Federal Register, Volume 60 Issue 30 (Tuesday, February 14, 1995)

[Federal Register Volume 60, Number 30 (Tuesday, February 14, 1995)]
[Notices]
[Pages 8389-8406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3526]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[BPD-793-NC]
RIN 0938-AG54

Medicare Program; Schedule of Limits on Home Health Agency Costs
Per Visit

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

ACTION: Notice with comment period.

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SUMMARY: This notice with comment period sets forth a revised schedule
of limits on home health agency costs that may be paid under the
Medicare program for cost reporting periods beginning on or after July
1, 1993. These limits replace the per-visit limits that were set forth
in our July 8, 1993 notice with comment period (58 FR 36748). This
notice also provides, in accordance with the provisions of the Omnibus
Budget Reconciliation Act of 1993 (OBRA '93), that there will be no
changes in the home health agency (HHA) cost limits for cost reporting
periods beginning on or after July 1, 1994, and before July 1, 1996. In
addition, this notice responds to public comments on the July 8, 1993
notice with comment period, which originally set forth the HHA cost
limits for cost reporting periods beginning on or after July 1, 1993,
and on the January 6, 1994 notice with comment period (59 FR 760),
which announced the elimination of the hospital based add-on effective
for cost reporting periods beginning on or after October 1, 1993.

DATES: Effective date: The revised schedule of limits on HHA costs set
forth in this notice is effective for cost reporting periods beginning
on or after July 1, 1993.
The OBRA '93 provision providing that there be no changes in the
HHA cost limits for cost reporting periods beginning on or after July
1, 1994, and before July 1, 1996, as set forth in this notice, is
effective for cost reporting periods beginning on or after July 1,
1994.
Comment date: Written comments will be considered if we receive
them at the appropriate address, as provided below, no later than 5:00
p.m. on April 17, 1995.

ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPD-793-NC, P.O. Box 7571,
Baltimore Maryland 21207-0517.
If you prefer, you may deliver your comments (1 original and 3
copies) to one of the following addresses: Room 309-G, Hubert H.
Humphrey Building, 200 Independence Ave., SW., Washington DC 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore
Maryland 21207.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPD-793-NC. Comments received timely will be available for
public inspection as they are received, 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).
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) 512-
2250. The cost for each copy is $8.00. 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
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Register.

FOR FURTHER INFORMATION CONTACT: Michael Bussacca, (410) 966-4602.

SUPPLEMENTARY INFORMATION:

I. Background

A. History

Section 1861(v)(1)(A) of the Social Security Act (the Act)
authorizes the Secretary to set limits on allowable costs incurred by a
provider of services for which payment may be made under the Medicare
program. These limits are based on estimates of the costs necessary for
the efficient delivery of needed health services. Under this
[[Page 8390]] authority, we have maintained limits on home health
agency (HHA) per-visit costs since 1979. The limits may be applied to
direct and indirect overall costs or to the costs incurred for specific
items or services furnished by the provider. Implementing regulations
appear at 42 CFR 413.30. Additional statutory provisions governing the
limits applicable to HHAs are contained at section 1861(v)(1)(L) of the
Act. Section 1861(v)(1)(L)(i) of the Act specifies that the cost limits
are not to exceed 112 percent of the mean of the labor-related and
nonlabor per-visit costs for freestanding HHAs. For cost reporting
periods beginning before October 1, 1993, section 1861(v)(1)(L)(ii) of
the Act requires that the Secretary make an adjustment to the cost
limits for the administrative and general (A&G) costs of hospital-based
HHAs. Section 1861(v)(1)(L)(iii) of the Act requires that the Secretary
establish HHA cost limits on an annual basis for cost reporting periods
beginning on or after July 1 of each year.
Accordingly, we published a notice with comment period that
appeared in the July 8, 1993, issue of the Federal Register (58 FR
36748), which set forth a schedule of limits on HHA costs for cost
reporting periods beginning on or after July 1, 1993. The limits were
computed using the actual cost per-visit data from cost reporting
periods ending on or after June 30, 1989, and before May 31, 1991, and
were adjusted by the latest estimates in the ``market basket'' index to
reflect changes in the price of goods and services furnished by HHAs.

B. Omnibus Budget Reconciliation Act of 1993

On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993
(OBRA '93) (Public Law 103-66) was enacted. Section 13564(a) of OBRA
'93 amended section 1861(v)(1)(L)(iii) of the Act to provide that there
be no changes in the HHA per-visit cost limits (except as may be
necessary to take into account the elimination of the A&G add-on for
hospital-based HHAs) for cost reporting periods beginning on or after
July 1, 1994, and before July 1, 1996. In addition, section 13564(b) of
OBRA '93 amended section 1861(v)(1)(L)(ii) of the Act to require that,
effective for cost reporting periods beginning on or after October 1,
1993, we no longer include a payment adjustment for A&G costs of
hospital-based HHAs in computing the HHA limits. The A&G per-visit add-
on for hospital-based HHAs had been applied since 1980. Under this
provision, hospital-based HHAs and freestanding HHAs will be treated
identically for payment purposes.
On January 6, 1994, we published a notice with comment period in
the Federal Register to announce the elimination of the A&G add-on for
hospital-based HHAs (59 FR 760). In that notice, we stated that in
computing a hospital-based HHA's cost limits for cost reporting periods
beginning on or after October 1, 1993, the A&G add-on amounts that were
to apply, as set forth in Table II of the July 8, 1993 notice (58 FR
36753), will not be used. We also stated that we would publish a
separate Federal Register notice to explain the effects of the
requirement under section 13564(a) of OBRA '93 that there be no changes
in the per-visit cost limits for home health services for cost
reporting periods beginning on or after July 1, 1994 and before July 1,
1996.

II. Discussion of Public Comments

A. Response to Public Comments Received On the July 8, 1993 Notice With
Comment Period

We received 28 items of timely correspondence on our HHA cost
limits notice issued in the Federal Register on July 8, 1993 (58 FR
36748). A discussion of the comments we received on that notice and our
responses to those comments is set forth below.
1. Cost Limits
Comment: Many commenters stated that the per-discipline cost limits
for skilled nursing and home health aides are inadequate. They believe
that the cost limits are arbitrary and not at the level required by
law. In addition, two commenters suggested that the limits effective
July 1, 1993 should be phased in.
Response: Section 1861(v)(1)(L) of the Act governs the methodology
for computing the HHA limits. As noted in section I.A of this notice,
section 1861(v)(1)(L)(i) of the Act specifies that the HHA per-visit
cost limits are not to exceed 112 percent of the mean of the labor-
related and nonlabor per-visit costs for freestanding HHAs. Section
1861(v)(1)(L)(iii) of the Act requires that we establish cost limits on
an annual basis for cost reporting periods beginning on or after July 1
of each year (except for cost reporting periods beginning on or after
July 1, 1994, and before July 1, 1996) and that we use the current
hospital wage index to calculate the limits.
Thus, in calculating the limits, we use actual cost-per-visit data
from the latest available settled Medicare cost reports. From those
data, we compute an average per-visit cost for each Medicare covered
home health service. The labor portion of the average per-visit cost is
adjusted, using the current hospital wage index, to account for
variations in area wage levels. We then apply a statistically valid
methodology for eliminating outlier costs to the average per-visit
costs for each service. The resulting average per-visit costs are
increased by 112 percent, the maximum the statute allows. We believe
the methodology used to calculate the cost limits correctly implements
the statute and results in a statistically valid national average of
the costs estimated to be necessary in the efficient delivery of needed
home health services under the Medicare program.
In summary, the implementation of the schedule of limits set forth
in our July 8, 1993 notice and the methodology for developing the
limits are in full compliance with statutory directives. In developing
these limits, we have made no changes, beyond those directly required
by OBRA '93, in the methodology used in setting the limits effective
July 1, 1991 and July 1, 1992. Finally, the statute does not provide
for a phase-in of the limits.
2. Database
Comment: Several commenters questioned the database used to develop
the cost limits. Some commenters raised concerns about the possible
omission of providers from California. Others suggested that the
provider database used to develop the limits was not representative
because HCFA relies only on settled cost reports to compute the HHA
cost limits.
Response: The data used in the calculations of the cost limits
effective July 1, 1993, were actual cost per-visit data extracted from
settled Medicare cost reports, for cost reporting periods ending on or
after June 30, 1989, and before May 31, 1991. This resulted in a
database of 2602 freestanding agencies located throughout the country.
Due to concerns with under-representation of HHAs, we reviewed the
Provider of Services (POS) file to determine the number of HHAs that
were Medicare-certified as of November, 1992 (the cut-off date of the
HHA database used to develop the HHA cost limits effective for cost
reporting periods beginning on or after July 1, 1993). Our review
showed that the POS file contained all HHA providers of service,
including terminated providers, existing providers, and new providers.
However, the POS file does not indicate whether a HHA needs to file a
cost report, or if a cost report is due from an HHA.
Accordingly, we extended our review. We instructed the nine
regional home health intermediaries (RHHIs) servicing the freestanding
HHAs to review their [[Page 8391]] files for the time period of our
data collection (before November 1992) to determine if any providers
had been omitted erroneously when the intermediaries filed their cost
report data for the HHA database. The RHHIs identified 309 freestanding
``missing'' providers. Our review of the original database showed that
it did not include data from Blue Cross and Blue Shield of California.
All ``missing'' providers' cost data were entered into the database and
were subject to an extensive edit process to validate the data. In
addition, we reexamined the entire database to identify duplicates and
as-submitted cost reports. This examination resulted in elimination of
120 duplicate reports from freestanding HHAs and the elimination of 100
hospital-based as-submitted cost reports. The revised database consists
of 2911 freestanding providers.
The following table shows the effects of the revised database on
the per-discipline cost limits for Metropolitan Statistical Area (MSA)
and non-MSA HHAs published in our July 8, 1993 notice. See section IV
of this notice for a revised table of limits effective for cost
reporting periods beginning on or after July 1, 1993, and before July
1, 1994.

Effect on Per-Visit Cost Limits for MSA and Non-MSA HHAs
------------------------------------------------------------------------
Effect Effect
on on
Type of visit limits limits
for MSA for non-
HHAs MSA HHAs
------------------------------------------------------------------------
Skilled nursing care................................ $+0.72 $+0.75
Physical therapy.................................... -1.59 -0.02
Speech pathology.................................... -1.50 +0.02
Occupational therapy................................ -1.20 +0.54
Medical social services............................. +0.06 -1.00
Home health aide.................................... +0.54 +0.26
------------------------------------------------------------------------

The following table shows the effects of the revised database on
the per-visit hospital-based add-on for MSA and non-MSA HHAs published
in our July 8, 1993 notice. See section IV of this notice for a revised
table of add-on amounts for hospital-based HHAs with cost reporting
periods beginning on or after July 1, 1993, and before October 1, 1993.

Effect on Per-Visit Add-On for MSA and Non-MSA HHAs
------------------------------------------------------------------------
Effect on
Effect on hospital-
hospital- based add-
Type of visit based add- on for
on for non-MSA
MSA HHAs HHAs
------------------------------------------------------------------------
Skilled nursing care.............................. $+0.03 $+0.57
Physical therapy.................................. -0.22 +0.22
Speech pathology.................................. -0.07 +0.51
Occupational therapy.............................. -0.20 +1.03
Medical social services........................... -1.14 +0.16
Home health aide.................................. +0.03 +0.25
------------------------------------------------------------------------

We recognize that the conversion to a limited number of fiscal
intermediaries and the lack of a internal HCFA system to track settled
cost reports for HHAs resulted in missing providers. In the future,
HCFA will request that each of the nine regional intermediaries submit
a list of all HHAs that it is servicing at the time of data collection.
Upon collecting the data, HCFA will cross-check the HHAs included in
the database with the lists submitted by the intermediaries.
Concerning the comment on the use of settled cost reports, all of
the RHHIs met the Contractor Performance Evaluation (CPEP) standard for
settling cost reports timely for FY 1991/1992. For example, in FY 1992,
90 percent of freestanding HHA cost reports were settled timely by the
RHHIs and would be available to be included in HCFA's database. Thus,
the use of settled cost reports does not affect the representative
nature of the database.
Comment: Some commenters believe that the conversion to a limited
number of intermediaries that specialize in handling home health claims
and the exclusive use of settled cost reports in the database
invalidate the rationale for excluding certain outliers from the
database as a first step, before proceeding with the calculation of the
cost limits. One commenter raised a series of specific questions about
the outlier exclusion process, including what constitutes an outlier,
how many agencies are classified as outliers, and whether all of an
HHA's costs are excluded if the agency has a single outlier discipline?
Response: The use of settled cost report data does not eliminate
the need to exclude outliers from the database. Outliers are aberrant
costs; these costs are not representative of industry norms. As in
previous schedules of HHA cost limits, the elimination of cost per-
visit outliers continues to be necessary in developing the limits
because the per-discipline cost data in our database are extracted from
actual cost reports. Although these cost reports have been settled, the
settlement process is designed to ensure that cost report data reflect
actual costs associated with covered visits; it does not assess whether
the actual costs are reasonable.
The elimination of outliers is on a per-discipline basis. That is,
we eliminate costs associated with a specific discipline that are
statistical outliers. Based on our longstanding policy, we consider
outliers to be those costs that are two standard deviations or more
from the mean. Therefore, the high outliers, as well as the low
outliers, are eliminated. All other per-discipline costs would be
included in the computation of the per-discipline limits. In the table
below we have listed the range of high and low per-visit costs for each
discipline for both the labor and the nonlabor portions for both MSA
limits and non-MSA limits. Only per-visit costs outside these ranges
are considered outliers. We believe that using costs beyond these
ranges, that is, outliers, to develop the per-visit limits subverts the
statistical validity of the national average of estimated costs.

Home Health Agency Cost Limits Outliers Labor and Nonlabor Portions Highs and Lows
----------------------------------------------------------------------------------------------------------------
Urban Labor low Labor high Nonlabor low Nonlabor high
----------------------------------------------------------------------------------------------------------------
Skilled nursing care............................ $33.85 $131.24 $6.08 $36.06
Physical therapy................................ 33.02 132.78 5.37 31.69
Speech pathology................................ 31.59 141.76 6.05 32.45
Occupational therapy............................ 29.85 139.01 6.19 35.88
Medical social services......................... 31.43 252.36 6.09 58.58
Home health aide................................ 16.16 75.30 2.87 19.21

Rural

Skilled nursing care............................ 39.98 141.46 4.74 29.15
[[Page 8392]]

Physical therapy................................ 41.77 147.54 6.69 28.34
Speech pathology................................ 40.28 160.19 7.36 37.65
Occupational therapy............................ 35.69 161.74 6.22 30.35
Medical social services......................... 36.42 350.59 6.85 62.15
Home health aide................................ 16.18 72.55 2.52 17.07
----------------------------------------------------------------------------------------------------------------

Comment: Two commenters recommended that we use data from hospital-
based agencies in the calculation of the limits. The commenters believe
that the calculation of the limits using only freestanding facilities
does not reflect the higher costs associated with hospital-based HHAs.
Response: Section 1861(v)(1)(L)(i) of the Act specifies that the
Secretary is to establish a single schedule of HHA cost limits based on
the cost experience of freestanding agencies. We have no discretion to
include hospital-based providers in the calculation of the HHA limits.
Comment: A commenter suggested that the use of settled cost reports
ignores the higher claims presented before the Provider Reimbursement
Review Board (PRRB) and that these claims should be included in the
database for calculation of the HHA cost limits.
Response: The use of settled cost reports in developing the HHA
cost limits was established for cost reporting periods beginning on or
after July 1, 1992 (see 57 FR 29411). Before July 1, 1992, HHA
databases included data from both settled and as-submitted cost
reports. We were able to begin using settled cost report data as a
result of revised CPEP standards that required Medicare fiscal
intermediaries to settle the HHA cost reports sooner than was required
under former standards. Consequently, as explained in our July 1, 1992
notice with comment period, settled data are available much sooner than
in previous cost reporting periods, and we believe the data accurately
reflect current conditions in the health care industry. The use of
settled cost reports allows us to eliminate misstated data including
nonallowable costs and noncovered visits that inevitably result from
using as-submitted cost reports. (See 57 FR 29410.)
Providers that file an appeal before the PRRB must have received a
Notice of Program Reimbursement for the fiscal year in question, before
filing the appeal. During the cost reporting periods ending on or after
June 30, 1989, and before May 31, 1991, on an annual basis, fewer than
2 percent of certified HHAs submitted appeals to the PRRB. If an appeal
was decided before we develop the annual HHA per-visit cost limits, the
final data would be entered into the database. In those cases in which
the PRRB appeal and administrative review processes are not completed
until after we have developed the annual HHA per-visit cost limits, the
settled data from the cost reports in question would be entered.
Including the adjusted data that may result from PRRB appeals into the
database would have no significant effect on the calculation of the
cost limits. Moreover, since the cost limits are set prospectively, it
would be neither necessary nor administratively feasible to include
adjusted data resulting from the completed appeals process into the HHA
database used to develop the annual limits. We note that the HHA per-
visit limits constitute an estimated national average of costs, and
individual providers are free to pursue exceptions to these averages
where justified.
Comment: Several commenters stated that the limits do not reflect
the costs associated with the implementation of the Omnibus Budget
Reconciliation Act of 1987 (OBRA '87) (Public Law 100-203) quality
assurance provisions, specifically, the requirements for home health
aide training and competency evaluation programs. They asserted that no
additional amount has been added to the HHA limits to account for these
costs.
Response: Section 1891(a)(3) of the Act requires HHAs to comply
with the requirements relating to home health aide training and
competency programs, established by OBRA '87. The cost-per-visit data
used in the calculations of the cost limits effective on July 1, 1993
were extracted from settled Medicare cost reports for periods ending on
or after June 30, 1989, and before May 31, 1991. We published
regulations on August 14, 1989 at 42 CFR Sec. 484.36 to require that
HHAs establish a competency evaluation program for home health aides by
February 14, 1990 (see 54 FR 33357-33360 and 33372). Therefore, the
costs associated with home health aide training and competency
evaluation programs are included in this database. However, if a
provider believes that it has incurred additional costs not included in
the limits relating to home health aide training and competency
evaluation programs, the provider may apply for an exception to the
cost limits under the exceptions process outlined in Sec. 413.30. This
situation could be recognized as an ``extraordinary circumstance''
exception under Sec. 413.30(f)(2).
Comment: A commenter indicated that the database from which the HHA
cost limits were developed was not available for public use when the
regulation was issued on July 8, 1993.
Response: It is our standard practice to make available to the
public the database used to construct the cost limits. HCFA's Bureau of
Data Management and Strategy annually publishes a ``Public Use Files
Catalog'' that identifies available Medicare/Medicaid data files and
gives instructions on how to obtain them. The database used to
construct the cost limits outlined in the July 8, 1993 notice (that is,
Medicare HHA Cycle 11 Data Set, containing data for cost reporting
periods ending on June 30, 1989, and before May 31, 1991) was available
from the Bureau of Data Management and Strategy, HCFA, to the public,
on the date the regulation was published. The HHA database is available
on tape or diskette for $680. For further information on obtaining data
used in calculating the HHA cost limits, see section VI.C of this
notice.
3. Market Basket
Comment: Several commenters believe that the market basket factors
that have been used to update the 1990 cost data seemed to understate
home care market basket cost increases of between 5 to 7 percent for
the 1992-1993 period and need to be updated for current weights and
revised wage-price proxies. Specifically, the commenters believe that
the market basket factors fail to account properly for increases in the
Federal minimum wage, base rates for workers' compensation premiums,
reimbursement for mileage, Federal gasoline tax, computers to submit
claims via electronic media communications, additional A&G costs,
[[Page 8393]] and FICA taxes. They indicated that there is evidence
that the market basket factors now used to update the cost limits are
too low and that appropriate alternatives exist and are being used to
make budget projections for the Administration and Congress.
Response: For the last several years, the HHA input price index
(market basket) has increased at the fastest rate of all the market
basket indices for the Medicare program. The increase in the market
basket reflects the weights and wage-price proxies in the market basket
to capture the special market conditions for HHA services (such as the
shortage of several categories of licensed health professionals
providing HHA services). The compensation and nonlabor proxies used in
the market basket include the effects of taxes on the rates of
increase. Wages and salaries include employer contributions (payroll
taxes) for social insurance (old age, survivors, disability and
hospital insurance). The wage and salary category also includes State
unemployment insurance, supplemental unemployment insurance and
workmen's compensation. The price proxies for transportation and
utilities include the relevant sales taxes. Further, the price proxy
for rental and leasing costs includes the impact of all costs including
property taxes.
The market basket factors used to update the cost limits are
consistent with, but not identical to, the cost-per-visit budget
projections for the Administration and Congress. The HHA market basket
is designed to measure price inflation for inputs used to produce HHA
services. It, therefore, does not take into account changes in the
quantity, mix or intensity of services per visit. In contrast, the
Administration's budget projections take into account the change in mix
of types of visits and the effects of productivity changes on per-visit
costs. Productivity changes are a major determinant of cost-per-visit
increases and are specifically excluded from the HHA market basket.
We believe that it would be appropriate to do a special study of
the weighting and wage-price proxies for the HHA market basket. We
intend to begin such a study in the near future, and we welcome public
comments on data sources for weights and wage-price proxies.
4. Wage Index
Comment: One commenter stated that the wage index factors used in
the calculation of the cost limits effective July 1, 1993 are lower
than the July 1, 1992 cost limits in almost all cases. In addition, the
commenter stated that the Omnibus Budget Reconciliation Act of 1990
(OBRA '90) mandates use of the most recent hospital wage index for
calculation of the labor portion of the cost limits, but it also
requires that aggregate payments to HHAs be budget neutral. The
commenter asserted that the use of a lower budget neutrality factor
than in the previous schedule of limits accounted in itself for a
reduction of approximately 2.5 percent in the cost limits. In addition,
the commenter noted that the budget neutrality factor of 2.7 percent
used in calculating the limits effective July 1, 1993 is a considerable
reduction from the 5.9 percent used in calculating the limits effective
July 1, 1992 and fails to provide Congressionally mandated budget
neutrality between the 1982 and the 1988 hospital wage indexes.
Response: Section 4207(d)(1) of OBRA '90 amended section
1861(v)(1)(L)(iii) of the Act to require that in establishing the HHA
schedule of limits annually on July 1 of each year we are to use the
current hospital wage index. To lessen the effect on individual HHAs
that would have been caused by implementing this requirement
immediately, section 4207(d)(3) of OBRA '90 provided for a 2-year
transition period during which we would use a blend of 1982 and 1988
hospital wage data. As required by section 1861(v)(1)(L)(iii) of the
Act, the limits effective for cost reporting periods beginning on or
after July 1, 1993, and before July 1, 1994, use the FY 1993 hospital
wage index, that is the hospital wage index effective for hospital
discharges on or after October 1, 1992, which is based entirely on 1988
wage survey data (see 58 FR 36750). Thus, although the wage indices
used in calculating the limits effective for cost reporting periods
beginning on or after July 1, 1993 are in many cases lower than in the
past, they reflect the latest available actual wages.
Section 4207(d)(2) of OBRA '90 requires that, in updating the wage
index used for establishing the HHA limits, aggregate payments will
remain the same as they would have been if the wage index had not been
updated. To meet this requirement, as explained in detail in our July
8, 1993 notice with comment period, we determined that it was necessary
to apply a budget neutrality adjustment factor of 1.027 (that is, an
increase of 2.7 percent) to the labor-related portion of the cost
limits (58 FR 36748-36749). However, for this notice, we have
recalculated the budget neutrality adjustment factor and have
determined that a factor of 1.067 should be applied (that is, a 6.7
percent increase). The change in the budget neutrality adjustment is
attributable to the revised limits that have resulted from our
validation of the HHA database.
Comment: A commenter stated that a persistent problem in the
application of the cost limits that is made more difficult by the new
limits are that HHAs, like hospitals, are sometimes assigned to the
``wrong'' geographic area. The commenter suggested that we consider
basing hospital wage indices on the wage levels paid by neighboring
providers and that wage levels should be standardized according to some
predefined occupational mix.
Response: Under section 1886(d)(3)(E) of the Act, the Secretary
annually establishes a 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. Section 1861(v)(1)(L)(iii) of
the Act requires that, in establishing the HHA schedule of limits, the
Secretary is to use the current hospital wage index.
Almost from the beginning of the hospital prospective payment
system, we have received comments from the hospital industry objecting
to the use of labor market areas based on Metropolitan Statistical
Areas (MSAs) established by the Office of Management and Budget to
construct the wage index. The Prospective Payment Assessment Commission
(ProPAC) has also recommended changes in how the labor market areas
used to construct the hospital wage index should be defined. We
recognize that, as currently structured, there are certain
inefficiencies inherent in the MSA-based system. In light of these
concerns, we have continued to examine a variety of options for
revising wage index labor market areas.
On May 27, 1994, we published a proposed rule in the Federal
Register (59 FR 27708) that detailed changes to the hospital
prospective payment system for FY 1995. In the proposed rule, we
discussed in detail issues raised by commenters concerning a ``nearest
neighbor'' approach to the wage index, as recommended by ProPAC, and
our research and analysis on alternative methodologies for defining
labor market areas (59 FR 27724 through 27732). These alternatives are
still under review, and no final decision has been made at this time to
use a different methodology in determining future payment rates.
5. Additional Costs/Exceptions
Comment: A commenter suggested that new HHAs be exempt from the
limits for the first two full year cost [[Page 8394]] reports, citing
the exemptions presently granted for inpatient facilities (non-PPS
hospitals and skilled nursing facilities). The commenter believes that
this resulted in discrimination against the establishment of home
health care services when the emphasis of health care is away from
inpatient services and toward home care.
Response: Prior to 1987, Sec. 413.40(f)(7) (formerly
Sec. 405.460(f)(7)) granted an exception to the cost limits to minimize
financial barriers to HHAs wanting to enter Medicare markets for the
first time, especially in underserved areas. On June 4, 1987, we
published a final rule with comment period (52 FR 21216) indicating
that the exception for newly-established HHAs was eliminated. As
discussed in detail in that final rule with comment period, evidence
acquired from FY 1980 through FY 1985 indicated a changing composition
of HHAs that suggested that financing was no longer a significant
obstacle to entering the market place, and therefore the exception was
rescinded. In fact, while hospital-based and proprietary agencies had
access to financial resources and patient populations, nonprofit and
free-standing agencies did not. We continue to believe that an
exception for newly-established HHAs is not necessary to encourage the
spread of HHAs services. Moreover, we note that the number of HHAs
servicing Medicare beneficiaries has increased approximately 28 percent
since 1987, from 5,857 to 7,473 as of March, 1994.
Comment: Several commenters indicated that the recruitment and
retention of occupational therapists and physical therapists,
especially in rural areas, results in increased costs not incorporated
in the HHA cost limits.
In addition, one commenter indicated that the additional amount of
$.18 allowed for the OSHA adjustment to account for new standards for
universal precautions is not adequate to account for the actual,
necessary and reasonable cost being incurred by HHAs after May 31,
1991.
The commenters believe that the failure to reflect these costs
fully in the per-visit limits will reduce access and quality of care to
beneficiaries.
Response: If a provider can quantify the costs it incurs as a
result of recruiting and retaining occupational therapists or physical
therapists, or an OSHA add-on amount that exceeds the allowed $.18, the
provider may apply for an exception to the cost limits under the
exceptions process outlined in Sec. 413.30. These situations could be
recognized as an ``extraordinary circumstances'' as defined in
Sec. 413.30(f)(2). The HHA cost limits effective for cost reporting
periods beginning on or after July 1, 1992 and on or after July 1, 1993
allow a provider an adjustment for costs incurred for OSHA, upon
presentation of documentation to the intermediary to substantiate the
adjustment. If a provider exceeds the adjustment, an exception to the
cost limits is made only to the extent that costs are reasonable,
attributable to the circumstances specified, separately identified by
the provider, and verified by the intermediary.
Comment: Some of the commenters believe that filing for a waiver to
seek an exception from the limits is time consuming, expensive and
impractical.
Response: The purpose of establishing the per-visit limits is to
cover the costs necessary in the efficient delivery of needed health
services. However, because the limits are not intended to take into
account every cost, we have established an exceptions process for
situations in which providers incur additional costs in excess of the
cost limits. Providers may apply for an exception to the cost limits
under the exceptions process outlined in Sec. 413.30. We believe that
the exceptions process is a fair and equitable method for HHAs to
substantiate costs exceeding the limit.
6. Administrative Procedure Act
Comment: A commenter stated that the schedule of cost limits
published on July 8, 1993 (58 FR 36748) is void because it is a product
of retroactive rulemaking, which is not authorized by the Social
Security Act and is prohibited by the Administrative Procedure Act
(APA). Specifically, the rule had an effective date of July 1, 1993,
but was not published in the Federal Register until July 8, 1993.
Further, the commenter stated that the rule is void because it was
issued in violation of the notice and comment requirements of the
Medicare statute and APA. The commenter believes that we did not have
``good cause'' to waive publication of a proposed notice and to waive
the 30-day delayed effective date requirements of the APA. The
commenter stated that HCFA failed to offer any explanation as to why
the rule could not have been published earlier.
Response: Section 1861(v)(1)(L)(iii) of the Act requires that the
Secretary update the HHA cost limits on an annual basis for cost
reporting periods beginning on or after July 1 of each year. On July 1,
1993, the schedule of limits on HHA costs per visit, effective for cost
reporting periods beginning on or after July 1, 1993, was filed with
the Office of the Federal Register and was made available for public
inspection (see 58 FR 36762 for file date). Under 44 U.S.C. section
1507, the filing of the document is sufficient to give constructive
notice of the contents of the document to a person subject to or
affected by it.
As explained in our July 8, 1993 notice with comment period, we
used the same methodology to develop the schedule of limits that was
used in setting the limits published on July 1, 1992. The cost limits
were updated to reflect the cost increases occurring between the cost
reporting periods for the data contained in the database and December
31, 1993.
Because the methodology used to develop the July 1, 1993 schedule
of limits was previously published for public comment and because we
are required by section 1861(v)(1)(L)(iii) of the Act to use the
current hospital wage index, which was based on 1988 wage survey data,
we determined that it would be impractical and unnecessary to request
public comment before we implemented the cost limits effective for cost
reporting periods beginning on or after July 1, 1993. Thus, we stated
that it would be contrary to public interest, and we found good cause
to waive publication of a proposed notice.
In response to the comment on the waiver of the 30-day delayed
effective date, as we explained in our July 8, 1993 notice with comment
period, in order for HHAs to receive timely the benefits of the cost
limits that are based on the updated wage index, it was necessary that
the limits be effective for cost reporting periods beginning on or
after July 1, 1993 as required by section 1861(v)(1)(L)(iii) of the Act
(see 58 FR 36762).

B. Response to Public Comments Received on the January 6, 1994 Notice
With Comment Period

We received 10 items of timely correspondence on our notice
eliminating payment adjustments for the A&G costs of hospital-based
HHAs. The comments we received on that notice and our responses to
those comments are set forth below.
Many of the comments we received on that notice addressed issues
that we have already addressed in section II.A of this notice,
particularly, the exclusion of hospital-based agencies from the
database. Since we have already addressed these comments, we are not
repeating our responses to the comments here.
1. Elimination of the A&G Add-on
Comment: One commenter agreed that the A&G add-on should be
eliminated. However, most commenters objected to [[Page 8395]] the
elimination of the A&G add-on, emphasizing that the costs incurred by
hospital-based and freestanding agencies are different. One commenter
stated that although section 13564 of OBRA '93 eliminates the A&G add-
on, it does not preclude the Secretary from making the adjustments that
are necessary to ensure fair payment to providers. In addition, another
commenter believes that the elimination of the add-on should be phased-
in.
Response: Section 13564(b) of OBRA '93 amended section
1861(v)(1)(L)(ii) of the Act to require that, effective for cost
reporting periods beginning on or after October 1, 1993, we no longer
include a payment adjustment for the A&G costs of hospital-based HHAs
in computing the HHA limits. Under this provision, for cost reporting
periods beginning on or after October 1, 1993, hospital-based HHAs and
free-standing HHAs will be treated identically for payment purposes.
The statute does not provide for a phase-in period.
Section 1861(v)(1)(L)(i)(III) of the Act defines fair payment to
HHAs at some level determined by the Secretary, but not in excess of
112 percent of the cost experience of freestanding providers. Section
1861(v)(1)(L)(ii) of the Act provides the Secretary with the authority
to provide for exceptions to the cost limits. Accordingly, if a
provider quantifies and provides an explanation of costs that exceed
the limits, it may apply for an exception to the cost limits under the
exceptions process outlined in Sec. 413.30.
2. Reimbursement Methodology
Comment: Two commenters indicated that the reimbursement
methodology for HHAs should be assessed, including a review of the
Medicare step-down cost methodology and the use of severity of illness
to determine the cost of care and length of stay for post-acute versus
community-based referrals. One commenter stated that the change in
methodology, that is, the elimination of the hospital-based add-on,
imposes a systematic error in accurately measuring costs of caring for
home health patients. Another commenter stated that HCFA should wait
for the results of the Federally funded demonstration projects that are
currently evaluating home care reimbursement before any changes are
made to the present home care reimbursement structure. The commenter
stated that the information we obtain from these studies should be used
to develop an appropriate industry-wide home care reimbursement system.
Response: We agree that further study of the HHA reimbursement
system is desirable. HCFA's Office of Research and Demonstrations is
presently conducting a demonstration relating to prospective payment
for HHAs. During the second phase of this demonstration, we intend to
develop a prototype case-mix or severity adjustment to be tested under
the demonstration for possible use in future payment methodologies. In
addition, HCFA has begun the Medicare Home Health Initiative, which
will review a variety of issues related to the home health benefit
including those presented above.

III. Provisions of This Notice With Comment Period

A. Revised Schedule of Limits

As discussed in section II.A.2 of this notice, we have identified
problems with the validity of the database used to calculate the cost
limits for cost reporting periods beginning on or after July 1, 1993,
as set forth in our July 8, 1993 notice. Therefore, we are setting
forth in this notice a revised schedule of limits on HHA costs that may
be paid under the Medicare program for cost reporting periods beginning
on or after July 1, 1993. We also are setting forth revised add-on
amounts for hospital-based HHAs for cost reporting periods beginning on
or after July 1, 1993, and before October 1, 1993.
Before adopting this approach, which entails the retroactive
application of the schedule of limits set forth in this notice, we
considered three possible alternatives for dealing with the problems
with the database used in the calculation of the cost limits effective
July 1, 1993. One option was to take no action to revise the limits, in
accordance with the provisions of section 13564(a) of OBRA '93, which
explicitly prohibit any changes in the cost limits for HHAs for cost
reporting periods beginning on or after July 1, 1994, and before July
1, 1996. However, we believe that in enacting these provisions,
Congress could not have envisioned that there would be errors in the
database that would necessitate revisions to the limits. Thus, we do
not believe that the revision of the limits under these circumstances
is inconsistent with the statute. In addition, we do not believe that
it is appropriate to base payments to HHAs on limits that are known to
be based on a limited database and are estimated to result in lower
Medicare payments to HHAs. (See section V of this notice for a
discussion of its economic impact.)
We also considered applying the changes to the cost limits
prospectively, that is, effective upon publication of this notice.
Although this option would avoid the administrative difficulties
associated with implementing revised limits retroactively for cost
reporting periods beginning on or after July 1, 1993, it still would
not conform strictly to the OBRA '93 provisions prohibiting any changes
in the cost limits until July 1, 1996. In addition, this option again
would disadvantage HHAs by not assigning accurate limits effective for
cost reporting periods beginning on or after July 1, 1993.
Our remaining option was to apply the changes to the cost limits
retroactively. That is, we would publish revised limits that would be
effective for cost reporting periods beginning on or after July 1,
1993, in place of the limits set forth in our July 8, 1993 notice. The
statute allows us to set the cost limits at a maximum of 112 percent of
the mean of per-visit costs for freestanding agencies. As in the past,
for the cost limits applicable to cost reporting periods beginning on
or after July 1, 1993, we set the limits at that maximum. Because we
have identified errors in the database of costs for freestanding
agencies, we believe that it is in keeping with the intent of the
statute that these errors be rectified. Therefore, we believe it is
appropriate, and consistent with the statute, to revise the limits for
cost reporting periods beginning on or after July 1, 1993, so that they
are based on 112 percent of the mean of the more accurate database of
freestanding agencies' per-visit costs. Also, despite the
administrative difficulties that may arise, we believe this option is
in the best interests of HHAs. Therefore, we have determined that
revising the limits, effective for cost reporting periods beginning on
or after July 1, 1993 is the most appropriate course of action.
Thus, the revised schedule of limits set forth in Table I of
section IV of this notice replaces the per-visit limits set forth in
our July 8, 1993 notice. As required by section 13564(a) of OBRA '93,
these limits will remain in effect for cost reporting periods beginning
before July 1, 1996. In addition, we are setting forth in Table II of
section IV of this notice revised A&G add-on amounts for hospital-based
HHAs to replace the add-on amounts set forth in our July 8, 1993
notice. In accordance with section 1861(v)(1)(L)(ii) of the Act, as
amended by section 13564 of OBRA '93, the intermediaries will make an
adjustment for the A&G add-on in computing the adjusted limits for
hospital-based HHAs with cost reporting periods beginning on or after
July 1, 1993, and before October 1, 1993.
For the convenience of the reader, we are republishing Tables IIIa,
IIIb, and IV [[Page 8396]] that were published in our July 8, 1993
notice. These tables contain the wage indices for urban and rural areas
and cost reporting year adjustment factor and also are presented in
section IV of this notice.
The intermediaries will compute the adjusted limits using the wage
index in Tables IIIa and IIIb set forth in section IV of this notice,
and will notify each HHA that they service of its applicable cost per-
visit limits for each type of service. Each HHA's aggregate limit
cannot be determined prospectively, but depends on each HHA's Medicare
visits for each type of service and actual costs for the cost reporting
period subject to this notice.
The HHA costs that are subject to the limits include the cost of
medical supplies routinely furnished in conjunction with patient care.
Durable medical equipment, orthotics, prosthetics, and other medical
supplies directly identifiable as services to an individual patient are
excluded from per-visit costs and are paid without regard to this
schedule of limits. (See Chapter IV of the Home Health Agency Manual
(HCFA Pub. 11).)
The intermediary will determine the limit for each HHA by
multiplying the number of Medicare visits for each type of service
furnished by the HHA by the respective per-visit cost limit. The sum of
these amounts is compared to the HHA's total allowable costs.

Example: HHA X, a free-standing agency located in Richmond VA,
furnishes 5,000 covered skilled nursing visits, 2,000 covered
physical therapy visits, and 4,000 covered home health aide visits
to Medicare beneficiaries during its 12-month cost reporting period
beginning on July 1, 1993.

The Aggregate Cost Limit is Determined As Follows:

----------------------------------------------------------------------------------------------------------------
Adjusted
Type of visit Visits Nonlabor labor Adjusted Aggregate
portion portion limit limit
----------------------------------------------------------------------------------------------------------------
Skilled Nursing Care................................... 5,000 $16.44 $74.72 $92.32 $461,600
Physical Therapy....................................... 2,000 16.52 75.28 92.96 185,920
Home Health Aide....................................... 4,000 8.33 37.65 46.57 186,280
Total Visits........................................... 11,000 ......... ......... ......... ...........
Aggregate Cost Limit................................... ......... ......... ......... ......... $833,800
----------------------------------------------------------------------------------------------------------------

As noted in section III.A of our July 8, 1993 notice, in order to
account for OSHA's universal precaution requirements, we also will
allow an additional adjustment to the aggregate cost limit of $.18 per
visit for those HHAs that incur costs in complying with these
requirements (see 58 FR 36749). An HHA must apply to its intermediary
for the add-on amount. The agency must demonstrate that it will exceed
its cost limit in order to be in compliance with the OSHA mandated
requirements. The HHA must provide the intermediary with adequate
documentation to support the add-on amount.
Before the limits are applied during settlement of the cost report,
the HHA's actual costs are reduced by the amount of individual items of
cost (for example, administrative compensation and contract services)
that are found to be excessive under the Medicare reasonable cost
principles of provider payment. That is, the intermediary reviews the
various reported costs, taking into account all Medicare payment
principles (for example, the cost guidelines for physical therapy
furnished under arrangement (see Sec. 413.106) and the limitation on
costs that are substantially out of line with those of comparable HHAs
(see Sec. 413.9)).

B. No Changes in the Cost Limits

As discussed in section I.B of this notice, section 13564(a) of
OBRA '93 amended section 1861(v)(1)(L)(iii) of the Act to provide that
there be no changes in the HHA per-visit cost limits (except as may be
necessary to take into account the elimination of the A&G add-on for
hospital-based HHAs) for cost reporting periods beginning on or after
July 1, 1994, and before July 1, 1996. The effect of this provision is
that a HHA's latest per-discipline cost limit for a period beginning on
or after July 1, 1993, and before July 1, 1994, as calculated under
this notice, without regard to subsequent adjustments under section
1861(v)(1)(L)(ii) of the Act for exceptions, will remain in effect
until its cost reporting period beginning on or after July 1, 1996. As
explained in our January 6, 1994 notice with comment period, section
13564(b) of OBRA '93 eliminated the A&G add-on for hospital-based HHAs.
Accordingly, there will be no changes, besides those due to the
elimination of the A&G add-on, to a HHA's cost limit for cost reporting
periods beginning on or after July 1, 1994, and before July 1, 1996, to
account for inflation, changes to the wage index or to MSA
designations. Thus, in computing a provider's cost limit for cost
reporting periods beginning on or after July 1, 1994, and before July
1, 1996, the cost reporting period adjustment factors that were to
apply for cost reporting periods beginning on or after July 1, 1994,
will not be used. (In our July 8, 1993 notice with comment period, we
specified that if we did not publish new limits to be effective on July
1, 1994, the limits effective July 1, 1993 would continue in effect,
but the last cost reporting year adjustment factor in Table IV would be
multiplied by an inflation factor once for each month between June 1,
1994, and the month in which the cost reporting period begins, until a
new schedule of limits or other provision is issued (58 FR 36760). In
accordance with section 13564(a) of OBRA '93, the inflation factor will
not be used for cost reporting periods beginning on or after July 1,
1994, and before July 1, 1996.) The revised schedule of per-visit
limits set forth in Table I of section IV of this notice, which
replaces the schedule of limits set forth in our July 8, 1993 notice,
will be used to compute the limits. Revised Table II will be used to
calculate the A&G add-on, when applicable. The wage indices in Tables
IIIa and IIIb that were originally published in our July 8, 1993 notice
and are republished in section IV of this notice will continue to be
used to compute the limits.
In the example below, a freestanding HHA in Dallas, Texas has a
cost reporting period beginning date of January 1, 1994. As calculated
under this notice, its cost limit for the 12-month period beginning
January 1, 1994, for occupational therapy is $96.13. Under the
provisions of this notice, the cost limit of $96.13 will remain in
effect for its 12-month cost reporting periods beginning January 1,
1995, and January 1, 1996. As explained above, the cost reporting
period adjustment factors that would have been used under the July 8,
1993 notice with comment period for calculating the limits for the
HHA's new cost reporting periods beginning January 1, 1995, and January
1, 1996, are not used. [[Page 8397]] Accordingly, the provider in this
example will not have any change in its cost limit until its cost
reporting period beginning January 1, 1997.

Example: Calculation of Adjusted Limit for Occupational Therapy
for a Freestanding HHA Located in Dallas, Texas: Computation of
Revised Limit for Occupational Therapy:

As noted above, for cost reporting periods beginning on or after
July 1, 1994, but before July 1, 1996, a freestanding HHA's cost limit
will be its latest per-discipline cost limit for the period beginning
on or after July 1, 1993, and before July 1, 1994, as calculated under
this notice and without regard to any subsequent adjustments, such as
an exception to the limit. Thus, if the HHA in the above example
received an exception to its cost limit for its cost reporting period
beginning January 1, 1993, its cost limit for the cost reporting period
beginning January 1, 1994, would not include the exception amount for
the previous period. To receive an exception or other adjustment to its
cost limit, the HHA would need to submit a request to its fiscal
intermediary in accordance with the procedures set forth in Sec. 413.30
of our regulations.
As explained in detail in our January 6, 1994 notice with comment
period, a hospital-based HHA's cost limit is computed in an identical
manner (59 FR 761) to the example above, since the A&G add-on for
hospital-based HHAs is no longer applicable for cost reporting periods
beginning on or after October 1, 1993.

C. Periods Other Than 12 Months

The above methodology applies to providers with cost reporting
periods of 12 months in duration. If a HHA's cost reporting period is
not 12 months in duration, a special adjustment factor is calculated.
This is necessary because inflation projections are computed to the
midpoint of a cost reporting period, and the adjustment factors in
Table IV (58 FR 36760) are based on 12-month reporting periods. For
cost reporting periods of other than 12 months, the calculation must be
made based on the midpoint of the specific cost reporting period. The
HHA's intermediary obtains this adjustment factor from HCFA central
office. This methodology results in a different cost limit than if a
12-month adjustment factor were used. However, since the provisions of
OBRA '93 require no changes in the cost limit on or after July 1, 1994,
the limit calculated with the special adjustment factor will remain in
place for subsequent cost reporting periods beginning before July 1,
1996.

D. Providers Entering the Medicare Program

For providers entering the Medicare program on or after July 1,
1994, and before July 1, 1996, the applicable cost limit will be the
cost limit for the identical period beginning on or after July 1, 1993,
through June 30, 1994. (The only exception to this policy is that, as a
result of the elimination of the A&G add-on for hospital-based HHAs
effective for cost reporting periods beginning on or after October 1,
1993, the A&G add-on amount is not included in the cost limit
calculation for hospital-based HHAs that enter the program.) For
example, if a provider enters the Medicare program on October 1, 1994,
with a 12-month cost reporting period, its cost limit will be
determined in the same manner as a cost limit for a period beginning
October 1, 1993, and ending September 30, 1994. If the provider's cost
reporting period is a short period, for example, a period beginning
October 1, 1994, and ending December 31, 1994, the provider's cost
limit will be determined in the same manner as a cost limit for a
period beginning October 1, 1993, and ending December 31, 1993. In
addition, whether the first period is a full 12-month period or a
period other than 12 months, the cost limit determined for the first
period will remain in effect until the provider's first cost reporting
period beginning on or after July 1, 1996.

E. Next Update of Limits

Before the enactment of OBRA '93, section 1861(v)(1)(L)(iii) of the
Act required that the HHA per-discipline cost limits be updated on July
1, 1994, and every year thereafter. Section 13564(a)(2) of OBRA '93
amended that section of the Act to delay the next update until July 1,
1996, and every year thereafter. Accordingly, there will be no changes
to the HHA per-discipline cost limits effective under this notice for
cost reporting periods beginning on or after July 1, 1993 for
inflation, changes in the wage index, or geographic designation until
July 1, 1996.

F. Adjustments to the Per-Visit Cost Limits

Section 1861(v)(1)(L)(ii) of the Act provides for appropriate
adjustments to the HHA per-discipline cost limits. These adjustments
are set forth at Sec. 413.30(f) and include: exceptions to the limits
for atypical services and extraordinary circumstances; and other
provisions. Section 13564(a)(1) of OBRA '93 mandates that the effect of
allowing no changes in the HHA per-visit cost limits for cost reporting
periods beginning on or after July 1, 1994, and before July 1, 1996,
not be considered in making adjustments to the per-visit cost limits
under the exceptions process. Therefore, effective for cost reporting
periods beginning on or after July 1, 1994, and before July 1, 1996, a
provider may request an exception only for costs incurred above the
amount that the limit would have been had the OBRA '93 provisions set
forth in this notice regarding no changes in the cost limits not been
enacted. Accordingly, for the purpose of determining the amount of an
exception to the HHA per-discipline cost limits under the regulations
at [[Page 8398]] Sec. 413.30(f), the difference between the amount of a
provider's cost limit as determined by the provisions set forth in this
notice, and the amount that a provider's cost limit would have been
under this notice had the OBRA '93 provisions requiring no changes in
the cost limits not been enacted, is not subject to an exception to the
per-discipline cost limits. We note that this provision does not apply
to the A&G add-on for hospital-based HHAs. That is, for cost reporting
periods beginning on or after October 1, 1993, the A&G add-on for
hospital-based HHAs will not be used in computing the amount that the
hospital-based cost limit would have been had the OBRA '93 provisions
requiring no changes in the limits not been enacted.
The example below demonstrates the computation to determine the
amount not subject to an exception under the provisions set forth in
this notice. The provider's cost limit for occupational therapy is
computed for the cost reporting period beginning January 1, 1994, in
accordance with the provisions set forth in this notice, and this limit
remains in effect until the cost reporting period beginning January 1,
1996. In the example, the provider has requested an exception to its
limit for the period beginning January 1, 1995. Again, we calculate
what the limit would have been had the OBRA '93 provisions requiring no
changes in the limits not been enacted. The difference between the
actual limit and the amount the limit would have been ($5.14) is the
amount not subject to an exception.
Example: Calculation of Amount Not Subject to an Exception to
the Limits for Occupational Therapy for a Freestanding HHA Located
in Dallas, Texas

Labor Related Component............... $74.97 (Table I)
Wage Index............................ x 0.9599 (Table IIIa)
--------------
Labor Portion......................... $71.96
Special Labor Adjustment for Budget x 1.067 ..................
Neutrality.
--------------
Adjusted Labor Component.............. $76.79
Nonlabor-Related Component............ +16.78 (Table I)
--------------
OSHA Per Diem Add-On.................. +.18 ..................
--------------
Limit Prior to Inflation Adjustment... $93.75
Cost Reporting Period Adjustment x 1.0254 (Table IV)
Factor.
--------------
(January 1, 1994)
Inflation Adjusted Limit (Limit in $96.13
Effect for January 1, 1994, January
1, 1995, and January 1, 1996).
Cost Reporting Period Adjustment x 1.0803 (Table IV)
Factor (January 1, 1995 for Exception
Purposes Only).
--------------
(Using the calculation procedures in
Table IV for cost reporting periods
beginning on January 1, 1995,
1.0475 is multiplied by 1.00442
seven times and the resulting
factor equals 1.0803.) (1.0475 x
(1.00442)\7\=1.0803).
Inflation Adjusted Limit (January 1, $101.27
1994 for Exception Purposes Only).
Amount Not Subject to Exception
($101.27-$96.13=$5.14)

IV. Tables

Table I.--Per Visit Limits for Home Health Agencies
------------------------------------------------------------------------
Labor Non-labor
Type of visit Limit portion portion\1\
------------------------------------------------------------------------
MSA (NECMA) Location:
Skilled Nursing Care........... $91.16 $74.72 $16.44
Physical Therapy............... 91.80 75.28 16.52
Speech Pathology............... 93.18 76.30 16.88
Occupational Therapy........... 91.75 74.97 16.78
Medical Social Services........ 129.62 105.99 23.63
Home Health Aide............... 45.98 37.65 8.33
Non-MSA Location:
Skilled Nursing Care........... $99.83 $84.88 $14.95
Physical Therapy............... 105.55 89.71 15.84
Speech Pathology............... 110.45 93.74 16.71
Occupational Therapy........... 107.02 90.55 16.47
Medical Social Services........ 164.60 139.56 25.04
Home Health Aide............... 46.30 39.36 6.94
------------------------------------------------------------------------
\1\Non-labor portion of limits for HHAs located in Alaska, Hawaii,
Puerto Rico, and the Virgin Islands are increased by multiplying them
by the following cost-of-living adjustment factors:

------------------------------------------------------------------------
Adjustment
Location factor
------------------------------------------------------------------------
Alaska.................................................. 1.250
Hawaii:
Oahu.................................................. 1.225
Kauai................................................. 1.175
Maui, Lanai, and Molokai.............................. 1.200
Hawaii (Island)....................................... 1.150
Puerto Rico............................................. 1.100
Virgin Islands.......................................... 1.125
------------------------------------------------------------------------

[[Page 8399]]
Table II.--Add-On Amounts for Hospital-Based Home health Agencies
------------------------------------------------------------------------
Labor Non-labor
Type of visit A&G Add-on portion portion
------------------------------------------------------------------------
MSA (NECMA) Location:
Skilled Nursing Care........... $12.20 $9.99 $2.21
Physical Therapy............... 11.30 9.25 2.05
Speech Pathology............... 11.48 9.39 2.09
Occupational Therapy........... 11.48 9.35 2.12
Medical Social Services........ 17.73 14.42 3.32
Home Health Aide............... 5.50 4.50 1.00
Non-MSA Location:
Skilled Nursing Care........... $14.99 $12.74 $2.25
Physical Therapy............... 16.14 13.73 2.41
Speech Pathology............... 16.09 13.67 2.42
Occupational Therapy........... 17.00 14.36 2.64
Medical Social Services........ 24.20 20.41 3.80
Home Health Aide............... 6.01 5.11 0.90
------------------------------------------------------------------------

Table IIIa.--Wage Index for Urban Areas
------------------------------------------------------------------------
Wage
Urban areas (constituent counties or county equivalents) index
------------------------------------------------------------------------
Abilene TX..................................................... 0.9183
Taylor, TX
Aguadilla, PR.................................................. 0.4549
Aguada, PR
Aguadilla, PR
Isabella, PR
Moca, PR
Akron, OH...................................................... 0.9455
Portage, OH
Summit, OH
Albany, GA..................................................... 0.8017
Dougherty, GA
Lee, GA
Albany-Schenectady-Troy, NY.................................... 0.8887
Albany, NY
Greene, NY
Montgomery, NY
Rensselaer, NY
Saratoga, NY
Schenectady, NY
Albuquerque, NM................................................ 1.0083
Bernalillo, NM
Alexandria, LA................................................. 0.8242
Rapides, LA
Allentown-Bethlehem, PA-NJ..................................... 0.9957
Warren, NJ
Carbon, PA
Lehigh, PA
Northampton, PA
Altoona, PA.................................................... 0.9201
Blair, PA
Amarillo, TX................................................... 0.8703
Potter, TX
Randall, TX
Anaheim-Santa Ana, CA.......................................... 1.2217
Orange, CA
Anchorage, AK.................................................. 1.4119
Anchorage, AK
Anderson, IN................................................... 0.9544
Madison, IN
Anderson, SC................................................... 0.7229
Anderson, SC
Ann Arbor, MI.................................................. 1.1815
Washtenaw, MI
Anniston, AL................................................... 0.7899
Calhoun, AL
Appleton-Oshkosh-Neenah, WI.................................... 0.9142
Calumet, WI
Outagamie, WI
Winnebago, WI
Arecibo, PR.................................................... 0.3938
Arecibo, PR
Camuy, PR
Hatillo, PR
Quebradillas, PR
Asheville, NC.................................................. 0.8760
Buncombe, NC
Athens, GA..................................................... 0.8518
Clarke, GA
Jackson, GA
Madison, GA
Oconee, GA
Atlanta, GA.................................................... 0.9557
Barrow, GA
Butts, 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
Rockdale, GA
Spalding, GA
Walton, GA
Atlantic City, NJ.............................................. 1.0464
Atlantic , NJ
Cape May, NJ
Augusta, GA-SC................................................. 0.9363
Columbia, GA
McDuffie, GA
Richmond, GA
Aiken, SC
Aurora-Elgin, IL............................................... 0.9626
Kane, IL
Kendall, IL
Austin, TX..................................................... 0.9560
Hays, TX
Travis, TX
Williamson, TX
Bakersfield, CA................................................ 1.0824
Kern, CA
Baltimore, MD.................................................. 1.0115
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Carroll, MD
Harford, MD
Howard, MD
Queen Annes, MD
Bangor, ME..................................................... 0.9027
Penobscot, ME
Baton Rouge, LA................................................ 0.9052
Ascension, LA
East Baton Rouge, LA
Livingston, LA
West Baton Rouge, LA
Battle Creek, MI............................................... 0.9480
Calhoun, MI
Beaumont-Port Arthur, TX....................................... 0.9599
Hardin, TX
Jefferson, TX
Orange, TX
Beaver County, PA.............................................. 1.0124
Beaver, PA
Bellingham, WA................................................. 1.0454
Whatcom, WA
Benton Harbor, MI.............................................. 0.8421
Berrien, MI
Bergen-Passaic, NJ............................................. 1.0733
Bergen, NJ
Passaic, NJ
Billings, MT................................................... 0.9287
Yellowstone, MT
Biloxi-Gulfport, MS............................................ 0.8030
Hancock, MS
Harrison, MS
Binghamton, NY................................................. 0.9223
Broome, NY
Tioga, NY
Birmingham, AL................................................. 0.8734
Blount, AL
Jefferson, AL
Saint Clair, AL
Shelby, AL
Walker, AL
Bismarck, ND................................................... 0.8845
Burleigh, ND
Morton, ND
Bloomington, IN................................................ 0.8604
Monroe, IN
[[Page 8400]]

Bloomington-Normal, IL......................................... 0.8723
McLean, IL
Boise City, ID................................................. 0.9718
Ada, ID
Boston-Lawrence-Salem-Lowell-Brockton, MA...................... 1.1762
Essex, MA
Middlesex, MA
Norfolk, MA
Plymouth, MA
Suffolk, MA
Boulder-Longmont, CO........................................... 1.0155
Boulder, CO
Bradenton, FL.................................................. 0.9225
Manatee, FL
Brazoria, TX................................................... 0.9276
Brazoria, TX
Bremerton, WA.................................................. 0.9495
Kitsap, WA
Bridgeport-Stamford-Norwalk-Danbury............................ 1.1984
Fairfield, CT
Brownsville-Harlingen, TX...................................... 0.8592
Cameron, TX
Bryan-College Station, TX...................................... 0.9451
Brazos, TX
Buffalo, NY.................................................... 0.8873
Erie, NY
Burlington, NC................................................. 0.7954
Alamance, NC
Burlington, VT................................................. 0.9320
Chittenden, VT
Grand Isle, VT
Caguas, PR..................................................... 0.4461
Caguas, PR
Gurabo, PR
San Lorenz, PR
Aguas Buenas, PR
Cayey, PR
Cidra, PR
Canton, OH..................................................... 0.8776
Carroll, OH
Stark, OH
Casper, WY..................................................... 0.8855
Natrona, WY
Cedar Rapids, IA............................................... 0.8938
Linn, IA
Champaign-Urbana-Rantoul, IL................................... 0.8710
Champaign, IL
Charleston, SC................................................. 0.8298
Berkeley, SC
Charleston, SC
Dorchester, SC
Charleston, WV................................................. 0.9653
Kanawha, WV
Putnam, WV
Charlotte-Gastonia-Rock Hill, NC-SC............................ 0.9432
Cabarrus, NC
Gaston, NC
Lincoln, NC
Mecklenburg, NC
Rowan, NC
Union, NC
York, SC
Charlottesville, VA............................................ 0.9576
Albermarle, VA
Charlottesville City, VA
Fluvanna, VA
Greene, VA
Chattanooga, TN-GA............................................. 0.9161
Catoosa, GA
Dade, GA
Walker, GA
Hamilton, TN
Marion, TN
Sequatchie, TN
Cheyenne, WY................................................... 0.7876
Laramie, WY
Chicago, IL.................................................... 1.0475
Cook, IL
Du Page, IL
McHenry, IL
Chico, CA...................................................... 1.0937
Butte, CA
Cincinnati, OH-KY-IN........................................... 0.9972
Dearborn, IN
Boone, KY
Campbell, KY
Kenton, KY
Clermont, OH
Hamilton, OH
Warren, OH
Clarksville-Hopkinsville, TN-KY................................ 0.7352
Christian, KY
Montgomery, TN
Cleveland, OH.................................................. 1.0695
Cuyahoga, OH
Geauga, OH
Lake, OH
Medina, OH
Colorado Springs, CO........................................... 0.9777
El Paso, CO
Columbia, MO................................................... 0.9468
Boone, MO
Columbia, SC................................................... 0.8904
Lexington, SC
Richland, SC
Columbus, GA-AL................................................ 0.7452
Russell, AL
Chattanoochee, GA
Muscogee, GA
Columbus, OH................................................... 0.9634
Delaware, OH
Fairfield, OH
Franklin, OH
Licking, OH
Madison, OH
Pickaway, OH
Union, OH
Corpus Christi, TX............................................. 0.8559
Nueces, TX
San Patricio, TX
Cumberland, MD-WV.............................................. 0.8155
Allegany, MD
Mineral, WV
Dallas, TX..................................................... 0.9599
Collin, TX
Dallas, TX
Denton, TX
Ellis, TX
Kaufman, TX
Rockwall, TX
Danville, VA................................................... 0.7476
Danville City, VA
Pittsylvania, VA
Davenport-Rock Island-Moline, IA-IL............................ 0.8640
Scott, IA
Henry, IL
Rock Island, IL
Dayton-Springfield, OH......................................... 0.9686
Clark, OH
Greene, OH
Miami, OH
Montgomery, OH
Daytona Beach, FL.............................................. 0.8907
Volusia, FL
Decatur, AL.................................................... 0.7457
Lawrence, AL
Morgan, AL
Decatur, IL.................................................... 0.8253
Macon, IL
Denver, CO..................................................... 1.0714
Adams, CO
Arapahoe, CO
Denver, CO
Douglas, CO
Jefferson, CO
Des Moines, IA................................................. 0.9225
Dallas, IA
Polk, IA
Warren, IA
Detroit, MI.................................................... 1.0924
Lapeer, MI
Livingston, MI
Macomb, MI
Monroe, MI
Oakland, MI
Saint Clair, MI
Wayne, MI
Dothan, AL..................................................... 0.7524
Dale, AL
Houston, AL
Dubuque, IA.................................................... 0.8341
Dubuque, IA
Duluth, MN-WI.................................................. 0.9479
St. Louis, MN
Douglas, WI
Eau Claire, WI................................................. 0.8444
Chippewa, WI
Eau Claire, WI
El Paso, TX.................................................... 0.8679
El Paso, TX
Elkhart-Goshen, IN............................................. 0.8913
Elkhart, IN
Elmira, NY..................................................... 0.8775
Chemung, NY
Enid, OK....................................................... 0.8877
Garfield, OK
Erie, PA....................................................... 0.9118
Erie, PA
Eugene-Springfield, OR......................................... 1.0123
Lane, OR
Evansville, IN-KY.............................................. 0.9422
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
Fargo-Moorhead, ND-MN.......................................... 0.9668
Clay, MN
Cass, ND
Fayetteville, NC............................................... 0.8262
Cumberland, NC
Fayetteville-Springdale, AR.................................... 0.7958
Washington, AR
Flint, MI...................................................... 1.1506
Genesee, MI
Florence, AL................................................... 0.7648
Colbert, AL
Lauderdale, AL
Florence, SC................................................... 0.8395
[[Page 8401]]

Florence, SC
Fort Collins-Loveland, CO...................................... 1.0197
Larimor, CO
Ft Lauderdale-Hollywood-Pompano Beach, FL...................... 1.0314
Broward, FL
Fort Myers-Cape Coral, FL...................................... 0.9759
Lee, FL
Fort Pierce, FL................................................ 1.0996
Martin, FL
St. Lucie, FL
Fort Smith, AR-OK.............................................. 0.7900
Crawford, AR
Sebastian, AR
Sequoyah, OK
Fort Walton Beach, FL.......................................... 0.8881
Okaloosa, FL
Fort Wayne, IN................................................. 0.8967
Allen, IN
De Kalb, IN
Whitley, IN
Forth Worth-Arlington, TX...................................... 0.9708
Johnson, TX
Parker, TX
Tarrant, TX
Fresno, CA..................................................... 1.0694
Fresno, CA
Gadsden, AL.................................................... 0.8166
Etowah, AL
Gainesville, FL................................................ 0.8763
Alachua, FL
Bradford, FL
Galveston-Texas City, TX....................................... 1.0129
Galveston, TX
Gary-Hammond, IN............................................... 0.9853
Lake, IN
Porter, IN
Glens Falls, NY................................................ 0.9193
Warren, NY
Washington, NY
Grand Forks, ND................................................ 0.9539
Grand Forks, ND
Grand Rapids, MI............................................... 0.9813
Kent, MI
Ottawa, MI
Great Falls, MT................................................ 0.9951
Cascade, MT
Greeley, CO.................................................... 0.9320
Weld, CO
Green Bay, WI.................................................. 0.9547
Brown, WI
Greensboro-Winston-Salem-High Point, NC........................ 0.9128
Davidson, NC
Davie, NC
Forsyth, NC
Guilford, NC
Randolph, NC
Stokes, NC
Yadkin, NC
Greenville-Spartanburg, SC..................................... 0.8887
Greenville, SC
Pickens, SC
Spartanburg, SC
Hagerstown, MD................................................. 0.9121
Washington, MD
Hamilton-Middletown, OH........................................ 0.9347
Butler, OH
Harrisburg-Lebanon-Carlisle, PA................................ 0.9879
Cumberland, PA
Dauphin, PA
Lebanon, PA
Perry, PA
Hartford-Middletown-New Britain-Bristol, CT.................... 1.1868
Hartford, CT
Middlesex, CT
Tolland, CT
Litchfield, CT
Hickory, NC.................................................... 0.8735
Alexander, NC
Burke, NC
Catawba, NC
Honolulu, HI................................................... 1.1534
Honolulu, HI
Houma-Thibodaux, LA............................................ 0.7315
Lafourche, LA
Terrebonne, LA
Houston, TX.................................................... 1.0022
Fort Bend, TX
Harris, TX
Liberty, TX
Montgomery, TX
Waller, TX
Huntington-Ashland, WV-KY-OH................................... 0.9400
Boyd, KY
Carter, KY
Greenup, KY
Lawrence, OH
Cabell, WV
Wayne, WV
Huntsville, AL................................................. 0.8799
Madison, AL
Indianapolis, IN............................................... 0.9665
Boone, IN
Hamilton, IN
Hancock, IN
Hendricks, IN
Johnson, IN
Marion, IN
Morgan, IN
Shelby, IN
Iowa City, IA.................................................. 0.9489
Johnson, IA
Jackson, MI.................................................... 0.9625
Jackson, MI
Jackson, MS.................................................... 0.7702
Hinds, MS
Madison, MS
Rankin, MS
Jackson, TN.................................................... 0.7878
Madison, TN
Jacksonville, FL............................................... 0.9122
Clay, FL
Duval, FL
Nassau, FL
St. Johns, FL
Jacksonville, NC............................................... 0.7125
Onslow, NC
Jamestown-Dunkirk, NY.......................................... 0.7746
Chautaqua, NY
Janesville-Beloit, WI.......................................... 0.8432
Rock, WI
Jersey City, NJ................................................ 1.0728
Hudson, NJ
Johnson City-Kingsport-Bristol, TN-VA.......................... 0.8633
Carter, TN
Hawkins, TN
Sullivan, TN
Unicoi, TN
Washington, TN
Bristol City, VA
Scott, VA
Washington, VA
Johnstown, PA.................................................. 0.8827
Cambria, PA
Somerset, PA
Joliet, IL..................................................... 1.0237
Grundy, IL
Will, IL
Joplin, MO..................................................... 0.7925
Jasper, MO
Newton, MO
Kalamazoo, MI.................................................. 1.1765
Kalamazoo, MI
Kankakee, IL................................................... 0.8454
Kankakee, IL
Kansas City, KS-MO............................................. 0.9550
Johnson, KS
Leavenworth, KS
Miami, KS
Wyandotte, KS
Cass, MO
Clay, MO
Jackson, MO
Lafayette, MO
Platte, MO
Ray, MO
Kenosha, WI.................................................... 0.8934
Kenosha, WI
Killeen-Temple, TX............................................. 1.1250
Bell, TX
Coryell, TX
Knoxville, TN.................................................. 0.8658
Anderson, TN
Blount, TN
Grainger, TN
Jefferson, TN
Knox, TN
Sevier, TN
Union, TN
Kokomo, IN..................................................... 0.9452
Howard, IN
Tipton, IN
LaCrosse, WI................................................... 0.8920
LaCrosse, WI
Lafayette, LA.................................................. 0.8194
Lafayette, LA
St. Martin, LA
Lafayette, IN.................................................. 0.8588
Tippecanoe, IN
Lake Charles, LA............................................... 0.8341
Calcasieu, LA
Lake County, IL................................................ 0.9953
Lake, IL
Lakeland-Winter Haven, FL...................................... 0.8409
Polk, FL
Lancaster, PA.................................................. 0.9221
Lancaster, PA
Lansing-East Lansing, MI....................................... 1.0242
Clinton, MI
Eaton, MI
Ingham, MI
Laredo, TX..................................................... 0.7248
Webb, TX
Las Cruces, NM................................................. 0.7877
Dona Ana, NM
Las Vegas, NV.................................................. 1.0588
Clark, NV
[[Page 8402]]

Lawrence, KS................................................... 0.8901
Douglas, KS
Lawton, OK..................................................... 0.8354
Comanche, OK
Lewiston-Auburn, ME............................................ 0.9021
Androscoggin, ME
Lexington-Fayette, KY.......................................... 0.8565
Bourbon, KY
Clark, KY
Fayette, KY
Jessamine, KY
Scott, KY
Woodford, KY
Lima, OH....................................................... 0.8030
Allen, OH
Auglaize, OH
Lincoln, NE.................................................... 0.8920
Lancaster, NE
Little Rock-North Little Rock, AR.............................. 0.8373
Faulkner, AR
Lonoke, AR
Pulaski, AR
Saline, AR
Longview-Marshall, TX.......................................... 0.8656
Gregg, TX
Harrison, TX
Lorain-Elyria, OH.............................................. 0.8933
Lorain, OH
Los Angeles-Long Beach, CA..................................... 1.2308
Los Angeles, CA
Louisville, KY-IN.............................................. 0.9291
Clark, IN
Floyd, IN
Harrison, IN
Bullitt, KY
Jefferson, KY
Oldham, KY
Shelby, KY
Lubbock, TX.................................................... 0.8766
Lubbock, TX
Lynchburg, VA.................................................. 0.8509
Amherst, VA
Campbell, VA
Lynchburg City, VA
Macon-Warner Robins, GA........................................ 0.8768
Bibb, GA
Huston, GA
Jones, GA
Peach, GA
Madison, WI.................................................... 1.0270
Dane, WI
Manchester-Nashua, NH.......................................... 1.0219
Hillsborough, NH
Merrimack, NH
Mansfield, OH.................................................. 0.8358
Richland, OH
Mayaguez, PR................................................... 0.4752
Anasco, PR
Cabo Rojo, PR
Hormigueros, PR
Mayaguez, PR
San German, PR
McAllen-Edinburg-Mission, TX................................... 0.7684
Hidalgo, TX
Medford, OR.................................................... 1.0005
Jackson, OR
Melbourne-Titusville, FL....................................... 0.9162
Brevard, FL
Memphis, TN-AR-MS.............................................. 0.9023
Crittenden, AR
De Soto, MS
Shelby, TN
Tipton, TN
Merced, CA..................................................... 1.0270
Merced, CA
Miami-Hialeah, FL.............................................. 1.0147
Dade, FL
Middlesex-Somerset-Hunterdon, NJ............................... 1.0903
Hunterdon, NJ
Middlesex, NJ
Somerset, NJ
Midland, TX.................................................... 1.0335
Midland, TX
Milwaukee, WI.................................................. 0.9680
Milwaukee, WI
Ozaukee, WI
Washington, WI
Waukesha, WI
Minneapolis-St Paul, MN-WI..................................... 1.0774
Anoka, MN
Carver, MN
Chisago, MN
Dakota, MN
Hennepin, MN
Isanti, MN
Ramsey, MN
Scott, MN
Washington, MN
Wright, MN
St. Croix, WI
Mobile, AL..................................................... 0.8454
Baldwin, AL
Mobile, AL
Modesto, CA.................................................... 1.1530
Stanislaus, CA
Monmouth-Ocean, NJ............................................. 1.0058
Monmouth, NJ
Ocean, NJ
Monroe, LA..................................................... 0.7832
Ouachita, LA
Montgomery, AL................................................. 0.7823
Autauga, AL
Elmore, AL
Montgomery, AL
Muncie, IN..................................................... 0.8397
Delaware, IN
Muskegon, MI................................................... 0.9680
Muskegon, MI
Naples, FL..................................................... 1.0282
Collier, FL
Nashville, TN.................................................. 0.9360
Cheatham, TN
Davidson, TN
Dickson, TN
Robertson, TN
Rutherford TN
Sumner, TN
Williamson, TN
Wilson, TN
Nassau-Suffolk, NY............................................. 1.3167
Nassau, NY
Suffolk, NY
New Bedford-Fall River-Attleboro, MA........................... 0.9962
Bristol, MA
New Haven-Waterbury-Meriden, CT................................ 1.2046
New Haven, CT
New London, London-Norwich..................................... 1.1525
New London, CT
New Orleans, LA................................................ 0.8967
Jefferson, LA
Orleans, LA
St. Bernard, LA
St. Charles, LA
St. John The Baptist, LA
St. Tammany, LA
New York, NY................................................... 1.3431
Bronx, NY
Kings, NY
New York City, NY
Putnam, NY
Queens, NY
Richmond, NY
Rockland, NY
Westchester, NY
Newark, NJ..................................................... 1.1350
Essex, NJ
Morris, NJ
Sussex, NJ
Union, NJ
Niagara Falls, NY.............................................. 0.8350
Niagara, NY
Norfolk-Virginia Beach-Newport News, VA........................ 0.8481
Chesapeake City, VA
Gloucester, VA
Hampton City, VA
James City Co., VA
Newport News City, VA
Norfolk City, VA
Poquoson, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
York, VA
Oakland, CA.................................................... 1.4225
Alameda, CA
Contra Costa, CA
Ocala, FL...................................................... 0.8580
Marion, FL
Odessa, TX..................................................... 1.0835
Ector, TX
Oklahoma City, OK.............................................. 0.9195
Canadian, OK
Cleveland, OK
Logan, OK
McClain, OK
Oklahoma, OK
Pottawatomie, OK
Olympia, WA.................................................... 1.0957
Thurston, WA
Omaha, NE-IA................................................... 0.8953
Pottawattamie, IA
Douglas, NE
Sarpy, NE
Washington, NE
Orange County, NY.............................................. 0.9815
Orange, NY
Orlando, FL.................................................... 0.9582
Orange, FL
Osceola, FL
Seminole, FL
Owensboro, KY.................................................. 0.8082
Daviess, KY
Oxnard-Ventura, CA............................................. 1.2259
Ventura, CA
Panama City, FL................................................ 0.8598
Bay, FL
Parkersburg-Marietta, WV-OH.................................... 0.8505
[[Page 8403]]

Washington, OH
Wood, WV
Pascagoula, MS................................................. 0.8720
Jackson, MS
Pensacola, FL.................................................. 0.8589
Escambia, FL
Santa Rosa, FL
Peoria, IL..................................................... 0.8704
Peoria, IL
Tazewell, IL
Woodford, IL
Philadelphia, PA-NJ............................................ 1.0908
Burlington, NJ
Camden, NJ
Gloucester, NJ
Bucks, PA
Chester, PA
Delaware, PA
Montgomery, PA
Philadelphia, PA
Phoenix, AZ.................................................... 1.0387
Maricopa, AZ
Pine Bluff, AR................................................. 0.7840
Jefferson, AR
Pittsburgh, PA................................................. 1.0087
Allegheny, PA
Fayette, PA
Washington, PA
Westmoreland, PA
Pittsfield, MA................................................. 1.0739
Berkshire, MA
Ponce, PR...................................................... 0.4583
Juana Diaz, PR
Ponce, PR
Portland, ME................................................... 0.9254
Cumberland, ME
Sagadahoc, ME
York, ME
Portland, OR................................................... 1.1529
Clackamas, OR
Multnomah, OR
Washington, OR
Yamhill, OR
Portsmouth-Dover-Rochester, NH................................. 1.0039
Rockingham, NH
Strafford, NH
Poughkeepsie, NY............................................... 1.0639
Dutchess, NY
Providence-Pawtucket-Woonsocket, RI............................ 1.0590
Bristol, RI
Kent, RI
Newport, RI
Providence, RI
Washington, RI
Provo-Orem, UT................................................. 1.0189
Utah, UT
Pueblo, CO..................................................... 0.8687
Pueblo, CO
Racine, WI..................................................... 0.8814
Racine, WI
Raleigh-Durham, NC............................................. 0.9448
Durham, NC
Franklin, NC
Orange, NC
Wake, NC
Rapid City, SD................................................. 0.8366
Pennington, SD
Reading, PA.................................................... 0.8778
Berks, PA
Redding, CA.................................................... 1.0507
Shasta, CA
Reno, NV....................................................... 1.1571
Washoe, NV
Richland-Kennewick, WA......................................... 0.9364
Benton, WA
Franklin, WA
Richmond-Petersburg, VA........................................ 0.9379
Charles City Co., 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................................... 1.1391
Riverside, CA
San Bernardino, CA
Roanoke, VA.................................................... 0.8251
Botetourt, VA
Roanoke, VA
Roanoke City, VA
Salem City, VA
Rochester, MN.................................................. 1.0985
Olmsted, MN
Rochester, NY.................................................. 0.9671
Livingston, NY
Monroe, NY
Ontario, NY
Orleans, NY
Wayne, NY
Rockford, IL................................................... 0.9245
Boone, IL
Winnebago, IL
Sacramento, CA................................................. 1.2280
Eldorado, CA
Placer, CA
Sacramento, CA
Yolo, CA
Saginaw-Bay City-Midland, MI................................... 1.0452
Bay, MI
Midland, MI
Saginaw, MI
St. Cloud, MN.................................................. 0.9382
Benton, MN
Sherburne, MN
Stearns, MN
St. Joseph, MO................................................. 0.9376
Buchanan, MO
St. Louis, MO-IL............................................... 0.9351
Clinton, IL
Jersey, IL
Madison, IL
Monroe, IL
St. Clair, IL
Franklin, MO
Jefferson, MO
St. Charles, MO
St. Louis, MO
St. Louis City, MO
Sullivan City, MO
Salem, OR...................................................... 1.0403
Marion, OR
Polk, OR
Salinas-Seaside-Monterey, CA................................... 1.2988
Monterey, CA
Salt Lake City-Ogden, UT....................................... 0.9892
Davis, UT
Salt Lake, UT
Weber, UT
San Angelo, TX................................................. 0.8107
Tom Green, TX
San Antonio, TX................................................ 0.8418
Bexar, TX
Comal, TX
Guadalupe, TX
San Diego, CA.................................................. 1.2095
San Diego, CA
San Francisco, CA.............................................. 1.4480
Marin, CA
San Francisco, CA
San Mateo, CA
San Jose, CA................................................... 1.4840
Santa Clara, CA
San Juan, PR................................................... 0.4967
Barcelona, PR
Bayoman, PR
Canovanas, PR
Carolina, PR
Catano, 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
Trojillo Alto, PR
Vega Alta, PR
Vega Baja, PR
Santa Barbara-Santa Maria-Lompoc, CA........................... 1.1721
Santa Barbara, CA
Santa Cruz, CA................................................. 1.2733
Santa Cruz, CA
Santa Fe, NM................................................... 0.9102
Los Alamos, NM
Santa Fe, NM
Santa Rosa-Petaluma, CA........................................ 1.2926
Sonoma, CA
Sarasota, FL................................................... 0.9741
Sarasota, FL
Savannah, GA................................................... 0.8294
Chatham, GA
Effingham, GA
Scranton, Wilkes Barre, PA..................................... 0.8916
Columbia, PA
Lackawanna, PA
Luzerne, PA
Monroe, PA
Wyoming, PA
Seattle, WA.................................................... 1.0827
King, WA
Snohomish, WA
Sharon, PA..................................................... 0.9024
[[Page 8404]]

Mercer, PA
Sheboygan, WI.................................................. 0.8836
Sheboygan, WI
Sherman-Denison, TX............................................ 0.9052
Grayson, TX
Shreveport, LA................................................. 0.9262
Bossier, LA
Caddo, LA
Sioux City, IA-NE.............................................. 0.8470
Woodbury, IA
Dakota, NE
Sioux Falls, SD................................................ 0.8797
Minnehaha, SD
South Bend-Mishawaka, IN....................................... 1.0142
St. Joseph, IN
Spokane, WA.................................................... 1.0648
Spokane, WA
Springfield, IL................................................ 0.9258
Menard, IL
Sangamon, IL
Springfield, MO................................................ 0.8050
Christian, MO
Greene, MO
Springfield, MA................................................ 1.0290
Hampden, MA
Hampshire, MA
State College, PA.............................................. 0.9861
Centre, PA
Steubenville-Weirton, OH-WV.................................... 0.8756
Jefferson, OH
Brooke, WV
Hancock, WV
Stockton, CA................................................... 1.1566
San Joaquin, CA
Syracuse, NY................................................... 0.9905
Madison, NY
Onondaga, NY
Oswego, NY
Tacoma, WA..................................................... 1.0276
Pierce, WA
Tallahassee, FL................................................ 0.9183
Gadsden, FL
Leon, FL
Tampa-St. Petersburg-Clearwater, FL............................ 0.9225
Hernando, FL
Hillsborough, FL
Pasco, FL
Pinellas, FL
Terre Haute, IN................................................ 0.8791
Clay, IN
Vigo, IN
Texarkana-TX-AR................................................ 0.7860
Miller, AR
Bowie, TX
Toledo, OH..................................................... 1.0160
Fulton, OH
Lucas, OH
Wood, OH
Topeka, KS..................................................... 0.9265
Shawnee, KS
Trenton, NJ.................................................... 1.0094
Mercer, NJ
Tucson, AZ..................................................... 0.9552
Pima, AZ
Tulsa, OK...................................................... 0.8542
Creeks, OK
Osage, OK
Rogers, OK
Tulsa, OK
Wagoner, OK
Tuscaloosa, AL................................................. 0.8487
Tuscaloosa, AL
Tyler, TX...................................................... 0.9798
Smith, TX
Utica-Rome, NY................................................. 0.8652
Herkimer, NY
Oneida, NY
Vallejo-Fairfield-Napa, CA..................................... 1.3150
Napa, CA
Solano, CA
Vancouver, WA.................................................. 1.0755
Clark, WA
Victoria, TX................................................... 0.8958
Victoria, TX
Vineland-Millville-Bridgeton, NJ............................... 0.9720
Cumberland, NJ
Visalia-Tulare-Porterville, CA................................. 1.0351
Tulare, CA
Waco, TX....................................................... 0.7783
McLennan, TX
Washington, DC-MD-VA........................................... 1.0928
District of Columbia, DC
Calvert, MD
Charles, MD
Frederick, MD
Montgomery, MD
Prince Georges, MD
Alexandria City, VA
Arlington, VA
Fairfax, VA
Fairfax City, VA
Falls Church City, VA
Loudoun, VA
Manassas City, VA
Manassas Park City, VA
Prince William, VA
Stafford, VA
Waterloo-Cedar Falls, IA....................................... 0.8884
Black Hawk, IA
Bremer, IA
Wausau, WI..................................................... 0.9709
Marathon, WI
West Palm Beach-Boca Raton-Delray Beach, FL.................... 1.0095
Palm Beach, FL
Wheeling, WV-OH................................................ 0.8035
Belmont, OH
Marshall, WV
Ohio, WV
Wichita, KS.................................................... 0.9770
Butler, KS
Harvey, KS
Sedgwick, KS
Wichita Falls, TX.............................................. 0.8139
Wichita, TX
Williamsport, PA............................................... 0.8829
Lycoming, PA
Wilmington, DE-NJ-MD........................................... 1.0825
New Castle, DE
Cecil, MD
Salem, NJ
Wilmington, NC................................................. 0.8677
New Hanover, NC
Worcester-Fitchburg-Leominster, MA............................. 1.0782
Worcester, MA
Yakima, WA..................................................... 1.0070
Yakima, WA
York, PA....................................................... 0.9008
Adams, PA
York, PA
Youngstown-Warren, OH.......................................... 0.9826
Mahoning, OH
Trumbull, OH
Yuba City, CA.................................................. 1.0220
Sutter, CA
Yuba, CA
Yuma, AZ....................................................... 0.8850
Yuma, AZ
------------------------------------------------------------------------

Table IIIb.--Wage Index for Rural Areas
------------------------------------------------------------------------
Non-urban areas Wage index
------------------------------------------------------------------------
ALABAMA.................................................... 0.7121
ALASKA..................................................... 1.3372
ARIZONA.................................................... 0.8724
ARKANSAS................................................... 0.6979
CALIFORNIA................................................. 1.0122
COLORADO................................................... 0.8382
CONNECTICUT................................................ 1.1857
DELAWARE................................................... 0.8537
FLORIDA.................................................... 0.8704
GEORGIA.................................................... 0.7769
HAWAII..................................................... 0.9579
IDAHO...................................................... 0.8917
ILLINOIS................................................... 0.7696
INDIANA.................................................... 0.7830
IOWA....................................................... 0.7517
KANSAS..................................................... 0.7426
KENTUCKY................................................... 0.7781
LOUISIANA.................................................. 0.7355
MAINE...................................................... 0.8294
MARYLAND................................................... 0.8029
MASSACHUSETTS.............................................. 1.1607
MICHIGAN................................................... 0.8893
MINNESOTA.................................................. 0.8288
MISSISSIPPI................................................ 0.6935
MISSOURI................................................... 0.7240
MONTANA.................................................... 0.8226
NEBRASKA................................................... 0.6967
NEVADA..................................................... 0.9663
NEW HAMPSHIRE.............................................. 0.9508
NEW JERSEY................................................. \1\
NEW MEXICO................................................. 0.8289
NEW YORK................................................... 0.8371
NORTH CAROLINA............................................. 0.7992
NORTH DAKOTA............................................... 0.7688
OHIO....................................................... 0.8438
OKLAHOMA................................................... 0.7384
OREGON..................................................... 0.9643
PENNSYLVANIA............................................... 0.8620
PUERTO RICO................................................ \2\0.4316
RHODE ISLAND............................................... \1\
SOUTH CAROLINA............................................. 0.7678
SOUTH DAKOTA............................................... 0.7179
TENNESSEE.................................................. 0.7316
TEXAS...................................................... 0.7578
UTAH....................................................... 0.8977
VERMONT.................................................... 0.8997
VIRGINIA................................................... 0.7784
VIRGIN ISLANDS............................................. \2\1.0000
WASHINGTON................................................. 0.9597
WEST VIRGINIA.............................................. 0.8482
WISCONSIN.................................................. 0.8459
WYOMING.................................................... 0.8423
------------------------------------------------------------------------
\1\All counties within State are classified urban.
[[Page 8405]]

\2\Approximate value for area.

Table IV.--Cost Reporting Year Adjustment Factor\1\
------------------------------------------------------------------------
The
If the HHA cost reporting period begins adjustment
factor is
------------------------------------------------------------------------
August 1, 1993............................................. 1.0042
September 1, 1993.......................................... 1.0085
October 1, 1993............................................ 1.0126
November 1, 1993........................................... 1.0169
December 1, 1993........................................... 1.0211
January 1, 1994............................................ 1.0254
February 1, 1994........................................... 1.0299
March 1, 1994.............................................. 1.0340
April 1, 1994.............................................. 1.0385
May 1, 1994................................................ 1.0430
June 1, 1994............................................... 1.0475
------------------------------------------------------------------------
\1\Based on compounded projected market basket inflation rates of 5.10
percent for 1994 and 5.30 percent for 1995.

V. Impact Statement

For notices such as this, we generally prepare a regulatory
flexibility analysis that is consistent with the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 through 612) unless the Secretary certifies
that this notice will not have a significant economic impact on a
substantial number of small entities. For purposes of the RFA, all HHAs
are treated as small entities.
This notice with comment period sets forth a revised schedule of
HHA per-visit cost limits and A&G add-on amounts for hospital-based
HHAs for cost reporting periods beginning on or after July 1, 1993. (We
note that, in accordance with section 13564(b) of OBRA '93, the A&G
add-on for hospital-based HHAs is eliminated effective for cost
reporting periods beginning on or after October 1, 1993.) In addition,
this notice announces the provisions of section 13564(a) of OBRA '93,
which provides for a delay in the updates of the HHA per-visit cost
limits until cost reporting periods beginning on or after July 1, 1996.
As discussed below, the aggregate impact of revising the schedule
of limits effective for cost reporting periods beginning on or after
July 1, 1993 is not significant. In contrast, the requirement under
section 13564(a) of OBRA '93 that these limits remain in place for cost
reporting periods beginning before July 1, 1996 will result in
significant Federal cost savings. The impact of this OBRA '93 provision
also is discussed further below. This notice explains the revised
methodology for calculating the HHA per-visit cost limits that result
from the provisions of OBRA '93. We do not believe that merely
explaining the results of these provisions in this notice will have a
significant effect on a substantial number of small entities.
Therefore, we have determined and the Secretary certifies that a
regulatory flexibility analysis under the RFA is not required.
However, to the extent that a legislative provision being announced
by a notice such as this may have a significant effect on beneficiaries
or providers or may be viewed as controversial, we believe that we
should address any potential concerns. In this instance, we believe it
is desirable to inform the public of our estimate of the substantial
budgetary effect of the statutory requirement that there be no update
in the HHA per-visit cost limits until cost reporting periods beginning
on or after July 1, 1996.

A. Effects of Revised Cost Limits for Cost Reporting Periods Beginning
On or After July 1, 1993 and Before July 1, 1994

In response to comments on the schedule of limits set forth in our
July 8, 1993 notice with comment period, we decided to validate the
database used in calculating the limits. As discussed in section II.A.2
of this notice, we determined that data were missing from a large
number of HHAs and that duplicate cost reports were used in the
calculation of the hospital-based add-on. Consequently, it was
necessary to recalculate the limits and add-on amounts effective for
cost reporting periods beginning on or after July 1, 1993. This notice
sets forth revised per-visit cost limits and add-on amounts for
hospital-based HHAs for cost reporting periods beginning on or after
July 1, 1993. Section II.A.2 of this notice contains tables that
illustrate the effects of using the revised database to calculate the
limits and the A&G add-on amounts. As the tables illustrate, the per-
visit cost limits and A&G add-on amounts change for each discipline.
Most notable is the increase in the limits and add-on amounts for
skilled nursing care and home health aide visits, since these visits
constitute the great majority of covered HHA visits. We estimate that
the aggregate impact of these changes on Medicare spending for HHA care
will be as follows:

Table 1.--Impact of Revised Limits\1\
------------------------------------------------------------------------
Fiscal year Costs
------------------------------------------------------------------------
1994........................................................... 10
1995........................................................... 10
1996........................................................... 10
1997........................................................... 10
------------------------------------------------------------------------
\1\All figures are rounded to the nearest 10 million.

We are unable to estimate the effects of these changes on
individual HHAs. In general, we believe that most HHAs will experience
small revenue increases under the revised limits; the degree of that
increase will vary depending on the proportion of the HHA's revenues
that come from the Medicare program, the distribution of services
provided by the HHA, and the HHA's ability to operate with the cost
limits.

B. Effect of Cost Limits On Cost Reporting Periods Beginning On or
After July 1, 1994 and Before July 1, 1996

In accordance with section 13564(a) of OBRA '93, this notice with
comment period specifies that there will be no changes in the per-visit
cost limits for home health services for cost reporting periods
beginning on or after July 1, 1994, and before July 1, 1996, except as
may be necessary to take into account the elimination of the A&G add-on
for hospital-based HHAs. We estimate that this statutory provision will
result in the following savings to the Medicare program:

Table 2.--Impact of Delay in the Update of HHA Limits\1\
------------------------------------------------------------------------
Fiscal year Savings
------------------------------------------------------------------------
1994.......................................................... $ 0
1995.......................................................... 130
1996.......................................................... 330
1997.......................................................... 100
------------------------------------------------------------------------
\1\All figures are rounded to the nearest $10 million.

As illustrated in Table 3 below, the delay in updating the cost
limits until July 1, 1996, will result in an increase in the number of
HHAs exceeding the HHA cost limits in all categories. Table 3 below
shows the impact of these changes.

Table 3.--Agencies Exceeding the Cost Limits\1\
------------------------------------------------------------------------
Exceeding Exceeding
HHAs in the the
Model limits as limits as
of 7/1/93 of 7/1/95
------------------------------------------------------------------------
Freestanding HHAs...................... 2992 763 1329
Urban................................ 2001 510 911
Rural................................ 991 253 418
Hospital-based HHAs.................... 1053 408 856
Urban................................ 447 173 383
[[Page 8406]]

Rural................................ 606 235 473
------------------------------------------------------------------------
\1\All figures are based on revised cost limits as published in this
notice for cost reporting periods beginning on or before July 1, 1993
and before July 1, 1994.

Again, we are unable to identify the effects of these provisions on
individual HHAs. However, we anticipate that overall HHA payments for
FY 1995 through FY 1997 will be approximately 0.9 percent, 2.0 percent,
and 0.5 percent less, respectively, than they would have been in those
years if the OBRA '93 provisions were not in effect. The effects of
this reduction on the total revenues of individual HHAs will depend on
the HHA's ability to operate within the cost limits and on the
proportion of the HHA's revenues that come from the Medicare program.
We estimate that the delay in updating the limits will not result in a
significant number of facilities' total revenues being increased or
reduced by 3 percent or more from the revised limits effective for cost
reporting periods beginning on July 1, 1993, as set forth in this
notice, adjusted for inflation.
Section 1102(b) of the Act requires the Secretary to prepare a
regulatory impact analysis if a notice such as this may have a
significant impact on the operations of a substantial number of small
rural hospitals. Such an analysis must conform to the provisions of
section 604 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital with fewer than 100 beds
located outside of a Metropolitan Statistical Area.
We have not prepared a rural impact statement since we have
determined and the Secretary certifies that this final notice will not
have a significant economic impact on the operations of a substantial
number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.

VI. Other Required Information

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

In adopting notices such as this, we ordinarily publish a proposed
notice in the Federal Register with a 60-day period for public comment
as required under section 1871(b)(1) of the Act. We also normally
provide a delay of 30 days in the effective date for documents such as
this. However, we may waive these procedures if we find good cause that
prior notice and comment or a delay in the effective date are
impracticable, unnecessary, or contrary to the public interest.
This notice revises the per-visit limits effective for cost
reporting periods beginning on or after July 1, 1993. We believe the
revised limits will be beneficial to HHAs. Moreover, we have revised
the limits based on public comments on our July 8, 1993 notice with
comment period.
In addition, as discussed above, before the enactment of OBRA '93,
section 1861(v)(1)(L)(iii) of the Act required that the HHA per-
discipline cost limits be updated annually no later than July 1 of each
year. However, section 13564(a)(1) of OBRA '93 specifies that there be
no changes in the HHA cost limits (except as may be necessary to take
into account the elimination of the A&G add-on for hospital-based HHAs)
for cost reporting periods beginning on or after July 1, 1994, and
before July 1, 1996. Section 13564(a)(2) of OBRA '93 amended section
1861(v)(1)(L)(iii) of the Act to delay the next required update of the
HHA limits until July 1, 1996.
Thus, in conformance with the clear direction of section 13564(a)
of OBRA '93, this notice announces the new HHA provisions and explains
the effects of these provisions on the methodology used in calculating
the HHA cost limits. We have made no changes in this methodology beyond
those directly required by OBRA '93. Moreover, section 13564(a) of OBRA
'93 mandates that these provisions are effective beginning with cost
reporting periods beginning on or after July 1, 1994. Because many of
the provisions in this notice announce, and explain the impact of,
changes made by statute that are already effective, we believe it is
unnecessary to publish a proposed notice or delay the effective date.
In summary, the only discretionary aspect of this notice is the
revision of the schedule of HHA cost limits effective for cost
reporting periods beginning on or after July 1, 1993. As noted above,
this change is being made in response to public comment and is clearly
beneficial to HHAs. Publishing a proposed rule or delaying the
effective date would postpone the correction of errors in the database
used to compute the HHA cost limits. Thus, we have concluded that in
this instance, it would be impracticable, unnecessary, and contrary to
the public interest to publish a proposed notice or to provide for a
30-day delay in the effective date of this notice. Therefore, we find
good cause to waive publication of a proposed notice and the 30-day
delay in effective date. However, we are providing a 60-day period for
public comment, as indicated at the beginning of this notice.

B. Paperwork Reduction Act

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

C. Requests for Data From the Public

In order to respond promptly to public requests for data used in
calculating the HHA cost limits, we have set up a process under which
commenters can gain access to the raw data on an expedited basis. The
HHA database is available on computer tape format or diskette for $680.
Anyone wishing to purchase data tapes 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.

D. Public Comments

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

Authority: (Sections 1102, 1814(b), 1861(v)(1)(A) and (v)(1)(L),
1866(a), and 1871 of the Social Security Act (42 U.S.C. 1302,
1395f(b), 1395x(v)(1)(A) and (v)(1)(L), 1395cc(a), and 1395hh);
section 13564(a) of Public Law 103-66 (42 U.S.C. 1395x(note)) and 42
CFR 413.30.)

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

Dated: October 11, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: November 4, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 95-3526 Filed 2-13-95; 8:45 am]
BILLING CODE 4120-01-P