.7 and 0.8
percent, respectively.
Due to the much larger proportion of overall payments that go to
urban hospitals, a smaller percentage change in their payments is
enough to offset the higher payments going to hospitals that send out a
relatively higher percentage of transfers. The reduction in payments
for urban hospitals comes from the proposed change in the definition of
transfers to include cases going to excluded hospitals and units, as
well as other hospital settings such as Veterans Administration
hospitals and nonparticipating hospitals. The hospital group with the
largest single negative impact is the ``Unknown'' Medicare utilization
category, a 0.6 percent decline. This is primarily due to two or three
hospitals with 5.0 to 8.0 percent decreases in their per case payment
level. The next largest negative impacts are among urban hospitals in
the West North Central and West South Central census divisions, each
with a -0.3 percent change.

F. Impacts of MGCRB Reclassifications (Column 5)

By March 30 of each year, the MGCRB makes reclassification
determinations that will be effective for the next fiscal year, which
begins on October 1. The MGCRB may reclassify a hospital to an adjacent
urban area or to a rural area with which it has a close proximity for
the purposes of using the other area's standardized amount, wage index
value, or both. (An RRC or an SCH may be redesignated to an area that
is not an adjacent county.)
To this point, all of the simulation models have assumed hospitals
are paid on the basis of their geographic location (with the exception
of ongoing policies that provide that certain hospitals receive
payments on bases other than where they are geographically located,
such as RRCs and hospitals in rural counties that are deemed urban
under section 1886(d)(8)(B) of the Act). The changes in column 5
reflect the per case payment impact of moving from this baseline to a
simulation incorporating the MGCRB decisions for FY 1995. As noted
above, these decisions affect hospitals' standardized amount and wage
index area assignments. In addition, hospitals reclassified for the
standardized amount also qualify to be treated as urban for purposes of
the DSH adjustment.
The proposed FY 1995 standardized payment amounts and wage index
values incorporate all of the MGCRB's reclassification decisions that
will be effective for FY 1995. The wage index values also reflect any
decisions made by the HCFA Administrator through the appeals and review
process for MGCRB decisions as of March 30, 1994. Additional changes
that result from the Administrator's review of MGCRB decisions will be
incorporated into the wage index values and standardized payment
amounts published in the final rule implementing changes to the
prospective payment system for FY 1995.
The overall effect of geographic reclassification is required to be
budget neutral by section 1886(d)(8)(D) of the Act. Prior to FY 1995,
the Secretary was required to adjust the urban standardized amounts so
as to ensure that total aggregate payments under the prospective
payment system after geographic reclassification were equal to the
aggregate payments that would have been made absent these provisions.
The rural standardized amounts were also adjusted to ensure that
aggregate payments to rural hospitals were not affected by
reclassifications. Due to the elimination of the separate rural amount
beginning October 1, 1994, the Secretary is required to provide a
single budget neutrality adjustment to the standardized amounts for the
effects of reclassification. We applied an adjustment of 0.993814 to
ensure that the effects of reclassification are budget neutral.
Rural hospitals benefit disproportionately from geographic
reclassification. Their payments rise 2.3 percent, while payments to
urban hospitals decline 0.4 percent. Rural referral centers experience
a 4.3 percent increase overall as a result of reclassification. Of the
138 hospitals in this category, 52 are reclassified for the wage index.
This positive impact on RRCs also appears in the category of rural
hospitals with 200 or more beds, which have a 4.7 increase in payments.
Large urban hospitals lose 0.6 percent because, as a group, they
have the smallest percentage of hospitals that are reclassified, fewer
than 6 percent. There are enough hospitals in other urban areas that
are reclassified to limit the decline in payments to this groups to 0.1
percent. Consequently, their payments are reduced by the budget
neutrality factor. Among urban hospital groups generally, payments fall
between 0.3 and 0.5 percent.
Among hospitals grouped by reclassification status during FY 1994
and FY 1995, the changes are predictable. Hospitals reclassified for FY
1994 but not for FY 1995 experience lower payments when
reclassification is taken into account compared to the previous column.
Because the rural payment rate now equals the other urban amount, the
loss of reclassification is not as detrimental in rural areas. Payments
to formerly reclassified rural hospitals fall by 0.5 percent, compared
to a decline of 1.1 percent for urban hospitals reclassified in FY 1994
but not in FY 1995. Significant positive impacts are evident for
hospitals reclassified for FY 1995. Rural hospitals reclassified for FY
1995 that were not reclassified for FY 1994 experience a 6.0 percent
payment increase, and rural hospitals reclassified during both years
experience an 8.5 percent increase.
Table II compares reclassified hospital payments for FY 1995 with
payment levels that assume reclassified hospitals are paid on the basis
of their geographic location rather than reclassified location. The
difference between Table II and Column 5 in Table I is that the
simulations in Table II incorporate all of the policy changes we are
proposing for FY 1995, as well as the statutory changes, before and
after reclassification. Specifically, Column 5 in Table I does not
include the outlier change enacted by section 13501(c) of Public Law
103-66. This change is reflected in the simulations in Table II.

Table II.--Effects on Payments per Case of Geographic Reclassification of Hospitals Under Current
Reclassification Policies
----------------------------------------------------------------------------------------------------------------
(c)Percent
change in
Number of (a)Payment per case (b)Payment per payment per case
hospitals without case after due to
reclassification\1\ reclassification reclassification
only\2\
----------------------------------------------------------------------------------------------------------------
FY 95 reclassifications................... 699 5,560 5,793 4.2
All reclassified hospitals:
Standardized amount only.............. 298 5,034 5,118 1.7
Wage index only....................... 203 5,263 5,670 7.7
Both.................................. 198 6,264 6,489 3.6
All urban reclassified hospitals.......... 236 6,691 6,842 2.3
Standardized amount only.............. 61 6,253 6,285 0.5
Wage index only....................... 24 8,180 8,646 5.7
Both.................................. 151 6,613 6,760 2.2
All reclassified rural hospitals.......... 463 4,263 4,588 7.6
Standardized amount only.............. 237 3,987 4,115 3.2
Wage index only....................... 179 4,496 4,888 8.7
Both.................................. 47 4,161 4,851 16.6
All nonreclassified hospitals............. 4,522 6,350 6,312 -0.6
Urban non-reclassified hospitals...... 2,711 6,771 6,729 -0.6
Rural non-reclassified hospitals...... 1,811 3,958 3,940 -0.5
----------------------------------------------------------------------------------------------------------------
\1\This column shows payments without regard to any previous MGCRB reclassification decision. All other FY 1995
policy changes are included.
\2\This column only shows the percentage change in payments resulting from decisions of the MGCRB for FY 1995.
All other FY 1995 policy changes are included in both simulation models.

Table II shows the changes in payments per case for all FY 1995
reclassified and nonreclassified hospitals in urban and rural locations
for each of the three reclassification categories (standardized amount
only, wage index only, or both). It illustrates that the large impact
for reclassified rural hospitals is due to reclassifications for both
the standardized amount and the wage index. These hospitals receive a
16.6 percent increase. In addition, rural hospitals reclassified for
the wage index only receive an 8.7 percent payment increase. The
overall impact on reclassified hospitals would be to increase their
payments per case by an average of 4.2 percent for FY 1995.
The reclassification of hospitals primarily affects payment to
nonreclassified hospitals through changes in the wage index and the
geographic reclassification budget neutrality adjustment required by
section 1886(d)(8)(D) of the Act. Among hospitals that were not
reclassified, the overall impact of hospital reclassifications would be
an average decrease in payments per case of about 0.6 percent,
approximately the geographic reclassification budget neutrality factor.
Rural nonreclassified hospitals decrease slightly less, experiencing a
0.5 percent decrease. This occurs because the wage index values in some
rural areas increase after reclassified hospitals are excluded from the
calculation of those index values.
The number of reclassifications for the standardized amount have
not declined from FY 1994. This is surprising because, with the
elimination of the separate rural amount, rural hospitals would seem to
have less to gain from reclassifying for the standardized amount. Of
course, some of them are hospitals reclassifying for the large urban
amount, thereby receiving a payment rate even higher than they would
receive from the other national amount. Rural hospitals also may wish
to reclassify for the standardized amount even though they are only
eligible to reclassify to an other urban area in order to either meet
the lower eligibility requirements for DSH payments, or to receive
higher DSH payments. The payment impact upon hospitals reclassified for
the standardized amount only, however, is significantly lower than it
is for hospitals reclassifying for either the wage index alone, or for
both the wage index and the standardized amount.
The foregoing analysis was based on MGCRB and HCFA Administrator
decisions made by March 30 of this year. As previously noted, there
will be changes to some MGCRB decisions through the appeals and review
process. The outcome of these cases may affect the final results of our
analysis, which we will present in the final rule.

G. Outlier Changes (Column 6)

Medicare provides extra payment in addition to the regular DRG
payment amount for extremely costly or extraordinarily lengthy cases
(cost outliers and day outliers, respectively). Section 13501(c) of
Public Law 103-66 requires the Secretary to phase out payment for day
outliers in 25 percent increments beginning in FY 1995. This reduction
in day outlier payments will be offset by an increase in payments for
cost outliers. The statute also requires the Secretary to establish a
fixed loss per case threshold for cost outliers instead of a threshold
based on a fixed multiple of the DRG payment amount or other fixed
dollar amount. For FY 1995, we are proposing that a case would receive
cost outlier payment if costs exceed the DRG amount plus $23,300. We
are also proposing to increase the marginal cost factor for cost
outliers from 75 to 80 percent.
The payment impacts of this change are minimal. The largest impacts
appear to be related to geographic location in terms of census
divisions. Urban hospitals in the Middle Atlantic census division have
payment reductions of 0.5 percent per case. Rural Middle Atlantic
hospitals have a 0.3 percent decline. In New England, both urban and
rural hospitals experience decreases of 0.2 percent. Since the changes
to outlier policy result in a shift in payments from cases paid as day
outliers to cases paid as cost outliers, this indicates that these
areas have higher percentages of day outliers. This is consistent with
our previous analysis indicating above average impacts related to day
outlier policy changes in the northeastern portion of the country (see
the June 4, 1992 proposed rule, 57 FR 23824).
The largest negative impact occurs among hospitals for which we
could not determine Medicare utilization rates. This group experiences
a 1.4 percent fall in payments per case. This appears to be primarily
attributable to 9 hospitals whose outlier payment percentages fall by
more than 20 percent.

H. All Changes (Column 7)

Column 7 compares our estimate of payments per case for FY 1995 to
our estimate of payments per case in FY 1994. It includes all of the
changes discussed in the previous columns. It also includes the impacts
of statutory differences from FY 1994 to FY 1995. These differences
were noted in the introduction. Specifically, they are: an increase in
DSH payments to urban hospitals with 100 or more beds and to rural
hospitals with 500 or more beds, and the elimination of the MDH
provision. This column also displays the impact of the 1.1 percent
lower than estimated outlier payments during FY 1994, also described in
the introduction and the Addendum.
Another change from FY 1994 is that there is no budget neutrality
adjustment to account for midyear wage index corrections. Last year's
adjustment factor was 0.998188. In addition, a single geographic
reclassification budget neutrality factor was applied to the proposed
FY 1995 standardized amounts of 0.993814. The FY 1994 factors applied
to the urban and rural amounts, respectively, were 0.992529 and
0.999472. Finally, the budget neutrality adjustment factor for the
updated wage index and the DRG recalibration is 0.997647, compared to
the FY 1994 factor of 0.999003. Although the net effect of these
changes are small, they have an effect on the payment differences shown
in this column.
Column 7 also reflects the 1.1 percent updates to the urban
standardized amounts. The increase in differential payments to rural
hospitals that results from eliminating the rural amount is shown in
Column 1. There may also be interactive effects among the various
factors comprising the payment system that we are not able to isolate.
For these reasons, the values in column 7 may not equal the sum of the
previous columns plus the other impacts that we are able to identify.
We also note that the percent changes associated with geographic
reclassification decisions by the MGCRB shown in Column 5 are not
included in the percent changes shown here, since Column 5 reflects the
impacts of geographic reclassifications relative to the FY 1995
baseline rather than the FY 1994 reclassifications. The impacts of FY
1994 geographic reclassifications relative to the payment impacts of FY
1995 reclassifications are shown in Column 5.
The impact on all hospitals is a 3.0 percent increase in payments
from FY 1994. The net change in total payments due to the proposed
changes for FY 1995 shown in columns 1 through 6 is 0.7 percent, due to
the elimination of the rural standardized amount. After accounting for
the 1.1 percent update to the urban standardized amounts, the move to a
single outlier offset, and a smaller overall geographic
reclassification budget neutrality factor, the difference between the
FY 1994 final standardized amounts and the FY 1995 proposed
standardized amounts is 1.5 percent. As described in the discussion of
the impacts of eliminating the rural amount, the portion of this
increase due to the smaller outlier offset is already reflected in the
changes shown in Column 1. In addition, the update to the hospital-
specific rate for SCHs is 1.4 percent in FY 1995. The average increase
in payments due to updates that is shown in Column 7 and not in Column
1 is about 1.2 percent.
Other significant changes that have not been isolated in the
previous columns include the following:
A 1.1 percent higher level of outlier payments is
estimated for FY 1995.
The increase in the DSH formula for FY 1995 results in
approximately a 0.1 percent increase in total payments.
The effect of eliminating the MDH provision is a 3.1
percent decline in payments for this group of hospitals, and a 0.2
percent decline for rural hospitals. The impact on total payments is
essentially zero.
As a geographic group, hospitals in rural areas experience the
largest payment increase, a 3.8 percent rise in payments per case over
FY 1994. The increase in estimated outlier payments over FY 1994 for
rural hospitals is 0.4 percent, below the 1.1 percent difference for
all hospitals. As we noted in the discussion of Column 5, eliminating
the rural amount would be expected to reduce the numbers and effects of
geographic reclassification. While the number of FY 1995
reclassifications does not appear to have fallen, however, the payment
effects are less than they would have been without eliminating the
rural amount. One sees this effect in Column 7 when examing the rows
containing rural hospitals reclassified during both FY 1994 and FY 1995
and rural hospitals reclassified during FY 1994 only. The 295 hospitals
in the former category experience an overall increase of 2.7 percent,
closer to that of urban hospitals, and the 149 hospitals in the latter
category experience a 3.6 percent decline in payments per case.
Hospitals in large and other urban areas experience 2.9 percent and
3.0 percent increases, respectively. Urban hospitals are affected the
most by the change in outlier payments from FY 1994 to FY 1995, a 1.2
percent increase. They also receive the bulk of the increase in DSH
payments, a 0.1 percent increase. Urban hospitals receive a net
increase due to FY 1995 geographic reclassifications relative to FY
1994 reclassifications. Again, examining the rows grouping hospitals by
their reclassification status for FY 1994 and FY 1995, urban hospitals
reclassified for both years have payment increases above those of rural
hospitals, and urban hospitals reclassified for FY 1994 but not FY 1995
do not lose as much as rural hospitals.
Among urban bed size groups, Column 7 shows changes in payments
ranging from 2.4 percent for the smallest hospitals to 3.4 percent for
the largest hospitals. The relatively smaller increases for the smaller
urban hospitals appears to be due to the negative impacts of the new
wage data, as shown in Column 3. Larger urban hospitals appear to
benefit from the large increase due to geographic reclassifications in
FY 1995 for 4 hospitals that were not reclassified in FY 1994.
The reverse occurs for rural hospitals. Among the smallest rural
hospitals (fewer than 50 beds), the effects of changes in
reclassification from FY 1994 to FY 1995 are negated by similar numbers
of hospitals gaining and losing reclassification from one year to the
next. The payment changes for larger rural hospitals are smaller
primarily because they do not benefit to the same extent from the
elimination of the rural standardized amount. They do, however, tend to
benefit from geographic reclassification in FY 1995 compared to FY
1994.

Table III.--Impact Analysis of Final Operating Cost Prospective Payment
System Changes for FY 1995
------------------------------------------------------------------------
Average FY Average FY
No. of 1994 1995 All
hospitals payment per payment per changes
case case
------------------------------------------------------------------------
(1) (2) (3) (4)

------------------------------------------------------------------------
(By Geographic
Location):
All Hospitals....... 5,248 6,051 6,235 3.0
Urban Hospitals..... 2,947 6,549 6,739 2.9
Large Urban Areas
(Populations Over 1
Million)........... 1,616 7,064 7,268 2.9
Other Urban Areas
(Populations of 1
Million or Fewer).. 1,331 5,877 6,050 3.0
Rural Areas......... 2,301 4,005 4,158 3.8
Bed Size (Urban):
0-99 Beds........... 733 4,476 4,586 2.4
100-199 Beds........ 922 5,555 5,699 2.6
200-299 Beds........ 610 6,049 6,213 2.7
300-499 Beds........ 493 6,925 7,130 3.0
500 or More Beds.... 189 8,468 8,754 3.4
Bed Size (Rural):
0-49 Beds........... 1,187 3,326 3,475 4.5
50-99 Beds.......... 687 3,717 3,870 4.1
100-149 Beds........ 227 4,159 4,304 3.5
150-199 Beds........ 106 4,212 4,364 3.6
200 or More Beds.... 94 4,893 5,054 3.3
Urban by Region:
New England......... 170 6,855 7,084 3.3
Middle Atlantic..... 440 7,278 7,484 2.8
South Atlantic...... 436 6,207 6,414 3.3
East North Central.. 491 6,301 6,504 3.2
East South Central.. 167 5,728 5,913 3.2
West North Central.. 198 6,216 6,379 2.6
West South Central.. 383 6,037 6,175 2.3
Mountain............ 120 6,399 6,496 1.5
Pacific............. 493 7,443 7,669 3.0
Puerto Rico......... 49 2,582 2,461 -4.7
Rural by Region:
New England......... 53 4,747 4,887 2.9
Middle Atlantic..... 85 4,530 4,616 1.9
South Atlantic...... 298 4,096 4,318 5.4
East North Central.. 310 4,017 4,142 3.1
East South Central.. 286 3,651 3,843 5.3
West North Central.. 536 3,749 3,886 3.6
West South Central.. 359 3,702 3,789 2.4
Moutain............. 224 4,276 4,418 3.3
Pacific............. 145 4,888 5,065 3.6
Puerto Rico......... 5 1,899 1,885 -0.8
(By Payment Categories):
Urban Hospitals..... 3,252 6,450 6,640 2.9
Large Urban Areas
(Populations Over 1
Million)........... 1,830 6,910 7,118 3.0
Other Urban Areas
(Populations of 1
Million or Fewer).. 1,422 5,723 5,884 2.8
Rural Areas......... 1,996 3,978 4,126 3.7
Teaching Status:
Non-Teaching........ 4,197 5,002 5,156 3.1
Fewer Than 100
Residents.......... 829 6,497 6,680 2.8
100 or More
Residents.......... 222 10,037 10,367 3.3
Disproportionate Share
Hospitals (DSH):
Non-DSH............. 3,341 5,355 5,517 3.0
Urban DSH:
100 Beds or More.... 1,355 7,111 7,323 3.0
Fewer Than 100 Beds. 143 4,257 4,389 3.1
Rural DSH:
Sole Community (SCH) 133 3,826 3,972 3.8
Referral Centers
(RRC).............. 47 4,915 5,063 3.0
Other Rural DSH Hosp.:
100 Beds or More.... 66 3,724 3,886 4.4
Fewer Than 100 Beds. 163 3,168 3,371 6.4
Urban Teaching and DSH:
Both Teaching and
DSH................ 645 8,106 8,347 3.0
Teaching and no DSH. 361 6,685 6,894 3.1
No Teaching and DSH. 853 5,669 5,841 3.0
No Teaching and no
DSH................ 1,393 5,192 5,331 2.7
Rural Hospital Types:
Nonspecial Status
Hospitals.......... 845 3,493 3,678 5.3
RRC................. 138 4,701 4,826 2.7
SCH................. 578 4,040 4,199 3.9
Medicare-Dependent
Hospitals (MDH).... 415 3,357 3,389 0.9
SCH and RRC......... 54 4,760 4,899 2.9
Type of Ownership:
Voluntary........... 3,282 6,177 6,362 3.0
Proprietary......... 753 5,523 5,688 3.0
Government.......... 1,213 5,769 5,961 3.3
Medicare Utilization as
a Percent of Inpatient
Days
0-25................ 305 8,114 8,351 2.9
25-50............... 1,471 7,150 7,373 3.1
50-65............... 2,244 5,479 5,648 3.1
Over 65............. 1,162 4,827 4,955 2.7
Unknown............. 66 9,367 9,572 2.2
Hospitals Reclassified
by the Medicare
Geographic Review
Board:
Reclassification Status
During FY94 and FY95:
Reclassified During
Both FY94 and FY95. 484 5,714 5,882 2.9
Urban............... 189 6,639 6,841 3.0
Rural............... 295 4,499 4,621 2.7
Reclassified During
FY 95 Only......... 215 5,076 5,547 9.3
Urban............... 47 6,315 6,846 8.4
Rural............... 168 4,093 4,516 10.3
Reclassified During
FY94 Only.......... 209 5,588 5,473 -2.1
Urban............... 60 7,173 7,112 -0.9
Rural............... 149 4,375 4,218 -3.6
FY 95 Reclassifications:
All Reclassified
Hosp............... 699 5,544 5,792 4.5
Urban............... 236 6,568 6,842 4.2
Rural............... 463 4,370 4,588 5.0
All Nonreclassified
Hospitals.......... 4,522 6,138 6,312 2.8
Urban............... 2,711 6,547 6,729 2.8
Rural............... 1,811 3,818 3,940 3.2
Other Reclassified
Hospitals (Section
1886(d)(8)(B))..... 27 4,314 4,407 2.1
------------------------------------------------------------------------

Table III presents the projected average payments per case under
the changes for FY 1995 for urban and rural hospitals and for the
different categories of hospitals shown in Table I. It compares the
projected payments for FY 1995 with the average estimated per case
payments for FY 1994. Thus, this table presents, in terms of the
average dollar amounts paid per discharge, the combined effects of the
changes presented in Table I. That is, the percentage changes shown in
the last column of Table I equal the percentage changes in average
payments from October 1, 1993 to October 1, 1994.

VII. Impact of Changes in the Capital Prospective Payment System

A. General Considerations

We now have data that were unavailable in previous impact analyses.
Specifically, we have cost report data for the first year of the
capital prospective payment system (cost reports beginning in FY 1992)
available through the December 1993 update of the Hospital Cost Report
Information System (HCRIS). We also have information on the aggregate
amount of obligated capital approved by the fiscal intermediaries.
However, our impact analysis of payment changes for capital-related
costs is still limited by the lack of hospital-specific data on several
items. These are the hospital's projected new capital costs for each
year, its projected old capital costs for each year, and the actual
amounts of obligated capital that will be put in use for patient care
and recognized as Medicare old capital costs in each year. The lack of
such information affects our impact analysis in the following ways:
Major investment in hospital capital assets (for example
in building and major fixed equipment) occurs at irregular intervals.
As a result, there can be significant variation in the growth rates of
Medicare capital-related costs per case among hospitals. We do not have
the necessary hospital-specific budget data to project the hospital
capital growth rate for an individual hospital.
Moreover, our policy of recognizing certain obligated
capital as old capital complicates the problem of projecting future
capital-related costs for individual hospitals. Under Sec. 412.302(c),
a hospital was required to notify its intermediary that it has
obligated capital, no later than the later of October 1, 1992 or 90
days after the beginning of the hospital's first cost reporting period
under the capital prospective payment system. The intermediary must
then notify the hospital of its determination whether the criteria for
recognition of obligated capital have been met by the later of the end
of the hospital's first cost reporting period subject to the capital
prospective payment system or 9 months after the receipt of the
hospital's notification. The amount that is recognized as old capital
is limited to the lesser of the actual allowable costs when the asset
is put in use for patient care or the estimated costs of the capital
expenditure at the time it was obligated. We have substantial
information regarding intermediary determinations of aggregate
projected obligated capital amounts. However, we still do not know when
these projects will actually be put into use for patient care, the
amount that will be recognized as obligated capital when the project is
put into use, or the Medicare share of the recognized costs. Therefore,
we do not know actual obligated capital commitments to be used in the
FY 1995 capital cost projections. We discuss in Appendix B the
assumptions and computations we employ to generate the amount of
obligated capital commitments for use in the FY 1995 capital cost
projections.
In Table IV of this appendix, we present the redistributive effects
that are expected to occur between ``hold-harmless'' hospitals and
``fully prospective'' hospitals in FY 1995. In addition, we have
integrated sufficient hospital-specific information into our actuarial
model to project the impact of FY 1995 capital payment policies by the
standard prospective payment system hospital groupings. We caution that
while we now have actual information on the effects of the transition
payment methodology and interim payments under the capital prospective
payment system and cost report data for most hospitals, we need to
generate randomly numbers for the change in old capital costs, new
capital costs for each year, and obligated amounts that will be put in
use for patient care services and recognized as old capital each year.
This means that we continue to be unable to predict accurately an
individual hospital's FY 1995 capital costs; however, with the more
recent data on the experience to date under the capital prospective
payment system, there is adequate information to estimate the aggregate
impact on most hospital groupings.
We present the transition payment methodology by hospital grouping
in Table V. In Table VI we present the results of the cross-sectional
analysis using the results of our actuarial model. This table presents
the aggregate impact of the FY 1995 payment policies. In Table VII, we
present a simulation of payments based on 100 percent of the Federal
rate. This simulation shows the average percentage change in the
Federal rate attributable to the updated rate and changes in payment
adjustments.

B. Projected Impact Based on the Proposed FY 1995 Actuarial Model

1. Assumptions
In this impact analysis, we model dynamically the impact of the
capital prospective payment system from FY 1994 to FY 1995 using a
capital acquisition model. The FY 1995 model, described in Appendix B
of this proposed rule, integrates actual data from individual hospitals
with randomly generated capital cost amounts. We have available capital
cost data from cost reports beginning in FY 1989, FY 1990, FY 1991 and
FY 1992 received through the December 1993 update of the Hospital Cost
Reporting Information System (HCRIS), interim payment data for
hospitals already receiving capital prospective payments through
PRICER, and data reported by the intermediaries that include the
hospital-specific rate determinations that have been made through
January 1, 1994 in the Provider-Specific file. We used this data to
determine the proposed FY 1995 capital rates. However, we do not have
individual hospital data on old capital changes, new capital formation,
and actual obligated capital costs. We have data on costs for capital
in use in FY 1992, and we age that capital by a formula described in
Appendix B. We therefore need to generate randomly only new capital
acquisitions for any year after FY 1992. All Federal rate payment
parameters are assigned to the applicable hospital.
For purposes of this impact analysis, the FY 1995 actuarial model
includes the following assumptions:
Medicare inpatient capital costs per discharge will
increase at the following rates during these periods:

Average Percentage Increase in Capital
------------------------------------------------------------------------
Costs per
Fiscal year discharge
------------------------------------------------------------------------
1994....................................................... 4.65
1995....................................................... 5.70
------------------------------------------------------------------------

The Medicare case-mix index will increase by 1.5 percent
in FY 1994 and FY 1995, and 2.0 percent in FY 1996 and later.
The Federal capital rate as well as the hospital-specific
rate will be updated by the 2-year moving average increase in Medicare
capital costs per case, net of case-mix change increase, between FY
1990 and FY 1992. The proposed FY 1995 update for inflation is 2.22
percent (see Addendum, Part III).
Consistent with the budget neutrality constraints provided
in section 1886(g)(1)(A) of the Act, estimated aggregate Medicare
payments for capital costs in FY 1995 will equal 90 percent of the
amount that would have been payable on a reasonable cost basis. The
budget neutrality adjustment factor will be applied to the Federal and
hospital-specific rates only and not to the hold-harmless state payment
for old capital.
2. Results
We have used the actuarial model to estimate the change in payment
for capital-related costs from FY 1994 to FY 1995. To show the effect
of the capital prospective payment system on low capital cost hospitals
and high capital cost hospitals, we are presenting separately in Table
IV the results of our simulation for these hospitals. We consider a
hospital to be a low capital cost hospital if, based on a comparison of
its initial hospital-specific rate and the applicable Federal rate, it
will be paid under the fully prospective payment methodology. A high
capital cost hospital is a hospital that, based on its initial
hospital-specific rate, will be paid under the hold-harmless payment
methodology. Based on our actuarial model, the breakdown of hospitals
is as follows:

Capital Transition Payment Methodology
------------------------------------------------------------------------
FY 1995 FY 1995
Percent of FY 1995 percent of percent of
Type of hospital hospitals percent of capital capital
discharges costs payments
------------------------------------------------------------------------
Low Cost Hospital... 64 59 48 50
High Cost Hospital.. 36 41 52 50
------------------------------------------------------------------------

A low capital cost hospital may request to have its hospital-
specific rate redetermined based on old capital costs in the current
year, through the later of the hospital's cost reporting period
beginning in FY 1994 or the first cost reporting period beginning after
obligated capital comes into use (within the limits established in
Sec. 412.302(e) for putting obligated capital in use for patient care).
If the redetermined hospital-specific rate is greater than the adjusted
Federal rate, these hospitals will be paid under the hold-harmless
payment methodology. Regardless of whether the hospital became a hold-
harmless payment hospital as a result of a redetermination, we have
continued to show these hospitals as low capital cost hospitals in
Table IV.
Assuming no behavioral changes in capital expenditures, Table IV
displays the percentage change in payments from FY 1994 to FY 1995
using the above described actuarial model.

Table IV.--NPRM Capital Budget Neutrality for FY 1994-1995
[Impact of Proposed Changes for FY 1995 on Capital Payments per Discharge]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted Average Hospital Hold-
Number of Discharges federal federal specific harmless Exceptions Total
hospitals payment percent payment payment payment payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1994 Payments Per Discharge

--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Cost Hospitals.............................. 3,331 6,075,449 $188.43 31.44 $256.05 $38.19 $4.79 $487.46
Fully Prospective........................... 1,983 3,674,477 180.29 30.00 379.22 ........... 1.75 461.26
Rebase--Fully Prospective................... 1,065 1,889,463 178.10 30.00 280.31 ........... 10.98 469.38
Rebase--100% Federal Rate................... 113 201,450 587.19 100.00 ........... ........... ........... 587.19
Rebase--Hold Harmless....................... 170 310,059 88.75 14.29 ........... 748.25 6.28 843.28
High Cost Hospitals............................. 1,893 4,176,293 317.53 51.81 ........... 410.64 3.43 731.60
100% Federal Rate........................... 737 1,722,137 622.83 100.00 ........... ........... ........... 622.98
Hold Harmless............................... 1,156 2,454,156 103.30 17.05 ........... 698.79 5.74 807.83
Total hospitals......................... 5,224 10,251,742 241.02 39.85 151.74 189.91 4.24 586.92
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
Adjusted Average Hospital Hold-
Number of Discharges federal federal specific harmless Exceptions Total Percent
hospitals payment percent payment payment payment payment change
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1995 Payments Per Discharge

--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Cost Hospitals................................ 3,331 6,075,449 $233.89 40.06 $209.78 $48.20 $10.66 $502.54 3.09
Fully Prospective............................. 1,983 3,674,477 230.42 40.00 228.76 ......... 3.07 462.25 0.21
Rebase--Fully Prospective..................... 1,065 1,889,463 228.05 40.00 229.67 ......... 26.82 484.54 3.23
Rebase--100% Federal Rate..................... 115 204,758 564.42 100.00 ......... ......... 1.90 566.32 -3.55
Rebase--Hold Harmless......................... 168 306,752 90.90 15.03 ......... 954.72 7.87 1,053.48 24.93
High Cost Hospitals............................... 1,893 4,176,293 329.84 54.88 ......... 407.48 4.67 742.00 1.42
100% Federal Rate............................. 758 1,788,585 611.51 100.00 ......... ......... 0.14 611.65 -1.82
Hold Harmless................................. 1,135 2,387,708 118.85 20.04 ......... 712.72 8.07 839.64 3.94
Total hospitals........................... 5,224 10,251,742 272.98 46.60 124.32 194.56 8.22 600.09 2.24
--------------------------------------------------------------------------------------------------------------------------------------------------------

Under section 1886(g)(1)(A) of the Act, aggregate payments under
the capital prospective payment system for FY 1992 through 1995
respectively, are to equal 90 percent of what would have been payable
on a reasonable cost basis in each year. (See Addendum, Part III for a
full discussion of the capital budget neutrality provision.) Currently,
we project that in FY 1994 aggregate payments under the capital
prospective payment system will be 93.05 percent of reasonable costs,
or 3.05 percentage points higher than the 90 percent target. We also
estimate an increase in capital cost per case of 5.70 percent from FY
1994 to FY 1995. To achieve budget neutrality in FY 1995, we estimate
there would be an aggregate 2.24 percent increase in FY 1995 Medicare
capital payments over the FY 1994 payments.
We project that low capital cost hospitals paid under the fully
prospective payment methodology will experience an average case-
weighted increase in payments of 3.09 percent, and high capital cost
hospitals will experience an average increase of 1.42 percent.
For hospitals paid under the fully prospective payment methodology,
the Federal rate payment percentage will increase from 30 percent to 40
percent and the hospital-specific rate payment percentage will decrease
from 70 to 60 percent in FY 1995.
The Federal rate payment percentage for a hospital paid under the
hold-harmless payment methodology is based on the hospital's ratio of
new capital costs to total capital costs. The average Federal rate
payment percentage for those hospitals receiving a hold-harmless
payment for old capital will increase from 17.05 percent to 20.04
percent. We estimate the percentage of hold-harmless hospitals paid
based on 100 percent of the Federal rate will increase from 39 percent
to 40 percent.
The average hospital-specific rate payment per discharge falls from
$151.74 in FY 1994 to $124.32 in FY 1995. A decline in the average
hospital-specific rate payment per discharge from FY 1994 to FY 1995 is
to be expected because of the reduction in the hospital-specific rate
blend percentage and the 5.76 percent decrease in the hospital-specific
rate from FY 1994 to FY 1995.
We are proposing no changes in our exceptions policies for FY 1995.
As a result, the minimum payment levels would be:
90 percent for sole community hospitals;
80 percent for urban hospitals with 100 or more beds and a
disproportionate share patient percentage of 20.2 percent or more; or,
70 percent for all other hospitals.
We estimate that exceptions payments will increase from 0.7 percent
of payments in FY 1994 to 1.37 percent of payments in FY 1995. The
projected distribution of the payments is shown in the table below:

Estimated FY 1995 Exceptions Payments
------------------------------------------------------------------------
Percent of
Type of hospital No. of exceptions
hospitals payments
------------------------------------------------------------------------
Low Capital Cost.............................. 280 77
High Capital Cost............................. 100 23
Total..................................... 380 100
------------------------------------------------------------------------

C. Cross-Sectional Comparison of Capital Prospective Payment
Methodologies

Table V presents a cross-sectional summary of hospital groupings by
capital prospective payment methodology. This distribution is generated
by our actuarial model.

Table V.--Distribution by Method of Payment (Hold-Harmless/Fully Prospective) of Hospitals Receiving Capital
Payments
----------------------------------------------------------------------------------------------------------------
(2) Hold-harmless
-------------------------------- (3) Percentage
(1) Total No. Percentage Percentage paid fully
of hospitals paid hold- paid fully prospective
harmless (A) federal (B) rate
----------------------------------------------------------------------------------------------------------------
By Geographic Location

All hospitals................................... 5,224 24.9 16.7 58.3
Large urban areas (populations over 1 million).. 1,603 29.1 21.6 49.2
Other urban areas (populations of 1 million or
fewer)......................................... 1,322 31.4 19.2 49.4
Rural areas..................................... 2,299 18.3 11.8 69.9
Urban hospitals................................. 2,925 30.2 20.5 49.3
0-99 beds................................... 713 28.6 19.6 51.8
100-199 beds................................ 920 36.4 20.1 43.5
200-299 beds................................ 610 29.5 20.5 50.0
300-499 beds................................ 493 24.3 22.9 52.7
500 or more beds............................ 189 22.8 20.1 57.1
Rural hospitals................................. 2,299 18.3 11.8 69.9
0-49 beds................................... 1,185 13.1 9.4 77.6
50-99 beds.................................. 687 22.6 13.0 64.5
100-149 beds................................ 227 26.4 18.9 54.6
150-199 beds................................ 106 22.6 15.1 62.3
200 or more beds............................ 94 28.7 13.8 57.4

By Region

Urban by Region................................. 2,925 30.2 20.5 49.3
New England................................. 170 12.9 20.0 67.1
Middle Atlantic............................. 440 18.6 24.8 56.6
South Atlantic.............................. 436 37.8 22.7 39.4
East North Central.......................... 489 23.1 14.9 62.0
East South Central.......................... 167 43.7 13.8 42.5
West North Central.......................... 197 32.0 17.3 50.8
West South Central.......................... 371 49.9 25.3 24.8
Mountain.................................... 120 28.3 31.7 40.0
Pacific..................................... 487 27.9 18.7 53.4
Puerto Rico................................. 48 18.8 12.5 68.8
Rural by Region................................. 2,299 18.3 11.8 69.9
New England................................. 53 17.0 11.3 71.7
Middle Atlantic............................. 85 12.9 20.0 67.1
South Atlantic.............................. 298 23.2 10.7 66.1
East North Central.......................... 310 16.8 8.1 75.2
East South Central.......................... 285 24.2 16.8 58.9
West North Central.......................... 536 12.3 9.7 78.0
West South Central.......................... 358 18.2 17.0 64.8
Mountain.................................... 224 20.5 9.8 69.6
Pacific..................................... 145 22.8 5.5 71.7
By Payment Classification

All hospitals................................... 5,224 24.9 16.7 58.3
Large urban areas (populations over 1 million).. 1,817 29.2 21.0 49.9
Other urban areas (populations of 1 million or
fewer)......................................... 1,413 30.2 17.9 51.9
Rural areas..................................... 1,994 17.4 12.0 70.7
Teaching Status:................................
Non-teaching................................ 4,174 25.3 16.2 58.5
Fewer than 100 Residents.................... 828 24.9 19.0 56.2
100 or more Residents....................... 222 17.6 18.0 64.4
Disproportionate share hospitals (DSH):
Non-DSH..................................... 3,320 24.1 15.2 60.8
Urban DSH:
100 or more beds............................ 1,355 29.0 21.5 49.4
Less than 100 beds.......................... 140 28.6 17.1 54.3
Rural DSH:
Sole Community (SCH)........................ 133 14.3 6.8 78.9
Referral Center (RRC)....................... 47 17.0 19.1 63.8
Other Rural:
100 or more beds............................ 66 24.2 18.2 57.6
Less than 100 beds.......................... 163 16.6 14.7 68.7
Urban teaching and DSH:
Both teaching and DSH....................... 645 22.5 19.1 58.4
Teaching and no DSH......................... 360 23.9 19.4 56.7
No teaching and DSH......................... 850 33.9 22.7 43.4
No teaching and no DSH...................... 1,375 31.9 18.0 50.1
Rural Hospital Types:
Non special status hospitals................ 843 16.8 13.0 70.1
RRC......................................... 138 25.4 15.9 58.7
SCH......................................... 54 27.8 13.0 59.3
Medicare-dependent hospitals (MDH).......... 415 8.4 11.3 80.2
SCH and MDH................................. 54 27.8 13.0 59.3
Type of Ownership:
Voluntary................................... 3,260 24.1 16.6 59.3
Proprietary................................. 751 43.9 26.1 30.0
Government.................................. 1,213 15.4 11.3 73.3
Medicare Utilization as a Percent of Inpatient
Days:
0-25........................................ 305 32.5 18.7 48.9
25-50....................................... 1,471 29.0 17.9 53.2
50-65....................................... 2,244 23.6 16.8 59.6
Over 65..................................... 1,162 20.8 14.5 64.6
----------------------------------------------------------------------------------------------------------------

As we explain in Appendix B, we were not able to determine a
hospital-specific rate for 24 of the 5,248 hospitals in our data base.
Consequently, the payment methodology distribution is based on 5,224
hospitals. This data should be fully representative of the payment
methodologies that will be applicable to hospitals.
The cross-sectional distribution of hospital by payment methodology
is presented by: (1) geographic location, (2) region, and (3) payment
classification. This provides an indication of the percentage of
hospitals within a particular hospital grouping that will be paid under
the fully prospective payment methodology and under the hold-harmless
methodology.
Table V indicates that 58.3 percent of hospitals are paid under the
fully prospective payment methodology. (This figure, unlike the figure
of 64 percent for low cost capital hospitals in the previous section,
takes account of the effects of redeterminations. In other words, this
figure does not include low cost hospitals that, following a hospital-
specific rate redetermination, are now paid under the hold-harmless
methodology.) As expected, a relatively higher percentage of rural and
governmental hospitals (69.9 percent and 73.3 percent, respectively)
are being paid under the fully prospective methodology. This is a
reflection of their lower than average capital costs per case. In
contrast, only 30 percent of proprietary hospitals are being paid under
the fully prospective methodology. This is a reflection of their higher
than average capital costs per case. (We found at the time of the
August 30, 1991 final rule (56 FR 43430) that 62.7 percent of
proprietary hospitals had a capital cost per case above the national
average cost per case.)

D. Cross-Sectional Analysis of Changes in Aggregate Payments

We used our FY 1995 actuarial model to estimate the potential
impact of our proposed changes for FY 1995 on total capital payments
per case, using a universe of 5,224 hospitals. The individual hospital
payment parameters are taken from the best available data, including:
the January 1, 1994 update to the Provider-Specific file, cost report
data, and audit information supplied by intermediaries. Table VI
presents a comparison of payments per case for FY 1994 and FY 1995. It
also presents the portion of total percentage change in payments that
can be attributed to Federal rate changes alone. Federal rate changes
include the 6.47 percent decrease in the Federal rate, a 1.5 percent
increase in case mix, changes in the adjustments to the Federal rate
(for example, the effect of the new hospital wage index on the
geographic adjustment factor), and reclassifications by the Medicare
Geographic Classification Review Board. The residual increase over the
change attributable to the Federal rate changes can be attributed to
the effects of transition changes, which include: the change from 30
percent to 40 percent in the portion of the Federal rate for fully
prospective hospitals, the hospital-specific rate update, changes in
the proportion of new to total capital for hold-harmless hospitals,
changes in old capital (for example, obligated capital put in use),
hospital-specific rate redeterminations, and exceptions. The
comparisons are provided by: (1) geographic location and (2) payment
classification and payment region.
The simulation results show that, on average, payments per case can
be expected to increase 2.2 percent in FY 1995. The results show that
the effect of the Federal rate changes alone is to decrease payments by
1.3 percent. However, the decrease attributable to the Federal rate
changes is more than offset by a 3.5 percent increase attributable to
the effects of transition changes and budget neutrality.
Our comparison by geographic location shows that urban and rural
hospitals experience similar rates of increase (2.2 percent and 2.3
percent, respectively). Urban hospitals will lose slightly less than
rural hospitals (-1.3 percent compared to -1.6 percent) from the
Federal rate changes. Urban hospitals will also gain slightly less than
rural hospitals (3.5 percent compared to 3.9 percent) from the effects
of transition changes.
By region, rural hospitals of the New England region have the
highest rate of increase (12.3 percent, of which -1.9 percent is due to
Federal rate changes and 14.2 percent to the effects of transition
changes). Puerto Rico hospitals fare worst: these hospitals will
experience a 2.5 percent decline in payments, of which -3.4 percent is
attributable to Federal rate changes and 0.9 percent to the effects of
transition changes.
By type of ownership, government hospitals are projected to have
the highest rate of increase (3.3 percent, of which -1.5 percent is due
to Federal rate changes and 4.8 percent to the effects of transition
changes). Payments to proprietary hospitals will decrease 0.2 percent
(-1.2 percent due to the Federal rate changes and 1.0 percent
attributable to the effects of transition changes) and payments to
voluntary hospitals will increase 2.5 percent (-1.3 percent due to
Federal rate changes and 3.8 percent to the effects of transition
changes).
Section 1886(d)(10) of the Act established the Medicare Geographic
Review Board (MGCRB). Hospitals may apply for reclassification for the
purpose of the wage index, standardized payment amount, or both.
Although there is no difference with respect to the Federal capital
rate, a hospital's geographic classification for purposes of the
operating standardized amount does affect a hospital's capital payments
as a result of the large urban adjustment factor and the
disproportionate share adjustment for urban hospitals with 100 or more
beds. Reclassification for wage index purposes affects the geographic
adjustment factor since that factor is constructed from the hospital
wage index.
To present the effects of the hospitals being reclassified for FY
1995 compared to the FY 1994 effects of reclassification, we show the
average payment percentage increase for hospitals reclassified in each
fiscal year and in total. For FY 1995 reclassifications, we are
indicating those hospitals reclassified for standardized amount
purposes only, for wage index purposes only, and for both purposes. The
reclassified groups are compared to all other nonreclassified
hospitals. These categories are further identified by urban and rural
designation.
Hospitals reclassified during FY 1995 as a whole are projected to
experience a 2.3 percent increase in payments (-1.0 attributable to
Federal rate changes and 3.3 percent attributable to the effects of
transition changes). Nonreclassified hospitals will gain slightly less
(2.2 percent) than reclassified hospitals (2.3 percent) overall. While
nonreclassified hospitals will lose slightly more (-1.4 percent
compared to -1.0 percent) than reclassified hospitals from the Federal
rate changes, they will gain more (3.6 percent to 3.3 percent) from the
effects of transition changes.

Table VI.--Comparison of Total Payments Per Case
[FY 1994 Payments Compared to FY 1995 Payments]
----------------------------------------------------------------------------------------------------------------
Average FY
Average FY 1995 Portion
Number of 1994 payments/ All changes attibutable
hospitals payments/ case after to Federal
case OBRA rate change
----------------------------------------------------------------------------------------------------------------
By Geographic Location:
All hospitals.............................. 5,224 587 600 2.2 -1.3
Large urban areas (populations over 1
million).................................. 1,603 673 688 2.4 -1.4
Other urban areas (populations of 1 million
of fewer)................................. 1,322 588 600 2.1 -1.1
Rural areas................................ 2,299 385 394 2.3 -1.6
Urban hospitals............................ 2,925 636 650 2.2 -1.3
0-99 beds.............................. 713 480 487 1.3 -1.6
100-199 beds........................... 920 581 589 1.4 -1.4
200-299 beds........................... 610 604 611 1.2 -1.4
300-499 beds........................... 493 646 660 2.2 -1.4
500 or more beds....................... 189 780 815 4.4 -0.8
Rural hospitals............................ 2,299 385 394 2.3 -1.6
0-49 beds.............................. 1,185 279 286 2.2 -2.1
50-99 beds............................. 687 356 359 0.8 -1.8
100-149 beds........................... 227 426 439 3.1 -1.7
150-199 beds........................... 106 397 402 1.1 -1.7
200 or more beds....................... 94 493 513 4.0 -0.9
By Region:
Urban by Region............................ 2,925 636 650 2.2 -1.3
New England............................ 170 589 616 4.6 -1.5
Middle Atlantic........................ 440 662 681 2.8 -1.7
South Atlantic......................... 436 650 661 1.7 -1.0
East North Central..................... 489 582 590 1.3 -1.1
East South Central..................... 167 595 612 2.8 -0.7
West North Central..................... 197 627 639 2.0 -1.1
West South Central..................... 371 675 681 0.9 -0.8
Mountain............................... 120 664 654 -1.5 -2.3
Pacific................................ 487 701 731 4.2 -1.5
Puerto Rico............................ 48 235 229 -2.5 -3.4
Rural by Region............................ 2,299 385 394 2.3 -1.6
New England............................ 53 523 587 12.3 -1.9
Middle Atlantic........................ 85 397 408 2.8 -2.1
South Atlantic......................... 298 402 405 0.9 -1.1
East North Central..................... 310 374 388 3.7 -1.3
East South Central..................... 285 366 370 1.0 -1.3
West North Central..................... 536 351 359 2.3 -2.3
West South Central..................... 358 369 373 1.1 -2.2
Mountain............................... 224 423 425 0.5 -1.3
Pacific................................ 145 428 444 3.6 -1.4
By Payment Classification:
All hospitals.............................. 5,224 587 600 2.2 -1.3
Large Urban areas (populations over 1
million).................................. 1,817 663 678 2.4 -1.3
Other urban areas (populations of 1 million
or fewer)................................. 1,413 571 582 1.9 -1.2
Rural areas................................ 1,994 378 388 2.6 -1.6
Teaching Status:...........................
Non-teaching........................... 4,174 515 520 0.8 -1.5
Fewer than 100 Residents............... 828 619 636 2.7 -1.1
100 or more Residents.................. 222 854 901 5.5 -1.2
Disproportionate share hospitals (DSH):
Non-DSH.................................... 3,320 549 561 2.1 -1.3
Urban DSH:
100 or more beds....................... 1,355 657 673 2.5 -1.3
Less than 100 beds..................... 140 410 408 -0.6 -1.9
Rural DSH:
Sole Community (SCH)................... 133 339 338 -0.3 -1.9
Referral Center (RRC).................. 47 425 433 1.8 -1.4
Other Rural:...........................
100 or more beds................... 66 366 363 -0.6 -2.3
Less than 100 beds................. 163 288 290 0.6 -2.0
Urban Teaching and DSH:
Both teaching and DSH...................... 645 713 738 3.5 -1.3
Teaching and no DSH........................ 360 652 678 3.9 -1.0
No teaching and DSH........................ 850 572 577 0.8 -1.4
No teaching and no DSH..................... 1,375 564 567 0.4 -1.4
Rural Hospital Types:
Non special status hospitals............... 843 335 341 1.8 -2.0
RRC........................................ 138 463 474 2.3 -1.3
SCH........................................ 578 372 380 2.1 -1.7
Medicare-dependent hospitals (MDH)......... 415 282 283 0.2 -2.3
SCH and MDH................................ 54 476 514 8.0 -0.9
Hospitals Reclassified by the Medicare
Geographic Classification Review Board:
Reclassification Status During FY94 and
FY95:
Reclassified During Both FY94 and FY95. 484 586 592 1.1 -1.6
Reclassified During FY95 Only.......... 215 500 532 6.4 0.8
Reclassified During FY94 Only.......... 189 508 514 1.2 -3.5
FY95 Reclassifications:
All Reclassified Hospitals............. 699 563 576 2.3 -1.0
All Nonreclassified Hospitals.......... 4,498 591 605 2.2 -1.4
All Urban Reclassified Hospitals....... 236 671 687 2.4 -1.1
Urban Nonreclassified Hospitals........ 2,689 632 647 2.2 -1.3
All Reclassified Rural Hospitals....... 463 439 448 2.2 -0.8
Rural Nonreclassified Hospitals........ 1,809 358 366 2.4 -2.1
Other Reclassified Hospitals (Section
1886(D)(8)(B))............................ 27 421 424 0.8 -1.7
Type of Ownership:
Voluntary.................................. 3,260 599 614 2.5 -1.3
Proprietary................................ 751 619 618 -0.2 -1.2
Government................................. 1,213 481 496 3.3 -1.5
Medicare Utilization as a Percent of Inpatient
Days:
0-25....................................... 305 667 699 4.8 -1.6
25-50...................................... 1,471 680 704 3.4 -1.2
50-65...................................... 2,244 542 549 1.3 -1.3
Over 65.................................... 1,162 504 510 1.3 -1.5
----------------------------------------------------------------------------------------------------------------

E. Cross-Sectional Analysis of Changes in the Federal Rate

The analysis in Table VII examines the impact of the following
changes in the Federal rate set forth in section III of the addendum to
this proposed rule--
The effects of eliminating the separate operating
prospective payment system rural standardized amount, as required under
section 1886(d)(3)(A) of the Act (column 3).
The effects of the annual reclassification of DRGs and
recalibration of the DRG weights required by section 1886(d)(4)(C) of
the Act (column 4).
The effects of the annual update of wage survey data on
the capital geographic adjustment factor (column 5).
The effects of the proposed changes in transfer policy
(column 6).
The effects of FY 1995 reclassifications by the MGCRB
(column 7).
The effects of changes in outlier policy (column 8).
The effects of all proposed FY 1995 changes affecting the
Federal rate, including those displayed in columns 3 through 8,
compared to FY 1994 payments based on the Federal rate (column 9).
To estimate the effects of these changes, we simulated payments
based on 100 percent of the Federal rate. As a result, the simulation
in Table VII has two significant limitations. The simulation
necessarily employs the FY 1994 and the proposed FY 1995 Federal rates.
However, the FY 1994 and FY 1995 Federal rates were determined on the
basis of the transition rules in which hospitals are paid various
portions of the Federal rate. (Fully prospective hospitals receive 30
percent of the Federal rate in FY 1994 and 40 percent in FY 1995. Hold-
harmless hospitals receive a portion of the Federal rate based on the
hospital-specific ratio of new Medicare capitals costs to total
Medicare capital costs. Approximately 16.7 percent of hospitals will be
paid 100 percent of the Federal rate in FY 1995.) In particular, the
budget neutrality adjustment required to assure that aggregate payments
equal 90 percent of reasonable costs would require revision if all
hospitals were paid 100 percent of the Federal rate. Thus, the
simulation of 100 percent Federal rate payments is based on rates that
would be different if payments were actually based on 100 percent of
the Federal rate.
Furthermore, the simulation does not necessarily reflect accurately
changes in capital prospective payment system payments from FY 1994 to
FY 1995. Rather, it reflects the percentage change in payments that
hospitals would experience if all hospitals were paid 100 percent of
the Federal rate. In fact, as previously noted, hospitals will receive
varying portions of their amounts on the basis of the Federal rate in
FY 1995. Section 412.308(c)(4)(ii) requires that estimated aggregate
payments based on the Federal rate for any year after any changes from
DRG reclassification and recalibration and the geographic adjustment
factor equal the estimated aggregate payments based on the Federal rate
that would have been made without such changes. Appendix B explains
that the varying portions of the Federal rate paid to each hospital are
taken into account in determining the aggregate Federal rate payment
amounts used to compute the DRG/GAF budget neutrality adjustment. The
aggregate Federal rate payments used to determine the budget neutrality
adjustment would be different if all hospitals were paid based on 100
percent of the Federal rate. Thus, Table VII represents the change in
payments under circumstances unlike those for which the DRG/GAF budget
neutrality adjustment is computed. As a result, it is to be expected
that the full effects of that budget neutrality requirement will not be
precisely reflected in Table VII.
The simulation in Table VII is not representative of changes in
capital prospective payment system payments from FY 1994 to FY 1995.
Rather, it reflects the percentage change in payments for hospitals
receiving 100 percent of the Federal rate. For other hospitals, it
reflects the percentage change in the Federal rate portion of payments,
holding the Federal rate portion constant. (Of course, for those other
hospitals, the Federal rate portion changes in almost all cases from FY
1994 to FY 1995.) Unlike the Federal rate payment change in Table VI,
the analysis in Table VII also does not include any increase in Federal
rate payments attributable to anticipated increases in the case-mix
index.
Because of the limitations on the simulation presented in Table
VII, we are considering whether to omit this table in future impact
statements. We welcome comments on the utility of this table and its
continued use in future impact statements.
The table shows that Federal rate payments can be expected to
decrease 4.5 percent overall prior to consideration of any increase in
the case-mix index. This decrease is due to the 6.5 percent decrease in
the Federal rate, which is partially offset by the 1.9 percent increase
in outlier payments.
The table also shows the distributional effects of the changes in
Federal rate payments from the changes noted above. We modeled the
effects of the changes in all columns, except column 7, in the same
manner as in Table I above. Thus, column 3 displays the payment changes
resulting from eliminating the rural standardized amount, modeled by
comparing simulated 100 percent Federal rate payments using our FY 1995
baseline model (as described in the operating portion of this impact
analysis) to simulated payments after eliminating the separate rural
amount. The changes in Federal rate payments from eliminating the rural
standardized amount are, as is to be expected, insignificant. The 0.1
percent gain for other urban hospitals reflects the spillover effect of
an increase in outlier payments for urban hospitals.
Column 4 presents the change in Federal rate payments of the
combined effects of the revised DRG classification system, and the
subsequent recalibration of DRG weights incorporating these revised
DRGs, as discussed in section II of this proposed rule. The DRG changes
are expected to produce only minimal effects on the distribution of
Federal rate payments. The highest gain from DRG reclassification and
recalibration is projected at 0.1 percent (for several classes of
hospitals), while the largest loss is projected at -0.3 percent (for
urban disproportionate share hospitals with 100 beds or less).
As with the previous two columns, the impact of the new wage data
in Federal rate payments is isolated in column 5 by holding the other
payment parameters constant in the two comparison simulations. That is,
the percentage changes demonstrate the changes in Federal rate payments
from our FY 1995 baseline--using the FY 1994 wage index before
geographic reclassifications based on 1990 wage survey data, after
elimination of the separate rural rate and incorporating the FY 1995
GROUPER--to a model substituting the FY 1995 pre-reclassification wage
index based on data submitted for hospital cost reporting periods
beginning in FY 1991. The only significant changes from the use of new
wage data on the capital geographic adjustment factor are on hospitals
in Puerto Rico. Urban Puerto Rico hospitals experience a decrease of
7.4 percent and rural Puerto Rico hospitals experience a decrease of
10.7 percent. As is the case with similar decreases in operating
prospective payment system payments, these effects are attributable to
improved reporting by hospitals.]
Column 6 illustrates the effects of the proposed transfer policy
changes relative to a baseline simulation based on current transfer
policy. The effects of the changes in transfer policy are similar to
those in operating prospective payment system payments. The transfer
changes increase Federal rate payments to rural hospitals by 0.5
percent, and decrease Federal rate payments to urban hospitals by 0.1
percent. As is the case with operating prospective payments, this
result is due to the fact that rural hospitals benefit from changing
the per diem methodology.
Column 7 displays the impact of the FY 1995 decisions by the MGCRB
compared to FY 1994 reclassification decisions. It includes all of the
changes proposed for FY 1995 discussed up to this point. Therefore, in
examining the changes for particular hospital groups, the impacts
discussed previously appear here as well (for example, the large
decreases in Puerto Rico due to the new wage data). This comparison
corresponds with the methodology used to determine the GAF/DRG budget
neutrality adjustment factor. To accomplish this comparison, we have
replaced the FY 1995 proposed capital Federal rate with the FY 1994
Federal rate adjusted by the 1.00115 proposed GAF/DRG budget neutrality
factor.
Column 8 shows the incremental effects of outlier changes alone.
The changes shown in this column closely reflect the changes in
operating prospective payments shown in Table 1.
Column 9 displays the combined changes from the previous columns,
as well as the effects of other factors affecting Federal rate
payments, compared to FY 1994 Federal rate payments. The other factors
include: the change in the standard Federal rate from FY 1994, the
effect of geographic reclassifications on large urban status, and a 1.9
percent increase in outlier payments. As noted in the previous
discussion, the effects of changes in geographic reclassification
decisions from FY 1994 to FY 1995, in addition to the changes discussed
in columns 3 through 6, are shown in column 7. These effects are
included in column 9 as well, along with the changes in outlier policy
and the changes in the Federal rate and outlier payments. Thus, only
the last column reflects the effects of all quantifiable policy changes
on simulated FY 1995 Federal rate payments.

Table VII.--Impact Analysis of Proposed Changes for FY 1995 Capital Prospective Payment System
[Percent Changes in Federal Payments Per Case]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pymt. Pymt. Elim. OBRA
No. of per per rural DRG New Transfer MGCRB 1993 All FY
Hosps.\1\ case FY case FY stand. recalibration wage policy reclassification outlier 1995
1994 1995 amount data changes changes changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
(0) (1) (2) (3) (4) (5) (6) (7) (8) (9)

--------------------------------------------------------------------------------------------------------------------------------------------------------
(By Geographic Location):
All Hospitals........................... 5,248 595 569 0.0 0.0 0.1 -0.1 0.0 0.0 -4.5
Urban Hospitals......................... 2,947 643 615 0.0 0.1 0.1 -0.1 -0.1 0.0 -4.4
Large Urban......................... 1,616 687 655 0.0 0.0 0.2 -0.2 -0.1 0.0 -4.6
Other Urban......................... 1,331 586 561 0.1 0.1 0.0 -0.1 -0.1 0.2 -4.2
Rural Areas............................. 2,301 400 380 0.0 0.0 0.3 0.5 0.7 -0.2 -4.8
Bed Size (Urban):
0-99 Beds............................... 733 462 440 0.1 -0.1 -0.3 0.4 0.1 0.0 -4.7
100-199 Beds............................ 922 558 532 0.0 0.0 -0.2 0.0 -0.2 0.1 -4.6
200-299 Beds............................ 610 609 581 0.0 0.0 0.0 -0.1 -0.2 -0.1 -4.6
300-499 Beds............................ 493 676 645 0.0 0.1 0.2 -0.2 -0.2 0.0 -4.5
500 or More Beds........................ 189 796 764 0.0 0.1 0.3 -0.4 0.1 0.2 -3.9
Bed Size (Rural):
0-49 Beds............................... 1,187 333 316 0.0 -0.1 0.4 1.0 1.1 -0.2 -5.0
50-99 Beds.............................. 687 374 355 0.0 -0.1 0.2 0.7 0.5 -0.1 -5.1
100-149 Beds............................ 227 418 396 0.0 0.0 0.3 0.5 0.1 -0.2 -5.2
150-199 Beds............................ 106 423 403 0.0 0.0 0.4 0.3 0.9 -0.3 -4.7
200 or More Beds........................ 94 476 458 0.0 0.1 0.3 0.1 1.0 -0.1 -3.9
Urban by Region:
New England............................. 170 668 636 0.0 0.1 1.1 -0.2 0.7 -0.4 -4.8
Middle Atlantic......................... 440 695 660 0.0 0.1 0.4 -0.2 -0.3 -0.6 -5.1
South Atlantic.......................... 436 615 592 0.0 0.1 0.2 0.0 0.3 0.2 -3.7
East North Central...................... 491 620 594 0.0 0.0 0.4 -0.1 0.3 0.1 -4.3
East South Central...................... 167 568 548 0.1 0.1 0.0 -0.1 0.0 0.6 -3.5
West North Central...................... 198 628 599 0.0 0.1 -0.1 -0.1 -0.2 0.1 -4.6
West South Central...................... 383 605 584 0.1 0.0 -1.0 -0.3 -1.3 0.9 -3.5
Mountain................................ 120 648 611 0.0 0.1 -0.9 -0.3 -1.5 -0.1 -5.7
Pacific................................. 493 726 693 0.0 0.0 -0.1 -0.1 0.1 0.1 -4.6
Puerto Rico............................. 49 268 239 0.0 0.1 -7.4 0.2 -8.6 0.7 -10.6
Rural by Region:
New England............................. 53 467 439 0.0 0.1 0.3 0.4 -0.2 -0.5 -6.0
Middle Atlantic......................... 85 445 422 0.0 0.1 0.4 0.3 0.3 -0.5 -5.1
South Atlantic.......................... 298 411 396 0.0 0.0 0.3 0.5 1.5 0.0 -3.7
East North Central...................... 310 402 383 0.0 0.0 0.9 0.6 1.2 -0.2 -4.6
East South Central...................... 286 364 348 0.0 -0.1 0.0 0.5 1.2 0.0 -4.4
West North Central...................... 536 378 357 0.0 0.0 0.4 0.7 0.5 -0.2 -5.4
West South Central...................... 359 374 350 0.1 -0.1 -0.1 0.5 -1.1 0.0 -6.3
Mountain................................ 224 414 395 0.1 0.0 0.2 0.5 0.2 -0.2 -4.5
Pacific................................. 145 479 455 0.0 0.0 0.2 0.5 0.5 -0.2 -5.0
Puerto Rico............................. 5 218 184 0.0 -0.2 -10.7 0.3 -11.4 0.3 -15.6
(By Payment Categories):
Urban Hospitals......................... 3,252 634 606 0.0 0.1 0.1 -0.1 -0.1 0.0 -4.4
Large Urban......................... 1,830 675 645 0.0 0.0 0.2 -0.2 -0.1 0.0 -4.5
Other Urban......................... 1,422 569 545 0.1 0.1 -0.1 0.0 -0.1 0.1 -4.3
Rural Hospitals......................... 1,996 395 375 0.0 0.0 0.3 0.5 0.4 -0.2 -5.0
Teaching Status:
Non-Teaching............................ 4,197 509 486 0.0 0.0 0.0 0.2 0.0 0.0 -4.6
Less Than 100 Res....................... 829 644 615 0.0 0.1 0.2 -0.2 -0.1 0.0 -4.4
100+ Residents.......................... 222 895 856 0.0 0.1 0.5 -0.6 0.1 0.1 -4.3
Disproportionate Share Hospitals (DSH):
Non-DSH................................. 3,341 552 527 0.0 0.1 0.1 0.2 0.0 -0.1 -4.6
Urban DSH:
100 Beds or More.................... 1,355 671 641 0.0 0.0 0.2 -0.3 0.0 0.1 -4.4
Fewer Than 100 Beds................. 143 422 403 0.1 -0.3 -0.1 0.4 0.4 0.1 -4.6
Rural DSH:
Sole Community (SCH)................ 133 352 331 0.0 -0.1 0.2 0.7 -0.2 0.0 -5.9
Referral Centers (RRC).............. 47 455 439 0.0 0.0 0.2 0.0 1.5 0.2 -3.6
Other Rural DSH Hosp:
100 Beds or More.................... 66 380 356 0.0 -0.1 0.1 0.6 -0.9 -0.3 -6.3
Fewer Than 100 Beds................. 163 325 309 0.0 -0.2 0.2 0.9 0.8 0.1 -4.9
Urban Teaching and DSH:
Both Teaching and DSH................... 645 746 713 0.0 0.1 0.3 -0.4 -0.1 0.1 -4.5
Teaching and no DSH..................... 361 680 651 0.0 0.1 0.2 -0.1 -0.1 0.0 -4.3
No Teaching and DSH..................... 853 561 537 0.0 0.0 -0.1 -0.1 0.0 0.2 -4.3
No Teaching and no DSH.................. 1,393 545 520 0.0 0.0 -0.1 0.2 -0.2 -0.1 -4.6
Rural Hospital Types:
Nonspecial Status Hospitals............. 845 366 346 0.0 -0.1 0.3 0.7 0.1 -0.2 -5.5
RRC..................................... 138 469 448 0.0 0.1 0.3 0.1 0.4 -0.1 -4.7
SCH..................................... 578 374 355 0.0 0.0 0.2 0.8 0.4 -0.2 -5.2
Medicare-Dependent Hospital............. 415 336 319 0.0 -0.1 0.4 0.9 0.9 -0.1 -5.1
SCH and RRC............................. 54 447 429 0.0 0.1 0.5 0.2 1.2 -0.3 -4.0
Type of Ownership:
Voluntary............................... 3,282 610 582 0.0 0.1 0.2 -0.1 0.0 0.0 -4.5
Proprietary............................. 753 562 540 0.1 -0.1 -0.5 0.0 -0.4 0.3 -3.8
Government.............................. 1,213 539 513 0.0 0.0 0.3 0.0 0.4 -0.1 -4.8
Medicare Utilization as a Percent of
Inpatient Days:
0-25.................................... 305 723 688 0.0 0.0 -0.1 -0.4 -0.3 0.3 -4.9
25-50................................... 1,471 682 652 0.0 0.1 0.2 -0.3 0.0 0.1 -4.4
50-65................................... 2,244 555 530 0.0 0.1 0.1 0.1 0.0 0.0 -4.5
Over 65................................. 1,162 496 473 0.0 0.0 0.1 0.2 0.1 -0.1 -4.7
Unknown................................. 66 767 716 -0.1 -0.1 0.5 -0.5 -0.4 -1.7 -6.7
Hospitals Reclassified by the Medicare
Geographic Review Board:
Reclassification Status During FY94 and
FY95:
Reclassified During Both FY94 and FY95.. 484 571 543 0.0 0.0 0.1 0.1 -0.5 0.0 -4.9
Urban............................... 189 659 627 0.0 0.0 0.0 -0.1 -0.9 0.1 -4.8
Rural............................... 295 455 432 0.0 0.0 0.4 0.3 0.2 -0.2 -5.1
Reclassified During FY95 Only........... 215 504 511 0.0 0.1 0.4 0.1 6.8 0.0 1.3
Urban............................... 47 632 635 0.1 0.1 0.3 -0.1 5.2 0.1 0.6
Rural............................... 168 403 412 0.0 0.0 0.5 0.4 8.6 -0.2 2.2
Reclassified During FY94 Only........... 209 551 497 0.0 0.0 0.1 0.2 -5.4 -0.3 -9.8
Urban............................... 60 699 643 0.0 0.1 0.2 0.0 -3.4 -0.4 -8.0
Rural............................... 149 438 386 0.0 0.0 0.0 0.4 -7.8 -0.2 -12.0
FY 95 Reclassifications:
All Reclassified Hosp................... 699 553 534 0.0 0.0 0.2 0.1 1.2 0.0 -3.4
Urban............................... 236 653 629 0.0 0.1 0.0 -0.1 0.4 0.1 -3.7
Rural............................... 463 439 426 0.0 0.0 0.4 0.4 2.7 -0.2 -3.0
All Nonreclassified Hospitals........... 4,522 603 575 0.0 0.0 0.1 -0.1 -0.2 0.0 -4.6
Urban............................... 2,711 642 613 0.0 0.1 0.1 -0.2 -0.2 0.0 -4.5
Rural............................... 1,811 379 357 0.0 0.0 0.3 0.6 -0.4 -0.2 -5.8
Other Reclassified Hospitals (Section
1886(d)(8)(B))......................... 27 444 418 0.1 0.0 0.3 0.5 -0.2 -0.3 -5.7
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B: Technical Appendix on the Capital Acquisition Model and
Budget Neutrality Adjustment

Section 1886(g)(1)(A) of the Act requires that for FY 1992 through
FY 1995 aggregate prospective payments for operating costs under
section 1886(d) of the Act and prospective payments for capital costs
under section 1886(g) of the Act be reduced each year in a manner that
results in a 10 percent reduction of the amount that would have been
payable on a reasonable cost basis for capital-related costs in that
year. Under Sec. 412.352, the 10 percent reduction is generated
entirely from the capital prospective payments. A budget neutrality
adjustment factor is applied to the Federal rate and hospital-specific
rate so that total capital payments for each year from FY 1992 through
FY 1995 equal 90 percent of Medicare inpatient capital costs in each
year.
To calculate the budget neutrality adjustment, we must project the
rate at which old capital will be depreciated and written off and at
which new capital will be acquired and depreciated. (Old capital costs
include depreciation, lease, interest expenses, and other capital-
related costs defined in Sec. 412.302 for depreciable assets that are
in use for patient care or obligated on or before December 31, 1990.)
In developing the FY 1992 prospective payment rates, there were
limited capital data available that could be used to project payments
under the capital prospective payment system and develop the budget
neutrality adjustment factor. Consequently, we developed a capital
acquisition model that relied on Monte Carlo random simulation
techniques to project capital costs for 6000 hypothetical hospitals.
This model is described in detail in the August 30, 1991 final rule (56
FR 43517-43522).
We now have cost report data for the first year of the capital
prospective payment system. These cost reports begin in FY 1992 (PPS-9)
and provide a break-out of old and new capital for the first time. We
used the December 1993 update of the PPS-9 cost reports, the January 1,
1994 update of the provider specific file, and the December 1993 update
of the intermediary audit file as data sources.
The available data still lack certain items that are required for
the determination of budget neutrality, including a hospital's
projected new capital costs for each year, its projected old capital
costs for each year, and the projected obligated capital amounts that
will be put in use for patient care services and recognized as old
capital each year.
For FY 1993 and FY 1994, we implemented an integrated model that
starts with the available data for existing hospitals and back-fills
the missing items with results from the capital acquisition model that
was used to develop the FY 1992 payment rates. Since we now have data
for FY 1992, we no longer need to use the integrated model, and,
consequently, we are no longer using the model that developed the FY
1992 rates.
Since hospitals under alternative payment system waivers (that is,
hospitals in Maryland and hospitals in the Finger Lakes Area Hospital
Corporation in New York) are currently excluded from the capital
prospective payment system, we excluded these hospitals from our model.
We first developed FY 1992, FY 1993, and FY 1994 hospital-specific
rates using the provider-specific file, the intermediary audit file,
and when available, cost reports. (We used the cumulative provider-
specific file, which includes all updates to each hospital's records,
and chose the latest record for each fiscal year.) We checked the
consistency between the provider-specific file and the intermediary
audit file. We also ensured that the FY 1993 increase in the hospital-
specific rate was at least 0.62 percent (the net FY 1993 update) and
that the FY 1994 hospital-specific rate was at least as large as the FY
1993 hospital-specific rate decreased by 2.16 percent (the net FY 1994
update). We were able to match hospitals to the files as shown in the
following table.

------------------------------------------------------------------------
No. of
Source hospitals

------------------------------------------------------------------------
Provider Specific File Only.................................. 47
Provider Specific and Audit File............................. 5201
----------
Total.................................................. 5248
------------------------------------------------------------------------

Forty-five of these hospitals had unusable or missing data. We were
able to back-fill a hospital-specific rate for 21 of these hospitals
from the cost reports as shown in the following table.

------------------------------------------------------------------------
No. of
Source hospitals

------------------------------------------------------------------------
PPS-5 Cost Reports........................................... 1
PPS-7 Cost Reports........................................... 2
PPS-8 Cost Reports........................................... 1
PPS-9 Cost Reports........................................... 17
----------
Total.................................................. 21
------------------------------------------------------------------------

We did not have data for 24 hospitals, and had to drop them from
the capital analysis. Most of these dropped hospitals are new hospitals
or hospitals with very few Medicare admissions. This leaves us with
5224 hospitals and should not affect the precision of the budget
neutrality determination.
We then determined old and new capital amounts for FY 1992 using
the PPS-9 cost reports as the first source of data. Since we matched
only 4,653 PPS-9 cost reports, we also used the provider-specific file
for old capital information. Even in cases where a cost report was
available, the break out of old and new capital was not always
available. In these cases, we used the old capital amounts and new
capital ratios from the provider-specific file. If these were missing
we derived the old capital amount from the hospital specific rate.
Finally, we used the intermediary audit file to develop obligated
capital amounts. Some hospitals had indicated that they could not bring
the obligated capital on line before the expiration of this provision,
so we excluded the obligated amounts for these hospitals from the
budget neutrality determination. Since the obligated amounts are
aggregate projected amounts, we computed a Medicare capital cost per
admission associated with these amounts. We adjusted the aggregate
amounts by the following factors:
(1) Medicare inpatient share of capital. This was derived from cost
reports and was limited to the Medicare share of total inpatient days.
It was necessary to limit the Medicare share because of data integrity
problems. Medicare share of inpatient days is a reasonably good proxy
for allocating capital. However, it may be understated if Medicare
utilization is high, and may be overstated because it ignores the
outpatient share of capital.
(2) Capitalization factor. This factor allocates the aggregate
amount of obligated capital to depreciation and interest amounts.
Consistent with the assumptions in the capital input price index, we
used a 25-year life for fixed capital and a 10-year life for movable
capital, and an average projected interest rate of 6.7 percent. We also
assumed that fixed capital acquisitions are about one-half of total
capital. In conjunction with the useful life and interest rate
assumptions, the resulting capitalized fixed capital is about one-half
of total capitalization. This is consistent with the allocations
between fixed and movable capital found on the cost reports. The ratio
we developed is 0.137, which produces the first year capitalization
based on the aggregate amount.
(3) A divisor of Medicare admissions to derive the capital per
discharge amount. Since we must project capital amounts for each
hospital, we continued to use a Monte Carlo simulation to develop these
amounts. The Monte Carlo simulation is now used only to project capital
costs per discharge amounts for each hospital. We analyzed the
distributions of capital increases, and noted a slightly negative
correlation between the dollar level of capital per admission, and the
rate of increase in capital. To determine the rate of increase in
capital cost per admission, we multiplied the lesser of $3,000 or the
capital cost per admission by .00006 and subtracted this result from
1.2. (Increases for capital levels over $3,000 were not influenced by
the level of capital, so this part of the calculation was capped at
$3,000.) We selected a random number from the normal distribution,
multiplied it by 0.17 (the standard deviation) and added it to -0.04
(the mean) and then added 1 to create a multiplier. This random result
was multiplied by the previous result to assign a rate of increase
factor which was multiplied by the prior year's capital per discharge
amount to develop a capital per discharge amount for the projected
year.
To model a projected year, we used the old and new capital for the
prior year multiplied by 0.96 (aging factor). The 0.96 aging factor is
the average of changes in capital over its life. The aged new and old
capital is subtracted from the projected capital described in the
previous paragraph. The difference represents newly acquired capital.
We assume that the hospital would accrue only a half year of costs for
newly acquired capital in the year in which the capital comes on line.
This is because, on average, new capital will come on line in the
middle of the year. We make the same assumption for obligated capital.
If the hospital has obligated capital, the lesser of one half of the
adjusted costs (as described in the succeeding paragraph) for newly
acquired capital or one half of the costs for obligated capital are
deemed to apply to the current year. The full year's costs for new or
obligated capital are assumed to apply for the following year. For FY
1994, one half of the costs for any outstanding obligated capital were
deemed to apply to FY 1994; a full year's costs were deemed to apply to
FY 1995. With the exception of certain hospitals about whom we have
information to the contrary, we assume that hospitals would meet the
expiration dates provided under the obligated capital provision. The
on-line obligated amounts are added to old capital and subtracted from
the newly acquired capital to yield residual newly acquired capital,
which is then added to new capital. The residual newly acquired capital
is never permitted to be less than zero.
Next, we computed the average total capital cost per discharge from
the capital costs that were generated by the model and compared the
results to total capital costs per discharge that we had projected
independently of the model. We adjusted the newly acquired capital
amounts proportionately, so that the total capital costs per discharge
generated by the model match the independently projected capital costs
per discharge.
Once each hospital's capital-related costs are generated, the model
projects capital payments. We use the actual payment parameters (for
example, the case-mix index and the geographic adjustment factor), that
are applicable to the specific hospital.
To project capital payments, the model first assigns the applicable
payment methodology (fully prospective or hold-harmless) to the
hospital. If available, the model uses the payment methodology
indicated in the PPS-9 cost reports or the provider-specific file.
Otherwise, the model determines the methodology by comparing the
hospital's FY 1992 hospital-specific rate to the adjusted Federal rate
applicable to the hospital. The model simulates Federal rate payments
using the assigned payment parameters and hospital-specific estimated
outlier payments. The case-mix index for a hospital is derived from the
1993 MedPAR file using the proposed FY 1995 DRG relative weights
published in this rule. The case-mix index is increased each year after
FY 1993 consistent with the continuing trend in case-mix increase.
We analyzed the case-mix increases for the recent past and found
that case-mix increases have decelerated to about 1.55 percent in FY
1992 and 0.83 percent in FY 1993. It is too early to reliably determine
a case-mix increase for FY 1994 from the discharge data. Since case-mix
increases appear to be decelerating, we have reduced our projected
long-term increase of 2 percent to 1.5 percent for both FY 1994 and FY
1995. We will continue to monitor case-mix increases and make
appropriate adjustments to our projections. (Since we are using FY 1993
cases for our analysis, the FY 1993 increase in case mix has no effect
on the FY 1995 Federal rate. It does affect the estimated update for
the FY 1996 Federal rate displayed in the projection table in this
appendix.)
Changes in geographic classification and corrections in the
hospital wage data used to establish the hospital wage index affect the
geographic adjustment factor. Changes in the DRG classification system
and the relative weights affect the case-mix index.
Section 13501(a)(3) of Public Law 103-66 requires that, for
discharges occurring after September 30, 1993, the unadjusted standard
Federal rate be reduced by 7.4 percent. Consequently, the model reduces
the unadjusted standard Federal rate by 7.4 percent effective in FY
1994. Because of the budget neutrality provisions in effect through FY
1995, this provision does not reduce aggregate payments for capital in
FY 1994 and FY 1995.
Section 412.308(c)(4)(ii) requires that the estimated aggregate
payments for the fiscal year, based on the Federal rate after any
changes resulting from DRG reclassifications and recalibration and the
geographic adjustment factor, equal the estimated aggregate payments
based on the Federal rate that would have been made without such
changes. For FY 1994, the budget neutrality adjustment factor was
1.0033. To determine the factor for FY 1995, we first determined the
portion of the Federal rate that would be paid for each hospital in FY
1995 based on its applicable payment methodology. We then compared
estimated aggregate Federal rate payments based on the FY 1994 DRG
relative weights and FY 1994 geographic adjustment factor to estimated
aggregate Federal rate payments based on the FY 1995 relative weights
and the FY 1995 geographic adjustment factor. In making the comparison,
we held the FY 1995 Federal rate portion constant and set the other
budget neutrality adjustment factor and exceptions reduction factor to
1.00. We determined that to achieve budget neutrality for the changes
in the geographic adjustment factor and DRG classifications and
relative weights, an incremental budget neutrality adjustment of
1.00115 for FY 1995 should be applied to the previous cumulative FY
1994 adjustment of 1.0033 (the product of the FY 1993 incremental
adjustment of .9980 and the FY 1994 incremental adjustment of 1.0053),
yielding a cumulative adjustment of 1.00445 through FY 1995.
The methodology used to determine the recalibration and geographic
(DRG/GAF) budget neutrality adjustment factor is similar to that used
in establishing budget neutrality adjustments under the prospective
payment system for operating costs. One difference is that under the
operating prospective payment system, the budget neutrality adjustments
for the effect of geographic reclassifications are determined
separately from the effects of other changes in the hospital wage index
and the DRG weights. Under the capital prospective payment system,
there is a single DRG/GAF budget neutrality adjustment factor for
changes in the geographic adjustment factor (including geographic
reclassification) and the DRG relative weights. In addition, there is
no adjustment for the effects that geographic reclassification has on
the other payment parameters, such as the payments for serving low
income patients or the large urban add-on.
In addition to computing the DRG/GAF budget neutrality adjustment
factor, we used the model to project total aggregate payments under the
prospective payment system and to compute the budget neutrality
adjustment factor that would result in estimated payments under the
capital prospective payment system equal to 90 percent of the amount
that would have been payable on a reasonable cost basis. This budget
neutrality factor is applied to the Federal and hospital-specific
rates, but not to the hold-harmless payments.
Additional payments under the exceptions process are accounted for
through a reduction in the Federal and hospital-specific rates.
Therefore, we used the model to calculate estimated exceptions payments
and the exceptions reduction factor. This exceptions reduction factor
ensures that estimated aggregate payments under the capital prospective
payment system, including exceptions payments, equal estimated
aggregate payments under the capital prospective payment system without
an exceptions process. Since changes in the level of the payment rates
change the level of payments under the exceptions process, the budget
neutrality and exceptions adjustments factors must be determined
through iteration. Further, these two factors interact with each other
so that they must be determined simultaneously. We successfully
determined values for these factors so that the exceptions adjustment
factor is correct, and estimated payments under the capital prospective
payment system equal 90 percent of estimated Medicare inpatient capital
costs.
In the August 30, 1991 final rule (56 FR 43517), we indicated that
we would publish each year the estimated payment factors generated by
the model to determine payments for the next 5 years. The table below
provides the actual factors for FY 1992, FY 1993, and FY 1994, the
proposed factors for FY 1995, and the estimated factors that would be
applicable through FY 1999. We caution that, except with respect to FY
1992, FY 1993, FY 1994, and the proposed FY 1995, these are estimates
only, and are subject to revisions resulting from continued
methodological refinements, more recent data, and any payment policy
changes that may occur. In this regard, we note that in making these
projections we have assumed that the cumulative DRG/GAF adjustment
factor will remain at 1.00445 for FY 1995 and later because we do not
have sufficient information to estimate the change that will occur in
the factor for years after FY 1995.
The projections are as follows:

----------------------------------------------------------------------------------------------------------------
Increase in cost Exceptions Budget Federal rate
Fiscal year per discharge\1\ Update factor reduction factor neutrality (after outlier
factor reduction)
----------------------------------------------------------------------------------------------------------------
1992.................. 1.87 N/A 0.9813 0.9602 415.59
1993.................. 1.17 6.07 .9756 .9162 \2\417.29
1994.................. 3.11 3.04 .9485 .8947 \3\378.34
1995.................. 4.14 2.22 .9797 .7986 \4\353.87
1996.................. 3.87 1.52 .9912 N/A 455.12
1997.................. 4.10 2.13 .9844 N/A 461.63
1998.................. 4.29 3.62 .9723 N/A 472.46
1999.................. 4.36 4.00 .9562 N/A 483.22
----------------------------------------------------------------------------------------------------------------
\1\Note: Adjusted for estimated 1.55 percent annual increase in case mix for FY 1992, 0.83 percent for FY 1993,
1.5 percent for FY 1994 and FY 1995, and 2.0 percent for FY 1996 and later.
\2\Note: Includes the DRG/GAF adjustment factor of 0.9980 and the change in the outlier adjustment from 0.9497
in FY 1992 to 0.9496 in FY 1993.
\3\Note: Includes the 7.4 percent reduction in the unadjusted standard Federal rate. Also includes the DRG/GAF
adjustment factor of 1.0033 and the change in the outlier adjustment from 0.9496 in FY 1993 to 0.9454 in FY
1994.
\4\Note: Includes the DRG/GAF adjustment factor of 1.00445 and the change in the outlier adjustment from 0.9454
in FY 1994 to 0.9372 in FY 1995. Future adjustments are, for purposes of this projection, assumed to remain at
the same level.

Appendix C

May 10, 1994.
The Honorable Albert Gore, Jr.,
President of the Senate, Washington, DC 20510

Dear Mr. President: Section 1886(e)(3)(B) of the Social Security
Act (the Act) requires that the Secretary of Health and Human
Services report to Congress the initial estimate of the applicable
percentage increase for FY 1995 that she will recommend for
hospitals subject to the Medicare prospective payment system (PPS)
and for hospitals and units excluded from PPS. This submission
constitutes the required report.
Our recommendations are consistent with the provisions of the
Omnibus Budget Reconciliation Act (OBRA) of 1993. For FY 1995, we
recommend an average update for all hospitals subject to PPS equal
to the percentage increase in the hospital market basket (an index
of inflation in goods and services used by hospitals) minus 1.4
percentage points. We currently estimate that the market basket rate
of increase for FY 1995 will be 3.6 percent. The average update for
all PPS hospitals would equal 2.2 percent (the market basket
percentage increase of 3.6 percent minus 1.4 percent).
We are recommending the updates for urban and rural hospitals
that are provided under current law. Under our recommendation and
OBRA 1993, urban PPS hospitals would receive the market basket rate
of increase minus 2.5 percentage points, or a 1.1 percent increase.
Rural PPS hospitals would receive the market basket rate of increase
plus 4.8 percentage points, or 8.4 percent. We currently have
separate PPS payment rates for large urban, other urban and rural
hospitals. However, the law requires us to eliminate the separate
rural rate and to establish a single rate for rural and other urban
hospitals beginning in FY 1995. The higher update for rural PPS
hospitals eliminates the difference between the rate paid to other
urban and rural PPS hospitals.
Sole community hospitals (SCHs) are the sole source of care in
their area and are afforded special payment protection to maintain
access to services for Medicare beneficiaries. SCHs are paid the
higher of a hospital-specific rate or the Federal rate. Under our
recommendation and OBRA 1993, the update to hospital-specific rates
will equal the market basket rate of increase minus 2.2 percentage
points or 1.4 percent.
Hospitals and units that are excluded from PPS are paid based on
reasonable costs subject to a limit under the Tax Equity and Fiscal
Responsibility Act (TEFRA) of 1982. Consistent with current law, we
recommend an increase in the TEFRA limit equal to the rate of
increase in the excluded hospital market basket (3.7 percent) minus
1.0 percentage points, or 2.7 percent.
Our recommendation for the updates is based on current
projections of relevant data, and is consistent with the President's
budget. A final recommendation on the appropriate percentage
increases for FY 1995 will be made nearer the beginning of the new
Federal Fiscal Year based on the most current market basket
projection available at that time. The final recommendation will
incorporate our analysis of the latest estimates of all relevant
factors, including recommendations by the Prospective Payment
Assessment Commission (ProPAC).
Section 1886(d)(4)(C)(iv) of the Act requires that the Secretary
include in her report recommendations with respect to adjustments to
the diagnosis-related group (DRG) weighting factors. At this time,
we do not anticipate recommending any adjustment to the DRG
weighting factors for FY 1995.
I am pleased to provide my recommendations to you.
Sincerely,
Donna E. Shalala
May 10, 1994.
The Honorable Thomas S. Foley,
Speaker of the House of Representatives, Washington, DC 20515.

Dear Mr. Speaker: Section 1886(e)(3)(B) of the Social Security
Act (the Act) requires that the Secretary of Health and Human
Services report to Congress the initial estimate of the applicable
percentage increase for FY 1995 that she will recommend for
hospitals subject to the Medicare prospective payment system (PPS)
and for hospitals and units excluded from PPS. This submission
constitutes the required report.
Our recommendations are consistent with the provisions of the
Omnibus Budget Reconciliation Act (OBRA) of 1993. For FY 1995, we
recommend an average update for all hospitals subject to PPS equal
to the percentage increase in the hospital market basket (an index
of inflation in goods and services used by hospitals) minus 1.4
percentage points. We currently estimate that the market basket rate
of increase for FY 1995 will be 3.6 percent. The average update for
all PPS hospitals would equal 2.2 percent (the market basket
percentage increase of 3.6 percent minus 1.4 percent).
We are recommending the updates for urban and rural hospitals
that are provided under current law. Under our recommendation and
OBRA 1993, urban PPS hospitals would receive the market basket rate
of increase minus 2.5 percentage points, or a 1.1 percent increase.
Rural PPS hospitals would receive the market basket rate of increase
plus 4.8 percentage points, or 8.4 percent. We currently have
separate PPS payment rates for large urban, other urban and rural
hospitals. However, the law requires us to eliminate the separate
rural rate and to establish a single rate for rural and other urban
hospitals beginning in FY 1995. The higher update for rural PPS
hospitals eliminates the difference between the rate paid to other
urban and rural PPS hospitals.
Sole community hospitals (SCHs) are the sole source of care in
their area and are afforded special payment protection to maintain
access to services for Medicare beneficiaries. SCHs are paid the
higher of a hospital-specific rate or the Federal rate. Under our
recommendation and OBRA 1993, the update to hospital specific rates
will equal the market basket rate of increase minus 2.2 percentage
points or 1.4 percent.
Hospitals and units that are excluded from PPS are paid based on
reasonable costs subject to a limit under the Tax Equity and Fiscal
Responsibility Act (TEFRA) of 1982. Consistent with current law, we
recommend an increase in the TEFRA limit equal to the rate of
increase in the excluded hospital market basket (3.7 percent) minus
1.0 percentage points, or 2.7 percent.
Our recommendation for the updates is based on current
projections of relevant data, and is consistent with the President's
budget. A final recommendation on the appropriate percentage
increases for FY 1995 will be made nearer the beginning of the new
Federal Fiscal Year based on the most current market basket
projection available at that time. The final recommendation will
incorporate our analysis of the latest estimates of all relevant
factors, including recommendations by the Prospective Payment
Assessment Commission (ProPAC).
Section 1886(d)(4)(C)(iv) of the Act requires that the Secretary
include in her report recommendations with respect to adjustments to
the diagnosis-related group (DRG) weighting factors. At this time,
we do not anticipate recommending any adjustment to the DRG
weighting factors for FY 1995.
I am pleased to provide my recommendations to you.
Sincerely,
Donna E. Shalala

Appendix D: Recommendation of Update Factors for Operating Cost
Rates of Payment for Inpatient Hospital Services

I. Background

Several provisions of the Social Security Act (the Act) address the
setting of update factors for services furnished in FY 1995 by
hospitals subject to the prospective payment system and those excluded
from the prospective payment system. Section 1886(b)(3)(B)(i)(X) of the
Act sets the FY 1995 percentage increases in the operating cost
standardized amounts equal to the rate of increase in the hospital
market basket minus 2.5 percentage points for prospective payment
hospitals located in urban areas. For hospitals located in rural areas,
section 1886(b)(3)(B)(i)(X) requires the Secretary to apply an update
so as to make the rural national average standardized amounts equal to
the other urban national average standardized amount. Section
1886(b)(3)(B)(iv) sets the FY 1995 percentage increase to the hospital-
specific rate applicable to sole community hospitals equal to the rate
of increase in the hospital market basket minus 2.2 percentage points.
Section 1886(b)(3)(B)(ii) of the Act sets the FY 1995 percentage
increase in the rate-of-increase limits for hospitals excluded from the
prospective payment system equal to the rate of increase in the
excluded hospital market basket minus a reduction factor (not to exceed
1.0 percent) depending on the provider's operating costs and target
amounts.
In accordance with section 1886(d)(3)(A) of the Act, we are
proposing to update the average standardized amounts, the hospital-
specific rates and the rate-of-increase limits for hospitals excluded
from the prospective payment system as provided in section
1886(b)(3)(B) of the Act. Based on the currently forecasted market
basket increase of 3.6 percent for hospitals subject to the prospective
payment system, the proposed updates in the standardized amounts are
1.1 percent for hospitals in urban areas and approximately 8.4 percent
for hospitals in rural areas. The proposed update in the hospital-
specific rate applicable to sole community hospitals is 1.4 percent
(that is, the market basket rate of increase of 3.6 percent minus 2.2
percentage points). The proposed update for hospitals excluded from the
prospective payment system is based on the percentage increase in the
excluded hospital market basket (currently estimated at 3.7 percent)
minus a reduction factor (not to exceed 1.0 percent).
Sections 1886(e)(2)(A) and (3)(A) of the Act require that the
Prospective Payment Assessment Commission (ProPAC) recommend to the
Congress by March 1, 1994 an update factor that takes into account
changes in the market basket rate of increase index, hospital
productivity, technological and scientific advances, the quality of
health care provided in hospitals, and long-term cost effectiveness in
the provision of inpatient hospital services.
In its March 1, 1994 report, ProPAC recommended update factors to
the standardized amounts equal to the percentage increase in the market
basket minus 1.5 percentage points for urban hospitals and the market
basket rate of increase plus 1.6 percentage points for hospitals
located in rural areas. Based on its market basket rate of increase
estimate of 3.7 percent, ProPAC's recommended updates to the
standardized amounts equal 2.2 percent for hospitals located in urban
areas and 5.3 percent for hospitals located in rural areas. ProPAC
recommended that the update for the hospital-specific rates applicable
to sole community hospitals be equal to the average update for all
hospitals (that is, equal to the percentage increase in the market
basket minus 1.0 percentage point, or 2.7 percent based on a market
basket rate of increase estimate of 3.7 percent). The components of
ProPAC's update factor recommendations are described in detail in the
ProPAC report, which is published as Appendix F to this document. We
discuss ProPAC's recommendations concerning the update factors and our
responses to those recommendations below.
Section 1886(e)(4) of the Act requires that the Secretary, taking
into consideration the recommendations of ProPAC, recommend update
factors for FY 1995 that take into account the amounts necessary for
the efficient and effective delivery of medically appropriate and
necessary care of high quality. Under section 1886(e)(5) of the Act, we
are required to publish the recommended FY 1995 update factors that are
provided for under section 1886(e)(4) of the Act. Accordingly, this
appendix provides our recommendations of appropriate update factors,
our analysis of the derivation of the amount of the update factors, and
our responses to the ProPAC recommendations concerning the update
factors.

II. Secretary's Recommendations

Under section 1886(e)(4) of the Act, we are recommending that the
standardized amounts be increased by an average amount equal to the
market basket rate of increase minus 2.5 percentage points for
hospitals located in urban areas and the market basket rate of increase
plus 4.8 percentage points for hospitals located in rural areas (before
the effects of adjustments for outlier, geographic reclassification and
recalibration of the DRG relative weights). Our recommendation for a
higher update to the rural standardized amount is intended to eliminate
the differential between the standardized amounts for other urban and
rural hospitals, as required by section 1886(b)(3)(B)(i)(X) of the Act.
We are also recommending an update of the market basket rate of
increase minus 2.2 percentage points to the hospital-specific rate for
sole community hospitals. These figures are consistent with the
President's budget recommendation, given the new market basket forecast
of 3.6 percent.
We recommend that hospitals excluded from the prospective payment
system receive an update equal to the percentage increase in the market
basket that measures input price increases for services furnished by
excluded hospitals minus 1.0 percentage point. That market basket rate
of increase is currently forecast at 3.7 percent. Subtracting 1.0
percentage point would result in an update for hospitals excluded from
the prospective payment system of 2.7 percent.
As required by section 1886(e)(4) of the Act, we have taken into
consideration the recommendations of ProPAC in setting these
recommended update factors. Our responses to the ProPAC recommendations
concerning the update factors are discussed below.

III. ProPAC Recommendation for Updating the Prospective Payment
System Standardized Amounts

For FY 1995, ProPAC recommends that the standardized amount be
updated by the following factors:
The projected rate of increase in the hospital market
basket (which was estimated to be 3.7 percent in ProPAC's March 1, 1994
report) with an adjustment of 0.0 percentage points to account for the
different wage and salary price proxies used for the ProPAC market
basket rate of increase.
A correction of -1.1 percent to reflect the forecast error
in the FY 1993 market basket rate of increase.
A discretionary adjustment factor of -0.4 percent composed
of an allowance of 0.3 percent for scientific and technological
advancement and an allowance of -0.7 percent for productivity
improvement.
An adjustment for case-mix change of 0.0 percent.
A differential update of 3.1 percent for hospitals located
in rural areas to reflect the phasing out of the differential in the
standardized amounts between rural and other urban hospitals.
Overall, the net increase employing the above factors is the
percentage increase in the hospital market basket minus 1.5 percentage
points for urban hospitals and the market basket percentage increase
plus 1.6 percentage points for rural hospitals. Based on the market
basket rate of increase estimate of 3.7 percent used in its March 1,
1994 report, ProPAC recommends that urban hospitals receive a 2.2
percent update and rural hospitals receive a 5.3 percent update.
Response: We are recommending an update that is consistent with the
Administration's budget proposal and the requirements of section
1886(b)(3)(B)(i) of the Act, as amended by section 13501(a) of Public
Law 103-66. Our recommendation is that: 1) the average update for
prospective payment system hospitals located in urban areas for FY 1995
be equal to market basket rate of increase forecast minus 2.5
percentage points, 2) the update to the rural standardized amounts be
sufficient to equate the rural with the other urban standardized
amounts. Based on HCFA's current forecast of the market basket rate of
increase (3.6 percent), we recommend an update for FY 1995 for urban
hospitals equal to 1.1 percent (the market basket rate of increase
minus 2.5 percentage points), and for rural hospitals equal to 8.4
percent (the market basket percentage increase plus 4.8 percentage
points). Under these recommendations, we now estimate that the average
update for all prospective payment system hospitals would be the market
basket minus 1.4 percentage points, or approximately 2.2 percent. As we
have explained in section II of the Addendum to this proposed rule, our
recommended updates would be applied to the unadjusted FY 1994
standardized payment amounts. That is, the FY 1994 standardized payment
amounts published in our September 1, 1993 final rule (at 58 FR 46362)
would be increased to remove the effects of adjustments made for
outliers and geographic reclassification before the recommended updates
would be applied.
Our recommendation is supported by the following analyses that
measure changes in hospital productivity, scientific and technological
advances, practice pattern changes, and changes in case mix:
Productivity: Service level productivity is defined as the
ratio of total service output to full time equivalent employees (FTEs).
While we recognize that productivity is a function of many variables
(for example, labor, non-labor material and capital inputs), we use a
labor productivity measure in our framework, since the current update
framework applies to operating payment. To recognize that we are
apportioning the short run output changes to the labor input, we weight
our productivity measure for operating costs by the appropriate share
of labor input to total operating input to determine the expected
effect on cost per case.
Our recommendation for the service productivity component is based
on historical trends in productivity and total output for both the
hospital industry and the general economy, and projected levels of
future hospital service output. ProPAC has also estimated cumulative
service productivity growth to be 4.9 percent from 1985-1989 or 1.2
percent annually. At the same time, they estimate total service growth
at 3.4 percent annually, implying a ratio of service productivity
growth to output growth of 0.35. Our MedPAR analysis indicates total
Medicare service output (charges per admission, adjusted for CPI
change) increased 20.9 percent from 1985-1993, or an approximate
average annual increase of 2.4 percent. Since it is not possible at
this time to develop a productivity measure specific to Medicare
patients, we examined productivity (output per hour) and output (gross
domestic product) for the economy. Depending on the exact time period,
annual changes in productivity range from 0.3 to 0.35 of the change in
output (that is, a 1.0 percent increase in output would be correlated
with an 0.3 to 0.35 percent change in output per hour).
Under our framework, the recommended update is based in part on
expected productivity--that is, projected service output during the
year multiplied by the historical ratio of service productivity to
total service output, multiplied by the share of labor in total
operating inputs, as calculated in the hospital market basket rate of
increase. This method estimates an expected labor productivity
improvement in the same proportion to expected total service growth
that has occurred in the past and assumes that, at a minimum, growth in
FTEs changes proportionally to the growth in total service output.
Thus, the recommendation allows for unit productivity to be smaller
than the historical averages in years that output growth is relatively
low, and higher in years that output growth is larger than the
historical trend. Based on the above estimates from both the hospital
industry and the economy, we have chosen to employ the range of ratios
of productivity change to output change of 0.30 to 0.35.
The expected change in total hospital service output is the product
of projected growth in total admissions (adjusted for outpatient
usage), projected real case-mix growth, and expected quality enhancing
intensity growth, net of expected decline in intensity due to reduction
of cost ineffective practice. Case-mix growth and intensity numbers for
Medicare are used as proxies for those of the total hospital, since
case-mix increases (used in the intensity measure as well) are
unavailable for non-Medicare patients. Thus, expected output growth is
simply the product of the expected change in intensity (0.0 percent),
projected admissions change (3.2 percent for 1995) and projected real
case-mix growth (1.0 to 1.4 percent for 1995), or 4.2 to 4.6 percent.
The share of direct labor services in the hospital market basket rate
of increase (consisting of wages and salaries and employee benefits) is
61.7 percent. Multiplying the expected change in total hospital service
output by the ratio of historical service productivity change to total
service growth of 0.30 to 0.35 and by the direct labor share percentage
provides our productivity standard of 0.8 to 1.0 percent.
ProPAC also believes hospitals should be given an incentive for
additional productivity improvement. ProPAC measures productivity as
the ratio of hospital admissions (adjusted for case mix and outpatient
services) per FTE employee (adjusted for changes in skill mix). ProPAC
includes in its productivity measurement the effect of changes in
practice patterns. We treat practice pattern changes as a portion of
our intensity adjustment, described below. This year, ProPAC assumes a
productivity gain of at least 1.4 percent and recommends a -0.7
percentage point adjustment on the basis that any productivity gains
should be shared equally by Medicare and hospitals.
Intensity: We base our intensity standard on the combined
effect of three separate factors: changes in the use of quality
enhancing services, changes in the use of services due to shifts in
within-DRG severity, and changes in the use of services due to
reductions of cost-ineffective practices. For 1995, we recommend an
adjustment of 0.0 percent. The basis of this recommendation is
discussed below.
We have no empirical evidence that accurately gauges the level of
quality-enhancing technology changes. Typically, a specific new
technology increases costs in some uses and decreases costs in other
uses. Concurrently, health status is improved in some situations while
in other situations it may be unaffected or even worsened using the
same technology. It is difficult to separate out the relative
significance of each of the cost-increasing effects for individual
technologies and new technologies.
The quality enhancing technology component is intended to recognize
the use of services which increase cost but whose value in terms of
enhanced health-status is commensurate with these costs. Such services
may result from technological change, or in some cases, increased use
of existing technologies. The latter recognizes that as cost and
medical effectiveness studies become available, some increased use of
existing, as well as new, services may be warranted.
The component for reduction of cost-ineffective practice recognizes
that some improvements in practice patterns could be made so that the
intensity of services provided is more consistent with the efficient
use of limited resources. That is, improvements could be made so that
the number of services provided during an inpatient stay, and their
complexity, produce an improvement in health status that is consistent
with the cost of care. This component of our update recommendation is
intended to encourage both hospitals and physicians to more carefully
consider the cost-effectiveness of medical care. This component of the
framework also accounts for real within-DRG change, since that should
be directly reflected in the CMI- adjusted growth in real charges per
case.
We note that, since 1985, the intensity of services per inpatient
admission has increased, even after adjusting for the growth in real
case mix each year. These increases, which are similar to pre-
prospective payment system increases, followed intensity decreases in
both 1984 and 1985. Following methods developed by HCFA's Office of the
Actuary for deriving hospital output estimates from total hospital
charges, ProPAC has estimated that case mix constant intensity per
admission increased at an average of 1.5 percent annually from 1985-
1990. We have developed Medicare-specific intensity measures for
inpatient services based on a five-year average using FY 1988-1993
MedPAR billing data. Consistent with ProPAC, case-mix constant
intensity is calculated as the change in total Medicare charges per
discharge adjusted for changes in the average charge per unit of
service as measured by the Medical CPI hospital component, and changes
in real case-mix. Past studies of case-mix change by the RAND
Corporation indicate that the change in real case-mix ranges from 1.0
percent to 1.4 percent per year. If we assume that real case-mix change
is 1.4 percent per year, we estimate case-mix constant intensity to
have declined by an average of 0.4 percent each year during the FY
1988-1993 period, a cumulative decrease of 2.1 percent. If we assume
that real case-mix has been growing at 1.0 percent annually, case-mix
constant intensity has declined by an average of 0.1 percent annually,
for a cumulative decrease of 0.6 percent. We note that regardless of
which real case-mix number we assume (1.0 or 1.4), we used the observed
case-mix increase for FY 1993 of 0.8 percent to calculate the real
case-mix constant intensity. Since we estimate that intensity has
declined during the FY 1988-1993 period, we are recommending a 0.0
percent intensity adjustment for FY 1995.
Quality Enhancing New Science and Technology: Project
Hope, under contract with ProPAC, annually estimates the incremental
operating costs of specific cost-increasing technologies. However, we
know of no definitive studies that establish an appropriate level or
range for this factor. ProPAC's adjustment is for the cost-increasing
effect of new technologies only, and this year assumes the estimated
costs for these technologies at only 0.3 percent.
We believe there may be several shortcomings with ProPAC's
recommendations with regard to technology. First, the estimate does not
account for offsetting changes in revenue due to changes in DRG
assignment. Second, it is not clear that all of the new technologies
listed in ProPAC's study significantly enhance health status. To the
extent the new technologies are not quality enhancing, an adjustment is
inappropriate. Finally, some of the technologies have considerable
potential for cost savings relative to the technologies they are
replacing.
Change in Case Mix: Our analysis takes into account
projected changes in case-mix, adjusted for changes attributable to
improved coding practices. For our FY 1995 update recommendation, we
are projecting a 1.5 percent increase in the case-mix index. We define
real case-mix change as actual changes in the mix (and resource
requirements) of Medicare patients as opposed to changes in coding
behavior that result in assignment of cases to higher-weighted DRGs but
do not reflect greater resource requirements. We estimate that 1.0 to
1.4 percent of the projected case-mix increase of 1.5 percent will be
real. This estimate is supported by past studies of case-mix change by
RAND Corporation. The most recent study by the RAND Corporation, ``Has
DRG Creep Crept Up? Decomposing the Case Mix Index Change Between 1987
and 1988'' by G.M. Carter, J.P. Newhouse and D.A. Relles, R-4098-HCFA/
ProPAC (1991), uses medical records from subsequent Federal fiscal
years using consistent standards to determine real case-mix change. The
study specifically suggests that real case-mix change is not dependent
on total change, but instead is a fairly steady 1.0 to 1.5 percent per
year. We use 1.4 percent as the upper bound because the RAND study did
not take into account that hospitals may have induced doctors to more
completely document medical records so as to improve payment. The
resulting adjustment to account for changes in case mix during FY 1993,
the most recent year for which data are available, is -0.1 to -0.5
percent (subtracting the projected case-mix of 1.5 percent and adding
real case mix change of 1.0 to 1.4 percent). The 0.9 percent figure
used in the ProPAC framework represents ProPAC's projection for
observed case-mix change, and its projection for real case-mix change,
including within-DRG case complexity change, during FY 1994. Consistent
with ProPAC's framework, we are using a projection for case-mix change
in our recommendation.
Effect of FY 1993 Reclassification and Recalibration: We
estimate that DRG reclassification and recalibration for FY 1993
resulted in a 0.1 percent decrease in the case-mix index when compared
with the case-mix index that would have resulted if we had not made the
reclassification and recalibration changes to the GROUPER. ProPAC does
not make an adjustment for DRG reclassification and recalibration in
its update recommendation (we note that Congress asks the Secretary for
an estimate of these effects in our update recommendation).
Correction for Market Basket Forecast Error: The FY 1993
estimated market basket percentage increase used to update the payment
rates was 4.1 percent. Our most recent data indicate the actual FY 1993
increase was 2.9 percent, reflecting that the actual increase in wages
was lower than projected. The resulting forecast error in the projected
FY 1993 market basket rate of increase forecast is 1.2 percentage
points. Our policy has been to make a forecast error correction if our
estimate is off by 0.25 percentage points or more. Therefore, we are
recommending an adjustment of -1.2 percentage points to reflect this
overestimation of the FY 1993 market basket rate of increase. The
following is a summary of the update ranges supported by our analyses
compared to ProPAC's framework.

Table 1.--Comparison of FY 1995 Update Recommendations
------------------------------------------------------------------------
HHS ProPAC
------------------------------------------------------------------------
Market Basket.......... MB MB
Difference Between HCFA ....................... +0.0
& ProPAC Market
Baskets.

------------------------------------------------
Subtotal........... MB MB

Policy Adjustment
Factors:
Productivity........... -0.8--1.0 -0.7
Intensity.............. 0.0
Science and ....................... +0.3
Technology.
Intensity.......... ....................... (\1\)
Real Within DRG ....................... (\2\)
Change.

------------------------------------------------
Subtotal....... -0.8--1.0 +0.3
Case Mix Adjustment
Factors:
Projected Case Mix -1.5 -0.9
Change.
Real Across DRG 1.0-1.4 +0.7
Change.
Real Within DRG (\3\) +0.2
Change.

------------------------------------------------
Subtotal....... -0.1--0.5 0.0
Effect of 1993 +0.1 ......................
Reclassification and
Recalibration.
Forecast Error -1.2 -1.1
Correction.

------------------------------------------------
Total Recommended MB-2.0-MB-2.6 MB-1.5
Update.
------------------------------------------------------------------------
(\1\) Included in ProPAC's Productivity Measure.
(\2\) Included in ProPAC's Case Mix Adjustment.
(\3\) Included in HHS' Intensity Factor.

The above analysis supports our recommended update to the urban
standardized amounts of the market basket rate of increase (that is,
3.6 percent) minus 2.5 percentage points, or 1.1 percent. In addition,
we believe a differential update for the standardized amount applicable
to rural hospitals is appropriate in order to phase out the
differential between the rural and other urban standardized amounts, as
required by section 1886(d)(3)(A)(iii) of the Act. We are recommending
that the rural standardized amount be updated by the market basket plus
4.8 percentage points for a total update of 8.4 percent. This
recommendation is consistent with the President's budget, which
includes an update to the standardized amounts for rural hospitals of
the market basket rate of increase plus the amount necessary to
eliminate the differential between the rural and other urban
standardized amounts.
We recommend that the hospital-specific rates applicable to sole
community hospitals be increased by the update factor that approximates
that applicable for urban hospitals. We believe that the considerations
used to develop the update recommendations for the rural standardized
amounts that would eliminate the difference between the rural and other
urban standardized amounts are not a relevant consideration for the
hospital-specific rates. Therefore, we are recommending an update to
hospital-specific rates of the market basket rate of increase minus 2.2
percentage points, which is consistent with current law and the
President's budget.

IV. ProPAC Recommendation for Updating the Rate-of-Increase Limits
for Excluded Hospitals

ProPAC recommends an update factor equal to the market basket rate
of increase minus 1.0 percentage point for excluded hospitals and
units. The 1.0 percentage point reduction represents a reduction of 1.0
percentage point to account for the forecast error in the FY 1993
market basket rate of increase for excluded units, no increase to
reflect the different compensation price proxies used by ProPAC, and no
allowance for new technology. ProPAC no longer recommends an additional
allowance based on the year the hospital or unit was excluded from the
prospective payment system, pending our report to Congress on payment
reform for excluded hospitals and units as mandated by Public Law 101-
508.
Response: We recommend that hospitals excluded from the prospective
payment system receive an update equal to the percentage increase in
the market basket that measures input price increases for services
furnished by excluded hospitals minus 1.0 percentage point. The
reduction is consistent with the updates provided under current law and
in the President's Budget. The market basket rate of increase for
excluded hospitals is currently forecast at 3.7 percent. Subtracting
1.0 percentage point would result in an update of 2.7 for excluded
hospitals and units.

Appendix E: Development of Update Framework for Prospective Payment
System for Inpatient Hospital Capital-Related Costs

I. Introduction

For FY 1992 through FY 1995, Sec. 412.308(c)(1) provides that the
update for the capital prospective payment rates (Federal rate and
hospital-specific rate) will be based on a 2-year moving average of
actual increases in Medicare inpatient capital costs per discharge. The
regulations provide that, beginning in FY 1996, HCFA will determine the
update in the capital prospective payment rates based on an analytical
framework that will take into account (1) changes in the price of
capital (which we will incorporate into a capital input price index),
and (2) appropriate changes in capital requirements resulting from
development of new technologies and other factors (such as the
diffusion of existing technologies and existing hospital capacity and
utilization). The objective of the capital update framework is to
determine a rate of increase in aggregate capital prospective payments
that, along with a rate of increase in DRG operating payments, ensures
a joint flow of capital and operating services for efficient and
effective care for Medicare patients.
Although the analytical framework will not be employed to determine
the annual update factor until FY 1996, we are presenting a series of
preliminary models, using available data and concepts, of an update
framework for the prospective payment system for hospital inpatient
capital-related costs. We have presented a series of models in our FY
1992, FY 1993, and FY 1994 rulemaking documents. We received no
comments on the most recent model of the framework, which appeared in
the September 1, 1993 final rule (58 FR 46489). Below we discuss the
current version of the model, based on our previously published version
and our continued analysis of the data and concepts incorporated into
the framework.
The model update framework includes a capital input price index
(CIPI) that parallels the operating input price index. The CIPI
measures the pure price changes associated with changes in capital-
related costs (prices x ``quantities''). The composition of capital-
related costs is maintained at base-year FY 1987 proportions in the
CIPI. As such, the composition of capital reflects the underlying
capital acquisition process. We selected FY 1987 as the base year for
this preliminary CIPI for consistency with the operating input price
index. We would periodically update both the operating and the capital
input price indexes to reflect the changing composition of inputs for
capital and operating costs. We expect to have rebased the capital and
operating input price indexes by the time we implement the final
capital update framework for FY 1996. The CIPI below illustrates the
methodology we propose to employ.
The model capital update framework, like the revised operating
update framework, incorporates several policy adjustments in addition
to the CIPI. We would adjust for case-mix index-related changes, for
intensity, and for the efficient and cost-effective use of capital
(such as movable equipment, buildings and fixed equipment) in the
hospital industry, as well as for error in the capital input price
index forecast.
In developing the model framework, we are attempting as much as
possible to maintain consistency with the current operating framework,
in order to facilitate the eventual development of a single prospective
payment system update framework. We are also concerned with promoting
the goals that motivated the adoption of the capital prospective
payment system, especially the goals of promoting more effective and
efficient utilization of capital resources in the hospital industry and
establishing incentives for hospitals to make cost-effective decisions
regarding acquisition of new capital resources.
It is important to emphasize that this presentation represents our
current thinking, and that we continue to encourage submission of
comments and recommendations for further improvements. We are
interested in suggestions regarding the CIPI, the proposed policy
adjustment factor for intensity, and alternative methodologies for
deriving the factors. We also welcome information concerning empirical
studies and sources of data that could be useful in developing the
framework. We will consider comments and recommendations on any aspect
of the model framework in making further developments for presentation
in the next version of the model. Our plan is to consider comments
received on this model for inclusion in one further preliminary model
to be included in this year's final rule for the prospective payment
system. We will then formally propose an analytical update framework
for implementation in FY 1996 during the rulemaking process for that
year.

II. ProPAC Recommendation for Updating the Capital Prospective
Payment System Federal Rate

ProPAC recommends the use of an update framework that includes a
capital market basket component that measures 1-year changes in the
purchase prices of a fixed basket of capital goods purchased by
hospitals (Recommendation 10). The ProPAC framework also includes
several policy adjustment factors. A forecast error correction factor
adjusts payment rates so that the effects of past errors are not
perpetuated. A financing policy adjustment accounts for the effects of
substantial deviations from long-term trends in interest rates on
hospital capital costs. The capital update framework also includes
adjustments for scientific and technological advances, productivity,
and case-mix change similar to those employed in the ProPAC operating
update framework.
In Recommendation 11, ProPAC also recommends the development and
use of a combined update framework for the prospective payment systems
for operating and capital-related costs for FY 1995.
Response: Our long-term goal is to develop a single prospective
payment system update framework. Currently, the regulations provide for
the determination of the capital prospective payment update by means of
a lagged 2-year average of actual Medicare capital cost increases. Once
we have completed work on an analytical framework for the capital
prospective payment update, we will begin to study development of a
unified framework. In the meantime, we will continue to maintain
consistency as much as possible with the current operating framework in
order to facilitate the eventual development of a unified framework.
The basic objectives of the ProPAC and HCFA update frameworks are
compatible. The goal of each framework is to provide a rate of increase
in capital prospective payments that, along with the rate of increase
in operating prospective payments, will ensure a flow of capital and
operating resources that will allow for efficient and effective care
for Medicare patients. Both frameworks are designed to provide
increases for the purchase of quality-enhancing new technologies. Both
frameworks provide for case-mix adjustments to remove the effects of
upcoding and to adjust for changes in within-DRG severity. Both
frameworks also seek to encourage efficient capital spending behavior
and to adjust the overall size of capital stock to appropriate levels.
Although the frameworks adopt different methodologies for promoting
some of these goals, they are philosophically compatible to the degree
that they share these goals.
However, there is one significant philosophical difference between
the ProPAC and HCFA frameworks. ProPAC's framework is based on the
premise that capital prospective payments are for future capital
purchases. Thus, ProPAC's proposed capital market basket reflects the
projected increase in the purchase price of capital goods from one year
to the next. To put it another way, the market basket under the ProPAC
framework reflects the price of replacing current capital stock at
future prices.
HCFA's framework is based on the premise that capital prospective
payments are for hospitals' future capital-related expenses rather than
for future capital-related purchases. That is, HCFA's framework
addresses the expenses associated with hospitals' given stock of
capital in a particular fiscal year; ProPAC's framework ignores
hospitals' present stock of capital and focuses on costs of capital
purchases that hospitals will make in a particular fiscal year.
There is a sound economic reason why the current purchase price of
capital assets alone is an inadequate measure of the price of capital.
The crucial distinguishing feature of capital assets is that they are
consumed over time. A satisfactory measure of the change in capital
input prices must therefore account for this fact. Consideration of the
costs for all capital currently in use for patient care, not just the
costs for current capital purchases, is necessary for this purpose. The
ProPAC index cannot adequately capture this aspect of changes in
capital input prices.
In addition to our disagreement with ProPAC over the basic purpose
of the CIPI, we also disagree over the treatment of interest. The pure
price aspects of interest costs (that is, the interest rate and the
purchase price that is represented in the amount of loan principal) are
beyond the control of the hospital industry. To be sure, the actual
decision to purchase capital assets or acquire debt is a ``quantity''
decision and typically is discretionary for a particular span of time.
However, measuring the actual expected price per unit of real capital,
independently of any evaluation of the propriety of any actual purchase
decisions, is essential to recognize that the industry has control over
the amount of capital it purchases but no control over the price it
pays for capital. Thus, the pure price aspect of interest cost changes
must be incorporated into the CIPI. Otherwise, the CIPI will not
accurately reflect the prices faced by hospitals who must borrow to
finance necessary capital acquisitions. Limitations on the quantity of
capital are appropriately implemented through policy adjustment
factors. The ProPAC approach artificially eliminates pure price changes
related to interest costs from the CIPI and incorporates them into a
discretionary adjustment factor. The HCFA CIPI retains all price
components of increase in interest costs as one measure of inflation in
capital-related expenses. It thereby keeps price and quantity aspects
distinct, allowing separate analysis of each factor of increases in
capital expenses.
We provide further comments on particular ProPAC recommendations in
sections III and IV of this appendix. The ProPAC recommendations
concerning the methodology for recognizing increases due to quality-
enhancing new technology and the case-mix index adjustment are
discussed in Appendix D in the context of the update recommendation for
the prospective payment system for operating costs.

III. Measurement of Capital Input Price Increases

A. Introduction

HCFA proposed a capital input price index as one component in
developing future update factors for the Federal rate in the September
1, 1992 Federal Register (57 FR 40016). We have presented revised
versions of the capital input price index in the May 26, 1993 (58 FR
30448) and September 1, 1993 (58 FR 46490) issues of the Federal
Register. The developing capital input price index parallels the
operating input price index. Both the developing capital input price
index and the operating input price index are designed to measure input
price changes for hospitals' current year expenses, that is, to
separate pure price changes from quantity and expenditure changes. The
operating sector input price index measures input price changes for
operating-related expenses. The capital input price index measures
input price changes for capital-related expenses. Capital-related
expenses include depreciation, interest, and other expenses (taxes and
insurance related to capital goods.)

B. Review of the HCFA Capital Input Price Index Methodology

The current version of the CIPI is based on the following
assumptions:

The Federal rate is based on the concept of capital-
related expenses of capital assets used for patient care in the
fiscal year and, therefore, any change in the Federal rate should
take into account expected changes in the input price aspects of
capital-related expenses;
Capital-related expenses are defined as the sum of
depreciation expense, capital-related interest costs, and other
capital-related costs, including taxes, insurance, and leases; and
The input prices related to capital-related expenses
are beyond the control of the hospital industry (that is, the
hospital is a price-taker, not a price-setter).

These assumptions lead directly to a definition of a CIPI that
takes into account the price aspects of changes in depreciation
expense, interest costs, and other capital-related costs. Further, the
assumptions lead directly to input prices for depreciation expense and
interest costs which, unlike operating costs, have a time dimension
that must be captured in the CIPI. HCFA includes three categories of
capital-related expenses in the CIPI: depreciation expense, interest
costs, and other capital-related costs (taxes and insurance).
Current depreciation expenses represent the summed depreciation
charges for all past purchases of fixed capital assets that are still
depreciable in the current period. The input prices associated with
these depreciation expenses are the purchase prices attached to all
past and current capital purchases for capital still depreciable in the
current period. A weighted average of these purchase prices thus
represents the input price associated with depreciation expenses in the
current period. Thus, the depreciation input price for the current
period measures price aspects of current depreciation expenses for
capital just as the operating input price index for the current period
measures price aspects of current operating expenses for labor and non-
capital goods and services. The depreciation input price differs from
the operating input price in that the depreciation input price is a
composite of all past capital purchase prices while the operating index
input price measures purchase prices for current periods only.
Current interest expenses represent the total interest charges for
all still-active past debt instruments associated with the purchase of
fixed capital assets. The input prices associated with these interest
expenses are the interest rates attached to all past debt instruments
that are still active in the current period. A weighted average of
these interest rates thus represents the input price associated with
interest expenses in the current period. Thus, the interest input price
for the current period measures price aspects of current interest
expenses just as the operating input price index for the current period
measures price aspects of current operating expenses for labor and non-
capital goods and services. The interest input price differs from the
operating input price in that the depreciation input price is a
composite of all past interest rates for debt instruments still active
while the operating index input price measures purchase prices for
current periods only.
Current year capital-related expenses for taxes and insurance have
an annual time dimension and, therefore, prices associated with these
expenses are, like operating input prices, current year prices only.

C. Revisions to the Depreciation Component of the CIPI

A commenter on a previous version of the CIPI recommended that
constant annual weights for capital price proxies be replaced by
variable annual weights that reflect the vintage purchases of capital.
The commenter pointed out that annual purchases of real capital tend to
increase over time. As annual purchases of capital increase, the later
years in the moving average of depreciation costs should be weighted
more heavily than the earlier years.
We agree with this comment. Accordingly, a special data base was
prepared to provide appropriate historical weights for depreciation and
interest input prices. The data base starts with financial variables
from the American Hospital Association (AHA) Panel Survey. These are
enhanced with data from Medicare cost reports and from the Department
of Commerce Capital Expenditure Survey. The data base provides annual
estimates of nominal purchases for building and fixed equipment and for
movable equipment. Leasing amounts were converted to nominal purchases
using the same relationships as appear for owner-operated capital.
Nominal purchases were then converted to annual real (that is, constant
dollar) purchases by dividing nominal expenditures by an appropriate
purchase price proxy.
Expected life for building and fixed equipment and for movable
equipment were derived from Medicare cost reports by dividing book
value of assets by current year depreciation amounts. The relative
distribution of real capital purchases within the respective life for
building and fixed equipment (25 years) and for movable equipment (10
years) were derived from the special data base. These relative
distributions are shown in Table 1. Relative distributions for a number
of different time periods were averaged to obtain the distributions in
Table 1. These distributions were all very similar regardless of the
periods chosen and, therefore, we selected an average of the
distributions in order to simplify the calculations.

Table 1.--Relative Weights for Capital Price Proxies Depreciation
Building and Fixed Equipment
Expected Life: 25 years
------------------------------------------------------------------------

1.............................................................. 0.015
2.............................................................. 0.019
3.............................................................. 0.022
4.............................................................. 0.024
5.............................................................. 0.023
6.............................................................. 0.022
7.............................................................. 0.020
8.............................................................. 0.021
9.............................................................. 0.025
10............................................................. 0.030
11............................................................. 0.033
12............................................................. 0.034
13............................................................. 0.034
14............................................................. 0.035
15............................................................. 0.038
16............................................................. 0.043
17............................................................. 0.049
18............................................................. 0.053
19............................................................. 0.056
20............................................................. 0.057
21............................................................. 0.060
22............................................................. 0.066
23............................................................. 0.071
24............................................................. 0.075
25............................................................. 0.077
--------
Total...................................................... 1.000

------------------------------------------------------------------------
Movable Equipment
Expected Life: 10 years
------------------------------------------------------------------------

1.............................................................. 0.064
2.............................................................. 0.072
3.............................................................. 0.077
4.............................................................. 0.085
5.............................................................. 0.095
6.............................................................. 0.101
7.............................................................. 0.109
8.............................................................. 0.122
9.............................................................. 0.132
10............................................................. 0.142
--------
Total...................................................... 1.000

------------------------------------------------------------------------
Interest
Expected Life: 22 years
------------------------------------------------------------------------

1.............................................................. 0.007
2.............................................................. 0.009
3.............................................................. 0.010
4.............................................................. 0.011
5.............................................................. 0.013
6.............................................................. 0.015
7.............................................................. 0.017
8.............................................................. 0.020
9.............................................................. 0.023
10............................................................. 0.027
11............................................................. 0.032
12............................................................. 0.038
13............................................................. 0.043
14............................................................. 0.050
15............................................................. 0.057
16............................................................. 0.064
17............................................................. 0.074
18............................................................. 0.083
19............................................................. 0.090
20............................................................. 0.098
21............................................................. 0.105
22............................................................. 0.114
--------
otal....................................................... 1.000
Source: Health Care Financing Administration, Office of the Actuary.

Table 2 shows the historical percentage changes in the capital
price proxies employed in the CIPI. These proxies are: the building
cost index maintained by the Engineering News-Record (ENR) for the
costs of fixed assets; the machinery and equipment component of the
Producer Price Index (PPI-11) for moveable equipment; the average yield
on domestic municipal bonds from the Bond Buyer index of 20 bonds
(Muni); the average yield on Moody's corporate bonds (AAA); a composite
of Muni and AAA indexes (Combined Muni/AAA); and the residential rent
component of the Consumer Price Index (CPI Rent) for other capital
costs.
We applied the relative weights from Table 1 to the appropriate
historical percent changes in capital price proxies listed in Table 2
to generate the current year prices for the CIPI depreciation sector
listed in Table 3. For example, the FY 1995 moveable equipment index
component percentage change of 1.9 percent in Table 3 represents the
average of the percentage changes in the moveable equipment price proxy
(PPI-11 in Table 2) for the previous 10 years (that is, FY 1985 through
1994), weighted by the relative weights listed for movable equipment in
Table 1.

Table 2.--Annual Percent Changes for Capital Input Price Proxies, 1949 to 1999\1\
proxy name: enrbci--building cost index--average of 20 u.s. cities ppi-11--machinery and equipment muni--average
yield on domestic municipal bonds--bond buyer (20 bonds) aaa--average yield on moody's aaa corporate bonds cpi
(all urban)--residential rent
----------------------------------------------------------------------------------------------------------------
Percent changes
-------------------------------------------
Fiscal year ENRBCI PPI-11 Combined
Muni AAA muni/AAA CPI rent
----------------------------------------------------------------------------------------------------------------
1949.......................................... 5.08 7.35 -4.43 -3.14 -4.20 4.41
1950.......................................... 2.79 0.46 -9.36 -4.16 -8.43 3.87
1951.......................................... 9.96 13.64 -5.81 7.10 -3.39 3.73
1952.......................................... 2.43 1.60 12.93 5.70 11.43 4.25
1953.......................................... 4.20 0.79 25.86 7.29 22.21 4.70
1954.......................................... 3.67 2.73 -8.20 -6.32 -7.87 4.79
1955.......................................... 4.37 1.90 -0.41 1.08 -0.15 1.43
1956.......................................... 5.26 7.46 7.82 7.65 7.79 1.69
1957.......................................... 3.55 7.99 24.03 18.02 22.96 1.94
1958.......................................... 4.55 3.22 -3.73 -1.10 -3.29 1.90
1959.......................................... 4.53 1.56 11.54 13.29 11.85 1.33
1960.......................................... 2.67 1.53 1.71 4.93 2.28 1.58
1961.......................................... 1.49 -0.30 -3.14 -3.24 -3.16 1.30
1962.......................................... 1.93 0.00 -6.42 0.81 -5.11 1.28
1963.......................................... 2.18 0.00 -3.43 -2.82 -3.31 1.01
1964.......................................... 3.21 0.91 3.23 3.30 3.25 1.00
1965.......................................... 2.32 0.60 -0.50 1.55 -0.10 0.99
1966.......................................... 3.65 2.69 16.52 11.02 15.44 1.23
1967.......................................... 2.90 3.78 2.41 8.26 3.51 1.69
1968.......................................... 6.22 2.80 14.68 14.50 14.64 2.38
1969.......................................... 10.25 3.27 21.50 9.83 19.20 2.79
1970.......................................... 5.43 4.22 22.18 17.95 21.41 4.07
1971.......................................... 11.52 4.30 -13.93 -4.94 -12.34 4.78
1972.......................................... 12.53 2.18 -5.81 -3.77 -5.42 3.53
1973.......................................... 8.78 2.61 -1.76 0.81 -1.26 4.01
1974.......................................... 5.76 9.95 12.58 12.46 12.56 4.82
1975.......................................... 8.04 19.37 19.17 7.95 16.94 5.33
1976.......................................... 8.97 6.70 -1.15 -3.23 -1.53 5.24
1977.......................................... 8.55 5.95 -15.84 -6.37 -14.13 5.80
1978.......................................... 8.74 7.49 1.12 5.59 2.00 6.74
1979.......................................... 7.98 8.85 7.27 8.90 7.60 7.05
1980.......................................... 8.12 11.47 26.89 22.89 26.07 8.64
1981.......................................... 7.04 10.65 32.94 20.74 30.49 8.84
1982.......................................... 7.41 7.03 16.17 5.46 14.18 8.00
1983.......................................... 6.46 3.23 -22.52 -17.72 -21.69 6.23
1984.......................................... 2.83 2.25 4.76 6.85 5.14 5.06
1985.......................................... 0.18 2.20 -5.27 -7.13 -5.61 5.87
1986.......................................... 1.87 1.50 -18.08 -19.64 -18.36 6.18
1987.......................................... 2.42 1.48 -5.49 -5.31 -5.46 4.45
1988.......................................... 2.48 2.18 7.12 9.94 7.62 3.85
1989.......................................... 1.42 3.47 -6.67 -4.78 -6.33 3.79
1990.......................................... 2.67 3.18 -1.19 -2.04 -1.34 4.18
1991.......................................... 1.52 2.25 -2.67 -2.60 -2.65 3.87
1992.......................................... 2.80 0.49 -7.39 -8.18 -7.54 2.60
1993.......................................... 5.10 0.50 -10.60 -8.90 -4.00 2.33
1994.......................................... 3.80 1.10 -6.10 -7.50 3.00 3.15
1995.......................................... 2.60 2.40 3.80 4.80 -0.56 5.06
1996.......................................... 3.20 2.50 -5.30 -0.80 -1.76 3.21
1997.......................................... 3.80 2.30 3.10 1.00 2.82 3.23
1998.......................................... 3.60 2.20 9.30 6.90 0.18 3.42
1999.......................................... 3.00 2.30 5.30 5.50 0.09 2.69
----------------------------------------------------------------------------------------------------------------
Source: Data Resources Inc.

Table 3.--HCFA Capital Input Price Index Percent Changes, Total and Components, Fiscal Years 1979 to 1999\1\
----------------------------------------------------------------------------------------------------------------
Depreciation
building and Movable
Fiscal Year Total Total fixed equipment Interest Other
equipment
----------------------------------------------------------------------------------------------------------------
Weight..................................... 1.0000 0.6510 0.3054 0.3456 0.3274 0.0216

----------------------------------------------------------------------------------------------------------------
Price Changes
----------------------------------------------------------------------------------------------------------------
1979....................................... 6.3 7.8 6.9 8.6 3.4 7.0
1980....................................... 7.3 7.9 7.0 8.7 6.0 8.6
1981....................................... 8.0 7.7 7.0 8.3 8.8 8.8
1982....................................... 8.2 7.5 7.0 7.9 9.6 8.0
1983....................................... 7.0 7.4 7.0 7.6 6.3 6.2
1984....................................... 6.7 6.9 6.8 7.1 6.3 5.1
1985....................................... 5.8 6.2 6.3 6.0 5.0 5.9
1986....................................... 4.5 5.6 6.0 5.2 2.3 6.2
1987....................................... 3.8 5.2 5.7 4.6 1.2 4.5
1988....................................... 3.7 4.8 5.5 4.1 1.6 3.9
1989....................................... 3.1 4.3 5.2 3.5 0.6 3.8
1990....................................... 2.8 4.0 5.1 3.1 0.1 4.2
1991....................................... 2.3 3.7 4.9 2.6 -0.4 3.9
1992....................................... 1.8 3.5 4.7 2.4 -1.4 2.6
1993....................................... 1.4 3.2 4.7 1.8 -2.2 2.4
1994....................................... 1.0 3.0 4.6 1.7 -3.2 1.7
1995....................................... 0.9 3.1 4.4 1.9 -3.6 2.6
1996....................................... 1.1 3.0 4.2 2.0 -3.0 5.4
1997....................................... 0.9 3.0 4.1 2.0 -3.3 2.9
1998....................................... 1.1 2.9 3.9 2.0 -2.6 4.6
1999....................................... 1.6 2.9 3.9 2.1 -1.2 5.5
----------------------------------------------------------------------------------------------------------------
\1\Index prices for 1994 through 1999 projected by Data Resources Inc.

Source: Health Care Financing Administration, Office of the Actuary.

The stability of the HCFA vintage-weighted CIPI compared to annual
changes in capital purchase prices is portrayed graphically in Figures
1 and 2. As we have discussed in connection with previous versions of
the CIPI, stability is an important criterion for evaluating such an
index. This is because excessive volatility in a price index deprives
the index of predictability, and thus inhibits the ability of
institutions to plan for changes in capital payments resulting from
changes in the CIPI.

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ProPAC recommends a capital input price index based on annual
changes in current capital purchase prices excluding consideration of
weighted historical capital purchase prices. We previously argued that
the ProPAC index was not logically consistent with the operating input
index that is currently used to assist updating DRG payment rates. We
would add that the volatility in annual purchase prices shown in
Figures 1 and 2 would introduce an unacceptable degree of volatility in
prospective capital payments.

D. Revisions to the Interest Price Component of the CIPI

Another commenter on a previous version of the CIPI recommended
that data from Securities Data Inc. be incorporated into the CIPI
interest computations. This source provides information on hospital
issuances of municipal and commercial bonds. From this data base, we
incorporated information that shows that the average expected life of
hospital bond debt instruments (that is, the time interval between the
issue date and the maturation date) was about 13 years for municipal
serial bonds and about 25 years for municipal term bonds. The weighted
average life for the 2 types of bonds was 22 years.
The relative nominal capital purchases within various 22-year
periods provided appropriate annual weights for annual changes in
interest rates. Not all capital purchases are funded by debt. Medicare
cost reports suggest that about 80 percent of new capital acquisitions
are financed by debt and about 20 percent by equity financing. However,
if the proportion of total purchases financed by debt does not change
substantially from year to year, then it is irrelevant whether we use
the full amount or a constant proportion of the full amount of nominal
capital acquisitions as weights for relative amounts of the debt
instruments still active in the current period.
Relative interest weights derived from our procedure are shown in
Table 1. When combined with percent changes in annual interest rates
from Table 2, the weights provide a current year estimates of interest
rate changes in the CIPI in Table 3. Thus, for example, the interest
rate component change of -3.2 percent in Table 3 for FY 1995 represents
the average of the previous 22 years in the interest rate proxy
(Combined Muni/AAA) in Table 2, weighted by the interest weights listed
in Table 1. We use a percent change in a combined municipal and AAA
commercial bond interest rate (shown in Table 2 as Combined Muni/AAA),
giving the municipal rate an 85 percent weight and the AAA rate a 15
percent weight, reflecting the relative hospital debts of the
government/non-profit hospital sector and the for-profit sector.
The stability of HCFA's vintage-weighted interest rate compared to
annual changes in interest rates is portrayed in Figure 3.

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As we have discussed in connection with previous versions of the
model, stability is an important criterion for evaluating the CIPI
because it provides an important degree of predictability to the index.
Although Medicare cost reports show that only 60 percent of current
hospital debt is in the form of notes or bonds (about 40 percent is in
the form of mortgages), we assumed that the relative annual weights for
all debt and the relative annual changes in interest rates for all debt
were the same as bond-related weights and price changes. We are still
searching for an appropriate source of information on hospital
commercial mortgage data. We do not expect that the discovery of such
data will materially alter our current conclusions about trends in
effective interest rates over time.
A third commenter on a previous version of the CIPI recommended
that we investigate the effects on interest rate changes of changing
structures of hospital bond ratings. If bond ratings are deteriorating,
hospitals incur higher interest rates; if bond ratings improve,
hospitals incur lower interest rates. Our CIPI currently recognizes
only changes in pure interest rates and does not recognize changes in
effective interest rates due to changes in bond ratings.
We examined a hospital municipal bond data base from Securities
Data Inc. to examine this issue. This data showed that serial bonds
dominated short-term bonds and term bonds dominated long-term bonds
(Figure 4). We classified all bond amounts by ratings found in the data
base for the years 1980 to 1992. We defined bonds rated as Baa1 or
above as ``Investment Grade'' bonds; all others were ``Non-Investment
Grade''. The percentage distribution of the issuance-amount-rated bonds
in Figure 5 (percentage amounts applied to dollar amount of debt
issuance) indicates no discernible trend in upward or downward ratings
over the period. We conclude that there is no evidence to justify a
component for deteriorating bond ratings in the CIPI.

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E. Projection of the CIPI for Fiscal Year 1995

We project a 0.9 percent increase in the CIPI for FY 1995 (Table 3
and Figure 6). This is the outcome of a 3.1 percent increase in
projected weighted depreciation prices in FY 1995 offset by a 3.6
percent decline in vintage- weighted interest rates in FY 1995.

F. ProPAC Input Price Index

1. Introduction
Three major differences distinguish ProPAC's CIPI from HCFA's CIPI:
The ProPAC CIPI measures changes in capital asset purchase
prices in the year the asset is purchased. HCFA's CIPI is designed to
measure changes in a vintage-weighted composite of capital asset
purchase prices.
The ProPAC CIPI uses capital asset purchase price proxies
that differ from HCFA's.
The ProPAC CIPI has no interest component. PROPAC treats
interest rate changes as a separate update factor component. Through
1995, for example, ProPAC expects that long term interest rates will
remain stable and, therefore, believes that it is not appropriate to
adjust capital payments for forecasted changes in interest rates in the
target year.
HCFA incorporates a vintage-weighted composite of interest rates in
its CIPI for the target year.

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2. Depreciation
ProPAC states that its CIPI is analogous to the prospective payment
operating price index. We disagree. The components of the operating
index represent price changes in ongoing hospital expenses for labor
and non- capital goods and services. The analogous capital expenses in
this context are current depreciation costs, interest costs and other
capital-related expenses (taxes and insurance). Current depreciation
and interest costs are a cumulative composite of segments of expenses
incurred in current and prior periods. Current interest costs are a
cumulative composite of segments of past and current year debt costs.
Since both depreciation and interest costs have a vintage component,
the price aspect of these costs must have a vintage component as well.
The HCFA CIPI attempts to capture these vintage components.
Differences between HCFA and ProPAC with respect to choices for
annual rates of change in capital purchase price proxies appear to be
minimal:
Changes in alternative price proxies for building and
fixed equipment are nearly coincidental (Table 3 and Figure 7). We are
still considering adoption of the price proxy recommended by ProPAC,
but we do not anticipate any material difference in the HCFA CIPI if we
do adopt this alternative proxy.

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Changes in alternative price proxies for moveable
equipment, although not as close as those for building and fixed
equipment, are nevertheless nearly coincidental for much of the
historical period (Table 3 and Figure 8).
As noted in our September 1, 1992 final rule, one basic criterion
for accepting price proxies is public availability of documentation on
data sources and methodology (57 FR 40018-40019). Despite repeated
efforts, neither we nor Data Resources Inc. have been able to obtain
documentation on the moveable price proxy recommended by ProPAC that
explains how it is derived and what sampling frame and sampling error
attach to the estimates. In the absence of such information we cannot
adopt the ProPAC alternative.
HCFA's assumption is that prices for hospital moveable equipment
change at about the same rate as general prices for all machinery and
equipment. This assumption is justified in part by the fact that not
all moveable equipment purchased by hospitals is medical equipment: it
stands to reason that the prices for non-medical equipment purchased by
hospitals would change at the same rate as prices for all machinery and
equipment. To examine this assumption further, we measured the rate of
change in the HCFA moveable price proxy relative to prices for medical
equipment only by preparing a composite index of medical prices from
the Bureau of Labor Statistics Producer Price Index (PPI) for two
commodity categories--medical instruments/equipment and X-ray/electro-
medical equipment.
The two PPI commodity indexes were then merged using their
respective PPI weights. Price change trends for the period for which
information is available are shown in Table 3 and Figure 8 (Inset).
Price changes for this index are not available for years prior to 1984.
Annual price changes for medical equipment were less than the annual
HCFA price proxy in all but the most recent 2 years and were about the
same as the ProPAC price proxy in the last 2 years. The medical
equipment price was substantially less than the ProPAC index for most
of the historical period. We will continue to monitor trends in these
indexes to ensure that appropriate price proxies are incorporated in
the CIPI.
3. Interest
ProPAC has proposed to project annual interest rates to future
periods and then to decide whether to allow an add-on to the Federal
capital rate depending on the magnitude of the projection. ProPAC has
presented no objective criteria for determining when an interest
adjustment is appropriate. We previously noted that a single-year
projection for interest rates is conceptually inappropriate since
interest costs must be vintage-weighted. In addition to this conceptual
problem, the ProPAC approach is impractical because future annual
interest rates are volatile, vulnerable to unpredictable market forces,
and subject to exogenous influences (such as Federal Reserve Board
decisions) that are difficult to anticipate. Thus, any projection of
future interest rates is likely to be inaccurate, resulting in
underpayment or overpayment of the Federal capital rate relative to the
capital-related expenses that the rate is supposed to compensate. The
resulting uncertainty in payments under future Federal capital rates
further complicates future capital expenditure decisions by hospitals.
On the other hand, the projected HCFA CIPI interest component for the
target year is the weighted average change over 22 years of interest
rate history, of which 20 years experience is historical. The projected
experience in the HCFA index for the most recent 2 years may be as
inaccurate as any ProPAC projection, but any error will have minimal
effects on Federal rates due to the appropriately weighted effect of
the historical data in the HCFA CIPI. This stability in the interest
rate component of the HCFA CIPI provides hospital planners with a
degree of certainty about future Federal rate payments, other things
remaining equal. Annual and weighted annual rates of change are
compared in Table 3.
4. The Composite HCFA CIPI
Annual percentage changes in the historical and projected HCFA and
ProPAC CIPIs differ markedly (Figure 9). The ProPAC CIPI is much more
volatile than the HCFA CIPI in the historical period through 1993
because it has no vintage-weighted capital input price factors for
depreciation.

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Further, the ProPAC CIPI omits interest rates. The cumulative
effect of declining interest rates for all debt instruments in recent
years has driven the rate of change in the HCFA interest rate component
downward, a trend projected into future rate years. The declining
interest rate component drags the HCFA CIPI below the ProPAC CIPI in
the projection period. Other things being equal, the ProPAC index would
result in overpayment through the Federal rate because anticipated
actual capital-related expenses will be less than ProPAC projects due
to the effects of lower interest rates on capital-related expenses.

IV. Case-Mix Adjustment and Adjustment for Forecast Error

The case-mix index (CMI) is the measure of the average DRG weight
for cases paid under the prospective payment system. Because the DRG
weight determines the prospective payment for each case, any percentage
increase in the CMI corresponds to an equal percentage increase in
hospital payments.
The CMI can change for any of several reasons: because the average
resource use of Medicare patients changes (``real'' case-mix change),
because changes in hospital coding of patient records result in higher
weight DRG assignments (``coding effects''), and because the annual DRG
reclassification and recalibration changes may not be budget neutral
(``reclassification effect''). In the update framework for the
prospective payment system for operating costs, we adjust the update
upwards to allow for real case- mix change, but remove the effects of
coding changes on the CMI. We also remove the effect on total payments
of prior changes to the DRG classifications and relative weights, in
order to retain budget neutrality for all CMI-related changes other
than patient severity. (For example, we adjusted for the effects of the
FY 1992 DRG reclassification and recalibration as part of our FY 1994
update recommendation.) The operating adjustment consists of a
reduction for total observed case-mix change, an increase for the
portion of case-mix change that we determine is due to real case-mix
change rather than coding modifications, and an adjustment for the
effect of prior DRG reclassification and recalibration changes. We
proposed to adopt this CMI adjustment as well in the capital update
framework.
We received no comments on the proposed CMI adjustment.
The current operating update framework contains an adjustment for
forecast error. The input price index forecast is based on historical
trends and relationships ascertainable at the time the update factor is
established for the following year. In any given year there can be
unanticipated price fluctuations that can result in differences between
the actual increase in prices faced by hospitals and the forecast used
in calculating the update factors. We continue to believe that the
capital update framework should include a forecast error adjustment
factor. In setting a prospective payment rate under the proposed
framework, we would make an adjustment for forecast error only if our
estimate of the capital input price index rate of increase for any year
is off by 0.25 percentage points or more. There is a 2-year lag between
the forecast and the measurement of the forecast error. Thus, for
example, we would adjust for a forecast error made in FY 1996 through
an adjustment to the FY 1998 update.
We received no comments on the proposed forecasting error
adjustment.

V. Policy Adjustment Factors

The capital input price index measures the pure price changes
associated with changes in capital-related costs (prices x
``quantities''). The composition of capital-related costs is maintained
at base-year 1987 proportions in the capital input price index. We
would address appropriate changes in the amount and composition of
capital stock through the policy adjustment factors.
The current update framework for the prospective payment system for
operating costs includes factors designed to adjust the input price
index rate of increase for policy considerations. Under the revised
operating framework, we adjust for service productivity (the efficiency
with which providers produce individual services such as laboratory
tests and diagnostic procedures) and intensity (the amount of services
used to produce a discharge). The service productivity factor for the
operating update framework reflects a forward-looking adjustment for
the changes that hospitals can be expected to make in service-level
productivity during the year. A hospital retains any productivity
increases above the average.
The intensity factor for the operating update framework reflects
how hospital services are utilized to produce the final product, that
is, the discharge. This component accounts for changes in the use of
quality-enhancing services, changes in within-DRG severity, and
expected modification of practice patterns to remove cost-ineffective
services. We originally proposed that the intensity adjustment factor
in the revised operating framework be adopted in the capital update
framework. That factor remains a part of our developing framework.
Under the revised operating update framework, we calculate case-mix
constant intensity as the change in total charges per admission,
adjusted for price level changes (the CPI hospital component) and
changes in real case mix. The use of total charges in the calculation
of the proposed intensity factor makes it a total intensity factor,
that is, charges for capital services are already built into the
calculation of the factor. We can therefore incorporate the proposed
intensity adjustment from the operating update framework into the
capital update framework. In the absence of reliable estimates of the
proportions of the overall annual intensity increases that are due,
respectively, to ineffective practice patterns and to the combination
of quality-enhancing new technologies and within-DRG complexity, we
would assume, as in the revised operating update framework, that one-
half of the annual increase is due to each of these factors. The
capital update framework would thus provide an add-on to the input
price index rate of increase of one-half of the estimated annual
increase in intensity to allow for within-DRG severity increases and
the adoption of quality-enhancing technology.
In our previous discussions of an efficiency adjustment, we
suggested that the adjustment should take into account two
considerations. One is that capital inputs, unlike operating inputs,
are generally fixed in the short run. The productivity target in the
revised operating framework operates on a short-term, year-to-year
basis. Targets for capital efficiency and cost-effectiveness, however,
must operate on a longer term basis. The other consideration is that,
prior to the adoption of the capital prospective payment system,
Medicare payment policy for capital-related costs, as well as the
policies of other payers, did not provide sufficient incentives for
efficient and cost-effective capital spending. As a result, capital
costs per case, and therefore base year prospective capital rates, may
be higher than would have been consistent with capital acquisition
policy in more efficiency-oriented markets. A guiding principle in
devising an efficiency adjustment is therefore that Medicare capital
prospective payment rates should not provide for maintenance of capital
in excess of the level that would be produced in an efficiency-oriented
competitive market.
As a preliminary examination of this issue, we analyzed the change
in actual Medicare capital cost per case for FYs 1986-1991 in relation
to the change in the capital input price index (which accounts for
change in the input prices for capital-related costs), and the other
adjustment factors that we were then proposing to include in the
framework. (The other adjustment factors are the increase in real case
mix and the increase in intensity due to quality-enhancing
technological change and within-DRG complexity.) We found rates of
increase in spending per case that exceeded the rate of increase
attributable to inflation in capital input prices, quality-enhancing
intensity increases, and real case-mix growth.
Economic theory suggests that an industry with a guaranteed return
on capital (such as the hospital industry prior to prospective payment
for capital-related costs) would have a tendency to be overly
capitalized relative to more competitive industries. This is because
the incentive for firms in such an industry is to compete on the basis
of more capital-intensive production processes than firms in other
industries. As a result, capital costs per case, and therefore base
year prospective capital rates, may be higher than would have been
consistent with capital acquisition policy in more efficiency-oriented
competitive markets.
Our analysis was designed to examine whether hospitals had in fact
responded to the incentives of the cost-based reimbursement system for
capital by expanding beyond what was necessary for efficient and cost-
effective delivery of services. The analysis confirmed that volume and
intensity of capital acquisition far outpaced the increase in capital
input prices during the years between the implementation of the
prospective payment system for operating costs and the introduction of
the capital prospective payment system. Even accounting for real CMI
increases and increases in intensity attributable to cost-increasing
but quality-enhancing new technologies, there remains a large excess of
capital-related spending.
The following table shows the results of our most recent analysis,
based on the most current data available and the most recent
projections. Differences between this table and the tables in previous
discussions in the Federal Register are due to revised figures for
average capital cost per case increases, based on the most recent data
and projections, and on our revised CIPI. We have also expanded the
analysis incorporated in this table to include FY 1985 and FY 1992,
thus encompassing all but 1 year of the period from the implementation
of the prospective payment system for operating costs to the
implementation of the prospective payment system for capitals costs.
(For FY 1984, sufficient data is not available to compute capital cost
per case increases and intensity increases.) The results of the
analysis in Table 4 are substantially similar to the results of
previous analyses. In Table 4 real case-mix increase is assumed to be
1.0 percent annually.

Table 4--Cumulative Percentage Change in Capital-Related Cost Per Case Due to Inflation, Real CMI, and
Intensity, 1986-1991
----------------------------------------------------------------------------------------------------------------
Percent
Real Allowable Resulting change
Year CIPI\1\ CMI\2\ Intensity\3\ Increase\4\ Cost/ Residual\6\
Case\5\
----------------------------------------------------------------------------------------------------------------
1985................................... 6.2 1.0 3.7 11.2 12.6 1.2
1986................................... 4.3 1.0 2.1 7.5 20.2 11.8
1987................................... 3.6 1.0 2.5 7.3 15.0 7.2
1988................................... 3.7 1.0 1.5 6.3 7.2 0.9
1989................................... 3.1 1.0 0.5 4.7 7.9 3.0
1990................................... 2.8 1.0 0.2 4.0 6.8 2.6
1991................................... 2.4 1.0 0.1 3.5 5.1 1.6
1992................................... 1.6 1.0 -0.7 1.9 3.4 1.5
------------------------------------------------------------------------
Cumulative (compounded).......... ......... ......... ............ 56.5 108.8 33.4
----------------------------------------------------------------------------------------------------------------
\1\Figures from Table 1, section III.
\2\Assuming that real CMI increase is 1.0 percent annually.
\3\One half of observed intensity increase, as determined by the of the joint operating/capital intensity
measure.
\4\The increase attributable to inflation, real CMI, and allowable intensity, calculated as the product of the
rates of increase of those factors (that is, 1.043x1.01x1.021=1.075 for 1986).
\5\Figures supplied by HCFA's Office of the Actuary.
\6\The actual increase in average cost per case divided by the increase attributable to inflation, real CMI, and
allowable intensity (that is, 1.202/1.075=1.118, an 11.2 percent residual for 1986).

We believe that the adjustment for capital efficiency and cost-
effectiveness should take into account the efficiency and effectiveness
of the capital resources present in the base year for the capital
prospective payment system. We do not believe that Medicare capital
payment rates should provide for maintenance of capital in excess of
the level that would be produced in an efficiency-oriented competitive
market. The capital efficiency adjustment should be designed to give
hospitals an incentive to reduce inefficiency and ineffectiveness in
capital resources. The analysis in Table 4 suggests that, in order to
restore the Federal rate to the level at which it would have been if
capital costs had not been excessive in the years before the
implementation of capital prospective payment, a cumulative reduction
in the rate of 28.2 percent (1.565/2.088=.7495, or -25.0 percent) is
justified.
We note that the Administration's Health Security Act contains a
proposal for an annual adjustment to the capital update for FY 1996
through FY 2003. This proposal is based in part on our previous
analysis of capital spending in the years prior to the implementation
of the capital prospective payment system. Section 4103(a)(2)(C) of the
proposed Health Security Act provides that the annual update factor
applied to the capital prospective payment system rates be reduced by
4.9 percent each year during that period (except that the change factor
can never be negative in any year).
Appendix F

PROSPECTIVE PAYMENT ASSESSMENT COMMISSION

REPORT AND RECOMMENDATIONS TO THE CONGRESS

March 1, 1994.

Prospective Payment Assessment Commission

Stuart H. Altman, Ph.D., Chairman
Richard A. Berman
James D. Bernstein
Clay D. Edmands
William S. Hoffman, Ph.D.
Clerk E. Kerr
James R. Kimmey, M.D.
David A. Kindig, M.D.
Judith R. Lave, Ph.D.
Larry L. Mathis
Robert J. Myers
Donald R. Oder
Elliott C. Roberts, Sr.
J. Michael Sadaj, M.D.
J.B. Silvers, Ph.D.
Roxane B. Spitzer-Lehmann, Ph.D.
Jae L. Wittlich

Staff and Consultants

Donald A. Young, M.D. Executive Director
Laura A. Dummit, Deputy Executive Director
Stuart Guterman, Deputy Executive Director
Sharon B. Arnold, Ph.D.
John L. Ashby
Amy B. Bernstein, Sc.D.
Thomas B. Bradley
Wylene Carlyle
Delores J. Curtis
Karen S. Fisher, J.D.
Gina M. Fortuna
Barbara J. Gage, Ph.D.
Timothy F. Greene
Joy M. Grossman, Ph.D.
Jeff E. Harris
Claudia C. Johnson
Lynn L. Lewis
Craig K. Lisk
Mary Anne Miles
Julian H. Pettengill
Molly Ryan
Claire E. Sharda
Deana L. Stoneman
Colleen M. Tynan
Deborah K. Williams
Jeannette A. Younes

March 1, 1994.
The Honorable Al Gore,
President of the Senate, United States Senate, Washington, D.C.
20510.

Dear Mr. President: I am hereby transmitting to the Congress the
annual report of the Prospective Payment Assessment Commission as
required by Section 1886(e)(3) of the Social Security Act as amended
by Public Law 101-508. This report presents a discussion of major
factors that have shaped the evolution of the hospital and discusses
possible changes facing the hospital of the future. The report also
contains 23 recommendations covering a range of topics, from broad
issues concerning Medicare and health care reform to updating
Medicare payment rates and refining certain aspects of Medicare
payments to hospitals and other facilities. This report reflects the
Commission's collective judgment about issues of substantial
importance to beneficiaries, hospitals, other providers, and the
Medicare program.
Sincerely,
Stuart H. Altman, Ph.D.,
Chairman.
Enclosure
March 1, 1994.
The Honorable Thomas Foley,
Speaker, United States House of Representatives, Washington,
D.C. 20515.

Dear Mr. Speaker: I am hereby transmitting to the Congress the
annual report of the Prospective Payment Assessment Commission as
required by Section 1886(e)(3) of the Social Security Act as amended
by Public Law 101-508. This report presents a discussion of major
factors that have shaped the evolution of the hospital and discusses
possible changes facing the hospital of the future. The report also
contains 23 recommendations covering a range of topics, from broad
issues concerning Medicare and health care reform to updating
Medicare payment rates and refining certain aspects of Medicare
payments to hospitals and other facilities. This report reflects the
Commission's collective judgment about issues of substantial
importance to beneficiaries, hospitals, other providers, and the
Medicare program.
Sincerely,
Stuart H. Altman, Ph.D.,
Chairman.
Enclosure

Capital Costs Per Case Increase From Cost Report Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average 2- Update
Increases year (average
Audit in increase CMI two year
Number Number Unadj- Increase adjusted adjusted in Observed adjusted increase
Fiscal year hospitals hospitals capital in cost capital cost per adjusted CMI increase of CMI
1st HCR 2nd cost per per case cost per case cost per (Percent) (Percent) adjusted
HCR\1\ case (Unadj.) case\2\ (Percent) case rate of
(Percent) increase)
(Percent)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1990...................................... 4251 5412 $543.27 ......... %540.05 ......... ......... ......... ......... .........
1991...................................... 4171 5323 584.69 7.62% 567.92 5.16 ......... 2.52 2.57 .........
1992...................................... 4098 4733 633.80 8.4 587.53 3.45 4.30 1.55 1.87 2.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Columns 1 and 2 represent the numbers of hospital cost reports used in developing capital costs per case figures in column 3. Since hospital cost
reporting periods do not all coincide with the Federal fiscal year, data for a given Federal fiscal year must be derived from more than one hospital
cost report, allocated proportionately to the Federal fiscal year. For example, for a hospital with a cost reporting period beginning January 1, one
quarter of its cost report for the period ending December 31, 1987 would be allocated to Federal fiscal year 1988, and three quarters of its cost
report for the period ending December 31, 1988 would be allocated to Federal fiscal year 1987. Column 1 represents the number of cost reports used
that ended in the Federal fiscal year in question. Column 2 represents the number of cost reports used that began in the Federal fiscal year in
question. Column 2 is greater than Column 1 because Column 2 includes cost reports for hospitals whose cost reporting period coincides with the
Federal year along with cost reports for those hospitals whose cost reporting periods do not coincide with the Federal fiscal year. Column 1 includes
only cost reports for hospitals whose cost reporting periods do not coincide with the Federal Fiscal year.
\2\Figures in column 5 represent capital costs per case, adjusted for the anticipated effects of cost report audits and reopenings, from the December
1993 update of HCRIS. The following factors were used in adjusting capital costs per case figures from column 3 for the effects of audits and
reopenings:
Audit Adjustment Applied to As-Submitted Cost Reports
Cost reporting periods beginning in:
FY 19900.9256
FY 19910.9172
FY 19920.9250
Audit Adjustment Applied to Settled Cost Reports
All years1.0043
The costs per case figures that result after the application of these audit adjustments to submitted and settled cost reports, respectively, are entered
in Column 5.

'TABLE OF CONTENTS

Executive Summary

Chapter

1. THE FUTURE OF HOSPITALS

Factors Affecting How Hospitals Have Evolved
Technological Advances
Financing Changes
Legal and Regulatory Environments
Hospital Responses to Changes in the Health Care Environment
Services Provided
Attempts to Control Growth in Costs
Arrangements with Other Hospitals, Facilities, and Insurers
Arrangements with Physicians
Hospitals in the Future

2. RECOMMENDATIONS

Recommentations for Fiscal Year 1995
Medicare and Health Care Reform
Recommendation 1: Medicare, Medicaid, and Private Payer Payment
and Coverage of the Uninsured
Recommendation 2: Payments to Hospitals Serving a Large Share of
Low-Income Patients
Recommendation 3: Payments for Additional Patient Care Costs
Incurred by Teaching Hospitals
Recommendation 4: Graduate Medical Education Funding and Payment
Recommendation 5: Quality of Care
Recommendation 6: Improvements in Premium Risk Adjustment
Methods
Recommendation 7: Controlling Medicare Spending Across All Sites
of Care
Recommendation 8: Strengthening Medicare's Risk Contracting
Program
Payment Updates
Recommendation 9: Update Factor for Operating Payments to PPS
Hospitals
Recommendation 10: Update Factor for Capital Payments to PPS
Hospitals
Recommendation 11: Single Operating and Capital Update Factor
Recommendation 12: Update Factor for Hospitals Paid on the Basis
of Hospital-Specific Rates
Recommendation 13: Update Factor for PPS-Excluded Hospitals and
Distinct-Part Units
Recommendation 14: Update to the Composite Rate for Dialysis
Services
Other Payment Policies
Recommendation 15: Improvements in Hospital Wage Data
Recommendation 16: Improvements in the PPS Hospital Wage Index
Recommendation 17: Nursing Facility Wage Index
Recommendation 18: Improving Outlier Payment Policy
Recommendation 19: Level of the Indirect Medical Education
Adjustment to PPS Operating Payments
Recommendation 20: Prospective Payment Method for Outpatient
Services
Recommendation 21: Revision of the Payment Formula for
Outpatient Services
Recommendation 22: Beneficiary Liability for Hospital Outpatient
Services
Recommendation 23: Limit the Length of Outpatient Observation
Stays

APPENDIXES

A. Background Material and Analyses
Fiscal Year 1995 PPS Operating Update
Fiscal Year 1995 PPS Capital Update
Fiscal Year 1995 Update for Payments to Dialysis Facilities
Nursing Facility Wage Index
B. Technical Report Series
C. Biographical Sketches of Commissioners
D. Statutory Mandate of the Commission
E. Change in DRG Relative Weights from Fiscal Year 1993 to Fiscal
Year 1994

List of Tables

Chapter 1. The Future of Hospitals

1-1 High-Technology Services Provided by Hospitals, Selected Years
(In Percent)
1-2 Hospital Losses and Gains as a Percentage of Costs, by Payment
Category, Selected Years
1-3 U.S. Hospitals, by Hospital Category, Selected Years
1-4 Non-Inpatient and Skilled Nursing Services Provided by
Community Hospitals, by Location, Selected Years (In Percent)
1-5 Hospital Net Patient Care Revenues from Ambulatory Services, by
Hospital Category, 1993 (In Percent)
1-6 Community Hospital Revenues, by Type of Service, Selected Years
(In Percent)
1-7 Inpatient and Outpatient Use of Services in Community
Hospitals, Selected Years
1-8 National Hospital Employee Costs and Personnel in Nonfederal
Short-Term Hospitals, 1971-1991
1-9 Multihospital Systems, 1979-1992
1-10 Hospitals with Health Maintenance Organization and Preferred
Provider Organization Contracts, by Hospital Category, Selected
Years (In Percent)
1-11 Hospital Net Patient Care Revenues from Health Maintenance
Organizations and Preferred Provider Organizations, by Hospital
Category, 1993 (In Percent)
1-12 Hospital-Physician Organizations, by Hospital Category, 1993
(In Percent)

Chapter 2. Recommendations

2-1 Recommended Update Factor for PPS Hospital Operating Payments,
Fiscal Year 1995
2-2 Recommended Update Factor for Capital Payments, Fiscal Year
1995
2-3 Estimated Fiscal Year 1995 Average Increase in Per Case
Payments Under Fully Prospective Rates
2-4 Recommended Update Factors for PPS-Excluded Hospitals, Fiscal
Year 1995

Appendix A. Background Materials and Analyses

A-1 Comparison of Increases in Hospital Market Basket, PPS Updates,
and PPS Payments Per Case, Fiscal Years 1984-1994 (In Percent)
A-2 Estimated Impact of Emerging Technologies on Medicare Operating
Costs for PPS Hospitals, Fiscal Year 1995 (In Millions)
A-3 Change in Aggregate Total Factor Productivity and Its
Components, 1984-1992 (In Percent)
A-4 Change in the Use of Hospital Inputs, 1984-1992 (In Percent)
A-5 Estimated Impact of Emerging Technologies on Medicare Capital
Costs for PPS Hospitals, Fiscal Year 1995 (In Millions)
A-6 Estimated Impact of Cost-Increasing Technologies for Dialysis
Facilities, Fiscal year 1995 (In Millions)
A-7 Productivity Indicators for Hospital-Based and Independent
Dialysis Facilities, 1990-1992
A-8 Unaudited Cost Per In-Facility Hemodialysis Treatment for
Hospital-Based and Independent Dialysis Facilities, 1990-1992
A-9 Hospital and Nursing Facility Wage Indexes, by Census Division
and Urban/Rural Location, Fiscal Year 1991
A-10 Distribution of Nursing Facility Medicare Payment to Cost
Ratios Under Alternative Payment Scenarios, by Census Division (In
Percent)

LIST OF FIGURES

Chapter 2. Recommendations

2-1 Current and Corrected Payment Formulas for Hospital Outpatient
Services

Appendix A. Background Material and Analyses

A-1 Change in Labor Productivity by Industry, 1980-1990 (In
Percent)
A-2 Annual Medicare Case-Mix Index Change, 1985-1994 (In Percent)

Executive Summary

In this report, the Prospective Payment Assessment Commission
(ProPAC) discusses major factors that have influenced how hospitals
have evolved, looks at how hospitals have responded to changes in the
health care environment, and suggests the future direction hospitals
may take. The Commission also presents 23 recommendations covering a
range of topics, from broad issues concerning Medicare and health care
reform to updating Medicare payment rates and refining certain aspects
of Medicare payments to hospitals and other facilities. The report is
submitted directly to the Congress, although the Secretary of Health
and Human Services is required to respond to the Commission's
recommendations.
ProPAC's responsibilities have expanded from its original mandate
of advising the Congress and the Secretary on the Medicare prospective
payment system (PPS) for hospitals. These additional responsibilities
include analyzing and developing prospective payment policies for all
facility services furnished to Medicare beneficiaries and examining
Medicaid hospital payment rates. In the past year, the Commission has
submitted reports to the Congress on Medicare and the American health
care system, global budgeting, and Medicaid disproportionate share
payment adjustments. ProPAC, however, continues to devote substantial
effort to updating and improving Medicare policies for paying
hospitals.

The Future of Hospitals

Summary of Recommendations

In Chapter 2, ProPAC presents 23 recommendations reflecting the
Commission's concerns regarding health reform and Medicare payment
policies. The Commission believes these proposed changes are necessary
for maintaining access to quality health care, encouraging productivity
and cost effectiveness in the provision of care, and improving payment
equity. The Commission developed its recommendations by setting
priorities, analyzing information, and deliberating on the implications
of alternative policies. ProPAC also pays close attention to the
concerns of the Congress, the Administration, health care providers,
third-party payers, enrollees, and the public. The Commission's
recommendations are offered to comply with ProPAC's statutory mandate
and to contribute to an informed, open debate about Medicare payment
policies. For fiscal year 1995, the Commission's recommendations
focused on three broad areas:
Medicare and health care reform,
Payment updates, and
Other payment policies.
Medicare and Health Care Reform--The health care industry is facing
major challenges as policy makers and legislators struggle to control
health care expenditures and expand coverage to people without
insurance. Several proposals have been introduced to reform the health
care system. Some of these focus on incremental changes in the
financing and delivery of health care; others call for fundamental
restructuring of the existing system. Most include provisions that
would affect the Medicare program.
The Health Security Act introduced by the President would
fundamentally change the financing and delivery of health care. Under
this proposal, most people under 65 would obtain health insurance
coverage through regional or corporate alliances that would negotiate
with health plans to provide medical services. Managed competition
among plans is expected to control the growth in health care
expenditures. As a contingency, however, premium rate increases would
be limited if expenditure growth were not contained. Medicare would be
retained as a separate program, although it would be subject to a
number of changes and cost-saving measures.
In this report, the Commission comments on specific features of the
Health Security Act and other health reform activities as they pertain
to the Medicare program. This discussion is found in Recommendations 1
through 8.

Payment Updates

Recommendations 9 through 14 present the Commission's recommended
updates to the payment amounts to various facilities. These include
operating and capital payments to hospitals paid under PPS, operating
payments to facilities excluded from PPS, and the composite rate for
dialysis services.
In examining each of these Medicare payment systems, the Commission
recommends to the Congress an appropriate update amount for fiscal year
1995 payments. In addition, ProPAC considers the appropriateness of the
base payment rate to which the update factor would be applied.
The Commission is mandated by law to submit to the Congress each
year the appropriate update to the inpatient hospital operating payment
rates under PPS. ProPAC considers several factors in developing this
update: the hospital market basket index, scientific and technological
advances, hospital productivity, case-mix change, and the quality and
long-term cost-effectiveness of health care. For fiscal year 1995, the
Commission recommends an average update of 2.7 percent to the
standardized payment amounts: an increase of 2.2 percent for urban
hospitals and of 5.3 percent for rural hospitals.
ProPAC's update recommendation for fiscal year 1995 operating
payments is higher than the update already legislated by the Congress.
ProPAC used its traditional approach of examining individually the
factors that contribute to the update. The Commission believes this
process results in an appropriate percentage to update the standardized
payment amounts for fiscal year 1995.
In addition, the Commission recommends an update factor for the
Federal capital payment rate. ProPAC follows an update framework
similar to that used for the operating payment update. For fiscal year
1995, ProPAC recommends a 3.6 percent increase to the Federal capital
payment rate for both urban and rural hospitals. When the transition to
fully prospective capital payments is complete, a single update factor
should be used for adjusting PPS operating and capital payment rates.
The Commission also considers the update for facilities currently
excluded from PPS and the update to the composite payment rate for
dialysis services. The facilities excluded from PPS are subject to the
payment limitations and incentives established in the Tax Equity and
Fiscal Responsibility Act of 1982. For fiscal year 1995, ProPAC
recommends the target rates for these facilities should be updated by
2.7 percent. Finally, the Commission recommends that the composite
payment rate for dialysis services should not be increased for fiscal
year 1995.
Other Payment Policies--The Commission is concerned with all
factors that might affect Medicare payments to facilities. In
Recommendations 15 through 23, ProPAC highlights issues affecting
Medicare payment specific to the hospital wage index, the nursing
facility wage index, the outlier payment policy, the indirect medical
education (IME) adjustment, and payment policies for hospital
outpatient services.
ProPAC conducted additional analyses related to improving the
hospital wage index. It recommends that the wage index be adjusted to
remove the effect of occupational mix. Moreover, the implementation of
a new wage index using hospital-specific labor market areas based on
hospital geographic proximity would improve the accuracy of the wage
index. The Commission also reexamined the appropriateness of nursing
facility wage index, and recommends collecting data so that such an
index can be developed and used to adjust Medicare skilled nursing
facility payments.
ProPAC supports the outlier payment provisions of the Omnibus
Budget Reconciliation Act of 1993 and makes several additional
recommendations to improve the policy for identifying outlier cases and
determining outlier payments. The Commission recommends reducing the
IME adjustment to PPS operating payments from 7.7 percent to 7.0
percent and retaining the IME adjustment until an alternative system
for compensating hospital for these costs is adopted.
The Commission submits four recommendations regarding payment for
hospital outpatient services. The need for a prospective payment system
is reiterated. Until such a system can be implemented, the current
payment formula to calculate hospital payments for ambulatory surgery
center-approved procedures, radiology services, and diagnostic services
should be revised. In addition, beneficiary liability for hospital
outpatient services should be reduced. Finally, the length of hospital
outpatient observation stays should be limited.

Recommendations for Fiscal Year 1995

Medicare and Health Care Reform

Recommendation 1: Medicare, Medicaid, and Private Payer Payment and
Coverage of the Uninsured
Health care reform will have a major effect on the Medicare and
Medicaid programs and the care beneficiaries receive. The Commission
believes substantial changes in program policies should be considered
only with a health care reform plan that covers the uninsured and pays
comparable rates for similar services. As Medicare and Medicaid have
constrained payments, providers have obtained additional revenue from
private payers rather than by reducing their costs. This increasing
reliance on cost shifting concerns ProPAC because it is likely to have
a negative effect on access to care for beneficiaries of government
programs. Further, possible adverse effects on beneficiaries of slower
growth in payments for hospital and other currently covered services
must be carefully balanced against desirable effects of increased
Medicare spending for new benefits proposed in the Health Security Act.
Recommendation 2: Payments to Hospitals Serving a Large Share of Low-
Income Patients
The Health Security Act would substantially reduce Medicare
disproportionate share payments, as universal coverage ameliorates many
of the problems these payments are intended to address. The Commission
believes the timing of any such reduction in Medicare payments should
be coordinated with the extension of universal coverage, so that
hospitals that provide care to low-income populations are not
disadvantaged. As a result, payments would be targeted more effectively
to the hospitals that provide care to these populations. Even so, the
payments received by different hospitals and the balance between
payment levels for Medicare and other patients may be affected
significantly. These changes should be structured to ensure that both
the level and distribution of payments are appropriate. ProPAC intends
to work with the Congress and the Secretary of Health and Human
Services to monitor and study this issue.
Recommendation 3: Payments for Additional Patient Care Costs Incurred
by Teaching Hospitals
ProPAC supports the explicit recognition by all payers of the
higher patient care costs teaching institutions incur. The Commission
believes such payments should be separated from patient care rates and
paid through a fund similar to the Academic Health Center Account
proposed in the Health Security Act. ProPAC is concerned, however, that
a sharp reduction in the payments teaching hospitals receive from
government payers may result in financial hardships for some of the
nation's major hospitals. Constraints on payments from private payers
may exacerbate this problem. Therefore, ProPAC recommends that the
total level of funding and the formula for distributing payments
through such a mechanism should be based on careful analysis of the
costs teaching institutions incur in carrying out their functions and
how these payments will affect graduate medical education and access to
the care these facilities provide.
Recommendation 4: Graduate Medical Education Funding and Payment
ProPAC supports efforts to establish a funding mechanism for
graduate medical education training programs that encompasses all
payers, including Medicare. The Commission believes this mechanism
should be separate from the payment received for patient care services.
The level of funding and the distribution of payments should be
determined according to the following principles:
Funding for graduate medical education should be
consistent with national work force goals, with respect to both the
number of residents trained and their specialty distribution.
Funding should support training for physician and certain
non-physicians medical personnel who contribute to attaining these
goals.
Payment should be made to the training program, whether it
is based in a hospital inpatient, hospital outpatient, or other
ambulatory setting. The optimal method for allocating and distributing
such payments needs to be determined.
Payment for graduate medical education should be based on
a national per resident amount, adjusted to recognize regional
differences in residents' salaries and other factors that, upon further
study, are found to be appropriate.
In addition, funds should be available to recognize the additional
personnel costs of hospitals that operate programs that lose specialty
training positions as a result of the process described above.
Recommendation 5: Quality of Care
The Commission believes there must be an effective quality
assurance program for Medicare enrollees, especially given health
reform's emphasis on cost control and proposed cutbacks in Medicare
spending. The Peer Review Organization program should be continued but
thoroughly evaluated. It should be replaced only by a program that has
been determined to be more effective.
Recommendation 6: Improvement in Premium Risk Adjustment Methods
The Commission recommends that the Secretary undertake the research
necessary to substantially improve current risk adjustment methods.
Risk adjustment will be needed under many health reform proposals to
ensure that the premiums paid to competing health plans accurately
reflect the risk composition of their enrollees. Until major
improvements can be made, some other mechanism may be needed to limit
the potential impact of enrolling individuals whose care proves to be
exceptionally costly.
Recommendation 7: Controlling Medicare Spending Across All Sites of
Care
Medicare should continue to develop policies to monitor and control
total expenditure growth across all sites of care. Payment methods
should not unduly favor the choice of one site over another. They
should also provide consistent incentives to constrain increases in
volume and service intensity across physicians and other providers.
Recommendation 8: Strengthening Medicare's Risk Contracting Program
The Commission recommends that the Secretary improve Medicare's
risk-based, managed care program to give more Medicare beneficiaries
the option of enrolling in managed care plans. To increase plan
participation, deficiencies related to the risk adjustment formula and
local differences in payments need to be corrected.

Payment Updates

Recommendation 9: Update Factor for Operating Payments to PPS Hospitals
For fiscal year 1995, the PPS standardized payment amounts should
be updated to account for the following:
The projected increase in the HCFA PPS market basket
index, currently estimated at 3.7 percent;
An adjustment of zero percentage points for the difference
between the projected ProPAC and HCFA market baskets;
A negative adjustment of 1.1 percentage points for
substantial error in the fiscal year 1993 market basket forecast;
A positive adjustment of 0.3 percentage points to reflect
the cost-increasing effects of scientific and technological advances;
A negative adjustment of 0.7 percentage points to
encourage hospital productivity improvements; and
A net adjustment of zero percentage points for case-mix
change.

In addition, a positive adjustment of 3.1 percentage points should be
made for hospitals in rural areas to complete the phaseout of the
differential in standardized amounts between rural and other urban
hospitals. ProPAC's recommendation would result in an estimated average
update factor of 2.7 percent for fiscal year 1995: an increase of 2.2
percent for urban hospitals and of 5.3 percent for rural hospitals.
Recommendation 10: Update Factor for Capital Payment to PPS Hospitals
For fiscal year 1995, the Commission recommends that a formula-
based approach be used to update capital payment rates. The capital
update should include the following:
The projected increase in a capital market basket index
that measures one-year changes in a fixed basket of capital goods
hospitals purchase, currently estimated at 3.4 percent;
An adjustment of zero percentage points to correct for
past forecast errors;
An adjustment of zero percentage points to reflect changes
in financing costs:
A positive adjustment of 0.9 percentage points for
scientific and technological advances;
A negative adjustment of 0.7 percentage points to encourage
hospital productivity; and
A net adjustment of zero percentage points for case-mix
change.

The Commission's recommendation would result in a 3.6 percent increase
in the Federal capital payment rate for both urban and rural hospitals.
Recommendation 11: Single Operating and Capital Update Factor
The Commission recommends that when the transition to fully
prospective capital payments is complete, a single update factor be
used for adjusting PPS operating and capital payment rates. Based on
ProPAC's recommended updates to the operating and capital payment
rates, the total increase to a fully prospective combined payment rate
would be 2.8 percent for fiscal year 1995.
Recommendation 12: Update Factor for Hospitals Paid on the Basis of
Hospital-Specific Rates
The Commission believes payments based on hospital-specific base-
year costs for sole community hospitals should be updated by the
average update given to all hospitals.
Recommendation 13: Update Factor for PPS-Excluded Hospitals and
Distinct-Part Units
For fiscal year 1995, the target rates for PPS-excluded hospitals
and distinct-part units should be updated by 2.7 percent. This
recommendation accounts for the following:
The projected increase in the HCFA PPS-excluded hospital
market basket, currently estimated at 3.7 percent;
An adjustment of zero percentage points for the difference
between the projected ProPAC and HCFA market baskets;
A negative adjustment of 1.0 percentage points for
substantial error in the fiscal year 1993 market basket forecast; and
An adjustment of zero percentage points for scientific and
technological advances.
Recommendation 14: Update to the Composite Rate for Dialysis Services
The fiscal year 1995 update recommendation for the composite rate
for dialysis services accounts for the following:
The projected increase in the market basket for dialysis
services in fiscal year 1995, estimated at 4.3 percent;
A positive adjustment of 0.7 percentage points to reflect
the additional costs associated with scientific and technological
advances;
A negative adjustment of 1.0 percentage points to
encourage productivity improvements; and
A negative discretionary adjustment of 4.0 percentage
points to reflect the relationship between payments and estimated
fiscal year 1994 costs.

This results in a net update recommendation of zero percent.

Other Payment Policies

Recommendation 15: Improvements in Hospital Wage Data
The Secretary should develop and implement improved methods for
collecting data on employee compensation and paid hours of employment
for hospital workers by occupational category. Once these data become
available, the Secretary should implement an adjustment to the hospital
wage index under PPS. This adjustment would correct the wage index for
the inappropriate effects of including geographic differences in the
mix of occupations employed.
Recommendation 16: Improvements in the PPS Hospital Wage Index
The Secretary should substantially revise the hospital wage index
under PPS for fiscal year 1995. The revised wage index should be
calculated using hospital-specific labor market definitions based on
hospital geographic proximity measured by the air-mile distances
between nearby hospitals. The Congress should repeal the current
statutory provisions relating to geographic reclassification for the
wage index.
Recommendation 17: Nursing Facility Wage Index
The Secretary should collect data on employee compensation and paid
hours of employment for employees of nursing facilities that care for
Medicare skilled nursing facility patients. Once these data become
available, the Secretary should develop a nursing facility wage index
and use it to adjust Medicare skilled nursing facility payments.
Recommendation 18: Improving Outlier Payment Policy
The Commission believes the outlier payment provisions of the
Omnibus Budget Reconciliation Act of 1993 will improve the current
policy for identifying outlier cases and determining outlier payments
under PPS. However, the following changes also should be implemented
for fiscal year 1995:
The estimated cost of the case and the outlier payment
amount should no longer be adjusted to reflect the hospital's indirect
medical education and disproportionate share status.
The marginal cost factor for cost outliers should be
increased to 80 percent.

These changes would further increase the effectiveness of outlier
payment in protecting against the risk of large losses on some cases.
They would also improve the distribution of outlier payments across
hospitals, including hospitals that receive a large number of transfer
cases.
Recommendation 19: Level of the Indirect Medical Education Adjustment
to PPS Operating Payments
The Commission recommends that the indirect medical education
adjustment to PPS operating payments be reduced from its current level
of 7.7 percent to 7.0 percent for fiscal year 1995. This reduction
should be implemented with the anticipated decrease in indirect medical
education payments returned to all hospitals through a proportionate
increase in the standardized payment amounts. The Commission also
recommends continuation of the indirect medical education adjustment to
PPS payments until an alternative system of compensating appropriately
for the higher costs of patient care in teaching institutions is fully
operational.
Recommendation 20: Prospective Payment Method for Outpatient Services
The Commission believes a prospective payment system for outpatient
services should be implemented. Outpatient payment reform should result
in consistent policies across all sites and providers. Payment should
be based on a prospective price per unit of service until other methods
can be developed that would appropriately control the volume of
services. The payment rate should be adjusted to reflect justifiable
cost differences across settings.
Recommendation 21: Revision of the Payment Formula for Outpatient
Services
Until prospective payment systems can be implemented for hospital
outpatient services, the blend formula used to calculate hospital
payments for ambulatory surgery center-approved procedures, radiology
services, and diagnostic services should be revised. The formula should
subtract beneficiary copayment after the total payment has been
calculated. The resulting reduction in Medicare program payments to
hospitals should be used to partially offset increases in program
expenditures due to reducing beneficiary liability.
Recommendation 22: Beneficiary Liability for Hospital Outpatient
Services
Beneficiary coinsurance for hospital outpatient services should be
limited to 20 percent of the Medicare-allowed payment, as it is in
other settings. For services not paid on a prospective basis,
beneficiary copayment would need to be estimated because it is not
known at the time of service delivery.
Recommendation 23: Limit the Length of Outpatient Observation Stays
The Commission recommends limiting the length of hospital
outpatient observation stays. Further, these changes should be
coordinated with Peer Review Organizations so that appropriate short
stay admissions are not denied. ProPAC supports HCFA's efforts in this
regard.

CHAPTER 1

THE FUTURE OF HOSPITALS

Hospitals--the central institutions in the American health care
system--have long been the sole source of technology-oriented acute
health care for the most complex cases. But because the capabilities of
technology were limited, until the last 20 years or so one hospital was
much like another. Each provided its community with essentially the
same range of services and was structured in a similar manner.
This is no longer the case. Changes in medical science and
technology and the financing of services have required hospitals to
become very different entities. Today, hospitals offer a rich mix of
complex, intensive services to a variety of patients. Relationships
among hospitals, other institutional providers, and payers have become
more complex as well, incorporating jointly produced services and
financial risk sharing. The role of physicians in hospitals' operations
has also evolved. Because of the wider range of services, patients, and
institutional arrangements, hospitals are now a much more diverse group
of medical care facilities, with as many differences as similarities.
The Prospective Payment Assessment Commission (ProPAC), created in
1983 by the legislation that established the Medicare prospective
payment system (PPS) for inpatient hospital services, advises the
Congress and the Secretary of Health and Human Services on policies
affecting payment for Medicare services in hospitals and other
institutional settings. It is thus appropriate that the Commission look
at changes that have affected hospitals in recent years and how
hospitals have responded. This chapter does just that, providing a
context for the recommendations in Chapter 2 on changes to Medicare
payment policy. The chapter concludes by examining what lies ahead for
hospitals, as government and private payers attempt to curb health care
spending and as comprehensive health reform is debated by the Congress.
Several major factors have influenced how hospitals have evolved.
The continuous introduction of new technological capabilities has led
to increases in the intensity of inpatient services for the acutely
ill. These advances have also allowed services formerly provided only
to hospital inpatients to be furnished in ambulatory settings.
Consequently, new providers have entered the health care market,
competing with hospitals for clients.
Changes in financing, limitations by insurers on using specific
services, and increased competition have contributed to unprecedented
declines in inpatient hospital utilization. In 1992, for instance,
there were 5.5 million fewer hospital admissions than in 1982, despite
a 10 percent population increase. The average length of a hospital stay
also fell to 6.4 days from 7.2 days, even though the average case was
more complex. Total health care expenditures, however, have continued
to rise at a dramatic rate, consuming 14 percent of the nation's gross
domestic product in 1992. As a result, payers have been pressed to
reevaluate their cost-based and charge-based payment practices and to
find ways to reduce their financial risk.
Hospitals have responded to the marked declines in inpatient
service use and constrained payments from public and private payers by
actively seeking new sources of revenue. They have expanded their
capacity to furnish ambulatory surgery and other outpatient services
and developed specialized units to provide inpatient psychiatric,
rehabilitation, and subacute nursing care. In addition, many have begun
to offer home health and various community-based services. Others have
concentrated on eliminating unprofitable cost centers or turned to more
revenue-enhancing activities. Some, for instance, have become
specialized facilities like psychiatric or rehabilitation hospitals,
while in rural areas, some small hospitals have eliminated inpatient
beds and become outpatient centers. Over time, hospitals have modified
their relationships with insurers, other providers, and physicians and
have attempted to curb expenses to strengthen their market position.
The configuration of the hospital represents a complex interaction
between financing, organizing, and providing specific services in a
local environment. Recently, for example, insurers and other payers
have strengthened efforts to reduce payments to hospitals and other
providers, and implemented utilization control activities. These
financial pressures have forced hospitals to assume more risk than was
the case under charge-based or cost-based reimbursement. Additionally,
hospitals have had to take a closer look at whether to add new
technologies and services.
Although for the past decade hospitals have been a major target of
government cost control--primarily through Medicare and Medicaid
payment policy--spending for the services they provide almost tripled
between 1980 and 1991, from $102 billion to $289 billion. Total health
care expenditures, however, have risen even more rapidly. Consequently,
policy makers are currently debating how to reform the health care
system to rein in the growth of public and private spending, while also
expanding coverage to the nearly 39 million Americans who are
uninsured. Even if reform is gradual and not comprehensive, hospitals
will be pressured to reduce costs and generate new revenues by
expanding service capacity. If comprehensive reform is enacted, the
fundamental relationships among payers, physicians, and other types of
providers may change markedly. The evolution of individual hospital
swill depend heavily on how health reform affects each facility's local
market, patient population, payer mix, and regulatory environment.

Factors Affecting how Hospitals Have Evolved

The health care environment has undergone radical changes over the
past two decades and is on the threshold of even greater ones. Two
major forces--advances in medical technology and financing mechanisms--
have profoundly influenced hospitals. Technological innovations have
expanded the services hospitals furnish and led to increased
competition from other providers. Until recently, a steady stream of
revenues from third-party cost-based and charge-based payers financed
these innovations. Increasingly, as payment policies have changed
hospitals have used higher payments from some payers to cover losses
created by lower payments from others. This has allowed the continued
expansion of services even as certain payers have attempted to limit
expenditures.

Technological Advances

Recent technological advances affecting the hospital industry range
from the development of new pharmaceutical and surgical instruments to
expensive diagnostic equipment like magnetic resonance imaging devices
(MRIs).
During the 1970s and early 1980s, hospitals were quick to adopt new
technologies even when clinical indications for their appropriate use
were still largely unstudied.\1\ Computerized tomography (CT) scanners
are illustrative. This technology first appeared in 1973; by 1985,
almost all community hospitals with more than 300 beds had a CT unit,
even though purchase prices averaged about $500,000.\2\ Similarly, in
1981, 14.8 percent of hospitals had cardiac catheterization capacity;
by 1992, this had risen to 27.6 percent (see Table 1-1). Hospitals have
also increased their magnetic resonance imaging, megavolt radiation
therapy, and open-heart surgery capabilities since the beginning of the
1980s.
Because it was so costly, most state-of-the-art equipment
traditionally was purchased only by hospitals. But new technological
developments, along with advances in medical expertise, have expanded
the ability of outpatient providers to offer services in competing
sites. The number of ambulatory surgery centers, for example,
mushroomed from 239 in 1983 to 1,556 in 1991.\3\
Technological developments not only have allowed hospitals and
other providers to offer a broader array of services, but also have
enabled more people and conditions to be treated. The expanded volume
that accompanies both new and existing technologies contributes more to
the rise in health care expenditures than does the cost of the
technological devices, themselves. Consequently, if frequently used,
even relatively inexpensive innovations can contribute substantially to
health care spending. As the supply of technology extends beyond
hospitals and the demand for these services increases, utilization may
grow more rapidly, thus driving up health care expenditures.

Table 1-1.--High-Technology Services Provided by Hospitals, Selected Years (In Percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Magnetic Megavolt
year Cardiac CT scan Lithotripsy resonance radiation Ocean-heart SPECT
catheterization (ESWL) imaging therapy surgery
--------------------------------------------------------------------------------------------------------------------------------------------------------
1981................................... 14.8% 21.4% 14.5% 9.6%
1985................................... 16.8 48.5 0.8% 15.2 11.1
1990................................... 24.1 61.1 5.4 15.6% 17.0 14.7 16.2%
1992................................... 27.6 65.9 7.2 21.3 17.5 16.0 24.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: CT = computerized tomography. ESWL = extracorporeal shock wave lithotripsy. SPECT = single photon emission computerized tomography. Includes all
Federal, nonfederal, general acute care, long-term care, and psychiatric hospitals as well as hospital units of institutions.

Source: American Hospital Association, Hospital Statics. 1981, and Annual Survey of Hospitals, 1985, 1990, and 1992.

Financing Changes

Advances in technology have raised the cost of medical care because
they have permitted the treatment of more complex cases. As the cost of
providing such care exceeded the ability of most individuals to pay, a
third party joined the hospital-patient relationship. This third party
initially was a private insurance plan that helped individuals share
the risk of costly illness. In 1965, the government joined the payer
mix with the creation of the Medicare and Medicaid programs. For many
years, government and private payers collected funds and distributed
payments to hospitals for the care of their beneficiaries, but did not
become involved in decisions relating to the services that were
provided, the site of care, or the type of provider. Payments to
providers were made on the basis of costs or charges, which allowed
revenues to increase directly as costs rose.
But with health care expenditures accelerating much more rapidly
than general inflation, insurance premiums grew markedly. This not only
threatened the ability and willingness of employers to fund higher
premiums, but also affected individuals by driving up out-of-pocket
payments for many services. Third-party payers responded by seeking
ways to slow the growth--particularly that in hospitals because they
had high costs per case and accounted for a major share of total health
care spending. Responding to skyrocketing government payments. Medicare
in the early 1980s replaced cost-based hospital payment with the
prospective payment system. This system allowed Medicare to reduce the
growth of its hospital payments. While some private insurers were also
able to control payment growth, most were not.
Hospitals have attempted to generate revenue to cover losses from
uncompensated care and below-cost payments for Medicaid and Medicare
patients by raising charges to private insurers. This practice is
called ``cost shifting.'' In addition, hospitals have actively sought
other sources of revenue. In 1981 net revenue gains from private
insurers equaled 5.0 percent of total hospital costs, while in 1991
this figure had risen to 11.6 percent (see Table 1-2). This largely
offset losses from Medicare, which increased from 1.0 percent to 4.4
percent, and from Medicaid, which rose from 0.7 percent to 2.3 percent
of total costs. Depending on their payer mix, however, hospitals differ
in their ability to cost shift. Those with large uncompensated care
patient populations and few generously paying privately insured
patients, for example, have had limited ability to cost shift. By
contrast, other types of hospitals--particularly those with a large
proportion of privately insured patients--have found it easier to cost
shift.

Table 1-2.--Hospital Losses and Gains as a Percentage of Costs, by
Payment Category, Selected Years
------------------------------------------------------------------------
Uncompensated Private
Year Medicare Medicaid care payers
------------------------------------------------------------------------
1981.............. -1.0% -0.7% -3.3% 5.0%
1983.............. -1.2 -0.8 -3.6 7.0
1985.............. 0.4 -1.0 -4.4 6.7
1987.............. -0.7 -1.7 -4.4 8.2
1989.............. -3.3 -2.5 -4.4 8.9
1991.............. -4.4 -2.3 -4.4 11.6
------------------------------------------------------------------------
Note: For each payment category, losses or gains are the difference
between the cost of providing care and the payment received. Operating
subsidies from state and local governments are considered payments for
uncompensated care patents.

Source: ProPac analysis of data from the American Hospital Association
Annual Survey of Hospitals.

The array of providers and payers and the lack of adequate
coordination among them also encourages shifts in site of care by
driving up use and expanding capacity in those settings that are not
experiencing as much pressure to contain costs. For example while
prospective payments has slowed the growth of Medicare payments for
inpatient care, service utilization in post-acute and ambulatory
settings has exploded, with a corresponding increase in expenditures.
Questioning the medical appropriateness and need for many hospital
admissions, third-party payers have adopted policies to encourage the
use of less costly providers and settings. Many private insurers have
turned to managed care arrangements, using financial incentives,
preferred provider agreements, and increased utilization review to curb
the use of inpatient hospital care. Private payers are also
increasingly regulating and limiting what they will cover and how much
they will reimburse, giving hospitals incentives to change the mix of
services they provide. Government, on the other hand, has focused its
efforts on evaluating, through utilization review, whether specific
services should be furnished and determining the setting in which
services must be provided. Medicare, for example, requires performance
of almost all cataract surgery on an outpatient basis. Both public and
private payers have attempted to influence the site and provision of
services through preadmission certification and retrospective claims
review with possible denial of payment.

Legal and Regulatory Environments

The legal and regulatory environments that hospitals face at both
the Federal and state levels also affect their financial condition and
organization of service delivery. The Federal government influences
hospitals, for example, through antitrust and tax laws. These
regulations significantly affect hospitals' ability to respond to
financial pressures by acquiring or contracting with other health care
providers.
Many states are considering or in the process of enacting
comprehensive health reform legislation that will influence how
hospitals are paid and which services are provided, even in the absence
of Federal health reform.\4\ Several states--among them Vermont, North
Dakota, Florida, and Minnesota--are crafting cost-containment
strategies that include expenditure targets or global caps on health
care spending and encourage or mandate the development of managed care
networks. Minnesota has established state boards to oversee major
capital expenditures and to foster collaboration among providers.
Vermont is preparing to implement payment limits for all providers
within the state, while providing health insurance to all its
residents. Hawaii has had universal health insurance coverage for 20
years. If states successfully lower the rates of increase in health
care expenditures, hospitals will see their revenues constrained and
their ability to cost shift among payers limited.

Hospital Responses to Changes in the Health Care Environment

How an individual hospital has evolved in response to technological
advances, financing changes, and legal or regulatory developments has
depended on the hospital's internal and external environments. Among
their responses are changes in the services provided; attempts to
control cost growth; and innovative arrangements among hospitals, other
providers, and insurers. The end result has been significant
diversification in the hospital industry.

Services Provided

A combination of fewer admissions and shorter stays has encouraged
hospitals to seek alternative sources of revenue. Inpatient admissions
for the population 65 and over decreased with the implementation of PPS
in 1983, but began growing again in 1986. Among the nonelderly, both
the number and rate of inpatient admissions have continued to drop.
Average length of stay fell considerably after PPS was introduced and
has shown only modest changes since then.
Some hospitals have responded to the decline in acute patient
admissions by targeting different patient populations. If hospitals
convert to specialty status, they also may be shielded from stringent
cost containment. In particular, they are exempt from PPS. Since 1980,
the number of general medical and surgical hospitals has decreased by
11.2 percent, while the number of psychiatric hospitals has accelerated
by 41.8 percent and the number of other specialty hospitals has grown
by 7.3 percent (see Table 1-3).

Table 1.3.--U.S. Hospitals, by Hospital Category, Selected Years
------------------------------------------------------------------------
Percent
Hospital category 1980 1985 1990 1992 change
1980-1992
------------------------------------------------------------------------
Short term....... 6,407 6,339 6,141 6,092 -4.9
Long term........ 558 533 508 447 -19.9
General medical
and surgical.... 6,105 5,961 5,566 5,424 -11.2
Psychiatric...... 558 629 774 791 41.8
Tuberculosis and
other specialty. 302 282 309 324 7.3
Community*....... 5,830 5,732 5,384 5,292 -9.2
Noncommunity..... 1,135 1,140 1,265 1,247 9.9
6-24 beds........ 327 267 301 294 -10.1
25-49 beds....... 1,209 1,134 1,095 1,078 -18.8
50-99 beds....... 1,674 1,666 1,633 1,595 -4.7
100-199 beds..... 1,567 1,618 1,562 1,572 0.3
200-299 beds..... 802 848 830 823 2.6
300-399 beds..... 484 507 503 489 1.0
400-499 beds..... 334 301 276 256 -23.4
500+ beds........ 568 531 449 432 -23.9
Voluntary........ 3,505 3,544 3,388 3,363 -4.1
Proprietary...... 891 1,052 1,139 1,134 27.3
Federal
government...... 359 343 337 325 -9.5
Nonfederal
government...... 2,210 1,933 1,785 1,717 -22.3
Residency
training........ 1,257 1,232 1,249 1,223 -2.7
Medical school
affiliation..... 997 1,120 1,238 1,154 15.7
Council of
Teaching
Hospitals member 406 454 387 381 -6.2
Urban............ 3,791 3,959 3,937 4,030 1.8
Rural............ 3,174 2,913 2,712 2,509 -20.5
New England...... 373 361 341 331 -11.3
Middle Atlantic.. 800 761 726 710 -11.3
South Atlantic... 1,026 1,037 1,050 1,043 1.7
East North
Central......... 1,060 1,022 959 957 -9.7
East South
Central......... 548 547 532 523 -4.6
West North
Central......... 896 883 846 820 -8.5
West South
Central......... 955 972 943 919 -3.8
Mountain......... 448 462 464 464 3.6
Pacific.......... 859 827 788 772 -10.1
All hospitals 6,965 6,872 6,649 6,539 -6.1%
------------------------------------------------------------------------
*Community hospitals include nonfederal short-term general and some
specialty hospitals.Q
Source: American Hospital Association Annual Survey of Hospitals.

The significance of non-inpatient and skilled nursing services also
has increased, although it varies by hospital location (see Table 1-4).
In 1985 about 40 percent of rural community hospitals reported having
any organized outpatient service; by 1992, more than 84 percent had
this capability. While 17 percent of rural hospitals surveyed derived
more than half of net patient care revenues in 1993 from ambulatory
services, this was true for only about 6 percent of urban hospitals
(see Table 1-5). These revenues were also a larger share of net patient
care revenues for non-teaching than for teaching hospitals.
Skilled nursing services were provided by 34 percent of community
hospitals in 1992, compared with 18.8 percent in 1985. Further, a
significantly higher proportion of rural, compared with urban,
hospitals furnished this care. This may partly reflect the attempts of
rural institutions to compensate for reduced inpatient utilization by
expanding skilled nursing care capacity. The percentage of rural
hospitals with swing beds (beds certified by Medicare as either acute
care or skilled nursing beds) has also risen.

Table 1-4.--Non-Inpatient and Skilled Nursing Services Provided by Community Hospitals, by Location, Selected
Years (In Percent)
----------------------------------------------------------------------------------------------------------------
Any
organized Alcohol/ Skilled
Location year outpatient Surgery^{b Psychiatric drug Rehabilitation Home health nursing^{c
services^{a dependency
----------------------------------------------------------------------------------------------------------------
All hospitals:....
1985.......... 54.1 93.4 15.3 16.1 39.3 29.7 18.8
1990.......... 85.2 94.7 19.6 20.5 51.5 35.6 22.3
1992.......... 88.9 94.4 21.9 21.0 55.0 38.0 34.0
Urban:............
1985.......... 66.9 95.7 23.6 22.9 54.9 31.8 11.1
1990.......... 90.0 95.0 29.0 28.6 66.2 34.4 18.7
1992.......... 92.6 94.7 31.2 28.8 67.3 35.8 26.0
Rural:............
1985.......... 39.3 90.7 5.8 8.2 21.3 27.4 27.6
1990.......... 79.6 94.4 8.4 10.8 34.2 37.1 26.4
1992.......... 84.1 94.1 9.9 10.9 39.0 40.9 44.4
----------------------------------------------------------------------------------------------------------------
^{aTrends in responses may reflect, in part, a change in the survey question between 1985 and 1990.
^{bHospitals may provide outpatient surgery without having an organized outpatient department.
^{cData for 1985 reflect the presence of skilled nursing services anywhere in the hospital. Data for 1990 and 1992
reflect the presence of a separate skilled nursing unit.

Source: American Hospital Association Annual Survey of Hospitals.

Talbe 1-5.--Hospital Net Patient Care Revenues from Ambulatory Services,
by Hospital Category, 1993 (In Percent)
------------------------------------------------------------------------
Net patient care revenues from ambulatory
Hospital Number of services (in percent)
category* hospitals -------------------------------------------
0-10 11-25 26-50 Over 50
------------------------------------------------------------------------
Atlantic....... 400 11.0 37.8 42.0 5.8
East Central... 391 6.6 24.0 54.7 11.8
West Central... 404 8.9 23.8 50.5 14.4
Far West....... 300 8.0 24.0 49.3 14.7
Urban.......... 736 9.5 39.8 41.6 5.7
Rural.......... 759 7.9 15.8 56.4 17.0
Teaching....... 233 13.3 54.0 27.0 3.9
Non-teaching... 1,262 7.8 22.7 53.2 12.8
--------------------------------------------------------
Total...... 1,495 8.7 27.6 49.1 11.4
------------------------------------------------------------------------
Note: Rows may not add to 100 due to survey item non-response.

*Atlantic includes the New England, Middle Atlantic, and South Atlantic
Census Division. East Central includes the East North Central and East
South Central Census divisions. West Central includes the West North
Central and West South Central Census divisions. Far West includes the
Mountain and Pacific Census divisions. Teaching hospitals are those
with more than 5 percent professional time spent teaching.

Source: Survey of Hospital-Physician Relations conducted by MACRO
International Inc., under contract to ProPac.

Hospitals have increasingly added home care capacity as well.
Hospital home care visits doubled between 1980 and 1990, from 6.2
million to 12.3 million.\5\ Compared with smaller hospitals, larger
ones had more visits.\6\ The percentage of community hospitals
operating home care programs, however, is not growing as rapidly as the
use of home care services.
During the 1970s and 1980s, many hospitals expanded their
outpatient departments and added ambulatory surgery centers. On
average, 37 percent of hospital equipment is devoted to meeting
outpatient demand.\7\ This expansion has had a major impact on hospital
revenues. About 25 percent of hospital revenues, on average, now come
from out-patient services (see Table 1-6). While inpatient admissions
have declined by about 14 percent since 1980, nonemergency outpatient
visits have more than doubled (see Table 1-7). Similarly, more than
half of hospital surgical procedures in 1992 were performed on an
outpatient basis, compared with only 16.3 percent in 1980.
Along with expanding their service capacity, hospitals have also
increased their labor pool to administer the new services. The number
of full-time equivalent personnel (FTEs) per patient has grown steadily
since the 1970s (see Table 1-8). In part this reflects the surge in
outpatient hospital services, since FTEs employed by hospitals may work
in either inpatient or outpatient departments. Nonetheless, labor costs
as a percentage of total hospital costs have been decreasing, while
capital costs are increasing as a percentage of total costs.

Attempts to Control Growth in Costs

Financial pressures on hospitals have spurred the growth in
services to augment revenues and have fostered a greater reliance on
cost shifting. As a result of these efforts, in aggregate, hospitals
have maintained positive total revenue margins. In 1991, the total
margin was 4.3 percent--higher than at any time before the introduction
of PPS.
However, as government and private insurers have stepped-up their
cost-containment efforts, hospitals are less able to compensate for
losses. Therefore, hospitals must increase efforts to reduce costs and
indeed have done so. After peaking at 5.0 percent in 1992, annual real
growth (above general inflation) in hospital costs per case dropped to
3.2 percent in the first quarter of 1993 and to 1.0 percent in the
third quarter. Whether this is a one-time phenomenon or the beginning
of a trend is uncertain.

Table 1-6.--Community Hospital Revenues, by Type of Service, Selected
Years
[In Percent]
------------------------------------------------------------------------
Year Inpatient Outpatient Other
------------------------------------------------------------------------
1980............................. 83.2 12.5 4.3
1985............................. 79.3 16.1 4.6
1990............................. 72.5 22.5 5.0
1992............................. 69.8 25.3 4.9
------------------------------------------------------------------------
Source: American Hospital Association National Hospital Panel Survey

Arrangements With Other Hospitals, Facilities, and Insurers

Hospitals have adopted a number of organizational strategies to
respond to changes in their operating environment. They have, for
instance, merged with, acquired, or contracted with other hospitals and
providers. They have also developed more complex relationships with
insurers.
During the 1980s, hospitals tended to diversify by acquiring
facilities or businesses (such as parking lots or non-health care
businesses) that often were unrelated to their basic mission. Many of
these investments were unprofitable, partly because hospital
administrators lacked the skills to manage non-acute care ventures.\8\
In the 1990s, however, hospital diversification efforts have focused on
reducing costs and offering a wider range of services to large
employers and purchasing coalitions through managed care contracts.\9\
Extensive mergers and acquisitions during the 1980s led to the
growth in the number of multihospital systems and in the percentage of
institutions that belonged to these systems (see Table 1-9). Between
1979 and 1992, the proportion of hospitals that were members of
multihospital systems increased from 27.1 percent to 43.2 percent.
These systems were thought to produce economies of scale and scope, but
whether they are more efficient is debatable.\10\ The fact that the
number of formal multihospital systems actually declined between 1990
and 1992 may reflect a trend toward the use of less formal contractual
arrangements, as well as mergers of existing systems.

Table 1-7.--Inpatient and Outpatient Use of Services in Community Hospitals, Selected Years
----------------------------------------------------------------------------------------------------------------
Inpatient services (in Outpatient visits (in Surgical procedures (in
thousands) thousands) percent)
Year -----------------------------------------------------------------------------------------------
Admissions Days Emergency Other Inpatient Outpatient
----------------------------------------------------------------------------------------------------------------
1980............ 36,143 273,085 77,245 125,064 83.7 16.3
1985............ 33,449 236,619 74,547 144,169 65.4 34.6
1990............ 31,181 225,972 86,693 214,636 49.5 50.5
1992............ 31,034 221,047 90,769 254,772 46.2 53.8
Percent change
1980-1992...... -14.1 -19.1 17.5 103.7 .............. ..............
----------------------------------------------------------------------------------------------------------------
AASource: American Hospital Association Annual Survey of Hospitals.

Hospitals have also developed innovative contractual arrangements
with other providers. Some rural hospitals, for example, have dealt
with declining population bases and the inability to provide high-
technology services to the communities they serve by setting up rural
networks or establishing telemedicine or computer information linkages
with large urban hospitals and other providers. Such linkages have
changed the configuration of the rural hospital.
Financial pressures have also stimulated the growth of managed
care, which has substantially altered the nature of relationships
between hospitals and insurers. For example, hospitals may assume more
financial risk under a capitated payment system. Types of managed care
arrangements differ substantially, however; the degree of control over
physician and other providers decision making--and this utilization--
consequently differs. Health maintenance organizations (HMOs) in
particular attempt to control expenditures primarily by reducing the
use of inpatient hospital care. Staff and group model HMOs exercise
more control over their employees than do independent practice
associations or preferred provider organizations (PPOs).

Table 1-8.--National Hospital Employee Costs and Personnel in Nonfederal Short-Term Hospitals, 1971-1991
----------------------------------------------------------------------------------------------------------------
Personnel^{b
Total costs for Employee costs as -------------------------------------
Year inpatient care a percentage of Total (in Number per 100
(in billions) total costs^{a thousands) patients
----------------------------------------------------------------------------------------------------------------
1971................................ $22.4 63.9 1,999 272
1972................................ 25.5 62.6 2,056 278
1973................................ 28.5 61.8 2,149 280
1974................................ 32.8 60.7 2,289 289
1975................................ 39.1 59.4 2,399 298
1976................................ 45.4 57.9 2,483 304
1977................................ 51.8 57.5 2,581 315
1978................................ 58.3 57.2 2,662 323
1979................................ 66.2 57.0 2,762 328
1980................................ 77.0 56.4 2,879 334
1981................................ 90.7 56.7 3,039 347
1982................................ 105.1 56.7 3,110 353
1983................................ 116.6 56.5 3,102 357
1984................................ 123.6 56.1 3,023 367
1985................................ 130.7 55.2 3,003 385
1986................................ 140.9 53.9 3,032 392
1987................................ 152.9 53.1 3,120 400
1988................................ 168.9 52.9 3,209 404
1989................................ 185.2 53.0 3,307 411
1991................................ 225.2 53.8 3,539 427
----------------------------------------------------------------------------------------------------------------
^{aIncludes employee payroll and benefit costs; excludes contracted labor services.
^{bFull-time equivalent personnel.
^{cSource: National Center for Health Statistics, Health, United States, 1992 (Hyattsville, Maryland: Public
Health Service, 1993).

Table 1-9.--Multihospital Systems, 1979-1992
------------------------------------------------------------------------
Number of Percent of
Year Number of hospitals all
systems in systems hospitals
------------------------------------------------------------------------
1979............................. 267 1,797 27.1
1980............................. 256 1,877 28.4
1981............................. 256 1,924 29.2
1982............................. 243 1,958 29.8
1983............................. 249 2,050 31.3
1984............................. 250 2,208 33.8
1985............................. 268 2,477 37.9
1986............................. 278 2,514 38.7
1987............................. 303 2,567 39.6
1988............................. 303 2,572 40.0
1989............................. 307 2,901 43.2
1990............................. 311 2,906 43.7
1991............................. 309 2,873 43.3
1992............................. 300 2,826 43.2
Percent change 1979-1992......... 12.4 57.3 ...........
------------------------------------------------------------------------
Note: Increases between 1988 and 1989 reflect, in part, inclusion of
Federal hospitals in 1989 and thereafter.
Source: American Hospital Association, Directory of Multihospital
Systems, 1980-1987, AHA Guide, 1988-1993, Financial Growth and
Diversification of Hospitals and Multihospital Systems, 1988, Data
Book on Multihospital Systems, 1980-1985, Hospital Statistics, 1992-
93, and Annual Survey of Hospitals, 1992.

The growth in the managed care industry has been well-documented,
although the rate of growth has not been uniform throughout the
country.\11\ In the West Census region in 1992, for instance, 25
percent of the population was enrolled in some sort of HMO, compared
with 7.8 percent in the South. The implementation of managed care plans
has also differed throughout the country. The average managed care plan
in the Pacific Census division contracts with 60 hospitals, while that
in New England contracts with 22 hospitals.
As managed care market power has grown, more hospitals have begun
contracting with HMOs and PPOs (see Table 1-10). This trend is
reflected in the increased importance of managed care as a source of
revenue. In 1993, 15.6 percent of hospitals in the Far West and 7.2
percent of hospitals in the East Central part of the country reported
that more than 25 percent of their net patient care revenues came from
HMOs or PPOs (see Table 1-11). Urban hospitals received more, on
average, from HMOs and PPOs than did rural hospitals, although 13.6
percent of rural hospitals reported receiving more than 10 percent of
revenues from these sources.

Arrangements With Physicians

While hospitals provide the buildings, equipment, and staff
necessary to furnish complex inpatient (and other) services, they
cannot operate without the cooperation of physicians, who admit, treat,
and discharge patients. Evidence suggests that a large portion of total
health care expenditures (an estimated 50 percent to 80 percent or
more) are directly influenced--if not directly controlled--by
physicians.\12\ In addition, physicians may influence hospitals'
nonoperating expenditures by advocating particular types of capital
investments.
As hospitals have assumed more financial risk, they have
increasingly pressured physicians to control their costs and use of
hospital services through internal management strategies and
contractual relationships that call for shared financial risk with
doctors. How well hospitals and physicians work together to control
costs and improve quality is unclear. Reluctant to surrender their
autonomy, physicians have largely been able to resist hospitals'
efforts to modify their practice styles. Therefore, many hospital
administrators concentrated more on maximizing revenues during the
1980s than on engaging physicians as partners in helping them curtail
spending. This strategy seems to be changing in the 1990s as hospitals
and physicians increasingly recognize their interrelated roles and
responsibilities.
The ability of hospitals and physicians to set up joint financial
arrangements--in particular to contract with managed care
organizations--has affected the way some hospitals deal with doctors.
One recent trend is for hospitals to acquire physician practices and
try to integrate physicians into hospital management to some degree. In
1993, almost 14 percent of hospitals surveyed had a formal physician/
hospital organization (PHO), 7 percent had a management services
organization (MSO), and 4 percent had a foundation that negotiated
managed care contracts on behalf of the hospital and physicians as a
unit (see Table 1-12).\13\ Such practice arrangements are less popular
in the West Central region than in other parts of the country, and are
more common in urban and teaching hospitals. These arrangements,
however, are not unheard of in rural hospitals, where 14 percent of
hospitals surveyed reported having some type of joint venture with
physicians.

Table 1-10.--Hospitals with Health Maintenance Organization and Preferred Provider Organization Contracts, by Hospital Category, Selected Years
[In Percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
HMO PPO HOM and/or PPO
Hospital Category -----------------------------------------------------------------------------------------------------------
1985 1990 1992 1985 1990 1992 1985 1990 1992
--------------------------------------------------------------------------------------------------------------------------------------------------------
Community................................... 33.1 48.1 51.9 25.3 52.9 60.4 40.4 62.5 67.9
Urban................................... 52.9 70.8 73.8 39.7 70.3 76.1 61.5 81.3 83.8
Rural................................... 30.6 43.6 47.1 23.1 48.3 55.1 37.2 57.0 61.8
New England................................. 54.7 70.3 71.0 18.2 46.4 56.6 56.7 71.6 72.9
Middle Atlantic............................. 37.3 56.9 64.8 9.3 37.2 48.9 40.5 64.8 72.0
South Atlantic.............................. 30.6 42.0 45.6 25.2 56.7 65.4 35.5 60.1 67.7
East North Central.......................... 48.8 67.9 69.2 37.2 72.0 76.8 57.0 82.2 84.2
East South Central.......................... 14.3 30.0 37.6 27.1 56.9 63.8 32.2 60.1 67.0
West North Central.......................... 25.4 37.3 37.4 13.1 34.2 44.2 28.7 45.9 52.8
West South Central.......................... 16.5 30.5 35.3 14.8 44.9 54.0 22.6 48.5 56.0
Mountain.................................... 25.7 39.9 44.6 27.7 45.4 49.8 34.4 48.5 53.5
Pacific..................................... 50.2 66.9 71.0 52.2 74.7 76.8 62.7 81.9 83.2
Voluntary................................... 40.0 57.3 59.9 28.3 56.9 64.3 47.2 69.0 73.7
Proprietary................................. 34.1 46.2 57.8 33.5 62.9 70.7 44.4 67.5 73.7
Government.................................. 17.3 28.0 30.4 15.1 39.0 46.7 23.7 45.4 51.5
All hospitals......................... 30.6 43.6 47.1 23.1 48.3 55.1 37.2 57.0 61.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: HMO = health maintenance organization. PPO = preferred provider organization. Trends in responses may reflect, in part, hospitals increasing
familiarity with HMO and PPO contracting over time; this may have increased the likelihood of positive survey responses.

Source: American Hospital Association Annual Survey of Hospitals.

Hospitals in the Future

The health care reform debate now under way focuses on the need for
and types of reforms necessary to stem runaway health spending and
provide universal health insurance coverage. The uncertain outcome of
this debate could have a dramatic effect on the hospital of the future.
Already, hospitals have responded in a variety of ways to the pressures
they face, diversifying the services they offer, pursuing different
avenues to control costs, and adopting new strategies that govern their
relationships with other providers and physicians. Existing pressures
to reduce spending and adapt to changing medical practices will
continue. Federal, state, and local governments will further their
efforts to bring health care expenditures under control and extend
services to vulnerable populations. Private payers will exert similar
pressures. Medical practice will advance, adding new treatments and
expanding the populations that could benefit from medical services.
The anticipation of health care reform and its ultimate nature,
though, will further affect hospitals and their role in health care
delivery. Comprehensive reform that alters the structure of financing
and delivery systems to control expenditure growth and expand coverage
would bring the most dramatic changes. Incremental reforms that modify
the existing relationships among payers and providers would likely
continue the adaptations hospitals are making now. Regardless of the
shape of reform, the critical features that will affect hospitals
relate to the type, strength, and source of pressure to control
spending.
Health care expenditure control can be achieved through slowing the
growth in costs per unit of service, reducing the number and intensity
of services provided, managing the mix of services, or all three.
Hospitals will be affected differently, depending on which strategy is
followed and the strength of the pressure to respond. Likewise, the
source of the pressure to control expenditures will affect hospital
responses. The impact of the efforts of individual payers--either in
the government or private sector--would be quite different from a
government mandate for expenditure control applied to all payers.
Similarly, whether hospitals are singled out or all health care
facilities are subject to controls will affect the response.

Table 1-11.--Hospital Net Patient Care Revenues from Health Maintenance
Organizations and Preferred Provider Organizations, by Hospital
Category, 1993
[In Percent]
------------------------------------------------------------------------
Net patient care revenues from HMOs and
Hospital Number of PPOs (in percent)
category* hospitals -------------------------------------------
0-10 11-25 26-50 Over 50
------------------------------------------------------------------------
Total...... 1,495 64.1 24.5 7.8 0.9
--------------------------------------------------------
Atlantic....... 400 65.5 25.5 6.0 2.0
East Central... 391 60.6 30.2 7.2
West Central... 404 75.4 14.9 5.9 1.0
Far West....... 300 51.7 29.0 13.3 2.3
Urban.......... 736 43.6 37.8 14.1 1.5
Rural.......... 759 84.1 11.7 1.6 0.3
Teaching....... 233 59.7 33.0 3.9 0.9
Non-teaching... 1,262 65.0 22.7 8.5 0.9
------------------------------------------------------------------------
Note: HMO=health maintenance organization. PPO=preferred provider
organization. Rows may not add to 100 due to survey item non-response.

*Atlantic includes the New England, Middle Atlantic, and South Atlantic
Census divisions. East Central includes the East North Central and
East South Central Census divisions. West Central includes the West
North Central and West South Central Census divisions. Far West
includes the Mountain and Pacific Census divisions. Teaching hospitals
are those with more than 5 percent professional time spent teaching.

Source: Survey of Hospital-Physician Relations conducted by MACRO
international Inc., under contract to ProPAC.

Rate-setting approaches to expenditure control involve imposing a
payment per unit of service. These rates could be used by all or some
payers and could be applied to a range of services and providers. Rate
setting would force institutions to gain control over the cost of
producing individual services by improving production efficiency. If
rates were imposed only for some services or provider types, or only by
some payers, shifts among types of services and across settings would
continue as a way to avoid cost-containment pressure. Hospitals may
also respond to these efforts by focusing on providing those services
that are relatively better paid. This could put some services or
populations at risk.
A system of global budgets or insurance premium caps could
accelerate the movement of hospitals to gain control over the continuum
of care. Global budgets are expenditure limits or targets that could be
applied to types of providers or services. Premium caps are similar
limits that would be enforced by insurers. Hospitals may respond by
forming health care networks to control expenditures for an episode of
care. Alternatively, hospitals may concentrate on providing a narrow
range of services efficiently and marketing these to established
networks or payers. Hospitals that fail to coordinate their services
with those offered by other providers would be the most vulnerable
under this scenario. Unless quality of care is carefully considered,
however, needed services could be eliminated in order to stay within
the limits.
Under any type of reform, less stringent cost-control efforts would
not be as disruptive to health care delivery patterns. Besides having a
greater impact on spending growth, intense expenditure control efforts
would likely alter institutional arrangements and service delivery
patterns.
The sources of pressure to control expenditures may also affect the
outcome of reform initiatives, as demonstrated by the responses to the
implementation of PPS. Cost shifting from less generous payers
(including most public ones) to more generous (largely private) payers
has had two major results. First, the gains from private-pay patients
have enabled the hospital sector to alleviate the pressure to control
costs that public programs have attempted to create. Second, the
ability to cost shift has, for many patients, maintained access to
services they overwise might not have received.

Table 1-12. Hospital-Physician Organizations, by Hospital Category, 1993
[In Percent]
----------------------------------------------------------------------------------------------------------------
Organization (in percent)
Number of ----------------------------------------------------------------
Hospital category* hospitals Any joint
venture PHO MSO Foundation IHO
----------------------------------------------------------------------------------------------------------------
Atlantic.......................... 400 33.3 18.3 6.5 5.3 2.3
East Central...................... 391 34.8 13.8 7.2 4.6 2.8
West Central...................... 404 24.3 10.3 5.1 2.4 2.0
Far West.......................... 300 32.7 11.3 9.3 4.3 4.3
Urban............................. 736 47.0 21.5 10.7 6.4 4.6
Rural............................. 759 14.0 5.9 3.2 2.0 0.9
Teaching.......................... 233 41.2 18.5 6.9 7.7 6.0
Non-teaching...................... 1,262 28.2 12.6 6.8 3.5 2.1
-----------------------------------------------------------------------------
Total......................... 1,495 30.2 13.6 6.9 4.1 2.7
----------------------------------------------------------------------------------------------------------------
Note: PHO=physician/hospital organization. MSO=management services organization. IHO=integrated health
organization.
*Atlantic includes the New England, Middle Atlantic, and South Atlantic Census divisions. East Central includes
the East North Central and East South Central Census divisions. West Central includes the West North Central
and West South Central Census divisions. Far West includes the Mountain and Pacific Census divisions. Teaching
hospitals are those with more than 5 percent professional time spent teaching.
Source: Survey of Hospital-Physician Relations conducted by MACRO International Inc., under contract to ProPAC.

Cost-containment pressure in any form that is applied by some
payers but not by others would exacerbate the current disparity in
relative payment levels across payers. This would put certain hospitals
at a financial disadvantage because of their inability to compete for
patients with more generous private insurance coverage. Increasingly, a
hospital's financial condition would be determined by its payer mix
rather than its efficiency. If the gap in relative payment levels is
widened because of different cost-containment measures across payers,
many hospitals that provide important services to specific segments of
the population may curtail their operations.
Within this climate of health reform to control expenditures and
expand coverage, medical technology continues to evolve. New threats to
the public's health (such as acquired immune deficiency syndrome) and
medical advances in areas like biotechnology and diagnostic imaging
will lead to the ongoing development of expensive new drugs, equipment,
and procedures. Better understanding of disease processes and medical
techniques for combating illness will continue. This will add to the
momentum to modify the mix of services and site of delivery. Such
changes may enhance the hospital's role, if it has control over the
continuum of service delivery. To the extent that these changes allow
more providers to compete with the hospital or substitute for some of
its functions, its role could diminish.
It is unclear how health care reform will affect the development
and diffusion of new technology and the application of medical
advances. Cost control may concentrate on innovations that reduce the
cost of care. Reform that incorporates rate setting would be more
likely to promote innovations that lower the cost of providing
services. Global budget or premium cap reform approaches would focus
attention on technologies or procedures that diminish costs over an
episode of care. Under any reform scenario, public and private payers
will continue their efforts to curb spending associated with new or
diffusing technologies and the expanded ability to provide services.
The hospital's traditional role as the center of the health care
delivery system has changed dramatically and is continuing to evolve.
Hospital spending still makes up the largest part of total health
expenditures, despite the increasing availability of services outside
the inpatient setting and the proliferation of ambulatory care
providers. As a result, hospitals will bear much of the pressure to
alter the way health care is delivered and paid for in the future. How
much of this pressure falls on different hospitals will vary, depending
on each hospital's current situation. how each hospital chooses to
respond, and how well the hospital can implement its response, will
differ as well. What the future holds for each hospital therefore will
be determined by a mix of internal and external forces. Facilities thus
will be further differentiated in the services they provide and their
relationships with other components of the health care financing and
delivery system.

Notes to Chapter 1

1. Louise B. Russell and Jane E. Sisk, ``Medical Technology in the
United States: The Last Decade,'' International Journal of Technology
Assessment in Health Care 4(2):269-88, 1988.
2. Ibid.
3. Prospective Payment Assessment Commission, Medicare and the
American Health Care System: Report to the Congress, June 1993, 93.
4. ``State Health Reform: Five Trends That Will Transform
Hospitals,'' Hospitals 66(19):26-38, October 5, 1992.
5. Sandy Lutz, ``Hospitals Continue Move Into Home Care,'' Modern
Healthcare 23(4):28-32, January 25, 1993.
6. Frank Cerne, ``Homeward Bound: Hospitals See Solid Future for
Home Health Care,`` Hospitals 67(4):52-54, February 20, 1993.
7. Howard J. Andersen, ``Survey: Equipment Budgets Up; Use in
Outpatient Areas Growing,'' Hospitals 66(18):38-44, September 20, 1992.
8. Jay Greene, ``Diversification, Take Two,'' Modern Healthcare
23(28):28-32, July 12, 1993.
9. Ibid.
10. Paul Starr, The Social Transformation of American Medicine
(BasicBooks: 1982); Larry Manheim, Stephen M. Shortell, and Stephanie
McFall, ``The Effect of Investor-Owned Chain Acquisitions on Hospital
Expenses and Staffing,'' Health Services Research 24(4):461-84, October
1989.
Prospective Payment Assessment Commission, Medicare and the
American Health Care System, June 1993, 139.
12. Jeffrey A. Alexander and Michael A. Morrisey, ``Hospital-
Physician Integration and Hospital Costs,'' Inquiry 25(3):388-401, Fall
1988; Jeffrey A. Alexander, Michael A. Morrisey, and Stephen M.
Shortell, ``Physician Participation in the Administration and
Governance of System and Freestanding Hospitals: A Comparison by Type
of Ownership'' in For-Profit Enterprise in Health Care, ed. Bradford H.
Gray (Washington, DC: National Academy Press, 1986); Stephen Shortell,
Michael A. Morrisey, and Douglas A . Conrad, ``Economic Regulation and
Hospital Behavior: The Effects on Medical Staff Organization and
Hospital-Physician Relationships,'' Health Services Research 20(5):597-
628, December 1985.
13. The survey conducted by MACRO International Inc., defined a PHO
as a joint venture between a hospital and physicians to own and operate
ambulatory or ancillary care projects or act as an agent for managed
care contracts. A subcategory of a PHO, and MSO is a separate entity;
is owned by physicians, the hospital or both; and contracts with solo
and group practice physicians to provide administrative services,
purchase physician practice assets, and act as the agent of the
hospital and physicians in managed care contracts. A foundation is a
corporation, usually a hospital affiliate of subsidiary, which acquires
all assets of medical group practices. It negotiates and executes
managed care contracts on behalf of both the hospital and physicians.

Chapter 2

RECOMMENDATIONS

When the Prospective Payment Assessment Commission (ProPAC) was
created by the Congress in 1983, its primary responsibility was to
examine issues related to the Medicare prospective payment system (PPS)
and make recommendations for updating and improving it. The Congress
gradually has expanded ProPAC's mandate to include payment policies for
all facility services furnished to Medicare beneficiaries. Accordingly,
the Commission has conducted analyses of Medicare payments for skilled
nursing facility (SNF), home health agency, and endstage renal disease
(ESRD) dialysis facility services.
In addition, at the request of the Congress, the Commission has
examined the adequacy of Medicaid hospital payment rates and the use of
Medicare payment methods for other payers. It has also analyzed issues
related to the design and implementation of a global budgeting system
to restrain health care spending. ProPAC continues to devote
substantial effort, however, to updating and improving payment for
hospitals under PPS and for those hospitals and distinct-part units
excluded from PPS.
Although this report is submitted to the Congress, the Secretary of
Health and Human Services is required to consider ProPAC's
recommendations and respond to them in the annual notice of PPS
rulemaking published in the Federal Register. The Commission is always
pleased to work with the Secretary to provide additional analysis and
information on its recommendations.
ProPAC's recommendations reflect the collective judgment of the 17
Commissioners. By the nature of their subject, some recommendations are
reviewed each year, such as the annual update factors. Others address
new issues or modify previous recommendations. All incorporate recent
research findings. For fiscal year 1995, the Commission's
recommendations address broader issues related to Medicare and health
care reform, in addition to the recommendations that relate more
specifically to Medicare facility payments.

Recommendations for Fiscal Year 1995

The Commission's recommendations center on three areas of concern:
Medicare and health care reform,
Payment updates, and
Other payment policies.
ProPAC's recommendations are intended to improve the equity and
effectiveness of Medicare's payments for health care services. In this
report, the Commission has considered certain aspects of health care
reform that may affect the Medicare program. The recommendations that
address payment updates reflect the Commission's view on aggregate
spending levels. Finally, other recommendations concern the
distribution of Medicare payments or the equity of Medicare's payment
formulas.

Medicare and Health Care Reform

The health care industry is facing major challenges this year as
legislators and policy makers struggle to control health expenditures
and expand coverage to people without insurance. Several legislative
proposals have been introduced to reform the health care system. Some
of these focus on incremental changes that would affect the financing
and delivery of health care. Others call for fundamental restructuring
of the existing systems. Most include provisions affecting the Medicare
program.
The Health Security Act introduced by the President would
fundamentally change the financing and delivery of health care. Under
this proposal, most people under 65 would obtain health insurance
coverage through regional or corporate alliances. These alliances would
negotiate with health plans to provide medical services. The health
plans would compete for patients on the basis of quality and costs.
This managed competition among plans is expected to control the growth
in health expenditures. As a contingency, however, premium rate
increases would be limited if expenditure growth were not contained.
Medicare would be retained as a separate program under the
President's proposal, although it would be subject to a number of cost-
saving measures. Reductions in hospital payment updates are proposed.
The disproportionate share (DSH) adjustment would be substantially
reduced; however, universal coverage may ameliorate many of the
problems this adjustment is intended to address. Medicare's indirect
medical education (IME) adjustment would be replaced by an Academic
Health Center Account to which Medicare and the alliances would
contribute. Medicare's direct medical education payments for the cost
of training medical residents would also be replaced by a special
account funded by all payers. Although the Act incorporates mechanisms
to ensure the quality of health care provided to those enrolled through
the alliances, the oversight provided by Medicare's Peer Review
Organizations (PROs) would be discontinued.
The Commission believes health care reform would have a major
impact on both providers and beneficiaries. The first eight
recommendations for fiscal year 1995 reflect the Commission's concerns
regarding the effect of health care reform on the Medicare program,
providers, and beneficiaries.
Recommendation 1: Medicare, Medicaid, and Private Payer Payment and
Coverage of the Uninsured
Health care reform will have a major effect on the Medicare and
Medicaid programs and the care beneficiaries receive. The Commission
believes substantial changes in program policies should be considered
only with a health care reform plan that covers the uninsured and pays
comparable rates for similar services. As Medicare and Medicaid have
constrained payments, providers have obtained additional revenue from
private payers rather than by reducing their costs. This increasing
reliance on cost shifting concerns ProPAC because it is likely to have
a negative effect on access to care for beneficiaries of government
programs. Further, possible adverse effects on beneficiaries of slower
growth in payments for hospital and other currently covered services
must be carefully balanced against desirable effects of increased
Medicare spending for new benefits proposed in the Health Security Act.
The Health Security Act proposed by the President contains a number
of complex features that interact and could have a major effect on the
services Medicare and Medicaid beneficiaries receive. The Act would
slow the growth in Medicare and Medicaid spending for currently covered
services, create a new prescription drug benefit, and add coverage for
long-term care services for the disabled. It would also use premium
limits to curb the rise in private payer spending and extend coverage
to the uninsured.
Medicare and, more recently, Medicaid have been important sources
of additional revenues for hospitals that treat a disproportionate
share of the poor. Substantial reductions in payment levels, such as
those proposed in the Health Security Act, could adversely affect
access to care for beneficiaries in both programs. Such reductions
should be considered only insofar as health reform provides coverage
for the uninsured.
Medicare and Medicaid beneficiary access to quality care also
depends on whether providers receive appropriate payments from both
government programs and private payers. Proposals that would further
restrain spending by public payers but that fail to narrow the gap in
payment to cost ratios between public and private payers or to provide
coverage for the uninsured could make it more difficult for the
beneficiaries of public programs and the uninsured to obtain access to
necessary care.
As both Medicare and Medicaid have constrained payments in recent
years, hospitals have turned to private payers for additional revenue
to offset losses, rather than reducing the increase in their expenses.
Cost shifting has allowed the Medicare program to curb spending, while
permitting beneficiaries to receive services at costs that exceeded
payments. It has also enabled many hospitals to maintain their
financial position. The ability of hospitals to cost shift, however,
has reduced their financial incentive to control expenses and increased
the costs for subscribers of private insurance plans. The reliance on
cost shifting as a revenue source has also disadvantaged hospitals that
provide services to a large share of Medicare and Medicaid
beneficiaries and charity care patients.Further, cost shifting has
disadvantaged hospitals where private payers successfully control
hospital revenues. Consequently, hospital financial condition and the
availability of services increasingly are determined by payer mix
rather than by efficiency.
A health care reform plan like the Health Security Act, which would
constrain the growth in private payer as well as government spending,
could also affect the care received by Medicare beneficiaries. Since
hospitals would not be able to obtain additional revenue from private
payers, they would have to limit expenses to a level consistent with
revenues. The slower rise in payments for current Medicare services,
however, would be accompanied by increased spending for a new
prescription drug benefit and coverage of certain long-term care
services. As the reform debate continues, balancing the effects of a
slowdown in spending for hospital and other covered services with an
increase in expenditures for new benefits is necessary to avoid
untoward effects on Medicare beneficiaries.
Recommendation 2: Payments to Hospitals Serving a Large Share of Low-
Income Patients
The Health Security Act would substantially reduce Medicare
disproportionate share payments, as universal coverage ameliorates many
of the problems these payments are intended to address. The Commission
believes the timing of any such reduction in Medicare payments should
be coordinated with the extension of universal coverage, so that
hospitals that provide care to low-income populations are not
disadvantaged. As a result, payments would be targeted more effectively
to the hospitals that provide care to these populations. Even so, the
payments received by different hospitals and the balance between
payment levels for Medicare and other patients may be affected
significantly. These changes should be structured to ensure that both
the level and distribution of payments are appropriate. ProPAC intends
to work with the Congress and the Secretary of Health and Human
Services to monitor and study this issue.
The Medicare DSH adjustment was implemented in 1986 to provide
additional payments to PPS hospitals that treat a large share of
indigent patients. Since then, the amount of DSH payments has grown
rapidly, as Congress has increased the number of eligible hospitals and
raised the adjustment for many. From fiscal year 1989 to fiscal year
1993, Medicare operating DSH payments grew from $1.1 billion (2.4
percent of all PPS payments) to $2.7 billion (4.1 percent of PPS
payments). In addition, beginning in fiscal year 1992, hospitals
received a DSH adjustment to their prospective capital payment amount.
Analyses by the Congressional Budget Office, ProPAC, and others
have shown that Medicare DSH payments far exceed any additional costs
that might be associated with treating Medicare patients in
disproportionate share hospitals. As a result, in the eighth year of
PPS, the PPS margin for all disproportionate share hospitals was 1.6
percent, compared with -7.2 percent for other hospitals.
The bulk of Medicare DSH payments goes to hospitals that provide a
large amount of uncompensated care and other services to the poor. This
is often cited as a justification for the magnitude of the payments
made under the Medicare DSH provision and the rules that govern how
these payments are distributed. Disproportionate share hospitals--
particularly those in inner cities--tend to have lower total margins
than other hospitals. The Commission is concerned about whether,
without Medicare DSH payments, Medicare beneficiaries and other
populations would continue to have access to the services these
hospitals provide.
However, ProPAC also is concerned about the ability to target
Medicare DSH payments effectively to the hospital that need them most.
Of all PPS hospitals, the 10 percent with the greatest uncompensated
care losses relative to their total costs provided 28 percent of all
uncompensated care (net of government subsidies); these hospitals
received only 17 percent of all Medicare DSH payments. At the other end
of the spectrum, the 10 percent of PPS hospitals with the smallest
uncompensated care burdens provided almost no net uncompensated are,
yet received almost 9 percent of all Medicare DSH payments.
The Health Security Act eventually would eliminate almost all
Medicare DSH payments, lowering Medicare hospital payments by an
estimated $430 million in fiscal year 1996. Medicare DSH payments would
be $4.8 billion lower than currently projected by fiscal year 2000,
amounting to a 3.5 percent reduction in baseline Medicare payments. On
the other hand, people who are now uninsured and those who are
underinsured would begin to receive coverage. Consequently, hospitals
now uncompensated for providing care to these patients would be paid
for these services.
Hospitals that serve low-income populations would still face some
risk of financial losses, particularly in treating some noncitizens and
other individuals who may be unable to meet their financial obligations
to providers. To recognize the additional costs of treating low-income
patients and to help hospitals furnish inpatient services to poor
populations not covered by the standard benefit package, $800 million
would be available in each of the first five years following passage of
the Act. These funds would be distributed based on the share of total
inpatient days accounted for by low-income patients at each eligible
hospital.
As with many provisions of the Health Security Act, the impact of
the reduction in Medicare DSH payments and the extent to which it is
offset by universal coverage is difficult to estimate. In addition to
the level of total hospital payments, the distribution of payments also
may change significantly. The Commission is concerned by the magnitude
of these changes and their potential effects on the availability of
necessary services to Medicare beneficiaries and all Americans. In
addition, if the timing of the reduction of DSH payments is not
coordinated with the extension of universal coverage, hospitals that
provide care to low-income populations may be adversely affected.
Preliminary analysis indicates that the financial status of
hospitals in the aggregate will depend largely on their ability to hold
cost increases below historical rates. ProPAC will continue to examine
the implications of health care reform for the distribution of
payments. In addition, the technical appropriateness of the proposed
changes in the rules that determine Medicate DSH payments will be
investigated as part of the Commission's ongoing mandate to analyze,
develop, and recommend improvements in Medicare payment for facility-
based services.
Recommendation 3: Payments for Additional Patient Care Costs Incurred
by Teaching Hospitals
ProPAC supports the explicit recognition by all payers of the
higher patient care costs teaching institutions incur. The Commission
believes such payments should be separated from patient are rates and
paid through a fund similar to the Academic Health Center Account
proposed in the Health Security Act. ProPAC is concerned, however, that
a sharp reduction in the payments teaching hospitals receive from
government payers may result in financial hardships for some of the
nation's major hospitals. Constraints on payments from private payers
may exacerbate this problem. Therefore, ProPAC recommends that the
total level of funding and the formula for distributing payments
through such a mechanism should be based on careful analysis of the
costs teaching institutions incur in carrying out their functions and
how these payments will affect graduate medical education and access to
the care these facilities provide.
The Health Security Act proposes an Academic Health Center Account
to support the patient are costs incurred routinely by teaching
facilities but not by other institutions. Among these are the costs of
reduced faculty productivity, uncompensated costs of clinical research,
and higher costs associated with specialized treatment of exceptional
cases. Contributions from Medicare and from the regional and corporate
alliances would fund the account. The available funds would be
distributed by the Secretary of Health and Human Services on the basis
of a formula related to the proposed Medicare IME adjustment percentage
for fiscal year 1996. Thus, payments for the additional patient care
costs insured by teaching hospitals would be separated from payments
for patient care services.
Medicare's contributions to the Academic Health Center Account
would be less than the IME payments made under the current formula,
with estimated budget savings of $17.8 billion over five years (1996 to
2000). This proposed reduction in Medicare payments reflects the
Administration's estimate of the amount by which current IME payments
exceed the additional patient care costs attributable to teaching
activities.
Set at $2.1 billion in fiscal year 1996 and $2.0 billion in fiscal
years 1997 and 1998, Medicare's contributions thereafter would rise at
the same rate as the consumer price index (CPI) for all urban
consumers. The total size of the Academic Health Center Account,
including contributions from the regional and corporate alliances as
well as Medicare, would be $3.1 billion in fiscal year 1996, increasing
to $3.2 billion, $3.2 billion, $3.7 billion, and $3.8 billion in the
succeeding years.
Many private payers now pay higher rates to teaching hospitals for
patient care services. However, in an environment of heightened price
competition, teaching hospitals may not be able to obtain payments that
reflect their higher patient care costs. Thus, they will likely be
unable to fund these with revenue from patient care services.
The Commission supports the explicit recognition by all payers of
the higher costs of treating patients in teaching institutions and the
separation of payments for these costs from the basic price of care.
However, ProPAC has three concerns about the Academic Health Center
Account proposal in the Health Security Act. First, the amount to be
distributed through the account should adequately reflect the
additional costs teaching institutions face. Relatively little is known
about the overall costs associated with the activities that the
Academic Health Center Account is intended to support. Both ProPAC and
the Health Care Financing Administration (HCFA) have analyzed the
relationship between the intensity of hospital-based teaching
activities and the cost of treating Medicare inpatients. However, the
relationship between teaching intensity and the cost of treating other
types of patients--that is, Medicare outpatients and non-Medicare
inpatients and outpatients--in hospitals and non-hospital settings is
not known. Moreover, existing information may not be applicable in the
environment of tight general funding constraints under health care
reform. More analysis is needed to ensure that the account has
sufficient funds to accomplish its purpose.
Second, the distribution of monies from the Academic Health Center
Account should be equitable and encourage the efficient operation of
teaching institutions. The proposed application of the Medicare IME
adjustment to total patient care revenue may not be the most
appropriate way to accomplish this objective. To allow for the proper
distribution of available funds, further analysis should focus on what
factors determine differences across institutions in terms of the costs
these funds are intended to defray.
Finally, the Commission is concerned about how the funding of the
academic health center mechanism might affect access to services these
facilities provide for Medicare beneficiaries and others. The funds
available through the Academic Health Center Account must adequately
reflect the additional costs of the services they are intended to
support. Substantial reductions in the level of Medicare IME payments
should not be made until other components of health reform are fully
implemented. (See Recommendation 19). The impact of any changes in the
level or distribution of payments among hospitals should be monitored
carefully.
In addition, distributing Medicare IME payments through the
academic health center mechanism rather than as an adjustment to the
Medicare payment rate would mean that the payment received for each
Medicare patient would be reduced relative to its current level (which
includes the 7.7 percent IME payment adjustment). Medicare payments are
a smaller proportion of costs than private payer payments. Although
ProPAC's preliminary analysis indicates that the current gap between
Medicare and non-Medicare payments relative to costs would narrow
rather than widen under the proposed approach, this issue should be
examined closely as health care reform is implemented.
Recommendation 4: Graduate Medical Education Funding and Payment
ProPAC supports efforts to establish a funding mechanism for
graduate medical education training programs that encompasses all
payers, including Medicare. The Commission believes this mechanism
should be separate from the payment received for patient care services.
The level of funding and the distribution of payments should be
determined according to the following principles:
Funding for graduate medical education should be
consistent with national work force goals, with respect to both the
number of residents trained and their specialty distribution.
Funding should support training for physicians and certain
non-physician medical personnel who contribute to attaining these
goals.
Payment should be made to the training program, whether it
is based in a hospital inpatient, hospital outpatient, or other
ambulatory setting. The optimal method for allocating and distributing
such payments needs to be determined.
Payment for graduate medical education should be based on
a national per resident amount, adjusted to recognize regional
differences in residents' salaries and other factors that, upon further
study, are found to be appropriate.
In addition, funds should be available to recognize the additional
personnel costs of hospitals that operate programs that lose specialty
training positions as a result of the process described above.
The Medicare program historically has paid hospitals for the costs
associated with operating a residency training program. Costs for
residents' salaries, faculty supervision, classroom space, program
administration, and other related overhead were, until recently,
recognized as a separate expense of which Medicare paid its share.
Medicare is essentially the only payer that explicitly recognizes these
expenses. Private insurers pay for these costs implicitly through the
higher payments they make to teaching hospitals.
The Consolidated Omnibus Budget Reconciliation Act of 1985 changed
Medicare's payment for these expenses to a hospital-specific per
resident amount. This amount is equal to the hospital's audited per
resident costs for the cost reporting period beginning during fiscal
year 1984, updated annually by the increase in the CPI for all urban
consumers.
Under the Health Security Act, there would be a fundamental change
in financing for graduate medical education (GME). Both Medicare and
the health care alliances (the entities responsible for coordinating
the purchase of health insurance for the non-Medicare population) would
contribute directly to a Health Professions Workforce Account. Initial
funding for this account would be set at $3.2 billion in fiscal year
1996, rising to $5.8 billion in 1999 and 2000 and increasing at the
same rate as the gross domestic product thereafter.
The Act would establish, within the Department of Health and Human
Services, a new National Council on Graduate Medical Education. This
council would determine the number and specialty distribution of
residency positions to be funded. At least 55 percent of individuals
completing eligible programs nationwide would be required to be in
primary care, beginning with the class entering training in the 1998-
1999 academic year. The primary care specialties to which the act
refers are family medicine, general internal medicine, general
pediatrics, and obstetrics and gynecology.
Funds would be distributed to the individual residency programs,
rather than to the hospital. Each program would receive a per resident
payment amount based on the national average per resident cost in the
1992-1993 academic year, trended forward by the CPI and adjusted to
reflect regional differences in residents' wages and wage-related
costs.
The Act would also establish a program with respect to graduate
nurse training that parallels the one for physician training, with
funding set at $200 million annually. The Secretary of Health and Human
Services would be further required to establish or expand programs to
train physicians, nurses, physician assistants, and other health
professionals to improve the efficiency and availability of health care
across geographic locations and settings.
ProPAC agrees that changes are needed in the way that graduate
medical education and other health care training activities are
structured and financed. While others have devoted substantial
attention to issues related to the supply and distribution of health
care personnel, the Commission's focus is on payment policies,
particularly as they affect facility-based care provided to the
Medicare population and other groups. Consistent with this focus,
ProPAC has identified several principles that should be used in
determining the level of funding and the distribution of payments to
support the training of health care professionals. These principles
should be used to guide policies relating to the funding of graduate
medical education whether comprehensive health reform is enacted or
not.
All-Payer Funding Mechanism.--The Commission believes it is
appropriate to include all payers in a mechanism for funding graduate
medical education that sets a nationwide level for such funding.
Moreover, this mechanism should be separate from the payment received
for patient care services.
Currently, payers other than Medicare contribute only implicitly to
the support of graduate medical education; Medicare's GME payment is
based on each hospital's own historical costs. Consequently, there are
unclear and inconsistent incentives related to the total number of
residents and their distribution across geographic areas, programs, and
institutions, as well as to costs per resident.
An all-payer funding mechanism for graduate medical education would
base the level and distribution of payments on a consistent set of
criteria. This would provide appropriate incentives for the allocation
of resources. It would also ensure that the costs of training
physicians would be borne by both the Medicare and the non-Medicare
populations. Further, a funding mechanism that recognizes the costs of
teaching activities regardless of setting would improve the
effectiveness of medical education as well as the equity of payments.
Consistency with National Work Force Goals.--Both the current
Council on Graduate Medical Education (COGME) and the Physician Payment
Review Commission (PPRC) have extensively examined physician supply and
specialty distribution issues. Each of these groups has recommended
limiting the number of residents entering training to 110 percent of
the number of graduates from U.S. medical schools. ProPAC supports
limiting the number of resident positions.
COGME and PPRC differ, however, on how they would approach the
issue of specialty distribution. COGME advocates increasing to 50
percent the proportion of primary care residents, which it defines as
family practice, general internal medicine, and general pediatrics.
PPRC does not recommend a specific percentage for primary care, but
endorses the designation of a national body to determine the most
appropriate specialty distribution of residents. ProPAC supports
proposals that would lead to a more appropriate specialty mix of
physicians, including those who serve the special needs of the Medicare
population. These issues, however, need to be reexamined periodically,
and an independent group should be created to monitor and set future
work force goals. The Commission believes graduate medical education
funding should be tied to these work force decisions.
Training for Other Categories of Health Care Professionals.--
National work force goals should include the appropriate use of both
physicians and other categories of health care professionals. The
determination of the appropriate roles for specific categories of
medical personnel is beyond ProPAC's mandate, however. In any event,
the availability and distribution of funding should be consistent with
national work force goals.
Payments to Training Programs.--Currently, Medicare pays the
hospital for the direct costs of approved graduate medical education
programs and direct medical education costs for the training of nurses
and allied health personnel. This provides a strong incentive in
support of hospital-based training and discourages the use of
alternative sites, such as physician offices and other ambulatory
settings. The Commission believes GME payments should be made to the
training program, rather than to the hospital. This would allow greater
flexibility concerning where and how the residents are trained and
would simplify fundings for residencies that are provided in several
settings.
Although ProPAC favors payment to the program rather than to the
hospital, questions arise about the appropriate designation of the
entity that would actually receive the payment. These questions need to
be addressed before final determination is made concerning the method
for allocating and distributing GME payments.
Per Resident Payment Amount.--The Commission believes GME payments
should be based on a national per resident payment amount, adjusted for
appropriate differences in costs across institutions. The current
Medicare per resident payment amounts, which are based on each
hospital's own historical costs, vary substantially. Moreover, this
variation in payments does not, as a rule, correspond to observed
differences in current costs.
ProPAC has examined some of the reasons for the variation in per
resident costs, and has found geographic location to be a significant
factor. In addition, some hospital and program characteristics are
correlated with per resident costs. However, the allocation of overhead
also appears to be related to reported costs. Moreover, the results
indicate that the PPS hospital wage index, which measures the cost of
all hospital labor inputs, may not be an appropriate adjuster for
residents' wage differences.
The Commission believes further work is necessary to identify
appropriate adjustments to a national per resident payment amount.
ProPAC will continue to examine this issue over the coming year.
Funding for Institutions That Lose Training Positions.--Adequate
funding should be available to assist hospitals that lose training
positions as a result of the reduction in the total number of positions
and the reallocation of these positions across hospitals and other
settings. Some of these institutions rely on residents to provide basic
patient care, and the loss of these positions should substantially
increase their costs. Moreover, many of these facilities are located in
areas where it is difficult to recruit other physicians, and many
provide care to populations that otherwise might not have access to
that care.
Recommendation 5: Quality of Care
The Commission believes there must be an effective quality
assurance program for Medicare enrollees, especially given health
reform's emphasis on cost control and proposed cutbacks in Medicare
spending. The Peer Review Organization program should be continued but
thoroughly evaluated. It should be replaced only by a program that has
been determined to be more effective.
The Health Security Act eliminates the PRO program and does not
replace it with another quality assurance program for Medicare
enrollees. The Commission views this as undesirable, especially given
that cutbacks in the rate of growth in Medicare spending and cost
controls in the private insurance market may adversely affect the
quality of care provided to Medicare patients. ProPAC has stressed the
importance of a regulatory quality assurance program for Medicare in
past recommendations; it believes that both pattern analysis and
individual case review should be continued.
The PRO program should not be eliminated until another way to
assess quality proves to be superior. In addition, it should be
evaluated to see what aspects are most effective in improving quality
of care. The Health Care Financing Administration should consider
implementing additional quality assurance programs and evaluating them
simultaneously with the PRO program to determine the best way to ensure
that Medicare beneficiaries receive quality care.
Dramatic changes in the PRO program have reduced the emphasis on
punitive case review and incorporated pattern analysis with educational
feedback. These changes are consistent with recommendations made by the
Institute of Medicine and others. There are no plans, however, to
evaluate this new methodology.
The proposed quality assurance program in the Health Security Act
depends largely on collecting and disseminating information to
purchasers, consumers, and providers on quality of care, access to
care, and patient satisfaction. This method of quality assurance is
largely untested. Further, under the Act it would not apply to most
Medicare enrollees. The Commission recommends that any quality
assurance methodology enacted as part of health reform should be
evaluated. In addition, the methodology should be appropriate for a
Medicare-enrolled population.
Recommendation 6: Improvements in Premium Risk Adjustment Methods
The Commission recommends that the Secretary undertake the research
necessary to substantially improve current risk adjustment methods.
Risk adjustment will be needed under many health reform proposals to
ensure that the premiums paid to competing health plans accurately
reflect the risk composition of their enrollees. Until major
improvements can be made, some other mechanism may be needed to limit
the potential impact of enrolling individuals whose care proves to be
exceptionally costly.
Under many health reform proposals, including the President's plan,
most individuals would obtain their health coverage from a health plan
that participates in local purchasing alliance. Under some proposals,
persons eligible for Medicaid, along with Medicare enrollees who choose
to obtain coverage through the risk program, also would receive
coverage and health services from a health plan that competes in the
local alliance. Therefore, the ability to establish equitable premium
payments among competing plans will be important for Medicare and
Medicaid enrollees, as well as for all other citizens.
The Commission believes payment equity among competing health plans
will be critical to preserving the long-term viability of competition
within each purchasing alliance. In addition, equitable payment is
necessary to promote and maintain equal access to health services among
different population groups, including Medicare and Medicaid
beneficiaries.
Accurate adjustment of plan premiums to reflect the risk
composition of plan enrollment is essential to achieve payment equity
among competing health plans. Fair risk adjustment methods are
important for two reasons. First, risk adjustment would ensure that all
plans are able to provide a comparable quantity and mix of health
services to enrollees with comparable needs. In the absence of
effective risk adjustment, plans that enroll high-risk persons would be
forced to limit access to needed services or take a financial loss.
Moreover, such plans would be unable to offer competitive premium rates
over the long run. Conversely, plans that enroll low-risk persons would
be able to provide a richer mix of services or make windfall financial
gains. Consequently, these plans would be able to offer favorable
premium rates, thereby securing a competitive advantage. Second,
without effective risk adjustment, competing health plans would have a
strong incentive to try to attract a favorable selection of enrollees
while avoiding high-risk persons. This could lead to unequal access to
care.
Current methods of risk adjustment appear to have serious
deficiencies. Risk adjustment involves using information about
individuals' demographic characteristics, health status, or recent use
of health services to predict future expenditures for health care.
Research suggests that even the best combination of available risk
indicators accounts for only a small proportion of the variability in
subsequent expenditures among individuals. Therefore, substantial
improvements in these methods and the data to support them are urgently
needed.
Until improved risk adjustment methods can be developed, the
financial risks and undesirable incentives associated with unfavorable
selection could be limited in other ways. This goal could be
accomplished by compensating plans for a portion of any large losses
they experience in providing care to enrollees with extraordinary
medical expenses. This could be done using the traditional reinsurance
mechanisms of the private insurance industry. In this case, health
plans could choose to purchase insurance against the occurrence of an
adverse claims experience that results in spending that is much higher
than expected. Such insurance would relieve some of the undesirable
consequences of ineffective risk adjustment.
Alternatively, plans' financial risks could be reduced by a
mandatory outlier policy analogous to the outlier payment policy under
PPS. Under this policy, all plans' premium revenues would be taxed to
provide an outlier payment fund. This fund would be used to make
additional payments to any plan that experiences large losses in
providing care to individual enrollees with extraordinary expenses.
Such payments would cover a high proportion of the loss in excess of a
fixed loss threshold. Consequently, this mechanism also would limit
plans' losses to the extent that they were attributable to unfavorable
selection. Therefore, it also would mitigate the unwanted effects of
inadequate risk adjustment.
Recommendation 7: Controlling Medicare Spending Across All Sites of
Care
Medicare should continue to develop policies to monitor and control
total expenditure growth across all sites of care. Payment methods
should not unduly favor the choice of one site over another. They
should also provide consistent incentives to constrain increases in
volume and service intensity across physicians and other providers.
The Commission endorses the development of prospective payment
methods for all services across all sites. These methods should be
designed to offer uniform incentives for efficiency as well as make
payments across sites more comparable. This is particularly important
because many services are available in alternative settings.
Prospective methods alone, however, will not address one of the major
reasons for expenditure growth: increased volume and intensity of
services. Medicare's physician payment method incorporates such
incentives through its volume performance standards by adjusting fees
to reflect the relationship between actual expenditures and an
expenditure target. Other providers are not subject to such direct
volume control measures.
Premium caps in the President's proposal provide incentives for
health plans to constrain price and service volume across all settings
for non-Medicare enrollees. The modifications to Medicare policies
included in the Health Security Act do not incorporate similar
incentives. While the Medicare provisions of the President's plan
generally would reduce the growth in per service payments, spending
increases likely would persist due to accelerating volume. The Medicare
program, therefore, should continue to develop volume control methods
for all sites of care.
The contribution of expanding utilization to expenditure growth is
well-illustrated by Medicare's home health program. Home health agency
charges per visit increased only 4.7 percent annually between 1988 and
1991, yet Medicare expenditures increased at an average annual rate of
10.8 percent. As another example, the Medicare payment rate for
dialysis services has not risen since 1985, yet expenditures increased
at an annual rate of 12.4 percent through 1990.
Several strategies for constraining volume have been identified.
One approach is to combine, or bundle, separately billable services
into a single payment unit. A volume performance standard like the one
implemented for physician payment is another method. Finally, managed
care arrangements have the potential to control utilization and
encourage care in the most appropriate setting. From a policy
standpoint, each of these methods provides certain advantages and
disadvantages. Each also presents different implementation issues. The
Medicare program should develop the most appropriate ways to achieve
volume and price control across all services and sites of care. The
approaches selected should create consistent incentives for all
providers in all settings.
Medicare benefit and payment policies are fragmented and at times
inconsistent across sites and providers. Improvements in these policies
are needed to ensure stable incentives to slow the growth in spending.
These changes should reward efficient resource use while improving the
continuum of care for Medicare beneficiaries.
Recommendation 8: Strengthening Medicare's Risk Contracting Program
The Commission recommends that the Secretary improve Medicare's
risk-based, managed care program to give more Medicare beneficiaries
the option of enrolling in managed care plans. To increase plan
participation, deficiencies related to the risk adjustment formula and
local differences in payments need to be corrected.
Medicare's risk-based, managed care program has been shown to
improve access and, in some cases, to provide a broader array of
services to Medicare beneficiaries. The program also may have the
potential to be cost effective for Medicare, particularly if evaluated
over several years.Furthermore, increased emphasis on risk-based,
managed care is consistent with the President's health care reform
proposal. Despite these advantages and the growth of managed care in
the private sector, only 5 percent of all Medicare enrollees
participate in Medicare's managed care program. One reason for the low
participation may be the limited availability of managed care options.
Health plans have been reluctant to participate in Medicare's risk-
based program because of concerns related to Medicare's payment method.
The Commission recommends that HCFA step up its efforts to improve the
methods for determining payments to risk-based, managed care plans,
thereby making this option more available to Medicare beneficiaries.
Participating plans are paid a capitated amount based on 95 percent
of each county's average Medicare fee-for-service expenditures.
However, Medicare managed care enrollees' utilization and related
expenditure patterns differ from those with fee-for-service coverage.
Managed care enrollees use fewer hospital days and more ambulatory
care. The dissimilarities between the two populations in service use
and related spending may not be captured in the current payment method.
Further, payments based on county-level fee-for-service
expenditures are even less representative of the average spending in
areas where managed care enrollment is high. Medicare's policies,
therefore, may penalize managed care plans in counties where they have
already helped to slow the growth in fee-for-service spending.
The risk-based, managed care program also has been criticized for
failing to make adequate risk adjustments in plan payment amounts.
Medicare uses a limited number of demographic variables to adjust
payments for enrollee characteristics (age, sex, Medicaid status, and
institutional status), but these measures are poor predictors of actual
expenditures. Better measures are being investigated that incorporate
utilization data for hospital and ambulatory care, prescription drug
use, and other factors directly related to health care use and
spending.
HCFA is reviewing ways to improve the payment methods for
Medicare's risk-based, managed care contracts. The Commission
recommends that HCFA continue these efforts to strengthen this
component of the Medicare program. Providing more equitable payments
could encourage greater plan participation, thereby giving more
beneficiaries the option of enrolling in managed care. Further,
evaluations of spending under Medicare managed care should be based on
longitudinal comparisons of beneficiary experience. Medicare's managed
care option could become even more important under many of the health
care reform proposals.

Payment Updates

The Commission is mandated by law to report to the Congress each
year on an appropriate update to the inpatient hospital payment rates
under PPS. ProPAC considers several factors in developing its annual
update recommendation: the hospital market basket index (which reflects
the prices of resources used by hospitals in providing inpatient care),
scientific and technological advances, hospital productivity, case-mix
change, and the quality and long-term cost-effectiveness of health
care. The Secretary of Health and Human Services is required to
consider the Commission's recommendation in developing her update
recommendation. The actual update historically has been legislated by
the Congress in the budget reconciliation process.
In the Omnibus Budget Reconciliation Act (OBRA) of 1993, the PPS
operating update was established for each fiscal year through 1997. For
fiscal year 1995, the update for hospitals in large urban areas (areas
with populations over one million) and other urban areas is set equal
to the change in the hospital market basket index minus 2.5 percentage
points. The update for rural hospitals is the amount necessary to bring
the rural standardized amount to the same level as the other urban
standardized amount. Even though the fiscal year 1995 update has been
set by law, the Commission has continued its traditional approach of
examining the individual factors that together determine the
appropriate update to the PPS payment rates. ProPAC believes this
approach results in a payment increase that is sufficient, in the
context of the current health care financing system, to maintain
Medicare beneficiaries' access to quality care while encouraging
hospital efficiency in providing that care.
In addition to the update to the PPS payment rates, the Commission
recommends an update for the Federal capital payment rate. ProPAC also
recommends an update for rates derived from hospital base-year costs,
which may be used in place of the PPS rates for sole community
hospitals. Finally, the Commission considers the update for facilities
currently excluded from PPS. ProPAC's recommendation for an update to
the composite payment rate for dialysis services is also presented.
Recommendation 9: Update Factor for Operating Payments to PPS Hospitals
For fiscal year 1995, the PPS standardized payment amounts should
be updated to account for the following:
The projected increase in the HCFA PPS market basket
index, currently estimated at 3.7 percent;
An adjustment of zero percentage points for the difference
between the projected ProPAC and HCFA market baskets;
A negative adjustment of 1.1 percentage points for
substantial error in the fiscal year 1993 market basket forecast;
A positive adjustment of 0.3 percentage points to reflect
the cost-increasing effects of scientific and technological advances;
A negative adjustment of 0.7 percentage points to
encourage hospital productivity improvements; and
A net adjustment of zero percentage points for case-mix
change.
In addition, a positive adjustment of 3.1 percentage points should
be made for hospitals in rural areas to complete the phase-out of the
differential in standardized amounts between rural and other urban
hospitals. ProPAC's recommendation would result in an estimated average
update factor of 2.7 percent for fiscal year 1995: an increase of 2.2
percent for urban hospitals and of 5.3 percent for rural hospitals.
This recommendation reflects the Commission's judgment about the
appropriate increase in the level of PPS payment rates. Since it is
based on current projections of the fiscal year 1995 increase in the
market basket index, the effective value of ProPAC's update factor
recommendation may be modified as more recent forecasts become
available. The components of ProPAC's update factor recommendation are
summarized in Table 2-1, and a discussion of each follows.
It should be noted that the increase in average per case payments
in each year exceeds the PPS update. This is because increases in the
Medicare case-mix index (CMI) result in proportionally higher hospital
payments. Future changes in case mix are difficult to predict; however,
on the basis of currently available data, ProPAC estimates that the CMI
will rise by 0.9 percent in fiscal year 1995. Based on the Commission's
recommendation of a 2.7 percent average update, the average increase in
per case payments would be about 3.6 percent.
PPS Market Basket Forecast and Forecast Error Correction--The
forecasted increase in the market basket index is the expected change
in the prices of the resources used during a typical hospital stay.
This forecast is the reference point used in updating the PPS payment
rates. The current forecast is for a 3.7 percent increase in HCFA's PPS
market basket index during fiscal year 1995.
In its March 1990 Report and Recommendations to the Secretary, U.S.
Department of Health and Human Services, ProPAC proposed modifications
to the market basket used by HCFA. Although HCFA adopted most of these
modifications, it did not incorporate the key provision that increased
the weight of internal hospital wages in the computation of the market
basket index. The Commission believes HCFA's market basket as currently
constructed does not adequately recognize the unique characteristics of
the hospital labor market.
Since the PPS update for fiscal year 1995 is legislated relative to
HCFA's market basket, that market basket is used as the basis for
ProPAC's update framework. The Commission takes this into account by
making an adjustment to allow for the estimated effect of the
modifications it has proposed. However, the current fiscal year 1995
forecast is that the increase in ProPAC's and HCFA's market baskets
will be the same. The corresponding adjustment, therefore, is zero
percentage points.
A forecasted market basket increase of 4.1 percent was used to set
payments in fiscal year 1993. The actual market basket increase,
however, was only 3.0 percent. The update for fiscal year 1993 thus was
set 1.1 percentage points higher than if the actual market basket
increase had been known at the time.
The Commission believes a correction for substantial error in
market basket forecasts in an important part of its update framework.
This correction protects both hospitals and the Federal government by
adjusting the base payment rates so that the effects of past forecast
errors (both positive and negative) are removed. Therefore, ProPAC's
update recommendation also includes a -1.1 percentage point adjustment
for fiscal year 1993 market basket forecast error.

Table 2-1.--Recommended Update Factor for PPS Hospital Operating
Payments, Fiscal Year 1994
------------------------------------------------------------------------

------------------------------------------------------------------------
Components of the Update

Components applied to all hospitals:
Fiscal year 1995 HCFA PPS market basket
forecast^{a................................ ........^{... 3.7%
Adjustment for difference between HCFA and
ProPAC market baskets^{a................... ........... 0.0
Correction for fiscal year 1993 forecast
error.................................... ........... -1.1
Allowance for scientific and technological
advances................................. ........... 0.3
Adjustment for productivity............... ........... -0.7
Adjustments for case-mix change (fiscal year
1994):
Total DRG case-mix index change........... -0.9 ...........
Real across-DRG case-mix change........... 0.7 ...........
Within-DRG case-complexity change......... 0.2 ...........
Net adjustment for case-mix change.... ........... 0.0
------------------------------------------------------------------------
Additional adjustments to the standardized
amounts:
Adjustment for large urban areas^{b......... 0.0 ...........
Adjustment for other urban areas^{c......... 0.0 ...........
Adjustment for rural areas................ 3.1 ...........
========================================================================
Total Update Factor

Overall average............................... ........... 2.7
Large urban areas......................... 2.2 ...........
Other urban areas......................... 2.2 ...........
Rural areas............................... 5.3 ...........
------------------------------------------------------------------------
^{aMarket basket forecast provided by the Health Care Financing
Administration, Office of the Actuary, December 1993. The market
basket forecast is subject to change as more current data becomes
available.
^{bLarge urban areas = metropolitan areas with populations of one million
or more.
^{cOther urban areas = metropolitan areas with populations of less than
one million.

Adjustment for Scientific and Technological Advances--The allowance
for scientific and technological advances is a future-oriented policy
target. It provides additional funds for hospitals to adopt quality-
enhancing health care advances, even when they increase costs. To
develop an informed judgment about the appropriate level of this
allowance, ProPAC annually examines emerging, cost-increasing
technologies and scientific developments. (See Appendix A for more
information on the technologies contributing to the increase.) The
Commission believes 0.3 percent is an appropriate level for the
operating scientific and technological advances allowance for fiscal
year 1995.
Adjustment for Productivity Improvement--The productivity
adjustment is also a future-oriented policy target. The Commission
believes it is reasonable to expect hospitals to achieve productivity
improvements during fiscal year 1995 that are comparable to those
achieved in other sectors of the economy. The recommended adjustment of
-0.7 percentage points is based on ProPAC's determination that hospital
productivity should increase by 1.4 percent and that the savings from
such productivity improvement should be shared equally by hospitals and
the Medicare program. The Commission thinks it is appropriate for the
costs of scientific and technological advances to be financed in part
by expected productivity gains, to provide an incentive for hospitals
to strive for productivity improvement as they adopt new technologies.
(See Appendix A for more information on trends in hospital
productivity.)
Adjustments for Case-Mix Change--The fiscal year 1995 PPS update
should be adjusted to account for the net effect of case-mix change
during fiscal year 1994. The net adjustment in this year's update is
zero percentage points and reflects the following:
A 0.9 percentage point reduction for the estimated change
in the CMI,
A positive allowance of 0.7 percentage points for real
case-mix change across diagnosis-related groups (DRGs), and
A positive allowance of 0.2 percentage points for within-
DRG case-complexity change.
Adjusting for these factors allows payments to increase due to real
changes in the resources required to treat an average Medicare patient.
At the same time, it removes the effect of changes in medical record
documentation and coding practices that are unrelated to patient
resource requirements. (See Appendix A for a more detailed discussion
of case-mix change.)
Differential Adjustments to the Standardized Amounts--ProPAC
supports the provisions of OBRA 1990 and OBRA 1993 that eliminate the
difference between the standardized payment amounts for rural and other
urban areas in fiscal year 1995. This year's update would complete a
process begun in 1991 that has provided higher updates in each year to
rural hospitals. The Commission estimates that the differential would
be eliminated if the rural update were 3.1 percentage points higher
than the urban update for fiscal year 1995.
Since the beginning of PPS, the ratio of Medicare payments to costs
has been higher for urban hospitals than for rural institutions. This
is primarily the result of two factors. First, urban hospitals have
benefited more from the PPS payment adjustments--particularly the
effects of CMI change and the IME and DSH adjustments. In addition,
rural hospitals have had large declines in inpatient volume, raising
fixed costs per case. However, as indicated in ProPAC's October 1991
report to the Congress, Rural Hospitals Under Medicare's Prospective
Payment System, several recent policy changes have improved the
relative performance of rural hospitals under PPS. This trend promises
to continue. The Commission will monitor and analyze the further
effects of these policies as additional data become available.
Recommendation 10: Update Factor for Capital Payments to PPS Hospitals
For fiscal year 1995, the Commission recommends that a formula-
based approach be used to update capital payment rates. The capital
update should include the following:
The projected increase in a capital market basket index
that measures one-year changes in a fixed basket of capital goods
hospitals purchase, currently estimated at 3.4 percent;
An adjustment of zero percentage points to correct for
past forecast errors;
An adjustment of zero percentage points to reflect changes
in financing costs;
A positive adjustment of 0.9 percentage points for
scientific and technological advances;
A negative adjustment of 0.7 percentage points to
encourage hospital productivity; and
A net adjustment for zero percentage points for case-mix
change.
The Commission's recommendations would result in a 3.6 percent
increase in the Federal capital payment rate for both urban and rural
hospitals.
ProPAC believes the capital update should be for future capital
purchases. It is designed to provide Medicare capital payments
reflective of future capital replacement prices. It would provide
updates appropriate to maintain hospital capital stock adequate to
provide efficient and effective care to Medicare beneficiaries.
The components of the update recommendation are summarized in Table
2-2; a discussion of each of these components follows. (See Appendix A
for more information on the capital update.)
Capital Market Basket--ProPAC's capital update recommendation
reflects projected increases in a market basket index designed to
measure changes in the prices of capital assets hospitals purchase.
This index, developed by the Commission, provides a measure of the
increase in capital input prices analogous to that used to update PPS
operating payments. (See Recommendation 9.) It also measures annual
change in the price of a fixed mix of capital goods.
The recommended market basket includes three price components:
building and fixed equipment, movable equipment, and other capital-
related costs such as insurance. The market basket weights reflect
hospitals' patterns of capital acquisition. In the absence of accurate
and current information on actual capital purchases, the Commission
believes that shares of depreciation expense, adjusted for other
capital-related costs, are the best available measures of future
purchases. Therefore these shares, combined with annual outlays for
capital-related costs, are used as weights in the market basket.

Table 2-2.--Recommended Update Factor for Capital Payments, Fiscal Year
1995
Components of the Update

Fiscal year 1995 capital market basket^{a........................ 3.4%
Correction for fiscal year 1993 forecast error................. (^{b)
Financing policy adjustment.................................... 0.0
Allowance for scientific and technological advances............ 0.9
Adjustment for productivity improvement........................ -0.7
Adjustment for case-mix change^{c................................ 0.0
--------
Total capital update......................................... 3.6
^{aMarket basket estimate developed by ProPAC using forecasted data
supplied by the Health Care Financing Administration, Office of the
Actuary, January 1994. The market basket forecast is subject to change
as more current data become available.
^{bNot applicable.
^{cCase-mix change components = total DRG CMI change, real across-DRG case-
mix change, and within-DRG case-complexity change.

Although updates should apply to the full Medicare capital payment
rate, which reflects historical levels of depreciation and interest,
interest rate changes should be handled separately from the market
basket. The Commission's financing policy adjustment addresses the
issue of interest rate change in the update framework.
The capital market basket proposed by the Secretary uses a complex
structure of weighted average changes in economywide price proxies and
measures of interest expense. Its value is largely determined by
historical values of its components. In ProPAC's view, a
straightforward market basket that reflects the change in the price of
hospital capital purchases and other capital-related costs in the
coming fiscal year is more appropriate. The recommended market basket
would provide Medicare capital payments reflective of future capital
purchase prices.
ProPAC studied a range of alternative capital price measures. In
its March 1993 Report and Recommendations to the Congress, the
Commission recommended using two price proxies especially relevant to
hospital industry capital purchases: for hospital building and fixed
equipment capital costs, the Boeckh building cost index subindex for
apartments and office buildings (institutional construction); and for
movable equipment capital costs, the Marshall and Swift hospital
equipment index. Changes in other capital-related costs would be
measured by the consumer price index for residential rent. Components
would be weighted as discussed above. The market basket would be used
to prepare single-year projections of price change.
As of January 1994, the projected increase in ProPAC's market
basket index for fiscal year 1995 is 3.4 percent. This forecast may
change as more up-to-date data become available and methodologies for
estimating the components of the market basket are refined.
Forecast Error Correction--The Commission believes the correction
of past market basket index forecast errors should be part of the
update framework. This correction protects both hospitals and the
Federal government by adjusting the payment rates so that the effects
of past forecast errors are not perpetuated. Because a capital market
basket has not yet been used to increase capital payment rates, a
correction factor is not needed this year.
Financing Policy Adjustment--The Commission's capital update frame
work includes a financing policy adjustment to account for the effects
of changes in interest rates on hospital capital costs. In ProPAC's
view, interest rate fluctuations should not be reflected in the market
basket. If they were, such changes might lead to volatility in updates,
overcompensation of hospitals in some circumstances, and undue risk for
facilities at other times. Instead, ProPAC recommends an explicit
adjustment to the capital update factor to account for significant
changes in interest rates.
The financing policy adjustment reflects interest rate changes that
might otherwise create a significant financial burden for hospitals, as
well as those that would produce substantial reductions in capital
costs. It would raise payments to compensate hospitals faced with
disruptive effects of extreme interest rate increases and allow the
Medicare program to share in some of the savings resulting from lower
interest rates.
Though relatively high compared with short-term rates and in light
of expected inflation, long-term interest rates are anticipated to
remain stable through fiscal year 1995. The Commission believes it is
not appropriate to adjust capital payments for forecasted changes in
interest rates at this time.
Scientific and Technological Advances--ProPAC recognizes that
future hospital capital investments may include more costly, quality-
enhancing medical technology. The capital update framework adjusts
payments to allow for scientific and technological advances. (See
Recommendation 9.) The Commission recommends a 0.9 percentage point
adjustment for the capital component of scientific and technological
advances.
Productivity Improvement--ProPAC recognizes the need to adapt the
capital stock of hospitals to a health care environment with less
demand for inpatient services through its productivity adjustment. This
adjustment serves as a target for improvement in productivity due to
more efficient use of plant and equipment and purchase of cost-
decreasing technologies. The Commission recommends an adjustment of
-0.7 percentage points to encourage more efficient use of existing
plant and equipment and the purchase of cost-decreasing technologies.
(See Recommendation 9.)
Case-Mix Change--Medicare uses the same DRG definitions and
relative weights for both operating payments and capital payments. As a
result, capital payments, respond to changes in the CMI in the same way
as do PPS operating payments. Thus the adjustment to capital payment
rates for CMI change is identical to that made to operating payment
rates. (See Recommendation 9.) The net adjustment for case-mix change
is zero percentage points.
Recommendation 11: Single Operating and Capital Update Factor
The Commission recommends that when the transition to fully
prospective capital payments is complete, a single update factor be
used for adjusting PPS operating and capital payment rates. Based on
ProPAC's recommended updates to the operating and capital payment
rates, the total increase to a fully prospective combined payment rate
would be 2.8 percent for fiscal year 1995.
The Commission believes there ultimately should be one payment for
hospital inpatient operating and capital expenses and a single annual
update to that payment. ProPAC recognizes that a combined capital and
operating update factor cannot be used until the transition to a fully
prospective capital payment system is complete. This is because the
update applies only to the prospective portion of capital payment
rates. Further, the operating payment update is currently set by law,
while the Secretary has authority to establish capital prospective
payment updates through annual rulemaking. The Medicare program,
however, should move to a single update approach for inpatient
operating and capital payment rates as soon as possible. Despite the
separate payment methods, hospitals do not distinguish between their
operating and capital payments. Operating payments may be used to
defray capital shortfalls and vice versa. Separate update factors for
operating and capital expenses do not reflect the way hospitals
actually use their revenues or make investment decisions.
ProPAC therefore recommends the development and use of an update
framework that includes capital and operating components for fiscal
year 1995. Like the operating update use by ProPAC, the combined update
approach should incorporate operating and capital market baskets to
measure changes in prices, as well as adjust for productivity,
scientific and technological advances, and case-mix change. This would
ensure that updates to both operating and capital base payment rates
reflect increases in the costs of the goods and services that hospitals
require to produce inpatient hospital care efficiently. Ultimately,
operating and capital components should be included in a single market
basket and set of adjustments.
A combined fully prospective update would yield an average payment
rate increase of 2.8 percent under the Commission's recommendation. The
total payment rate increase, however, would be about 3.7 percent,
because of expected increases in the CMI (see Table 2-3).
Recommendation 12: Update Factor for Hospitals Paid on the Basis of
Hospital-Specific Rates
The Commission believes payments based on hospital-specific base-
year costs for sole community hospitals should be updated by the
average update given to all hospitals.
The recommendation would result in an update to the hospital-
specific rates of 2.7 percent for fiscal year 1995, consistent with the
Commission's recommendation on the PPS update. Since the update is
based on current projections of the fiscal year 1995 increase in the
market basket index, its effective value may be modified as more recent
forecasts become available.
OBRA 1989 provides that certain hospitals be paid on the basis of
the PPS rate, their own 1982 base-year costs updated to the current
year, or their updated 1987 base-year costs, whichever would yield the
largest payment. Sole community hospitals, which meet certain criteria
based on distance from other hospitals or market share, qualify for
this special treatment. Provisions affecting small rural Medicare-
dependent hospitals, which were defined as rural hospitals with fewer
than 50 beds and at least a 60 percent Medicare share of total
discharges or inpatient days, expired with cost reporting periods
ending on or after April 1, 1993. However, OBRA 1993 restored this
provision for cost reporting periods ending before October 1, 1994. For
fiscal year 1995. Medicare-dependent hospitals will no longer be paid
on the basis of hospital-specific rates and will be treated like other
rural hospitals.

Table 2-3.--Estimated Fiscal Year 1995 Average Increase in Per Case
Payments Under Fully Prospective Rates--Percent
Operating update factor........................................ 2.7
Capital update factor.......................................... 3.6
Total average update......................................... 2.8
Estimated case-mix index change (fiscal year 1995)............. 0.9
--------
Total average increases in PPS payments*..................... 3.7
*The total average increase in PPS payments reflects the multiplicative
effects of the total average update and case-mix index change.

Current law requires that the hospital-specific rates for these
hospitals be updated at a rate equal to the expected average update for
all PPS hospitals. ProPAC concurs with this provision. Sole community
hospitals are accorded special treatment under PPS because they may
face higher historical costs due to their special circumstances.
Nevertheless, these hospitals should be able to control their cost
increases as other hospitals do. Last year, the Commission recommended
that the update for rural areas be applied to the hospital-specific
rate, on the grounds that other rural hospitals are the appropriate
comparison group for these hospitals. However, this year's PPS update
for rural hospitals (including sole community hospitals) is
substantially higher than the average for all hospitals. The Commission
believes the average increase for all hospitals provides a reasonable
update for the hospital-specific rates available to these facilities.
Recommendation 13: Update Factor for PPS-Excluded Hospitals and
Distinct-Part Units
For fiscal year 1995, the largest rates for PPS-excluded hospitals
and distinct-part units should be updated by 2.7 percent. This
recommendation accounts for the following:
The projected increase in the HCFA PPS-excluded hospital
market basket, currently estimated at 3.7 percent.
An adjustment of zero percentage points for the difference
between the projected ProPAC and HCFA market baskets;
A negative adjustment of 1.0 percentage points for
substantial error in the fiscal year 1993 market basket forecast; and
An adjustment of zero percentage points for scientific and
technological advances.
When PPS was established, it was clear that prospective payment
based on DRGs could not be applied universally and that certain
providers would need to be excluded. At this time, five types of
specialty hospitals (psychiatric, rehabilitation, long-term,
children's, and cancer) and two types of distinct-part units in general
hospitals (psychiatric and rehabilitation) are exempt from PPS. These
providers are excluded primarily because DRGs fail to accurately
predict the resource costs for the patients they treat.
PPS-excluded hospitals and distinct-part units are subject to the
payment limitations and incentives established in the Tax Equity and
Fiscal Responsibility Act of 1982 (TEFRA). Each provider is paid on the
basis of its current Medicare-allowable inpatient operating costs per
discharge, or a target amount. The target amount is based on the
provider's allowable costs per discharge in a base year, trended to the
current year by an annual update factor. Medicare's share of allowable
capital costs is paid in its entirety.
Under TEFRA, a facility with inpatient operating costs per
discharge that are less than its target rate receives its costs plus
either 50 percent of the difference between its cost per discharge and
the target or 5 percent of the target amount, whichever is less. A
facility with inpatient operating costs per discharge above its target
rate receives the target amount plus half the difference between that
amount and its cost per discharge, but no more than 110 percent of the
target. Further, the Secretary is required to provide for an adjustment
to a facility's payment when events beyond the facility's control
distort its cost increase for a cost reporting period.
Although the Congress legislates the update to the TEFRA target
amounts, ProPAC and the Secretary of Health and Human Services are
required to recommend an annual update factor. For fiscal years 1994
through 1997, each facility will receive an update ranging from the
projected increase in the market basket to the market basket increase
minus 1.0 percentage points. The Commission recommends an average
update to the target rate equal to the market basket increase minus 1.0
percentage points for fiscal year 1995 (see Table 2-4).
Market Basket--The update recommendation is determined primarily by
the projected increase in the PPS-excluded market basket index, which
measures the price of inputs used by these facilities in treating
Medicare patients. The current HCFA market basket increase forecast for
fiscal year 1995 is 3.7 percent. There is no difference between the
HCFA and ProPAC market basket forecasts for 1995, so no adjustment to
reflect this difference is necessary.
Forecast Error Correction.--ProPAC believes the update should be
corrected for substantial past market basket forecast errors. Because
projections must rely on available data, they cannot accurately
anticipate all future economic conditions that may affect input prices.
Updates based on market basket forecasts, therefore, may result in
overpayments or underpayments to PPS-excluded facilities, which should
not be carried forward to subsequent payment years. The market basket
projection used to update TEFRA target amounts in fiscal year 1993 was
4.2 percent. The actual market basket increase, however, was only 3.2
percent. Therefore, ProPAC's update recommendation includes a -1.0
percentage point adjustment for fiscal year 1993 market basket forecast
error.

Table 2-4.--Recommended Update Factor for PPS-Excluded Hospitals, Fiscal
Year 1995--Percent
Components of the Update

Fiscal year 1995 HCFA PPS-excluded market basket forecast*..... 3.7
Adjustment for difference between HCFA and ProPAC market
baskets....................................................... 0.0
Correction for fiscal year 1993 forecast error................. -1.0
Allowance for scientific and technological advances............ 0.0
--------
Total update............................................... 2.7
*Market basket forecast provided by the Health Care Financing
Administration, Office of the Actuary, December 1993. The market
basket forecast is subject to change as more current data become
available.

Scientific and Technological Advances--ProPAC also believes the
update should include an allowance for scientific and technological
advances for PPS-excluded hospitals and distinct-part units. This
allowance is intended to encourage providers to adopt quality-enhancing
technologies, even when they increase costs. It reflects the
Commission's judgment about the expected growth in the cost of
providing inpatient services resulting from scientific and
technological advances.
To reach an informed judgment on the appropriate allowance, ProPAC
examined emerging technologies used in PPS-excluded facilities to
estimate their operating costs and predict their increased use in
fiscal year 1995. (See Appendix A for a full discussion of ProPAC's
methodology.) To be included in the estimate, a technology must be
emerging (that is, diffused beyond minimal use but not fully diffused),
quality-enhancing, and cost-increasing. The contractor identified two
scientific advances that met these criteria: the drugs sertraline
hydrochloride and ondanestron hydrochloride. The total increase in
operating costs due to these advances is estimated to be $140,000, or
0.002 percent of Medicare payments to PPS-excluded facilities in fiscal
year 1995. Therefore, the Commission is recommending no allowance for
scientific and technological advances.
Unlike the update for PPS hospitals, the update for excluded
facilities does not include a productivity adjustment. The productivity
adjustment to the PPS update is based on the principle that Medicare
should share in the savings generated by productivity improvements.
However, Medicare automatically shares in the savings under TEFRA
because part of any productivity increase is factored into reduced
Medicare payments. ProPAC believes a further reduction in payments for
gains in productivity is not appropriate.
Revising the Payment Method--In October 1992, the Commission
submitted an interim report on payment reform for PPS-excluded
providers. The findings suggested that in aggregate, TEFRA payments to
PPS-excluded facilities appeared adequate for most provider types.
Notable exceptions were psychiatric hospitals and distinct-part units,
and long-term hospitals. However, substantial variation in the
proportion of facilities with costs exceeding their target rate was
found across and within all provider types. Further, the Commission
could not make definitive conclusions regarding the adequacy of the
TEFRA payment system due to the lack of information on the amount of
exceptions payments made to PPS-excluded providers.
Specialty hospitals and distinct-part units were excluded from PPS
primarily because the DRG patient classification system does not
adequately group patients in these facilities according to resource
use. However, considerable effort has been put into developing a
patient classification system for rehabilitation hospitals and
distinct-part units based on patient functional status. The Commission
supports such efforts in hope that a prospective payment system for
specialty facilities can be developed.
Although at this time prospective payment for these facilities is
not feasible, modifications to the current TEFRA payment method may be
possible. Each type of PPS-excluded provider has unique patient
characteristics and cost experiences, yet for payment purposes all
types are treated similarly. TEFRA does not recognize varying factors
that affect costs, such as changes in case mix and treatment patterns,
and all providers receive the same basic update to the target rate. A
more complete understanding of the factors that differentiate these
facilities may help to identify appropriate revisions to the current
TEFRA payment system and update formula.
ProPAC encourages the Secretary to examine further the factors
contributing to cost increases among these facilities. The Commission
will continue to evaluate the appropriateness of the TEFRA system for
PPS-excluded providers, and will respond to the Secretary's proposal
for payment reform when it becomes available.
Recommendation 14: Update to the Composite Rate for Dialysis Services
The fiscal year 1995 update recommendations for the composite rate
for dialysis services accounts for the following:
The projected increase in the market basket for dialysis
services in fiscal year 1995, estimated at 4.3 percent;
A positive adjustment of 0.7 percentage points to reflect
the additional costs associated with scientific and technological
advances;
A negative adjustment of 1.0 percentage points to
encourage productivity improvements; and
A negative discretionary adjustment of 4.0 percentage
points to reflect the relationship between payments and estimated
fiscal year 1994 costs.
This results in a net update recommendation of zero
percent.
In 1972, the Congress extended Medicare coverage to almost all U.S.
residents with end-stage renal disease. These beneficiaries are
entitled to all Medicare-covered services, including dialysis
treatments or transplant services to replace lost kidney function.
Since 1983, payment for outpatient dialysis services has been based on
a composite rate. The composite rate is a prospective payment intended
to cover the costs of services typically furnished during a dialysis
treatment. Derived from data from 1977 through 1979, it represents a
weighted average cost per treatment for dialysis provided in facilities
and at home according to the proportion of beneficiaries treated in
each site. This method was intended to promote the less expensive home
treatment alternative by paying the same amount for care provided in
either site. The level of the composite rate has remained essentially
unchanged since it was developed.
OBRA 1990 mandated that ProPAC recommend an annual update to
dialysis payments. In developing its recommendation, the Commission
first estimated how much payments should increase between fiscal years
1994 and 1995 using a methodology similar to that employed in the
update recommendation for PPS hospital payments. Then it evaluated the
appropriateness of the base payment rate to which the update factor
would be applied. (See Appendix A for more information on the
background analyses.)
Market Basket--The market basket index measures changes in the
price of inputs dialysis facilities use to produce dialysis treatments.
It is based on a set of input components that reflect all the goods and
services dialysis providers purchase. Using 1992 dialysis facility cost
report data, four types of inputs were identified: capital, labor,
other direct costs, and overhead. Each component has a weight that
represents its cost share, or proportion of total expenses. The price
change for each component is measured by a proxy. The price proxies
were adapted from those Medicare uses for the PPS, home health agency,
and skilled nursing facility market baskets. The Commission estimates
that the prices of inputs used in a dialysis treatment will rise 4.3
percent between fiscal years 1994 and 1995.
Scientific and Technological Advances--The scientific and
technological advances allowance is intended to encourage dialysis
facilities to adopt new technologies that improve the quality of
patient care, even when they increase costs. It is an estimate of the
combined operating and capital costs of new and emerging dialysis-
related technologies, and their expected increase in use for the coming
fiscal year. To reach an informed judgment on the appropriate
allowance, ProPAC examined a set of the most important new cost-
increasing innovations in the dialysis industry. On the basis of this
analysis, the Commission concluded that Medicare payments should rise
by 0.7 percent to cover the costs of new technologies in fiscal year
1995.
Productivity Improvement--The productivity adjustment is intended
to give dialysis facilities a financial incentive for continued
improvements in productivity through the more efficient use of
resources. It is an estimate of the productivity gains that can be
expected for the coming year. The Commission considered a range of
options to reach an appropriate adjustment. ProPAC's historical
productivity study and recent trends in the cost per dialysis treatment
suggest a higher estimate may be appropriate. Concerns that further
reductions in the length of dialysis sessions may adversely affect
quality of care support a lower adjustment. ProPAC concluded that a
modest productivity target of 2.0 percent arrives at the proper
balance. The savings from productivity gains should be shared equally
by the industry and Medicare, resulting in a productivity adjustment of
-1.0 percentage points.
Discretionary Adjustment--ProPAC's analysis indicates that in
aggregate, the estimated cost per dialysis treatment in fiscal year
1994 is about 5 percent below the median wage-adjusted composite rate.
This varies by type of facility. The estimated cost per treatment for
independent facilities is about 13 percent below the payment rate.
Costs are about 16 percent above payments for hospital-based
facilities. Determining the true difference between payments and costs
was complicated by data deficiencies. Nonetheless, the Commission
believes it is important to recognize this difference in its update
recommendation through an adjustment to the base composite rate.
The latest cost data probably are overstated substantially because
they have not been audited, although the magnitude of this effect is
not known. Inconsistent cost reporting practices and cost allocation
methods raise additional concerns about data comparison and reliability
across facilities. Further, government regulations implemented in 1992
have likely increased facility costs, but the exact amount is not
known. In the Commission's judgment, a discretionary adjustment of -4.0
percentage points balances the need to account for the difference
between 1994 estimated costs and payments with uncertainties regarding
the current level of costs.
ProPAC appreciates HCFA's continued efforts in compiling the
database of unaudited dialysis facility cost reports and in auditing a
sample of fiscal year 1991 cost reports. These data are important in
developing annual update recommendations. The Commission supports
HCFA's actions to improve the quality of the cost data by adding edits
to the Hospital Cost Report Information System, revising the cost
report schedules and instructions, and working with facilities and
fiscal intermediaries to ensure that cost reports are filed correctly
and completely. These measures will enhance the accuracy and
reliability of the data, which is essential for decision making.
ProPAC will continue to evaluate payments to dialysis facilities.
Its analysis will focus on the difference between payments and costs
and how this relationship varies across providers. Additionally, ProPAC
will take a closer look at the disparity between reported and audited
costs to better assess the adequacy of payments. Because accurate and
reliable data are crucial to this undertaking, the Commission urges
HCFA to continue its measures to improve data quality and to regularly
audit a representative sample of independent and hospital-based
dialysis facility cost reports.

Other Payment Policies

PPS adjusts hospital payments in several ways to account for
factors that may legitimately affect hospital costs, such as the level
of teaching activity, wage rates, and patient mix.
As part of its mandate, the Commission examines the distribution of
PPS payments across hospitals and makes recommendations concerning the
various adjustments to the payment system. ProPAC considers adjustments
that are made both at a hospital level and at a case level. In this
year's report, the Commission recommends improvements in the PPS
hospital wage index, outlier payment policy, and the indirect medical
education adjustment.
ProPAC is also responsible for making recommendations on Medicare
payment for facility services provided in settings other than the
inpatient hospital. These payments have grown rapidly throughout the
1980s and have become an increasingly important part of the
Commission's agenda. In this report, ProPAC's recommendations concern
payment to skilled nursing facilities and hospital outpatient
facilities.
Recommendation 15: Improvements in Hospital Wage Data
The Secretary should develop and implement improved methods for
collecting data on employee compensation and paid hours of employment
for hospital workers by occupational category. Once these data become
available, the Secretary should implement an adjustment to the hospital
wage index under PPS. This adjustment would correct the wage index for
the inappropriate effects of including geographic differences in the
mix of occupations employed.
The PPS wage index is intended to measure geographic differences in
the unit prices of labor inputs hospitals purchase to provide inpatient
services. Currently, hospitals report only total compensation and total
paid hours for all employees, regardless of occupation. Consequently,
the average hourly wage calculated for each labor market area measures
the average labor cost per hour for hospitals in the area, reflecting
both unit prices for labor and the occupational mix of employees.
The Commission believes the wage index should adjust payments for
relative differences in local labor prices, rather than in costs. While
local market prices for labor presumably are determined by forces
beyond the control of an individual hospital, the quantity and skill
mix of labor purchased clearly result from management decisions.
Differences among hospitals in mission, services offered, and patient
population served may lead to variations in the volume and mix of labor
required to produce needed inpatient services. The resulting
differences in operating cost per discharge, however, are accounted for
by other hospital-specific adjustments in PPS, such as the case-mix
index, and by the indirect medical education and disproportionate share
adjustments.
Hospitals located in large cities tend to employ a substantially
more expensive mix of labor than hospitals located in rural areas.
Consequently the current wage index values for large urban areas tend
to be too high, while those for rural areas tend to be too low. This
results in overpayment for some hospitals and underpayment for others.
Previous ProPAC studies of 1988 occupation-specific compensation
data reported by California hospitals suggest that an adjustment for
occupational mix would increase the current wage index values for rural
hospitals and decrease those for hospitals located in large urban
areas. In 1992, the Commission again used the California data to
examine the effect of occupational mix adjustment on wage indexes based
on hospital-specific labor market areas. The results from this study
were consistent with ProPAC's earlier findings. Adjustment for
occupational mix may be particularly important for hospitals located in
areas where there are few other hospitals.
Differences in occupational mix are an important factor affecting
the accuracy of the wage index and equity of payment under PPS. To
address this problem, the Commission previously has recommended
collecting compensation and employee hours data by occupational
category. However, the Secretary has rejected this recommendation on
several grounds, including the burden that would be imposed on the
hospital industry and lingering doubts about the likely accuracy of
occupation-specific data. The Commission believes accurate occupation-
specific data can and should be obtained to correct the continuing bias
in the wage index. Further, the burden of collecting such data could be
minimized by adapting methods currently used by the Bureau of Labor
Statistics to collect occupation-specific data for the employment cost
index.
A second set of issues relates to the timeliness and accuracy of
the wage data. Accurate and timely data are essential to improve equity
of payments among hospitals under PPS. These issues are important
because the wage index directly affects the distribution of about 70
percent of all payments under PPS, or some $42 billion per year.
Under current law, the Secretary is required to update the wage
index annually, beginning in fiscal year 1994. The wage data collected
on hospitals' annual cost reports for this purpose, however, will
continue to lag by three to four years because of the length of the
cost reporting cycle, intermediary auditing, and data submission to
HCFA. In addition, the wage data many hospitals submitted on their
fiscal year 1990 cost reports were initially inaccurate or
substantially incomplete. HCFA's experience collecting wage data by
mail survey, with or without occupation-specific data, has been equally
poor.
ProPAC believes the implementation of a new wage index based on
hospital-specific market areas may help to improve the accuracy of the
wage data. (See Recommendation 16.) With a nearest neighbor approach, a
hospital's own data would generally have more influence on its wage
index than is now the case. Therefore, hospital administrators may be
more strongly motivated to ensure the quality of the information they
submit.
Adjustment of the wage index for occupational mix would
substantially improve payment equity among hospitals under the current
PPS labor market definitions. It would be equally desirable for a wage
index based on nearest neighbor labor market areas. In this case,
ProPAC believes an occupational-mix adjustment would reduce variation
in wage index values among nearby hospitals and would help the wage
index more accurately reflect the labor price levels hospitals face.
Recommendation 16: Improvements in the PPS Hospital Wage Index
The Secretary should substantially revise the hospital wage index
under PPS for fiscal year 1995. The revised wage index should be
calculated using hospital-specific labor market definitions based on
hospital geographic proximity measured by the air-mile distances
between nearby hospitals. The Congress should repeal the current
statutory provisions relating to geographic reclassification for the
wage index.
The Commission believes the wage index would be substantially more
accurate if it were calculated using hospital-specific labor market
areas based on geographic proximity rather than on political
boundaries, as is now the case. Under this approach, a labor market
area would be defined for each hospital (the target hospital),
including only hospitals located in its immediate vicinity.
Consequently, each hospital's ``nearest neighbor'' wage index would
reflect its own wage rate averaged with those paid by other nearby
hospitals.
This approach has strong intuitive appeal. Hospitals located near
each other represent potential alternative sources of employment for
health care workers living in the area. Therefore, in almost all
instances, the average wage rate paid by all nearby hospitals should
provide a reasonably accurate measure of the amount the target hospital
must pay to compete for labor.
ProPAC's analysis suggests that hospital-specific labor market
areas offer important advantages compared with the present definitions.
The current market areas have fixed borders defined by the county and
state boundaries of metropolitan statistical areas and statewide rural
areas. Hospitals located near each other but on opposite sides of such
borders often have widely different wage indexes and PPS payment rates,
even though they face similar local market conditions. By contrast,
nearest neighbor labor markets for nearby hospitals overlap
substantially, including many of the same hospitals. This tends to
reduce the likelihood of large differences in their wage index values.
A second advantage is that nearest neighbor labor market areas
generally are much smaller than the current labor market areas.
Consequently, they more effectively capture geographic differences in
market wage levels.
Under current policy, hospitals located in the same labor market
area have the same wage index, which is based on the average wage for
the area. Excluding the effects of geographic reclassification, about
65 percent of all PPS hospitals incur a large loss or a large gain
because their hourly wage rates differ from the labor market average by
more than 5 percent. Because many labor market areas are large,
however, local hospital wage levels often vary substantially within
them. As a result, a significant portion of the losses and gains
currently experienced by individual hospitals are attributable to their
location in a part of the market area where local wage rates are higher
or lower than the labor market average. Although many of these
hospitals pay wage rates that are consistent with those of other nearby
hospitals, they are inappropriately penalized or rewarded because the
local wage level differs from the labor market average. This results in
inequitable payment.
Under a nearest neighbor approach, each hospital's wage index would
be based on the level of wage rates paid by hospitals located nearby.
Consequently, many of the hospitals that now face large losses or gains
would find these discrepancies reduced or eliminated. Other hospitals
are inappropriately sheltered by the current system. Many of these
hospitals would find their small losses or gains substantially altered,
reflecting the level of wages in their immediate area.
Implementation of a nearest neighbor wage index in fiscal year 1995
would result in a substantial redistribution of PPS payments among
hospitals. However, these changes would make payments more accurate and
equitable.
ProPAC has examined a number of alternatives for determining the
most appropriate size of nearest neighbor labor market areas. Increases
in the size of the market areas tend to have two different effects. On
the one hand, the wage index values for nearby hospitals are less
likely to be substantially different. Consequently, hospitals located
near each other are less apt to be paid significantly different PPS
payment rates. This occurs because each hospital's wage index is based
on wage data for a larger number of hospitals.
On the other hand, larger market areas include hospitals that are
located farther from the target hospital. Consequently, wage rates
within each area tend to vary more. This suggests that some of the more
distant hospitals may face labor market conditions that differ from
those in the immediate vicinity of the target hospital. Therefore,
using larger market areas may yield wage index values that are less
accurate indicators of the labor market conditions faced by the target
hospital.
Finding a balance between these conflicting outcomes is complicated
by the fact that hospital circumstances vary widely. About 30 percent
of all PPS hospitals are located in relatively high density areas, with
seven or more other PPS hospitals located within a radius of 20 miles.
At the other end of the spectrum, 46 percent of all PPS hospitals are
located in low density areas, with fewer than three other hospitals
located within 20 miles.
For hospitals in areas where there are many other hospitals nearby,
hospital-specific labor market areas could include the nearest 15
hospitals within a 20-mile radius. This would keep the variability in
wage rates at a low level, while limiting the frequency of large
differences in wage indexes among nearby hospitals. For hospitals
located in areas with few hospitals nearby, hospital-specific markets
should include at least three other hospitals. In many instances, this
would require going beyond 20 miles. To avoid incorporating hospitals
facing substantially different labor market conditions, however, the
maximum distance should be 30 to 35 miles.
In short, a labor market area could be defined for each hospital by
including the nearest 15 hospitals within a 20-mile radius, but going
up to a maximum of 30 to 35 miles to find at least three other
hospitals. Although any of these criteria could be modified, minor
changes probably would not make the wage index less accurate. A wage
index based on labor market definitions similar to those outlined above
would, in ProPAC's view, be far more accurate than the current one.
Implementation of this approach would impose both one-time and
ongoing administrative burdens on HCFA. For example, HCFA would need to
verify the latitude and longitude coordinates for each PPS hospital.
Methods and procedures would need to be developed for incorporating new
hospitals into the wage index, and for dealing with multi-campus
hospitals.
In addition, HCFA would need to devise methods and administrative
processes for addressing requests for exceptions. The Commission's
research shows that hospital-specific labor market areas defined using
air-mile distances generally correspond closely with those defined
using road miles. Differences will occur, however, because of the
presence of major transportation barriers such as a river or
mountainous terrain. An exceptions process may be needed where a road-
mile definition would produce a substantially different wage index.
ProPAC recognizes that adoption of a new wage index based on
nearest neighbor labor markets will have a significant effect on PPS
payments for many hospitals. This effect is due partly to changes in
the labor market definitions, and partly to eliminating geographic
reclassification for the wage index. The Commission believes strongly
that continued reclassification of the wage index would not be needed
once a nearest neighbor wage index is implemented.
Hospitals whose wage index values are reduced by the adoption of a
nearest neighbor wage index would receive lower payments because of
this change. ProPAC believes, however, that such changes in hospital
wage index values generally would reflect improvements in accuracy and
fairness. Hospitals whose wage indexes decline would be primarily those
previously sheltered by their inclusion in an appropriately large labor
market area or those that received an in appropriately high wage index
because of geographic reclassification.
Recommendation 17: Nursing Facility Wage Index
The Secretary should collect data on employee compensation and paid
hours of employment for employees of nursing facilities that care for
Medicare skilled nursing facility patients. Once these data become
available, the Secretary should develop a nursing facility wage index
and use it to adjust Medicare skilled nursing facility payments.
Medicare payments to nursing facilities are adjusted by the
hospital wage index to reflect geographic differences in labor costs.
Yet the geographic differentials in the cost of labor for hospital
employees differ from those for employees of nursing facilities. This
may be because there are state variations in regulations affecting
staffing of nursing facilities that differ from those of hospitals.
Further, through their Medicaid programs and certification and
oversight roles, states have a major impact on the costs and structure
of nursing facilities. Some of this variation is being reduced through
provisions in OBRA 1987 that mandated stepped-up Federal oversight of
nursing facilities.
Another potential reason why the geographic differentials in
hospital wages do not adequately reflect variation in nursing facility
wages may be skill mix differences. Compared with hospitals, nursing
facilities employ more aides. The relative differences in the salaries
of aides and nurses may not be the same across geographic areas. These
differences in the employee mix and relative wages are not reflected by
the hospital wage index.
An accurate wage index is necessary to account for geographic
differences in wages. As with the hospital wage index, the method used
to collect wage and hour data for nursing facilities should be
prospective. Further, the Commission suggests the Secretary phase in
the use of the nursing facility wage index to allow facilities to
adjust.
ProPAC recognizes that collecting nursing facility wage data and
developing an index may take several years. The Commission investigated
an interim approach of separate cost limits for each Census division to
account for geographic cost differences. (See Appendix A for a more
complete discussion.) This technique substantially changed the
distribution of payments compared with the way payments were allocated
under the current hospital wage index or a simulated nursing facility
wage index. It inappropriately adjusted for cost variation caused by
differences in state Medicaid payment policies and rates and other
state certification requirements. The Commission thus rejects the
interim measure, recommending instead that efforts focus on the
development of a nursing facility wage index.
Recommendation 18: Improving Outlier Payment Policy
The Commission believes the outlier payment provisions of the
Omnibus Budget Reconciliation Act of 1993 will improve the current
policy for identifying outlier cases and determining outlier payments
under PPS. However, the following changes also should be implemented
for fiscal year 1995:
The estimated cost of the case and the outlier payment
amount should no longer be adjusted to reflect the hospital's indirect
medical education and disproportionate share status.
The marginal cost factor for cost outliers should be
increased to 80 percent.
These changes would further increase the effectiveness of
outlier payment in protecting against the risk of large losses on some
cases. They would also improve the distribution of outlier payments
across hospitals, including hospitals that receive a large number of
transfer cases.
The DRGs used to determine PPS payment are designed to group cases
with similar resource requirements. The hospital's payment for each
case is based on the nationwide average cost of patients in the DRG.
The hospital is at risk for the difference between the cost of the case
and the payment it receives. However, costs for individual cases in any
DRG may vary widely, due to patient-specific or treatment-specific
factors that are not incorporated in the current classification system.
Even an efficient hospital, therefore, may have some cases with much
higher than average resource requirements. These cases represent large
financial losses to the hospitals that threat them.
In general, most hospitals should be able to offset losses from
more costly cases with gains from less costly ones. However, this
averaging principle does not adequately protect hospitals with a small
number of admissions, because they may be unable to offset the losses
associated with an occasional very costly case. It also fails to
protect certain hospitals that regularly care for a greater than
average share of costly patients.
To recognize this, additional payment is provided to hospitals for
cases that are exceptionally resource intensive. Outlier payment is
also intended to protect against incentives that may adversely affect
certain types of patients or cases that are perceived to be associated
with a greater likelihood of financial loss.
Definition of Outlier Cases--Currently, hospitals receive
additional payment for cases that have exceptionally long stays (day
outliers) or high costs (cost outliers). Cases that qualify as both day
and cost outliers are paid according to the formula that yields the
highest payment. Over time, there has been increased emphasis on cost
as a criterion for identifying outlier cases and determining outlier
payments. The estimated proportion of outlier payments based on the day
outlier formula has fallen from 85 percent in fiscal year 1984 to 32
percent in fiscal year 1994.
The Commission consistently has supported the increased emphasis on
cost outliers relative to day outliers because the cost criterion
better identifies the cases associated with the largest losses to the
hospital. In its March 1993 Report and Recommendations to the Congress,
ProPAC recommended eliminating day outlier payments over a three-year
period. In OBRA 1993, the Congress required that payments for day
outlier cases be phased out beginning in fiscal year 1995 and ending in
fiscal year 1998.
As the emphasis on cost outliers grows, however, it becomes more
important to measure case-level costs accurately. Because costs are not
reported for individual cases, the only way to identify cost outlier
cases is to adjust reported charges. The Commission intends to analyze
alternative methods for estimating case-level costs, their relative
accuracy, and their implications for the distribution of outlier
payments.
Outlier Thresholds--A case does not qualify for outlier payment
unless it exceeds the day or cost outlier threshold. One problem with
the current threshold is that the loss incurred before outlier payments
begin is not the same for every DRG, because DRGs have different
payment amounts. Further, the loss is not the same for every hospital,
because the cost of each case is adjusted by the hospital's IME and DSH
payment adjustments.
A threshold based on a fixed loss--that is, one that is set so that
the loss incurred before outlier payments begin is equivalent for every
case and hospital--would be more effective in reducing the impact of
large losses associated with individual cases. In its March 1993 Report
and Recommendations to the Congress, the Commission recommended that
the cost outlier threshold for each case at each hospital should be a
fixed amount (adjusted for differences in area wages and cost of
living) above the DRG payment rate for the case. In OBRA 1993, the
Congress enacted this change, to begin in fiscal year 1995.
Another issue is whether estimated costs and outlier payments
should be adjusted to reflect the hospital's teaching and
disproportionate share status. Currently, the estimated cost for each
case is reduced by the hospital's IME and DSH payment adjustments. For
example, a case costing $50,000 at a teaching or disproportionate share
hospital is considered less costly for the purposes of outlier payment
than one costing $50,000 at a non-teaching, non-disproportionate share
hospital. The amount by which the estimated cost exceeds the outlier
threshold (which determines the outlier payment amount) thus is smaller
for the case treated at the teaching or disproportionate share
hospital. The resulting outlier payment amount is then increased by the
hospital's IME and DSH adjustments, but this generally is not enough to
offset the loss in outlier payments resulting from the reduced cost
estimate for the case.
ProPAC's analysis indicates that these adjustments result in
substantial underpayment for outlier cases treated by teaching and
disproportionate share hospitals. The IME and DSH adjustments should
apply to the base payment amount that hospitals receive for every case.
Outlier payments, on the other hand, are intended to defray the loss
incurred beyond some threshold in treating exceptionally expensive
cases. Teaching or disproportionate share hospitals should not have to
bear greater losses before outlier payments begin than do otherwise
similar hospitals. Moreover, outlier payments should be based on the
loss incurred on the case rather than the hospital's teaching or
disproportionate share status.
Marginal Cost Factors--Once a case exceeds the relevant outlier
threshold, the payment rate depends on the marginal cost factor. For
example, hospitals are paid 75 percent of the estimated cost beyond the
threshold for cost outliers and therefore must bear 25 percent of the
additional estimated cost beyond the threshold. This is intended to
provide an incentive to continue to control the costs of outlier cases.
In addition, it is believed that the additional payment for outlier
cases should be less than the estimated cost beyond the threshold
because of a potential bias in the way cost is estimated.
The changes discussed above would improve the effectiveness of
outlier payment policy in identifying and directing payment to the most
costly cases. Outlier payments no longer would be made for cases on
which the hospital incurs only small losses or even gains. Given these
changes, the Commission believes it would be appropriate to compensate
hospitals for a higher percentage of the losses beyond the cost outlier
threshold. The marginal cost factor for cost outliers therefore should
be raised to 80 percent.
Outlier Payment Pool--The outlier pool is expressed in terms of the
percentage of total PPS payments (excluding the IME and DSH
adjustments) that is set aside for outlier payments. By law, it must be
between 5.0 percent and 6.0 percent; it currently is set at 5.1
percent.
Last year, ProPAC recommended that the outlier payment pool should
be increased to 6.0 percent of total PPS payments. Upon further
examination, however, the Commission has determined that the reduction
in DRG payment rates required to fund a larger outlier pool would
offset the benefit from reduced losses that hospitals would have to
incur before outlier payments begin (see the discussion below). The
Commission will continue to examine the implications of changing the
size of the outlier pool in the context of recent and proposed changes
in outlier payment policy.
Financing Outlier Payments--Outlier payments are financed by
across-the-board reductions in the DRG payment amounts for urban and
rural hospitals--5.5 percent and 2.3 percent, respectively, in fiscal
year 1994. These reductions reflect the difference in the anticipated
percentages of outlier payments for the two groups. In fiscal year
1995, with the elimination of the differential between the standardized
payment amounts for rural and other urban areas, these reductions will
be equal for all hospitals.
Recent ProPAC analyses indicate that outlier cases and payments are
concentrated among groups of hospitals and DRGs. These findings suggest
that financing outlier payments by an equal reduction in the basic DRG
rate paid for each case results in overpayment for DRGs with a high
percentage of outlier payments and underpayment for DRGs with a low
percentage of outlier payments.
Financing outlier payments by reducing the payment rates for cases
in each DRG, based on the anticipated percentage of outlier payments in
that DRG, holds promise in improving the effectiveness of outlier
payments and overall payment equity. Last year, ProPAC recommended this
change. The Commission is concerned, however, about the potential
redistribution of payments that would result. ProPAC intends to
continue its work on this issue, specifically in analyzing the impact
on payments across hospitals and types of cases.
Transfer Cases and High-Transfer Hospitals--ProPAC has also
examined the impact of the outlier payment changes enacted in OBRA 1993
and the additional changes proposed by the Commission. The results
indicate that while the OBRA 1993 changes generally target a higher
proportion of outlier payments to the most expensive cases, they
actually reduce estimated payments to transfer cases and the hospitals
that most frequently receive them.
This reduction is due largely to the application of the IME and DSH
payment adjustments in estimating outlier costs and calculating outlier
payments. As discussed earlier, the application of these adjustments
results in substantial underpayment for outlier cases at teaching and
disproportionate share hospitals. Because many of the hospitals that
receive the most transfer cases are teaching hospitals, and because a
high proportion of transfer cases are outliers, the effect on these
cases and hospitals is particularly adverse.
The implementation of the additional changes recommended by the
Commission would substantially increase payments for transfer cases and
hospitals that receive a large number of these cases, by targeting more
outlier payments to the cases associated with the largest losses.
ProPAC's analysis of these issues will be described in more detail in
its technical report, Outlier Payment Policy (June 1994).
Recommendation 19: Level of the Indirect Medical Education Adjustment
to PPS Operating Payments
The Commission recommends that the indirect medical education
adjustment to PPS operating payments be reduced from its current level
of 7.7 percent to 7.0 percent for fiscal year 1995. This reduction
should be implemented with the anticipated decrease in indirect medical
education payments returned to all hospitals through a proportionate
increase in the standardized payment amounts. The Commission also
recommends continuation of the indirect medical education adjustment to
PPS payments until an alternative system of compensating appropriately
for the higher costs of patient care in teaching institutions is fully
operational.
The IME adjustment is intended to recognize the higher costs
teaching hospitals incur in treating Medicare patients. These higher
costs have been attributed to caring for patients with more severe or
complex illnesses, providing a broader scope of services and more
services per patient, and using a costlier mix of staff.
ProPAC annually estimates the relationship between teaching
intensity and standardized Medicare operating costs per discharge. The
standardization controls for differences in costs that are accounted
for by other PPS payment factors. These include geographic differences
in the PPS base payment amounts, the local area wage index, the
hospital's Medicare case-mix index, and outlier payments for extremely
long or costly cases. The most recent analysis was based on cost data
from the eighth year of PPS and payment rules for fiscal year 1994. The
results indicate that, on average, a 10 percent difference in teaching
intensity is associated with a 5.2 percent difference in Medicare
operating costs per discharge.
The estimated relationship between costs and teaching intensity is
affected by other aspects of the payment system. For example, the
differential in rural and other urban standardized payment amounts will
be eliminated in fiscal year 1995. If the elimination of this
differential were effective in fiscal year 1994, the IME estimate would
rise to 5.3 percent. Implementation of improvements in the PPS hospital
wage index and outlier payment policy would increase Medicare payments
to teaching hospitals. (See Recommendations 16 and 18.) These changes
also would require that the IME adjustment be reduced to reflect more
accurately the relationship between costs and teaching intensity.
The Commission recognizes that since PPS began, the Medicare
program has more than adequately compensated teaching hospitals for the
costs of treating medicare patients. The current 7.7 percent IME
operating payment adjustment is substantially higher than the empirical
estimate of 5.2 percent indicated by the most recent analysis.
Moreover, PPS operating margins consistently have been higher for
teaching hospitals than for nonteaching hospitals. PPS margins have
been especially high for major teaching hospitals (that is, those with
the highest levels of teaching intensity).
However, the Commission is concerned that the continued operation
of these hospitals and the fulfillment of their unique role in the
provision of health care might be impaired by a substantial immediate
reduction of Federal support. ProPAC believes the Medicare program's
responsibility to its enrollees is broader than merely paying for
services for beneficiaries. This responsibility includes maintaining
access to the quality of care and types of services available at
teaching hospitals, which might be affected adversely by a sharp
decline in IME payments.
Given these considerations, the Commission believes a gradual
reduction of the IME adjustment is a prudent course of action. ProPAC's
recommendation would reduce the adjustment by approximately one-third
of the difference between the current adjustment and the Commission's
estimate of 5.2 percent. The Commission will continue to examine the
financial status of teaching hospitals to avoid any deleterious effects
on access to quality care for Medicare enrollees. This approach
recognizes as an ultimate objective the use of the IME adjustment to
compensate appropriately for differences in Medicare costs that are
attributable to differences in teaching intensity.
The Health Security Act would eliminate the IME adjustment to PPS
payments beginning in fiscal year 1996. Instead, Medicare and all other
payers would contribute to an Academic Health Center Account, from
which the Secretary would distribute payments to teaching institutions.
Medicare's proposed $2.1 billion contribution to this account in 1996
is based, in part, on estimated IME expenditures using a 3.0 percent
IME payment adjustment.
The 3.0 percent factor is consistent with previous estimates--using
HCFA's methodology--of the relationship between teaching intensity and
Medicare inpatient operating cost per case. This consistency, however,
is an artifact of HCFA's analytic approach, which offsets the
disproportionate share hospital payment adjustment against each
hospital's Medicare costs per discharge. ProPAC does not offset costs
of DSH payments, because the Commission has determined that DSH
payments generally do not reflect differences in costs.
The Health Security Act would reduce the DSH adjustment, because it
would also reduce the number of uninsured and underinsured patients. A
smaller DSH adjustment would raise HCFA's estimate of the relationship
between teaching intensity and Medicare inpatient costs per case almost
to the level of ProPAC's estimates. This change would not affect
ProPAC's estimates. Thus, a 3.0 percent adjustment is likely to be
substantially lower than either HCFA's or ProPAC's estimate of the
empirical relationship between teaching intensity and Medicare
inpatient costs per case.
ProPAC is concerned that the level of funding of the Academic
Health Care Account and the formula for distributing these funds are
not based on objective analysis of the costs incurred by teaching
hospitals in carrying out their functions. (See Recommendation 3.)
Therefore, the Commission believes Medicare can best carry out its
responsibilities to maintain access to quality care for Medicare
beneficiaries and other patients by retaining the IME adjustment to PPS
payments until an alternative system of compensating appropriately for
the higher costs of patient care in teaching institutions is fully
operational.
Changes in the IME adjustment should be considered in the context
of its interactions with other components of the payment system and its
effects on PPS payments, as well as hospitals' overall financial
status. The impact on the quality of care and access to that care
should also be considered. In general, any change in Medicare payment
policy must be considered in terms of its effect on the health care
system as a whole.
In the coming year, ProPAC will continue to examine the level and
structure of the IME adjustment, as well as other factors that affect
hospitals' payments, costs, and financial condition. The distribution
of PPS and total margins and the other effects of possible changes in
the IME adjustment will be studied. The Commission will also examine
the potential effects on teaching hospitals of proposals in the Health
Security Act. (See Recommendation 3.) A description of ProPAC's most
recent analyses is available in the Commission's technical report,
Indirect Medical Education and Disproportionate Share Payment
Adjustments to Hospitals (March 1994).
Recommendation 20: Prospective Payment Method for Outpatient Services
The Commission believes a prospective payment system for hospital
outpatient services should be implemented. Outpatient payment reform
should result in consistent policies across all sites and providers.
Payment should be based on a prospective price per unit of service
until other methods can be developed that would appropriately control
the volume of services. The payment rate should be adjusted to reflect
justifiable cost differences across settings.
The Commission supports congressional intent to establish
prospective payment methods for hospital outpatient services. These
methods will create incentives for controlling costs by offering
providers the opportunity for a profit as well as the risk of financial
loss. Such incentives are enhanced further as more services are bundled
within the rate. The current payment method for hospital-provided
outpatient services contributes to both cost and charge inflation.
Because payments incorporate at least a portion of facility-specific
costs or charges, hospitals that reduce their costs receive less in
payments. Thus, there is little financial incentive to deliver care
more efficiently.
The Commission believes the method and unit of payment should be
comparable across settings. This consistency is necessary because the
ambulatory services offered by hospitals are also furnished in other
sites, such as free-standing surgery centers and physician offices.
Moreover, most ambulatory care is provided outside of hospital
settings. Additionally, the various payment methods and units that
Medicare employs for ambulatory services encourage choosing the site of
service on the basis of financial rather than clinical considerations.
Finally, the lack of payment comparability across sites inhibits
efforts to control overall health care expenditures.
Although the same method and unit should be used to determine
payment to all providers of ambulatory services, the payment rate may
vary for different providers and across treatment sites. There are many
reasons why costs may differ among similar providers (such as teaching
and non-teaching hospitals) and across treatment sites (such as
hospitals and physician offices). The Commission believes it is
desirable to recognize in the payment system those factors that
represent a benefit to society and are beyond the control of the
provider, such as the costs associated with medical education. Further,
these costs should be shared more broadly across the health care system
to avoid financial discrimination against teaching facilities.
Medicare should establish a prospective payment rate per unit of
service based on methods currently used in other settings. Such a
system would go a long way toward improving the financial incentives to
providers by rewarding efficiencies in service provision and penalizing
inefficiencies. ProPAC recognizes that such a system should be only an
interim measure, however, because it does not control the growth in
volume of services. The Commission therefore recommends that an
outpatient prospective payment system be implemented as soon as
possible to incorporate volume control measures. The payment should
move from a fee for an individual service to a larger payment unit
containing more services. Such a bundled approach, along with the
integration of hospital-provided outpatient services into the physician
volume performance standards, is necessary to control outpatient
expenditures.
ProPAC will submit additional recommendations to the Congress as
part of its analysis of the pending report from the Secretary on
outpatient payment. Problems with the current payment method, however,
should not be ignored until a new system for outpatient services is
fully implemented. Features of the current system that encourage cost
and charge inflation and increase beneficiary liability should be
changed immediately.
Recommendation 21: Revision of the Payment Formula for Outpatient
Services
Until prospective payment systems can be implemented for hospital
outpatient services, the blend formula used to calculate hospital
payments for ambulatory surgery center-approved procedures, radiology
services, and diagnostic services should be revised. The formula should
subtract beneficiary copayment after the total payment has been
calculated. The resulting reduction in Medicare program payments to
hospitals should be used to partially offset increases in program
expenditures due to reducing beneficiary liability.
The total Medicare payment for certain ambulatory surgery,
radiology, and other diagnostic services is based on the lesser of
costs, charges, or a blended amount. The beneficiary's copayment is 20
percent of charges. Medicare's share is intended to be the total
payment amount minus the beneficiary copayment. For facilities paid the
blended amount, however, program payments are not reduced by the full
amount of the copayment. Thus, total payments to hospitals for
outpatient services are higher than the Congress intended.
The formula that determines the blended amount combines two parts:
the first is the hospital-specific portion of payment based on the
lesser of costs or charges minus 20 percent of charges; the second is
the prospective portion based on 80 percent of the applicable
prospective rate. For ambulatory surgery, the prospective rate is the
payment for the relevant procedure category used in paying free-
standing ambulatory surgery centers (ASCs). For radiology and
diagnostic services, it is a portion of the payment in the physician
fee schedule that is intended to represent the technical expense of
providing that service.
The second part of the formula, calculated at 80 percent of the
prospective rate, inappropriately assumes that 20 percent of the
prospective rate equals 20 percent of charges (the copayment). In fact,
charges are usually much higher than the prospective rate. Because the
full contribution of beneficiary cost sharing is not captured.
Medicare's share of hospital payments is overstated. To correct the
formula, the copayment should be subtracted after the calculation of
the total amount. For ambulatory surgery, the current and the corrected
payment calculations are illustrated in Figure 2-1.
The Commission believes the current blend formula results in
payments to hospitals that are higher than the Congress intended.
Additionally, this quirk in the formula provides a strong incentive for
hospitals to increase charges, which increases beneficiary liability
and total payments to the hospital.
Correcting the formula would substantially reduce hospital
payments. The Commission recommends this reduction in program
expenditures should be used to partially offset the increase in program
expenditures for outpatient services that results from setting the
beneficiary copayment at 20 percent of payments rather than at 20
percent of charges. (See Recommendation 22.).

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Recommendation 22: Beneficiary Liability for Hospital Outpatient
Services
Beneficiary coinsurance for hospital outpatient services should be
limited to 20 percent of the Medicare-allowed payment, as it is in
other settings. For services not paid on a prospective basis,
beneficiary copayment would need to be estimated because it is not
known at the time of service delivery.
Medicare payment to hospitals for most outpatient services is based
at least partly on costs or charges. Payment for these hospital
outpatient services is not prospective. Therefore, it is known until
the annual Medicare Cost Report is settled. Consequently, beneficiary
liability is set at 20 percent of charges, rather than at 20 percent of
payments as it is for the same services in other settings. Because
hospital charges generally are higher than the costs of Medicare
payments for outpatient services, beneficiaries are responsible for
substantially more than 20 percent of costs or payments. In addition,
for most providers charges have grown more rapidly than payments,
resulting in disproportionate increases in beneficiary cost sharing.
HCFA estimated that, in fiscal year 1993, beneficiaries were
responsible for 33 percent of the facility portion of hospital
outpatient spending. This is considerably more than if the services had
been provided in other ambulatory settings. This difference in cost
sharing unfairly penalizes beneficiaries who receive care in hospital
outpatient departments. Further, it provides incentives for
beneficiaries to choose a site of care on the basis of financial
considerations rather than the appropriateness of the setting.
ProPAC recommends reducing beneficiary liability for hospital
outpatient services to 20 percent of payments. The Commission
recognizes that until prospective payment is implemented for outpatient
services, payment for a service will not be known at the time of
delivery. Beneficiary liability based on payments, therefore, must be
estimated. This could be done in several ways. Copayments could equal a
lower percentage of charges, for example. Alternatively, the interim
payment to charge ratio, which HCFA furnishes to all hospitals, could
be used to determine the coinsurance amount for each service.
The Commission believes it would be ideal to address beneficiary
coinsurance in conjunction with the implementation of a prospective
payment system for hospital outpatient services. (See Recommendation
20.) It is not clear, however, when such a system will be in place.
Reducing the coinsurance requirement thus should not be delayed until
implementation of prospective payment. This change is necessary to
reduce the significant burden on Medicare beneficiaries who receive
outpatient services in a hospital.
ProPAC understands that reducing beneficiary coinsurance will
substantially increase Medicare outlays and reduce hospital payments.
The Commission therefore recommends phasing in the change in
beneficiary liability over a five-year period.
Recommendation 23: Limit the Length of Outpatient Observation Stays
The Commission recommends limiting the length of hospital
outpatient observation stays. Further, these changes should be
coordinated with Peer Review Organizations so that appropriate short
stay admissions are not denied. ProPAC supports HCFA's effort in this
regard.
Observation services are furnished by a hospital on an outpatient
basis and include the use of a bed and periodic monitoring by a
hospital's nursing staff. To be reimbursed by Medicare, these services
must be reasonable and necessary to evaluate a patient's condition or
determine the need for an admission. Medicare requires that the
services are ordered by a physician. Observation stays are intended to
last fewer than 24 hours, but there are no limits on how long an
individual might stay under observation.
When Medicare's prospective payment system was implemented, Peer
Review Organizations examined short inpatient admissions to prevent
hospitals from receiving the full DRG payment for unnecessary stays.
Outpatient observation stays, paid on a cost basis, allowed Medicare
reimbursement for services to beneficiaries who did not need to be
admitted as inpatients.
Before 1989, Medicare's policy specified that if an observation
stay lasted more than 23 hours, the stay would be deemed an inpatient
admission. Thus, the hospital would receive the relevant DRG payment,
and the stay would be subject to PRO review. This policy was never
published in the Federal Register, however, so implementation and
administration were inconsistent. After 1989, the limits for
observation stays were removed.
ProPAC analysis indicates that even though observation stays are a
small proportion of outpatient services, these stays--particularly long
ones--are increasing. Because Medicare pays for these services on a
cost basis, the growing number of longer observation stays has
implications for higher Medicare outlays and beneficiary liability.
In 1991, 2.3 percent of all outpatient bills had observation stay
charges, an increase of 77 percent over 1989. The proportion of these
bills with stays lasting more than two days increased from 7.1 percent
in 1989 to 11.1 percent in 1991. The average change for all observation
stays was $3,212 in 1991. The implications for beneficiary liability
are substantial because copayments are currently set at 20 percent of
charges. Compared with the $628 deductible for a hospital admission in
1991, the beneficiary copayment for an observation stay lasting two or
more days averaged $765.
HCFA is planning to limit the length of multiple-day observation
stays. The change would require hospitals to admit a patient who has
been under observation in an outpatient department for two consecutive
midnights. The hospital would receive payment under the appropriate
DRG, and the stay would be subject to PRO review. These changes might
increase the number of short inpatient stays: HCFA plans to coordinate
with the PROs to ensure that appropriate short admissions are not
disallowed. The Commission supports all these efforts.

[FR Doc. 94-12516 Filed 5-23-94; 8:45 am]
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