[Federal Register Volume 61, Number 127 (Monday, July 1, 1996)] [Notices] [Pages 34344-34365] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-16883] [[Page 34343]] _______________________________________________________________________ Part IX Department of Health and Human Services _______________________________________________________________________ Health Care Financing Administration Medicare Program; Schedule of Limits on Home Health Agency Costs Per Visit for Cost Reporting Periods Beginning On or After July 1, 1996; Notice Federal Register / Vol. 61, No. 127 / Monday July 1, 1996 / Notices [[Page 34344]] DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration [BPD-867-NC] RIN 0938-AH54 Medicare Program; Schedule of Limits on Home Health Agency Costs Per Visit for Cost Reporting Periods Beginning On or After July 1, 1996 AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Notice with comment period. ----------------------------------------------------------------------- SUMMARY: This notice sets forth a revised schedule of limits on home health agency costs that may be paid under the Medicare program. These limits replace the per-visit limits that were set forth in our February 14, 1995 notice with comment period (60 FR 8389). This notice also responds to comments on the February 14, 1995 notice. This notice does not provide for a permanent extension of the provision of the Omnibus Budget Reconciliation Act of 1993 (OBRA '93) that there be no changes in the home health agency cost limits for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996. However, a proposal to extend the effects of the OBRA '93 freeze is included in President Clinton's FY 1997 Budget. DATES: Effective Date: The schedule of limits is effective for cost reporting periods beginning on or after July 1, 1996. Comment Date: Written comments will be considered if we receive them at the appropriate address, as provided below, no later than 5 p.m. on August 30, 1996. ADDRESSES: Mail comments (one original and three copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: BPD-867-NC P.O. Box 7517 Baltimore, MD 21207-0517 If you prefer, you may deliver your written comments (one original and three copies) to one of the following addresses: Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20221, or Room C5-09-26, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting please refer to file code BPD-867-NC. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 309-G of the Department's offices at 200 Independence Avenue, SW., Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (Phone: (202) 690-7890). Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 783-3238 or by faxing to (202) 275- 6802. The cost for each copy is $8.00. As an alternative, you may view and photocopy the Federal Register document at most libraries designated as U.S. Government Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register. FOR FURTHER INFORMATION CONTACT: Michael Bussacca, (410) 786-4602. SUPPLEMENTARY INFORMATION: I. Background Section 1861(v)(1)(A) of the Social Security Act (the Act) authorizes the Secretary to establish limits on allowable costs incurred by a provider of services that may be paid under the Medicare program, based on estimates of the costs necessary in the efficient delivery of needed health services. Under this authority, we have maintained limits on home health agency (HHA) per-visit costs since 1979. The limits may be applied to direct or indirect overall costs or to the costs incurred for specific items or services furnished by the provider. Implementing regulations are located at 42 CFR 413.30. Additional statutory provisions specifically 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 on or after July 1, 1986, and 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 (except for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996). In establishing these limits, the Act directs the Secretary to use the applicable hospital wage index, as discussed below. On February 14, 1995, we published in the Federal Register (60 FR 8389) a notice with comment period that set forth 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. These limits replaced the per-visit limits that were set forth in our July 8, 1993 notice with comment period (58 FR 36748). Like the July 8, 1993 limits, the February 14, 1995 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 later estimates in the ``market basket'' index to reflect changes in the prices of goods and services furnished by HHAs. The February 14, 1995 notice also provided, in accordance with section 13564(a) of the Omnibus Budget Reconciliation Act of 1993 (OBRA `93) (Public Law 103-66), that there be no changes in the HHA costs limits for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996 (except as needed to take into account the elimination of the A&G add-on for hospital-based HHAs, effective for cost reporting periods beginning on or after October 1, 1993). This notice with comment period sets forth cost limits for cost reporting periods beginning on or after July 1, 1996. As required by section 1861(v)(1)(L)(iii) of the Act, we are using the area wage index applicable under section 1886(d)(3)(E) of the Act determined using the survey of the most recent available wages and wage-related costs of hospitals located in the geographic area in which the HHA is located. For purposes of this notice, the HHA wage index is based on the most recent hospital wage index, that is, the hospital wage index effective for hospital discharges on or after October 1, 1995, which uses FY 1992 wage data. As the statute also specifies, in applying the hospital wage index to HHAs, no adjustments are to be made to account for hospital reclassifications under section 1886(d)(8)(B) of the Act, decisions of the Medicare Geographic Classification Review Board under [[Page 34345]] section 1886(d)(10) of the Act, or decisions by the Secretary. II. Analysis of and Response to Public Comments We received 14 items of timely correspondence on the February 14, 1995 notice with comment period. These comments and our responses are discussed below. Comment: Nine commenters stated that, in view of the elimination, effective for cost reporting periods beginning on or after October 1, 1993, of the payment adjustment for the A&G cost of hospital-based HHAs, it was no longer appropriate to establish cost limits based only on cost reporting data from freestanding HHAs. Although the commenters acknowledged that section 1861(v)(1)(L)(i) of the Act continues to require that the limits be based on the ``* * * per visit costs for freestanding home health agencies'', they suggested that this provision was inconsistent with the elimination of the A&G add-on under section 13564(b) of OBRA `93 and requested that cost reporting data from both hospital-based and freestanding agencies be used in establishing the limits. Response: As the commenters noted, 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 mean per-visit costs of freestanding agencies. Although section 13564(b) of OBRA '93 amended section 1861(v)(1)(L)(ii) of the Act to provide that, effective for cost reporting periods beginning on or after October 1, 1993, we no longer make a payment adjustment to the limits to account for the A&G costs of hospital-based agencies, this provision of OBRA '93 did not amend the explicit requirement of section 1861(v)(1)(L)(i) of the Act concerning the agency costs upon which the limits are to be based. Therefore, the limits continue to be based on the costs of freestanding home health agencies, as required by the Act. We have no discretion to include hospital-based providers in the calculation of HHA limits. Comment: One commenter suggested that certain services be allowed when provided by a pharmacist in the patient's home such as patient counseling/education, clinical assessment, drug regimen review and drug therapy monitoring. Response: Section 1861(m) of the Act provides for per-visit payment to HHAs solely for those services provided by the six home health disciplines. Current policy does not provide for payment for home visits by pharmacists as suggested by the commenter. Comment: One commenter asked if the special adjustment factors for cost reporting periods of other than 12 months would have to be revised because of the changes in the revised schedule of limits published on February 14, 1995. Response: The projected annual rates of inflation used in the July 8, 1993 and February 14, 1995 notices were the same, as were the adjustment factors in both notices. Therefore, no change in the special adjustment factors to be applied by the intermediaries was necessary. Comment: Two commenters requested clarification on how HCFA applies the add-on adjustment to the limits for those agencies with costs in excess of their limit that are attributable to the Occupational Safety and Health Administration (OSHA) universal precaution requirement. Response: As discussed in detail later, the OSHA add-on is no longer necessary for cost reporting periods beginning on or after July 1, 1996. Even for cost reporting periods prior to that date, the OSHA add-on is not an automatic adjustment to the home health agency cost limits. An agency must apply to the intermediary for the add-on amount and the agency must demonstrate that it will exceed its cost limit and provide adequate documentation to support the add-on adjustment. The agency must show that it has incurred expenses to comply with the OSHA requirements. Documentation should include copies of the agency's infection control procedure, invoices documenting the purchase of gloves, gowns and other disposable items. The costs of inoculations of hepatitis B vaccine can also be used to support the adjustment. An HHA can also provide documentation that it has given training to the employees concerning blood-borne pathogens. We provided instructions to HCFA's intermediaries spelling out these requirements in a 1994 program memorandum. Comment: One commenter stated that the HHA market basket increases have consistently lagged behind actual cost-per-visit increases. Response: As discussed in detail below in section IV of this notice and the Appendix, we have used a revised and rebased market basket in calculating the cost limits set forth in this notice. Actual aggregate cost-per-visit increases reflect changes in both the mix of visit types and the quantity and intensity of services per visit, as well as discretionary purchase price increases higher than reasonable costs. In contrast, the HHA market basket is designed to measure price to inflation for inputs used to produce HHA service. Thus, we would not expect actual aggregate cost-per-visit increases to equal changes in an HHA market basket that reflects pure price increases for efficient purchases. Comment: Nine commenters questioned whether HCFA had correctly interpreted the requirement under section 13564(a) of OBRA `93 that there be no changes in the previous per-visit HHA cost limits for cost reporting periods beginning on or after July 1, 1994 and before July 1, 1996. The commenters pointed out that, under our July 8, 1993 notice, the cost limits of HHAs with cost reporting periods beginning on or after July 1, 1993, and before July 1, 1994, were subject to monthly cost reporting period adjustment factors to allow for the effects of inflation on the cost limits of HHAs with different cost reporting periods. Subsequently, under our February 14, 1995 notice, we specified that each HHA's latest per-visit cost limit for a period beginning on or after July 1, 1993, and before July 1, 1994, was to remain in effect until its cost reporting period beginning on or after July 1, 1996. Thus, HHAs with cost reporting periods beginning on July 1, 1993, for example, would be subject to lower limits than HHAs with cost reporting periods that began any time after that date. Commenters asserted that this policy created continuing inequities and suggested several alternatives, including:Eliminate the monthly cost reporting period adjustment factors for all HHAs. Set the cost reporting period adjustment factor for all HHAs to the level that would have been in effect for an agency whose cost reporting period began on June 30, 1994, effectively equalizing payment to all HHAs at the highest possible level under the limits effective for cost reporting periods beginning on or after July 1, 1993, until the establishment of the new limits effective for cost reporting periods beginning on or after July 1, 1996. Amend OBRA '93 to allow for the use of the market basket inflation factors set forth in our July 8, 1993 notice with comment period. Response: We recognize that the provisions of OBRA '93 produced differences in per-visit limits for HHAs depending on their cost reporting periods. However, we do not believe that the interpretations of OBRA '93 suggested by the commenter are within our authority, given the explicit language of section 13564 of OBRA '93, which precludes ``any change'' to the existing limits (except for those related [[Page 34346]] to the elimination of the A&G add-on for hospital-based HHAs). The Congress undoubtedly was aware that not all HHAs have the same cost reporting periods, but chose not to make any adjustments to the existing cost limits in setting forth the relevant provisions. In our view, none of the three specific alternatives raised by the commenters could be accomplished through rulemaking, but would require further legislative action. Comment: Several commenters recommended that HCFA study the weighting and price proxies of the present market basket index. Response: As discussed in detail below, in the process of developing a revised and rebased market basket, we have thoroughly examined the current market basket cost categories, weights, and price proxies. We have tabulated freestanding HHA 1993 Medicare cost report data, the latest available data that are relatively complete, in order to develop the cost structure of freestanding home health agencies. New cost categories based on the latest Medicare Cost Reports and other sources have been used and revised price proxies have been applied that more accurately represent reasonable price changes of the new cost categories. The 1993-based weights reflect the latest available structure of costs for HHAs. The 1993-based market basket has 12 cost categories, only three of which replicate the previous, 1976-based market basket cost categories. Both the wages and salaries and employee benefit price proxies are occupational indexes and have relative weights specific to the home health industry. Price proxies reflect economy-wide as well as hospital wages. The occupational indexes each contain four occupational subcategories: professional and technical workers (including registered nurses, therapists, medical social workers and other professional/ technical workers); managerial and supervisory workers; clerical workers; and service workers (which includes home health aides). The non-labor proxies include price series which represent specific cost categories such as telephones and postage expenses as well as more general categories, such as All Other Expenses. We believe that the 1993-based market basket cost categories accurately reflect the structure of HHA costs, and that the price proxies accurately reflect the price changes in the goods and services purchased by prudent HHAs. Comment: Several commenters recommended that HCFA include service- related measures in order to make the market basket a better prognosticator of costs per visit. Response: Under a case-mix system of payment, service-related measures may be useful in setting upper limits for particular illness levels for each of the categories of HHA visits, just as prospective payment system for hospitals uses different illness levels for various diagnostic groups. Under the current HHA payment system, however, different intensities of HHA services associated with patients' illness levels and needs for care are reflected in the mix of types of visits used and in the number and length of visits per week. The percent increase in costs per visit per unit of time are approximately the same for all categories of visits. Thus, we apply a uniform HHA market basket inflation adjustment, just as the hospital prospective payment system uses a single hospital market basket adjustment factor for all DRGs. Comment: One commenter stated that the wage indices in the February 14, 1995 and July 8, 1993 notices should have reflected changes to the Metropolitan Statistical Areas (MSAs) that were included in the hospital prospective payment system proposed rule published on May 26, 1993 (58 FR 30222). Response: Section 1861(v)(I)(L)(iii) of the Act specifies that in establishing the HHA cost limits, we use the area wage index applicable under section 1886(d)(3)(E) of the Act. The hospital wage index used in both our July 8, 1993 and February 14, 1995 notices was the index applicable on July 1, 1993, the effective date of the July 8, 1993 and February 14, 1995 cost limits notices. (Subsequently, section 13564(a) of OBRA '93 specified that there be no changes in the HHA costs limits, except those related to the elimination of the A&G add-on, for cost reporting periods beginning on or after July 1, 1994 and before July 1, 1996.) As noted in our May 26, 1993 proposed rule and confirmed in the September 1, 1993 hospital prospective payment system final rule, the revisions to MSA designations that were discussed in the May 26, 1993 proposed rule did not take effect until October 1, 1993 (58 FR 46292). Thus, for HHA payment purposes these MSA changes are now taking effect, under this notice, for cost reporting periods beginning on or after July 1, 1996. III. Updating the Wage Index on a Budget-Neutral Basis Section 4207(d)(2) of the Omnibus Budget Reconciliation Act of l990 (OBRA '90) (Public Law 101-508) requires that, in updating the wage index, aggregate payments to HHAs will remain the same as they would have been if the wage index had not been updated. Therefore, overall payments to HHAs are not affected by changes in the wage index values. To comply with the requirement of section 4207(d)(2) of OBRA '90 that updating the wage index be budget neutral, we determined that it is necessary to apply a budget neutrality adjustment factor of 0.91 to the labor-related portion of the cost limits. This adjustment ensures that aggregate payments to HHAs are not affected by the change to a wage index based on the hospital wage index published on September 1, 1995. That is, an adjustment of -9.1 percent in the labor-related portion of the limits results in the same program expenditures as if we had not updated the wage index (See the example in section VIII.A of this notice regarding the adjustment of cost limits by the wage index and the budget neutrality factor.) IV. Update of Limits The methodology used to develop the schedule of limits set forth in this notice is the same as that used in setting the limits effective July 1, 1993. We are continuing to use the latest settled cost report data from freestanding HHAs to develop the HHA cost limits. We have updated the cost limits to reflect the expected cost increases occurring between the cost reporting periods for the data contained in the data base and June 30, 1997. A. Data Used To develop the schedule of limits effective July 1, 1996, we extracted actual cost per-visit data from settled Medicare cost reports for periods beginning on or after June 1, 1991, and settled by October 1, 1995. The majority of the cost reports were from Federal fiscal year (FY) 1993. We then adjusted the data using the latest available market basket indexes to reflect expected cost increases occurring between the cost reporting periods contained in our data base and June 30, 1997. In previous cost limits, HCFA used the market basket index to adjust the cost report data to the midpoint (December 31) of the first cost reporting period to which the limits applied (July 1). The present limits adjust the data to the end of the first cost reporting period to which the limits apply (June 30, 1997), a change that will enable fiscal intermediaries to calculate the applicable adjustment factors for HHAs with a cost reporting period of fewer than 12 months. Previously, the [[Page 34347]] intermediaries had to contact HCFA's central office for this adjustment. We note that, under this notice, we are no longer providing for an add-on to the HHA cost limits for those HHAs that incur costs associated with the OSHA universal precaution requirements. This add-on is no longer necessary because these updated limits were computed using a data base that includes the costs of complying with the OSHA standards. B. Wage Index The wage index is used to adjust the labor-related portion of the limits to reflect differing wage levels among areas. In setting this schedule of limits, we used the FY 1996 hospital wage index, which is based on 1992 hospital wage data. Each HHA's labor market area is determined based on the definitions of MSAs issued by the Office of Management and Budget (OMB). Section 1861(v)(1)(L) of the Act requires that we use the current hospital wage index (that is, the FY 1996 hospital wage index, which was published in the Federal Register on September 1, 1995 (60 FR 45883)) to establish the HHA cost limits. Therefore, this schedule of limits reflects the MSA definitions that currently are in effect under the hospital prospective payment system. We are continuing to incorporate exceptions to the MSA classification system for certain New England counties that were identified in the July 1, 1992 notice (57 FR 29410). These exceptions have been recognized in setting hospital cost limits for cost reporting periods beginning on and after July 1, 1979 (45 FR 41218), and were authorized under section 601(g) of the Social Security Amendments of 1983 (Public Law 98-21). Section 601(g) of Public Law 98-21 requires that any hospital in New England that was classified as being in an urban area under the classification system in effect in 1979 will be considered urban for the purposes of the hospital prospective payment system. This provision is intended to ensure equitable treatment under the hospital prospective payment system. Under this authority, the following counties have been deemed to be urban areas for purposes of payment under the inpatient hospital prospective payment system: Litchfield County, CT in the Hartford, CT MSA. York County, ME and Sagadahoc County, ME in the Portland, ME MSA. Merrimack County, NH in the Boston-Brockton-Nashua, MA-NH MSA. Newport County, RI in the Providence Fall-Warwick, RI MSA. We are continuing to grant these urban exceptions for the purpose of applying the HCFA hospital wage index to the HHA cost limits. These exceptions result in the same New England County Metropolitan Area (NECMA) definitions for hospitals, SNFs, and HHAs. In New England, MSAs are defined on town boundaries rather than on county lines but exclude parts of the four counties cited above that would be considered urban under the MSA definition. Under this notice, those four counties are urban under either definition, NECMA or MSA. V. Provisions of the HHA Schedule of Limits The schedule of limits set forth below was calculated using 112 percent of the mean per-visit costs of free-standing HHAs and is adjusted by the latest estimates in the market basket index. The schedule of limits effective for cost reporting periods beginning on or after July 1, 1996 is based on the latest settled cost data available and provides for the following: A classification system based on whether an HHA is located within an MSA, a NECMA, or a non-MSA area. (See Tables 7a and 7b in section X of this notice for the listing of MSAs, NECMAs, and rural areas.) The use of a single schedule of limits for hospital-based and freestanding agencies. This single limit is based on the cost experience of freestanding agencies. The use of a market basket index, which was developed from the price of goods and services purchased by HHAs to account for the impact of changing wage and price levels on HHA costs. The market basket has been rebased and revised as described in section VI of this notice. The use of the current hospital wage index. The wage index is used to adjust the labor-related portion of the limits. The employee wage portion of the market basket index, including a proportionate share of contract services (64.226 percent), and the employee benefits portion (13.442 percent) are used to determine the labor component (77.668 percent) of all HHA per-visit costs used to set the limits. Separate treatment of the labor-related and nonlabor components of per-visit costs. The separate components of costs are calculated by obtaining actual HHA cost data for each agency for cost periods beginning on or after June 1, 1991 and settled before October 1, 1995, and increasing those data by the actual and projected increases in the HHA market basket index. We then separate each HHA's per-visit costs into labor and nonlabor portions, and divide the labor portion by the wage index value for the agency's location to control for the effect of geographic variations in prevailing wage levels. Separate means are computed for the labor and nonlabor components of per-visit costs. For each comparison group, the resulting amounts are shown in Table 6 of section IX of this notice. The application of a cost-of-living adjustment to the nonlabor portion of the limit for HHAs located in Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands. Limits that are determined for the per-visit cost of each type of home health service: skilled nursing care, physical therapy, speech pathology, occupational therapy, medical social services, and home health aide. Application of the limits in the aggregate after an HHA's actual costs are adjusted. An HHA's actual costs are adjusted for individual items of cost that are found to be excessive under Medicare principles of provider payment and for costs that are not included in the limitation amount. The limits are applied in the aggregate to the cost remaining after these adjustments are made. Payment is limited to the lower of the actual costs or the cost limits. VI. Rebasing and Revising of the Home Health Agency Market Basket A. Background Effective for cost reporting periods beginning on or after July 1, 1980, HCFA developed and adopted a home health agency input price index (that is, the home health agency ``market basket''). Although ``market basket'' technically describes the mix of goods and services used to produce home health care, this term is also commonly used to denote the input price index derived from that market basket. Accordingly, the term ``market basket'' used in this notice refers to the home health agency input price index. The percentage change in the market basket reflects the average change in the price of goods and services purchased by home health agencies to furnish reasonable cost home health care services. HCFA first used the market basket to adjust home health agency cost limits by an amount that reflected the average increase in the prices of the goods and services used to furnish reasonable cost home health care. This approach linked the increase in the cost limits to the efficient utilization of resources. For background information on the home health agency market basket, see the February 15, 1980 [[Page 34348]] Federal Register (45 FR 10451) and the February 14, 1995 Federal Register (60 FR 8392). The home health agency market basket is a fixed-weight Laspeyres type price index constructed in three steps. First, a base period is selected and total base period expenditures are estimated for mutually exclusive and exhaustive spending categories based upon type of expenditure. Then the proportion of total costs that each category represents is determined. These proportions are called ``cost'' or ``expenditure weights.'' The next step essential for developing an input price index is to match each expenditure category to an appropriate price/wage variable, called a price proxy. These proxy variables are drawn from a publicly available statistical series published on a consistent schedule, preferably at least quarterly. In the final step, the price level for each spending category is multiplied by the expenditure weight for that category. The sum of these products (that is, weights multiplied by proxied indexed levels) for all cost categories yields the composite index level in the market basket in a given year. Repeating the third step (that is, establishing a price proxy for each expenditure category) for other years will produce a time series of market basket index levels. Dividing one index level by an earlier index will produce rates of growth in the input price index. The market basket is described as a fixed-weight index because it answers the question of how much more or less it would cost, at a later time, to purchase the same mix of goods and services that was purchased in the base period. The effects on total expenditures resulting from changes in the quantity or mix of goods and services purchased subsequent to the base period are by design not considered. HCFA believes that it is desirable to rebase the market basket so the cost weights reflect changes in the mix of goods and services that HHAs purchase (HHA inputs) in furnishing home health care. The current HHA cost weights are from calendar year 1976. To the extent feasible, the data used to rebase the home health agency market basket are from FY 1993. If data from other periods supplemented FY 1993 data, they were aged forward or backward for price changes. B. Rebasing and Revising the Home Health Agency Market Basket The terms ``rebasing'' and ``revising'', while often used interchangeably, actually denote different activities. Rebasing is the term used to define moving the base year for the structure of costs of an input price index (that is, for this notice we are moving the base year cost structure from calendar year 1976 to Federal fiscal year 1993). Revising is the term used to define changing data sources, cost categories, and/or price proxies used in the input price index. HCFA has rebased and revised the home health agency market basket to: Reflect 1993 cost data, the latest available data on the structure of HHA costs, rather than 1976 cost data; Create additional cost categories; and Modify certain variables used as the price proxies for some of the cost categories, using improved price proxies that were not available when the current market basket was developed. In developing the revised market basket, HCFA reviewed HHA expenditure data for the market basket cost categories. For each freestanding HHA, we reviewed the latest settled cost report whose cost reporting period began on or after June 1, 1991 and was settled by October 1, 1995. These reports primarily were from FY 1993. Earlier and later year cost data were aged forward or backward for price changes to FY 1993. Data on home health agency expenditures for nine major expense categories (wages and salaries, employee benefits, transportation, operation and maintenance, administrative and general, insurance, fixed capital, movable capital, and a residual ``all other'') were tabulated. Expenditures for contract services were also tabulated from these Medicare cost reports. After totals for these main cost categories were calculated, we then determined the proportion of total costs that each category represents. The proportions represent the major rebased market basket weights. Weights for the telephone, paper and printing, postage, and residual all other administrative and general subcategories were determined using the latest available (1987) U.S. Department of Commerce Bureau of Economic Analysis (BEA) Input-Output Table, from which data for other medical and health services were extracted. These data were aged from 1987 to 1993 using relative price changes. The BEA Input-Output database, which is updated at 5-year intervals, was most recently described in the Survey of Current Business article, ``Benchmark Input-Output Accounts for the U.S. Economy, 1987'' (April 1994). This work resulted in the identification of 12 separate cost categories. The 1976-based home health agency market basket had nine separate cost categories. Detailed descriptions of each category and respective price proxy are provided in the Appendix to this notice. The differences between the major categories for the 1993-based index and those used for the current 1976-based index are summarized in Table 1 below. HCFA has allocated the Contracted Services weight to the Wages and Salaries and Employee Benefits cost categories in the 1976-based index in the same way as the 1993-based index for consistency and ease of comparison. See Table 2 for documentation of how HCRIS contract services' labor was allocated to three cost category components. Table 1.--Comparison of 1993 and 1976 Home Health Agency Major Cost Categories and Weights ---------------------------------------------------------------------------------------------------------------- 1976-based market basket, Rebased 1993 adjusted for Home Health consistency of Cost categories Agency market contract labor basket with rebased 1993-based market basket ---------------------------------------------------------------------------------------------------------------- Wages and Salaries, including allocated Contract Services' Labor................ 64.226 70.724 Employee Benefits, including allocated Contract Services' Labor................. 13.442 8.577 All Other, including allocated Contract Services' Non-Labor to Other Administrative & General and Other Expenses.................................... 22.332 20.699 ------------------------------- Total..................................................................... 100.000 100.000 ---------------------------------------------------------------------------------------------------------------- [[Page 34349]] The 1993-based cost categories and weights are listed in Table 2 below. Table 2.--1993-Based Cost Categories, Weights, and Price Proxies ---------------------------------------------------------------------------------------------------------------- 1993-based Cost Category market basket Price proxy weight ---------------------------------------------------------------------------------------------------------------- Compensation, including allocated Contract 77.668 ........................................... Services' Labor. Wages and Salaries, including allocated 64.226 HHA Occupational Wage Index. Contract Services' Labor. Employee benefits, including allocated Contract 13.442 HHA Occupational Benefits Index. Services' Labor. Operations & Maintenance........................... 0.832 CPI-U Fuel & Other Utilities. Administrative & General, including allocated 9.569 ........................................... Contract Services' Non-Labor. Telephone...................................... 0.725 CPI-U Telephone. Paper & Printing............................... 0.529 CPI-U Household Paper, Paper Products & Stationery Supplies. Postage........................................ 0.724 CPI-U Postage. Other Administrative & General, including 7.591 CPI-U Services. allocated Contract services Non-Labor. Transportation..................................... 3.405 CPI-U Private Transportation. Capital-Related.................................... 3.204 ........................................... Insurance...................................... 0.560 CPI-U Household Insurance. Fixed Capital.................................. 1.764 CPI-U Owner's Equivalent Rent. Movable Capital................................ 0.880 PPI Machinery & Equipment. Other Expenses, including allocated Contract 5.322 CPI-U All Items Less Food & Energy. Services' Non-Labor. ---------------- Total........................................ 100.000 ........................................... ---------------------------------------------------------------------------------------------------------------- In the 1976-based market basket, the labor-related portion was 79.301 and the remaining share was 20.699. In the revised and rebased market basket, the labor-related share is 77.668. The labor-related share includes wages and salaries, employee benefits, and contracted services' labor. The nonlabor-related share is 22.332. The higher share of nonlabor-related cost in 1993 may reflect in part the changing cost structure associated with the post-prospective payment system case mix of home health agencies. Table 3 details the components of the labor- related share for the 1976-based and 1993-based market baskets. Table 3.--Labor-Related Share of Home Health Agency Market Basket ------------------------------------------------------------------------ 1993-based 1976-based Cost category market basket market basket weight weight ------------------------------------------------------------------------ Wages and Salaries, including Contract Services' Labor allocation............. 64.226 70.724 Employee Benefits, including Contract Services' Labor allocation............. 13.442 8.577 Contracted Services, Labor-Related share (\1\) (\1\) ------------------------------- Total Labor Related............... 77.668 79.301 ------------------------------- Total Non-Labor Related........... 22.332 20.699 ------------------------------------------------------------------------ \1\Included above. After the 1993 cost weights for the rebased home health agency market basket were computed, we selected the most appropriate wage and price proxies currently available to monitor the rate of increase for each expenditure category. The indicators are based on Bureau of Labor Statistics (BLS) data and are grouped into one of the following BLS categories: Employment Cost Indexes--Employment Cost Indexes (ECIs) measure the rate of change in employee wage rates and employer costs for employee benefits per hour worked. These indexes are fixed-weight indexes and strictly measure the change in wage rates and employee benefits per hour. They are not affected by shifts in employment mix. ECIs were not available when we developed the calendar year 1976-based home health agency market basket. ECIs are superior to average hourly earnings as price proxies for input price indexes for two reasons: (1) They measure pure price change, and (2) they are available by occupational groups, not just by industry. Consumer Price Indexes--Consumer Price Indexes (CPIs) measure change in the prices of final goods and services bought by the typical consumer. Consumer price indexes were used when the expenditure was more similar to that of retail consumers in general rather than a purchase at the wholesale level, or if no appropriate Producer Price Index (PPI) was available. [[Page 34350]] Producer Price Indexes--PPIs are used to measure price changes for goods sold in other than retail markets. For example, a PPI for movable equipment was used, rather than a CPI for equipment. PPIs in some cases are preferable price proxies for goods that home health agencies purchase as inputs utilized in the process of producing their outputs. Average Hourly Earnings--Average Hourly Earnings (AHEs) are used to measure the rate of change of earnings for various industries and, therefore, can reflect a changing occupational mix within a particular industry. The AHE series is calculated by dividing gross payrolls by total hours, and it measures actual earnings rather than pure wage rates. It is a current-weight series rather than a fixed-weight index and thus reflects shifts in employment mix. An AHE rather than an ECI is used when there is no corresponding ECI category that is an appropriate measure of growth for a given labor category or when the ECI does not have sufficient length of history to be useful for our purpose. The 1993-based HHA input price index does not use AHE as a price proxy, but the 1976-based index did. Our price proxies for the rebased home health agency market basket are summarized in the Appendix to this notice. The forecasted rate of growth for the fiscal year, beginning July 1, 1996, for the rebased home health agency market basket is 3.1 percent, while the forecasted rate of growth for the 1976-based home health agency market basket is 3.3 percent. A comparison of the yearly changes from 1993-1998 for the 1976-based market basket and the 1993-based market basket is shown below. Table 4--Comparison of the 1993-Based Market Basket and the 1976-Market Basket, Percent Change, 1993-1998 ---------------------------------------------------------------------------------------------------------------- Home Health Home Health Agency market Agency market Difference (1993- Fiscal years beginning July 1 basket, FY basket, CY based minus 1976- 1993 base 1976 base based ---------------------------------------------------------------------------------------------------------------- Historical: July 1992, FY 1993...................................... 3.4 3.8 (0.4) July 1993, FY 1994...................................... 3.0 2.7 0.3 July 1994, FY 1995...................................... 2.9 3.2 (0.3) Forecasted: July 1995, FY 1996...................................... 2.7 3.1 (0.4) July 1996, FY 1997...................................... 3.1 3.3 (0.2) July 1997, FY 1998...................................... 3.2 3.4 (0.2) Historical Average: 1993-1995............................... 3.1 3.2 (0.1) Forecasted Average: 1996-1998............................... 3.0 3.3 (0.3) ---------------------------------------------------------------------------------------------------------------- Source: DRI/McGraw Hill HCC, 1st QTR 1996;@USSIM/TREND25YR0296 @CISSIM/CONTROL961. Released by HCFA, OACT, Office of National Health Statistics. Note that the historical average rate of growth for 1993-1995 for the home health agency 1993-based market basket was only 0.1 percentage points less than that of the 1976-based market basket, an insignificant difference. HCFA believes that the 1993-based HHA market basket gives a more accurate measure of the annual increases in reasonable cost care because (1) The cost structure reflects 1993 rather than 1976 costs, and (2) superior new wage-price variables have been incorporated into the 1993-based index. The forecasted average annual rate of growth for 1996-1998 is 3.0 percent for the 1993-based market basket, and 3.3 percent for the 1976-based market basket. Given the complexities of forecasting, this difference is very small. HCFA has developed a HHA Blended Wage and Salary Index and a HHA Blended Benefits Index. HCFA will use these blended indexes as price proxies for the wages and salary and the employee benefits portions of the market basket. In the 1976-based market basket, the average hourly earnings in the hospital industry (nonsupervisory workers) was used as a price proxy for wages and salaries, and the supplements to wages and salaries per worker in nonagricultural establishments were used as a price proxy for employee benefits. The new price proxies for these two cost categories are similar to those used in the prospective payment hospital market basket and the excluded hospital market basket, but with occupational weights reflecting the occupational mix in home health agencies. These proxies are a combination of internal and external proxies (health industry specific and economy-wide). HCFA has disaggregated the mix of home health agency workers into specific categories and applied a combination of internal and external price proxies in the HCFA HHA Occupational Wage and Salary and Benefits Indexes. The supply and demand relationships for certain professional-technical occupations such as registered nurses may be more appropriately reflected in the blended indicators of compensation changes for professional and technical employees. The occupational composition of the HHA Occupational Wage and Salary Index and the HHA Occupational Benefits Index are shown in the Appendix to this notice. VII. Methodology for Determining Cost-per-Visit Limits A. Data For this notice, the cost-per-visit limit values were determined by extracting settled actual cost-per-visit data from Medicare cost reports for periods beginning on or after June 30, 1991, and settled before October 1, 1995. We then adjusted the data using the latest available market basket factors to reflect expected cost increases occurring between the cost reporting periods contained in our data base and June 30, 1997. The following adjustment factors were used to compute the per-visit costs: [[Page 34351]] Table 5.--Factors for Inflating Data Base Dollars to June 30, 1997 [Inflation Adjustment Factors] \1\ ---------------------------------------------------------------------------------------------------------------- Fiscal year end 1992 1993 1994 ---------------------------------------------------------------------------------------------------------------- January 31...................................................... .............. 1.13729 1.10178 February 28..................................................... .............. 1.13412 1.09908 March 31........................................................ .............. 1.13096 1.09642 April 30........................................................ .............. 1.12782 1.09380 May 31.......................................................... .............. 1.12473 1.09121 June 30......................................................... 1.15976 1.12172 1.08863 July 31......................................................... 1.15643 1.11878 1.08606 August 31....................................................... 1.15316 1.11589 1.08349 September 30.................................................... 1.14995 1.11301 1.08090 October 31...................................................... 1.14678 1.11015 1.07830 November 30..................................................... 1.14363 1.10731 1.07571 December 31..................................................... 1.14047 1.10453 1.07316 ---------------------------------------------------------------------------------------------------------------- \1\ By multiplying nominal dollars for a given fiscal year end by its respective inflation adjustment factor will express those dollars in the dollar levels for June 30, 1997. Sources: Input Price Index used to develop adjustment factors were obtained from DRI/McGraw-Hill for the period between 1989:4 and 1999:4. The forecasts are from DRI's 1st QTR 1996;@USSIM/TREND25YR 0296 @CISSIM/Control 961 forecast exercise which has historical data through 1995:4. B. Cost Reporting Periods Consisting of Fewer Than 12 Months HHAs may have cost reporting periods that are fewer than 12 months in duration. This may happen, for example, when a new provider enters the Medicare program after its selected fiscal year has already begun, or when a provider experiences a change of ownership before the end of the cost reporting period. As explained in section IV of this preamble, the data used in calculating the cost limits were updated to June 30, 1997. Therefore, the cost limits published in this notice are for a 12- month cost reporting period beginning July 1, 1996 and ending June 30, 1997. For 12-month cost reporting periods beginning after July 1, 1996 and before July 1, 1997, cost reporting year adjustment factors are provided in Table 8. However, when a cost reporting period consists of fewer than 12 months, adjustments must be made to the data that have been developed for use with 12-month cost reporting periods. In previous notices, we instructed intermediaries to contact HCFA for short period adjustment factors. In this notice, however, to promote the efficient dissemination of cost limits to providers with cost reporting periods of fewer than 12 months, we are publishing the following examples and tables to enable intermediaries to calculate the applicable adjustment factors. Cost reporting periods of fewer than 12 months may not necessarily begin on the first of the month or end on the last day of the month. In order to simplify the process in calculating ``short period'' adjustment factors, if the short cost reporting period begins before the sixteenth of the month, we will consider the period have begun on the first of that month. If the start period begins on or after the sixteenth of the month, it will be considered to have begun at the beginning of the next month. Also, if the short period ends before the sixteenth of the month, we will consider the period to have ended at the end of the preceding month; if the short period ends on or after the sixteenth of the month it will be considered to have ended at the end of that month. Examples 1. After approval by its intermediary, an HHA changes its fiscal year end from June 30 to December 31. Therefore, the HHA had a short cost reporting period beginning on July 1, 1996 and ending on December 31, 1996. The cost limits that apply to this short period must be adjusted as follows: Step 1--From Table 9, sum the index levels for the months of July, 1996 through December, 1996: 6.84863. Step 2--Divide the results from Step 1 by the number of months in the short period. 6.84963 6 = 1.141438 Step 3--From Table 9, sum the index levels for the months in the common period of July, 1996 through June, 1997. 13.79728 Step 4--Divide the results in Step 3 by the number of months in the common period. 13.79728 12 = 1.149773 Step 5--Divide the results from Step 2 by the results from Step 4. This is the adjustment factor to be applied to the published limits 1.141438 1.149773 = .992751 Step 6--Apply the results from Step 5 to the published cost limits. a. Urban Skilled Nursing Labor Portion $76.57 x .992751 = $76.01 b. Urban Skilled Nursing Nonlabor Portion $21.62 x .992751 = $21.46. 2. A HHA with a fiscal year end of November 30, 1996 changes ownership on September 21, 1997. The HHA is required to file a terminated cost report for the period of December 1, 1996 to September 21, 1997. The cost limits that apply to this short period must be adjusted as follows: Step 1--From Table 9, sum the index level for the month of December, 1996 through September, 1997. 11.61295 Step 2--Divide the results from Step 1 by the number of months in the short period. 11.61295 10 = 1.161295 Step 3--From Table 9, sum the index levels for the months in the common period of July, 1996, through June, 1997. 13.79728 Step 4--Divide the results from Step 3 by the number of months in the common period. 13.79728 12 = 1.149773 Step 5--Divide the results from Step 2 by the results from Step 4. 1.161295 1.149773 = 1.010021 Step 6--Apply the results from Step 5 to the published cost limits. a. Urban Skilled Nursing Labor Portion $76.57 x 1.010021 = $77.34 b. Urban Skilled Nursing Non-Labor Portion $21.62 x 1.010021 = $21.84 C. Standardization for Wage Levels After adjustment by the market basket index, we divided each HHA's per-visit [[Page 34352]] costs into labor and nonlabor portions. The labor portion of costs (77.668 percent as determined by the market basket) represents the employee wage and benefit factor plus the contract services factor from the market basket. We then divided the labor portion of per-visit costs by the wage index applicable to the HHA's location to arrive at an adjusted labor cost. D. Adjustment for ``Outliers'' We transformed all per-visit cost data into their natural logarithms and grouped them by type of service and MSA, NECMA, or non- MSA location, in order to determine the mean cost and standard deviation for each group. We then eliminated all ``outlier'' costs, retaining only those per-visit costs within two standard deviations of the mean in each service. E. Basic Service Limit We calculate a basic service limit equal to 112 percent of the mean labor and nonlabor portions of the per-visit costs of freestanding HHAs for each type of service. (See Table 6 in section IX.) VIII. Computing the Adjusted Limit A. Adjustment of Cost Limits by Wage Index To arrive at the adjusted limit, which is to be applied to each service furnished by an HHA, the HHA's intermediary first determines the adjusted labor-related component by multiplying the labor-related component of the limit by the appropriate wage index and by multiplying the adjusted labor-related component by the special labor adjustment for budget neutrality. (See example below and Tables 7a and 7b in section X of this notice.) The sum of the nonlabor component plus the labor-related component is the adjusted limit applicable to an HHA. Example--Calculation of Adjusted Occupational Therapy Limit for a Freestanding HHA in Dallas, TX Labor component (Table 6)...................................... 83.41 Wage index value (Table 7a).................................... 0.9804 Labor portion.................................................. 81.78 Special labor adjustment for budget neutrality................. 0.91 Adjusted labor portion......................................... 74.42 Nonlabor component (Table 6)................................... 23.84 Adjusted occupational therapy limit............................ 98.26 B. Adjustment for Reporting Year If an HHA has a 12-month cost reporting period beginning on or after August 1, 1996, the adjusted per-visit limit for each service is again revised by an adjustment factor from Table 8 that corresponds to the month and year in which the cost reporting period begins. Each factor represents the compounded rate of monthly increase derived from the projected annual increase in the market basket index, and is used to account for inflation in costs that will occur after the date on which the limits become effective. For example, if the HHA in the example above had a cost reporting period beginning January 1, 1997, its per-visit therapy limit would be further adjusted as follows: Computation of Revised Limit for Occupational Therapy Adjusted per-visit limit...................................... 98.26 Adjustment factor from Table 8................................ 1.01524 Revised per-visit limit....................................... 99.76 In this example, the revised adjusted per-visit limit for occupational therapy applicable to this HHA for the cost reporting period beginning January 1, l997, is $99.76 per visit. If an HHA uses a cost reporting period that is not 12 months in duration, a special calculation of the adjustment factor must be made. This results from the fact that projections are computed to June 30, 1997. This calculation is done using the methodology described in section VII.B. IX. Schedule of Limits The schedule of limits set forth below applies to cost reporting periods beginning on or after July 1, 1996. The intermediaries will compute the adjusted limits using the wage index published in Tables 7a and 7b of section X and will notify each HHA they service of its applicable cost per-visit limit 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 for the cost reporting periods 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 the per-visit costs and are paid without regard to this schedule of limits. (See Chapter IV of the Home Health Agency Manual (HCFA Pub. ll).) 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 cost. Example: HHA X, a freestanding agency located in Richmond, VA, furnished 5,000 covered skilled nursing visits, 2,000 physical therapy visits, and 4,000 home health aide visits to Medicare beneficiaries during its 12-month cost reporting period beginning July 1, 1996. The aggregate cost limit for the HHA is calculated as follows: Determining the Aggregate Cost Limit ---------------------------------------------------------------------------------------------------------------- Adjusted Type of visit Visits Nonlabor labor Adjusted Aggregate portion portion limit \1\ limit ---------------------------------------------------------------------------------------------------------------- Skilled nursing..................................... 5,000 $21.62 $63.09 $84.71 $423,550 Physical therapy.................................... 2,000 23.59 69.09 92.65 185,360 Home health aide.................................... 4,000 10.56 30.60 41.16 164,640 ----------------------------------------------------------- Total Visits.................................. 11,000 .......... .......... .......... .......... Aggregate cost limit.......................... .......... .......... .......... .......... 773,5501 ---------------------------------------------------------------------------------------------------------------- \1\ Includes special labor adjustment of 0.91 for budget neutrality. 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 principles of provider payment. That is, the intermediary reviews the various reported costs, taking into account all the Medicare payment principles; for example, the cost guidelines for [[Page 34353]] physical therapy furnished under arrangements (see 42 CFR 413.106) and the limitation on costs that are substantially out of line with those comparable home health agencies (see 42 CFR 413.9). Table 6.--Per Visit Limits for Home Health Agencies ------------------------------------------------------------------------ Labor Nonlabor Type of visit Limit portion portion ------------------------------------------------------------------\1\--- MSA (NECMA) location: Skilled nursing care.................. 98.19 76.57 21.62 Physical therapy.................. 107.43 83.84 23.59 Speech pathology.................. 107.99 84.11 23.88 Occupational therapy.............. 107.25 83.41 23.84 Medical social services........... 142.05 110.59 31.46 Home health aide.................. 47.70 37.14 10.56 Non-MSA location: Skilled nursing care................. 109.62 89.53 20.09 Physical therapy..................... 119.65 97.61 22.04 Speech pathology..................... 130.61 106.31 24.30 Occupational therapy................. 129.30 105.06 24.24 Medical social services.............. 184.03 149.82 34.21 Home health aide..................... 47.60 38.87 8.73 ------------------------------------------------------------------------ \1\ Nonlabor portion of limits for HHA 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 ------------------------------------------------------------------------ X. Wage Indexes Table 7a.--Wage Index for Urban Areas ------------------------------------------------------------------------ Wage Urban area (constituent counties or county equivalents) index ------------------------------------------------------------------------ 0040 Abilene, TX............................................. 0.8546 Taylor, TX 0060 Aguadilla, PR........................................... 0.4744 Aguada, PR Aguadilla, PR Moca, PR 0080 Akron, OH............................................... 0.9558 Portage, OH Summit, OH 0120 Albany, GA.............................................. 0.8608 Dougherty, GA Lee, GA 0160 Albany-Schenectady-Troy, NY............................. 0.8818 Albany, NY Montgomery, NY Rensselaer, NY Saratoga, NY Schenectady, NY Schoharie, NY 0200 Albuquerque, NM......................................... 0.9542 Bernalillo, NM Sandoval, NM Valencia, NM 0220 Alexandria, LA.......................................... 0.7917 Rapides, LA 0240 Allentown-Bethlehem-Easton, PA.......................... 1.0198 Carbon, PA Lehigh, PA Northampton, PA 0280 Altoona, PA............................................. 0.9007 Blair, PA 0320 Amarillo, TX............................................ 0.8759 Potter, TX Randall, TX 0380 AK Anchorage, AK........................................ 1.3373 Anchorage, 0440 Ann Arbor, MI........................................... 1.2116 Lenawee, MI Livingston, MI Washtenaw, MI 0450 Anniston, AL............................................ 0.8158 Calhoun, AL 0460 Appleton-Oshkosh-Neenah, WI............................. 0.8844 Calumet, WI Outagamie, WI Winnebago, WI 0470 Arecibo, PR............................................. 0.4498 Arecibo, PR Camuy, PR Hatillo, PR 0480 Asheville, NC........................................... 0.9218 Buncombe, NC Madison, NC 0500 Athens, GA.............................................. 0.9097 Clarke, GA Madison, GA Oconee, GA 0520 *Atlanta, GA............................................ 1.0069 Barrow, GA Bartow, GA Carroll, GA Cherokee, GA Clayton, GA Cobb, GA Coweta, GA DeKalb, GA Douglas, GA Fayette, GA Forsyth, GA Fulton, GA Gwinnett, GA Henry, GA Newton, GA Paulding, GA Pickens, GA Rockdale, GA Spalding, GA Walton, GA 0560 Atlantic City- Cape May, NJ............................. 1.0935 Atlantic City, NJ Cape May, NJ 0600 Augusta-Aiken, GA-SC.................................... 0.8955 Columbia, GA McDuffie, GA Richmond, GA [[Page 34354]] Aiken, SC Edgefield, SC 0640 Austin-San Marcos, TX................................... 0.9255 Bastrop, TX Caldwell, TX Hays, TX Travis, TX Williamson, TX 0680 Bakersfield, CA......................................... 1.0502 Kern, CA 0720 *Baltimore, MD.......................................... 0.9865 Anne Arundel, MD Baltimore, MD Baltimore City, MD Carroll, MD Harford, MD Howard, MD Queen Annes, MD 0733 Bangor, ME.............................................. 0.9360 Penobscot, ME 0743 Barnstable-Yarmouth, MA................................. 1.3457 Barnstable, MA 0760 Baton Rouge, LA......................................... 0.8670 Ascension, LA East Baton Rouge, LA Livingston, LA West Baton Rouge, LA 0840 Beaumont-Port Arthur, TX................................ 0.8603 Hardin, TX Jefferson, TX Orange, TX 0860 Bellingham, WA.......................................... 1.2681 Whatcom, WA 0870 Benton Harbor, MI....................................... 0.8258 Berrien, MI 0875 *Bergen-Passaic, NJ..................................... 1.1677 Bergen, NJ Passaic, NJ 0880 Billings, MT............................................ 0.8705 Yellowstone, MT 0920 Biloxi-Gulfport-Pascagoula, MS.......................... 0.8448 Hancock, MS Harrison, MS Jackson, MS 0960 Binghamton, NY.......................................... 0.9005 Broome, NY Tioga, NY 1000 Birmingham, AL.......................................... 0.9144 Blount, AL Jefferson, AL St. Clair, AL Shelby, AL 1010 Bismarck, ND............................................ 0.8299 Burleigh, ND Morton, ND 1020 Bloomington, IN......................................... 0.8429 Monroe, IN 1040 Bloomington-Normal, IL.................................. 0.8740 McLean, IL 1080 Boise City, ID.......................................... 0.9051 Ada, ID Canyon, ID 1123 *Boston-Brockton-Nashua-MA-NH........................... 1.1684 Bristol, MA Essex, MA Middlesex, MA Norfolk, MA Plymouth, MA Suffolk, MA Worcester, MA Hillsborough, NH Merrimack, NH Rockingham, NH Strafford, NH 1125 Boulder-Longmont, CO.................................... 0.9780 Boulder, CO 1145 Brazoria, TX............................................ 0.8814 Brazoria, TX 1150 Bremerton, WA........................................... 1.0295 Kitsap, WA 1240 Brownsville-Harlingen-San Benito, TX.................... 0.8649 Cameron, TX 1260 Bryan-College Station, TX............................... 0.8987 Brazos, TX 1280 *Buffalo-Niagara Falls, NY.............................. 0.9186 Erie, NY Niagara, NY 1303 Burlington, VT.......................................... 0.9252 Chittenden, VT Franklin, VT Grand Isle, VT 1310 Caguas, PR.............................................. 0.4706 Caguas, PR Cayey, PR Cidra, PR Gurabo, PR San Lorenzo, PR 1320 Canton-Massillon, OH.................................... 0.8749 Carroll, OH Stark, OH 1350 Casper, WY.............................................. 0.8429 Natrona, WY 1360 Cedar Rapids, IA........................................ 0.8359 Linn, IA 1400 Champaign-Urbana, IL.................................... 0.8867 Champaign, IL 1440 Charleston-North Charleston, SC......................... 0.8928 Berkeley, SC Charleston, SC Dorchester, SC 1480 Charleston, WV.......................................... 0.9498 Kanawha, WV Putnam, WV 1520 *Charlotte-Gastonia-Rock Hill, NC-SC.................... 0.9661 Cabarrus, NC Gaston, NC Lincoln, NC Mecklenburg, NC Rowan, NC Union, NC York, SC 1540 Charlottesville, VA..................................... 0.9179 Albemarle, VA Charlottesville City, VA Fluvanna, VA Greene, VA 1560 Chattanooga, TN-GA...................................... 0.9129 Catoosa, GA Dade, GA Walker, GA Hamilton, TN Marion, TN 1580 Cheyenne, WY............................................ 0.7935 Laramie, WY 1600 *Chicago, IL............................................ 1.0632 Cook, IL DeKalb, IL DuPage, IL Grundy, IL Kane, IL Kendall, IL Lake, IL McHenry, IL Will, IL 1620 Chico-Paradise, CA...................................... 1.0531 Butte, CA 1640 *Cincinnati, OH-KY-IN................................... 0.9418 Dearborn, IN Ohio, IN Boone, KY Campbell, KY Gallatin, KY Grant, KY Kenton, KY Pendleton, KY Brown, OH Clermont, OH Hamilton, OH Warren, OH 1660 Clarksville-Hopkinsville, TN-KY......................... 0.7542 Christian, KY Montgomery, TN 1680 *Cleveland-Lorain-Elyria, OH............................ 0.9835 Ashtabula, OH Cuyahoga, OH Geauga, OH Lake, OH Lorain, OH Medina, OH 1720 Colorado Springs, CO.................................... 0.9294 El Paso, CO 1740 Columbia, MO............................................ 0.9461 Boone, MO 1760 Columbia, SC............................................ 0.9033 Lexington, SC Richland, SC 1800 Columbus, GA-AL......................................... Russell, AL 0.7756 Chattanoochee, GA Harris, GA Muscogee, GA 1840 *Columbus, OH........................................... 0.9734 Delaware, OH Fairfield, OH Franklin, OH Licking, OH Madison, OH Pickaway, OH 1880 Corpus Christi, TX...................................... 0.8941 Nueces, TX San Patricio, TX 1900 Cumberland, MD-WV....................................... 0.8372 Allegany, MD Mineral, WV 1920 *Dallas, TX............................................. 0.9804 Collin, TX Dallas, TX Denton, TX Ellis, TX Henderson, TX Hunt, TX Kaufman, TX Rockwall, TX [[Page 34355]] 1950 Danville, VA............................................ 0.8465 Danville City, VA Pittsylvania, VA 1960 Davenport-Rock Island-Moline, IA-IL..................... 0.8347 Scott, IA Henry, IL Rock Island, IL 2000 Dayton-Springfield, OH.................................. 0.9428 Clark, OH Greene, OH Miami, OH Montgomery, OH 2020 Daytona Beach, FL....................................... 0.8902 Flagler, FL Volusia, FL 2030 Decatur, AL............................................. 0.8180 Lawrence, AL Morgan, AL 2040 Decatur, IL............................................. 0.7790 Macon, IL 2080 *Denver, CO............................................. 1.0447 Adams, CO Arapahoe, CO Denver, CO Douglas, CO Jefferson, CO 2120 Des Moines, IA.......................................... 0.8792 Dallas, IA Polk, IA Warren, IA 2160 *Detroit, MI............................................ 1.0831 Lapeer, MI Macomb, MI Monroe, MI Oakland, MI St. Clair, MI Wayne, MI 2180 Dothan, AL.............................................. 0.7751 Dale, AL Houston, AL 2190 Dover, DE............................................... 0.8960 Kent, DE 2200 Dubuque, IA............................................. 0.8054 Dubuque, IA 2240 Duluth-Superior, MN-WI.................................. 0.9660 St. Louis, MN Douglas, WI 2281 Dutchess County, NY..................................... 1.0754 Dutchess, NY 2290 Eau Claire, WI.......................................... 0.8660 Chippewa, WI Eau Claire, WI 2320 El Paso, TX............................................. 0.9266 El Paso, TX 2330 Elkhart-Goshen, IN...................................... 0.8764 Elkhart, IN 2335 Elmira, NY.............................................. 0.8460 Chemung, NY 2340 Enid, OK................................................ 0.8170 Garfield, OK 2360 Erie, PA................................................ 0.9196 Erie, PA 2400 Eugene-Springfield, OR.................................. 1.1138 Lane, OR 2440 Evansville-Henderson, IN-KY............................. 0.8899 Posey, IN Vanderburgh, IN Warrick, IN Henderson, KY 2520 Fargo-Moorhead, ND-MN................................... 0.8912 Clay, MN Cass, ND 2560 Fayetteville, NC........................................ 0.8843 Cumberland, NC 2580 Fayetteville-Springdale-Rogers, AR...................... 0.7090 Benton, AR Washington, AR 2620 Flagstaff, AZ-UT........................................ 0.8619 Coconino, AZ Kane, UT 2640 Flint, MI............................................... 1.0738 Genesee, MI 2650 Florence, AL............................................ 0.7700 Colbert, AL Lauderdale, AL 2655 Florence, SC............................................ 0.8522 Florence, SC 2670 Fort Collins-Loveland, CO............................... 1.0595 Larimer, CO 2680 *Ft. Lauderdale, FL..................................... 1.0499 Broward, FL 2700 Fort Myers-Cape Coral, FL............................... 0.9666 Lee, FL 2710 Fort Pierce-Port St. Lucie, FL.......................... 1.0401 Martin, FL St. Lucie, FL 2720 Fort Smith, AR-OK....................................... 0.7588 Crawford, AR Sebastian, AR Sequoyah, OK 2750 Fort Walton Beach, FL................................... 0.8705 Okaloosa, FL 2760 Fort Wayne, IN.......................................... 0.8691 Adams, IN Allen, IN DeKalb, IN Huntington, IN Wells, IN Whitley, IN 2800 *Forth Worth-Arlington, TX.............................. 1.0059 Hood, TX Johnson, TX Parker, TX Tarrant, TX 2840 Fresno, CA.............................................. 1.0522 Fresno, CA Madera, CA 2880 Gadsden, AL............................................. 0.8568 Etowah, AL 2900 Gainesville, FL......................................... 0.9007 Alachua, FL 2920 Galveston-Texas City, TX................................ 1.0304 Galveston, TX 2960 Gary, IN................................................ 0.9517 Lake, IN Porter, IN 2975 Glens Falls, NY......................................... 0.9276 Warren, NY Washington, NY 2980 Goldsboro, NC........................................... 0.8165 Wayne, NC 2985 Grand Forks, ND-MN...................................... 0.8946 Polk, MN Grand Forks, ND 2995 Grand Junction, CO...................................... 0.8957 Mesa, CO 3000 Grand Rapids-Muskegon-Holland, MI....................... 1.0055 Allegan, MI Kent, MI Muskegon, MI Ottawa, MI 3040 Great Falls, MT......................................... 0.8913 Cascade, MT 3060 Greeley, CO............................................. 0.9146 Weld, CO 3080 Green Bay, WI........................................... 0.8910 Brown, WI 3120 *Greensboro-Winston-Salem-High Point, NC................ 0.9160 Alamance, NC Davidson, NC Davie, NC Forsyth, NC Guilford, NC Randolph, NC Stokes, NC Yadkin, NC 3150 Greenville, NC.......................................... 0.9102 Pitt, NC 3160 Greenville-Spartanburg-Anderson, SC..................... 0.9047 Anderson, SC Cherokee, SC Greenville, SC Pickens, SC Spartanburg, SC 3180 Hagerstown, MD.......................................... 0.9074 Washington, MD 3200 Hamilton-Middletown, OH................................. 0.8782 Butler, OH 3240 Harrisburg-Lebanon-Carlisle, PA......................... 0.9972 Cumberland, PA Dauphin, PA Lebanon, PA Perry, PA 3283 *Hartford, CT........................................... 1.2391 Hartford, CT Litchfield, CT Middlesex, CT Tolland, CT 3285 Hattiesburg, MS......................................... 0.7245 Forrest, MS Lamar, MS 3290 Hickory-Morganton-Lenoir, NC............................ 0.8677 Alexander, NC Burke, NC Caldwell, NC Catawba, NC 3320 Honolulu, HI............................................ 1.1212 Honolulu, HI 3350 Houma, LA............................................... 0.7596 Lafourche, LA Terrebonne, LA 3360 *Houston, TX............................................ 0.9874 Chambers, TX Fort Bend, TX Harris, TX Liberty, TX Montgomery, TX Waller, TX 3400 Huntington-Ashland, WV-KY-OH............................ 0.8997 Boyd, KY Carter, KY [[Page 34356]] Greenup, KY Lawrence, OH Cabell, WV Wayne, WV 3440 Huntsville, AL.......................................... 0.8113 Limestone, AL Madison, AL 3480 *Indianapolis, IN....................................... 0.9757 Boone, IN Hamilton, IN Hancock, IN Hendricks, IN Johnson, IN Madison, IN Marion, IN Morgan, IN Shelby, IN 3500 Iowa City, IA........................................... 0.9371 Johnson, IA 3520 Jackson, MI............................................. 0.9132 Jackson, MI 3560 Jackson, MS............................................. 0.7543 Hinds, MS Madison, MS Rankin, MS 3580 Jackson, TN............................................. 0.8511 Madison, TN 3600 Jacksonville, FL........................................ 0.8953 Clay, FL Duval, FL Nassau, FL St. Johns, FL 3605 Jacksonville, NC........................................ 0.6926 Onslow, NC 3610 Jamestown, NY........................................... 0.7535 Chautaqua, NY 3620 Janesville-Beloit, WI................................... 0.8786 Rock, WI 3640 Jersey City, NJ......................................... 1.1050 Hudson, NJ 3660 Johnson City-Kingsport-Bristol, TN-VA................... 0.8746 Carter, TN Hawkins, TN Sullivan, TN Unicoi, TN Washington, TN Bristol City, VA Scott, VA Washington, VA 3680 Johnstown, PA........................................... 0.8948 Cambria, PA Somerset, PA 3710 Joplin, MO.............................................. 0.7923 Jasper, MO Newton, MO 3720 Kalamazoo-Battlecreek, MI............................... 1.0657 Calhoun, MI Kalamazoo, MI Van Buren, MI 3740 Kankakee, IL............................................ 0.9114 Kankakee, IL 3760 *Kansas City, KS-MO..................................... 0.9351 Johnson, KS Leavenworth, KS Miami, KS Wyandotte, KS Cass, MO Clay, MO Clinton, MO Jackson, MO Lafayette, MO Platte, MO Ray, MO 3800 Kenosha, WI............................................. 0.8872 Kenosha, WI 3810 Killeen-Temple, TX...................................... 1.0526 Bell, TX Coryell, TX 3840 Knoxville, TN........................................... 0.8518 Anderson, TN Blount, TN Knox, TN Loudon, TN Sevier, TN Union, TN 3850 Kokomo, IN.............................................. 0.8834 Howard, IN Tipton, IN 3870 La Crosse, WI-MN........................................ 0.8519 Houston, MN La Crosse, WI 3880 Lafayette, LA........................................... 0.8443 Acadia, LA Lafayette, LA St. Landry, LA St. Martin, LA 3920 Lafayette, IN........................................... 0.8328 Clinton, IN Tippecanoe, IN 3960 Lake Charles, LA........................................ 0.8094 Calcasieu, LA 3980 Lakeland-Winter Haven, FL............................... 0.8879 Polk, FL 4000 Lancaster, PA........................................... 0.9569 Lancaster, PA 4040 Lansing-East Lansing, MI................................ 1.0105 Clinton, MI Eaton, MI Ingham, MI 4080 Laredo, TX.............................................. 0.6834 Webb, TX 4100 Las Cruces, NM.......................................... 0.8861 Dona Ana, NM 4120 *Las Vegas, NV-AZ....................................... 1.0934 Mohave, AZ Clark, NV Nye, NV 4150 Lawrence, KS............................................ 0.8549 Douglas, KS 4200 Lawton, OK.............................................. 0.8594 Comanche, OK 4243 Lewiston-Auburn, ME..................................... 0.9433 Androscoggin, ME 4280 Lexington, KY........................................... 0.8348 Bourbon, KY Clark, KY Fayette, KY Jessamine, KY Madison, KY Scott, KY Woodford, KY 4320 Lima, OH................................................ 0.8863 Allen, OH Auglaize, OH 4360 Lincoln, NE............................................. 0.9093 Lancaster, NE 4400 Little Rock-North Little Rock, AR....................... 0.8527 Faulkner, AR Lonoke, AR Pulaski, AR Saline, AR 4420 Longview-Marshall, TX................................... 0.8727 Gregg, TX Harrison, TX Upshur, TX 4480 *Los Angeles-Long Beach, CA............................. 1.2491 Los Angeles, CA 4520 Louisville, KY-IN....................................... 0.9327 Clark, IN Floyd, IN Harrison, IN Scott, IN Bullitt, KY Jefferson, KY Oldham, KY 4600 Lubbock, TX............................................. 0.8443 Lubbock, TX 4640 Lynchburg, VA........................................... 0.8319 Amherst, VA Bedford, VA Bedford City, VA Campbell, VA Lynchburg City, VA 4680 Macon, GA............................................... 0.8991 Bibb, GA Houston, GA Jones, GA Peach, GA Twiggs, GA 4720 Madison, WI............................................. 1.0055 Dane, WI 4800 Mansfield, OH........................................... 0.8373 Crawford, OH Richland, OH 4840 Mayaguez, PR............................................ 0.4644 Anasco, PR Cabo Rojo, PR Hormigueros, PR Mayaguez, PR Sabana Grande, PR San German, PR 4880 McAllen-Edinburg-Mission, TX............................ 0.8669 Hidalgo, TX 4890 Medford-Ashland, OR..................................... 0.9944 Jackson, OR 4900 Melbourne-Titusville-Palm Bay, FL....................... 0.9323 Brevard, FL 4920 *Memphis, TN-AR-MS...................................... 0.8399 Crittenden, AR DeSoto, MS Fayette, TN Shelby, TN Tipton, TN 4940 Merced, CA.............................................. 1.0877 Merced, CA 5000 *Miami, FL.............................................. 1.0163 Dade, FL 5015 *Middlesex-Somerset-Hunterdon, NJ....................... 1.0809 Hunterdon, NJ Middlesex, NJ Somerset, NJ 5080 *Milwaukee-Waukesha, WI................................. 0.9498 Milwaukee, WI Ozaukee, WI [[Page 34357]] Washington, WI Waukesha, WI 5120 *Minneapolis-St. Paul, MN-WI............................ 1.0744 Anoka, MN Carver, MN Chisago, MN Dakota, MN Hennepin, MN Isanti, MN Ramsey, MN Scott, MN Sherburne, MN Washington, MN Wright, MN Pierce, WI St. Croix, WI 5160 Mobile, AL.............................................. 0.7801 Baldwin, AL Mobile, AL 5170 Modesto, CA............................................. 1.1161 Stanislaus, CA 5190 *Monmouth-Ocean, NJ..................................... 1.0562 Monmouth, NJ Ocean, NJ 5200 Monroe, LA.............................................. 0.7900 Ouachita, LA 5240 Montgomery, AL.......................................... 0.7878 Autauga, AL Elmore, AL Montgomery, AL 5280 Muncie, IN.............................................. 0.9125 Delaware, IN 5330 Myrtle Beach, SC........................................ 0.7961 Horry, SC 5345 Naples, FL.............................................. 0.9871 Collier, FL 5360 *Nashville, TN.......................................... 0.9266 Cheatham, TN Davidson, TN Dickson, TN Robertson, TN Rutherford TN Sumner, TN Williamson, TN Wilson, TN 5380 *Nassau-Suffolk, NY..................................... 1.3590 Nassau, NY Suffolk, NY 5483 *New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT.... 1.2534 Fairfield, CT New Haven, CT 5523 New London-Norwich, CT.................................. 1.1899 New London, CT 5560 *New Orleans, LA........................................ 0.9454 Jefferson, LA Orleans, LA Plaquemines, LA St. Bernard, LA St. Charles, LA St. James, LA St. John The Baptist, LA St. Tammany, LA 5600 *New York, NY........................................... 1.3815 Bronx, NY Kings, NY New York, NY Putnam, NY Queens, NY Richmond, NY Rockland, NY Westchester, NY 5640 *Newark, NJ............................................. 1.1407 Essex, NJ Morris, NJ Sussex, NJ Union, NJ Warren, NJ 5660 Newburgh, NY-PA......................................... 1.0619 Orange, NY Pike, PA 5720 *Norfolk-Virginia Beach-Newport News, VA-NC............. 0.8411 Currituck, NC Chesapeake City, VA Gloucester, VA Hampton City, VA Isle of Wight, VA James City, VA Mathews, VA Newport News City, VA Norfolk City, VA Poquoson City, VA Portsmouth City, VA Suffolk City, VA Virginia Beach City, VA Williamsburg City, VA York, VA 5775 *Oakland, CA............................................ 1.5202 Alameda, CA Contra Costa, CA 5790 Ocala, FL............................................... 0.8942 Marion, FL 5800 Odessa-Midland, TX...................................... 0.8753 Ector, TX Midland, TX 5880 *Oklahoma City, OK...................................... 0.8358 Canadian, OK Cleveland, OK Logan, OK McClain, OK Oklahoma, OK Pottawatomie, OK 5910 Olympia, WA............................................. 1.1109 Thurston, WA 5920 Omaha, NE-IA............................................ 0.9794 Pottawattamie, IA Cass, NE Douglas, NE Sarpy, NE Washington, NE 5945 *Orange County, CA...................................... 1.2299 Orange, CA 5960 *Orlando, FL............................................ 0.9515 Lake, FL Orange, FL Osceola, FL Seminole, FL 5990 Owensboro, KY........................................... 0.7498 Daviess, KY 6015 Panama City, FL......................................... 0.8182 Bay, FL 6020 Parkersburg-Marietta, WV-OH............................. 0.7751 Washington, OH Wood, WV 6080 Pensacola, FL........................................... 0.8183 Escambia, FL Santa Rosa, FL 6120 Peoria-Pekin, IL........................................ 0.8619 Peoria, IL Tazewell, IL Woodford, IL 6160 *Philadelphia, PA-NJ.................................... 1.1112 Burlington, NJ Camden, NJ Gloucester, NJ Salem, NJ Bucks, PA Chester, PA Delaware, PA Montgomery, PA Philadelphia, PA 6200 *Phoenix-Mesa, AZ....................................... 0.9808 Maricopa, AZ Pinal, AZ 6240 Pine Bluff, AR.......................................... 0.7985 Jefferson, AR 6280 *Pittsburgh, PA......................................... 0.9743 Allegheny, PA Beaver, PA Butler, PA Fayette, PA Washington, PA Westmoreland, PA 6323 Pittsfield, MA.......................................... 1.0838 Berkshire, MA 6360 Ponce, PR............................................... 0.4780 Guayanilla, PR Juana Diaz, PR Penuelas, PR Ponce, PR Villalba, PR Yauco, PR 6403 Portland, ME............................................ 0.9744 Cumberland, ME Sagadahoc, ME York, ME 6440 *Portland-Vancouver, OR-WA.............................. 1.1248 Clackamas, OR Columbia, OR Multnomah, OR Washington, OR Yamhill, OR Clark, WA 6483 Providence-Warwick, RI.................................. 1.1027 Bristol, RI Kent, RI Newport, RI Providence, RI Washington, RI 6520 Provo-Orem, UT.......................................... 0.9843 Utah, UT 6560 Pueblo, CO.............................................. 0.8508 Pueblo, CO 6580 Punta Gorda, FL......................................... 0.9402 Charlotte, FL 6600 Racine, WI.............................................. 0.8704 Racine, WI 6640 Raleigh-Durham-Chapel Hill, NC.......................... 0.9539 Chatham, NC Durham, NC Franklin, NC Johnston, NC Orange, NC Wake, NC [[Page 34358]] 6660 Rapid City, SD.......................................... 0.8267 Pennington, SD 6680 Reading, PA............................................. 0.9570 Berks, PA 6690 Redding, CA............................................. 1.1796 Shasta, CA 6720 Reno, NV................................................ 1.1087 Washoe, NV 6740 Richland-Kennewick-Pasco, WA............................ 1.0011 Benton, WA Franklin, WA 6760 Richmond-Petersburg, VA................................. 0.9055 Charles City County, VA Chesterfield, VA Colonial Heights City, VA Dinwiddie, VA Goochland, VA Hanover, VA Henrico, VA Hopewell City, VA New Kent, VA Petersburg City, VA Powhatan, VA Prince George, VA Richmond City, VA 6780 *Riverside-San Bernardino, CA........................... 1.1616 Riverside, CA San Bernardino, CA 6800 Roanoke, VA............................................. 0.8483 Botetourt, VA Roanoke, VA Roanoke City, VA Salem City, VA 6820 Rochester, MN........................................... 1.0545 Olmsted, MN 6840 *Rochester, NY.......................................... 0.9585 Genesee, NY Livingston, NY Monroe, NY Ontario, NY Orleans, NY Wayne, NY 6880 Rockford, IL............................................ 0.8872 Boone, IL Ogle, IL Winnebago, IL 6895 Rocky Mount, NC......................................... 0.8760 Edgecombe, NC Nash, NC 6920 *Sacramento, CA......................................... 1.2539 El Dorado, CA Placer, CA Sacramento, CA 6960 Saginaw-Bay City-Midland, MI............................ 0.9489 Bay, MI Midland, MI Saginaw, MI 6980 St. Cloud, MN........................................... 0.9549 Benton, MN Stearns, MN 7000 St. Joseph, MO.......................................... 0.8457 Andrews, MO Buchanan, MO 7040 *St. Louis, MO-IL....................................... 0.8880 Clinton, IL Jersey, IL Madison, IL Monroe, IL St. Clair, IL Franklin, MO Jefferson, MO Lincoln, MO St. Charles, MO St. Louis, MO St. Louis City, MO Warren, MO 7080 Salem, OR............................................... 0.9590 Marion, OR Polk, OR 7120 Salinas, CA............................................. 1.4263 Monterey, CA 7160 *Salt Lake City-Ogden, UT............................... 0.9681 Davis, UT Salt Lake, UT Weber, UT 7200 San Angelo, TX.......................................... 0.7777 Tom Green, TX 7240 *San Antonio, TX........................................ 0.8414 Bexar, TX Comal, TX Guadalupe, TX Wilson, TX 7320 *San Diego, CA.......................................... 1.1844 San Diego, CA 7360 *San Francisco, CA...................................... 1.4413 Marin, CA San Francisco, CA San Mateo, CA 7400 *San Jose, CA........................................... 1.4429 Santa Clara, CA 7440 *San Juan-Bayamon, PR................................... 0.4514 Aguas Buenas, PR Barceloneta, PR Bayamon, PR Canovanas, PR Carolina, PR Catano, PR Ceiba, PR Comerio, PR Corozal, PR Dorado, PR Fajardo, PR Florida, PR Guaynabo, PR Humacao, PR Juncos, PR Los Piedras, PR Loiza, PR Luguillo, PR Manati, PR Morovis, PR Naguabo, PR Naranjito, PR Rio Grande, PR San Juan, PR Toa Alta, PR Toa Baja, PR Trujillo Alto, PR Vega Alta, PR Vega Baja, PR Yabucoa, PR 7460 San Luis Obispo-Atascadero-Paso Robles, CA.............. 1.1405 San Luis Obispo, CA 7480 Santa Barbara-Santa Maria-Lompoc, CA.................... 1.1136 Santa Barbara, CA 7485 Santa Cruz-Watsonville, CA.............................. 1.3944 Santa Cruz, CA 7490 Santa Fe, NM............................................ 1.1108 Los Alamos, NM Santa Fe, NM 7500 Santa Rosa, CA.......................................... 1.2693 Sonoma, CA 7510 Sarasota-Bradenton, FL.................................. 0.9737 Manatee, FL Sarasota, FL 7520 Savannah, GA............................................ 0.8968 Bryan, GA Chatham, GA Effingham, GA 7560 Scranton--Wilkes-Barre--Hazleton, PA.................... 0.8724 Columbia, PA Lackawanna, PA Luzerne, PA Wyoming, PA 7600 *Seattle-Bellevue-Everett, WA........................... 1.1305 Island, WA King, WA Snohomish, WA 7610 Sharon, PA.............................................. 0.8903 Mercer, PA 7620 Sheboygan, WI........................................... 0.7981 Sheboygan, WI 7640 Sherman-Denison, TX..................................... 0.8780 Grayson, TX 7680 Shreveport-Bossier City, LA............................. 0.9007 Bossier, LA Caddo, LA Webster, LA 7720 Sioux City, IA-NE....................................... 0.8436 Woodbury, IA Dakota, NE 7760 Sioux Falls, SD......................................... 0.8761 Lincoln, SD Minnehaha, SD 7800 South Bend, IN.......................................... 0.9475 St. Joseph, IN 7840 Spokane, WA............................................. 1.0377 Spokane, WA 7880 Springfield, IL......................................... 0.8940 Menard, IL Sangamon, IL 7920 Springfield, MO......................................... 0.7896 Christian, MO Greene, MO Webster, MO 8003 Springfield, MA......................................... 1.0517 Hampden, MA Hampshire, MA 8050 State College, PA....................................... 1.0162 Centre, PA 8080 Steubenville-Weirton, OH-WV............................. 0.8455 Jefferson, OH Brooke, WV Hancock, WV 8120 Stockton-Lodi, CA....................................... 1.1536 San Joaquin, CA 8140 Sumter, SC.............................................. 0.8344 Sumter, SC 8160 Syracuse, NY............................................ 0.9531 Cayuga, NY Madison, NY Onondaga, NY [[Page 34359]] Oswego, NY 8200 Tacoma, WA.............................................. 1.0828 Pierce, WA 8240 Tallahassee, FL......................................... 0.8321 Gadsden, FL Leon, FL 8280 *Tampa-St. Petersburg-Clearwater, FL.................... 0.9262 Hernando, FL Hillsborough, FL Pasco, FL Pinellas, FL 8320 Terre Haute, IN......................................... 0.8672 Clay, IN Vermillion, IN Vigo, IN 8360 Texarkana, AR-Texarkana, TX............................. 0.8198 Miller, AR Bowie, TX 8400 Toledo, OH.............................................. 1.0424 Fulton, OH Lucas, OH Wood, OH 8440 Topeka, KS.............................................. 0.9735 Shawnee, KS 8480 Trenton, NJ............................................. 1.0033 Mercer, NJ 8520 Tucson, AZ.............................................. 0.9289 Pima, AZ 8560 Tulsa, OK............................................... 0.8245 Creek, OK Osage, OK Rogers, OK Tulsa, OK Wagoner, OK 8600 Tuscaloosa, AL.......................................... 0.8090 Tuscaloosa, AL 8640 Tyler, TX............................................... 0.9430 Smith, TX 8680 Utica-Rome, NY.......................................... 0.8514 Herkimer, NY Oneida, NY 8720 Vallejo-Fairfield-Napa, CA.............................. 1.3483 Napa, CA Solano, CA 8735 Ventura, CA............................................. 1.1924 Ventura, CA 8750 Victoria, TX............................................ 0.8435 Victoria, TX 8760 Vineland-Millville-Bridgeton, NJ........................ 0.9966 Cumberland, NJ 8780 Visalia-Tulare-Porterville, CA.......................... 1.0446 Tulare, CA 8800 Waco, TX................................................ 0.7898 McLennan, TX 8840 *Washington, DC-MD-VA-WV................................ 1.1116 District of Columbia, DC Calvert, MD Charles, MD Frederick, MD Montgomery, MD Prince Georges, MD Alexandria City, VA Arlington, VA Clarke, VA Culpepper, VA Fairfax, VA Fairfax City, VA Falls Church City, VA Fauquier, VA Fredericksburg City, VA King George, VA Loudoun, VA Manassas City, VA Manassas Park City, VA Prince William, VA Spotsylvania, VA Stafford, VA Warren, VA Berkeley, WV Jefferson, WV 8920 Waterloo-Cedar Falls, IA................................ 0.8600 Black Hawk, IA 8940 Wausau, WI.............................................. 1.0034 Marathon, WI 8960 West Palm Beach-Boca Raton, FL.......................... 1.0217 Palm Beach, FL 9000 Wheeling, OH-WV......................................... 0.7518 Belmont, OH Marshall, WV Ohio, WV 9040 Wichita, KS............................................. 0.9562 Butler, KS Harvey, KS Sedgwick, KS 9080 Wichita Falls, TX....................................... 0.7826 Archer, TX Wichita, TX 9140 Williamsport, PA........................................ 0.8508 Lycoming, PA 9160 Wilmington-Newark, DE-MD................................ 1.1539 New Castle, DE Cecil, MD 9200 Wilmington, NC.......................................... 0.9299 New Hanover, NC Brunswick, NC 9260 Yakima, WA.............................................. 0.9951 Yakima, WA 9270 Yolo, CA................................................ 1.1615 Yolo, CA 9280 York, PA................................................ 0.9165 York, PA 9320 Youngstown-Warren, OH................................... 0.9555 Columbiana, OH Mahoning, OH Trumbull, OH 9340 Yuba City, CA........................................... 1.0611 Sutter, CA Yuba, CA 9360 Yuma, AZ................................................ 0.9769 Yuma, AZ ------------------------------------------------------------------------ *Large Urban Area Table 7b.--Wage Index for Rural Areas ------------------------------------------------------------------------ Wage Nonurban area index ------------------------------------------------------------------------ Alabama....................................................... 0.7164 Alaska........................................................ 1.2034 Arizona....................................................... 0.7995 Arkansas...................................................... 0.6897 California.................................................... 1.0096 Colorado...................................................... 0.7988 Connecticut................................................... 1.3117 Delaware...................................................... 0.9019 Florida....................................................... 0.8668 Georgia....................................................... 0.7721 Hawaii........................................................ 0.9847 Idaho......................................................... 0.8378 Illinois...................................................... 0.7497 Indiana....................................................... 0.8067 Iowa.......................................................... 0.7352 Kansas........................................................ 0.7229 Kentucky...................................................... 0.7650 Louisiana..................................................... 0.7275 Maine......................................................... 0.8425 Maryland...................................................... 0.8463 Massachusetts................................................. 1.0577 Michigan...................................................... 0.8744 Minnesota..................................................... 0.8127 Mississippi................................................... 0.6697 Missouri...................................................... 0.7186 Montana....................................................... 0.8091 Nebraska...................................................... 0.7219 Nevada........................................................ 0.8788 New Hampshire................................................. 1.0013 New Jersey \1\................................................ ........ New Mexico.................................................... 0.8329 New York...................................................... 0.8647 North Carolina................................................ 0.7999 North Dakota.................................................. 0.7265 Ohio.......................................................... 0.8286 Oklahoma...................................................... 0.6985 Oregon........................................................ 0.9486 Pennsylvania.................................................. 0.8521 Puerto Rico................................................... 0.4326 Rhode Island \1\.............................................. ........ South Carolina................................................ 0.7738 South Dakota.................................................. 0.6987 Tennessee..................................................... 0.7409 Texas......................................................... 0.7316 Utah.......................................................... 0.8652 Vermont....................................................... 0.9043 Virginia...................................................... 0.7788 Washington.................................................... 0.9775 West Virginia................................................. 0.8036 Wisconsin..................................................... 0.8391 Wyoming....................................................... 0.8013 ------------------------------------------------------------------------ \1\ All counties within the State are classified urban. Table 8.--Cost Reporting Year Adjustment Factor \1\ ------------------------------------------------------------------------ The If the HHA cost reporting period begins adjustment factor is ------------------------------------------------------------------------ August 1, 1996............................................. 1.00251 September 1, 1996.......................................... 1.00505 October 1, 1996............................................ 1.00759 November 1, 1996........................................... 1.01012 December 1, 1997........................................... 1.01266 January 1, 1997............................................ 1.01524 February 1,1997............................................ 1.01788 March 1, 1997.............................................. 1.02056 April 1, 1997.............................................. 1.02326 May 1, 1997................................................ 1.02599 June 1, 1997............................................... 1.02875 ------------------------------------------------------------------------ \1\ Based on compounded projected market basket inflation rates. [[Page 34360]] These adjustment factors are subject to change based on later estimates of cost increases. If for any reason we do not publish a new schedule of limits to be effective on July 1, 1997 or do not announce other changes in the current schedule by that date, the current limits will continue in effect. Intermediaries will be notified of the adjustment factors to be applied until a new schedule of limits or other provision is issued. Table 9.--Monthly Index Levels for Calculating Inflation Factors To Be Applied To Home Health Agency Cost Limits ------------------------------------------------------------------------ Index Month level ------------------------------------------------------------------------ July 1996..................................................... 1.13366 August 1996................................................... 1.13700 September 1996................................................ 1.13999 October 1996.................................................. 1.14299 November 1996................................................. 1.14600 December 1996................................................. 1.14899 January 1997.................................................. 1.15199 February 1997................................................. 1.15500 March 1997.................................................... 1.15700 April 1997.................................................... 1.15900 May 1997...................................................... 1.16100 June 1997..................................................... 1.16466 July 1997..................................................... 1.16832 August 1997................................................... 1.17200 September 1997................................................ 1.17499 October 1997.................................................. 1.17799 November 1997................................................. 1.18100 December 1997................................................. 1.18466 January 1998.................................................. 1.18832 February 1998................................................. 1.19200 March 1998.................................................... 1.19433 April 1998.................................................... 1.19666 May 1998...................................................... 1.19900 ------------------------------------------------------------------------ Source: DR/McGraw-Hill HCC, 1st QTR 1996; @USSIM/TREND 25YR0296 @CISSIM/ CONTROL961. XI. Regulatory Impact Statement For notices such as this, we generally prepare an initial regulatory flexibility analysis that is consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 through 612) unless we certify that the 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. As discussed below, the aggregate impact of this notice is relatively small, and we have no evidence that the economic impact on most HHAs will be significant. Moreover, this notice is necessary to implement the provisions of section 1861(v)(1)(L) of the Act; thus no alternatives to the provisions set forth in this notice are available. However, because this notice may have some effect on a large number of providers, we are providing a voluntary regulatory flexibility analysis. This notice with comment period sets forth a schedule of HHA cost limits for cost reporting periods beginning on or after July 1, 1996. The methodology used to develop the schedule of limits set forth in this notice is the same as that used in setting the limits effective July 1, 1993. (As discussed in section IV.A of this notice, we are no longer providing for an add-on to the HHA cost limits for those HHAs that incur costs associated with the OSHA universal precaution requirements, since these updated limits are computed using a data base that includes the costs of complying with the OSHA standards.) In accordance with section 1861(v)(1)(L)(i) of the Act, we are continuing to set the limits not to exceed 112 percent of the mean of the labor- related and nonlabor per-visit costs for freestanding HHAs. As required by section 1861(v)(1)(L)(iii) of the Act, we are using the most recent hospital wage index to calculate the HHA cost limits, that is, the hospital wage index effective for discharges on or after October 1, 1995, which is based on 1992 wage survey data. The wage index is used to adjust the labor-related portion of the limits to reflect differing wage levels among areas. As discussed in section II of this notice, we are applying a budget neutrality adjustment factor of 0.91 to the labor-related portion of the limits to ensure that aggregate payments to HHAs are not affected by the updating of the wage index. We continue to use the latest settled cost report data to develop the HHA cost-per-visit limit values for each type of home health service: skilled nursing care, physical therapy, speech pathology, occupational therapy, medical social services, and home health aide. Thus, for this notice, we have updated the cost-per-visit limits by using actual cost-per-visit data from settled Medicare cost reports for periods beginning on or after June 1, 1991, and settled by October 1, 1995. The majority of the cost reports were from FY 1993. The data have been adjusted by the most recent market basket factors to reflect the expected cost increases occurring between the cost reporting periods for the data contained in the data base and June 30, 1997. The intermediary determines the aggregate cost 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. 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 database used to calculate these limits consists of cost reporting data from 3,190 freestanding HHAs, compared with 2,992 freestanding HHAs used in calculating the limits in effect for cost reporting periods beginning on or after July 1, 1993. We estimate that the revised HHA cost limits implemented in this notice with public comment period will result in the following costs to the Medicare program: Table 10.--HHA Cost Limits [Medicare Program Costs] \1\ ------------------------------------------------------------------------ Costs (in Fiscal year millions) ------------------------------------------------------------------------ 1996....................................................... 0 1997....................................................... 10 ------------------------------------------------------------------------ \1\ Figures are rounded to the nearest million. The costs associated with the new HHA cost limits represent the difference between projected aggregate Medicare expenditures under the new limits and projected aggregate expenditures using the limits in effect for cost reporting periods beginning on or after July 1, 1993, updated by the market basket increases since those limits took effect. This notice does not provide for a permanent extension of the OBRA '93 provision that there be no changes in the home health agency cost limits for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996. Because this change would require statutory authority, President Clinton's FY 1997 Budget includes a proposal to do so. We are unable to identify the effects of changes to the cost limits on individual HHAs. In general, we believe that most HHAs will experience small revenue increases under the new limits; the degree of that increase will vary depending on the proportion of an HHA's revenues that come from Medicare, the distribution of services provided by the HHA, and the HHA's ability to operate within the cost limits. Table 11 below illustrates the proportion of HHAs that are likely to be affected by the limits: Table 11.--HHAs Exceeding the Cost Limits ------------------------------------------------------------------------ Percent HHAs of HHAs HHAs in exceeding exceeding database the the limits limits ------------------------------------------------------------------------ Total HHAs............................. 4987 1720 34.5 [[Page 34361]] Freestanding........................... 3190 773 24.2 Hospital-based......................... 1797 947 52.7 ------------------------------------------------------------------------ Section 1102(b) of the act requires the Secretary to prepare a regulatory impact analysis if a final notice may have a significant impact on the operations of a substantial number of small rural hospitals. Such an analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital located outside a Metropolitan Statistical Area with fewer than 50 beds. We are not preparing a rural impact statement because the Secretary has determined, and certifies, that this notice will not have a significant impact on a substantial number of rural hospitals. In accordance with the provisions of Executive Order 12866, this notice was reviewed by the Office of Management and Budget. XII. Other Required Information A. Waiver of Proposed Notice and 30-Day Delay in 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 public interest. Section 1861(v)(1)(L)(iii) of the Act requires that the Secretary establish revised HHA cost limits for cost reporting periods beginning on or after July 1, 1991 and annually thereafter (except for cost reporting periods beginning on or after July 1, 1994 and before July 1, 1996). As discussed in section III above, in accordance with the statute, we have used the same methodology to develop the schedule of limits that was used in setting the limits effective for cost reporting periods beginning on or after July 1, 1993. The cost limits have been updated by the appropriate market basket adjustment factor to reflect the cost increases occurring between the cost reporting periods for the data contained in the data base and June 30, 1997. In addition, as required under section 1861(v)(1)(L)(iii) of the Act, we have updated the wage index using the most recent hospital wage index. If HHAs are to receive timely the benefits of these new cost limits based on the updated wage index and market basket adjustment factors, it is necessary that these limits be published in time to take effect for cost reporting periods beginning on or after July 1, 1996. Because the methodology used to develop this schedule of limits is for the most part dictated by the statute and has been previously published for public comment, we believe 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 the 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 final notice does not impose information collection requirements. Consequently, it does not need to be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. C. Public Comments Because of the large number of items of correspondence we normally receive on a notice with comment period, we are not able to acknowledge or respond to them individually. However, we will consider all comments concerning the provisions of this notice that we receive by the date and time specified in the ``DATES'' section of this notice, and we will respond to those comments in a subsequent notice. Appendix--Technical Features of the HHA Market Basket Index As discussed in the preamble of this rule, we are rebasing and revising the home health agency market basket. This appendix describes the technical features of the 1993-based index that we are proposing for this notice. We present this description of the market basket in three steps: A synopsis of the structural differences between the 1976- and the 1993-based market baskets. A description of the methodology used to develop the cost category weights in the 1993-based market basket. A description of the data sources used to measure price change for each component of the 1993-based market basket, making note of the differences from the price proxies used in the 1976-based market basket. I. Synopsis of Structural Changes Adopted in the Rebased 1993 Home Health Agency Market Basket Three major structural differences exist between the 1976-based and the 1993-based home health agency market baskets. 1. More recent home health agency expenditure data are being used in the revised and rebased home health agency market basket. The 1976-based market basket contained cost shares that were derived from 1976 Medicare cost reports and other available health industry surveys. The 1993-based market basket uses data from the latest settled Medicare Cost Reports for Freestanding Home Health Agencies whose cost reporting periods began after June 1, 1991 and were settled by October 1, 1995 (one per HHA). These data were primarily reports from Federal fiscal year 1993; earlier and later data were aged forward and backward to Federal fiscal year 1993 using price changes. Additional information from the U.S. Department of Commerce Bureau of Economic Analysis (BEA) 1987 Input-Output Tables was used for some subcategories. It was aged to 1993 for relative price changes. 2. Some cost categories have been disaggregated and some cost categories have been combined. These category changes reflect the availability of data in the cost reports and in the BEA Input-Output Tables. 3. We will use Blended HHA Occupational Wage and Benefits Indexes. This parallels the use of Blended Wage and Salary and Benefits Indexes in the PPS and Excluded Hospital market baskets, but with adjustments for the occupational mix of home health agencies. II. Methodology for Developing the Cost Category Weights Cost category weights for the 1993-based market basket were developed in two stages. First, base weights for nine main categories (Wages and Salaries, Employee Benefits, Transportation, Operation and Maintenance, Administrative and General, Insurance, Fixed Capital, Movable Capital, and a residual All Other) were derived from the Home Health Agency Medicare Cost Reports described above. A weight for [[Page 34362]] Contract Service Labor was derived from the HHA Medicare Cost Reports, and allocated to (a) Wages & Salaries, (b) Employee Benefits, (c) Other Administrative and General, and (d) Other Expenses. Contract Services costs were allocated to the above four categories with proportionally higher weight given to (a) Wages and Salaries and (b) Employee Benefits to reflect that a substantial portion of contract services are from individual independent contractors with lower overhead than the average home health agency. Second, the weight for Administrative and General was divided into subcategories using cost shares from the 1987 Input- Output Table for the Other Medical and Health Services industry, produced by the U.S. Department of Commerce, Bureau of Economic Analysis, aged to 1993 using price changes. The Other Medical and Health Services industry is the residual of the Health Services industry less the Doctors and Dentists, Hospitals, and Nursing and Personal Care Facilities industries. It includes SIC 804, Other Health Practitioners; SIC 807, Medical and Dental Laboratories; SIC 808, Home Health Agencies; SIC 809 Health and Allied Services, not elsewhere classified; and SIC 074, Veterinary Services. The largest share of employment in these industries is in home health agencies. Below we describe the source of the nine main category weights and their subcategories in the 1993-based market basket. 1. Wages and Salaries, including an allocation for contract services' labor: The wages and salaries cost category is one of the nine base weights derived from using the Medicare Cost Reports. Contract Services, which is also derived from the Medicare Cost Reports, is split among the (a) Wages and Salaries, (b) Employee Benefits, (c) Other Administrative and General, and (d) Other Expenses cost categories. An example of Contract Service Labor is registered nurses who are employed and paid by firms which contract for their work with home health agencies or a registered nurse who is an independent contractor and works out of his or her personal residence. The wages and salaries cost category was disaggregated into four occupational subcategories (professional and technical, executive and administrative, administrative support, home health aides, and all other service occupations) to reflect the mix of occupational inputs used by home health agencies. The 1993-based weights were developed from the Medicare Cost Reports. The 1976-based market basket had a separate cost category for Contracted Services' Labor. 2. Employee Benefits, including an allocation for contract services' labor: The employee benefits cost category is one of the nine base weights derived from the Medicare cost reports. A share of contract services' labor was allocated to this cost category. Like wages and salaries, the employee benefit weight in the 1993-based market basket is a composite of four labor subcategories. These were developed from the Medicare cost reports. 3. Transportation: The weight for Transportation was derived from the Medicare Cost Reports. The 1976-based market basket had a similar cost category. 4. Operations and Maintenance: The weight for Operations and Maintenance was derived from the Medicare Cost Reports. The 1976-based market basket had Utilities and Miscellaneous Cost Categories which have been replaced. 5. Administrative and General, including an allocation for non- labor associated with contract labor services: The weight for Administrative and General was derived from the Medicare cost reports. The subcategories of Telephone, Paper and Printing, Postage, and residual Other Administrative and General expenses were derived from the 1987 BEA Input-Output Tables, moved forward to 1993 using price changes. A share of contract services non-labor expenses (implied other expenses) was allocated to the Other Administrative and General subcategory. The 1976-based market basket contained an Office Administration Costs category. 6. Capital-related: The weights for the subcategories for Insurance, Fixed Capital, and Movable Capital were derived from the Medicare cost reports. The 1976-based market basket did not contain insurance, fixed capital or movable capital as separate categories, but did contain a Miscellaneous Costs, an Office Administration Costs, a Rental and Leasing, and a Medical Nursing Supplies cost category. Capital-related costs include interest expenses. 7. Other Expenses: The weight for Other Expenses was derived from the Medicare Cost Reports. A share of contract services non-labor expenses (implied other expenses) was allocated to the Other Expenses cost category. The 1976-based market basket had a Miscellaneous Costs cost category. III. Price Proxies Used To Measure Cost Category Growth 1. Wages and Salaries, including an allocation for contract services' labor: For measuring price growth in the 1993-based market basket, price proxies are applied to the five occupational subcategories within the wages and salaries component, as is done in the hospital market baskets, weighted to reflect the home health agency occupational mix. The Professional and Technical occupational subcategory is represented by a blend of health industry and economy- wide price proxies. Therefore, there are five price proxies for four occupational subcategories (the Professional and Technical occupational subcategory has a blend of two). Table 4 at the end of this appendix describes the wages and salaries component of the market basket. 2. Employee Benefits, including an allocation for contract services' labor: For measuring price growth in the 1993-based market basket, price proxies are applied to the four occupational subcategories within the employee benefits component, as is done in the hospital market baskets, weighted to reflect the home health agency occupational mix. The Professional and Technical occupational subcategory is represented by a blend of health industry and economy- wide price proxies. Therefore there are five price proxies for four occupational subcategories (the Professional and Technical subcategory has a blend of two). Table 5 at the end of this appendix describes the employee benefits component of the market basket. 3. Operations and Maintenance: The percentage change in the price of Fuel and Other Utilities as measured by the Consumer Price Index was applied to this component. This is a revision from the 1976-based index in which the percentage change in the price of utilities was measured by a composite fuel and other utilities index. 4. Telephone: The percentage change in the price of Telephone Service as measured by the Consumer Price Index was applied to this component. This is a revision from the 1976-based index when the cost of telephone service was not specifically measured. 5. Paper and Printing: The percentage change in the price of Paper and Printing as measured by the Consumer Price Index for Household Paper Products and Stationery Supplies was applied to this component. This is a revision from the 1976-based index when the cost of paper and printing was not specifically measured. 6. Postage: The percentage change in the price of Postage as measured by the Consumer Price Index was applied to this component. This is a revision from the 1976-based index when the cost of postage was not specifically measured. 7. Other Administrative and General, including an allocation for non-labor [[Page 34363]] expenses associated with contract services: The percentage change in the price of services as measured by the Consumer Price Index was applied to this component. In the 1976-based market basket the CPI for Services was used as a proxy for Office Administration costs. 8. Insurance: The percentage change in the price of Household Insurance as measured by the Consumer Price Index was applied to this component. This is a revision from the 1976-based market basket in which the price of insurance was not specifically measured. 9. Transportation: The percentage change in the price of Transportation as measured by the Consumer Price Index was applied to this component. The same proxy was used for Transportation in the 1976- based market basket. 10. Fixed capital: The percentage change in the price of Owner's Equivalent Rent as measured by the Consumer Price Index was applied to this component. The percentage change in the price of Residential Rent as measured by the Consumer Price Index was used as a proxy for Rental and Leasing in the 1976-based market basket. 11. Movable Capital: The percentage change in the price of Machinery and Equipment as measured by the Producer Price Index was applied to this component. In the 1976-based market basket the percentage change in the price of Medical Equipment and Supplies as measured by the Consumer Price Index was applied to the Medical Nursing Supplies component. 12. Other Expenses, including an allocation for non-labor expenses associated with contract services: The percentage change in the price of All Items Less Food and Energy as measured by the Consumer Price Index was applied to this component. This is a revision from the 1976- based index, when the percentage change in the price of All Items as measured by the Consumer Price Index was applied to the Miscellaneous Costs component. A comparison of price proxies used in the 1993-based and the 1976- based home health agency market baskets follows: Appendix Table 1.--A Comparison of Price Proxies Used in the 1993-Based and 1976-Based Home Health Agency Market Baskets ------------------------------------------------------------------------ 1993-Based price 1976-Based price Cost category proxy proxy ------------------------------------------------------------------------ Compensation: Wages and Salaries...... HHA Occupational AHE Hospitals Wage Index. (Private nonsupervisory workers). Employee Benefits....... HHA Occupational BEA Supplements to Benefits Index. Wages & Salaries per Worker (BLS); (BEA Aggregate Supplements/number of workers from BLS). Operations and CPI-U Fuel & Other Index composed of Maintenance. Utilities. CPI-U Water & Sewage; IPD Fuel & Oil Coal (PCE); IPD Electricity (PCE); IPD Natural Gas (PCE). Administrative and .................... CPI-U Services General. (category: Office Administration Costs). Telephone............... CPI-U Telephone..... .................... Paper and Printing...... CPI-U Household .................... Paper, Paper Products & Stationery Supplies. Postage................. CPI-U Postage....... .................... Other Administrative and CPI-U Services...... .................... General. Transportation.......... CPI-U Private CPI-U Transportation. Transportation. Capital-Related: Insurance............... CPI-U Household .................... Insurance. Fixed Capital........... CPI-U Owner's CPI-U Residential Equivalent Rent. Rent category: Rental & Leasing. Movable Capital......... PPI Machinery & CPI-U Equipment. Nonprescription Medical Equipment & Supplies. Other Expenses.......... CPI-U All Items Less CPI-U All Items. Food & Energy. Contracted Services..... Contained within Composite All Other Wages & Salaries, HHA Cost Category Employee Benefits, Weights with Other associated price Administrative & proxy variables. General & Other Expenses cost categories; see those price proxies ------------------------------------------------------------------------ We allocated the Contract Services' share of home health agency expenses among (a) Wages and Salaries, (b) Employee Benefits, (c) Other Administrative and General, and (d) Other Expenses. The split chosen is one of three alternatives that we examined. In Alternative A, we split the Contract Services cost share only between (a) Wages and Salaries and (b) Employee Benefits. In Alternative B, we split the Contract Services cost share among (a) Wages and Salaries, (b) Employee Benefits, (c) Other Administrative and General, and (d) Other Expenses. In Alternative C, the option selected, we split the Contract Services cost share among (a) Wages and Salaries, (b) Employee Benefits, (c) Other Administrative and General, and (d) Other Expenses, but we gave proportionally more to (a) Wages and Salaries and (b) Employee Benefits, and less to (c) Other Administrative and General and (d) Other Expenses. This third middle-ground option recognizes that personnel in Contract Services may be employees of a firm contracting with home health agencies or may be independent contractors, working out of their personal residences, with relatively small non-labor expenses. Results of the three alternatives appear in Appendix Table 2, while a comparison of historical and forecasted percent changes are shown in Appendix Table 3. [[Page 34364]] Appendix Table 2.--Three Alternatives for Allocation of Contract Services; Cost Share ---------------------------------------------------------------------------------------------------------------- Alternative C: Split of contract services' cost Alternative B: Split of share among (a) wages contract services' cost and salaries, (b) Alternative A: Split of share among (a) wages employee benefits, (c) contract services' cost and salaries, (b) other administrative Cost category share between (a) wages employee benefits, (c) and general, and (d) and salaries and (b) other administrative other expenses, with employee benefits and general, and (d) smaller allocation to other expenses (c) and (d) and larger allocation to (a) and (b) (selected) ---------------------------------------------------------------------------------------------------------------- Compensation......................... 79.224 76.479 77.668 Wages & Salaries..................... 65.512 63.243 64.226 Employee Benefits.................... 13.712 13.327 13.442 Operations & Maintenance............. 0.832 0.832 0.832 Administrative & General............. 8.791 10.163 9.569 Telephone............................ 0.725 0.725 0.725 Paper & Printing..................... 0.529 0.529 0.529 Postage.............................. 0.724 0.724 0.724 Other Administrative & General....... 6.813 8.165 7.591 Transportation....................... 3.405 3.405 3.405 Capital-Related...................... 3.204 3.204 3.204 Insurance............................ 0.560 0.560 0.560 Fixed Capital........................ 1.764 1.764 1.764 Movable Capital...................... 0.880 0.880 0.880 All Other Expenses................... 4.544 5.916 5.322 -------------------------------------------------------------------------- Total.......................... 100.000 100.000 100.000 ---------------------------------------------------------------------------------------------------------------- Appendix Table 3.--A Comparison of Three Alternatives for Allocation of Contract Services' Cost Share for the 1993-Based Home Health Agency Market Basket, Percent Change, 1993-1998 ---------------------------------------------------------------------------------------------------------------- Alternative C: Split of Contract Services' cost Alternative B: Split of share among (a) Wages Contract Services' cost and Salaries, (b) Alternative A: Split of share among (a) Wages Employee Benefits, (c) Contract Services' cost and Salaries, (b) Other Administrative Fiscal Years beginning July 1 share between (a) Wages Employee Benefits, (c) and General, and (d) and Salaries and (b) Other Administrative Other Expenses, with Employee Benefits and General, and (d) smaller allocation to Other Expenses (c) and (d) and larger allocation to (a) and (b) (Selected) ---------------------------------------------------------------------------------------------------------------- Historical: July 1992, FY 1993............... 3.40 3.40 3.40 July 1993, FY 1994............... 3.00 3.00 3.00 July 1994, FY 1995............... 2.90 2.90 2.90 Forecasted: July 1995, FY 1996............... 2.70 2.70 2.70 July 1996, FY 1997............... 3.10 3.10 3.10 July 1997, FY 1998............... 3.20 3.20 3.20 Historical Average: 1993-1995........ 3.10 3.10 3.10 Forecasted Average: 1996-1998........ 3.00 3.00 3.00 ---------------------------------------------------------------------------------------------------------------- Source: DRI/McGraw Hill HCC, 1st Qtr. 1996;@USSIM/TREND25 YR0296@CISSIM/CONTROL961. Released by HCFA, OACT, Office of National Health Statistics. Note that there is no difference in historical performance or forecasts among the three alternatives. The components of the HHA Occupational Wages and Salaries and Occupational Benefit Indexes are listed below: Appendix Table 4.-- HCFA HHA Occupational Wages and Salaries Index ---------------------------------------------------------------------------------------------------------------- Cost category Weight Price proxy. ---------------------------------------------------------------------------------------------------------------- Skilled Nursing & Therapists & Other Professional/ 45.758 50% ECI for Wages & Salaries in Private Industry Technical, Including an allocation for Contract for Professional. Specialty & Technical Workers Services' Labor. and 50% ECI for Wages & Salaries for Civilian Hospital Workers. Managerial/Supervisory, including an allocation 5.527 ECO for Wages & Salaries in Private Industry for for Contract Services' Labor. Executive, Administrative & Managerial Workers. Clerical, including an allocation for Contract 15.019 ECI for Wages & Salaries in Private Industry for Services' Labor. Administrative Support, Including Clerical Workers. Service, including an allocation for Contract 33.696 ECI for Wages & Salaries in Private Industry Services' Labor. Service Occupations ----------- [[Page 34365]] Total....................................... 100.00 ---------------------------------------------------------------------------------------------------------------- The total weight for wages and salaries in the 1993-based Home Health Agency market basket is 64.226 percent. Appendix Table 5.--HCFA HHA Occupational Benefits Index (Employee Benefits Component of the 1993-Based Market Basket) ---------------------------------------------------------------------------------------------------------------- Cost category Weight Price proxy ---------------------------------------------------------------------------------------------------------------- Skilled Nursing & Therapists & Other Professional/ 44.182 50% ECI for Benefits in Private Industry for Technical, including an allocation for Contract Professional. Specialty & Technical Workers and Services' Labor. 50% ECI for Benefits for Civilian Hospital Workers. Managerial/Supervisory, including an allocation 5.097 ECI for Benefits in Private Industry for for Contract Services' Labor. Executive, Administrative & Managerial Workers. Clerical, including an allocation for Contract 15.848 ECI for Benefits in Private Industry for Services' Labor. Administrative Support, Including Clerical Workers. Service, including an allocation for Contract 34.873 ECI for Benefits in Private Industry Service Services' Labor. Occupations. ----------- Total....................................... 100.00 ---------------------------------------------------------------------------------------------------------------- The total weight for employee benefits in the 1993-based Home Health Agency market basket is 13.442 percent. Authority: Section 1861(v)(1)(L) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)); section 4207(d) of Pub. L. 101-508 (42 U.S.C. 1395x (note)). (Catalog of Federal Domestic Assistance Program No. 93.773 Medicare--Hospital Insurance) Dated: June 24, 1996. Bruce C. Vladeck, Administrator, Health Care Financing Administration. Dated: June 26, 1996. Donna E. Shalala, Secretary. [FR Doc. 96-16883 Filed 6-27-96; 4:08 pm] BILLING CODE 4120-01-P