[Federal Register Volume 62, Number 168 (Friday, August 29, 1997)] [Rules and Regulations] [Pages 45966-46140] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-22890] [[Page 45965]] _______________________________________________________________________ Part IV Department of Health and Human Services _______________________________________________________________________ Health Care Financing Administration _______________________________________________________________________ 42 CFR Parts 400, 409, et al. Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 1998 Rates; Final Rule Federal Register / Vol. 62, No. 168 / Friday, August 29, 1997 / Rules and Regulations [[Page 45966]] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration 42 CFR Parts 400, 409, 410, 411, 412, 413, 424, 440, 485, 488, 489, and 498 [BPD-878-FC] RIN 0938-AH55 Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 1998 Rates AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Final rule with comment period. ----------------------------------------------------------------------- SUMMARY: We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes resulting from the Balanced Budget Act of 1997, Pub. L. 105-33, and changes arising from our continuing experience with the systems. In the addendum to this final rule with comment period, we describe changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. Generally, these changes are applicable to discharges occurring on or after October 1, 1997. We also set forth rate-of-increase limits and changes for hospitals and hospital units excluded from the prospective payment systems. DATES: Effective Date: This rule is a major rule as defined in Title 5, United States Code, section 804(2). Section 4644 of Pub. L. 105-33 provides that, with respect to this final rule, the reference in Title 5, United States Code, section 801(a)(3)(A) to a 60-day delay in the effective date for major rules is deemed to be a reference to a 30-day delay. In accordance with these provisions, the provisions of this final rule with comment period are effective on October 1, 1997. Comment Period: Comments on the provisions resulting from the Balanced Budget Act of 1997 will be considered if received at the appropriate address, as provided below, no later than 5 p.m. on October 28, 1997. We will not consider comments concerning provisions that remain unchanged from the June 2, 1997 proposed rule or that were revised based on public comment. ADDRESSES: Mail written comments (one original and three copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: BPD-878-FC, 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 20201, or Room C5-09-26, Central Building, 7500 Security Boulevard, Baltimore, MD 21244-1850. Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting, please refer to file code BPD-878-FC. Comments received timely will be available for public inspection as they are received, generally beginning approximately three weeks after publication of a document, in Room 309- G of the Department's offices at 200 Independence Avenue, SW, Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890). For comments that relate to information collection requirements, mail a copy of comments to: Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Allison Herron Eydt, HCFA Desk Officer; and Health Care Financing Administration, Office of Information Services, Information Technology Investment Management Group, Division of HCFA Enterprise Standards, Room C2-26-17, 7500 Security Boulevard, Baltimore, MD 21244-1850 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) 512-1800 or by faxing to (202) 512- 2250. The cost for each copy is $8.00. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register. FOR FURTHER INFORMATION CONTACT: Nancy Edwards, (410) 786-4531, Operating Prospective Payment, DRG, and Wage Index Issues. Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded Hospitals, and Graduate Medical Education Issues. SUPPLEMENTARY INFORMATION: I. Background A. Summary Under section 1886(d) of the Social Security Act (the Act), a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively-set rates was established effective with hospital cost reporting periods beginning on or after October 1, 1983. Under this system, Medicare payment for hospital inpatient operating costs is made at a predetermined, specific rate for each hospital discharge. All discharges are classified according to a list of diagnosis-related groups (DRGs). The regulations governing the hospital inpatient prospective payment system are located in 42 CFR part 412. As required by section 1886(g) of the Act, effective with cost reporting periods beginning on or after October 1, 1991, we also have implemented a prospective payment methodology for hospital inpatient capital-related costs. Under the capital-related cost methodology, a predetermined payment amount per discharge is made for Medicare inpatient capital-related costs. B. Summary of the Provisions of the June 2, 1997 Proposed Rule On June 2, 1997, we published a proposed rule in the Federal Register (62 FR 29902) setting forth proposed changes to the Medicare hospital inpatient prospective payment systems for both operating costs and capital-related costs, which would be effective for discharges occurring on or after October 1, 1997. Subsequently, on August 5, 1997, the Balanced Budget Act of 1997, Public Law 105-33, was enacted. This Act made major changes to the Medicare hospital payment systems, rates, and policies effective beginning with FY 1998. These legislative changes are summarized under section I.D. of this preamble. More specific details on individual provisions that we are implementing in this final rule with comment period are included under the various sections of this preamble. Following is a summary of the major changes that we had proposed to make in the June 2, 1997 proposed rule:We proposed changes for FY 1998 DRG classifications and relative weights, as required by section 1886(d)(4)(c) of the Act. We proposed to update the hospital wage index for FY 1998. We also [[Page 45967]] proposed revisions to the wage index based on hospital redesignations and a revised process for wage data verification. We proposed to use a revised hospital market basket in developing the recommended FY 1998 update factor for the operating prospective payment rates and the excluded hospital rate-of-increase limits. We discussed several provisions of the regulations in 42 CFR Parts 412 and 413 and set forth certain proposed changes concerning the following: + Elimination of day outlier payments. + Rural referral centers. + Indirect medical education. + Direct graduate medical education programs. We discussed several provisions of the regulations in 42 CFR parts 412, 413, and 489 and set forth certain proposed changes and clarifications concerning the following: + Possible adjustments to capital minimum payment levels. + Special exceptions application process. We proposed changes to the application of the criteria for ``hospitals within hospitals'' seeking exclusion from the prospective payment system. We also proposed technical clarifications concerning exclusion of rehabilitation units. In the addendum to the proposed rule, we set forth proposed changes to the amounts and factors for determining the FY 1998 prospective payment rates for operating costs and capital-related costs. We also proposed update factors for determining the rate-of- increase limits for cost reporting periods beginning in FY 1998 for hospitals and hospital units excluded from the prospective payment system. In Appendix A of the proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected entities. In Appendix B of the proposed rule, we set forth our technical appendix on the proposed FY 1998 capital cost model. In Appendix C of the proposed rule, we set forth the data sources used to determine the market basket relative weights and choice of price proxies. In Appendix D of the proposed rule, we included our report to Congress on our initial estimate of an update factor for FY 1998 for both hospitals included in and hospitals excluded from the prospective payment systems, as required by section 1886(e)(3)(B) of the Act. As required by sections 1886(e)(4) and (e)(5) of the Act, in Appendix E, we provided our recommendation of the appropriate percentage change for FY 1998 for the following: + Large urban area and other area average standardized amounts (and hospital-specific rates applicable to sole community hospitals) for hospital inpatient services paid for under the prospective payment system for operating costs. + Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by hospitals and hospital units excluded from the prospective payment system. In the proposed rule, we discussed in detail the March 1, 1997 recommendations made by the Prospective Payment Assessment Commission (ProPAC). ProPAC is directed by section 1886(e)(2)(A) of the Act to make recommendations on the appropriate percentage change factor to be used in updating the average standardized amounts. In addition, section 1886(e)(2)(B) of the Act directs ProPAC to make recommendations regarding changes in each of the Medicare payment policies under which payments to an institution are prospectively determined. In particular, the recommendations relating to the hospital inpatient prospective payment systems are to include recommendations concerning the number of DRGs used to classify patients, adjustments to the DRGs to reflect severity of illness, and changes in the methods under which hospitals are paid for capital-related costs. Under section 1886(e)(3)(A) of the Act, the recommendations required of ProPAC under sections 1886(e)(2) (A) and (B) of the Act are to be reported to Congress not later than March 1 of each year. We printed ProPAC's March 1, 1997 report, which included its recommendations, as Appendix F to the proposed rule. The recommendations, and the actions we proposed to take with regard to them (when an action was recommended), were discussed in detail in the appropriate sections of the preamble, the addendum, or the appendices to the proposed rule. C. Public Comments Received in Response to the June 2 Proposed Rule A total of 341 items of correspondence containing comments on the proposed rule were received. The main areas of concern addressed by the commenters were the changes in the DRG classifications related to coronary stents and stereotactic radiosurgery, and the request for comments on future changes for burn cases. Among other areas of concern addressed by the commenters were implementation of the FY 1999 wage index and the policy change related to hospitals and hospital units excluded from the prospective payment system (specifically, hospital- within-hospital policy). Summaries of the public comments received and our responses to those comments appear in the individual related sections of the preamble. D. Relevant Provisions of the Balanced Budget Act of 1997 As noted above, on August 5, 1997, after we had issued the proposed rule for the FY 1998 prospective payment system changes, the Balanced Budget Act of 1997 was enacted. This Act made major changes that affect Medicare payments for hospital inpatient services under the prospective payment systems and the cost limits applicable to excluded hospitals, as well as the direct graduate medical education payments. Because most of these changes are effective October 1, 1997, we have had to make some revisions to the June 2 proposals as well as make additional changes. The provisions of Public Law 105-33 that we are implementing in this final rule with comment period are as follows: 1. Hospital Operating Payment Update. The applicable percentage change in the standardized amounts is 0 percent for FY 1998, the market basket percentage increase minus 1.9 percentage points for all hospitals in all areas for FY 1999, the market basket percentage increase minus 1.8 percentage points for hospitals in all areas for FY 2000, the market basket percentage increase minus 1.1 percentage points for hospitals for all areas for FYs 2001 and 2002, and the market basket percentage increase for hospitals in all areas for FY 2003 and subsequent fiscal years. (Section 4401(a)) Hospitals that do not receive disproportionate share (DSH) or indirect medical education (IME) payments and are (MDH) for FY 1998 or 1999 will receive a higher update for that year if-- The hospital is in a State in which the aggregate prospective payment system operating payments to these types of hospitals is less than the aggregate prospective payment system operating costs (an overall State negative operating margin) for FY 1995 cost reporting periods; and The hospital itself has a negative operating prospective payment system margin in the payment year. (Section 4401(b)) 2. Hospital Capital Rate Reduction. The Federal capital rate and the hospital-specific rate are reduced by applying the budget neutrality factor [[Page 45968]] that was in effect in FY 1995, which results in a 15.68 percent reduction in the rates. In addition, for FY 1998 through FY 2002, both rates will be reduced an additional 2.1 percent. These reductions together result in an overall reduction of 17.78 percent in the unadjusted rates for the next 5 years. (Section 4402) 3. Disproportionate Share Payments. The DSH payments to hospitals are reduced by 1 percent in FY 1998, 2 percent in FY 1999, 3 percent in FY 2000, 4 percent in FY 2001, and 5 percent in FY 2002. (Section 4403) 4. Outlier Payments. Beginning in FY 1998, IME and DSH payments will be made only on the base DRG payment rates and not on outlier payments. In determining outlier payments, the fixed loss cost outlier threshold will encompass payments for IME and DSH. (Section 4405) 5. Base Payment Rate to Puerto Rico Hospitals. The national share of the Puerto Rico payment rate is increased from 25 to 50 percent. Thus, these hospitals will be paid based on 50 percent of a national payment amount (based on a discharge-weighted average of the large urban and other urban national standardized amounts) and 50 percent of the Puerto Rico payment amount. (Section 4406) 6. Special Reclassification. The Secretary is given discretionary authority to deem Stanly County, North Carolina (a rural county) as a part of the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina MSA (a large urban area) for purposes of the prospective payment system. (Section 4408) 7. New Guidelines for Geographic Reclassification. Public Law 105- 33 includes several provisions concerning geographic reclassification under section 1886(d)(10) of the Act. For geographic reclassifications for FY 1998 and subsequent years, the Secretary must establish and publish alternative guidelines for a hospital that demonstrates that-- Its average hourly wage is at least 108 percent of the average hourly wage of all other hospitals in its Metropolitan Statistical Area (MSA) (or New England County Metropolitan Area (NECMA)); It pays at least 40 percent of the adjusted uninflated wages in the MSA; and It submitted an application and was approved for reclassification for the wage index for FYs 1992 through 1997. (Section 4409) For reclassifications for FYs 1999, 2000, and 2001, a hospital may seek reclassification to another area for purposes of DSH payment whether or not the standardized amount is the same. (Section 4203(a)) For any hospital that has ever been classified as a rural referral center (RRC), the Medicare Geographic Classification Review Board (MGCRB) may not reject an application for reclassification for purposes of the wage index on the basis of the 108 percent rule. (Section 4202) For any hospital that is owned by a municipality and was reclassified as an urban hospital for FY 1996, the Secretary must exclude the overhead wages and hours associated with a skilled nursing facility that is owned by the hospital and that is physically located apart from the hospital in determining the hospital's average hourly wage for purposes of qualifying for FY 1998 reclassification, if the hospital had previously applied for and been denied reclassification for FY 1998. (Section 4410(c)) 8. Floor on Area Wage Index. Beginning with FY 1998, the wage index for an urban hospital may not be lower than the Statewide area rural wage index. (Section 4410 (a) and (b)) 9. Indirect Medical Education. The IME formula is revised to reduce the IME adjustment factor from 7.7 percent to 7.0 percent in FY 1998, 6.5 percent in FY 1999, 6.0 percent in FY 2000, and 5.5 percent in FY 2001 and subsequent fiscal years. (Section 4621(a)) For cost reporting periods beginning on or after October 1, 1997, the total number of full-time equivalent residents in a hospital's approved medical residency training program in the fields of allopathic medicine and osteopathic medicine is limited to the hospital's full- time equivalent count for the most recent cost reporting period ending on or before December 31, 1996. For cost reporting periods beginning on or after October 1, 1997, a hospital's indirect medical education full- time equivalent count is based on the average full-time equivalent count for the cost reporting period and the preceding two cost reporting periods. For the first cost reporting period beginning on or after October 1, 1997, the average is based on residents in that period and the preceding period. The statute provides for adjustments for short periods and a transition rule for FY 1998. Furthermore, the ratio of residents-to- beds may not exceed the ratio calculated during the prior cost reporting period (after accounting for the cap on the number of resident FTEs). For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary must make payments to teaching hospitals for the indirect costs of graduate medical education associated with Medicare managed care discharges. Payment is equal to the per discharge amount that would have been made for that discharge if the beneficiary were not enrolled in managed care, multiplied by an applicable percentage. The applicable percentage is 20 percent in 1998, 40 percent in 1999, 60 percent in 2000, 80 percent in 2001, and 100 percent in 2002 and subsequent years. 10. Rural Referral Centers. Any hospital classified as an RRC for FY 1991 will be classified as an RRC for FY 1998 and subsequent fiscal years. (Section 4202(b)) 11. Medicare-Dependent, Small Rural Hospitals. The special treatment of MDHs is reinstated for FYs 1998, 1999, and 2000. The payment methodology is identical to the methodology applicable in FY 1993; that is, if the hospital's hospital-specific rate based on 1982 or 1987 costs is higher than the Federal rate, the hospital receives 50 percent of the difference between the Federal rate and the hospital- specific rate. (Section 4204) 12. Reinstatement of the Add-On for Blood Clotting Factor. The add- on payment for blood clotting factor provided to inpatients with hemophilia is permanently reinstated beginning in FY 1998. (Section 4452) 13. Counting Residents for Direct Graduate Medical Education. For cost reporting periods beginning on or after October 1, 1997, the total number of unweighted full-time equivalent residents in a hospital's approved medical residency training program in the fields of allopathic medicine and osteopathic medicine is limited to the hospital's unweighted full-time equivalent count for the most recent cost reporting period ending on or before December 31, 1996. For cost reporting periods beginning on or after October 1, 1997, a hospital's direct medical education full-time equivalent count is based on the average full-time equivalent count for the cost reporting period and the preceding two cost reporting periods. For the first cost reporting period beginning on or after October 1, 1997 the average is based on residents in that period and the preceding period. The statute provides for adjustments for short periods and a transition rule for FY 1998. The Secretary is permitted to prescribe rules that allow institutions that are members of the same affiliated group (as defined by the Secretary) to elect to apply the FTE cap on an aggregate basis. The Secretary must prescribe rules for providing exceptions to the cap for [[Page 45969]] medical residency training programs beginning on or after January 1, 1995. The statute gives the Secretary authority to collect whatever data are necessary to implement these provisions. (Section 4623) 14. Payments to Managed Care Plans for Graduate Medical Education. For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary must make payments to teaching hospitals for the direct costs of graduate medical education associated with Medicare managed care discharges. Payment is equal to the product of the per resident amount, the total number of FTE residents working all areas of the hospital, the fraction of the total number of inpatient bed days that are attributable to Medicare managed care enrollees, and an applicable percentage. The applicable percentage is 20 percent in 1998, 40 percent in 1999, 60 percent in 2000, 80 percent in 2001 and 100 percent in 2002 and subsequent years. (Section 4624) 15. Payment to Nonhospital Providers. For cost reporting periods beginning on or after October 1, 1997, the Secretary may establish rules for payment to qualified nonhospital providers for the direct costs of medical education incurred in the operation of an approved medical residency training program. Qualified nonhospital providers include federally qualified health centers, rural health clinics, Medicare Choice organizations, and any other nonhospital providers that the Secretary determines to be appropriate. The rules established by the Secretary must specify the amounts, form, and manner in which payments will be made and the portion of the payments that will be made from each of the Medicare Trust Funds. The Secretary must reduce the aggregate amount paid to hospitals to the extent payment is made to nonhospital providers for residents included in the hospital's full- time equivalent count. (Section 4625) 16. Payment for Combined Medical Residency Training Programs. The initial residency period for combined programs consisting only of primary care training is the longest of the composite programs plus one additional year. A resident enrolled in a combined medical residency training program that includes an obstetrics and gynecology program qualifies for this special rule if the other programs combined with the obstetrics and gynecology program are for training a resident in primary care. This provision is effective for residency training programs beginning July 1, 1997. (Section 4627) 17. Payment Update for Excluded Hospitals and Hospital Units. For FY 1998, the rate-of-increase limits for excluded hospitals and units will be updated by 0 percent. For FYs 1999 through 2002, the update factor is tied to the relationship between the hospital's target amount and its operating costs. For hospitals with costs exceeding the target amount by 10 percent or more, the update is the market basket percentage increase; if costs exceed the target but by less than 10 percent, the update factor equals the market basket percentage increase minus 0.25 percentage points for each percentage point by which costs are less than 10 percent over the target (but in no case less than 0); if costs are less than or equal to the target but not below \2/3\ of the target amount, the update is the greater of 0 percent or the market basket percentage increase minus 2.5 percentage points; and if costs do not exceed \2/3\ of the target amount, the update factor is 0 percent. (Section 4411) 18. Reductions to Capital Payments. Capital payment amounts for certain excluded hospitals and hospital units are reduced by 15 percent for FYs 1998 through 2002. (Section 4412) 19. Rebasing. A hospital that was excluded from the prospective payment system before 1991 may apply to rebase its target amount for its cost reporting period beginning in FY 1998. The rebased target amount is determined by using the five latest settled cost reporting periods as of August 5, 1997, updating for inflation, excluding the highest and the lowest cost per discharge, and calculating an average for the remaining three. Long-term care hospitals with costs exceeding 115 percent of their target amount and a 70- percent disproportionate patient percentage may elect to use the cost reporting period beginning during FY 1996 as their base year, updated for inflation. (Section 4413) 20. Cap on Target Amounts for Excluded Hospitals and Units. For FYs 1998 through 2002, the target amount will be capped at the 75th percentile of the target amounts for similar facilities for cost reporting periods ending during FY 1996, updated by inflation. This cap applies to psychiatric hospitals and units, rehabilitation hospitals and units, and long-term care hospitals. 21. Bonus and Relief Payments to Excluded Hospitals and Units. Bonus payments to excluded hospitals and units are the lesser of-- 15 percent of the amount by which the ceiling (target amount times Medicare discharges) exceeds the amount of operating costs; or 2 percent of the ceiling. A continuous improvement bonus payment system is established beginning FY 1998 for hospitals with at least 3 full cost reporting periods whose operating costs for the payment period are less than the least of its target amount, its trended costs (as defined by the statute), or its expected costs (as defined by the statute). The bonus under this system equals the lesser of-- 50 percent of the amount by which operating costs are less than expected costs; or 1 percent of the ceiling. Hospitals with costs over 110 percent of their ceiling receive relief payments equal to an additional 50 percent of the amount by which costs exceed 110 percent of the ceiling, not to exceed 10 percent of the ceiling. (Section 4415) 22. Change in Payment and Target Amount for New Providers. Effective October 1, 1997, the new provider exemptions for excluded hospitals are eliminated except for children's hospitals. The amount of payment for a new provider will be the lesser of operating costs for the period, or 110 percent of the national median of the target amount for hospitals in the same class for cost reporting periods ending in FY 1996, wage adjusted and updated by the market basket percentage increase to the fiscal year in which the hospital first received payments. (Section 4416 and 4419) 23. Treatment of Certain Long-Term Care Hospitals. Long-term care hospitals located in the same building or on the same campus as another hospital and that were in existence on September 30, 1995, are grandfathered in as hospitals excluded from the prospective payment system. This amendment applies to discharges occurring on or after October 1, 1995. (Section 4417(a)) A hospital that first received payment in 1986, has an average inpatient length of stay greater than 20 days, and in its 12-month cost reporting period ending in FY 1997, has 80 percent or more of its annual Medicare discharges that reflect a finding of neoplastic disease, is excluded from the prospective payment system as a long-term care hospital. This provision applies to cost reporting periods beginning on or after August 5, 1997. (Section 4417(b)) 24. Treatment of Certain Cancer Hospitals. A hospital recognized as a comprehensive cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983; located in a State which, as of December 19, 1989, was not operating a demonstration project under section 1814(b); that applied for and was denied classification on or before December 31, 1990; is licensed for less than 50 acute [[Page 45970]] care beds; and demonstrates that at least 50 percent of its total discharge reflects a finding of neoplastic disease for the 4-year period ending December 31, 1996, is excluded from the hospital prospective payment system retroactively to 1991. The legislation includes an option to rebase payments. Retroactive payments must be made by August 5, 1998. (Section 4418) 25. Limited-Service Rural Hospital Program A ``Medicare Rural Hospital Flexibility Program'' is established. This program is a national limited-service hospital program that replaces the existing Essential Access Community Hospital/Rural Primary Care Hospital (EACH/RPCH) program which operates in seven States. The program allows States to designate rural facilities as ``critical access hospitals'' if they are located a sufficient distance from other hospitals, make available 24-hour emergency care, maintain no more than 15 inpatient beds, and keep inpatients no longer than 96 hours (except where weather or emergency conditions dictate, or a Peer Review Organization waives the limit). In addition, critical access hospitals do not have to meet all of the staffing requirements that apply to hospitals under Medicare. Payment for inpatient and outpatient services under this program is on the basis of reasonable cost. States may receive grants for program activities, and are authorized to provide for the creation of networks, which include at least one critical access hospital and at least one acute care hospital. Critical access hospitals with swing-bed agreements are allowed to have up to 25 inpatient beds and to furnish both acute (hospital-level) and SNF-level care, provided that no more than 15 of those beds are used at any one time for acute care. Existing RPCHs, otherwise eligible as CAHs, and existing medical assistance facilities (MAFs) participating under the MAF demonstration project in Montana, will be deemed as CAHs. Existing EACHs in rural areas will continue to be paid as sole community hospitals but no new EACHs will be designated. (Section 4201) 26. Change in Publication Dates. Beginning with the FY 1999 update, the DRG prospective payment rate methodology and the recommended hospital prospective payment updates must be published as a proposed rule by April 1 and as a final rule by August 1 of each year. (Section 4644 (a)(1) and (b)(1)) As a conforming change, the deadline for applications for geographic reclassification for years beginning with FY 2000 is moved from October 1 to September 1. Because the FY 1999 applications are due on October 1, 1997, the Secretary is directed to shorten the deadlines for MGCRB decision making, so that a final decision for all applications is made by June 15, 1998. (Section 4644(c)) Each of these provisions and the changes to the regulations necessary to implement these provisions are described in greater detail in sections III, IV, V, and VI of this preamble. II. Changes to DRG Classifications and Relative Weights A. Background Under the prospective payment system, we pay for inpatient hospital services on the basis of a rate per discharge that varies by the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case takes an individual hospital's payment rate per case and multiplies it by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG relative to the average resources used to treat cases in all DRGs. Congress recognized that it would be necessary to recalculate the DRG relative weights periodically to account for changes in resource consumption. Accordingly, section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights annually. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. The changes to the DRG classification system and the recalibration of the DRG weights for discharges occurring on or after October 1, 1997 are discussed below. B. DRG Reclassification 1. General Cases are classified into DRGs for payment under the prospective payment system based on the principal diagnosis, up to eight additional diagnoses, and up to six procedures performed during the stay, as well as age, sex, and discharge status of the patient. The diagnosis and procedure information is reported by the hospital using codes from the International Classification of Diseases, Ninth Edition, Clinical Modification (ICD-9-CM). The Medicare fiscal intermediary enters the information into its claims system and subjects it to a series of automated screens called the Medicare Code Editor (MCE). These screens are designed to identify cases that require further review before classification into a DRG can be accomplished. After screening through the MCE and any further development of the claims, cases are classified by the GROUPER software program into the appropriate DRG. The GROUPER program was developed as a means of classifying each case into a DRG on the basis of the diagnosis and procedure codes and demographic information (that is, sex, age, and discharge status). It is used both to classify past cases in order to measure relative hospital resource consumption to establish the DRG weights and to classify current cases for purposes of determining payment. The records for all Medicare hospital inpatient discharges are maintained in the Medicare Provider Analysis and Review (MedPAR) file. The data in this file are used to evaluate possible DRG classification changes and to recalibrate the DRG weights. Currently, cases are assigned to one of 492 DRGs in 25 major diagnostic categories (MDCs). Most MDCs are based on a particular organ system of the body (for example, MDC 6, Diseases and Disorders of the Digestive System); however, some MDCs are not constructed on this basis since they involve multiple organ systems (for example, MDC 22, Burns). In general, principal diagnosis determines MDC assignment. However, there are five DRGs to which cases are assigned on the basis of procedure codes rather than first assigning them to an MDC based on the principal diagnosis. These are the DRGs for liver, bone marrow, and lung transplant (DRGs 480, 481, and 495, respectively) and the two DRGs for tracheostomies (DRGs 482 and 483). Cases are assigned to these DRGs before classification to an MDC. Within most MDCs, cases are then divided into surgical DRGs (based on a surgical hierarchy that orders individual procedures or groups of procedures by resource intensity) and medical DRGs. Medical DRGs generally are differentiated on the basis of diagnosis and age. Some surgical and medical DRGs are further differentiated based on the presence or absence of complications or comorbidities (hereafter CC). Generally, GROUPER does not consider other procedures; that is, nonsurgical procedures or minor surgical procedures generally not performed in an operating room are not listed as operating room (OR) procedures in the GROUPER decision tables. However, there are a few non-OR procedures that do affect DRG [[Page 45971]] assignment for certain principal diagnoses, such as extracorporeal shock wave lithotripsy for patients with a principal diagnosis of urinary stones. We proposed several changes to the DRG classification system for FY 1998. The proposed changes, the comments we received concerning them, our responses to those comments, and the final DRG changes are set forth below. 2. MDC 1 (Diseases and Disorders of the Nervous System) a. Stereotactic Radiosurgery Effective October 1, 1995, procedure code 92.3 (stereotactic radiosurgery) was created and classified as a non-OR procedure. However, because this procedure had previously been coded to procedure codes that are classified as operating room procedures, we assigned procedure code 92.3 to the same surgical DRGs as the predecessor codes. Therefore, in the following DRGs, stereotactic radiosurgery is considered a non-OR procedure that affects DRG assignment: in MDC 1, DRG 1 (Craniotomy Age >17 Except for Trauma), DRG 2 (Craniotomy for Trauma Age >17), and DRG 3 (Craniotomy Age 0-17) and, in MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), DRG 286 (Adrenal and Pituitary Procedures). In addition, in MDC 17 (Myeloproliferative Diseases and Disorders and Poorly Differentiated Neoplasms), procedure code 92.3 is considered a major OR procedure for purposes of assignment to DRG 400 (Lymphoma and Leukemia with Major OR Procedure) and DRGs 406 and 407 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Major OR Procedure).1 We stated in the June 2, 1995 proposed rule (60 FR 29207) that we would analyze the stereotactic radiosurgery cases as soon as the FY 1996 cases were available to ensure that these DRG assignments were appropriate. --------------------------------------------------------------------------- \1\ A single title combined with two DRG numbers is used to signify pairs. Generally, the first DRG is for cases with CC and the second DRG is for cases without CC. If a third number is included, it represents cases of patients who are age 0-17. Occasionally, a pair of DRGs is split on age >17 and age 0-17. --------------------------------------------------------------------------- In analyzing the FY 1996 MedPAR file, we found that there were stereotactic radiosurgery cases assigned to DRGs 1, 286, 400, and 407. In DRG 1, the average standardized charges for these cases are approximately $16,400 compared to approximately $27,800 for DRG 1 overall and the lengths of stay are about 3 days and 10 days, respectively. In DRG 286, the average charges for procedure code 92.3 are also much lower than all cases in that DRG, about $11,900 versus $19,400. Again the length of stay is also much lower for stereotactic radiosurgery, just over 1 day compared to almost 7 days for all DRG 286 cases. Because the cases associated with procedure code 92.3 clearly are much less resource-intensive than the other cases in the DRGs to which it is assigned, we proposed to reassign procedure code 92.3 to DRGs 7 and 8 (Peripheral and Cranial Nerve and Other Nervous System Procedures) in MDC 1 and DRGs 292 and 293 (Other Endocrine, Nutrition and Metabolic OR Procedures) in MDC 10. We also proposed to remove procedure code 92.3 from the list of major OR procedures in MDC 17. Therefore, these cases would be assigned to DRGs 401 and 402 (Lymphoma and Non-Acute Leukemia with Other OR Procedure) and DRG 408 (Myeloproliferative Disorders or Poorly Differentiated Neoplasms with Other OR Procedure). We received over 130 comments regarding our proposal to move procedure code 92.3, including many from people who underwent radiosurgery. Three commenters supported the proposal. One commenter concurred that a revision of the DRG assignment and payment level for radiosurgery is appropriate, but suggested that any change be delayed until further analysis of industry data has been conducted. The remaining commenters opposed our proposal and strongly recommended that stereotactic radiosurgery cases continue to be assigned to DRG 1, or if a change must be made, these cases should be assigned to their own DRG with an appropriate relative weight. The specific comments we received are discussed below. Comment: Many commenters stated that stereotactic radiosurgery is cost effective and is less expensive (by approximately \1/3\) than open cranial surgery. The commenters were concerned that this proposal would result in a 40 percent reduction in payment for these cases. Response: Currently, stereotactic radiosurgery is being paid at the same level as open cranial surgery, as the commenter noted. We believe these comments support our decision to move the radiosurgery cases into a DRG with cases of comparable utilization of resources, rather than group them with open surgery procedures, which involve much greater resource use. Our intent is not to discourage the utilization of this advanced technology nor to reduce payment arbitrarily, but to make appropriate payment for the procedure by assigning it to a DRG with similar resource use. Comment: There are several different approaches being used in stereotactic radiosurgery. The two most prevalent are the gamma knife and the linear accelerator. Some commenters believe that we should be analyzing these cases separately and possibly making different DRG assignments for them. Other commenters urged us not to distinguish between approaches in radiosurgery, and one of these commenters submitted data to demonstrate that there is no difference in patient outcomes and that the different types of approach are clinically similar. Response: Effective October 1, 1995, a new ICD-9-CM procedure code was created to capture stereotactic radiosurgery. The new code 92.3 (Stereotactic radiosurgery) encompasses both gamma knife and linear accelerator procedures. This topic was addressed at a public meeting of the ICD-9-CM Coordination and Maintenance Committee in 1994 at which representatives from the radiosurgery industry were in attendance. Comments were accepted at the meeting and attendees were also invited to submit written comments. At that time, we did not receive any negative comments regarding the inclusion of all approaches to radiosurgery in one code. Therefore, with only one code, we are unable to distinguish the radiosurgery cases based on different approaches. We note that one difference between the approaches is the initial capital costs of the equipment. However, now that capital payments are made to hospitals under a prospective payment system, there is no way for us to specifically recognize these different costs. Comment: Several commenters stated that because most radiosurgery patients do not have complicating conditions, which are necessary to be assigned to DRG 7, most cases will be assigned to DRG 8 and receive the lower relative weight associated with less complicated cases. In any event, the commenters believe that the payment for DRGs 7 and 8 is less than the costs of providing the treatment. One commenter stated that the average payment for radiosurgery cases assigned to DRG 1 in FY 1996 was $11,876.28, while payment for DRGs 7 and 8 in the same year averaged $9,973.13 and $4,547.64, respectively. Therefore, this proposal could reduce hospital payment for the average Medicare radiosurgery cases in DRG 1 by as much as 62 percent. Response: We have performed an analysis of the full FY 1996 MedPAR file, updated through June 1997. Of the 1,275 cases coded with procedure 93.2, 966 cases would have been assigned to [[Page 45972]] DRGs 7 and 8 under our proposal. Of those 966 cases, 406 classify to DRG 7 and 560 cases classify to DRG 8. The average charges of these reassigned cases are approximately $16,300 for DRG 7 and $13,700 for DRG 8. The average standardized charges for DRG 7 and 8 overall are approximately $20,250 and $9,950, respectively. Thus, the average charges for radiosurgery cases assigned to DRG 7 (just over 40 percent of the total) are approximately $4,000 less than the overall cases assigned to that DRG and the average charges for the cases assigned to DRG 8 are approximately $4,000 more than the overall cases. Therefore, given a similar distribution at any hospital, the payments for the DRG 7 and 8 cases should come close to balancing out; that is, DRG 7 will result in payments in excess of costs and DRG 8 will result in approximately equal numbers of cases with costs in excess of payments. This is consistent with the design of the prospective payment system, which is intended to make an average, predetermined payment for each case that encourages hospitals to provide care efficiently and economically and treat a mix of patients so that cases incurring payments in excess of costs are balanced by cases incurring costs in excess of payments. The difference between assignment to DRG 7 and DRG 8 is the documentation of complications resulting from treatment or comorbidities that are present upon admission and may affect treatment. Examples of these secondary diagnoses that, in fact, many of the patients who commented reported having are postoperative nausea (which may prolong the patient's stay), diabetes, congestive heart failure, and emphysema. In fact, commenters stated that one of the advantages of radiosurgery over open surgery is that it can be performed on patients with comorbidities who could not otherwise tolerate surgery for their conditions. We also note that DRGs 1 and 2 are not split on the basis of CCs; rather, they are assigned based on whether the case is or is not a trauma case. Therefore, hospitals might not have coded secondary diagnoses for radiosurgery cases. Nonetheless, over 40 percent of the reassigned cases in our analysis have CCs included on the bill. We believe this will remain true in FY 1998 and the percentage may even increase now that properly coding CCs will affect the amount of payment. In response to the commenter concerned about the low payment for DRGs 7 and 8, we note that, based on the MedPAR file, the average payment for radiosurgery cases assigned to DRG 1 in FY 1996 was approximately $16,000. If those cases had been assigned to DRGs 7 and 8 in that year, we estimate that the average payment would have been approximately $14,000 and $8,000, respectively. Thus, on average, payment for radiosurgery cases will be reduced by approximately 30 percent. This is consistent with commenter's assertion that this procedure costs approximately one-third less than an open cranial procedure. Comment: Commenters suggested that instead of continuing to assign radiosurgery cases to DRG 1, it would be acceptable to assign these cases to their own DRG and assign a weight of approximately 3.0. Response: As we have stated in several previous documents, including the June 2 proposed rule (in connection with the discussion of automatic implantable cardioverter defibrillators (62 FR 29906)), we are reluctant to create device-specific DRGs where the cost of the device dominates the charges. Creating a separate DRG for radiosurgery, where the costs of the device used to perform the procedure dominates the charges, would be a similar issue. With such a procedure-specific DRG, it would be relatively easy for hospitals and manufacturers of the equipment to raise the charges for the cases until they create a relative weight that consistently pays them more than their costs. We believe that the resource consumption associated with cases in DRGs 7 and 8 is similar to that required by radiosurgery cases. However, we will continue to monitor this technology to ensure that these DRGs remain appropriate assignments. Comment: Several commenters believe that the relatively low charges of the radiosurgery cases result, in part, from incorrect use of procedure code 92.3. These commenters requested that we either wait until these issues are resolved to make a DRG change or that we adjust the cases in the MedPAR file based on industry data. Response: It is often the case with a new code, whether diagnosis or procedure, that there is a period of time necessary to gain experience and correctly use the code. We did notice some coding discrepancies when we reviewed the radiosurgery cases. However, these discrepancies are not in the cases that are assigned to DRGs 7 and 8, but rather the cases that remain assigned to DRG 1. We note that coders appear to be including improperly the approach to the radiosurgery procedure, such as coding thalamotomy and pallidotomy separately in addition to the stereotactic radiosurgery code. In addition, the coding of some cases has included codes that represent the result of the radiosurgery, that is, the destruction of the lesion of the brain. Again this is an improper coding practice. Both of these coding practices result in radiosurgery cases being assigned to DRG 1. We will continue to monitor these cases to ensure that our decision to reassign radiosurgery to DRGs 7 and 8 remains appropriate. We will also work with the industry concerning the possibility of assigning separate ICD-9-CM codes to the different types of radiosurgery. b. Sleep Apnea In our August 30, 1996 final rule (61 FR 46168), we discussed our review of the DRG assignment of cases in which surgery is performed to correct obstructive sleep apnea (diagnosis code 780.57). When coded as the principal diagnosis, sleep apnea is assigned to DRGs 34 and 35 (Other Disorders of the Nervous System) in MDC 1. The result of our review was to assign several surgical procedures used to correct sleep apnea to DRGs 7 and 8 (Peripheral and Cranial Nerve and Other Nervous System Procedures). These procedures involved repair of the palate or pharynx (procedure codes 27.69, 29.4, and 29.59). Previously, since none of these surgical procedures had been assigned to MDC 1, cases of sleep apnea treated with one of these procedures had been assigned to DRG 468 (Extensive OR Procedure Unrelated to Principal Diagnosis) or DRG 477 (Nonextensive OR Procedure Unrelated to Principal Diagnosis). An associated procedure that is also used to treat sleep apnea is correction of cleft palate (procedure code 27.62). Currently, correction of cleft palate is assigned only to DRG 52 (Cleft Lip and Palate Repair) in MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth, and Throat). Thus, when this procedure is performed for sleep apnea cases, the cases would be assigned to DRG 468. We proposed to add this surgical procedure to MDC 1. Like the palate and pharynx repair procedures that were addressed last year, these cases are not clinically similar to the other surgical DRGs in MDC 1; thus, we proposed to include them in DRGs 7 and 8. Comment: We received three comments on this proposal. One commenter supported the change; another registered no objection but pointed out that the proposed rule stated procedure code 27.62 is currently assigned to DRG 477 (Nonextensive OR Procedure Unrelated to Principal Diagnosis) when the principal diagnosis [[Page 45973]] is sleep apnea. The commenter noted that under the current DRG groupings, such a case would actually be assigned to DRG 468. The final commenter stated that if a patient is admitted for cleft palate repair, the principal diagnosis likely would be cleft palate (diagnosis code 749.xx) even if sleep apnea is also present, presumably resulting in assignment to DRG 52. This commenter suggested that if cleft palate repair is performed infrequently in conjunction with a principal diagnosis of obstructive sleep apnea, it would be unnecessary to reassign these cases to DRGs 7 and 8. Response: In the proposed rule, we inadvertently stated that sleep apnea cases involving the correction of cleft palate currently would be assigned to DRG 477. The commenter is correct that such cases are currently assigned to DRG 468. Although a patient admitted for cleft palate repair would more likely have a principal diagnosis of cleft palate than of sleep apnea, cases do occur in which obstructive sleep apnea is the documented reason for the surgery. Our rationale for the proposed change is based not on the frequency of the cases but on whether or not these cases are appropriately assigned to DRG 468, which by definition should encompass only cases involving unrelated operating room procedures. Because we believe that cleft palate repair is related to obstructive sleep apnea, it would be inappropriate to continue to assign these cases to DRG 468; the better policy is to assign the procedure to DRGs 7 and 8 in MDC 1. Therefore, we are adopting this change in this final rule. c. Geniculate Herpes Zoster Geniculate herpes zoster (diagnosis code 053.11) is an acute viral disease characterized by inflammation of spinal ganglia and by a vesicular eruption along the area of distribution of a sensory nerve. In the August 30, 1996 final rule (61 FR 27447), we moved diagnosis codes 053.10 and 053.19 (herpes zoster with unspecified nervous system complication and other herpes zoster, respectively) from DRG 20 (Nervous System Infection Except Viral Meningitis) to DRGs 18 and 19 (Cranial and Peripheral Nerve Disorders). We considered moving diagnosis code 053.11 at that time, however, the higher average charges associated with geniculate herpes zoster and slightly higher length of stay led us to decide instead to leave 053.11 in DRG 20 and to reassess this decision in upcoming years. For the proposed rule, we conducted an analysis of the cases assigned to DRG 20 using the FY 1996 MedPAR file. The average standardized charges for these cases were approximately $8,430, significantly lower than the average charges for the DRG of approximately $21,180. The average length of stay for the geniculate herpes zoster cases, approximately 6 days, was also less than the average length of stay for DRG 20 of approximately 10 days. Based on these data, we proposed to reassign diagnosis code 053.11 to DRGs 18 and 19, which have average charges of approximately $8,460 and $5,460, respectively. The average length of stay for DRGs 18 and 19 was approximately 6 days and 4 days, respectively. We received two comments supporting this change and we are including it in the final DRG changes. 3. MDC 5 (Diseases and Disorders of the Circulatory System) a. Heart Assist Devices In November 1995, we amended our general noncoverage decision concerning artificial hearts and related devices. Section 65-15 of the Medicare Coverage Issues manual was revised to allow coverage of the HeartMate Implantable Pneumatic Left Ventricular Assist System (HeartMate IP LVAS) in accordance with its Food and Drug Administration (FDA)- approved use as a temporary mechanical circulation support in nonreversible left ventricular failure as a bridge to cardiac transplant. In order to receive Medicare coverage, all of the following conditions must be met: The patient is listed as an approved heart transplant candidate by a Medicare-approved heart transplant center. The implantation of the system is done in a Medicare- approved heart transplant center. Written permission from the listing center is needed if the patient has the implantation done at another Medicare-approved center. The patient is on inotropes. The patient is on an intra-aortic balloon pump (if possible). The patient has left atrial pressure or pulmonary capillary wedge pressure 20mm Hg with either-- --Systolic blood pressure 80 mm Hg; or --Cardiac index of 2.0 1/min/m\2\. A procedure code for implant of an implantable, pulsatile heart assist system (37.66), which includes the HeartMate IP LVAS, was created effective October 1, 1995. At that time, the procedure code was assigned to DRGs 110 and 111 (Major Cardiovascular Procedures). In the proposed rule, we presented our analysis of a full year of cases coded with this procedure (FY 1996 MedPAR file, December update) to determine if this DRG assignment remained appropriate. In the full (100 percent) FY 1996 MedPAR file, there were 51 cases of implant of an internal heart assist system (procedure code 37.66) in MDC 5. Of these 51 cases, 18 were assigned to DRG 110 and none to DRG 111. The other 33 cases were assigned to DRG 103 (Heart Transplant), DRG 104 (Cardiac Valve Procedures with Cardiac Cath), DRGs 106 and 107 (Coronary Bypass), and DRG 108 (Other Cardiothoracic Procedures). Of the 18 cases assigned to DRG 110, the average charge was about $96,000 and the average length of stay was 22.5 days. The average charges for all cases assigned to DRG 110 was about $36,500 and the average length of stay was 10.1 days. Thus, the cases coded with procedure code 37.66 are much more resource-intensive than the other cases assigned to DRG 110. In reviewing the other surgical DRGs in MDC 5 for possible reassignment of this procedure, we identified two DRGs that contained cases clinically similar to implant of heart assist device cases: DRG 103 and DRG 108. For FY 1996, the average charge of cases in DRG 103 was approximately $164,000 and the length of stay was 46 days. For DRG 108, these statistics were about $54,000 and 12.1 days. Thus, the average charge for DRG 103 was approximately $68,000 higher than the average charge of the heart assist device cases and the average charge for DRG 108 was approximately $42,000 lower. Because our general policy is to assign a procedure code to a DRG with clinically similar cases that is the best match in terms of resource use, we proposed to assign procedure code 37.66 to DRG 108. Comment: We received two comments supporting this proposal. However, several other commenters believe that the only solution that would be appropriate is to assign procedure code 37.66 either to DRG 103 or to its own DRG. In support of this comment, they cite the very high resource utilization associated with the procedure. In addition, one commenter believed that failure to revise our proposal could limit Medicare beneficiaries' access to this procedure. Response: As noted in the proposed rule, although reassignment of these cases to DRG 108 does not place them in a DRG with identical resource use, it is the best alternative we have at this time. As we discuss above in section II.B.2.a. of this preamble concerning radiosurgery, it has not been our [[Page 45974]] practice to create device-specific DRGs. Assignment of these cases to DRG 103 would be no more appropriate in terms of resource use than reassignment to DRG 108. In addition, we believe that only transplant cases should be assigned to that DRG. We will continue to monitor these cases in future years. We are also contemplating the feasibility of conducting a comprehensive review of the current surgical DRGs in MDC 5. We last did this effective for FY 1991. Because there have been so many changes in approach to heart surgery in the past few years as well as the development of new devices and techniques, we believe such a review could help realign these cases in terms of both clinical and resource use homogeneity. With regard to the statement that failure to revise our proposal could result in denial of heart assist devices to Medicare beneficiaries, we note, as we have in many previous documents, that it is a violation of a hospitals Medicare provider agreement to place restrictions on the number of Medicare beneficiaries it accepts for treatment unless it places the same restrictions on all other patients. We also note that, effective May 5, 1997, the coverage instructions concerning heart assist devices were revised to delete the specific product names and the hemodynamic criteria (Transmittal No. 94; April 1997). As revised, section 65-15 of the Medicare Coverage Issues Manual allows coverage of a ventricular assist device used for support of blood circulation postcardiotomy if the device has received approval from the FDA for that purpose and the device is used according to FDA- approved labeling instructions or as a bridge to heart transplant if all of the following conditions are met: The device is used as a temporary mechanical circulatory support as a bridge to cardiac transplant. The patient is listed as an approved heart transplant candidate by a Medicare-approved heart transplant center. The implantation of the system is done in a Medicare- approved heart transplant center. If the patient is listed with another center, written permission is needed from that center. b. Automatic Implantable Cardioverter Defibrillators (AICD) For several years, we have received correspondence concerning the appropriate DRG assignment of procedures involving automatic implantable cardioverter defibrillators (AICDs). These cases are currently assigned to DRG 116 (Other Permanent Cardiac Pacemaker Implant or AICD Generator or Lead Procedure), and are represented by the following procedure codes: 37.95 Implantation of automatic cardioverter/defibrillator lead(s) only 37.96 Implantation of automatic cardioverter/defibrillator pulse generator only 37.97 Replacement of automatic cardioverter/defibrillator lead(s) only 37.98 Replacement of automatic cardioverter/defibrillator pulse generator only As explained in detail in the September 1, 1992 final rule (57 FR 39749), the clinical composition and relative weights of the surgical DRGs in MDC 5 do not offer a perfect match with the AICD cases. However, review of those DRGs in terms of clinical coherence and similar resource consumption led to the determination that DRG 116 was the best possible fit. In that document, we stated that we would continue to monitor these cases. We last discussed this issue in the September 1, 1995 final rule (60 FR 45780). At that time, we concluded that, although the average charge for AICD cases was much higher than the average charge for DRG 116 overall, the AICD cases were clinically similar to the DRG 116 cases and should not be moved. In addition, a slight decrease in the average charge for the cases between the FY 1993 and FY 1994 MedPAR files led us to believe further reductions might be forthcoming since there were new AICD devices entering the market that might lead to increased price competition. For the proposed rule, we reviewed the most current AICD cases as contained in the FY 1996 MedPAR file and found that the average standardized charge for AICD cases assigned to DRG 116 was $28,777 compared to an average charge of $21,330 for all cases in DRG 116. Because the average charge for AICD cases continued to be much higher than the average charge for all other DRG 116 cases, we proposed to move them to DRG 115 (Permanent Cardiac Pacemaker Implantation with AMI, Heart Failure or Shock). We also proposed to revise the title of DRG 115 to ``Permanent Cardiac Pacemaker Implant with AMI, Heart Failure or Shock or AICD Lead or Generator Procedure.'' We received several comments commending us on this decision and we are adopting it as final. c. Coronary Artery Stent Effective October 1, 1995, procedure code 36.06 (Insertion of coronary artery stent(s)) was introduced. As dictated by our longstanding practice, we assigned this code to the same DRG category as its predecessor codes. Therefore, procedure code 36.06 was assigned to DRG 112 (Percutaneous Cardiovascular Procedures), as insertion of a stent is usually performed in conjunction with percutaneous transluminal coronary angioplasty (PTCA). We discussed this assignment and public comments we received in both the September 1, 1995 final rule (60 FR 45785) and the August 30, 1996 final rule (61 FR 46171). We stated that we would review the stent cases as soon as the FY 1996 MedPAR file was available, as these would be the first Medicare data available for these cases. As discussed in the proposed rule, our analysis of the FY 1996 MedPAR data on coronary stent implantation in Medicare beneficiaries revealed the following: The difference between the average length of stay for the stent cases and the nonstent cases was 0.19 days (4.39 days versus 4.20 days). Charges for patients receiving a stent were approximately $23,650, while charges for patients without stent implant were approximately $17,480, for a difference of $6,170. Of those beneficiaries who had a PTCA procedure in FY 1996, approximately 34 percent received a stent. Based on the significant variation in hospital charges between stent and nonstent cases in DRG 112, we proposed to move these cases out of that DRG. Although the coronary artery stent cases are not clinically similar to the pacemaker cases in DRG 116, the resource consumption of those cases is very similar. Therefore, absent any other appropriate DRG, we proposed to add to DRG 116 those cases including procedure codes for PTCA in combination with insertion of coronary stent. Specifically, we proposed to move into DRG 116 the following procedure codes when performed in conjunction with procedure code 36.06: 35.96 Percutaneous valvuloplasty 36.01 Single vessel percutaneous transluminal coronary angioplasty [PTCA] or coronary atherectomy without mention of thrombolytic agent 36.02 Single vessel percutaneous transluminal coronary angioplasty [PTCA] or coronary atherectomy with mention of thrombolytic agent 36.05 Multiple vessel percutaneous transluminal coronary angioplasty [PTCA] or coronary atherectomy performed during the same operation, with or without mention of thrombolytic agent [[Page 45975]] 36.09 Other removal of coronary artery obstruction 37.34 Catheter ablation of lesion or tissues of the heart We also proposed to change the title of DRG 116 to ``Other Permanent Cardiac Pacemaker Implant or PTCA with Coronary Artery Stent Implant.'' Comment: We received many comments in support of this move. Commenters cited increased payment for use of coronary stenting in appropriate patients as a rational response to an economic dilemma. One commenter requested that consideration be given to increased payment for the cost of the stents themselves within DRG 116 for those cases in which multiple stents are implanted in the same operative episode. Response: We appreciate the positive responses generated by this proposal. With regard to the request for modification of DRG 116 to take into account the use of more than one stent per patient, we would remind the commenter that one of the parameters of the prospective payment system is predetermined, identical payments for each discharge in a DRG. To arbitrarily begin to increase payment based on the number of stents used in a procedure would undermine the system. We will continue to monitor the stent cases and the assignment to DRG 116. If PTCA cases with stent become a higher percentage of the PTCA cases or the average charge for stent cases falls, we may reconsider this assignment. Comment: There were several commenters who, while supporting the proposal to increase increasing stent payment, also chided us for our lack of foresight in neglecting to consider new drug therapies in conjunction with PTCA. The pharmaceutical referenced in these comments is a category of drugs called glycoprotein (GP) IIb/IIIa inhibitors, which act to reduce platelet aggregation, thereby reducing death rate, recurrent heart attack, and further surgery. Commenters suggested that HCFA take immediate steps to establish a procedure code describing infusion of GPIIb/IIIa therapy. They further suggested that if the agency's required lead time for revising an existing ICD-9-CM code, or creating a new code for platelet inhibitor therapy, precluded a new code from being effective this October 1, then HCFA should create a temporary code that hospitals could use until a new ICD-9-CM code could become effective. It was suggested that such a temporary code would allow the reclassification of angioplasty with GPIIb/IIIa usage into DRG 116 to be effective October 1, 1997. Response: We appreciate the suggestion that the category of GPIIb/ IIIa platelet inhibitor drugs be uniquely identified in the ICD-9-CM coding system, but would also note that a write-in campaign during a proposed rule comment period does not permit us to respond to this request in a responsible manner. To quickly produce a temporary code would be the equivalent of producing a permanent code, but would not include due process in order to make it a meaningful addition to the ICD-9-CM coding system. We would point out that, effective October 1, 1986, code 36.04 (intracoronary artery thrombolytic infusion) was added to the procedure coding system based on a proposal made by a major pharmaceutical company. As we rely heavily on information from the public to make the ICD-9-CM coding system responsive to the coding needs of the hospital industry, we anticipated that the guidance, language, and suggestions received from this pharmaceutical company were current and timely. In the interim, there has been no public protest or demand for an ICD-9-CM platelet inhibitor therapy code that would better meet the needs of the industry. In retrospect, we regret that we integrated this code as it does not appear to have been an appropriate addition to the coding system. We will work with the drug and hospital industry representatives to provide us with more insight and better language as we bring the topic of platelet inhibitors before the ICD-9-CM Coordination and Maintenance Committee on December 4, 1997. We would anticipate, therefore, having an appropriate code describing GPIIb/IIIa drug therapy early next year. This code would be effective for discharges on or after October 1, 1998. d. Circulatory Disorders (DRGs 121 and 122) In response to a comment on the May 31, 1996 proposed rule, we stated in the August 30, 1996 final rule (61 FR 46172) that we would conduct a comprehensive review of cases currently assigned to DRG 121 (Circulatory Disorders with Acute Myocardial Infarction (AMI) and Cardiovascular Complications, Discharged Alive) and DRG 122 (Circulatory Disorders with AMI without Cardiovascular Complications, Discharged Alive) to determine whether changes were needed to the list of complicating conditions that can result in assignment to DRG 121. Accordingly, for the FY 1998 proposed rule, we analyzed the cases in the FY 1996 MedPAR file that were assigned to either DRG 121 or 122. Through a variety of statistical analyses of length of stay and standardized charge data, we assessed the impact on resource use of all coded secondary diagnoses. Our analysis of these secondary diagnosis codes revealed many cases now assigned to DRG 122 in which certain secondary diagnoses are associated with resource use comparable to cases assigned to DRG 121. Although many of these cases involve secondary diagnoses that are not strictly cardiovascular in nature, such as diagnosis code category 482 (other bacterial pneumonia), we now believe that it is appropriate to expand DRG 121 to include such major complications when they are represented in significant volume among the cases in the DRG. Continuing to limit DRG 121 only to cases involving the existing list of cardiovascular complications would contribute to large variations in the charges and lengths of stay for cases in DRG 122. Therefore, we proposed to change the title of DRG 121 to ``Circulatory Disorders with AMI and Major Complications, Discharged Alive,'' and to add the following diagnosis codes to the list of complications that would produce assignment to DRG 121 when present in conjunction with the existing list of AMI diagnoses: 398.91 Rheumatic heart failure 416.0 Primary pulmonary hypertension 430 Subarachnoid hemorrhage 431 Intracerebral hemorrhage 432.0 Nontraumatic extradural hemorrhage 432.1 Subdural hemorrhage 432.9 Unspecified intracranial hemorrhage 433.01 Occluded basilar artery with cerebral infarction 433.11 Occluded carotid artery with cerebral infarction 433.21 Occluded vertebral artery with cerebral infarction 433.31 Occluded multiple and bilateral artery with cerebral infarction 433.81 Occluded specified precerebral artery with cerebral infarction 433.91 Occluded precerebral artery NOS with cerebral infarction 434.00 Cerebral thrombosis 434.01 Cerebral thrombosis with cerebral infarction 434.10 Cerebral embolism 434.11 Cerebral embolism with cerebral infarction 434.90 Cerebral artery occlusion 434.91 Cerebral artery occlusion with cerebral infarction 436 Acute, but ill-defined, cerebrovascular disease [[Page 45976]] 481 Pneumococcal pneumonia 482.xx Other bacterial pneumonia (all 4th and 5th digits) 483.x Pneumonia due to other specified organism (all 4th digits) 484.x Pneumonia in infectious diseases classified elsewhere (all 4th digits) 485 Bronchopneumonia, organism unspecified 486 Pneumonia, organism unspecified 487.0 Influenza with pneumonia 507.x Pneumonitis due to solids and liquids (all 4th digits) 518.0 Pulmonary collapse 518.5 Pulmonary insufficiency following trauma and surgery 518.81 Respiratory failure 707.0 Decubitus ulcer 996.62 Infection and inflammatory reaction due to other vascular device, implant, and graft 996.72 Other complications due to other cardiac device, implant, and graft We note that, in conjunction with the proposed changes, we also proposed to revise the title of DRG 122 to read ``Circulatory Disorders with AMI without Major Complications, Discharged Alive.'' We received four comments fully supporting these proposed changes and are including them in the final DRG changes. 4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue) a. Introduction As discussed in detail below, we proposed to create several new DRGs in MDC 8 effective for discharges on or after October 1, 1997. Specifically, we proposed to replace current DRGs 214 and 215 (Back and Neck Procedures) with the following new DRGs: DRG 496 Combined Anterior/Posterior Spinal Fusion DRG 497 Spinal Fusion with CC DRG 498 Spinal Fusion without CC DRG 499 Back and Neck Procedures Except Spinal Fusion with CC DRG 500 Back and Neck Procedures Except Spinal Fusion without CC In addition, we proposed to replace existing DRGs 221 and 222 (Knee Procedures) with new DRGs 501 and 502 (Knee Procedures with Principal Diagnosis of Infection) and DRG 503 (Knee Procedures without Principal Diagnosis of Infection). b. Back and Neck Procedures Currently, hospital inpatient cases involving back and neck procedures generally are assigned to DRGs 214 and 215 (assuming a principal diagnosis that groups the case to MDC 8). We have received correspondence indicating that within these DRGs, cases involving spinal fusion procedures represent a distinctly more complex and resource-intensive subset, and that payment under DRGs 214 and 215 is inadequate to cover the costs of treating patients that require spinal fusion. Therefore, for the proposed rule we conducted an analysis of the cases assigned to DRGs 214 and 215 using the FY 1996 MedPAR file. Within our sample, cases involving fusion procedures (procedure codes 81.00-81.09) constituted approximately 35 percent of cases in DRG 214 (Back and Neck Procedures with CC) and 23 percent of those in DRG 215 (Back and Neck Procedures without CC). In DRG 214, the average standardized charges for the fusion cases were nearly double the charges of the nonfusion cases (approximately $25,300 versus $12,900). There were also significant differences in charges in DRG 215--$14,400 for fusion cases and $8,500 for nonfusion cases. Lengths of stay for fusion cases were also longer, although not dramatically so--7.1 days for fusion cases versus 5.4 days for other cases in DRG 214, and 3.8 days versus 3.1 days in DRG 215. In view of the volume of cases involved and the clear differences in resource use, we concluded that it would be appropriate to create additional DRGs to separate spinal fusion cases from the other back and neck procedures. Next, we expanded our analysis to determine whether it would be appropriate to subdivide the spinal fusion cases according to whether both anterior and posterior spinal fusion were performed. This combination of procedures, which involves fusing both the front and rear of the vertebrae, typically is performed on patients who have had previous fusions that have not bonded effectively or who have several vertebrae that need extensive fusion on both sides of the spine. As the table below illustrates, the average charges and lengths of stay for the cases involving both anterior and posterior spinal fusion were markedly greater than for the other spinal fusion cases in either DRG 214 or 215. ------------------------------------------------------------------------ Average length Type of case Avg. of stay charges (in days) ------------------------------------------------------------------------ Anterior and posterior spinal fusion................ $51,200 12.3 DRG 214--Other spinal fusion........................ 24,300 6.9 DRG 215--Other spinal fusion........................ 14,300 3.8 ------------------------------------------------------------------------ Even though the cases in which both anterior and posterior spinal fusions were performed represented only about 3 percent of all spinal fusion cases in our sample, we concluded that the magnitude of the differences in both average charges and lengths of stay warranted a further subdivision of the spinal fusion cases. Based on this analysis, we proposed to replace the two existing DRGs for back and neck procedures with five new DRGs. For ease of reference and classification, current DRGs 214 and 215 would be made invalid and we would establish new DRGs 496 through 500 to contain all the cases that are currently grouped in DRGs 214 and 215. We believe that the division of these cases into the new DRGs would improve clinical coherence and provide for more appropriate payment for both spinal fusion cases and cases involving other back and neck procedures. Discharges would be assigned to each of the five proposed DRGs as follows: DRG 496 Combined Anterior/Posterior Spinal Fusion DRG 496 would include any combination of procedure codes as follows: One or more of the following procedure codes-- 81.02 Other cervical fusion anterior 81.04 Dorsal/dorsulum fusion anterior 81.06 Lumbar/lumbosac fusion anterior and One or more of the following procedure codes-- 81.03 Other cervical fusion posterior 81.05 Dorsal/dorsulum fusion posterior 81.08 Lumbar/lumbosac fusion posterior DRGs 497 and 498 Spinal Fusion with and without CC DRGs 497 and 498 would include any of the following procedure codes, as long as any combination of procedure codes would not otherwise result in assignment to proposed DRG 496-- 81.00 Spinal fusion NOS 81.01 Atlas-axis fusion 81.02 Other cervical fusion anterior 81.03 Other cervical fusion posterior 81.04 Dorsal/dorsulum fusion anterior 81.05 Dorsal/dorsulum fusion posterior 81.06 Lumbar/lumbosac fusion anterior [[Page 45977]] 81.07 Lumbar/lumbosac fusion lateral 81.08 Lumbar/lumbosac fusion posterior 81.09 Refusion of spine DRGs 499 and 500 Back and Neck Procedures Except Spinal Fusion with and without CC. All procedure codes in current DRGs 214 and 215 other than procedure codes 81.00 through 81.09 would be assigned to DRGs 499 and 500. We received five comments in support of this proposal. We are adopting the proposed changes as final. c. Knee Procedures On several occasions, most recently in our September 1, 1993 final rule (58 FR 46286), we have examined cases in DRG 209 (Major Joint and Limb Reattachment of the Lower Extremity) to see whether hip replacement cases that involve infections or other complications should be classified separately from the less complicated cases in DRG 209. We have found that the average charges and lengths of stay for cases with principal diagnoses of infection or complications were only slightly higher than for all cases in DRG 209. When we limited our analysis to cases with a principal diagnosis of infection, we found that the cases had significantly higher charges than for DRG 209 overall, but in view of the small volume of cases (less than 0.5 percent of the total DRG 209 cases), we decided that changes in the classification of cases in DRG 209 were not warranted. In the proposed rule, at the request of several correspondents, we revisited the issue of whether DRG refinements are needed to address differences in resource use associated with orthopedic procedures where deep infections are present. To evaluate this issue, we analyzed various classifications of cases in MDC 8. We began by identifying all cases with a principal diagnosis indicating deep orthopedic infection of the lower extremities or spine. The diagnosis codes used were as follows: 711.05 Pyogenic arthritis pelvic region and thigh 711.06 Pyogenic arthritis lower leg 711.07 Pyogenic arthritis ankle and foot 711.08 Pyogenic arthritis other specified sites 730.05 Acute osteomyelitis pelvic region and thigh 730.06 Acute osteomyelitis lower leg 730.07 Acute osteomyelitis ankle and foot 730.08 Acute osteomyelitis other specified sites 730.15 Chronic osteomyelitis pelvic region and thigh 730.16 Chronic osteomyelitis lower leg 730.17 Chronic osteomyelitis ankle and foot 730.18 Chronic osteomyelitis other specified sites 730.25 Unspecified osteomyelitis pelvic region and thigh 730.26 Unspecified osteomyelitis lower leg 730.27 Unspecified osteomyelitis ankle and foot 730.28 Unspecified osteomyelitis other specified sites 996.66 Infection and inflammatory reaction due to internal joint prosthesis 996.67 Infection and inflammatory reaction due to other internal orthopedic device For each of the DRGs into which these cases are grouped, we then compared the average standardized charges and average length of stay for cases with any of the infection diagnoses listed above with other cases in the DRGs. Unlike in the past, we did not limit our analysis to DRG 209 but examined all DRGs within MDC 8 that focus on surgical procedures of the lower extremities or spine, including DRGs 209; 210, 211, and 212 (Hip and Femur Procedures Except Major Joint); 214 and 215 (Back and Neck Procedures); and 221 and 222 (Knee Procedures). For the most part, we again found that these cases represented only a very small proportion of the total cases in the DRGs in question. In DRG 209, for example, cases with one of the above diagnosis codes as the principal diagnosis continued to constitute less than 1 percent of all cases in the DRG. Moreover, although the average standardized charges for the deep infection cases ($24,834) were approximately 21 percent higher than the charges for the remaining cases in the DRG ($19,297), the differences are well within one standard deviation of the average charge. Given the small volume of cases, we again conclude that changes in DRG 209 are not justified. The only DRGs that we examined in which cases with a principal diagnosis of deep infection represented more than 1 percent of total cases in our sample were DRGs 221 and 222. As illustrated in the chart below, there are significant differences in both average charges and average length of stay between infection cases in these DRGs and other cases in the DRGs. ------------------------------------------------------------------------ Average Number Average length Type of case of cases charges of stay \1\ (in (in dollars) days) ------------------------------------------------------------------------ DRG 221 (all cases)....................... 451 16,529 7.2 DRG 221 with infection.................... 152 23,174 11.4 DRG 221 w/out infection................... 299 13,151 5.1 DRG 222 (all cases)....................... 340 9,149 3.9 DRG 222 with infection.................... 37 14,452 7.0 DRG 222 w/out infection................... 303 8,502 3.5 ------------------------------------------------------------------------ \1\ Based on the 10-percent random sample of the FY 1996 MedPAR file. Thus, more than one-third of cases in DRG 221 had a principal diagnosis of deep infection, the average length of stay for these cases was more than twice as long as for the remaining cases, and average charges were approximately 76 percent higher. Similarly, for the 12 percent of total DRG 222 cases with infection as the principal diagnosis, the average length of stay was double that for other cases, with average charges approximately 70 percent higher. Given the proportional volume of cases involved, and the significant differences in both average charges and length of stay for infection cases in these DRGs, we concluded that DRG refinements are appropriate. Based on this analysis, we proposed to replace the two existing DRGs for knee procedures with three new DRGs. Again, for ease of reference and classification, current DRGs 221 and 222 would be made invalid and we would establish new DRGs 501 through 503 to contain all the cases that are currently grouped in DRGs 221 and 222. Discharges would be assigned to each of the three proposed DRGs as follows: DRG 501 Knee Procedures with Principal Diagnosis of Infection with CC [[Page 45978]] DRG 502 Knee Procedures with Principal Diagnosis of Infection without CC DRG 501 and 502 would include any of the operating room procedures now assigned to DRGs 221 and 222, when the principal diagnosis is any of the following: 711.06 Pyogenic arthritis lower leg 730.06 Acute osteomyelitis lower leg 730.16 Chronic osteomyelitis lower leg 730.26 Unspecified osteomyelitis lower leg 996.66 Infection and inflammatory reaction due to internal joint prosthesis 996.67 Infection and inflammatory reaction due to other internal orthopedic device DRG 503 Knee Procedures without Principal Diagnosis of Infection DRG 503 would include any of the operating room procedures now assigned to DRGs 221 and 222 when the principal diagnosis is not listed above under DRGs 501 and 502. Comment: We received four comments in support of this proposed change. One of the commenters suggested that we also consider splitting proposed DRG 503 into two DRGs to distinguish between cases with and without CCs. Response: As shown in the table above, based on the FY 1996 MedPAR 10 percent sample, the average charges associated with cases in new DRG 503 are $13,151 for cases with CC and $8,502 for cases without CC. The average lengths of stay for DRG 503 cases with and without CC are 5.1 and 3.5 days, respectively. We note that the mean standardized charges for this DRG are approximately $10,100. Given the similar lengths of stay for these two sets of cases and the relatively small magnitude of difference in average charges (much less than one standard deviation), we do not believe that further division of the new DRG is warranted. Thus, we are adopting the new proposed DRGs for Knee Procedures as final. 5. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract) Among the ICD-9-CM coding changes that took effect October 1, 1995 was the addition of new procedure code 59.72 (injection of implant into urethra or bladder neck). Although this procedure is not routinely performed in an operating room, the code was previously included within codes classified as operating room procedures. Thus, as is our practice, we assigned this procedure code to the surgical DRGs to which the procedure had formerly been assigned as a non-OR procedure that affects DRG assignment. Therefore, procedure code 59.72 was assigned to DRGs 308 and 309 (Minor Bladder Procedures) and DRG 356 (Female Reproductive System Reconstructive Procedures). In the June 2, 1995 proposed rule (60 FR 29209), we stated that we would reevaluate the DRG classification of this code when data on its use became available for analysis in 2 years, that is, in preparation for the FY 1998 rulemaking process. We indicated that possible changes would include moving the procedure code to a different surgical DRG or classifying the code as a non-OR procedure that did not affect DRG assignment. In the FY 1996 MedPAR file, there were several cases with procedure code 59.72 assigned to DRGs 308 and 309. The chart below compares average charges and length of stay for cases in these DRGs with and without the injection procedure. ------------------------------------------------------------------------ Average Average length Type of case Number charge of stay of cases (in (in dollars) days) ------------------------------------------------------------------------ DRG 308 with procedure 59.72.............. 5 6,978 4.2 DRG 308 w/out procedure 59.72............. 910 13,254 6.5 DRG 309 with procedure 59.72.............. 7 5,879 1.4 DRG 309 w/out procedure 59.72............. 311 7,888 2.7 ------------------------------------------------------------------------ As the table illustrates, cases in which injection of implant into the urethra or bladder neck is the only relevant procedure for DRG assignment purposes constitute a very small minority of the cases in DRGs 308 and 309. However, these cases have lower average charges and length of stay than other cases in the DRGs. Thus, we proposed to reclassify the procedure code as a non-OR procedure that does not affect DRG assignment. Under this proposal, cases currently assigned to DRGs 308 and 309 because of the performance of an implant injection would be reassigned to medical DRGs in MDC 11, primarily either DRGs 320, 321, and 322 (Kidney and Urinary Tract Infections) or DRGs 331 and 332 (Other Kidney and Urinary Tract Diagnoses). Both of these sets of DRGs have average charges closely in line with the charges for cases in which procedure 59.72 now determines DRG assignment. This change would also affect DRG 356 in MDC 13 (Diseases and Disorders of the Female Reproductive System). Within the 10 percent sample used for this analysis, only 2 of the 2,689 cases in DRG 356 were assigned based on the presence of procedure code 59.72, and as in DRGS 308 and 309, both the average charges and length of stay were lower than for other cases. We received two comments in support of this proposal and are including it in the final DRG changes. 6. Surgical Hierarchies Some inpatient stays entail multiple surgical procedures, each one of which, occurring by itself, could result in assignment of the case to a different DRG within the MDC to which the principal diagnosis is assigned. It is, therefore, necessary to have a decision rule by which these cases are assigned to a single DRG. The surgical hierarchy, an ordering of surgical classes from most to least resource intensive, performs that function. Its application ensures that cases involving multiple surgical procedures are assigned to the DRG associated with the most resource-intensive surgical class. Because the relative resource intensity of surgical classes can shift as a function of DRG reclassification and recalibration, we reviewed the surgical hierarchy of each MDC, as we have for previous reclassifications, to determine if the ordering of classes coincided with the intensity of resource utilization, as measured by the same billing data used to compute the DRG relative weights. A surgical class can be composed of one or more DRGs. For example, in MDC 5, the surgical class ``heart transplant'' consists of a single DRG (DRG 103) and the class ``coronary bypass'' consists of two DRGs (DRGs 106 and 107). Consequently, in many cases, the surgical hierarchy has an impact on more than one DRG. The methodology for determining the most resource-intensive surgical class, therefore, involves weighting each DRG for frequency to determine the average resources for each surgical class. For example, assume surgical class A includes DRGs 1 and 2 and surgical class B includes DRGs 3, 4, and 5, and that the average charge of DRG 1 is higher than that of DRG 3, but the average charges of DRGs 4 and 5 are higher than the average charge of DRG 2. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weight the average charge of each DRG by frequency (that is, by the number of cases in the DRG) to determine average resource consumption for the surgical class. The surgical classes would then be ordered [[Page 45979]] from the class with the highest average resource utilization to that with the lowest, with the exception of ``other OR procedures'' as discussed below. This methodology may occasionally result in a case involving multiple procedures being assigned to the lower- weighted DRG (in the highest, most resource-intensive surgical class) of the available alternatives. However, given that the logic underlying the surgical hierarchy provides that the GROUPER searches for the procedure in the most resource-intensive surgical class, this result is unavoidable. We note that, notwithstanding the foregoing discussion, there are a few instances when a surgical class with a lower average relative weight is ordered above a surgical class with a higher average relative weight. For example, the ``other OR procedures'' surgical class is uniformly ordered last in the surgical hierarchy of each MDC in which it occurs, regardless of the fact that the relative weight for the DRG or DRGs in that surgical class may be higher than that for other surgical classes in the MDC. The ``other OR procedures'' class is a group of procedures that are least likely to be related to the diagnoses in the MDC but are occasionally performed on patients with these diagnoses. Therefore, these procedures should only be considered if no other procedure more closely related to the diagnoses in the MDC has been performed. A second example occurs when the difference between the average weights for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy since, by virtue of the hierarchy change, the relative weights are likely to shift such that the higher-ordered surgical class has a lower average weight than the class ordered below it. Based on the preliminary recalibration of the DRGs, we proposed to modify the surgical hierarchy as set forth below. As we stated in the September 1, 1989 final rule (54 FR 36457), we are unable to test the effects of the proposed revisions to the surgical hierarchy and to reflect these changes in the proposed relative weights due to the unavailability of revised GROUPER software at the time this proposed rule is prepared. Rather, we simulate most major classification changes to approximate the placement of cases under the proposed reclassification and then determine the average charge for each DRG. These average charges then serve as our best estimate of relative resource use for each surgical class. We test the proposed surgical hierarchy changes after the revised GROUPER is received and reflect the final changes in the DRG relative weights in the final rule. We proposed to revise the surgical hierarchy for the Pre-MDC DRGs, MDC 9 (Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast), MDC 10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), and MDC 12 (Diseases and Disorders of the Male Reproductive System) as follows: In the Pre-MDC DRGs, we would reorder Bone Marrow Transplant (DRG 481) above Liver Transplant (DRG 480). In MDC 9, we would reorder Perianal and Pilonidal Procedures (DRG 267) above Breast Procedures (DRGs 257-262). In MDC 10, we would reorder OR Procedures for Obesity (DRG 288) above Skin Graft and Wound Debridement (DRG 287). In MDC 12, we would reorder Circumcision (DRGs 342 and 343) above Transurethral Prostatectomy (DRGs 336 and 337). Based on a test of the proposed changes using the most recent MedPAR file and the revised GROUPER software, we found that the proposed change to the Pre-MDC DRGs, Bone Marrow Transplant (DRG 481) above Liver Transplant (DRG 480) is not supported and this change will not be incorporated in this final rule. The Pre-MDC DRGs hierarchy will remain the same as in FY 1997. We received one comment in support of our surgical hierarchy proposals. We also received one comment that disagreed, as discussed below. Comment: One commenter was opposed to reordering Circumcision (DRGs 342 and 343) above Transurethral Prostatectomy (DRGs 336 and 337). The commenter stated that circumcision (procedure code 64.0) is the only procedure in DRGs 342 and 343, and the commenter believes that this procedure is not as resource intensive or complex as the procedures assigned to DRGs 336 and 337. The commenter suggested the more appropriate assignment for a case involving both a transurethral prostatectomy and a circumcision would be DRGs 336 and 337. Response: Based on the Medicare cases, the average standardized charges for cases assigned to DRGs 342 and 343 is almost $7,000, which is higher than the average standardized charges of cases assigned to DRGs 336 and 337, approximately $6,500. Thus, if a case involves both a circumcision and a prostatectomy, we believe it should be assigned to the higher-weighted DRG category. Although circumcision can be a relatively simple surgery for infants, when it is performed for Medicare beneficiaries, it appears to be a more complicated procedure and might involve the use of significant resources. The other proposed changes to the surgical hierarchy are still supported by the data and no additional changes are indicated. Therefore, we are incorporating these changes in this final rule. 7. Refinement of Complications and Comorbidities List There is a standard list of diagnoses that are considered complications or comorbidities (CCs). We developed this list using physician panels to include those diagnoses that, when present as a secondary condition, would be considered a substantial complication or comorbidity. In previous years, we have made changes to the standard list of CCs, either by adding new CCs or deleting CCs already on the list. In the September 1, 1987 final notice concerning changes to the DRG classification system (52 FR 33143), we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered a valid CC in combination with a particular principal diagnosis. Thus, we created the CC Exclusions List. We made these changes to preclude coding of CCs for closely related conditions, to preclude duplicative coding or inconsistent coding from being treated as CCs, and to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. In the May 19, 1987 proposed notice concerning changes to the DRG classification system (52 FR 18877), we explained that the excluded secondary diagnoses were established using the following five principles: Chronic and acute manifestations of the same condition should not be considered CCs for one another (as subsequently corrected in the September 1, 1987 final notice (52 FR 33154)). Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for a condition should not be considered CCs for one another. Conditions that may not co-exist, such as partial/total, unilateral/bilateral, obstructed/unobstructed, and benign/malignant, should not be considered CCs for one another. The same condition in anatomically proximal sites should not be considered CCs for one another. Closely related conditions should not be considered CCs for one another. The creation of the CC Exclusions List was a major project involving hundreds [[Page 45980]] of codes. The FY 1988 revisions were intended to be only a first step toward refinement of the CC list in that the criteria used for eliminating certain diagnoses from consideration as CCs were intended to identify only the most obvious diagnoses that should not be considered complications or comorbidities of another diagnosis. For that reason, and in light of comments and questions on the CC list, we have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC. (See the September 30, 1988 final rule for the revision made for the discharges occurring in FY 1989 (53 FR 38485); the September 1, 1989 final rule for the FY 1990 revision (54 FR 36552); the September 4, 1990 final rule for the FY 1991 revision (55 FR 36126); the August 30, 1991 final rule for the FY 1992 revision (56 FR 43209); the September 1, 1992 final rule for the FY 1993 revision (57 FR 39753); the September 1, 1993 final rule for the FY 1994 revisions (58 FR 46278); the September 1, 1994 final rule for the FY 1995 revisions (59 FR 45334); the September 1, 1995 final rule for the FY 1996 revisions (60 FR 45782); and the August 30, 1996 final rule for the FY 1997 revisions (61 FR 46171)). We proposed a limited revision of the CC Exclusions List to take into account the changes that will be made in the ICD-9-CM diagnosis coding system effective October 1, 1997, as well as the proposed CC changes described above. (See section II.B.9, below, for a discussion of ICD-9-CM changes.) These changes were proposed in accordance with the principles established when we created the CC Exclusions List in 1987. We received one comment, which supported our changes to the CC lists. The changes discussed above have been added to Table 6E, Additions to the CC Exclusions List, in section V of the Addendum to this final rule. Tables 6E and 6F in section V of the Addendum to this final rule contain the revisions to the CC Exclusions List that will be effective for discharges occurring on or after October 1, 1997. Each table shows the principal diagnoses with final changes to the excluded CCs. Each of these principal diagnoses is shown with an asterisk and the additions or deletions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. CCs that are added to the list are in Table 6E--Additions to the CC Exclusions List. Beginning with discharges on or after October 1, 1997, the indented diagnoses will not be recognized by the GROUPER as valid CCs for the asterisked principal diagnosis. CCs that are deleted from the list are in Table 6F--Deletions from the CC Exclusions List. Beginning with discharges on or after October 1, 1997 the indented diagnoses will be recognized by the GROUPER as valid CCs for the asterisked principal diagnosis. Copies of the original CC Exclusions List applicable to FY 1988 can be obtained from the National Technical Information Service (NTIS) of the Department of Commerce. It is available in hard copy for $92.00 plus $6.00 shipping and handling and on microfiche for $20.50, plus $4.00 for shipping and handling. A request for the FY 1988 CC Exclusions List (which should include the identification accession number, (PB) 88-133970) should be made to the following address: National Technical Information Service; United States Department of Commerce; 5285 Port Royal Road; Springfield, Virginia 22161; or by calling (703) 487-4650. Users should be aware of the fact that all revisions to the CC Exclusions List (FYs 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, and 1997) and those in Tables 6E and 6F of this document must be incorporated into the list purchased from NTIS in order to obtain the CC Exclusions List applicable for discharges occurring on or after October 1, 1997. Alternatively, the complete documentation of the GROUPER logic, including the current CC Exclusions List, is available from 3M/Health Information Systems (HIS), which, under contract with HCFA, is responsible for updating and maintaining the GROUPER program. The current DRG Definitions Manual, Version 14.0, is available for $195.00, which includes $15.00 for shipping and handling. Version 15.0 of this manual, which will include the final FY 1998 DRG changes, will be available in October 1997 for $195.00. These manuals may be obtained by writing 3M/HIS at the following address: 100 Barnes Road; Wallingford, Connecticut 06492; or by calling (203) 949-0303. Please specify the revision or revisions requested. 8. Review of Procedure Codes in DRGs 468, 476, and 477 Each year, we review cases assigned to DRG 468 (Extensive OR Procedure Unrelated to Principal Diagnosis), DRG 476 (Prostatic OR Procedure Unrelated to Principal Diagnosis), and DRG 477 (Nonextensive OR Procedure Unrelated to Principal Diagnosis) in order to determine whether it would be appropriate to change the procedures assigned among these DRGs. DRGs 468, 476, and 477 are reserved for those cases in which none of the OR procedures performed is related to the principal diagnosis. These DRGs are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group. DRG 476 is assigned to those discharges in which one or more of the following prostatic procedures are performed and are unrelated to the principal diagnosis: 60.0 Incision of prostate 60.12 Open biopsy of prostate 60.15 Biopsy of periprostatic tissue 60.18 Other diagnostic procedures on prostate and periprostatic tissue 60.21 Transurethral prostatectomy 60.29 Other transurethral prostatectomy 60.61 Local excision of lesion of prostate 60.69 Prostatectomy NEC 60.81 Incision of periprostatic tissue 60.82 Excision of periprostatic tissue 60.93 Repair of prostate 60.94 Control of (postoperative) hemorrhage of prostate 60.95 Transurethral balloon dilation of the prostatic urethra 60.99 Other operations on prostate All remaining OR procedures are assigned to DRGs 468 and 477, with DRG 477 assigned to those discharges in which the only procedures performed are nonextensive procedures that are unrelated to the principal diagnosis. The original list of the ICD-9-CM procedure codes for the procedures we consider nonextensive procedures if performed with an unrelated principal diagnosis was published in Table 6C in section IV of the Addendum to the September 30, 1988 final rule (53 FR 38591). As part of the final rules published on September 4, 1990, August 30, 1991, September 1, 1992, September 1, 1993, September 1, 1994, September 1, 1995, and August 30, 1996, we moved several other procedures from DRG 468 to 477. (See 55 FR 36135, 56 FR 43212, 57 FR 23625, 58 FR 46279, 59 FR 45336, 60 FR 45783, and 61 FR 46173, respectively.) a. Adding Procedure Codes to MDCs We annually conduct a review of procedures producing DRG 468 or 477 assignments on the basis of volume of cases in these DRGs with each procedure. Our medical consultants then identify those procedures occurring in conjunction with certain [[Page 45981]] principal diagnoses with sufficient frequency to justify adding them to one of the surgical DRGs for the MDC in which the diagnosis falls. Based on this year's review, we proposed to move procedure code 54.92 (Removal of foreign body from peritoneal cavity) to MDC 11 and assign it to DRG 315 (Other Kidney and Urinary Tract OR Procedures). We note that, under the current DRGs, when procedure code 54.92 is coded in addition to a principal diagnosis code of 868.14 (injury with open wound into retroperitoneum), the case is assigned to DRG 468. Comment: We received two comments on this proposed change. One commenter fully supported the proposal. The other commenter noted that moving procedure code 54.92 from DRG 468 to DRG 315 in MDC 11 would result in a 43 percent reduction in the DRG relative weight associated with the case. Although the change makes sense clinically, the commenter questioned the financial impact involved. Response: The purpose of DRG 468 is to accommodate cases in which an OR procedure that is unrelated to the principal diagnosis is performed. As the commenter acknowledges, the clinical relationship between procedure code 54.92 (Removal of foreign body from peritoneal cavity) and a principal diagnosis code of 868.14 (injury with open wound into retroperitoneum) is clear. We note that this change would have resulted in the reassignment of only one case in FY 1996; therefore, the financial impact involved is minimal. We are adopting this change as proposed. b. Reassignment of Procedures Among DRGs 468, 476, and 477 We also reviewed the list of procedures that produce assignments to DRGs 468, 476, and 477 to ascertain if any of those procedures should be moved from one of these DRGs to another based on average charges and length of stay. Generally, we move only those procedures for which we have an adequate number of discharges to analyze the data. In reviewing the list of OR procedures that produce DRG 468 assignments, we analyzed the average charge and length of stay data for cases assigned to that DRG to identify those procedures that are more similar to the discharges that currently group to either DRG 476 or 477. We identified two procedures--other surgical occlusion of abdominal arteries (procedure code 38.86) and other arthrotomy of knee (procedure code 80.16)--that are significantly less resource intensive than the other procedures assigned to DRG 468. Therefore, we proposed to move procedure codes 38.86 and 80.16 to the list of procedures that result in assignment to DRG 477. In reviewing the list of procedures assigned to DRG 477, we did not identify any procedures that should be assigned to either DRG 468 or 476. Comment: We received two comments on this proposal. Both commenters supported moving procedure code 80.16, but one of the commenters believes that procedure code 38.86 represents cases that are very complicated and require a high level of resources. Response: Our review of the average resource use associated with DRG 468 cases with procedure code 38.86 support this change. The average charge associated with this case is approximately $13,150. The average charges for cases in DRG 468 and 477 are approximately $30,000 and $14,300, respectively. Thus, moving procedure code 38.86 to DRG 477 appears appropriate in terms of resource use. We will review the cases in the FY 1997 MedPAR file when it becomes available to ensure that this remains true for those cases. 9. Changes to the ICD-9-CM Coding System As discussed above in section II.B.1 of this preamble, the ICD-9-CM is a coding system that is used for the reporting of diagnoses and procedures performed on a patient. In September 1985, the ICD-9-CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee charged with the mission of maintaining and updating the ICD-9-CM. That mission includes approving coding changes, and developing errata, addenda, and other modifications to the ICD-9-CM to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non-Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system. The Committee is co-chaired by the National Center for Health Statistics (NCHS) and HCFA. The NCHS has lead responsibility for the ICD-9-CM diagnosis codes included in Volume 1--Diseases: Tabular List and Volume 2--Diseases: Alphabetic Index, while HCFA has lead responsibility for the ICD-9-CM procedure codes included in Volume 3-- Procedures: Tabular List and Alphabetic Index. The Committee encourages participation in the above process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding fields, such as the American Health Information Management Association (AHIMA) (formerly American Medical Record Association (AMRA)), the American Hospital Association (AHA), and various physician specialty groups as well as physicians, medical record administrators, health information management professionals, and other members of the public to contribute ideas on coding matters. After considering the opinions expressed at the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies. The Committee presented proposals for coding changes at public meetings held on June 6 and December 5 and 6, 1996, and finalized the coding changes after consideration of comments received at the meetings and in writing within 60 days following the December 1996 meeting. The initial meeting for consideration of coding issues for implementation in FY 1999 was held on June 6, 1997. The minutes of the meeting can be obtained from the HCFA Home Page @ http://www.hcfa.gov.pubaffr.htm. Paper copies of these minutes will no longer be available and the mailing list will be discontinued. We encourage commenters to address suggestions on coding issues involving diagnosis codes to: Donna Pickett, Co-Chairperson; ICD-9-CM Coordination and Maintenance Committee; NCHS; Room 1100; 6525 Belcrest Road; Hyattsville, Maryland 20782. Comments may be sent by E-mail to: [email protected]. Questions and comments concerning the procedure codes should be addressed to: Patricia E. Brooks, Co-Chairperson; ICD-9-CM Coordination and Maintenance Committee; HCFA, Office of Hospital Policy; Division of Prospective Payment System; C5-06-27; 7500 Security Boulevard; Baltimore, Maryland 21244-1850. Comments may be sent by E-mail to: [email protected]. The ICD-9-CM code changes that have been approved will become effective October 1, 1997. The new ICD-9-CM codes are listed, along with their DRG classifications, in Tables 6A and 6B (New Diagnosis Codes and New Procedure Codes, respectively) in section V of the Addendum to this final rule. As we stated above, the code [[Page 45982]] numbers and their titles were presented for public comment in the ICD- 9-CM Coordination and Maintenance Committee meetings. Both oral and written comments were considered before the codes were approved. Further, the Committee has approved the expansion of certain ICD-9- CM codes to require an additional digit for valid code assignment. Diagnosis codes that have been replaced by expanded codes, other codes, or have been deleted are in Table 6C (Invalid Diagnosis Codes). These invalid diagnosis codes will not be recognized by the GROUPER beginning with discharges occurring on or after October 1, 1997. The corresponding new or expanded diagnosis codes are included in Table 6A. Revisions to diagnosis code titles are in Table 6D (Revised Diagnosis Code Titles), which also includes the DRG assignments for these revised codes. For FY 1998, there are no procedure codes that have been replaced or deleted nor are there any revisions to procedure code titles. We received three comments concerning our assignment of new ICD-9-CM codes. Comment: One commenter wrote in support of the creation of a new diagnosis code for pyoderma gangrenosum (code 686.01) in order to distinguish this condition from infectious pyoderma. The commenter stated that pyoderma gangrenosum is not infectious, but instead is a manifestation of other disease such as ulcerative colitis or Crohn's disease. Pyoderma gangrenosum is characterized by ulcers with extensive necrosis around the edges and are generally found on the lower extremities. Therefore, the commenter believes that this code should be assigned to DRG 271 (Skin Ulcers) rather than DRGs 277, 278, and 279 (Cellulitis). Response: When a new code is introduced, our longstanding practice is to assign it to the same DRG category as its predecessor code or codes. Therefore, we proposed to assign diagnosis code 686.01 to DRGs 277, 278, and 279, the DRGs to which its predecessor code, 686.0 (pyoderma), had been assigned. The resource use and other data associated with this diagnosis code will be available in the FY 1998 MedPAR file, which will be used for analysis as part of the FY 2000 DRG changes. We will evaluate the DRG assignment of code 686.01 at that time. Comment: In the proposed rule, we announced a new diagnosis code (031.2) for disease due to disseminated mycobacterium avium- intracellulare complex (DMAC). We proposed that this code be classified to DRG 423 (Other Infectious and Parasitic Disease Diagnoses) in MDC 18 (Infectious and Parasitic Diseases, Systemic or Unspecified Sites) as well as be designated as an HIV major related condition in DRG 489 (HIV with Major Related Condition). A commenter disagreed with our decision to classify this code as a non-CC; that is, diagnosis code 031.2 would not be included on the CC list. The commenter believes that when DMAC is present as a secondary diagnosis, it would be considered a substantial complication or comorbidity. Response: DMAC is the most common disseminated bacterial infection in patients with advanced acquired immunodeficiency syndrome (AIDS). As such, cases coded with 031.2 will also be coded with a principal or secondary diagnosis of 042, Human immunodeficiency virus (HIV) disease and will be assigned to DRG 489. DRG 489 is not divided based on the presence or absence of CCs. We believe that the vast majority of patients with DMAC, if not all, will be assigned to this DRG, thus negating the need to add this disease to the CC list. As noted above, it is our practice to assign new codes to the same category as their predecessor code was assigned. We note that cases coded 031.2 would have been coded to 031.8 (other specified mycobacterial diseases), which is not a CC. We will review the assignment of cases in which DMAC is coded as a secondary condition when the FY 1998 MedPAR file becomes available and re-evaluate our decision. Comment: Commenters noted what they believed to be a typographical error concerning new code V42.83 (organ or tissue replaced by transplant, pancreas). In Table 6A, New Diagnosis Codes, this code was recorded as being assigned to MDC 7, DRG 467 (Other Factors Influencing Health Status). Since DRG 467 is assigned to MDC 23, the commenters assumed this was a typographical error. Response: The commenters are correct; diagnosis code V42.83 is assigned to DRG 204 (Disorders of Pancreas Except Malignancy) in MDC 7. 10. Other Issues a. MDC 22 (Burns) Under the current DRG system, burn cases generally are assigned to one of six DRGs in MDC 22 (Burns). These DRGs-- DRGs 456 through 460 and 472--have been in place without change since 1986. Recently, we have received several letters from representatives of facilities that specialize in treating burn cases asserting that the existing DRGs do not adequately capture the variation in resource use associated with different types of burn cases. In the proposed rule (62 FR 29912), we discussed the concerns of these correspondents and solicited public comments on whether changes in these DRGs can increase their ability to explain the variation in resource use among burn cases. We received approximately 15 public comments on this issue, all of which supported our efforts to identify DRG groupings that would reflect more homogeneous resource use. These comments included a proposal for restructuring the DRG classifications in MDC 22 that has been endorsed by the American Burn Association. Several commenters also suggested the need for a special facility category to make possible payment differences for designated burn care facilities. As noted in the proposed rule, however, any suggestions involving payment adjustments for hospitals designated as burn centers would require legislative action. We intend to conduct a full review of the comments and proposals we have received as part of the FY 1999 DRG analysis agenda. We will discuss our findings and, if appropriate, propose modifications to MDC 22 in the FY 1999 proposed rule. b. Marfan Syndrome (DRG 390) We are making a minor DRG classification change for FY 1998 that we inadvertently did not include in the June 2 proposed rule. Based on correspondence we have received, we reviewed the assignment of diagnosis code 759.82 (Marfan syndrome) to DRG 390 (Neonate with Other Significant Problems) in MDC 15 (Newborns and Other Neonates with Conditions Originating in the Perinatal Period). While Marfan syndrome is a congenital disorder, cardiovascular abnormalities associated with the disorder are most likely to manifest in adults. Because the current classification system often results in adult patients being classified to the MDC for newborns, we agree that, from a clinical coherence standpoint, it is appropriate that these cases be reclassified. Therefore, we are reassigning code 759.82 from DRG 390 into MDC 5, DRGs 135, 136, and 137 (Cardiac Congenital & Valvular Disorders). There were no cases with a principal diagnosis code of 759.82 in the FY 1996 MedPAR file. C. Recalibration of DRG Weights We proposed to use the same basic methodology for the FY 1998 recalibration as we did for FY 1997. (See the August 30, 1996 final rule (61 FR 46176).) That is, we would recalibrate the weights based on charge data for [[Page 45983]] Medicare discharges. However, we would use the most current charge information available, the FY 1996 MedPAR file, rather than the FY 1995 MedPAR file. The MedPAR file is based on fully-coded diagnostic and surgical procedure data for all Medicare inpatient hospital bills. The final recalibrated DRG relative weights are constructed from FY 1996 MedPAR data, based on bills received by HCFA through June 1997, from all hospitals subject to the prospective payment system and short- term acute care hospitals in waiver States. The FY 1996 MedPAR file includes data for approximately 11.2 million Medicare discharges. The methodology used to calculate the DRG relative weights from the FY 1996 MedPAR file is as follows: All the claims were regrouped using the DRG classification revisions discussed above in section II.B of this preamble. Charges were standardized to remove the effects of differences in area wage levels, indirect medical education costs, disproportionate share payments, and, for hospitals in Alaska and Hawaii, the applicable cost-of-living adjustment. The average standardized charge per DRG was calculated by summing the standardized charges for all cases in the DRG and dividing that amount by the number of cases classified in the DRG. We then eliminated statistical outliers, using the same criteria as was used in computing the current weights. That is, all cases that are outside of 3.0 standard deviations from the mean of the log distribution of both the charges per case and the charges per day for each DRG. The average charge for each DRG was then recomputed (excluding the statistical outliers) and divided by the national average standardized charge per case to determine the relative weight. A transfer case is counted as a fraction of a case based on the ratio of its length of stay to the geometric mean length of stay of the cases assigned to the DRG. That is, a 5-day length of stay transfer case assigned to a DRG with a geometric mean length of stay of 10 days is counted as 0.5 of a total case. We established the relative weight for heart and heart- lung, liver, and lung transplants (DRGs 103, 480, and 495) in a manner consistent with the methodology for all other DRGs except that the transplant cases that were used to establish the weights were limited to those Medicare-approved heart, heart-lung, liver, and lung transplant centers that have cases in the FY 1995 MedPAR file. (Medicare coverage for heart, heart-lung, liver, and lung transplants is limited to those facilities that have received approval from HCFA as transplant centers.) Acquisition costs for kidney, heart, heart-lung, liver, and lung transplants continue to be paid on a reasonable cost basis. Unlike other excluded costs, the acquisition costs are concentrated in specific DRGs (DRG 302 (Kidney Transplant); DRG 103 (Heart Transplant for heart and heart-lung transplants); DRG 480 (Liver Transplant); and DRG 495 (Lung Transplant)). Because these costs are paid separately from the prospective payment rate, it is necessary to make an adjustment to prevent the relative weights for these DRGs from including the effect of the acquisition costs. Therefore, we subtracted the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average charge for the DRG and before eliminating statistical outliers. When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We proposed to use that same case threshold in recalibrating the DRG weights for FY 1998. For this final rule, using the FY 1996 MedPAR data set, there are 34 DRGs that contain fewer than 10 cases. We computed the weights for the 34 low-volume DRGs by adjusting the FY 1997 weights of these DRGs by the percentage change in the average weight of the cases in the other DRGs. The weights developed according to the methodology described above, using the proposed DRG classification changes, result in an average case weight that is different from the average case weight before recalibration. Therefore, the new weights are normalized by an adjustment factor, so that the average case weight after recalibration is equal to the average case weight before recalibration. This adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the prospective payment system. Section 1886(d)(4)(C)(iii) of the Act requires that beginning with FY 1991, reclassification and recalibration changes be made in a manner that assures that the aggregate payments are neither greater than nor less than the aggregate payments that would have been made without the changes. Although normalization is intended to achieve this effect, equating the average case weight after recalibration to the average case weight before recalibration does not necessarily achieve budget neutrality with respect to aggregate payments to hospitals because payment to hospitals is affected by factors other than average case weight. Therefore, as we have done in past years and as discussed in section II.A.4.a of the Addendum to this final rule, we are making a budget neutrality adjustment to assure that the requirement of section 1886(d)(4)(C)(iii) of the Act is met. Although we received no comments on the recalibration of the DRG weights, we did receive one comment that relates to that process. Comment: One commenter was concerned about the reduction in the proposed FY 1998 relative weight for DRG 480 (Liver Transplant), compared to the FY 1997 weight. The commenter noted that Table 5 of the proposed rule (62 FR 29990) indicated approximately an 8-day reduction in length of stay from FY 1995 to FY 1996 and asked that we review the MedPAR data for this DRG to verify the accuracy of the data and the consequent change in the relative weight. Response: Every year when the relative weights are recalibrated, we use charge information from the most recent Medicare data available. That is, we use the charges reported by hospitals for the cases under each DRG to establish the relative weights. As the commenter requested, we have re-examined the FY 1996 MedPAR data that are used in establishing the DRG relative weights for FY 1998. We have not identified any problems or anomalies related to the cases in DRG 480 and are confident that the relative weight and length of stay data set forth in Table 5 of this final rule are accurate. We note that the final FY 1996 MedPAR data result in a slightly higher relative weight and average length of stay for DRG 480 than shown in the proposed rule, although the data still indicate close to a 7-day reduction in average length of stay for these cases. (Data for the final rule are taken from the June 1997 update of the FY 1996 MedPAR data, rather than the December 1996 file used for the proposed rule.) Both the relative weight and the length of stay for liver transplant cases have exhibited continuing declines since the early 1990's. Although the decline between FY 1995 and FY 1996 was more pronounced than in some other years, this change is not unusual for a relatively low volume DRG (fewer than 400 cases) with a large range of reported charges and lengths of stay. A few very low or very high charge cases can make a dramatic difference in the DRG weight. [[Page 45984]] III. Changes to the Hospital Wage Index and Medicare Geographic Reclassification Guidelines A. Background Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts ``for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.'' In accordance with the broad discretion conferred under the Act, we currently define hospital labor market areas based on the definitions of Metropolitan Statistical Areas (MSAs), Primary MSAs (PMSAs), and New England County Metropolitan Areas (NECMAs) issued by the Office of Management and Budget (OMB). OMB also designates Consolidated MSAs (CMSAs). A CMSA is a metropolitan area with a population of one million or more, comprised of two or more PMSAs (identified by their separate economic and social character). For purposes of the hospital wage index, we use the PMSAs rather than CMSAs since they allow a more precise breakdown of labor costs. If a metropolitan area is not designated as part of a PMSA, we use the applicable MSA. Rural areas are areas outside a designated MSA, PMSA, or NECMA. In the proposed rule, we noted that, effective April 1, 1990, the term Metropolitan Area (MA) replaced the term Metropolitan Statistical Area (MSA) (which had been used since June 30, 1983) to describe the set of metropolitan areas comprised of MSAs, PMSAs, and CMSAs. The terminology was changed by OMB in the March 30, 1990 Federal Register to distinguish between the individual metropolitan areas known as MSAs and the set of all metropolitan areas (MSAs, PMSAs, and CMSAs) (55 FR 12154). For purposes of the prospective payment system, we will continue to refer to these areas as MSAs. Section 1886(d)(3)(E) of the Act also requires that the wage index be updated annually beginning October 1, 1993. Furthermore, this section provides that the Secretary base the update on a survey of wages and wage-related costs of short-term, acute care hospitals. The survey should measure, to the extent feasible, the earnings and paid hours of employment by occupational category, and must exclude the wages and wage-related costs incurred in furnishing skilled nursing services. We also adjust the wage index, as discussed below in section III.B.3, to take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act. B. FY 1998 Wage Index Update The final FY 1998 wage index in section V. of the Addendum (effective for hospital discharges occurring on or after October 1, 1997 and before October 1, 1998) is based on the data collected from the Medicare cost reports submitted by hospitals for cost reporting periods beginning in FY 1994 (the FY 1997 wage index was based on FY 1993 wage data). We used the same categories of data that were used in the FY 1997 wage index. Therefore, the FY 1998 wage index reflects the following: Total salaries and hours from short-term, acute care hospitals. Home office costs and hours. Fringe benefits associated with hospital and home office salaries. Direct patient care contract labor costs and hours. The exclusion of salaries and hours for nonhospital type services such as skilled nursing facility services, home health services, or other subprovider components that are not subject to the prospective payment system. We proposed to calculate a separate Puerto Rico-specific wage index to be applied to the Puerto Rico standardized amount. We stated that this wage index would be calculated in the same manner as the national wage index described below, but will be based solely on Puerto Rico's data. We received several comments supporting the new Puerto Rico- specific wage index. We are implementing that change and revising Sec. 412.210(e) accordingly. We did not propose any changes in the reporting of hospital wage index data, but we received numerous comments regarding the FY 1995 wage data, which will not be used until we develop the FY 1999 wage index. The Medicare cost report for reporting periods beginning during FY 1995 included several changes to the Worksheet S-3 that will allow us to analyze further refinements to the wage index. Among those changes are the separate reporting of all salary costs for physicians (including teaching physicians), residents, and certified registered nurse anesthetists (CRNAs). In addition, we collected overhead cost data by cost center in order to analyze the possibility of excluding overhead costs attributable to skilled nursing facilities and other excluded areas from the wage index. These comments are discussed in detail below. Comment: Two commenters stated that we should exclude physician salaries (as recommended by the Medicare Technical Advisory Group); one suggested that we should immediately exclude these costs using information from the Worksheet A-8-2 of the Medicare cost report. Alternatively, a few commenters suggested that we should include contracted Part A physician salaries for those States in which hospitals are prohibited from employing physicians. Several commenters are concerned that the removal of teaching physician and resident salaries would redistribute revenues from large metropolitan areas with large teaching programs to areas that support medical education to a lesser extent. The commenters noted that recent legislation revising the payments for disproportionate share and the indirect medical education adjustments (sections 4403 and 4621 of Public Law 105-33) will further reduce payment for hospitals in major metropolitan areas. Other commenters suggested that we analyze the impact of excluding the data before making a final decision. Some commenters specifically recommended that we determine whether hospitals that are prohibited from employing physicians are disadvantaged by our current policy, and, if so, that we develop a policy that minimizes the redistribution of revenue and the concentration of losses in particular geographic areas. Response: These comments relate to the FY 1995 wage data, which we are not using in developing the FY 1998 wage index. We will consider these comments in developing the FY 1999 wage index. Although the deadline for fiscal intermediaries to submit all of the reviewed FY 1995 wage data to HCFA is mid-November 1997, we intend to begin our analysis of these data prior to that time, based on the data that have already been submitted to the Health Care Provider Cost Report Information System (HCRIS). We note that our fundamental objective in administering the wage index is to ensure that it is accurate and fair, and we will evaluate the use of the FY 1995 wage data with that objective in mind. Regarding the suggestion that we use Worksheet A-8-2 to exclude Part A physician salaries, we noted in the proposed rule (62 FR 29914) that, because the intermediaries had already begun reviewing the FY 1994 cost report and finalizing the Worksheet S-3 data, we did not believe it would be appropriate to revise their instructions and require them to make a change to their procedure. Therefore, we will review and evaluate for the FY 1995 data, which provides for the separate [[Page 45985]] reporting of physician salaries when considering appropriate changes in the FY 1999 wage index. Comment: One hospital association commented that it had analyzed unedited preliminary FY 1995 HCRIS data and concluded that revising our policy to include contracted Part A physician salaries would redistribute current payments by only half of what would result if we changed our policy to exclude all Part A physician and resident salaries. (Currently, we exclude contracted Part A physician salaries, but include similar salaries if the physician is employed by the hospital.) Other commenters noted other data issues that arise using the preliminary FY 1995 HCRIS wage data. Response: In response to these comments, we would emphasize that the cost report data analyzed by these commenters are very preliminary, and in many cases, have not yet been reviewed by the intermediaries. The data were extracted from the HCRIS Minimum Data Set, which is updated quarterly and becomes more accurate and complete after the deadline for completion of the wage data desk reviews by the intermediaries. We are aware of the need to carefully review these data due to the changes discussed above, and we will work with those in the hospital industry that have taken the initiative to begin to examine the data in order to draw upon their findings while proceeding with our analysis. Comment: Two commenters stated that wages and wage-related costs for physicians, residents, and CRNAs are not reported separately for FY 1995, but are reported separately for FY 1996. They requested that HCFA postpone its evaluation of the exclusion of these data until the FY 1996 data are available, and that HCFA announce this 1-year delay in the FY 1998 final rule. Response: We are aware that for the FY 1995 cost reports some hospitals may have reported teaching physicians' salaries with residents' wages, and also did not separately report wage-related costs for physicians, residents, and CRNAs. To address this situation we revised the FY 1996 cost reporting instructions. We will consider the impact of this problem in our FY 1995 data analysis. Comment: Four commenters disputed the rationale that Part A physician and resident salaries should be excluded from the wage index because these costs are largely paid through Medicare direct graduate medical education payments. They stated that other costs, such as outpatient and general service costs that are allocated to excluded cost centers, are similarly paid outside the prospective payment system, but are included in the wage index calculation. Response: The FY 1995 revised Worksheet S-3 allows for the separate reporting of direct salaries and hours by general service cost centers as well as physician salaries. We plan to analyze these data to determine the feasibility of allocating general service costs and removing those costs that are associated with excluded areas. Regarding outpatient costs, hospital staff frequently provide services in both the outpatient and inpatient departments, and we believe that the inclusion of outpatient salaries causes little or no distortion to the wage index. 1. Verification of Wage Data From the Medicare Cost Report The data for the FY 1998 wage index were obtained from Worksheet S- 3, Part II of the Medicare cost report. The data file used to construct the final wage index includes FY 1994 data submitted to HCRIS. As in past years, we performed an intensive review of the wage data, mostly through the use of edits designed to identify aberrant data. In the proposed rule, we discussed in detail our review of the wage data as well as the process that hospitals could use to verify their wage data and submit requests for corrections if necessary (62 FR 29914). To be reflected in the final wage index, wage data corrections had to be reviewed, verified, and transmitted to HCFA through HCRIS by June 16, 1997. (Any changes after this date are limited to errors related to handling the data, as described below in section III.C of this preamble.) All data elements that failed edits have been resolved and are reflected in the final wage index. 2. Computation of the Wage Index The method used to compute the final wage index is as follows: Step 1--As noted above, we based the FY 1998 wage index on wage data reported on the FY 1994 Medicare cost reports. We gathered data from each of the non-Federal, short-term, acute care hospitals for which data were reported on the Worksheet S-3, Part II of the Medicare cost report for the hospital's cost reporting period beginning on or after October 1, 1993 and before October 1, 1994. In addition, we included data from a few hospitals that had cost reporting periods beginning in September 1993 and reported a cost reporting period exceeding 52 weeks. These data were included because no other data from these hospitals would be available for the cost reporting period described above, and particular labor market areas might be affected due to the omission of these hospitals. However, we generally describe these wage data as FY 1994 data. Step 2--For each hospital, we subtracted the excluded salaries (that is, direct salaries attributable to skilled nursing facility services, home health services, and other subprovider components not subject to the prospective payment system) from gross hospital salaries to determine net hospital salaries. To determine total salaries plus fringe benefits, we added direct patient care contract labor costs, hospital fringe benefits, and any home office salaries and fringe benefits reported by the hospital, to the net hospital salaries. Step 3--For each hospital, we adjusted the total salaries plus fringe benefits resulting from Step 2 to a common period to determine total adjusted salaries. To make the wage inflation adjustment, we used the percentage change in average hourly earnings estimated for each 30- day increment from October 14, 1993 through April 15, 1995, for hospital industry workers from Standard Industry Classification 806, Bureau of Labor Statistics Employment and Earnings Bulletin. The annual inflation rates used were 3.6 percent for FY 1993, 2.7 percent for FY 1994, and 3.3 percent for FY 1995. The inflation factors used to inflate the hospital's data were based on the midpoint of the cost reporting period as indicated below. Midpoint of Cost Reporting Period ------------------------------------------------------------------------ Adjustment After Before factor ------------------------------------------------------------------------ 10/14/93........................... 11/15/93.............. 1.038679 11/14/93........................... 12/15/93.............. 1.036376 12/14/93........................... 01/15/94.............. 1.034077 01/14/94........................... 02/15/94.............. 1.031784 02/14/94........................... 03/15/94.............. 1.029496 03/14/94........................... 04/15/94.............. 1.027213 04/14/94........................... 05/15/94.............. 1.024935 05/14/94........................... 06/15/94.............. 1.022662 06/14/94........................... 07/15/94.............. 1.020394 07/14/94........................... 08/15/94.............. 1.018131 08/14/94........................... 09/15/94.............. 1.015873 09/14/94........................... 10/15/94.............. 1.013620 10/14/94........................... 11/15/94.............. 1.010881 11/14/94........................... 12/15/94.............. 1.008150 12/14/94........................... 01/15/95.............. 1.005426 01/14/95........................... 02/15/95.............. 1.002709 02/14/95........................... 03/15/95.............. 1.000000 03/14/95........................... 04/15/95.............. 0.997298 ------------------------------------------------------------------------ For example, the midpoint of a cost reporting period beginning January 1, 1994 and ending December 31, 1994 is June 30, 1994. An inflation adjustment factor of 1.020394 would be applied to the wages of a hospital with such a cost reporting period. In addition, for the data for any cost reporting period that [[Page 45986]] began in FY 1994 and covers a period of less than 360 days or greater than 370 days, we annualized the data to reflect a 1-year cost report. Annualization is accomplished by dividing the data by the number of days in the cost report and then multiplying the results by 365. Step 4--For each hospital, we subtracted the reported excluded hours from the gross hospital hours to determine net hospital hours. We increased the net hours by the addition of any direct patient care contract labor hours and home office hours to determine total hours. Step 5--As part of our editing process, we deleted data for 18 hospitals for which we lacked sufficient documentation to verify data that failed edits because the hospitals are no longer participating in the Medicare program or are in bankruptcy status. We retained the data for other hospitals that are no longer participating in the Medicare program because these hospitals reflected the relative wage levels in their labor market areas during their FY 1994 cost reporting period. Step 6--Each hospital was assigned to its appropriate urban or rural labor market area prior to any reclassifications under sections 1886(d)(8)(B) or 1886(d)(10) of the Act. Within each urban or rural labor market area, we added the total adjusted salaries plus fringe benefits obtained in Step 3 for all hospitals in that area to determine the total adjusted salaries plus fringe benefits for the labor market area. Step 7--We divided the total adjusted salaries plus fringe benefits obtained in Step 6 by the sum of the total hours (from Step 4) for all hospitals in each labor market area to determine an average hourly wage for the area. Step 8--We added the total adjusted salaries plus fringe benefits obtained in Step 3 for all hospitals in the nation and then divided the sum by the national sum of total hours from Step 4 to arrive at a national average hourly wage. Using the data as described above, the national average hourly wage is $20.0950. Step 9--For each urban or rural labor market area, we calculated the hospital wage index value by dividing the area average hourly wage obtained in Step 7 by the national average hourly wage computed in Step 8. Step 10--Following the process set forth above, we developed a separate Puerto Rico-specific wage index for purposes of adjusting the Puerto Rico standardized amounts. We added the total adjusted salaries plus fringe benefits (as calculated in Step 3) for all hospitals in Puerto Rico and divided the sum by the total hours for Puerto Rico (as calculated in Step 4) to arrive at an overall average hourly wage of $9.1364 for Puerto Rico. For each labor market area in Puerto Rico, we calculated the hospital wage index value by dividing the area average hourly wage (as calculated in Step 7) by the overall Puerto Rico average hourly wage. Step 11--Section 4410(a) Public Law 105-33 provides that, for discharges on or after October 1, 1997, the area wage index applicable to any hospital that is not located in a rural area may not be less than the area wage index applicable to hospitals located in rural areas in the State in which the hospital is located. For FY 1998, this change affects 128 hospitals in 32 MSAs. The MSAs affected by this provision are identified in Table 4A by a footnote. Furthermore, this wage index floor is to be implemented in such a manner as to assure that aggregate prospective payment system payments are not greater or less than those which would have been made in the year if this section did not apply. We note that the Secretary has exercised the authority granted to her by section 4408 of Public Law 105- 33 to include Stanly County in the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina MSA. This change is reflected in the final wage index. 3. Revisions to the Wage Index Based on Hospital Redesignation Under section 1886(d)(8)(B) of the Act, hospitals in certain rural counties adjacent to one or more MSAs are considered to be located in one of the adjacent MSAs if certain standards are met. Under section 1886(d)(10) of the Act, the Medicare Geographic Classification Review Board (MGCRB) considers applications by hospitals for geographic reclassification for purposes of payment under the prospective payment system. The methodology for determining the wage index values for redesignated hospitals is applied jointly to the hospitals located in those rural counties that were deemed urban under section 1886(d)(8)(B) of the Act and those hospitals that were reclassified as a result of the MGCRB decisions under section 1886(d)(10) of the Act. Section 1886(d)(8)(C) of the Act provides that the application of the wage index to redesignated hospitals is dependent on the hypothetical impact that the wage data from these hospitals would have on the wage index value for the area to which they have been redesignated. Therefore, as provided in section 1886(d)(8)(C) of the Act, the wage index values were determined by considering the following: If including the wage data for the redesignated hospitals would reduce the wage index value for the area to which the hospitals are redesignated by 1 percentage point or less, the area wage index value determined exclusive of the wage data for the redesignated hospitals applies to the redesignated hospitals. If including the wage data for the redesignated hospitals reduces the wage index value for the area to which the hospitals are redesignated by more than 1 percentage point, the hospitals that are redesignated are subject to that combined wage index value. If including the wage data for the redesignated hospitals increases the wage index value for the area to which the hospitals are redesignated, both the area and the redesignated hospitals receive the combined wage index value. The wage index value for a redesignated urban or rural hospital cannot be reduced below the wage index value for the rural areas of the State in which the hospital is located. Rural areas whose wage index values would be reduced by excluding the wage data for hospitals that have been redesignated to another area continue to have their wage index values calculated as if no redesignation had occurred. Rural areas whose wage index values increase as a result of excluding the wage data for the hospitals that have been redesignated to another area have their wage index values calculated exclusive of the wage data of the redesignated hospitals. The wage index value for an urban area is calculated exclusive of the wage data for hospitals that have been reclassified to another area. However, geographic reclassification may not reduce the wage index value for an urban area below the statewide rural wage index value. We note that, except for those rural areas where redesignation would reduce the rural wage index value, the wage index value for each area is computed exclusive of the wage data for hospitals that have been redesignated from the area for purposes of their wage index. As a result, several urban areas listed in Table 4a have no hospitals remaining in the area. This is because all the hospitals originally in these urban areas have been reclassified to another area by the MGCRB. These areas with no remaining hospitals receive the prereclassified wage index value. The prereclassified wage index value will apply as long as the area remains empty. The final wage index values for FY 1998 are shown in Tables 4A, 4B, 4C, and 4F in the Addendum to this final rule. Subject to the provisions of Public [[Page 45987]] Law 105-33, the FY 1998 wage index values incorporate all hospital redesignations for FY 1998, withdrawals of requests for reclassification, wage index corrections, appeals, and the Administrator's review process. For FY 1998, 357 hospitals are redesignated for purposes of the wage index (hospitals redesignated under section 1886(d)(8)(B) or 1886(d)(10) of the Act). Hospitals that are redesignated should use the wage index values shown in Table 4C. Areas in Table 4C may have more than one wage index value because the wage index value for a redesignated rural hospital cannot be reduced below the wage index value for the rural areas of the State in which the hospital is located. When the wage index value of the area to which a rural hospital is redesignated is lower than the wage index value for the rural areas of the State in which the rural hospital is located, the redesignated rural hospital receives the higher wage index value, that is, the wage index value for the rural areas of the State in which it is located, rather than the wage index value otherwise applicable to the redesignated hospitals. Tables 4D and 4E list the average hourly wage for each labor market area, prior to the redesignation of hospitals, based on the FY 1994 wage data. In addition, Table 3C in the Addendum to this final rule includes the adjusted (inflated) average hourly wage for each hospital based on the FY 1994 data. The MGCRB will use the average hourly wage published in the final rule to evaluate a hospital's application for reclassification, unless that average hourly wage is later revised in accordance with the wage data correction policy described in Sec. 412.63(s)(2). In such cases, the MGCRB will use the most recent revised data used for purposes of the hospital wage index. C. Changes to the Medicare Geographic Classification Review Board (MGCRB) Guidelines and Timeframes Various provisions of Public Law 105-33 address the guidelines the MGCRB uses to reclassify hospitals to other geographic areas as well as the timetable under which hospitals must submit applications for reclassification and the MGCRB and the Secretary must make decisions on those applications. 1. Revised Application and MGCRB Timeframes Currently, a hospital must submit an application to the MGCRB for geographic reclassification for a fiscal year by the first day of the preceding fiscal year (that is, October 1, 1997 for reclassification effective in FY 1999). The MGCRB has 180 days to make a decision on that application (no later than March 31 of the fiscal year), the hospital has 15 days to request a review of that decision by the Administrator of HCFA (by April 15), and the Administrator has up to 90 days to issue a final decision (July 15). Under our current publication schedule, the July 15 deadline allows the final geographic reclassification decisions to be incorporated in the wage index and payment rates that are published in the final rule on or about September 1. Sections 4644 (a)(1) and (b)(1) of Public Law 105-33 amend section 1886 (d)(6) and (e) of the Act to provide that the final rule setting the payment rates for years beginning with FY 1999 must be published by August 1. Because this change in publication dates would conflict with the timetable for geographic reclassification decisions, section 4644(c) of Public Law 105-33 amended section 1886(d)(10)(C)(ii) of the Act to require a hospital to submit an application for reclassification no later than the first day of the month preceding the beginning of the Federal fiscal year (that is, by September 1) beginning with applications filed for reclassification for FY 2000. Under this timetable, the amount of time the MGCRB and the Administrator have to make decisions will not change from the current schedule. In addition, because applications filed for reclassification effective in FY 1999 are not due until October 1, 1997, section 4644(c)(2) requires us to shorten the deadlines under section 1886(d)(10)(C) of the Act so that all final decisions on MGCRB applications will be completed by June 15, 1998. We have consulted with the staff of the MGCRB and the reclassification decisions will be made by the MGCRB by February 28, 1998. This will allow final decisions of the Secretary to be completed by June 15, 1998. We are revising Secs. 412.256 and 412.274 to implement the change in the application deadline. 2. Alternative Wage Index Reclassification Guidelines for Individual Hospitals a. In the September 1, 1992 final rule, we revised the wage index guidelines at Sec. 412.230(e) to add the requirement that a hospital cannot be reclassified unless its average hourly wage is at least 108 percent of the average hourly wage of the area in which it is located. For FY 1998 reclassification, section 4409 of Public Law 105-33 requires the Secretary to establish alternative wage index guidelines for geographic reclassification. As provided in the statute, a hospital may reclassify for wage index purposes if it demonstrates that: Its average hourly wage is at least 108 percent of the average hourly wage of all other hospitals in its MSA, that is, not including its own wage data. It pays at least 40 percent of the adjusted uninflated wages in the MSA. It reclassified for the wage index for each of the fiscal years 1992 through 1997. The hospital must also meet all other applicable guidelines (for example, proximity). As noted above, this provision is effective for FY 1998 reclassifications. Because the application and decision making process for FY 1998 reclassification is already completed, we must provide special guidelines for hospitals to apply for reclassification under this provision for FY 1998. A hospital seeking reclassification for FY 1998 under this provision must submit its application to the MGCRB by September 15, 1997. In addition, the hospital must submit 7 copies of a completed application to the MGCRB. The MGCRB will dismiss a hospital's request for reclassification if the completed application is not received by September 15, 1997. If the MGCRB renders a favorable decision on a hospital's application, the hospital will be reclassified for purposes of the wage index for FY 1998 as if that decision had been made under the usual guidelines and timetable. Ordinarily, a hospital seeking MGCRB reclassification for a fiscal year must submit its application by October 1 of the preceding fiscal year, and all reclassification decisions with respect to a fiscal year must be finalized before the beginning of the fiscal year (this includes decisions of the MGCRB as well as decisions of the HCFA Administrator when the Administrator undertakes review). However, sections 4409 and 4410 of Public Law 105-33, enacted on August 5, 1997, set forth special reclassification provisions under which certain hospitals may be reclassified for FY 1998 (beginning on October 1, 1997). The MGCRB will make decisions on applications for reclassification based on these provisions before the beginning of the fiscal year, but it will not be feasible to complete the process for appeals or other review before October 1. Nevertheless, we believe it is appropriate to permit appeals of decisions on requests for reclassification under sections 4409 and 4410. Therefore, for such appeals, we are incorporating the current appeals and [[Page 45988]] review process (including the timetables for a hospital to request review and for the Administrator to complete review) even though that process will not be finalized until after the beginning of the fiscal year. Our general position has been, and continues to be, that changes to the prospective payment rates should be made prospectively only. Nevertheless, given the extraordinary circumstances presented by the recent enactment of the legislation, if a decision on a request for reclassification under section 4409 or section 4410 becomes final under this process after the beginning of the fiscal year, the decision will be effective as of the beginning of the fiscal year. We are revising the regulations at Sec. 412.230(e) to implement this provision. b. In the case of a hospital that is owned by a municipality and that was reclassified as an urban hospital for FY 1996, in calculating the hospital's average hourly wage for the purposes of geographic reclassification for FY 1998 only, section 4410(c) of Public Law 105-33 requires the exclusion of general service wages and hours of personnel associated with a skilled nursing facility that is owned by the hospital of the same municipality and that is physically separated from the hospital to the extent that such wages and hours of such personnel are not shared with the hospital and are separately documented. A hospital seeking reclassification under this provision must submit 7 copies of a completed application to the MGCRB by September 15, 1997. The MGCRB will dismiss a hospital's request for reclassification if the completed application is not received by September 15, 1997. If the MGCRB renders a favorable decision on a hospital's application, the hospital will be reclassified for purposes of the wage index for FY 1998 as if that decision had been made under the usual guidelines and timetable. The special appeals procedures discussed earlier apply to this context as well. 3. Alternative Guidelines for Rural Referral Centers Currently, under section 1886(d)(10)(D) of the Act, rural referral centers (RRCs) are allowed to apply to the MGCRB to be reclassified for purposes of the wage index adjustment. To be reclassified, RRCs must meet the following criteria: The hospital's average hourly wage must be at least 108 percent of the Statewide rural hourly wage. The hospital's average hourly wage must be at least 84 percent of the average hourly wage of the target urban area to which the RRC is applying. As provided in section 4202 of Public Law 105-33, the MGCRB is prohibited from rejecting a hospital's request for reclassification on the basis of any comparison between the average hourly wage and the average hourly wage of hospitals in the area in which the hospital is located if the hospital was ever classified as an RRC. However, RRCs will continue to be required to have an average hourly wage that is at least 84 percent of the average hourly wage of the target urban area to which the RRC is applying. In addition, while RRCs do not have to meet the proximity requirements for reclassification, they continue to be required to seek reclassification to the nearest urban area. We are revising Sec. 412.230(a)(3) to implement this provision. 4. Reclassification for the Disproportionate Share Adjustment Section 4203 of Public Law 105-33 provides that for a limited time a rural hospital may apply and qualify for reclassification to another area for purposes of disproportionate share adjustment payments whether or not the standardized amount is the same for both areas. For 30 months after the date of enactment of Public Law 105-33, the MGCRB will consider the application under section 1886(d)(10)(C)(i) of a hospital requesting a change in the hospital's geographic classification for purposes of determining for a fiscal year eligibility for and additional payment amounts under section 1886(d)(5)(F) of the Act. Under Public Law 105-33, the MGCRB will apply the guidelines for standardized amount reclassification (Sec. 412.230(d)) until the Secretary establishes separate guidelines. Therefore, hospitals seeking such reclassification for FY 1998 must submit a reclassification application to the MGCRB by October 1, 1997. Decisions based on these applications will be effective for FY 1999 (beginning on October 1, 1998). Section 4203 of Public Law 105-33 is effective for the 30 month period beginning on the date of enactment. Accordingly, hospitals may seek reclassification for purposes of DSH for FY 2000 and FY 2001. We are revising Sec. 412.230(a)(5)(ii) of the regulations to implement this provision. 5. Occupational Mix Adjustment Section 412.230(e) describes the criteria for hospital reclassification for purposes of the wage index. One of the criteria relates to the relationship between the hospital's wages and those of the area to which it seeks reclassification. Specifically, Sec. 412.230(e)(1)(iv) provides that the hospital must demonstrate that its wages are at least 84 percent of the average hourly wage of hospitals in the area to which it seeks reclassification, or that the hospital's average hourly wage weighted for occupational mix is at least 90 percent of the average hourly wage of hospitals in the area to which it seeks reclassification. Under Secs. 412.232(c) and 412.234(b), a group of hospitals seeking to reclassify must demonstrate that its aggregate average hourly wage is at least 85 percent of the average hourly wage of the hospitals in the area to which it seeks reclassification. These sections also provide that the threshold for the occupational-mix adjusted hourly wage for hospital groups is the same as that for a single hospital, that is, 90 percent. In the August 30, 1996 final rule, we stated that, because the American Hospital Association (AHA) was terminating its collection of information on the Hospital Personnel by Occupation Category as of 1994, there would be no suitable source of occupational mix data for hospitals to use for geographic reclassification under Secs. 412.230(e)(1)(iv), 412.232(c) and 412.234(b) beginning with reclassifications effective for FY 1999 (61 FR 46185). In that rule, we stated that we would not make a final decision on this issue until the next year in case another suitable source of occupational mix data were found. Although we did not include any alternative data source in the proposed rule, we received some comments suggesting another way to obtain occupational mix data. Comment: One commenter proposed a methodology for collecting occupational mix data for those hospitals that seek to be reclassified through the MGCRB process using occupational mix data as part of their wage index calculations. The commenter proposed the following process: Any hospital that wants to use the 90 percent occupational mix adjustment criteria should be allowed to use the 1993 AHA data for FY 1999 reclassifications, which must be filed by October 1, 1997. For any hospital that successfully reclassifies for FY 1999 using the 1993 AHA data, HCFA would contact the State or local hospital associations in the State in which the reclassified hospital is located to obtain more current occupational mix data for the affected MSAs that could be used by the individual hospital for future years' occupational mix data. In some cases, there may be costs incurred in collecting these data. The commenter suggested that the individual reclassified hospitals would bear any costs of data collection incurred by the State or local hospital [[Page 45989]] associations or, alternatively, the costs could be distributed by the associations to the individual hospitals in the MSA asked to provide these data. The applicable hospital associations would provide the data to HCFA for any data review deemed necessary by HCFA. The individual hospitals would obtain the occupational mix data directly from HCFA after HCFA had completed any data edits or performed any other procedures that HCFA believes necessary to determine the validity and usability of the data. The data would be collected in a single survey for FY 1995, FY 1996, and FY 1997 to correspond with the next 3 years of wage survey data. Thus, current data would be available for the next 3 years for the individual MSA to which a hospital was successfully reclassified using the 90 percent occupational mix data. For future years, individual hospitals seeking to qualify using the occupational mix criterion for a wage index reclassification to an MSA where the data are not already being collected could use the 1993 AHA data for the first year. This would then trigger a data accumulation request for that area. It is the opinion of the commenter that this would allow all prospective payment hospitals to use the 90 percent criterion if needed. Three State hospital associations also wrote to indicate support for this proposal. The AHA supports the use of its 1993 occupational mix data on an interim basis. In addition, although the AHA does not wish to be the future vehicle of data collection, it supports the concept of hospitals designing a method to collect occupational mix data for use in future years. Response: As we stated in the June 4, 1991 final rule with comment period (56 FR 25458), the reclassification process requires the use of occupational mix data that are comparable across areas and that can be consistently applied. We are unaware of any sources other than the AHA data that meet these criteria. (Originally, these data were also available from the Department of Labor Statistics, which has since discontinued its hospital wage survey.) We responded to comments on this issue in the August 30, 1996 final rule (61 FR 46186). In that document, we reiterated that we were interested only in occupational mix data that are available on a national basis. We also noted that we were not interested in collecting the data ourselves. The commenter's proposal fails to meet the ``national basis'' criterion that we set. The commenter proposes that only hospitals in certain areas would have to report occupational mix data. This does not provide a national database for those other hospitals that might want to use the data at some future time, nor does it allow verification of the data through edit checks performed on a national basis, such as those that we perform on the wage data. The commenter also proposes that HCFA ensure that the data are collected and that HCFA edit and validate the data and provide them to those who request the data. We do not want to be either the requestor or the repository of these data, nor do we have the resources to edit or validate these data. In addition, this proposal contemplates the use of the 1993 AHA data for several years. For example, if a hospital first attempts to qualify using occupational mix data for FY 2002 in an area not already collecting these data, it would have to use the 1993 AHA occupational mix categories to adjust 1997 wage data. We believe that this would not be an accurate measure of the hospital's weighted average hourly wage for purposes of reclassification. Finally, the commenter suggests that those hospitals that benefit from the use of occupational mix data should fund the data collection effort. This could lead to some inconsistency in availability of the data. If some hospitals that could benefit are unable to fund the collection effort, they would be at a disadvantage. Moreover, we are uncomfortable with the concept of allowing hospitals that will benefit from certain data to pay others for those data. We are unsure about how the payment incentive might influence the data. Since we have discovered no other suitable source of occupational mix data during the past year, we have no updated occupational mix data to correspond with the FY 1994 wage data that will be used for FY 1999 reclassifications. Therefore, this option will no longer be available to hospitals. We have amended the regulations at Secs. 412.230(e), 412.232(c), and 412.234(b) to reflect this decision. We remain interested in any occupational mix data proposals that meet our criteria. D. Requests for Wage Data Corrections In the proposed rule, we stated that, as in past years, we would make a data file available in mid-August containing the wage data used to construct the wage index values in the final rule. (Please note that this data file is also available through the Internet at HCFA's home page (http://www.hcfa.gov).) As with the file made available in March 1997, HCFA makes the August wage data file available to hospital associations and the public. This August file is being made available only for the limited purpose of identifying any potential errors made by HCFA or the intermediary in the entry of the final wage data that result from the process described above, not for the initiation of new wage data correction requests. If, after reviewing the August data file or the information in this final rule, a hospital believes that its wage data are incorrect due to a fiscal intermediary or HCFA error in the entry or tabulation of the final wage data, it should send a letter to both its fiscal intermediary and HCFA. The letters should outline why the hospital believes an error exists and provide all supporting information, including dates. These requests must be received by HCFA and the intermediaries no later than September 15, 1997. Requests mailed to HCFA should be sent to: Health Care Financing Administration; Center for Health Plans and Providers; Attention: Stephen Phillips, Technical Advisor; Division of Acute Care; C5-06-27; 7500 Security Boulevard; Baltimore, MD 21244-1850. Each request also must be sent to the hospital's fiscal intermediary. The intermediary will review requests upon receipt and contact HCFA immediately to discuss its findings. As noted in the proposed rule, after mid-August, we will make changes to the hospital wage data only in those very limited situations involving an error by the intermediary or HCFA that the hospital could not have known about before its review of the August wage data file. Specifically, after that point, neither the intermediary nor HCFA will accept the following types of requests in conjunction with this process: Requests for wage data corrections that were submitted too late to be included in the data transmitted to HCRIS on or before June 16, 1997. Requests for correction of errors that were not, but could have been, identified during the hospital's review of the March 1997 data. Requests to revisit factual determinations or policy interpretations made by the intermediary or HCFA during the wage data correction process. Verified corrections to the wage index received timely (that is, by September 15, 1997) will be effective October 1, 1997. We believe the wage data correction process described above provides hospitals with sufficient opportunity to bring errors in their wage data to the intermediary's attention. Moreover, because hospitals had access to the wage data in mid-August, they will have [[Page 45990]] had the opportunity to detect any data entry or tabulation errors made by the intermediary or HCFA before the implementation of the FY 1998 wage index on October 1, 1997. If hospitals avail themselves of this opportunity, the wage index implemented on October 1 should be free of such errors. Nevertheless, in the unlikely event that such errors should occur, we retain the right to make midyear changes to the wage index under very limited circumstances. Specifically, in accordance with Sec. 412.63(s)(2), we may make midyear corrections to the wage index only in those limited circumstances where a hospital can show: (1) that the intermediary or HCFA made an error in tabulating its data; and (2) that the hospital could not have known about the error, or did not have an opportunity to correct the error, before the beginning of FY 1998 (that is, by the September 15, 1997 deadline). As indicated earlier, since a hospital will have had the opportunity to verify its data, and the intermediary will notify the hospital of any changes, we do not foresee any specific circumstances under which midyear corrections would be made. However, should a midyear correction be necessary, the wage index change for the affected area will be effective prospectively from the date the correction is made. E. Modification of the Process and Timetable for Updating the Wage Index Although the wage data correction process described above has proven successful for ensuring that the wage data used each year to calculate the wage indexes are generally reliable and accurate, we expressed concern in the proposed rule that there have been an excessive number of revisions being requested after the release of the wage data in mid-March. Last year, in developing the FY 1997 wage index, the wage data were revised between the proposed and the final rules for more than 13 percent of the hospitals (approximately 700 of 5,200). The number of revisions this year was similar. Since hospitals are expected to submit complete and accurate data, and the data are reviewed and edited by the intermediaries and HCFA, we believe that we should be making few revisions after the release of the March wage data file. According to information received from the intermediaries, these late revisions are partly due to the lack of responsiveness of hospitals in providing sufficient information to the intermediaries during the desk reviews (that is, during the intermediary's review of the hospital's cost report). Our analysis of last year's wage data also showed that, although the volume of revisions was high, the effect of the changes on the wage index was minimal. Of the 370 labor market areas, only 4 (1.1 percent) experienced a change of 5 percent or more in their wage index value and only 39 (10.6 percent) experienced a change of 1 percent or more. Thus, the intensity of work that must be performed in order to incorporate these revisions in the 1 month available between the mid-June date for revision requests and the mid-July date by which we must begin calculation of the final wage index is not warranted in light of the minimal changes to the actual wage index values. Another feature of the current process is that it results in corrections to the final wage index after the September 1 final rule publication and before the October 1 effective date of the wage index. Immediately following the development of the final wage index, a second wage data file is made available in mid-August so that hospitals may again verify the accuracy of their wage data. If a hospital detects an error made by the intermediary or HCFA in the handling (entry or transmission) of the wage data, the hospital may request a correction (this year, by September 15). The corrections are published in the Federal Register after the October 1 implementation date in a correction notice to the final rule. We would prefer to minimize the need to republish certain wage index values after the final rule is in effect. Finally, hospitals base their geographic reclassification decisions (whether or not to withdraw their applications) on the wage index published in the proposed rule. Although the FY 1997 proposed and final wage indexes were quite similar, we cannot ensure this will happen each year if increasing numbers of hospitals delay the submittal to their intermediaries of wage data supporting documentation until the May 15 deadline. We believe that hospitals could make more informed decisions regarding reclassification if the proposed wage index more closely resembles the final wage index. Therefore, in the proposed rule, we discussed possible revisions to the wage data verification process. 1. Process and Timetable The major change we proposed to the current process was the requirement that wage data revisions be requested (and resolved) earlier, before publication of the proposed rule. Subsequent corrections would be allowed only for errors in handling the data (our current timetable allows for such corrections after the final rule is published). For example, the FY 1999 wage index will use FY 1995 cost report data (that is, cost reports beginning in FY 1995) and become effective October 1, 1998. Under the proposed timetable, hospitals would be required to submit all requests for wage data revisions to their intermediary by mid-December 1997. We indicated this would provide ample opportunity for hospitals to evaluate the results of intermediaries' desk reviews and prepare any requests for corrections. We noted that the desk reviews are to be performed on an ongoing basis as cost reports are received from hospitals and, for the FY 1995 wage data, must be completed prior to the mid-November 1997 deadline for submitting all FY 1995 wage data to HCRIS. As under the current process, after reviewing requests for wage data revisions submitted by hospitals, fiscal intermediaries would transmit any revised cost report to HCRIS and forward a copy of the revised wage index Worksheet S-3 to the hospital. If requested revisions are not accepted, the fiscal intermediaries would notify the hospital in writing of reasons why the changes were not accepted. We believe that fiscal intermediaries are generally in the best position to make evaluations regarding the appropriateness of a particular cost and whether it should be included in the wage index data. However, if a hospital disagrees with the intermediary's policy interpretation, the hospital may contact HCFA in an effort to resolve the dispute. All policy issues would be resolved by mid-January. The proposed timetable for developing the annual update to the wage index was as follows (an asterisk indicates no change from prior years): Mid-November* All desk reviews for hospital wage data are completed and revised data transmitted by intermediaries to HCRIS. Mid-December Deadline for hospitals to request wage data revisions and provide adequate documentation to support the request. Mid-January Deadline for intermediaries to submit to HCRIS all revisions resulting from hospitals' requests for adjustments (as of mid-December) (and verification of data submitted to HCRIS (as of mid- November)). Early April Edited wage data are available for release to the public. May 1* Proposed rule published with 60-day comment period and 45-day withdrawal deadline for geographic reclassification. [[Page 45991]] Early May (2 weeks after publication of proposed rule) Deadline for hospitals to notify HCFA and intermediary that wage data are incorrect due to mishandling of data (that is, error in data entry or transmission) by intermediary or HCFA. Late May (2 weeks after previous deadline) Deadline for intermediaries to transmit all revisions to HCRIS. September 1* Publication of the final rule. October 1* Effective date of updated wage index. The most significant change reflected in the proposed timetable is that we would no longer make available a preliminary wage data file prior to hospitals' final opportunity to request corrections. As noted in section V of this preamble, section 4644(b) of Public Law 105-33 requires that, beginning with FY 1999, we publish a proposed rule on changes to the prospective payment system by April 1 prior to the fiscal year when such changes are to become effective, and a final rule by August 1. In light of this and for other reasons discussed below, we are revising this proposed timetable for preparing the FY 1999 wage index to allow for release of a public use file containing the edited preliminary FY 1995 wage data. 2. Cost Reporting Timetable In the proposed rule, we stated that the proposed timetable would not significantly alter the time hospitals have to ensure the accuracy of their data. In developing the wage index for a given fiscal year, we use the most recent, reviewed wage data, that is, wage data from cost reports that began in the fiscal year 4 years earlier. For example, for the FY 1999 wage index, we will use data from cost reporting periods beginning in FY 1995. Hospitals must submit cost reports to their intermediaries within 150 days of the end of their cost reporting periods. Once the cost report is received, the intermediary has 12 months to review and settle it. As part of the settlement process, we require intermediaries to conduct a desk review of the wage data. The desk review program for hospital wage data targets potentially aberrant data and checks the completeness and accuracy of the data, including verifying that reported costs are in conformance with our policy, before they are used in calculating the wage index. The intermediary checks the wage data and supporting documentation submitted by the hospital and contacts the hospital if additional information is needed to verify the accuracy of the data. When it is necessary for the intermediary to adjust a hospital's wage data, the intermediary notifies the hospital in writing of the change to the cost report and hospitals then have the opportunity to request adjustments. This would continue to be the case. Since intermediaries must settle cost reports within 12 months of their receipt, most of the cost reports are settled by the time we compile the data to calculate the wage index. We note, however, that the annual update of the wage index is not tied directly to the cost report settlement process since extensions or reopenings of settled cost reports may be granted. The following is an illustration of the process for settling a typical cost report beginning in FY 1995. Of course, hospitals' cost reporting periods may begin at any time during the year. January 1, 1995 Cost reporting period begins. December 31, 1995 Cost reporting period ends. May 31, 1996 Cost report must be submitted by the hospital to the intermediary. July 31, 1996 Cost report must be transmitted by the intermediary to HCRIS. May 31, 1997 Cost report must be settled by the intermediary. (Desk review of hospital wage data is performed on an ongoing basis by the intermediary before the cost report is settled.) July 31, 1997 Settled cost report must be transmitted by the intermediary to HCRIS. Comment: One association representing fiscal intermediaries objected to our statement that the intermediaries must settle cost reports within 12 months of their receipt. The commenter stated that this is not consistent with our current audit and reimbursement performance standards. Response: The regulations at Sec. 405.1835(c) provide that the intermediary has up to 12 months from receipt of a cost report in which to settle it. For purposes of the contractor performance evaluation program (CPEP) for FY 1997, the standard is that the intermediary has at least 21 months from receipt of a hospital's cost report in which to settle it. While we are not changing the CPEP instructions or standards for FY 1997, the instructions are subject to change from year to year. Therefore, in the discussion of the wage index timetable, we used the cost report settlement information from the regulations, which are relatively constant, not the performance evaluation standard, which is subject to change from year to year. Since we are required by statute to update the wage index on an annual basis, the wage index update is not tied directly to the cost report settlement process as the settlement may be delayed for several reasons, including allowances by the CPEP, extensions, and reopenings. Comment: The same commenter was also concerned that the proposed modification to the timetable for developing the FY 1999 wage index would require intermediaries to complete desk reviews for two cost reporting periods within the same budget year and that this substantial increase in work would require additional funding. Response: Regarding the commenter's concern that additional funding would be needed to handle the increased desk review workload (which would result from revising the timetable as proposed), in the instructions for the wage index desk review the intermediaries are instructed to perform the desk reviews as the cost reports are received. We do not agree with the commenter's assertion that shortening the timeframe for developing the wage index will result in a substantial increase in the intermediaries' workload. In fact, as we pointed out in the preamble to the proposed rule, under the current process, intermediaries are required to verify the inclusion and accuracy of all hospitals' wage data twice during the wage index development. Our proposed timetable would have eliminated the need for the second verification by the intermediaries. Comment: One hospital association suggested that the number of late revisions could be reduced if intermediaries completed the wage data desk reviews within 60 days from receipt of hospitals' cost reports and if HCFA and the intermediaries would use the same edits. Others commented that HCFA's edits are unrealistic and that improved edits would reduce the need for a preliminary wage data file. Response: We agree with the commenter's suggestion that the number of late revisions could be reduced if intermediaries completed the wage data desk reviews soon after receipt of the hospitals' cost reports. There is a desk review being developed to perform an automated review of the entire cost report, including the hospital wage index information, as the cost reports are received by the intermediary. The expectation is that desk review would integrate the editing of the wage data and the other cost report data, as well [[Page 45992]] as eliminate the need for a separate desk review of the wage data by the intermediary and editing of the wage data by HCFA. Until that desk review is in place, the wage data desk review is a necessary part of the annual update to the wage index. Regarding the edits, the same types of edits are used by HCFA and the intermediaries. The initial edits, performed by the intermediary in the desk review, are broad in order to identify problem areas. We then perform a more focused review, using the same types of edits as in the desk review, once the data are received and aggregated. Also, additional edits on the aggregated data are performed. We update the wage data edits each year and will reevaluate and revise the types and thresholds of the edits to better identify incomplete or inaccurate data. 3. The Final Revised Timetable for Finalizing Wage Data We received approximately 40 comments regarding our proposal to reduce the amount of time for developing the wage index. Comment: Most of the commenters were opposed to our proposal, stating that it would reduce the number of days that the hospital industry has for reviewing the wage data. Another commenter believes that the fact that the preliminary wage data file is released only 2 months prior to the mid-May deadline for revisions is the main cause of late submissions. One hospital added that the expedited timeframe would be disadvantageous for rural hospitals, especially in an environment in which their wage index values are decreasing while the urban values are increasing. Response: We continue to believe that expediting the resolution of all wage data issues earlier in the process will improve the accuracy of the wage index. Hospitals are ultimately responsible for the accuracy of their cost report information. Because intermediaries are required to notify hospitals of changes to their cost reports, including those affecting the wage data, we do not agree that the timing of the release of the preliminary data file is the cause for the volume of last minute revisions. Hospitals should know what is included in their wage data well before the release of this file. In fact, our intent in releasing the preliminary data file is primarily to allow hospitals to verify that the data on file at HCFA matches their latest wage data information. We remain concerned that the release of the preliminary file itself and the final opportunity for revisions it provides actually encourages hospitals to wait to request revisions until after its release. With regard to the comment that the proposed timetable would adversely impact rural hospitals, it is not clear to us from the comment how this proposal would have that effect. By placing greater emphasis on individual hospitals to ensure the accuracy of their data earlier in the process, we believe the result would be a more accurate wage index overall. Comment: Two commenters stated that they agreed that the schedule for developing the wage data should be shortened, but that HCFA should continue to make available the preliminary wage data file. A few commenters suggested that the preliminary file could be released to the public earlier, for example, in mid-December (about 30 days after the deadline for the intermediaries to transmit the data to HCRIS) to reduce the amount of late changes. Response: Due to the requirement that the changes to the inpatient prospective payment system be published one month earlier (beginning with FY 1999), we have no choice but to expedite this process. Although commenters suggested that a preliminary file could be released in mid- December, that date would not provide sufficient time for the fiscal intermediaries to verify hospitals' data that are included on the file. We believe it would be counterproductive to ask the industry to review the data file prior to the fiscal intermediaries' verification. However, in light of the concerns about eliminating the preliminary file, we plan to make available an edited, preliminary FY 1995 wage data file in February 1998. Comment: Several commenters stated that since the wage data requirements in the FY 1995 cost report have changed significantly from previous years, it would be inappropriate to implement an expedited process for the FY 1999 wage index. Two hospital associations commented that they evaluated preliminary FY 1995 wage data from the HCRIS Minimum Data Set and concluded that the data showed serious reporting problems. Many of the commenters stated that the hospital industry uses the preliminary file to evaluate the quality of the wage data and to ensure that Medicare payment is properly allocated among hospitals. Some of the commenters said that the wage data would likely be less accurate without the industry's review of the preliminary wage data file. One association added that, without the edited preliminary file, those evaluating hospital wage data would have to rely on the HCRIS file, which is less accurate and less complete. Response: Effective with cost reporting periods beginning on or after October 1, 1994, we revised the Medicare cost report to provide for the separate reporting of all salary costs for physicians (including teaching physicians), residents, and CRNAs. In addition, in order to analyze the feasibility of excluding overhead costs attributable to skilled nursing facilities and other excluded areas, overhead cost data is collected by cost center. After evaluating these data, we will consider appropriate changes in developing the FY 1999 and future wage index updates. Thus, we have decided to release a preliminary wage data file for the FY 1999 wage index prior to hospitals' final opportunity to request corrections. The combination of the changes to the FY 1995 wage data, the earlier publication schedule, and the comments we received regarding the timing of intermediaries' audits caused us to reverse our intention to eliminate the preliminary data file during the processing of the FY 1999 wage index and to make other adjustments. Therefore, we are making several changes to the current timetable as well as the timetable we proposed. The most significant of these changes is that the preliminary public use file will now be made available in February (we will contact the hospital industry regarding the precise release date), and that hospitals will then have 30 days (rather than the current 60 days) to request revisions to their data. This shortened review period is necessitated by the earlier publication date and our intent to eliminate the need for an annual correction notice reflecting changes due to data handling errors. We believe that this will enable us to utilize the hospital industry's analyses to help ensure the accuracy of the data. However, due to the earlier publication schedule, hospitals will have only 30 days to review their data and request adjustments. We believe the trade-off between making preliminary data available earlier and shortening the time for review is fair. Intermediaries will have 30 days to review the requests, make their determinations, and transmit the revised data to HCRIS. We plan to release a final wage data file in May for the limited purpose of allowing hospitals the opportunity to identify errors made by HCFA or the intermediary in the transmission of the final wage data. We anticipate that this revised timetable will meet our objective of enabling us to correct any data errors contained in the final wage data file prior to publication of the final rule on August 1. [[Page 45993]] Thus, the final revised timetable is as follows: Mid-November--All desk reviews for hospital wage data are completed and revised data transmitted by fiscal intermediaries to HCRIS. Early February--Edited wage data are available for release to the public. Early March--Deadline for hospitals to request wage data revisions and provide adequate documentation to support the request. Early April--Deadline for intermediaries to transmit appropriate revised wage data to HCRIS. April 1--Proposed rule published with 60-day comment period and 45- day withdrawal deadline for geographic reclassification. Early May--Final wage data are available for release to the public. Early June--Deadline for hospitals to notify HCFA and their fiscal intermediary that wage data are incorrect due to mishandling of data (that is, an error in data entry or transmission) by intermediary or HCFA. August 1--Publication of the final rule. October 1--Effective date of updated wage index. We believe this timetable, like the timetable reflected in the proposed rule, is a logical step in the evolution of the process for compiling the wage data used to calculate the hospital wage index. For a number of years, the hospital wage index was based on a wage survey that was not updated every year. Applicable policies permitted hospitals to request and receive midyear corrections to the data on the wage survey. Beginning with FY 1994 (beginning on October 1, 1993), we used wage data submitted by hospitals on Worksheet S-3, Part II of the hospital cost report, and we update the wage data every year. We revised our wage data process accordingly--we stopped making midyear corrections to the wage data (except under very limited circumstances, as noted below), and instead attempted to finalize the wage data by the final rule. The new timetable would shorten the time for revisions somewhat further. Because we have used cost report data for 5 years now, hospitals should be well aware of the importance of submitting accurate wage data on the Worksheet S-3, Part II. Also, as intermediaries and hospitals have become increasingly familiar with the data collection and verification process, handling the data has become more routine and streamlined. For example, over the past year, we have greatly improved the overall efficiency of our communications with the intermediaries through greater reliance on electronic transmission of wage data. In short, then, there should be less need for revising wage data after desk reviews, and we believe it is reasonable and appropriate to revise the timetable for requesting and resolving wage data revisions. We would continue to make midyear corrections to the wage index in accordance with Sec. 412.63(s)(2), in those limited circumstances where a hospital can show: (1) that the intermediary or HCFA made an error in tabulating its data; and (2) that the hospital could not have known about the error, or did not have an opportunity to correct the error, before the beginning of the fiscal year. Although we do not anticipate that such situations would arise, this regulation would remain unchanged. F. Wage Index Workgroup As stated in the proposed rule, we are concerned that the rapid and dramatic changes occurring in hospitals' operating environments, combined with the current time lag in the data used to construct the wage index, is leading to a situation where the wage index may be becoming less representative of hospitals' current labor costs. Hospitals' increasing reliance on contract labor for a broadening array of functions, hospital mergers and the development of integrated delivery systems, and the expansion of the prospective payment system to other sites of care are factors that indicate a need for a concerted effort to ensure that the data required for calculating the wage index are available and reliable. Furthermore, despite the improvements that resulted from the work of the special Medicare Technical Advisory Group (MTAG) several years ago, technical questions about the treatment of certain types of labor costs continue to arise. For these reasons, we believe there is a need for an ongoing workgroup to address wage index related issues periodically. We solicited input from representatives of the hospital industry (and other provider types interested in the collection of wage data) regarding the need for such a workgroup and their willingness to participate. We also sought public input regarding the structure and scope of such a workgroup. Comment: The response to the proposed wage index workgroup was favorable. Some commenters believe the group should be formally established and meet on a regular basis to ensure the attention and resources needed to accomplish its objectives. Several commenters recommended that the wage index workgroup be formed under the auspices of the MTAG. Another commenter suggested that a workgroup formed on an ad hoc basis, with one or more specific issues to address, might be the best way to structure the group. Several commenters stated that the group's agenda should be broadly defined to encompass input price adjustment issues related to hospitals, skilled nursing facilities, home health agencies, rehabilitation facilities, and managed care plans. Some commenters expressed interest in participating in such a workgroup. Response: We will proceed with the development of the wage index workgroup. We will be in contact with interested parties to arrange a meeting to discuss issues related to its structure and focus. We appreciate the enthusiastic responses, and believe that utilization of a workgroup will expedite many procedural improvements in the wage index process. IV. Revising the Hospital Operating Market Baskets A. General Discussion We used a hospital input price index (that is, the hospital ``market basket'') to develop the inflation component update factors for operating costs. Although ``market basket'' technically describes the mix of goods and services used to produce hospital care, this term is also commonly used to denote the input price index (that is, cost category weights and price proxies combined) derived from that market basket. Accordingly, the term ``market basket'' as used in this document refers to the hospital input price index. The terms rebasing and revising, although often used interchangeably, actually denote different activities. Rebasing moves the base year for the structure of costs of an input price index (for example, moving the base year cost structure from FY 1987 to FY 1992). Revising means changing data sources, cost categories, or price proxies used in the input price index for a given base year. In the August 30, 1996 final rule, effective for FY 1997, we both rebased and revised the hospital operating market baskets (61 FR 46186). B. Revising the Hospital Market Basket We used a revised hospital market basket for the FY 1998 update framework for the operating prospective payment rates. In the August 30, 1996 final rule, we discussed the possibility of revising the market basket when additional data became available (61 FR 46187). Consistent with that discussion, we used a revised market basket that still has a base year of FY 1992, but [[Page 45994]] incorporates additional data, specifically the Asset and Expenditure Survey, 1992 Census of Service Industries, by the Bureau of the Census, Economics and Statistics Administration, U.S. Department of Commerce, which did not become available until after the FY 1997 final rule was published. (For further discussion of the differences between the revised market basket for FY 1998 and the current market basket, see Appendix C of this final rule with comment period.) In the current market basket, data for four major expense categories (wages and salaries, employee benefits, pharmaceuticals, and a residual category) are from Medicare hospital cost reports for periods beginning in FY 1992 (that is, periods beginning on or after October 1, 1991 and before October 1, 1992). These cost reports, which we refer to as PPS-9 cost reports (the 9th year of the prospective payment system), are reported in the Health Care Provider Cost Report Information System (HCRIS). In the revised hospital market basket, we still use the cost report data, and categories and weights are unchanged from the current market basket. Within the residual category, the categories and weights for nonmedical professional fees and professional liability insurance are also unchanged. (For a detailed discussion of the determination of weights, see the August 30, 1996 final rule (61 FR 46187)). Table 1 shows a comparison of the current and the revised operating market basket cost categories, weights, and price proxies. For the revised market basket, weights for the ``Utilities'' and ``All Other'' cost categories, as well as most subcategories, were derived using the Asset and Expenditure Survey, published by the Bureau of the Census, Economics and Statistics Administration, U.S. Department of Commerce, in conjunction with the latest available (1987) Input-Output Table, produced by the Bureau of Economic Analysis (BEA), U.S. Department of Commerce. The 1987 input-output cost shares, aged to 1992 using historical price changes between 1987 and 1992 for each category, were allocated to be consistent with the newly available 1992 asset and expenditure data. The resulting combined data were allocated to be consistent with the 1992 hospital cost report data. Revised relative weights for the base year were then calculated for various expenditure categories. This work resulted in the identification of 22 separate cost categories in the revised market basket. Four categories previously separate were combined with existing categories. Specifically, Business Services, and Computer and Data Processing Services were combined with All Other Labor-Intensive Services. Transportation Services was combined with All Other Nonlabor-Intensive Services, and the Fuel, Oil, Coal etc. category was split between Fuels (nonhighway) and Miscellaneous Products. We combined these categories so that the market basket would conform more closely with the 1992 Asset and Expenditure Survey. Detailed descriptions of each of the four categories and their respective price proxies can be found in the August 30, 1996 final rule (61 FR 46323). Changing the structure of the market basket using the 1992 Asset and Expenditure Survey allows for a more accurate reflection of the cost structures faced by hospitals. When the Bureau of the Census or the BEA improves methodologies for the collection and categorization of data, it is likely the weights will also change. Table 1.--Comparison of Current 1992-Based Prospective Payment Hospital Market Basket with Revised 1992-Based Prospective Payment Hospital Market Basket ------------------------------------------------------------------------ Current Revised 1992- 1992- Expense categories Price proxy based PPS based PPS market market basket basket -------------------------------------------------------\1\-------------- 1. Compensation:............ .................... 61.390 61.390 A. Wages and salaries... HCFA occupational 50.244 50.244 wage index. B. Employee benefits.... HCFA occupational 11.146 11.146 benefits index. 2. Nonmedical professional ECI-compensation for 2.127 2.127 fees. professional, specialty, and technical. 3. Utilities:............... .................... 2.470 1.542 A. Electricity.......... PPI commercial 1.349 0.927 electric power. B. Fuels (nonhighway)... PPI commercial 1.015 0.369 natural gas. C. Water and sewerage... CPI-U water and 0.106 0.246 sewerage maintenance. 4. Professional liability HCFA professional 1.189 1.189 insurance. liability insurance premium index. 5. All other expenses:...... .................... 32.825 33.752 A. All other products:.. .................... 24.033 24.825 (1) Pharmaceuticals... PPI ethical 4.162 4.162 (prescription) drugs. (2) Food.............. .................... 3.459 3.386 (a) Direct purchase... PPI processed foods 2.363 2.314 and feeds. (b) Contract service.. CPI food away from 1.096 1.072 home. (3) Chemicals......... PPI industrial 3.795 3.666 chemicals. (4) Medical PPI medical 3.128 3.080 instruments. instruments and equipment. (5) Photographic PPI photographic 0.399 0.391 supplies. supplies. (6) Rubber and PPI rubber and 4.868 4.750 plastics. plastic products. (7) Paper products.... PPI converted paper 2.062 2.078 and paperboard products. (8) Apparel........... PPI apparel......... 0.875 0.869 (9) Machinery and PPI machinery and 0.211 0.207 equipment. equipment. (10) Miscellaneous PPI finished goods.. 1.074 2.236 products. B. All other services:.. .................... 8.792 8.927 (1) Postage........... CPI-U postage....... 0.272 0.272 (2) Telephone services CPI-U telephone 0.531 0.581 services. (3) All other: labor ECI compensation for 7.457 7.277 intensive. private service occupations. (4) All other: CPI-U all items..... 0.532 0.796 nonlabor intensive. [[Page 45995]] Total............... .................... 100.000 100.000 ------------------------------------------------------------------------ Note: Due to rounding, weights may not sum to total. \1\ Expense categories based on revised 1992-based hospital market basket for comparison purposes. In calculating payments to hospitals, the labor-related portion of the standardized amounts is adjusted by the hospital wage index. As discussed in the August 30, 1996 final rule (61 FR 46189), for purposes of determining the labor-related portion of the standardized amounts, we sum the percentages of the labor-related items (that is, wages and salaries, employee benefits, professional fees, business services, computer and data processing services, postage, and all other labor- intensive services) in the operating hospital market basket. Effective for FY 1997, this summation resulted in a labor-related portion of the hospital market basket of 71.246 percent, and a nonlabor-related portion of 28.754 percent. Thus, since October 1, 1996, we have considered 71.2 percent of operating costs to be labor-related for purposes of the prospective payment system (we rounded to the nearest tenth). In connection with the revisions to the hospital market basket, we have reestimated the labor-related share of the standardized amounts. Based on the relative weights described in Table 2, the labor-related portion (wages and salaries, employee benefits, professional fees, postage, and all other labor-intensive services) is 71.066 percent, and the nonlabor-related portion is 28.934 percent. Accordingly, effective with discharges occurring on or after October 1, 1997, we are revising the labor-related and nonlabor-related shares of the large urban and other areas' standardized amounts used to establish the prospective payment rates to 71.1 and 28.9, respectively. The amounts in Table 2 reflect the revised labor-related and nonlabor-related portions. We note that the labor-related portions of the rates published in Table 2 have remained approximately the same. The labor-related portion has decreased from 71.2 percent to 71.1 percent. Table 2.--Labor-Related Share of Revised 1992-Based Prospective Payment Hospital Market Basket ------------------------------------------------------------------------ Cost category Weight ------------------------------------------------------------------------ Wages and salaries............................................ 50.244 Employee benefits............................................. 11.146 Professional fees............................................. 2.127 Postal services............................................... 0.272 All other labor intensive..................................... 7.277 --------- Total labor-related....................................... 71.066 Total nonlabor-related.................................... 28.934 ------------------------------------------------------------------------ Comment: We received comments encouraging us to revisit the market basket framework annually to adjust for changes such as additional administrative costs for hospitals that revise their Medicare billing procedures to screen claims in response to current policies such as the 3-day payment window and pending legislation such as the change in definition of a transfer. Response: When slight adjustments are made to individual weights within the hospital market baskets, there is typically little or no change in the historical or forecasted market baskets. A shift in weights from one cost category to another results in a zero sum. Cost categories rising in relative importance are offset by cost categories falling in relative importance. The total weight is 100 before and after the shift. There is an impact on the weighted average of price changes only when the price changes (not levels) of the cost categories shifted are substantially different. This is not typically the case. Regarding administrative costs, we note that rebasing the market basket is done at 5-year intervals. In the interim, additional costs for administration are appropriately handled in the update framework, which includes factors such as hospital productivity and intensity of services. Comment: We received a comment requesting that the market baskets be revised again when more recent Input- Output Tables become available from the Bureau of Economic Analysis. The commenter also questioned changes to the market baskets that (1) reduce weights within the utilities cost category by moving some of the weight to the miscellaneous products category and (2) combine business and computer services into all other labor-intensive services. Response: The changes in weights in the revised market baskets are the result of using data from the Asset and Expenditure Survey. We did a sensitivity analysis in which we developed a test index identical to the revised prospective payments market basket except that the weights and proxies for the current version of ``All Other Services'' were substituted for those in the revised market basket's ``All Other Services'' category. For the historical and forecast period of 1992- 2002, half of the years showed no difference and half showed a 0.1 percentage point difference in the percent change upon which updates are based. We feel that the revised market baskets represent an improvement in cost categories and price proxies, and therefore are better measures of composite price changes. When the Input-Output Tables for 1992 become available we will review these data carefully. Revised Input-Output data are automatically included in rebasing on a regular schedule (approximately every 5 years). C. Selection of Price Proxies Only four categories that are part of the current hospital market basket do not appear in the revised hospital market basket. Of the 22 categories that are part of both the current and the revised market baskets, only the weights might differ. The wage and price proxies selected for these cost categories are the same as those selected last year. A description and discussion of each price proxy are set forth in the August 30, 1996 final rule (61 FR 46324). The price proxies are shown in Table 1, above. The makeup of the HCFA Blended Occupational Wage Index and the HCFA Blended Occupational Benefits Index used as proxies for Wages and Salaries [[Page 45996]] and Employee Benefits, respectively, remain the same as last year. (See 61 FR 27463.) To examine the impact of the changes to the weights and the reduction of the number of cost categories, we developed a comparison for the period FY 1994 through FY 1999. Using historical data for FY 1994 through FY 1996, and forecasts for FY 1997 through FY 1999 for the prospective payment market basket, we compared the percentage changes for the current and the revised market baskets. Table 3.--Comparison of the Current Prospective Payment Hospital Market Basket and the Revised Prospective Payment Hospital Market Basket Percent Change, FY 1994-1999 ------------------------------------------------------------------------ Current Revised hospital hospital Federal fiscal year market market Difference basket basket ------------------------------------------------------------------------ Historical: 1994................................ 2.6 2.6 0.0 1995................................ 3.2 3.2 0.0 1996................................ 2.5 2.4 -0.1 Forecasted: 1997................................ 2.3 2.1 -0.2 1998................................ 2.7 2.7 0.0 1999................................ 3.0 2.9 -0.1 Historical average: 1994-1996.......... 2.8 2.7 -0.1 Forecasted average: 1997-1999........... 2.7 2.6 -0.1 ------------------------------------------------------------------------ Note that the historical average rate of growth for 1994 through 1996 for the improved revised prospective payment hospital market basket is almost equal to that of the current market basket. The 0.1 percentage point difference is less than the +/- 0.25 percent threshold for corrections for forecast error. The forecasted average rate of growth for 1997 through 1999 for the revised market basket is 0.1 percentage points less than that of the current market basket. D. Separate Market Basket for Hospitals and Hospital Units Excluded From the Prospective Payment System As in the prospective payment hospital market basket, weights for the six main cost categories contained in the excluded hospital market basket (that is, weights for wages and salaries, employee benefits, professional fees, malpractice insurance, pharmaceuticals, and the residual category) remain the same. Only the weights for ``Utilities'' and the categories within ``All Other'' have been revised. Table 4 below shows weights for the current and revised 1992-based excluded hospital market basket. Table 4.--Comparison of Current 1992-Based Excluded Hospital Market Basket with Revised 1992-Based Excluded Hospital Market Basket ------------------------------------------------------------------------ Current Revised 1992- 1992- based based Expense categories Price proxy excluded excluded market market basket basket -------------------------------------------------------\1\-------------- 1. Compensation:............ .................... 63.721 63.721 A. Wages and salaries... HCFA occupational 52.152 52.152 wage index. B. Employee benefits.... HCFA occupational 11.569 11.569 benefits index. 2. Nonmedical professional ECI-compensation for 2.098 2.098 fees. professional, specialty, and technical. 3. Utilities................ .................... 2.557 1.675 A. Electricity.......... WPI commercial 1.396 1.007 electric power. B. Fuels (nonhighway)... WPI commercial 1.051 0.401 natural gas. C. Water and sewerage... CPI-U water and 0.110 0.267 sewerage maintenance. 4. Professional liability HCFA professional 1.081 1.081 insurance. liability insurance premium index. 5. All other expenses....... .................... 30.541 31.425 A. All other products... .................... 23.640 24.227 (1) Pharmaceuticals... PPI ethical 3.070 3.070 (prescription) drugs. (2) Food.............. .................... 3.581 3.468 (a) Direct purchase... PPI processed foods 2.446 2.370 and feeds. (b) Contract service.. CPI food away from 1.135 1.098 home. (3) Chemicals......... PPI industrial 3.929 3.754 chemicals. (4) Medical PPI medical 3.238 3.154 instruments. instruments and equipment. (5) Photographic PPI photographic 0.413 0.400 supplies. supplies. (6) Rubber and PPI rubber and 5.039 4.865 plastics. plastic products. (7) Paper products.... PPI converted paper 2.134 2.182 and paperboard products. (8) Apparel........... PPI apparel......... 0.906 0.890 (9) Machinery and PPI machinery and 0.218 0.212 equipment. equipment. (10) Miscellaneous PPI finished goods.. 1.112 2.232 products. B. All other services... .................... 6.901 7.198 (1) Postage........... CPI-U postage....... 0.282 0.295 (2) Telephone services CPI-U telephone 0.549 0.631 services. [[Page 45997]] (3) All other: labor ECI compensation for 5.519 5.439 intensive. private service occupations. (4) All other: CPI-U all items..... 0.551 0.833 nonlabor intensive. --------------------- Total................. .................... 100.000 100.000 ------------------------------------------------------------------------ Note: Due to rounding, weights may not sum to total. \1\ Expense categories based on revised 1992-based hospital market basket for comparison purposes. V. Other Decisions and Changes to the Prospective Payment System for Inpatient Operating Costs A. Outlier Payments (Secs. 412.80, 412.82, 412.84, and 412.86) 1. Elimination of Day Outlier Payments Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for ``outlier'' cases, that is, cases involving extraordinarily high costs (cost outliers) or long lengths of stay (day outliers). That section also provides that, beginning with FY 1995, payments for day outliers will be phased out over 3 years. We have discussed this phase out and its implementation in detail in the September 1, 1994, September 1, 1995, and August 30, 1996 final rules (59 FR 45366, 60 FR 45854, and 61 FR 46228, respectively). Since payment for day outliers will be eliminated effective with discharges occurring in FY 1998, we proposed conforming revisions to the regulations at Secs. 412.80, 412.82, 412.84, and 412.86. At the same time, we proposed to make a technical change to the provision concerning outlier payments for transfer cases to conform the regulations to policies that we have stated in previous prospective payment system rules but did not codify. See the final rules published September 1, 1995 (60 FR 45804) and September 1, 1993 (58 FR 46306-07). We received no comments on these conforming changes and are incorporating them in this final rule with comment period as proposed. 2. Changes to Outlier Payments in Pub. L. 105-33 Section 4405 of Public Law 105-33 amended sections 1886 (d)(5)(B)(i)(I) and (d)(5)(F)(ii)(I) of the Act to provide that, in determining the additional payment for indirect medical education (IME) and/or disproportionate share hospitals (DSH), the IME and DSH adjustment factors are applied only to the base DRG payment, not the sum of the base DRG payment and any cost outlier payments, effective with discharges occurring on or after October 1, 1997. The same section of Pub. L. 105-33 also amended section 1886(d)(5)(A)(ii) of the Act to require that the fixed loss cost outlier threshold is based on the sum of DRG payments and IME and DSH payments for purposes of comparing costs to payments. Therefore, we are revising our regulations at Sec. 412.84(g) to remove the provision that costs be reduced by the IME and DSH adjustment factors for purposes of comparing costs to payments to determine if costs exceed the fixed loss cost outlier threshold, as well as deleting current Sec. 412.80(c). Conforming changes are made at current Sec. 412.105(a) (IME) and Sec. 412.106(a)(2) (DSH). We are also making a corresponding change to the capital cost outlier methodology. We received two public comments urging us to implement this provision in the final rule. As indicated above, one change resulting from Pub. L. 105-33 is that, in determining whether a case meets the cost outlier threshold, we will not standardize the costs of the case to account for IME and DSH payments. The following examples show the effect on two hospitals of this change in methodology. In the example, we use DRG 286, which has a relative weight of 2.2671. Each hospital has a wage index of 1. The labor-related national large urban standardized amount is $2,776.21; the nonlabor-related large urban standardized amount is $1,128.44. Before the Change Standard Cost = (Billed Charges x Cost to Charge Ratio) (1 + IME + DSH) Outlier Payments = (80 percent of (Standard Cost--Threshold)) * (1 + IME + DSH) Total Payments = Outlier Payments + (Federal Rate x (1 + IME + DSH)) ------------------------------------------------------------------------ Non-IME, IME and DSH Non-DSH hospital hospital ------------------------------------------------------------------------ Billed charges................................ $100,000 $100,000 IME adjustment factor......................... 0.0744 0.0 DSH adjustment factor......................... 0.1413 0.0 Cost to charge ratio.......................... 0.72 0.72 Standard cost................................. $59,225.14 $72,000 Outlier threshold............................. $17,806.30 $17,806.30 Outlier payments.............................. $40,282.30 $43,354.96 Total payments................................ $51,043.96 $52,207.19 ------------------------------------------------------------------------ Even with high IME and DSH adjustments, the IME and DSH hospital receives a lower payment for an identical outlier case. This case uses the fixed loss outlier threshold of $7,600 from the proposed rule. In the following example, the IME and DSH hospital's costs are not adjusted for IME and DSH. The outlier threshold amount includes IME and DSH payments. There are no IME and DSH payments for outliers. The outlier threshold increases under this method for all hospitals. After the Change Standard Cost = (Billed Charges x Cost to Charge Ratio) Outlier Payments = 80 percent of (Standard Cost--Threshold) Total Payments = Outlier Payments + (Federal Rate x (1 + IME + DSH)) ------------------------------------------------------------------------ Non-IME, ME and DSH non-DSH hospital hospital ------------------------------------------------------------------------ Billed charges................................ $100,000 $100,000 IME adjustment factor......................... 0.0744 0.0 DSH adjustment factor......................... 0.1413 0.0 Cost to charge ratio.......................... 0.72 0.72 Standard cost................................. $72,000 $72,000 Outlier threshold............................. $20,961.91 $19,052.49 Outlier payments.............................. $40,830.47 $42,358.01 Total payments................................ $51,592.13 $51,210.24 ------------------------------------------------------------------------ [[Page 45998]] This case uses the final fixed loss threshold of $11,050 for FY 1998. The fixed loss threshold increase from the proposed rule is due to the higher standard costs of IME and DSH hospitals. B. Rural Referral Centers (Sec. 412.96) Under section 1886(d) of the Act, hospitals generally are paid by the Medicare program for inpatient hospital services covered by Medicare in accordance with the prospective payment system. Certain hospitals, however, receive special treatment under that system. Section 1886(d)(5)(C)(i) of the Act specifically provides for exceptions and adjustments to prospective payment amounts, as the Secretary deems appropriate, to take into account the special needs of rural referral centers. Section 412.96(d) of the regulations provides that, for discharges occurring before October 1, 1994, rural referral centers received the benefit of payment for inpatient operating costs per discharge based on the other urban payment amount rather than the rural standardized amount. As of October 1, 1994, the other urban and rural standardized amounts are the same. However, rural referral centers continue to receive special treatment under both the disproportionate share hospital payment adjustment and the criteria for geographic reclassification. One of the ways that a rural hospital may qualify as a rural referral center is to meet two mandatory criteria (specifying a minimum case-mix index and a minimum number of discharges) and at least one of three optional criteria (relating to specialty composition of medical staff, source of inpatients, or volume of referrals). These criteria are described in detail in Sec. 412.96(c). 1. Case-Mix Index Criteria Section 412.96(c)(1) sets forth the case-mix index criteria and provides that, for cost reporting periods beginning on or after October 1, 1986, a hospital's case-mix index for discharges ``during the Federal fiscal year that ended 1 year prior to the beginning of the cost reporting period for which the hospital is seeking referral center status'' must be at least equal to the national case-mix index value as established by HCFA or the median case-mix value for urban hospitals in the region in which the hospital is located (excluding hospitals receiving indirect medical education payments), whichever is lower. As discussed in the proposed rule, we feel that the language in Sec. 412.96(c)(1) does not clearly address situations in which the Federal fiscal year does not end exactly 1 year prior to the beginning of the cost reporting period for which the hospitals are seeking referral center status. Therefore, we clarified which case-mix index values are used to determine referral center status. We emphasized that this clarification represents no substantive change in policy. Our policy, which we have applied consistently since 1986, is that the case-mix index used for an individual hospital in the determination of whether it meets the case-mix index criterion is the case-mix index for discharges during the most recent Federal fiscal year that ended at least 1 year prior to the beginning of the cost reporting period for which the hospital is seeking referral center status. We received no comments on our proposal to revise Sec. 412.96(c)(1) to clarify the time period used to calculate the case-mix index, and we are adopting it as proposed. 2. Updated Case-Mix and Discharge Criteria As noted above, a rural hospital can qualify as a rural referral center if the hospital meets two mandatory criteria (case-mix index and number of discharges) and at least one of three optional criteria (medical staff, source of inpatients, or volume of referrals). With respect to the two mandatory criteria, a hospital may be classified as a rural referral center if its-- Case-mix index is at least equal to the lower of the median case-mix index for urban hospitals in its census region, excluding hospitals with approved teaching programs, or the median case-mix index for all urban hospitals nationally; and Number of discharges is at least 5,000 discharges per year or, if fewer, the median number of discharges for urban hospitals in the census region in which the hospital is located. (The number of discharges criterion for an osteopathic hospital is at least 3,000 discharges per year.) a. Case-Mix Index Section 412.96(c)(1) provides that HCFA will establish updated national and regional case-mix index values in each year's annual notice of prospective payment rates for purposes of determining rural referral center status. In determining the proposed national and regional case-mix index values, we follow the same methodology we used in the November 24, 1986 final rule, as set forth in regulations at Sec. 412.96(c)(1)(ii). Therefore, the proposed national case-mix index value includes all urban hospitals nationwide, and the proposed regional values are the median values of urban hospitals within each census region, excluding those with approved teaching programs (that is, those hospitals receiving indirect medical education payments as provided in Sec. 412.105). These values are based on discharges occurring during FY 1996 (October 1, 1995 through September 30, 1996) and include bills posted to HCFA's records through December 1996. Therefore, in addition to meeting other criteria, we proposed that to qualify for initial rural referral center status, a hospital's case-mix index value for FY 1996 would have to be at least-- 1.3525; or Equal to the median case-mix index value for urban hospitals (excluding hospitals with approved teaching programs as identified in Sec. 412.105) calculated by HCFA for the census region in which the hospital is located (see the table set forth in the June 2, 1997 proposed rule at 62 FR 29923). Based on the latest data available (FY 1996 bills received through June 1997), the final national case-mix value is 1.3529 and the median case-mix values by region are set forth in the table below: ------------------------------------------------------------------------ Case-mix Region index value ------------------------------------------------------------------------ 1. New England (CT, ME, MA, NH, RI, VT)...................... 1.2322 2. Middle Atlantic (PA, NJ, NY).............................. 1.2455 3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)....... 1.3701 4. East North Central (IL, IN, MI, OH, WI)................... 1.2610 5. East South Central (AL, KY, MS, TN)....................... 1.3023 6. West North Central (IA, KS, MN, MO, NE, ND, SD)........... 1.2088 7. West South Central (AR, LA, OK, TX)....................... 1.3265 8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................. 1.3476 9. Pacific (AK, CA, HI, OR, WA).............................. 1.3450 ------------------------------------------------------------------------ For the benefit of hospitals seeking to qualify as referral centers or those wishing to know how their case-mix index value compares to the criteria, we are publishing each hospital's FY 1996 case-mix index value in Table 3C in section IV of the Addendum to this final rule with comment period. In keeping with our policy on discharges, these case- mix index values are computed based on all Medicare patient discharges subject to DRG-based payment. b. Discharges Section 412.96(c)(2)(i) provides that HCFA will set forth the national and regional numbers of discharges in each [[Page 45999]] year's annual notice of prospective payment rates for purposes of determining referral center status. As specified in section 1886(d)(5)(C)(ii) of the Act, the national standard is set at 5,000 discharges. However, we proposed to update the regional standards. The proposed regional standards are based on discharges for urban hospitals' cost reporting periods that began during FY 1995 (that is, October 1, 1994 through September 30, 1995). That is the latest year for which we have complete discharge data available. Therefore, in addition to meeting other criteria, we proposed that to qualify for initial rural referral center status or to meet the triennial review standards for cost reporting periods beginning on or after October 1, 1997, the number of discharges a hospital must have for its cost reporting period that began during FY 1996 would have to be at least-- 5,000; or Equal to the median number of discharges for urban hospitals in the census region in which the hospital is located. (See the table set forth in the June 2, 1997 proposed rule at 62 FR 29924.) Based on the latest discharge data available, the final median numbers of discharges for urban hospitals by census regions are as follows: ------------------------------------------------------------------------ Number of Region discharges ------------------------------------------------------------------------ 1. New England (CT, ME, MA, NH, RI, VT)..................... 6658 2. Middle Atlantic (PA, NJ, NY)............................. 8367 3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)...... 7515 4. East North Central (IL, IN, MI, OH, WI).................. 7290 5. East South Central (AL, KY, MS, TN)...................... 6650 6. West North Central (IA, KS, MN, MO, NE, ND, SD).......... 5189 7. West South Central (AR, LA, OK, TX)...................... 5133 8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................ 7982 9. Pacific (AK, CA, HI, OR, WA)............................. 5919 ------------------------------------------------------------------------ We reiterate that, to qualify for rural referral center status for cost reporting periods beginning on or after October 1, 1997, an osteopathic hospital's number of discharges for its cost reporting period that began during FY 1996 would have to be at least 3,000. We received no comments on the rural referral center criteria. 3. Retention of Referral Center Status Section 1886(d)(5)(C)(i) of the Act states that ``the Secretary shall provide for such exceptions and adjustments to the payment amounts * * * as the Secretary deems appropriate to take into account the special needs of regional and national referral centers * * *'' The Conference Committee Report accompanying Public Law 98-21 (the original legislation implementing the prospective payment system) contained little additional language concerning the definition of ``regional and national referral centers.'' The Report did indicate, however, that they should include very large acute care hospitals located in rural areas. Thus, we established qualifying criteria for referral center status to identify those rural hospitals that, because of bed size, a large number of complicated cases, a high number of discharges, or a large number of referrals from other hospitals or from physicians outside the hospital's service area, were likely to have operating costs more similar to urban hospitals than to the average smaller community hospitals. The regulations implementing the referral center provision are codified at Sec. 412.96. In 1984, after a year's experience with the referral center criteria, we determined that once approved for the referral center adjustment, a hospital would retain its status for a 3-year period. At the end of the 3-year period, we would review the hospital's performance to determine whether it should be requalified for an additional 3-year period. The requirement for triennial review was added to the regulations in 1984 (Sec. 412.96(f)) to be effective for cost reporting periods beginning on or after October 1, 1987 (the end of the first 3 years of the referral center adjustment). However, since then, three statutory moratoria on the performance of the triennial reviews were enacted by Congress. When the third of these moratoria expired at the end of cost reporting periods that began during FY 1994, we implemented the triennial review requirements and some hospitals lost their referral center status. (See the September 1, 1993 final rule (58 FR 46310) for a detailed explanation of the moratoria and the implementation of the triennial reviews.) Hospitals could lose rural referral center status in other ways. With the creation of the Medicare Geographic Classification Review Board (MGCRB) and a hospital's ability, beginning in FY 1992, to request that it be reclassified from one geographic location to another, we stated that if a referral center was reclassified to an urban area for purposes of the standardized amount, it would, in most instances, be voluntarily terminating its referral center status. (See the June 4, 1991 final rule with comment period (56 FR 25482).) This was true because, in most instances, a hospital's ability to qualify as a ``rural referral center'' was contingent upon (among other criteria) its status as a rural hospital. In addition, rural referral centers located in areas that were redesignated as urban by the Office of Management and Budget lost their referral center status. These hospitals had qualified for referral center status under criteria applicable only to hospitals located in rural areas. OMB's designation of the areas to urban status meant that such hospitals were urban for all purposes and thus could no longer qualify as rural referral centers. Section 4202(b)(1) of Public Law 105-33 states that, ``Any hospital classified as a rural referral center by the Secretary * * * for fiscal year 1991 shall be classified as such a rural referral center for fiscal year 1998 and each subsequent fiscal year.'' Thus, many of the hospitals that lost their referral center status for the reasons listed above must be reinstated. For the purpose of implementing this provision, we consider that a hospital that was classified as a referral center for any day during FY 1991 (October 1, 1990 through September 30, 1991) meets the reinstatement criterion. We have identified 136 hospitals that were classified as rural referral centers in 1991 and are no longer classified as referral centers at this time. Of these, approximately 70 lost their referral center status for failure to meet the triennial review requirements; approximately 40 lost their status due to MGCRB reclassification; approximately 20 were in areas redesignated as urban by OMB, and 6 hospitals voluntarily requested withdrawal of their referral center status. We are reinstating rural referral center status for all hospitals that lost the status due to triennial review or MGCRB reclassification. The HCFA regional offices will notify each hospital (and the hospital's fiscal intermediary) of their reinstatement as referral centers effective October 1, 1997. If a hospital believes it should be reinstated but does not receive notification, it should contact the appropriate regional office. We are not reinstating rural referral center status to hospitals in areas redesignated as urban by OMB or hospitals that requested withdrawal of such status. The language of section 4202(b)(1) states that any hospital classified as a rural referral center for FY 1991, ``* * * shall be classified as such a rural referral center for fiscal year 1998 and each subsequent fiscal year.'' (Emphasis added.) Hospitals located in [[Page 46000]] areas redesignated as urban by OMB, since FY 1991, are no longer physically located in a rural area and they can no longer be classified as ``rural'' referral centers. We also do not believe the law intended that referral center classification be forced on hospitals that do not want it and we are, therefore, not reinstating the status of the six hospitals that requested withdrawal. If, however, any of these hospitals wish to be requalified as a referral center, they should contact their HCFA regional office. We note that section 4202(b)(1) provides reinstatement to only those hospitals that were classified as rural referral centers during FY 1991. That is, any hospital approved as a referral center after FY 1991 would not be protected by this provision. We do not believe that it is equitable or administratively practical to maintain two lists of referral centers, that is, a list of those hospitals approved for referral center status in 1991 and thus protected by the reinstatement provision and a list of those hospitals approved after FY 1991 and not protected by the provision. Therefore, we are terminating the requirement for triennial reviews of referral center status and reinstating all hospitals that lost referral center status due to those reviews. Thus, Secs. 412.96 (f) and (g) (1) and (2) are deleted. If we later discover some hospital or class of hospitals that we believe should not be allowed to retain referral center status because they fail to meet some basic requirement we believe is essential to receiving this special designation, we will consider reinstating some type of annual or periodic qualifying criteria. In addition, we recognize that there are hospitals that qualified for referral center status after 1991 and that may have lost that status in a subsequent year due to reclassification by the MGCRB. Again, we do not believe it is equitable or administratively practical to treat such hospitals differently than those protected by the provision of Public Law 105-33. Thus, we believe that any hospital that lost its referral center status due to reclassification by the MGCRB, regardless of whether it was classified as a referral center during FY 1991, should be reinstated effective October 1, 1997. The regional offices will make every effort to identify and notify all affected hospitals. However, hospitals that believe they meet the criteria for reinstatement but do not receive notification from the regional office or their fiscal intermediary, should contact the appropriate regional office. We are also eliminating the policy that a hospital loses RRC status if it is reclassified as urban by the MGCRB. We note that for reclassified hospitals, RRC status would have no payment effect. Every effort will be made to process all reinstatements as quickly as possible. C. Payment for Medicare-Dependent, Small Rural Hospitals (Sec. 412.108) Section 4204 of Public Law 105-33 amended section 1886(d)(5)(G) of the Act to reinstate the classification of Medicare-dependent, small rural hospitals (MDHs) for cost reporting periods beginning on or after October 1, 1997 and before October 1, 2001. This category of hospitals was originally created by section 6003(f) of the Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239), enacted on December 19, 1989, which added a new section 1886(d)(5)(G) of the Act. As provided by that law, the special payment for MDHs was to be available for cost reporting periods beginning on or after April 1, 1990 and ending on or before March 31, 1993. Hospitals classified as MDHs were paid using the same methodology applicable to sole community hospitals; that is, based on whichever of the following rates yielded the greatest aggregate payment for the cost reporting period: The national Federal rate applicable to the hospital. The updated hospital-specific rate using FY 1982 cost per discharge. The updated hospital-specific rate using FY 1987 cost per discharge. Section 13501(e)(1) of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66), enacted on August 10, 1993, extended the MDH provision through discharges occurring before October 1, 1994. Under this revised provision, after the hospital's first three 12-month cost reporting periods beginning on or after April 1, 1990, the additional payment to an MDH whose applicable hospital-specific rate exceeded the Federal rate was limited to 50 percent of the amount by which that hospital-specific rate exceeded the Federal rate. In reinstating the MDH special payment for discharges occurring on or after October 1, 1997 and before October 1, 2001, section 4204 of Public Law 105-33 did not revise either the qualifying criteria for these hospitals nor the most recent payment methodology. Therefore, the criteria a hospital must meet in order to be classified as an MDH are the same as before. Section 1886(d)(5)(G)(iv) of the Act defines an MDH as any hospital that meets all of the following criteria: The hospital is located in a rural area. The hospital has 100 or fewer beds. The hospital is not classified as an SCH (as defined at Sec. 412.92) at the same time that it is receiving payment under this provision. In the hospital's cost reporting period that began during FY 1987, not less than 60 percent of its inpatient days or discharges were attributable to inpatients entitled to Medicare Part A benefits. For the purpose of implementing section 4204 of Pub. L. 105-33, we consider that a hospital that meets the criteria above and that was classified as an MDH on September 30, 1994 is reinstated as an MDH. We have identified 414 hospitals that were classified as MDHs on September 30, 1994. Of these, 20 hospitals no longer participate in the Medicare program, 15 hospitals are now classified as SCHs, 6 hospitals are now located in urban areas, and 5 have more than 100 beds. We will provide fiscal intermediaries with a list of the hospitals we have identified; therefore, hospitals that meet the criteria for classification as an MDH and that were classified as an MDH on September 30, 1994 do not need to take any action in order to be reinstated as an MDH. At the time the year-end settlement is made, the fiscal intermediary will determine for each cost reporting period which hospitals meet the criteria to qualify as MDHs. In addition, the intermediary will determine for each cost reporting period which of the payment options yields the highest rate of payment to a hospital that qualifies as an MDH. We note that classification as an MDH is not optional. Therefore, hospitals that meet the criteria in Sec. 412.108(a) are not eligible for the temporary special payment provided for in section 4401(b) of Public Law 105-33 (discussed below in section IV-D). However, if a hospital that receives notification that it is being reinstated as an MDH believes it no longer meets the criteria because, for example, it has had an increase in its bed size to more than 100 beds, it should contact its fiscal intermediary. For purposes of determining a hospital's bed size, we will continue to use the same definition (which is defined for indirect medical education purposes at Sec. 412.105(b)). That is, the number of beds in a hospital is determined by counting the number of available bed days during the hospital's cost reporting period, not including beds or bassinets in the healthy newborn nursery, custodial care, and excluded distinct part units, and dividing that number by the number of days in the cost reporting period. [[Page 46001]] We are revising Secs. 412.90 and 412.108 to reflect the reinstatement of the MDH special payment. Section 4204(a)(3) of Public Law 105-33 permits those hospitals that applied and were approved for reclassification to a large urban area for purposes of receiving the large urban rates through the MGCRB to decline that reclassification for FY 1998. Normally, hospitals approved for reclassification have only 45 days from the date of the proposed rule to withdraw their request for reclassification. However, the statute provides that, in this situation, hospitals may withdraw their request for FY 1998 reclassification to a large urban area for purposes of the standardized amount. Any hospital that does not requalify for MDH reinstatement for FY 1998 because of a reclassification to an urban area by the MGCRB for FY 1998 will be notified and given the opportunity to decline that reclassification. D. Special Payment for Certain Nonteaching, Nondisproportionate Share Hospitals That Do Not Qualify as Medicare-Dependent, Small Rural Hospitals (Sec. 412.107) Section 4401(b) of Public Law 105-33 provides a temporary special payment for FYs 1998 and 1999 for certain hospitals that do not receive any additional payment through the IME or DSH adjustment and do not meet the criteria to be classified as a Medicare-dependent, small rural hospital (MDH). As set forth in section 4401(b)(2), in order to qualify for the special payment, a hospital must be located in a State in which the aggregate operating prospective payment for hospitals that meet the special payment criteria (that is, non-IME, non-DSH, non-MDH hospitals) is less than the aggregate allowable operating costs of inpatient hospital services (referred to hereafter as a negative operating prospective payment margin) for those hospitals for their cost reporting periods that began during FY 1995. In addition, a hospital must have a negative operating prospective payment margin during the cost reporting period at issue (beginning in FY 1998 or 1999). Under the provisions of section 4401(b)(1), for these hospitals, the percentage increase otherwise applicable to the standardized amount for FY 1998 will be increased by 0.5 percentage points and, for FY 1999, the applicable percentage increase will be increased by 0.3 percentage points. Based on the current law, this means that these hospitals will receive an update of 0.5 percent for FY 1998 (the update for all other hospitals is 0) and, for FY 1999, an update of the market basket increase minus 1.6 percentage points (1.9 for all other hospitals). Under section 4401(b)(1), in applying these updates, the increase provided in FY 1998 will not apply in computing the update for FY 1999 and neither update will affect the updates provided for discharges in fiscal years after FY 1999. Under section 4401(b)(2) of Public Law 105-33, in determining whether a hospital qualifies for the special payment for a given cost reporting period, we must look first at statewide aggregate data for non-IME, non-DSH, non-MDH hospitals for cost reporting periods beginning during FY 1995, and second at hospital-specific characteristics for the cost reporting period at issue. With respect to the first criterion, we used the best data currently available. We used the latest update to the provider-specific file to identify those hospitals that do not receive IME or DSH payments. We also identified those hospitals that meet the criteria to be designated as an MDH. Using the latest update to the Health Care Provider Cost Report Information System (HCRIS), we examined the FY 1995 cost report data for the non-IME, non-DSH, and non-MDH hospitals identified above and found that the following States meet the criteria set forth in section 4401(b)(2)(B): Alaska, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maine, Missouri, New Hampshire, New Jersey, Ohio, Puerto Rico, Rhode Island, Vermont, Wisconsin, For purposes of determining qualification for special payment under section 4401(b), this is the final list of qualifying States. We recognize that cost reports for cost reporting periods beginning during FY 1995 might be subject to further adjustments, and we considered the option of waiting until all FY 1995 cost reports are finally settled before determining the qualifying States. We rejected this approach because under the prospective payment system, we believe that, to the extent possible, we must set the payment parameters that will be applied to hospitals before the start of the fiscal year. If we waited several years for all FY 1995 cost reports to be settled before making this additional payment to the qualifying hospitals, hospitals would have less certainty about the amount of payments they would receive. Moreover, the intent of Congress to provide relief to hospitals in FYs 1998 and 1999 would be compromised. In addition, for purposes of computing the FY 1998 and 1999 standardized amounts and performing the necessary related calculations (for example, the budget neutrality adjustments), we need to make a prospective determination about which hospitals are likely to be affected. In short, then, for purposes of determining the qualifying States under section 4401(b)(2)(B), we have decided to use the best data available now. With respect to hospital-specific characteristics, however, the statute requires that we look at data for the cost reporting period at issue (beginning in FY 1998 or 1999). That is, we must look at the cost reporting period at issue and determine whether the hospital has a negative operating prospective payment margin for that period, and whether the hospital received IME or DSH payments or qualified as an MDH for that period. Thus, the final determination as to whether a hospital is eligible for the add-on cannot be made until cost report settlement. We intend to make interim payment to these hospitals beginning with discharges occurring on or after October 1, 1997, based on the latest information available to the fiscal intermediaries. That is, if a hospital is in one of the 17 designated States, is not receiving IME or DSH payments in FY 1998 or 1999, is not an MDH, and, based on the latest cost report information available to the intermediary, has a negative operating prospective payment margin, the intermediary will pay the hospital based on the higher standardized amount during the fiscal year. As noted above, the final decision as to a hospital's qualification for the additional payment will be made at cost report settlement. We have added a new Sec. 412.107 to the regulations and revised Sec. 412.90 to implement this provision. We note that in the Addendum and Appendix A to this final rule with comment period, we refer to the hospitals that qualify for the higher standardized amount as ``temporary relief'' hospitals. E. Payments to Disproportionate Share Hospitals (Sec. 412.106) Effective for discharges beginning on or after May 1, 1986, hospitals that treat a disproportionately large number of low-income patients receive additional payments through the DSH adjustment. Section 4403(a) of Public Law 105-33 reduces the payment a hospital would otherwise receive under the current disproportionate share formula by 1 percent for FY 1998, 2 percent for FY 1999, 3 percent for FY 2000, 4 percent for FY 2001, 5 percent for FY 2002, and 0 percent for FY 2003 and each subsequent fiscal year. Therefore, the actual payment a hospital receives under DSH will be reduced by 1 percent for FY 1998. We are adding a new [[Page 46002]] paragraph (e) to Sec. 412.106 to implement this provision. In addition, section 4403(b) of Public Law 105-33 requires the Secretary to submit to Congress, no later than 1 year after enactment (that is, by August 5, 1998), a report that contains a formula for determining the amount of additional payments to disproportionate share hospitals. In determining the formula, the Secretary is required to establish a single threshold for costs incurred by hospitals in serving low-income patients, and consider the following costs: (1) the costs incurred for furnishing hospital services to individuals entitled to Medicare Part A and SSI; and (2) the costs incurred for furnishing services to individuals receiving Medicaid who are not entitled to benefits under Part A of Medicare, including individuals enrolled in a managed care organization or any other managed care plan under Medicaid and individuals who receive medical assistance in a State with an 1115 waiver under Medicaid. In developing the formula, the Secretary is given the authority to require hospitals receiving DSH payments to submit any information the Secretary finds necessary in order to develop the formula. F. Payment for Blood Clotting Factor for Hemophilia Inpatients (Secs. 412.2 and 412.115) Hemophilia is a blood disorder characterized by prolonged coagulation time, caused by an inherited deficiency of a factor in plasma necessary for blood to clot. For purposes of this final rule with comment period, hemophilia is considered to encompass the following three conditions: Factor VIII deficiency (classical hemophilia); Factor IX deficiency (plasma thromboplastin component); and Von Willebrand's disease. Section 6011 of Public Law 101-239 amended section 1886(a)(4) of the Act to provide that prospective payment hospitals receive an additional payment for the costs of administering blood clotting factor to Medicare hemophiliacs who are hospital inpatients. Section 6011(b) specified that the payment is to be based on a predetermined price per unit of clotting factor multiplied by the number of units provided. This add-on payment originally was effective for blood clotting factor furnished on or after June 19, 1990, and before December 19, 1991. Section 13505 of Public Law 103-66 amended section 6011(d) of Public Law 101-239 to extend the period covered by the add-on payment for blood clotting factors administered to Medicare inpatients with hemophilia through September 30, 1994. Most recently, section 4452 of Public Law 105-33 amended section 6011(d) of Public Law 101-239 to reinstate the add-on payment for the costs of administering blood clotting factor to Medicare beneficiaries who have hemophilia and who are hospital inpatients for discharges occurring on or after October 1, 1997. We are calculating the add-on payment for FY 1998 using the same methodology we used in the past. That is, we are establishing a price per unit of clotting factor based on the current price listing available from the 1997 Drug Topics Red Book, the publication of pharmaceutical average wholesale prices (AWP). We are setting separate add-on amounts, for the following clotting factors, as described by HCFA's Common Procedure Coding System (HCPCS). The add-on payment amount for each HCPCS code is based on the median AWP of the several products available in that category of factor, discounted by 15 percent. Based on this methodology, the prices per unit of factor are as follows: Per unit J7190 Factor VIII (antihemophilic factor-human)................. $0.76 J7192 Factor VIII (antihemophilic factor-recombinant)........... 1.00 J7194 Factor IX (complex)....................................... 0.32 J7196 Other hemophilia clotting factors (e.g., anti-inhibitors). 1.10 These prices will be effective for add-on payment for blood clotting factors administered to inpatients who have hemophilia for discharges beginning on or after October 1, 1997 through September 30, 1998. As noted above, we are following the same methodology as we have in previous years in calculating the FY 1998 add-on payment for the cost of administering blood clotting factors to hospital inpatients with hemophilia. In view of the brief period of time between the enactment of Public Law 105-33 and the need to reinstitute the add-on payment for blood clotting factors, we believe that using this methodology is the only viable alternative. However, we understand that hospitals may be able to obtain blood clotting factors at prices substantially below the median AWP. Thus, we believe it is possible that the methodology for determining add-on payment amounts could be revised to better reflect the actual costs of administering the blood clotting factors. We intend to examine our methodology before establishing the add-on payment amount for FY 1999 and are soliciting comments on the appropriateness of the add-on payment amount and suggestions for the best methodology to calculate this amount. We have revised Secs. 412.2(f)(8) and 412.115(b) to indicate that for discharges occurring on or after October 1, 1997, we will make an add-on payment for the costs of administering blood clotting factor to Medicare hospital inpatients who have hemophilia. We will reissue instructions to Medicare hospitals and fiscal intermediaries concerning the codes to use for clotting factor and how to use them. We note that payment will be made for blood clotting factor only if there is an ICD- 9-CM diagnosis code for hemophilia and the appropriate HCPCS code included on the bill. G. Payments to Hospitals in Puerto Rico (Sec. 412.204) Currently, the Puerto Rico payment rate for operating costs is based on 75 percent of the Puerto Rico-specific standardized amount and 25 percent of a national standardized amount. Section 4406 of Public Law 105-33 amended section 1886(d)(9)(A) of the Act to revise the Puerto Rico and national shares of the Puerto Rico payment rate. Beginning with discharges occurring on or after October 1, 1997, the Puerto Rico payment rate will be a blend of 50 percent of the Puerto Rico standardized amount and 50 percent of a national standardized amount. We are revising Sec. 412.204 of the regulations to conform with this amendment. H. Changes to the Indirect Medical Education Adjustment (Sec. 412.105) 1. Changes in the June 2, 1997 Proposed Rule Section 1886(d)(5)(B) of the Act provides that prospective payment hospitals that have residents in an approved graduate medical education program receive an additional payment to reflect the higher indirect operating costs associated with graduate medical education. The regulations regarding the calculation of this additional payment, known as the IME adjustment, are at Sec. 412.105. The additional payment is based in part on the applicable IME adjustment factor. The adjustment factor is calculated by using a hospital's ratio of residents-to-beds in the formula set forth at section 1886(d)(5)(B)(ii) of the Act. The criteria governing whether a program is considered approved are currently at Sec. 412.105(g)(1)(i). These criteria are the same as those used to identify approved programs for the direct graduate medical education [[Page 46003]] payment under Sec. 413.86(b). In the August 30, 1991 final rule (56 FR 43237), we added a criterion to Sec. 413.86(b), but inadvertently did not add it to Sec. 412.105(g)(1)(i). This criterion added the Annual Report and Reference Handbook of the American Board of Medical Specialties (ABMS) as another publication to be used to identify approved programs. Historically, we have used the same criteria to determine whether a residency training program is approved for payments under both the indirect and the direct graduate medical education payments. This has in fact been our policy with regard to whether programs listed in the ABMS' Annual Report and Reference Handbook are considered approved for IME adjustment payments, even though Sec. 412.105(g)(1)(i) was not changed. To avoid any future confusion, we proposed to revise this section to parallel the changes made at Sec. 413.86(b). We received no public comments on this proposal and are adopting this change in the final rule with comment period. In addition, we proposed to delete current Sec. 412.105(g)(1)(iv), which excludes from the IME resident count any anesthesiology residents employed to replace anesthetists. This exclusion was originally intended to prevent hospitals from hiring residents in lieu of nonphysician anesthetists. Given that certain rural hospitals continue to receive pass-through cost-based payment for their anesthetist costs, we no longer believe this provision is warranted. Nor are we aware of any specific instances where it has been applied. We received one public comment in support of this proposed revision and no opposing comments. Therefore, we are implementing this change in the final rule with comment period. 2. Changes to IME in Public Law 105-33 In addition to making the changes set forth above, we are revising the regulations to incorporate the provisions of section 4621 of Public Law 105-33, which revised section 1886(d)(5)(B) of the Act in several ways. First, it gradually reduces the current level of IME adjustment (approximately a 7.7 percent increase for every 10 percent increase in the resident-to-bed ratio) over the next several years. The schedule for the IME adjustment is as follows: 7.0 percent for discharges during FY 1998; 6.5 percent during FY 1999; 6.0 percent during FY 2000; and 5.5 percent during FY 2001 and thereafter. Second, section 4621 established certain limits both on the full- time equivalent (FTE) number of residents counted by each hospital and on the resident-to-bed ratio. Effective for discharges on or after October 1, 1997, section 4621(b)(1) added a new section 1886(d)(5)(B)(v) to the Act to provide that a hospital's total number of resident FTEs in the fields of allopathic and osteopathic medicine may not exceed the total number of such resident FTEs in the hospital during its most recent cost reporting period ending on or before December 31, 1996. Furthermore, section 1886(d)(5)(B)(vi)(I), as added by section 4621(b)(1) of Public Law 105-33, provides that the ratio of residents-to-beds may not exceed the ratio of residents-to-beds during the prior cost reporting period (after accounting for the cap on the number of resident FTEs). Third, for cost reporting periods beginning on or after October 1, 1997, and subject to the new limit on counting residents described above (as well as the expansion of allowable settings to off-site services, as described below), new section 1886(d)(5)(B)(vi)(II) provides that residents will be counted based on a 3-year rolling average. This policy will decrease the financial impact of downsizing residency programs. Resident counts for cost reporting periods beginning during FY 1998 will be based on an average of the number of residents from the past 2 years, and for subsequent periods, resident counts will be based on an average of the past 3 years. With respect to medical residency training programs established on or after January 1, 1995, section 1886(d)(5)(B)(viii) provides that the Secretary must develop rules to apply these limits to new programs, giving special consideration to ``facilities that meet the needs of underserved areas,'' and to facilitate the application of aggregate limits in the case of affiliated groups (as defined by the Secretary). The Secretary may require any entity that operates a medical residency training program to submit additional information necessary to carry out the limits. We have revised the regulations at Sec. 413.86(g)(6) to comply with these directions. For a more detailed explanation of this provision, see section V.I of the preamble concerning the direct graduate medical education payments. Finally, section 4621(b)(2) amended section 1886(d)(5)(B)(iv) to allow all the time spent by a resident in patient care activities under an approved medical residency training program at an entity in a nonhospital setting to be counted towards the determination of full- time equivalency if the hospital incurs all, or substantially all, of the costs for the training program in the nonhospital setting. Therefore, we are revising current Sec. 412.105(g)(1)(ii)(C), which allowed hospitals to include the time residents spent in certain community health centers, to also include nonhospital settings where residents' time may be counted for purposes of IME. The eligibility criteria for this new provision is similar to a provision regarding direct graduate medical education payments at section 1886(h)(4)(E) of the Act, and implemented at Sec. 413.86(f)(iii). We will rely upon the same criteria for direct graduate medical education to identify eligible situations under this new IME provision. In addition to the regulatory changes, we intend to issue instructions to fiscal intermediaries to implement these changes effective October 1, 1997. We are also revising Sec. 412.105(d) to reinsert instructions for determining the education adjustment factors that were incorrectly deleted in a correction notice published on January 29, 1996 (61 FR 2725), and deleting current paragraph (f), which describes the determination of full-time resident counts for cost reporting periods beginning prior to July 1, 1991. Section 4622 of Public Law 105-33 added a new section 1886(d)(11) to the Act to provide for IME payments to teaching hospitals for discharges associated with Medicare managed care beneficiaries for portions of cost reporting periods occurring on or after January 1, 1998. The additional payment is equal to an ``applicable percentage'' of the estimated average per discharge amount that would have been made for that discharge if the beneficiary were not enrolled in managed care. The applicable percentage is set forth in section 1886(h)(3)(D)(ii) of the Act and is equal to 20 percent in 1998, 40 percent in 1999, 60 percent in 2000, 80 percent in 2001, and 100 percent in 2002 and subsequent years. We are adding a new paragraph (g) to Sec. 412.105 to implement this provision. I. Direct Graduate Medical Education (GME) 1. Newly Participating Hospitals (Sec. 413.86(e)) Under section 1886(h) of the Act and implementing regulations, Medicare pays hospitals for the direct costs of graduate medical education on the basis of per resident costs in a 1984 base year. Under existing regulations at [[Page 46004]] Sec. 413.86(e)(4), if a hospital did not have residents in the 1984 base period but later participates in teaching activities, the fiscal intermediaries calculate a per resident amount based on a weighted average of all the hospitals in the same geographic wage area. There must be at least three hospitals for this calculation. If there are fewer than three hospitals, the regulations require the fiscal intermediary to contact the HCFA Central Office for a determination of the appropriate amount to use. We proposed to revise the regulations for determining base year per resident amounts for hospitals that participated in residency training after the 1984 base period. Under the proposed changes to Sec. 413.86(e)(4)(i)(B), we sequentially follow the criteria listed below until we would base the weighted average calculation on a minimum of 3 per resident amounts: If there are fewer than three hospitals in the hospital's geographic wage area, we would determine a weighted average based on the per resident amounts for all hospitals in the hospital's own wage area, plus hospitals in geographically contiguous wage areas. If there are still fewer than three hospitals in the hospital's own wage area, plus hospitals in contiguous wage areas, the weighted average would be based on the per resident amounts for all hospitals in the State. If there are fewer than three hospitals in the entire State, the weighted average would be based on the per resident amounts for all hospitals in that State plus hospitals in contiguous States. If there are fewer than three hospitals in that State and contiguous States, the weighted average per resident amount would be based on the national average per resident amount. Comment: One commenter stated that our proposed policy appears reasonable but we have not indicated how the policy would affect the per resident amounts for hospitals that previously had their payment amounts determined by HCFA Central Office. Response: The proposed policy simply reflects the methodology in effect prior to this final rule with comment period. As discussed below, we are revising the methodology in this final rule with comment period. However hospitals that previously had a per resident amount determined by HCFA Central Office will be unaffected since policy changes can only be effective prospectively. Comment: Two commenters suggested that the proposed methodology may negatively affect the expansion of training sites, particularly in rural areas where there might not be three hospitals with established per resident amounts. One of these commenters suggested that the hospital with the new training program be given the option of establishing a per resident amount based on its ``cost, not to exceed the higher of the contiguous area average, or the national average cost per resident, perhaps adjusted by the appropriate wage index.'' The other commenter suggested that if there are fewer than three hospitals, that we use the lower of the new hospital's cost per resident or the national average cost per resident adjusted by the hospital wage index. The commenter suggested that this approach would be consistent with HCFA initiatives to move from historical local or regional cost based payments to national averages. Another benefit of this approach according to this commenter is that it is simple and would overwhelmingly benefit rural hospitals. Response: The per resident amounts vary widely among hospitals nationwide. Given this wide variation, we believe it is difficult to know whether a hospital establishing a new program in any given geographic area will receive a high or low per resident amount using our proposed methodology. Although the first commenter's suggested alternative is similar to the proposed policy, it guarantees a per resident amount for the new hospital that is either equal to or higher than the per resident amount under the proposed methodology if the hospital's own costs exceed the contiguous area average or the national average per resident amount. We find merit in the latter commenter's suggested alternative of using the lower of the hospital's own costs or a national average per resident amount. It has the advantage of being simple and equally as likely to produce an equitable rate as our proposed methodology. We support using the commenter's proposed methodology with a modification. Thus, effective October 1, 1997 the per resident amount for new teaching hospitals is based on the lower of the hospital's actual per resident costs or: The weighted average of the per resident amounts for hospitals located in the same geographic area as that term is used in the prospective payment system under 42 CFR part 412. Where there are fewer than three hospitals in a geographic wage area, we will use regional weighted average per resident amounts determined for each of the nine census regions established by the Bureau of Census for statistical and reporting purposes. 2. New Legislative Changes to Direct Graduate Medical Education (Direct GME) a. Limit on the Count of Residents (Sec. 413.86(g)) Section 4623 of Public Law 105-33 adds section 1886(h)(4)(F) of the Act to establish a limit on the number of allopathic and osteopathic residents that a hospital can include in its full time equivalent (FTE) count for Direct GME payment. Residents in dentistry and podiatry are exempt from the cap. For cost reporting periods beginning on or after October 1, 1997, a hospital's unweighted direct medical education FTE count may not exceed the hospital's unweighted FTE count for its most recent cost reporting period ending on or before December 31, 1996. Currently, hospitals report their weighted but not their unweighted FTE count on their Medicare cost report. New section 1886(h)(4)(H)(iii) of the Act gives the Secretary authority to collect whatever data are necessary to implement this provision. Hospitals have been required to report resident-specific information to their fiscal intermediaries under longstanding requirements of Sec. 413.86, and we believe it is possible to implement section 1886(h)(4)(F) without mandating significant additional reporting. Since the unweighted direct GME FTE count will be used in calculating direct GME payments, we expect to amend the Medicare cost report to require hospitals to report the unweighted FTE direct GME count for future cost reporting periods. A separate data collection effort will be required to obtain the information for the most recent cost reporting periods ending on or before December 31, 1996. We believe the hospital's unweighted FTE limit for its most recent cost reporting period ending on or before December 31, 1996 should be based on a 12 month cost reporting period. If the hospital's most recent cost reporting period ending on or before December 31, 1996, is a short period report, the fiscal intermediaries shall make adjustments so that the hospital's unweighted FTE limit corresponds to the equivalent of a 12 month cost reporting period. We are revising Sec. 413.86(g)(4) accordingly. (1) Counting Residents Based on a 3-Year Average (Sec. 413.86(g)(5)) Section 1886(h)(4)(G)(iii) of the Act, as added by section 4623 of Public Law 105-33, provides that for the hospital's first cost reporting period beginning on or after October 1, 1997, the hospital's weighted FTE count for payment [[Page 46005]] purposes equals the average of the weighted FTE count for that cost reporting period and the preceding cost reporting period. For cost reporting periods beginning on or after October 1, 1998, section 1886(h)(4)(G) of the Act requires that hospitals' direct medical education weighted FTE count for payment purposes equal the average of the actual weighted FTE count for the payment year cost reporting period and the preceding 2 cost reporting periods. This provision provides incentives for hospitals to reduce the number of residents in training by phasing in the associated reduction in payment over a 3- year period. We are revising Sec. 413.86(g)(5) accordingly. For cost reporting periods beginning on or after October 1, 1997, we will determine the hospital's direct GME payment as follows: Step one. Determine the average of the weighted FTE counts for the payment year cost reporting period and the prior two immediately preceding cost reporting periods (with exception of the hospital's first cost reporting period beginning on or after October 1, 1997, which will be based on the average of the weighted average for that cost reporting period and the immediately preceding cost reporting period). Step two. Determine the hospital's allowable direct GME costs without regard to the FTE cap (before determining Medicare's share). That is, take the sum of (a) the product of the primary care per resident amount and the primary care weighted FTE count, and (b) the product of the non-primary care per resident amount and the non-primary care weighted FTE count. Step three. Divide the hospital's allowable direct GME costs by the total number of FTE residents (including the effect of weighting factors) for the cost reporting period to determine the average per resident payment amount (this amount reflects the FTE weighted average of the primary and non-primary care per resident amounts) for the cost reporting period. Step four. Multiply the average per resident payment amount for the cost reporting period by the 3 year average weighted count to determine the hospital's allowable direct GME costs. This product is then multiplied by the hospital's Medicare patient load for the cost reporting period to determine Medicare's direct GME payment to the hospital. The following example illustrates determination of direct GME payment under the rolling average methodology: Assume a hospital with a cost reporting period ending December 31, 1996 (beginning January 1, 1996) had 100 unweighted FTE residents and 90 weighted FTE residents. The hospital's FTE cap is 100 unweighted residents. Step one. In its cost reporting period beginning January 1, 1997, it had 100 unweighted residents and 90 weighted residents. The hospital had 90 unweighted residents and 85 weighted residents for its cost reporting period beginning January 1, 1998. In its cost reporting period beginning on January 1, 1999, the hospital had 80 unweighted residents and 80 weighted residents. The 3 year weighted average for the hospital's cost reporting period beginning January 1, 1999 is 85 (90+85+80)/3). Step two. Payment for the cost reporting period is determined by multiplying hypothetical per resident amounts for primary care and non- primary care residents as follows: Primary Care--$50,000 x 70 weighted FTEs=$3,500,000 Other--$47,000 x 10 weighted FTEs=$470,000 Total direct GME payments before using the 3-year average FTE counts and applying the Medicare patient load would be $3,970,000 ($3,500,000 + $470,000). Step three. Divide $3,970,000 by 80 total FTEs (70+10) to determine an average per resident FTE payment of $49,625. Step four. Multiply this figure by 85 FTEs (from step 1 above) to determine a total payment $4,218,125. Apply the hospital's Medicare patient load to determine Medicare's direct GME payment. To address situations in which a hospital increases the number of FTE residents over the cap, notwithstanding the limit established under section 1886(h)(4)(F), we are establishing the following policy for determining the hospital's weighted direct GME FTE count for cost reporting periods beginning on or after October 1, 1997. Determine the ratio of the hospital's unweighted FTE count for residents in those specialties for the most recent cost reporting period ending on or before December 31, 1996, to the hospital's number of FTE residents without application of the cap for the cost reporting period at issue. Multiply the ratio determined above by the weighted FTE count for those residents for the cost reporting period. Add the weighted count of residents in dentistry and podiatry to determine the weighted FTEs for the cost reporting period. This methodology should be used for purposes of determining payment for cost reporting periods beginning on or after October 1, 1997. The hospital's unweighted count of interns and residents for a cost reporting period beginning before October 1, 1997 will not be subject to the FTE limit. For example, if the hospital's FTE count of residents in its cost reporting period ending December 31, 1996 is 100 residents before application of the initial residency weighting factors and the hospital's number of residents for its December 31, 1990 cost reporting period is 110 FTE residents, the ratio of residents in the two cost reporting periods equals 100/110. If the hospital's weighted FTE count is 100 FTE residents in the December 31, 1998 cost reporting period (that is, of the 110 unweighted residents, 20 are beyond the initial residency period and are weighted as 0.5 FTE), the hospital's weighted FTE count for determining direct GME payment is equal to (100/110) * 100, or 90.9 FTE residents. If a hospital's unweighted count of residents in specialties other than dentistry and podiatry does not exceed the limit, the weighted FTE count equals the actual weighted FTE count for the cost reporting period. The weighted FTE count in either instance will be used to determine a hospital's payment under the 3 year rolling average payment rules. We believe this proportional reduction in the hospital's unweighted FTE count is an equitable mechanism for implementing the statutory provision. Section 1886(h)(4)(G)(ii) of the Act provides that the Secretary makes appropriate modifications to ensure that the average FTE resident counts are based on the equivalent of full 12 month cost reporting periods. We are revising Sec. 413.86(g)(5) to allow the fiscal intermediaries to make the appropriate adjustments to ensure that 3 year and 2 year average FTE counts are based on the equivalent of 12 month periods. (2) Exceptions to the Direct GME FTE Limit (Sec. 413.86(g)(6)) Under new section 1886(h)(4)(H)(i) of the Act, the Secretary is required, consistent with the principles of establishing a limitation on the number of residents paid for by Medicare and the 3-year rolling average, to establish rules with respect to the counting of residents medical residency training programs established on or after January 1, 1995. Such rules must give special consideration to facilities that meet the needs of underserved rural areas. Language in the Conference Report indicates concern that there be proper flexibility to respond to changing needs given the sizeable number of hospitals [[Page 46006]] that elect to initiate new (or terminate existing) training programs. Pursuant to the statute, we are establishing the following rules for applying the FTE limit and determining the FTE count for hospitals that established new medical residency training programs on or after January 1, 1995. For purposes of this provision, a ``program'' will be considered newly established if it is accredited for the first time, including provisional accreditation on or after January 1, 1995, by the appropriate accrediting body. Although the Secretary has broad authority to prescribe rules for counting residents in new programs, the Conference Report for Public Law 105-33 indicates concern that aggregate number of FTE residents should not increase over current levels. Accordingly, we will continue to monitor growth in the aggregate number of residency positions and may consider changes to the policies described below if there continues to be growth in the number of residency positions. We are providing for adjustments in the following situations: (i) Hospitals with no Residents prior to January 1, 1995. If a hospital had no residents before January 1, 1995 and it establishes one or more new medical residency training programs on or after that date, the hospital's FTE cap will be based on the number of first year residents participating in its accredited graduate medical education training programs in the third year of receiving payments for direct GME. The hospital's unweighted FTE resident cap will equal the product of the number of first year residents in that year and the number of years in which residents are expected to complete that program based on the minimum accredited length for the type of program as published in the Graduate Medical Education Directory. For example, assume a hospital that did not receive any direct GME payment in its cost reporting period ending December 31, 1994 (the hospital's most recent cost reporting period ending before January 1, 1995) established an internal medicine program and receives direct GME payment for residents beginning a training program on July 1, 1998. The hospital's cap would be adjusted to reflect the resident cap for residents in the internal medicine program for its cost reporting periods ending in 1998 and 1999. In the hospital's cost reporting period ending December 31, 2000 (the third cost reporting period in which the hospital has residents), there are five first-year FTE residents participating in the hospital's internal medicine program. Since the minimum length listed for internal medicine programs in the Graduate Medical Education Directory is 3 years, this hospital's unweighted FTE cap can subsequently be adjusted by up to 15 FTEs. (ii) Hospitals with Residents prior to January 1, 1995, not Located in Rural Areas If a hospital is not located in a rural area and had residents in its most recent cost reporting period ending before January 1, 1995, the hospital's unweighted FTE cap may be adjusted for new medical residency training programs established on or after January 1, 1995 but before August 5, 1997. An adjustment under this policy allows programs which began between January 1, 1995 and enactment of the statute to grow to full capacity. No adjustments to the FTE cap will be allowed for new medical residency training programs established on or after August 5, 1997. An adjustment in the hospital's FTE limit for a new program will be based on the product of the number of first year residents in the third year of the newly established program and the minimum accredited length for the type of program published in the Graduate Medical Education Directory. The hospital's revised unweighted FTE limit reflects the number of residents in its most recent cost reporting period ending on or before December 31, 1996 adjusted for the incremental increase in its FTE count for newly established programs. We are providing the following example to illustrate how to make adjustments to the FTE cap for newly established medical residency training programs in hospitals that received direct GME payments prior to January 1, 1995. Assume a hospital had an unweighted direct GME count of 100 FTE residents for its cost reporting period ending June 30, 1996 and the hospital, although it had 6 first year positions, began an internal medicine program on July 1, 1995 with only 4 first year residents. On July 1, 1996, the program expands to 10 residents (six first-year residents and four second-year residents). On July 1, 1997, the program has 16 residents (six first-year residents, six second-year residents and four third-year residents). Since the minimum accredited length for allopathic internal medicine programs listed in the Graduate Medical Education Directory is 3 years, the hospital's unweighted FTE cap can subsequently be adjusted to reflect 18 residents in the internal medicine program (six first-year residents x 3 years). In the hospital's cost reporting period ending June 30, 1996 (the initial cap year), the hospital had a total of 100 FTE residents including 4 in internal medicine. Thus, the hospital's adjusted cap equals 100 residents plus 14 (18-4) or 114 residents. (iii) Hospitals Located in Rural Areas that had Residents before January 1, 1995 and Other Rural Hospitals that Added Residents Under (i) of this Section. We would treat these rural hospitals the same as all other hospitals which had residents before January 1, 1995 with the exception that the unweighted FTE limit for these hospitals could be adjusted to reflect residents in new medical residency training programs established on or after August 5, 1997. That is, if these hospitals added new programs on or after August 5, 1997 the cap would be adjusted but not without limit. A hospital's unweighted limit would be adjusted for each new program based on the methodology described above based on the product of the number of first year residents in the third year of the newly established program and the minimum number of years of the accredited program. For these hospitals, the limit will only be adjusted for additional new programs but not for expansions of existing or previously existing programs. A hospital seeking an adjustment to the unweighted direct GME FTE resident count limit under this exception policy must provide documentation to its fiscal intermediary justifying the adjustment. (3) Aggregate Direct GME FTE Limit for Affiliated Institutions (Sec. 413.86(g)(4)) Section 1886(h)(4)(H)(ii) of the Act permits but does not require the Secretary to prescribe rules that allow institutions that are members of the same affiliated group (as defined by the Secretary) to elect to apply the FTE resident limit on an aggregate basis. This provision would permit hospitals flexibility in structuring rotations within a combined cap when they share residents. Pursuant to the broad authority conferred by the statute, we are establishing the following criteria to define ``affiliated group''. Hospitals in the same geographic wage area. For purposes of this provision, ``affiliated group'' includes two or more hospitals located in the same geographic wage area (as that term is used for purposes of the inpatient operating prospective payment system), if the hospital rotate residents to the other hospitals of the group during the course of the approved program. Hospitals that are not located in the same geographic wage area. If the hospitals are not located in the same [[Page 46007]] geographic wage area, we will consider them part of the same affiliated group if the hospitals are jointly listed in common as a major participating institution (as that term is used in the Graduate Medical Education Directory, 1997-1998) for one or more programs. We are defining an affiliated group on an institution-wide basis. Hospitals may participate in many different specialty programs and may share residents for one specialty program with one hospital but share residents for a different program with another hospital. We recognize that hospitals may affiliate for the purpose of specific specialty programs, but for purposes of applying an aggregate cap, it is not administratively feasible to apply the cap on a program by program basis. We are implementing all of the above provisions of section 1886(h)(4) of the Act effective with cost reporting periods beginning on or after October 1, 1997. The statute does not provide a specific effective date for the rules related to affiliated groups aggregating resident FTE counts. Because each of the special rules is operative in conjunction with FTE limit, we believe it is appropriate to implement these provisions on October 1, 1997. We welcome public comments on implementation of the provisions of Public Law 105-33 relating to direct GME payments. b. Payments to Hospitals for Direct Costs of Graduate Medical Education of Medicare Managed Care Beneficiaries (Sec. 413.86(d)(2)) Section 4624 of Public Law 105-33 amended section 1886(h)(3) of the Act to provide a 5-year phase-in of payments to teaching hospitals for graduate medical education associated with services to Medicare managed care discharges for portions of cost reporting periods occurring on or after January 1, 1998. The amount of payment is equal to the product of the per resident amount, the total weighted number of FTE residents working all areas of the hospital (and nonhospital setting in certain circumstances) subject to the limit on number of FTE residents under section 1886(h)(4)(F) and the averaging rules under section 1886(h)(4)(G) of the Act described above, the ratio of the total number of inpatient bed days that are attributable to Medicare managed care enrollees to total inpatient days and the applicable percentage. The applicable percentages are 20 percent in 1998, 40 percent in 1999, 60 percent in 2000, 80 percent in 2001, and 100 percent in 2002 and subsequent years. We are revising Sec. 413.86(d)(2) to establish a 5-year phase-in payment methodology to hospitals for direct GME payments based on Medicare managed care enrollees for portions of cost reporting periods beginning on or after January 1, 1998. We will modify the Medicare cost report to determine direct GME payments associated with services to Medicare managed care enrollees. Section 4001 of Public Law 105-33 adds section 1853(a)(3)(C) of the Act. New section 1853(a)(3)(C) requires the Secretary to implement a risk adjustment methodology that accounts for variations in per capita costs based on health status and other demographic factors in Medicare payments to managed care organizations by no later than January 1, 2000. Public Law 105-33 also adds section 1853(a)(3)(B) of the Act to require the Secretary to collect data necessary from managed care organizations to implement this provision. We are currently considering the data requirements necessary to implement both the direct and indirect medical education and risk adjustment provisions. We plan to consult with organizations representing hospitals and managed care plans to develop an administrative mechanism for implementing both of these provisions. c. Permitting Payment to Nonhospital Providers Under section 4625 of Public Law 105-33, for cost reporting periods beginning on or after October 1, 1997, the Secretary is authorized but not required to establish rules for payment to ``qualified nonhospital providers'' for the direct costs of medical education incurred in the operation of an approved medical residency training program. Under the statute, qualified nonhospital providers include Federally Qualified Health Centers, Rural Health Clinics, Medicare + Choice organizations and such other nonhospital providers the Secretary determines to be appropriate. We expect to establish rules that specify the amounts, form, and manner in which payments will be made and the portion of such payments that will be made from each of the Medicare trust funds. The Secretary must reduce the aggregate amount paid to nonhospital providers to the extent payment is made for residents included in the hospital's FTE count. Since we have not previously made payments for direct graduate medical education to nonhospital providers, we are interested in receiving comment on how to implement this provision. We are particularly concerned that any methodology assure that Medicare does not pay two entities for the same training time. In particular, we are interested in receiving public comments on how to determine appropriate payment for ambulatory sites. Under 42 CFR part 405 subpart E, federally qualified health centers and rural health clinics are paid on the basis of an all inclusive rate for each beneficiary visit for the covered services. We are interested in receiving public comments on whether we should pay these entities for GME on a cost basis, a per resident amount, or some other basis and how to determine Medicare's share of their costs. Similarly, since we have not previously made explicit payments to managed care plans for direct GME we are interested in how we should pay them. Section 413.86(f)(1) allows hospitals to include resident time in nonhospital sites when the hospital incurs all or substantially all of the costs. Under Sec. 413.86(f)(1)(iii)(B) we have defined ``all or substantially all'' to mean that the hospital has a written agreement with the nonhospital site that it will continue to pay the resident's salary for training time in that setting. We are interested in receiving comments on whether this is an appropriate standard for determining which institution should be paid for the resident's training time or whether there are other financial arrangements we should consider in determining which entity incurs ``all or substantially all'' of the costs. d. Medicare Special Reimbursement Rule for Primary Care Combined Residency Programs (Sec. 413.86(g)(1)) Section 413.86(g)(2) requires full payment for residents within an initial residency period. Section 413.86(g)(3) requires residents beyond the initial residency period to be weighted as 0.5 FTE for purposes of determining GME payment. The initial residency period is defined as the minimum number of years required to become board eligible in specialty and is determined at the time a resident enters a medical residency training program. In the August 30, 1996 final rule (61 FR 46211), we clarified that the initial residency period for residents in combined medical residency training programs is limited to the time required to complete the longer of the composite programs. Effective for residents in or beginning training on or after July 1, 1997, section 4627 of Public Law 105-33 amends section 1886(h)(5)(G) of the Act to require that the initial residency period for combined programs consisting only of primary care training, equals the longer of the composite programs plus one year. A primary care resident is a resident enrolled in an approved medical residency training program in [[Page 46008]] family medicine, general internal medicine, general pediatrics, preventive medicine, geriatric medicine, or osteopathic general practice. This provision also adds one year to the initial residency period for combined primary care and obstetrics and gynecology programs. We are amending Sec. 413.86(g)(1) to implement the provisions of section 1886(h)(5)(G) for residents in or beginning training on or after July 1, 1997. J. Medicare Rural Hospital Flexibility Program 1. Previous Law--EACH/RPCH Program Section 1820 of the Act, before the enactment of the Public Law 105-33 of 1997, established the Essential Access Community Hospital (EACH) program. Under that program, seven States received grants to develop rural health networks consisting of Rural Primary Care Hospitals (RPCHs) and EACHs. RPCHs are limited-service rural hospitals that provide outpatient and short-term inpatient hospital care on an urgent or emergency basis. They then release patients or transfer them to an EACH or other acute care hospital. To be designated as RPCHs, hospitals had to meet certain criteria, including requirements that they not have more than 6 inpatient beds for acute (hospital-level) care and maintain an average inpatient length of stay of no more than 72 hours. Montana also has a separate, limited-service hospital program called the Medical Assistance Facility (MAF) program, which has been in operation since 1988. This program operates under a demonstration waiver from HCFA that allows these limited service hospitals to be reimbursed for providing treatment to Medicare beneficiaries even though they are not required to meet all requirements applicable to hospitals. In addition, HCFA supplies grant funding to the Montana Hospital Research and Education Foundation to provide technical assistance, liaison, public education, and other services to the MAFs. The first MAF was licensed and began participating in the demonstration in 1990. At this point a total of 12 MAFs have been licensed and certified. Additional facilities are in the process of considering a conversion to MAF status. 2. Changes Made by Balanced Budget Act of 1997 The new legislation replaces the current 7-State EACH/RPCH program with a new Medicare Rural Hospital Flexibility Program that will be available in any State that chooses to set up such a program and provide HCFA with the necessary assurances that it has developed, or is in the process of developing, a State rural health care plan meeting certain requirements, and that it has designated, or is in the process of designating, rural nonprofit hospitals or facilities as critical access hospitals (CAH). To be eligible as a CAH, a facility must be a rural public or nonprofit hospital located in a State that has established a Medicare rural hospital flexibility program, and must be located more than a 35- mile drive from any other hospital or critical access hospital. In mountainous terrain or in areas with only secondary roads available, the mileage criterion is 15 miles. In addition, the facility must make available 24-hour emergency care services, provide not more than 15 beds for acute (hospital-level) inpatient care, and keep each inpatient for no longer than 96 hours, unless a longer period is required because of inclement weather or other emergency conditions, or a PRO or other equivalent entity, on request, waives the 96-hour restriction. An exception to the 15-bed requirement is made for swing-bed facilities, which are allowed to have up to 25 inpatient beds that can be used interchangeably for acute or SNF-level care, provided that not more than 15 beds are used at any one time for acute care. The facility is also required to meet certain staffing and other requirements that closely parallel the requirements for RPCHs. The new legislation also defines a rural health network as an organization consisting of at least one CAH and at least one acute care hospital, the members of which have entered into agreements regarding patient referral and transfer, the development and use of communications systems, and the provision of emergency and nonemergency transportation. In addition, each CAH in a network must have an agreement for credentialing and quality assurance with at least one hospital that is a member of the network, or with a PRO or equivalent entity, or with another appropriate and qualified entity identified in the rural health care plan for the State. 3. Grandfathering of Existing Facilities Under the new legislation, no new EACH designations would be made, but rural hospitals designated as EACHs under previous law would continue to be paid as sole community hospitals. The previous payment provisions applicable to RPCHs are repealed, and the law instead provides that CAHs will be paid on a reasonable cost basis for their inpatient and outpatient services. The law specifically provides that existing RPCHs and MAFs will be deemed as CAHs if these facilities or hospitals are otherwise eligible to be designated by the State as CAHs. Under a special provision applicable to the MAF program, the MAF demonstration project is extended until at least October 1, 1998, to allow for an appropriate transition between the MAF and CAH programs. 4. Provision of SNF-Level Care in RPCHs Previous law provided specific rules relating to the number of beds that an RPCH could use to provide SNF-level care. As noted above, the new legislation provides considerable flexibility to a CAH with a swing-bed agreement to use inpatient beds for either SNF or acute care, as long as the total number of inpatient beds does not exceed 25 and the number of beds used at any one time for acute care does not exceed 15. 5. Implementing Regulations To allow the changes made by the enactment of Public Law 105-33 to be implemented by the statutory effective date of October 1, 1997, we are publishing the interim rules set forth below. In developing these rules, our general approach has been to retain the provisions of existing RPCH regulations, except where the new legislation clearly requires us to make a change. We believe this approach will allow the new amendments to be implemented with a minimum of inconvenience for existing facilities and will serve as the basis for a smooth transition between the RPCH and CAH programs. To implement the section 4201 amendments, we are revising existing regulations as follows: Part 409 (Hospital Insurance Benefits), Sec. 409.30(a) is revised to specify that to qualify for posthospital SNF care in a hospital or CAH, a beneficiary must have received inpatient CAH care for at least 3 consecutive calendar days (rather than the 72 hours required previously for RPCHs). This change ensures that care in CAHs and in acute care hospitals is counted uniformly toward the prior stay requirement. Part 410 (Supplementary Insurance Benefits), Sec. 410.2 is revised to add a ``CAH'' in the definitions of both ``Participating'' providers and ``nonparticipating'' providers. Also, Sec. 410.152(k) is revised to delete the description of payment methods for RPCH outpatient services that were mandated under previous law and to reflect the new statutory provision. As [[Page 46009]] explained more fully below, the statute now provides that payment for these services is to be made on a reasonable cost basis. We are specifying that ``reasonable cost'' is to be determined under section 1861(v)(1)(A) of the Act and existing regulations in Parts 413 and 415. Then, Sec. 410.155(a) is revised to add a critical access hospital (CAH) that meets the requirements of part 485 in the definition of ``Hospital''. Furthermore, paragraph (b) is revised to add a CAH as a provider in which inpatient mental health services that are identified in paragraphs (b) (1) through (4) are not subject to mental health services limitations described in paragraph (b). Part 412 (Prospective Payment Systems for Inpatient Hospital Services) Sec. 412.109 is revised to reflect the elimination of the EACH designation. However, we are retaining the provisions in current regulations that are needed to allow rural hospitals designated as EACHs under previous law to continue to be paid as sole community hospitals and, where appropriate, to obtain adjustments to their hospital-specific rates. We are revising the regulations to clarify that HCFA will terminate the EACH designation of a hospital that no longer complies with the terms, conditions, and limitations that were applicable when it was designated as an EACH. Part 413 (Principles of Reasonable Cost Reimbursement; Payment for End-Stage Renal Disease Services; Optional Prospectively Determined Payment Rates for Skilled Nursing Facilities), Secs. 413.1(a)(1)(G), 413.13(c)(2)(iv), and 413.70 are revised to reflect the elimination of the previously applicable payment methods for RPCHs. As noted above, the provisions of the Medicare law applicable to payment for both inpatient and outpatient RPCH services (sections 1814(l) and section 1834(g) of the Act, respectively) were amended by sections 4201 (c)(3)(B) and (c)(5) of Public Law 105-33 to remove the previous payment provisions, including the provisions of section 1834(g)(1)(B), and require that payment to CAHs for these services be made on a reasonable cost basis. Reasonable cost is defined at section 1861(v)(1)(A) of the Act and in regulations. We have specified that ``reasonable cost'' is to be determined under section 1861(v)(1)(A) of the Act and existing Medicare reimbursement regulations at 42 CFR parts 413 and 415 and in the statute. Part 485, Subpart F (previously Conditions of Participation for Rural Primary Care Hospitals) is revised to reflect the new CAH statutory requirements regarding the definition of a rural health network, status and location requirements, designation requirements for CAHs, the requirements regarding the content of network agreements, number of beds and length of stay permitted, and the special requirements for CAHs that provide SNF-level services. We recognize that some facilities which received approval from HCFA under previous law to provide SNF-level services, may wish to continue operating under the terms of that approval. To authorize this, the regulations will allow a CAH that participated in the Medicare program as a rural primary care hospital (RPCH) on September 30, 1997 and, on that date, had in effect an approval from HCFA to use its inpatient facilities to provide posthospital SNF care, to continue in that status under the same terms, conditions, and limitations that were applicable at the time those approvals were granted. However, a CAH that was granted swing-bed approval under previous law may request by January 1, 1998 that HCFA evaluate its application to be a CAH and a swing-bed provider under the current law and the regulations set forth below. If this request is approved, the approval is effective not earlier than October 1997. As of the date of approval, the CAH no longer has any status based on its previous approval and may not request reinstatement under previously effective provisions. We are also making nomenclature changes in various sections of Parts 400, 409, 410, 411, 413, 414, 424, 440, 485, 488, 489, and 498 to reflect the statutory change from RPCHs to CAHs. 6. Other Implementation Issues a. Process for Review and Acceptance of State Assurances States interested in establishing a Medicare rural hospital flexibility program will submit to the Regional Administrator of the HCFA Regional Office responsible for oversight of Medicare and Medicaid in the State, an application signed by an official of the State. The application will express the State's interest in establishing a Medicare rural hospital flexibility program and will contain, at a minimum, the following assurances and other information: The State must provide assurances that-- (1) The State has developed, or is in the process of developing, a State rural health care plan that provides for the creation of one or more rural health networks as defined in Sec. 485.603(a), promotes regionalization of rural health services in the State, and improves access to hospitals and other health services for rural residents of the State; (2) The State has developed a rural health care plan in consultation with the hospital association of the State, rural hospitals located in the State, and the State Office of Rural Health (or, in the case of a State in the process of developing such a plan, that assures the Secretary that the State will consult with these organizations); and (3) The State has designated or is in the process of designating (consistent with the rural health plan), rural nonprofit or public hospitals or facilities located in the State as critical access hospitals; and The State must also provide other information to support its assurances, as follows: (1) A copy of the State rural health care plan. If the State is in the process of developing the plan, the State should submit a copy of the current draft of the plan along with an anticipated completion date; (2) An explanation of how the State rural health plan will provide for the creation of one or more rural health networks, promote regionalization of rural health services, and improve access to hospitals and other health services for rural residents of the State; and (3) a listing of the facilities which the State has designated, or plans to designate, as critical access hospitals. Section 1820(b)(3) of the Act authorizes HCFA to require other information and assurances in support of a State rural health plan. Therefore, HCFA will send the State a written request for any other information it may need to complete review of the application to establish a Medicare Rural Hospital Flexibility Program. HCFA will review the application from the State for the assurances listed above and will notify the State in writing of its decision on the State's application. Facilities designated under an approved plan will be eligible for certification by the HCFA Regional Office as CAHs, in accordance with the regulations in 42 CFR Part 485, Subpart F. We welcome comments on whether the information and assurances set forth above are sufficient, or whether other information or assurances are needed. We will consider this issue carefully and notify States in writing of any changes in the information or assurances required. b. Designation of Facilities in Border States Section 1820(k), as in effect prior to the enactment of the Public Law 105- [[Page 46010]] 33, explicitly authorized States with EACH programs to designate facilities in adjacent States as EACHs or RPCHs if certain conditions were met. Section 4201 of Public Law 105-33 deleted that authority. Therefore, a facility can be designated as a CAH only by a State in which it is located. The regulations as revised at Sec. 485.606 have deleted any reference to this authority. c. Designation of Closed Facilities Section 1820(f)(1)(B), as in effect prior to the enactment of Public Law 105-33, explicitly allowed, under certain circumstances, States with EACH programs to designate facilities as RPCHs even though the facilities had closed and were not longer functioning as hospitals at the time they applied for RPCH status. The new legislation removed that authority so there is now no basis on which a closed facility can be designated as a CAH. We have revised Sec. 485.612 to reflect this change. K. Changes to the Update Factors for Federal Rates for Inpatient Operating Costs (Sec. 412.63) Public Law 105-33 made several revisions to the applicable percentage change (the update factor) to the Federal rates for prospective payment hospitals. Section 4401(a)(1) of Public Law 105-33 amended section 1886(b)(3)(B)(i) of the Act to revise the update factors for the Federal rates for inpatient operating costs for FYs 1998 through 2002. The update factor for FY 1998 is now 0 percent for hospitals in all areas. For FY 1999, the update for hospitals in all areas is the market basket rate of increase minus 1.9 percentage points. (As discussed in detail in section V.D. of this final rule with comment period, section 4401(b) provides for a higher update in FY 1998 and FY 1999 for certain hospitals that do not receive disproportionate share or indirect medical education payments and are not designated as Medicare-dependent, small rural hospitals.) For FY 2000, the update for all areas is the market basket rate of increase minus 1.8 percentage points. For FY 2001 and FY 2002, the update for all areas is the market basket rate of increase minus 1.1 percentage points. For FY 2003 and subsequent years, the update for all areas is the market basket rate of increase. The specific updates to be applied for FY 1998 are discussed in the addendum and Appendix D to this document. In this final rule with comment period, we are making the necessary changes to Sec. 412.63 to implement these provisions. L. Change in the Publication Date of the Proposed and Final Rules for the Hospital Inpatient Prospective Payment System (Sec. 412.8) Section 4644(b) of Public Law 105-33 amends section 1886(e) of the Act to require the Secretary to publish the proposed and final rules that contain her proposed and final recommendations on the annual update factor applicable to the hospital payment rates by the April 1 and August 1 prior to the start of the fiscal year to which the rates apply beginning with the FY 1999 rates. The current schedule calls for publication on May 1 and September 1. We are revising Sec. 412.8(b) and (c) of the regulations to implement this change. In that section, we are also deleting the current paragraph (a) since it is redundant. M. Technical Change: Correction of Statutory Citation The August 30, 1996 final rule (61 FR 46165) included an amendment to Sec. 489.27 that reprinted the statutory reference governing the distribution of an ``Important Message from Medicare.'' This reference, ``section 1886(a)(1)(M)'', was incorrect. We are correcting this reference to read ``section 1866(a)(1)(M)''. VI. Changes to the Prospective Payment System for Capital-Related Costs A. Possible Adjustment to Capital Prospective Payment System Minimum Payment Levels Section 412.348(b) of the regulations provides that, during the capital prospective payment system transition period, any hospital may receive an additional payment under an exceptions process if its total inpatient capital-related payments under its payment methodology (that is, fully prospective or hold-harmless) are less than a minimum percentage of its allowable Medicare inpatient capital-related costs. The minimum payment levels are established by class of hospitals under Sec. 412.348(c). The minimum payment levels for portions of cost reporting periods occurring in FY 1997 are: Sole community hospitals (located in either an urban or rural area), 90 percent; Urban hospitals with at least 100 beds and a disproportionate share patient percentage of at least 20.2 percent and urban hospitals with at least 100 beds that qualify for disproportionate share payments under Sec. 412.106(c)(2), 80 percent; and All other hospitals, 70 percent. Under Sec. 412.348(d), the amount of the exceptions payment is determined by comparing the cumulative payments made to the hospital under the capital prospective payment system to the cumulative minimum payment levels applicable to the hospital, for each cost reporting period subject to that system. Any amount by which the hospital's cumulative payments for previous cost reporting periods exceeds its cumulative minimum payment levels for those cost reporting periods is deducted from the additional payment that would otherwise be payable for a cost reporting period. Section 412.348(g) also provides for a separate special exceptions process for hospitals undertaking major renovations or replacement of aging facilities during the decade of the transition. For as long as 10 years beyond the end of the transition period, certain hospitals may be eligible to receive special exceptions payments at a 70 percent minimum payment level. For hospitals that qualify for the special exceptions provision before the end of the transition, the general and special exceptions provisions will run concurrently during the later years of the transition. However, since the minimum payment level for the special exceptions provision is at the same level that applies to all hospitals under the general provision (currently 70 percent), the special exceptions provision will generate no additional payment to hospitals until the end of the transition period. Section 412.348(h) further provides that total aggregate estimated exceptions payments under both the regular exceptions process and the special exceptions process may not exceed 10 percent of the total estimated capital prospective payments (exclusive of hold-harmless payments for old capital) for the same fiscal year. In the FY 1997 final rule implementing the prospective payment system for capital- related costs, we stated that the minimum payment levels in subsequent transition years would be revised, if necessary, to keep the projected percentage of payments under the exceptions process at no more than 10 percent of capital prospective payments. In section III of the Addendum to the June 2, 1997, proposed rule (62 FR 29951), we discussed the factors and adjustments used to develop the FY 1998 Federal and hospital-specific rates. In particular, we discussed the FY 1998 exceptions payment reduction factor. This factor adjusts the annual payment rates for the estimated level of additional payments for exceptions in FY 1998. In the proposed rule, we estimated that exceptions payments would equal 7.24 percent of aggregate [[Page 46011]] payments based on the Federal rate and the hospital-specific rate. We indicated that in the final rule we would develop a new estimate of the level of exceptions payments, and revise the exceptions payment adjustment factor accordingly, on the basis of the data that became available to us prior to publication of the final rule for FY 1998. We model exceptions payments based on the best information available on hospitals' actual payment methodology. We also indicated that while it was not necessary at that time to propose reductions in the minimum payment levels, we might find it necessary to implement adjustments to the minimum payment levels in the final rule. We, therefore, provided public notification that adjustments to the minimum payment levels were possible in the FY 1998 final rule. As explained in Appendix B, since publication of the proposed rule, we have made a change to our model with regard to admissions. This change has caused the number and dollar value of exceptions to drop significantly. We are now estimating that exceptions payments will equal 3.41 percent of aggregate payments based on the Federal rate and hospital-specific rate in FY 1998, instead of the 7.24 percent we estimated in the proposed rule. This also means the exceptions payment reduction factor, which accounts for expected exceptions payments, will reflect a 3.41 percent reduction to the rates for FY 1998, rather than a 7.24 percent reduction. Because of this change in our estimate of exceptions payments, we will not have to adjust minimum payment levels for FY 1998 to keep exceptions within 10 percent of total payments. In the proposed rule we indicated that when it did become necessary to adjust the minimum payment levels in accordance with Sec. 412.348(h), we would contemplate adjusting each of the existing levels (that is, 90 percent for sole community hospitals, 80 percent for large urban DSH hospitals, and 70 percent for all other hospitals and special exceptions) by 5 percentage point increments until estimated exceptions payments were within the 10 percent limit. For example, we would set minimum payment levels at 85 percent for sole community hospitals, 75 percent for large urban DSH hospitals, and 65 percent for all other hospitals and special exceptions, provided that aggregate exceptions payments at those minimum payment levels were projected to be no more than 10 percent of total rate-based payments. We indicated our belief that this policy appropriately provided for all classes of hospitals to share in the reduction in exceptions payments, while simultaneously preserving the special protections provided by higher minimum payment levels for sole community hospitals and large urban DSH hospitals relative to all other hospitals. If aggregate exceptions payments at those minimum payment levels still exceeded 10 percent of total rate-based payments, we proposed to continue reducing the minimum payment levels by 5 percentage point increments each until the requirement of Sec. 412.348(h) was satisfied. We provided notification of our thinking on this issue in order to solicit public comment on the appropriate method for adjusting the minimum payment levels. Comment: We received several comments expressing concern about our proposal to cut minimum payment levels in five percentage point increments, if necessary, to stay within the ten percent limit on overall exceptions payments. The commenters expressed concern that cutting the minimum payment levels by five percentage increments might reduce exception payments more than necessary to stay within the ten percent cap. Some commenters stated that using five percent incremental adjustments instead of something more exact was not consistent with the level of specificity that HCFA uses to make other types of adjustments, and recommended that we use the same level of specificity in making adjustments to the minimum payment levels that we use in making other types of adjustments. Some commenters recommended that we adjust minimum payment levels by tenths of a percent. One commenter noted that because the minimum payment levels vary by type of hospital--90 percent for sole community hospitals, 80 percent for urban DSH hospitals, and 70 percent for all other hospitals and special exceptions, cutting all hospitals by the same percentages would affect some hospitals more than others. Response: After considering the commenters' concerns, we have decided it would be appropriate to adjust each of the minimum payment levels by one percentage point increments in order to meet the ten percent limit. We are changing the regulations at Sec. 412.348 to reflect this change in our policy. We will make an adjustment to the minimum payment levels when necessary by applying this policy. We decided not to implement the suggestion made by some commenters that we adjust the minimum payment levels to the tenth of a percent level. We believe such precise adjustments are inappropriate in this context because our calculations reflect estimates, not exact figures. We have also decided not to adjust groups with higher minimum payment levels, such as sole community hospitals and urban DSH hospitals, more than groups with lower minimum payment levels, such as all other hospitals and special exceptions. At the time we established the minimum payments, at the inception of capital PPS, we decided that some groups warranted higher exception payments because of the type of care they provided or their location in a particular community. We believe it is still appropriate to maintain those higher levels of exception payments for sole community hospitals and urban DSH hospitals. Comment: One commenter suggested that we use excess funds not paid out for outliers to fund the shortfall in capital exceptions. Response: The commenter misunderstands the prospective nature of outlier and capital exceptions policies and projections. We set payment parameters such as outlier thresholds and capital minimum payment levels before a fiscal year based on estimates. We also make prospective adjustments to the applicable rates (operating standardized amounts or capital Federal rates) to account for the projected level of outlier payments or capital exceptions payments. Thus, for example, we set outlier thresholds so that the outlier payments for operating costs are projected to equal 5.1 percent of total DRG operating payments, and we adjust the operating standardized amounts correspondingly. We do not set aside a pool of money to fund outlier cases. Moreover, once the payment parameters and adjustments are established for a fiscal year, we do not make retroactive adjustments based on differences between estimated and actual payments, whether actual payments are higher or lower than estimated payments. B. Special Exceptions Application Process As discussed in section VI.A above, a separate special exceptions provision extends protection to certain hospitals undertaking major renovation or replacement of aging facilities during the decade of the transition. The regulation establishing eligibility for this special exceptions provision, and describing the criteria by which eligible hospitals qualify for special exceptions payments (Sec. 412.348(g)), was finalized on September 1, 1994 (59 FR 45385). In the proposed rule, we did not propose to make any policy changes to the [[Page 46012]] special exceptions provision. However, we had received questions from hospitals and intermediaries about the special exceptions process, and we discussed a few aspects of that process particularly with regard to the age of assets test and the excess capacity test. We reviewed the application process, the project need requirement, the project size requirement, and the excess capacity test. We specified that based on the latest data available, we had decided to set the 75th percentile for the age of assets test at 15.4 years rather than the 16.4 years we had originally contemplated. We received no comments on these clarifications to the special exceptions process. C. Reduction to the Standard Federal Capital Payment Rate and the Unadjusted Hospital-Specific Rate Section 4402 of Public Law 105-33 amended section 1886(g)(1)(A) of the Act to require that, for discharges occurring on or after October 1, 1997, the Secretary must apply the budget neutrality adjustment factor used to determine the Federal capital payment rate in effect on September 30, 1995 (as described in Sec. 412.352) to the unadjusted standard Federal capital payment rate (as described in Sec. 412.308(c)) effective September 30, 1997, and the unadjusted hospital-specific rate (as described in Sec. 412.328(e)(1)) effective September 30, 1997. For discharges occurring on or after October 1, 1997, and before September 30, 2002, the Secretary must reduce the same rates an additional 2.1 percent. The budget neutrality adjustment factor effective September 30, 1995 was .8432 (59 FR 45416) which is equivalent to a 15.68 percent ((1.0-.8432) * 100) reduction in the unadjusted standard Federal capital payment rate and the unadjusted hospital-specific rate in effect on September 30, 1997. The additional 2.1 percent reduction to the rates reduces the rates in effect on September 30, 1997 by a total of 17.78 percent. The unadjusted standard Federal rate must be distinguished from the annual Federal rate actually used in making payment under the capital PPS system. The unadjusted standard Federal rate is the underlying or base rate used to determine the Federal rate for each Federal fiscal year by applying the formula described in Sec. 412.308(c). The annual Federal rate is the result of that determination process in Sec. 412.308(c). Under the statute, the additional 2.1 percent reduction applies for a limited time. The language at section 4402 indicates the 2.1 percent reduction applies to discharges occurring ``before September 30, 2002''. This would require that we calculate special rates that would be in effect for only one day. We believe that Congress intended to apply the reduction to discharges occurring through September 30, 2002. Accordingly, we plan to seek a technical correction to change the date that the 2.1 percent reduction expires from September 29, 2002, to September 30, 2002. Since we assume this technical error will be corrected, we are using the September 30, 2002 expiration date in our regulations. When we restore the 2.1 percent reduction to the Federal rate after September 30, 2002, we plan to restore the rate to the level that it would have been without the reduction. We determined the adjustment factor for FY 1998 by deducting both cuts (.1568 and .021) from 1 (1-.1568-.021-.8222). We then applied .8222 to the unadjusted standard Federal rate. The adjustment factor to restore the 2.1 percent cut would be the adjustment without the 2.1 percent cut (.8432) divided by the adjustment with the 2.1 percent cut (.8222) (.8432/.8222=1.02554). To restore the 2.1 percent reduction, we will apply 1.02554 to the unadjusted standard Federal capital payment rate in setting rates for discharges after September 30, 2002. Section 412.328(e) of the regulations provides that the hospital- specific rate for each fiscal year is determined by adjusting the previous fiscal year's hospital specific rate by the hospital specific rate update factor and the exceptions payment adjustment factor. After these two adjustments are applied, a net adjustment to the rate is determined. The previous year's hospital specific rate is analogous to the standard Federal rate, which is updated each year to become the annual Federal rate. When the 2.1 percent reduction is restored, most hospitals will have completed the transition to a fully prospective payment system for capital related costs. However, new hospitals might be eligible for hold harmless payments beyond the transition, so we may need to continue to compute a hospital specific rate. If we need to restore the 2.1 percent reduction to the hospital specific rates, we will do so in a manner similar to that described above with respect to the unadjusted standard Federal capital payment rate. In this final rule with comment period, we are revising two sections of the capital prospective payment system regulations to implement these statutory requirements. Specifically, we are revising the regulations at Secs. 412.308(c) and 412.328(e) to provide for the required 15.68 and 2.1 percent reduction to the rates. The 2.1 percent reduction will be restored after September 30, 2002. We discuss the effect of this reduction to the standard Federal rate and other changes in the adjustment factors to the FY 1998 Federal rate in section III of the Addendum to this final rule with comment period. D. Revision to the Calculation of the Puerto Rico Rate Currently, operating and capital payments to hospitals in Puerto Rico are paid on a blend of 75 percent of the Puerto Rico rate based on data from Puerto Rico hospitals only, and 25 percent of the national rate based on data from all hospitals nationwide. As described in section V.I of this preamble, the Balanced Budget Act of 1997 increases the national share of the operating payment from 25 percent to 50 percent, and decreases the Puerto Rico share of the operating payment from 75 percent to 50 percent. Under the broad authority of section 1886(g) of the Act, we are revising the calculation of capital payments to Puerto Rico as well, to parallel the change that is being made in the calculation of operating payments to Puerto Rico. Effective October 1, 1997, we will base capital payments to hospitals in Puerto Rico on a blend of 50 percent of the national rate and 50 percent of the Puerto Rico specific rate. This change will increase payments to Puerto Rico hospitals since the national rate is higher than the Puerto Rico rate. In this final rule with comment period, as required by Public Law 105-33, we are reducing the unadjusted standard Federal rate and hospital-specific rate by 17.78 percent for discharges occurring on or after October 1, 1997, and before October 1, 2002. Section 1886(g) of the Act confers broad authority on the Secretary to implement a capital prospective payment system. In accordance with this authority, we are extending the reduction to the capital rates to the Puerto Rico capital rates as described in Sec. 412.374(a). VII. Changes for Hospitals and Units Excluded From the Prospective Payment System A. New Requirements for Certain Hospitals Excluded From the Prospective Payment System (Sec. 412.22(e)) In the September 1, 1994 final rule (59 FR 45330), we established several additional criteria for excluding from [[Page 46013]] the prospective payment system long-term care hospitals that occupy space in the same building or on the same campus as another hospital (Sec. 412.23(e)). Under these criteria, such facilities (sometimes called ``hospitals within hospitals'') could qualify for exclusion only if the two entities have separate governing bodies, chief executive officers, medical staffs, and chief medical officers. In addition, they were required to be capable of performing certain basic hospital functions without assistance from the hospitals with which they are co- located, or they had to receive at least 75 percent of their inpatients from sources other than the co-located hospital. We further revised these regulations on September 1, 1995 (60 FR 45778), by adding a third option under which hospitals that did not meet the criteria specified above could establish separate operation by showing that no more than 15 percent of their inpatient operating costs were attributable to the hospital with which they share space. The regulations were necessary to prevent inappropriate Medicare payments to entities that are in effect, long-stay units of other hospitals. At the same time, the regulations set forth criteria to ensure that entities may qualify for exclusion from the prospective payment system if an exclusion is warranted. Exclusion of long-term care hospitals from the prospective payment system is appropriate when hospitals have few short-stay or low-cost cases and might be systematically underpaid if the prospective payment system were applied to them. These reasons for exclusion do not apply if the entity that provides the long-term care is part of a larger hospital, which does have short-stay and low-cost cases and can be paid appropriately under the prospective payment system. ProPAC has recommended that HCFA monitor the growth in the number of long-term care hospitals within hospitals and evaluate whether the current Medicare certification rules that apply to these facilities should be changed (Recommendation 31). ProPAC noted that there is concern that the hospital-within-a-hospital model was devised as a way for acute care hospitals to receive higher payments for their long-stay cases. At the same time, the model may be an appropriate and efficient alternative to acute inpatient care for cases that require additional services, but at a more intense level than those provided in other post-acute settings. ProPAC recommended that HCFA conduct a comprehensive study of the characteristics, patient mix, treatment patterns, costs, and financial performance of hospitals within hospitals. We have been monitoring the development of the hospital-within-a- hospital model. We agree with ProPAC that our policy should simultaneously strive to prevent inappropriate exclusions of units as separate hospitals, while allowing an appropriate degree of flexibility for facilities to respond to changing patient care needs. As a result of our monitoring efforts, in the June 2, 1997 proposed rule, we proposed two changes to the hospital-within-a-hospital regulations (62 FR 29928). We proposed to add a new Sec. 412.22(f) to address hospitals that are unable to meet certain exclusion criteria solely because of State law. In addition, we proposed to extend the application of these rules to other classes of facilities that might seek exclusion from the prospective payment system as hospitals-within-hospitals. As discussed in detail in the proposed rule, the first proposed change concerned the relationship between the exclusion criteria and State laws. Specifically, we proposed to add Sec. 412.22(f) to address hospitals that, as a matter of State law, would be unable to make the necessary organizational changes to meet the hospital-within-a-hospital criteria. Under our proposal, if a hospital could not meet the criteria in Secs. 412.23(e)(3) (i) or (iii) (proposed to be redesignated as Secs. 412.22(e) (1) and (3)) solely because its governing body or medical staff is under the control of a third entity that also controls the hospital with which it shares a building or a campus or cannot meet the criteria in Secs. 412.23(e)(3) (ii) or (iv) (proposed to be redesignated as Secs. 412.22 (e)(2) and (e)(4)) solely because its chief medical officer or chief executive officer is employed by or under contract with such a third entity, the hospital could nevertheless qualify for an exclusion if that hospital meets the other applicable criteria and: Is owned and operated by a State university; Has been continuously owned and operated by that university since October 1, 1994; Is required by State law to be subject to the ultimate authority of the university's governing body; and Was excluded from the prospective payment system as a long-term care hospital for any cost reporting period beginning on or after October 1, 1993, but before October 1, 1994. We solicited comments and suggestions on this issue as well as on whether the language of the proposed rule effectively addressed the situation of hospitals disadvantaged by State law. We also proposed to redesignate Sec. 412.23 (e)(3) through (e)(5) which specifies the criteria for hospitals-within-hospitals as Sec. 412.22(e), (g), and (h). This change would have extended the application of the hospital-within-a-hospital rules to all types of facilities that can be excluded from the prospective payment system. As we stated in the proposed rule, we believe it is important to exclude, as hospitals only bona fide separate hospitals, not units of larger hospitals. We also proposed to incorporate, within this extended hospital-within-a-hospital rule, the above provisions that we proposed for facilities owned and operated by a State university. At the same time, we were considering whether it was appropriate for new hospitals-within-hospitals to receive the exemption from the TEFRA rate-of-increase ceiling during the first 2 years of operation. We stated that the purpose of the new hospital exemption was to recognize that a hospital might face a period of cost distortions as it began operations and tried to establish its presence in its market. We did not believe that newly established hospitals-within-hospitals would necessarily face the same degree of cost distortion during their initial periods of operation since they operate within existing, identifiable hospitals. While we did not formally propose elimination of the new hospital exemption for hospitals-within-hospitals at this time, we proposed considering adoption of such a provision in this year's final rule. We invited comment on whether elimination of the new hospital exemption for hospitals-within-hospitals would be advisable. As discussed in detail below, Public Law 105-33 made changes in the treatment of certain long-term care hospitals. As a result of this new legislation, we are withdrawing our proposal regarding State owned hospitals-within-hospitals and implementing our proposal concerning the extension of the hospital-within-hospital rules with some changes. The discussion that follows details the provisions of section 4417 of Public Law 105-33, explains how these provisions will be implemented, and responds to comments on the proposed rule. Section 4417 of Public Law 105-33 specifies that a hospital that was classified by the Secretary on or before September 30, 1995, as an excluded long-term care hospital shall continue to be so classified notwithstanding that it is located in the same building as, or on the same campus as, another hospital. [[Page 46014]] This statutory provision supersedes certain aspects of the current regulatory requirements for long-term care hospitals-within-hospitals, and affects our proposal to extend the hospital-within-a-hospital criteria to excluded hospitals other than long-term care hospitals. While the amendment made by section 4417 of Public Law 105-33 is specific to long term care hospitals, we believe the considerations underlying the legislation also apply to other types of hospitals- within-hospitals. In view of this statutory change and to provide for consistent treatment of all excluded hospitals-within-hospitals, we have decided to withdraw our proposal to include a specific provision for State- owned hospitals-within-hospitals. Instead, we are revising Sec. 412.22(e) of the regulations to provide that for cost reporting periods beginning on or after October 1, 1997, if a hospital occupies space in a building also used by another hospital, or in one or more entire buildings located on the same campus as buildings used by another hospital, the hospital must meet the hospital-within-a-hospital criteria unless the hospital was excluded from the prospective payment system on or before September 30, 1995, in which case the hospital- within-a-hospital criteria do not apply. This provision would apply to all types of excluded hospitals, not just long-term care hospitals. The extension of the hospital-within-a-hospital criteria to hospitals not exempt from the criteria based on their status before October 1995 would be prospective only for cost reporting periods beginning on or after October 1, 1997. We wish to emphasize that the grandfathering provision based on a hospital's pre-October 1995 status would not be made available to any hospital which may have been excluded at one time but lost its exclusion for reasons unrelated to hospital-within-a- hospital status. Comment: One commenter argued that many hospitals sharing space with others will need additional time to comply with the hospital- within-a-hospital rules, since they may need to recruit added staff, make arrangements with new vendors, and reorganize their administrative staff and governing bodies. The commenter suggested that, to allow these changes to be made, the effective date should be changed so that these hospitals would first have to meet the requirements for cost reporting periods beginning on or after October 1, 1998 or October 1, 1999. Another commenter suggested that the proposed effective dates would result in impermissible retroactive rulemaking, and recommended that each hospital potentially subject to the new rules be grandfathered for at least one cost reporting period to allow for an orderly transition. Another commenter suggested that the proposal regarding State-owned hospitals may be moot as a result of section 4417 of Public Law 105-33, which specifically requires grandfathering of all long-term care hospitals-within-hospitals that were excluded on September 30, 1995. Response: We agree that, in view of section 4417 of Public Law 105- 33, it would not be appropriate to adopt our proposals regarding hospitals-within-hospitals as stated in the proposed rule. We have considered the commenter's concerns; however, we believe use of a single effective date of October 1, 1997 will result in the most simple and consistent implementation of the rule. Comment: One commenter objected to the parts of the proposal under which a hospital would have been required to have been continuously owned and operated by a State university since October 1, 1994, and would have been required to have been excluded for a cost reporting period beginning after September 30, 1993 but before October 1, 1994. The commenter asserted that these provisions would exclude otherwise qualified facilities from the grandfathering provision. Response: As noted above, we are not adopting the proposal regarding State-owned hospitals, but have extended the grandfathering provision to all types of excluded hospitals which were excluded on or before September 30, 1995. Comment: A commenter suggested that the provisions of the proposed rule not be applied to hospitals co-located with long-term care hospitals or to any excluded hospitals that share space. The commenter reasoned that this would be unnecessary because in such cases where both hospitals are excluded and serve discrete patient types, there is no incentive for inappropriate transfers, referrals, or other abusive practices. The commenter also recommended that the organizational separateness requirements not be applied where 75 percent or more of a hospital's referrals come from outside sources. Response: We believe the rule should be applied to situations in which the hospitals that share space are all excluded. Even in the absence of a new provider exemption to the TEFRA limit, a hospital may have incentives to inappropriately establish a hospital-within-a- hospital. For example, the two facilities may have different target rates and this may lead to the diversion of some patients to one of the hospitals for reasons of payment rather than for the benefit of the patient. Moreover, the types of populations treated by different types of excluded facilities are not mutually exclusive: rehabilitation patients can be treated in a long-term care hospital, and rehabilitation hospitals are not precluded from accepting and treating long-stay patients. Thus, permitting exclusion of such ``hospitals'' within other hospitals may create incentives for abuse that would be diluted or absent if the facilities were freestanding. Regarding the 75 percent referral requirement, we note that it is intended to measure functional separateness and thus complements, but cannot replace, the structural separateness tests. Comment: One commenter stated that although some hospitals have been co-located with others for many years they have not gained an unfair advantage. The commenter also believed that the hospital-within- a-hospital criteria relating to control over two co-located hospitals by a third entity are too stringent and do not recognize that such arrangements are common among nonprofit hospitals and are used by organizations to carry out their fiduciary responsibilities with respect to subordinate corporations. The commenter suggested that the proposed rules be withdrawn or, if they are not withdrawn, applied only to requests for exclusion received on or after October 1, 1997, applied only where the rate of referral between hospitals is over 25 percent, or both. Response: As explained above, we agree that our proposals to extend the application of the hospital-within-a-hospital rules should be applied only prospectively, starting with cost reporting periods beginning on or after October 1, 1997. Further, the rules will not apply to all excluded hospitals which were excluded on or before September 30, 1995. However, we do not agree that our criteria regarding control by a third entity are too stringent or that they unfairly disadvantage nonprofit hospitals. While it may be common for corporations to exercise significant control over their subordinate components, we continue to believe this control indicates that the components are part of a larger organization, not bona fide separate hospitals. We also do not agree that a low rate of referrals between co-located hospitals is sufficient to avoid the need to determine that an entity is a bona fide separate hospital. Even in the absence of a significant level of referrals, a hospital unit may be misrepresented as a separate hospital in order to obtain a more favorable reimbursement. Thus, [[Page 46015]] avoiding referrals does not eliminate all incentives for abuse. Comment: ProPAC recommended that the Secretary conduct an extensive review of hospitals-within-hospitals, to determine if the existence of this model undermines the incentives of the prospective payment system. Response: We share this concern and are monitoring the status of these facilities. We will continue to review the status of these facilities and evaluate the implications of the changes in Public Law 105-33 affecting newly excluded hospitals and the hospital-within-a- hospital issue. In addition to the changes discussed above, in Sec. 412.22(e)(5) (ii) and (iii), we are adding a reference to ``the six-month period immediately preceding the first cost reporting period for which exclusion is sought.'' This language clarifies that the criteria in these paragraphs also apply to excluded hospitals other than long term care or children's hospitals, since excluded hospitals other than long- term care or children's hospitals do not always have a prior cost reporting period of at least 6 months that is used to establish length of stay or treatment of an inpatient population which is predominantly individuals under age 18. B. Exclusion of New Rehabilitation Units and Expansion of Existing Rehabilitation Units (Sec. 412.30(b)(4)) In the September 1, 1995 final rule (60 FR 45839), we made certain changes to clarify the regulations applicable to the exclusion of new rehabilitation units and the expansion of units already excluded. These changes were intended only to clarify existing policy, not to change it. However, in making these changes we inadvertently omitted a paragraph that explicitly allowed newly participating hospitals to open new rehabilitation units and also to allow the new rehabilitation units to be excluded immediately from the prospective payment system. In omitting this paragraph, we had no intention of rescinding the policy. In the June 2, 1997 proposed rule, we indicated that we would restore this paragraph to the regulations, which the proposed rule would have redesignated at (Sec. 412.30(b)(4)), to correct this omission and to reaffirm current policy. (For further information on this policy, see the Federal Register published September 1, 1992 (57 FR 39746)). We received no comments on this proposal and are implementing the change in this final rule with comment period. C. Delicensing and Relicensing of Beds (Sec. 412.30) We have received a number of questions about cases in which hospitals remove some bed capacity from their State license and Medicare certifications, then later increase the number of their licensed and certified beds and seek to have the bed capacity ``added'' and considered part of a new, or newly expanded, prospective payment system-exempt rehabilitation unit. Assuming that simultaneous delicensure and relicensure of beds would not be accepted as the addition of new bed capacity, we also have been asked how long bed capacity would have to be excluded from a hospital's licensure and certification to be considered ``new'' for purposes of the prospective payment system exclusion rules at Sec. 412.30. Section 412.30 establishes separate ways for new and converted units to meet the exclusion criterion related to the type of patient population treated. New units are allowed to qualify for initial exclusion based in part on a certification regarding their intent to treat a patient population of the kind described in Sec. 412.23(b)(2), rather than on a showing that they have actually treated such a population during the hospital's most recent cost reporting period. Converted units may not be excluded based on a certification, but must show that they actually met the Sec. 412.23(b) requirement during the hospital's most recent 12-month cost reporting period. New units are defined as those that are part of a hospital that has not previously sought exclusion for any rehabilitation unit and that comprise greater than 50 percent of the newly licensed and certified bed capacity, while converted units are those that do not qualify as new. Section 412.30 also provides for separate treatment of new and converted bed capacity that is used to expand existing units. Different rules apply to the addition of new (as opposed to converted) bed capacity, and it would not be appropriate to recognize an ``increase'' in the bed capacity that coincides with a decrease in bed capacity in another area, resulting in no net increase in the hospital's total licensed and certified bed capacity. Similarly, it would not be appropriate to allow a hospital to circumvent those rules simply by removing some bed capacity from its licensure and certification on a temporary basis, and then increasing its bed size a few days, weeks, or months later. Thus, when a hospital seeks to add a new excluded rehabilitation unit, or to increase the size of an existing unit by adding new bed capacity, the bed size of the hospital in the past must be taken into account. The current regulations do not specify how long a decrease in a hospital's bed capacity must be effective before a subsequent increase in the hospital's licensure and certification can be considered as ``new'' capacity. However, to ensure consistent and equitable treatment of all hospitals with excluded rehabilitation units, in the June 2, 1997 proposed rule, we proposed to provide in the regulations (proposed Sec. 412.30(a)) that a decrease in capacity must remain effective for at least a full 12-month cost reporting period before an equal or lesser number of beds can be added to the hospital's licensure and certification and considered ``new''. This means that when a hospital seeks to establish a new unit, or to enlarge an existing unit, under the criteria in Sec. 412.30, the HCFA Regional Office will review its records on the facility to determine whether any beds have been delicensed and decertified during the 12-month cost reporting period before the period for which the new beds are to be added. To the extent that bed capacity was removed from the hospital's licensure and certification during that period, that amount of bed capacity cannot be considered ``new'' under Sec. 412.30. For example, if a hospital with a calendar year cost reporting period had removed 15 beds from its licensure and certification in calendar year 1997 and, for calendar year 1998, sought to set up a new rehabilitation unit that would include 20 beds that would be added to its licensure and certification as of January 1, 1998, only 5 of those beds could be considered ``new'' under Sec. 412.30. The remaining beds would be considered converted beds. This guideline applies to changes in a hospital's total licensed and certified bed capacity, regardless of whether specific beds or physical areas within a hospital have previously been operational and available to rehabilitation patients. Thus, if a hospital delicenses 25 beds on one floor in the third month of a cost reporting period and, 2 months later, increases its licensure and certification by adding a 25- bed unit in a previously unoccupied area on another floor, that unit could not be considered ``new'' under Sec. 412.30 even though it occupies different space from the beds that represented the delicensed capacity. This guideline applies only for purposes of exclusion from the prospective payment system and is not intended to limit a hospital's ability to add to its licensed and certified bed capacity for the provision [[Page 46016]] of services paid for under the prospective payment system. We are also revising Sec. 412.30(c)(1)(ii) to state that beds that a hospital wishes to add to an excluded rehabilitation unit can be considered ``new,'' and thus subject to earlier exclusion than existing beds, only if the hospital's total inpatient bed capacity has increased by an amount that is more than 50 percent of the number of beds the hospital seeks to add to the unit, so that the added beds represent primarily newly licensed and certified capacity. Comment: One commenter suggested that the proposal is too stringent, in that it does not take into account that hospitals may be pursuing separate CON activities--construction of a new facility to replace an older, larger facility, and creation of a new rehabilitation unit. The commenter suggested that the coincidence of these events could result in an inadvertent appearance of shifting of bed capacity and recommended that we not impose the delicensing rule but instead rely solely on CON approval to determine the appropriateness of expansions in rehabilitation units. Another commenter suggested that the proposal is unnecessarily restrictive. Response: We understand that there may be situations in which it is appropriate for a hospital, acting in response to community needs and changes in demand for specific types of services, to separately pursue changes in bed size as described by this commenter. While such changes would not be undertaken with any intent to evade exclusion requirements, it nevertheless is clear that they would constitute a shift of the hospital's existing net bed capacity from acute to rehabilitation use, rather than an increase in bed capacity. Thus, we believe such shifts would appropriately be treated under the rules for conversion of bed capacity, and thus have not adopted this comment. D. Special Excluded Hospital Criteria Added by Public Law 105-33 (Sec. 412.23) Public Law 105-33 added special criteria for certain hospitals to be excluded from the prospective payment system. Section 1886(d)(1)(B)(iv) of the Act as amended by section 4417(b) of Public Law 105-33 allows certain hospitals with an average length of stay of less than 25 days to be excluded from the prospective payment system as a long-term care hospital. In order to be excluded under this provision, a hospital must have first been excluded as a long-term care hospital in calendar year 1986, have an average inpatient length of stay of greater than 20 days, and demonstrate that 80 percent or more of its annual Medicare inpatient discharges in the 12-month cost reporting period ending in Federal fiscal year 1997 have a principal diagnosis that reflects a finding of neoplastic disease. The exclusion under this provision is effective for cost reporting periods beginning on or after August 5, 1997 (the date of enactment of Pub. L. 105-33). We are revising Sec. 412.23(e) to implement this provision. Section 4418 of Public Law 105-33 provides an additional category of hospitals that can qualify as cancer hospitals for purposes of exclusion from the prospective payment system. As amended, section 1886(d)(1)(B)(v) of the Act includes a hospital that meets the following criteria: The hospital was recognized as a comprehensive cancer center or clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983. The hospital must have applied for and been denied, on or before December 31, 1990, classification as a cancer hospital. The hospital was licensed for fewer than 50 acute care beds as of the date of enactment of this subclause (that is, August 5, 1997). The hospital is located in a State that, as of December 19, 1989, was not operating a demonstration project under section 1814(b) of the Act. The hospital demonstrates that, for the 4-year period ending on December 31, 1996, at least 50 percent of the hospital's total discharges have a principal finding of neoplastic disease; that is, the discharge has a principal diagnosis code of 140-239, V58.0, V58.1, V66.1, V66.2, or 990. A hospital that meets these criteria is classified as an excluded cancer hospital for cost reporting periods beginning on or after January 1, 1991. In addition, for purposes of payment, the base period applicable to such a hospital is the hospital's cost reporting period beginning during FY 1990 or the period under new section 1886(b)(3)(F) of the Act (discussed below). We are revising the regulations at Sec. 412.23(f) to incorporate this provision. E. Changes Based on New Legislation for the Payment of Hospitals and Units Excluded from the Prospective Payment System (Sec. 413.40) Public Law 105-33 significantly altered the payment provisions for excluded hospitals and units. Prior to the passage of Public Law 105- 33, the payment provisions for excluded hospitals and units applied consistently to all categories of excluded providers (that is, psychiatric, rehabilitation, long-term care, children's, and cancer). However, effective for cost reporting periods beginning on or after October 1, 1997, there are specific payment provisions for psychiatric, rehabilitation, and long-term care providers and modifications to payment provisions for all excluded providers. Following is a complete discussion of the new provisions and the revised regulations. 1. Rate-of-Increase Percentages for Excluded Hospitals and Units (Sec. 413.40 (c) and (g)) Hospitals and units excluded from the prospective payments system receive payment for inpatient hospital services they furnish on the basis of reasonable costs, subject to a rate-of-increase ceiling. An annual per discharge limit (the target amount as defined in Sec. 413.40(a)) is set for each hospital or hospital unit based on the hospital's own cost experience in its base year. The target amount is multiplied by the Medicare discharges and applied as an aggregate upper limit (the ceiling as defined in Sec. 413.40(a)) on total inpatient operating costs for a hospital's cost reporting period. Section 4411 of Public Law 105-33 amended sections 1886(b)(3)(B) of the Act regarding the rate-of-increase percentages to be applied to each target amount as set forth below. The applicable rate-of-increase percentage for the cost reporting period beginning during FY 1998 is 0 percent. For cost reporting periods beginning in FY 1999 through FY 2002, the applicable rate-of-increase percentage is the market basket rate of increase percentage minus a factor based on the percentage by which the hospital's operating costs exceed the hospital's ceiling for the most recent cost reporting period for which information is available. If the hospital's operating costs are equal to or exceed 110 percent of the ceiling amount, the rate-of- increase percentage increase is equal to the market basket percentage. If the hospital's costs exceed the ceiling but are less than 110 percent of the ceiling, the rate-of-increase percentage is the market basket rate of increase minus .25 percentage points for each percentage point by which costs are less than 10 percent over the ceiling. The rate-of- increase percentage is in no case less than 0 percent. If the hospital's costs are equal to or less than ceiling but greater than 66.7 percent of the ceiling, the rate-of-increase percentage is the greater of the market basket minus 2.5 percentage points or 0 percent. [[Page 46017]] If the hospital's costs do not exceed 66.7 percent of the ceiling, the rate-of-increase percentage is 0 percent. If the hospital first receives payments as an excluded provider on or after October 1, 1997, the new statutory payment methodology for new hospitals applies. Examples of how the rate-of-increase percentage provision applies in determining the applicable rate-of- increase percentages are as follows: Example 1 Cost reporting period beginning in FY 1999: FY 1997 target amount.................................... $8,000 Medicare discharges...................................... x 100 ------------ FY 1997 ceiling.......................................... $800,000 FY 1997 allowable inpatient operating costs.............. $1,000,000 FY 1997 costs over (under) of the ceiling................ $200,000 FY 1997 costs as percentage of the ceiling............... 125 FY 1998 rate-of-increase percentage...................... 0 FY 1999 rate-of-increase percentage: market basket....... 2.60 FY 1999 target amount (FY 1998 target amount of $8,000 x 1.026).................................................. $8,208 Example 2 Cost reporting period beginning in FY 1999: FY 1997 target amount.................................... $9,800 Medicare discharges...................................... x 100 ------------ FY 1997 ceiling.......................................... $980,000 FY 1997 allowable inpatient operating costs.............. $1,000,000 FY 1997 costs over (under) the ceiling................... $20,000 FY 1997 percent by which costs exceed (do not exceed) the ceiling................................................. 2.04 FY 1998 rate-of-increase percentage...................... 0 FY 1999 rate-of-increase percentage: Market basket............................................ 2.60 Percentage point reduction (.25 x (10-2.04))............. (1.99) ------------ Update (percent)......................................... .61 FY 1999 target amount (FY 1998 target amount $9,800 x 1.0061)................................................... $9,859.78 Example 3 Cost reporting period beginning in FY 1999: FY 1997 target amount.................................... $10,500 Medicare discharges...................................... x 100 ------------ FY 1997 ceiling.......................................... $1,050,000 FY 1997 allowable inpatient operating costs.............. $1,000,000 FY 1997 costs over (under) the ceiling................... $(50,000) FY 1997 costs as percentage of the ceiling............... 95.2 FY 1998 rate-of-increase percentage...................... 0 FY 1999 percentage increase: Market basket............................................ 2.60 Percentage point reduction............................... (2.50) ------------ Update (percent)......................................... .10 FY 1999 target amount (FY 1998 target amount $10,500 x 1.001).................................................. $10,510.50 Example 4 Cost reporting period beginning in FY 1999: FY 1997 target amount.................................... $16,000 Medicare discharges...................................... x 100 ------------ FY 1997 ceiling.......................................... $1,600,000 FY 1997 allowable inpatient operating costs.............. $1,000,000 FY 1997 costs over (under) the ceiling................... $(600,000) FY 1997 costs as percentage of the ceiling............... 62.5 FY 1998 rate-of-increase percentage:..................... 0 FY 1999 rate-of-increase percentage...................... 0 FY 1999 target amount (FY 1998 target amount of $16,000 x 1.0).................................................... $16,000 We are revising Sec. 413.40(c)(3)(vi) and adding new paragraphs (c)(3)(vii) and (c)(3)(viii) and (g)(5) to set forth the new rate-of- increase percentage provisions. 2. Request for a new base period (Sec. 413.40(b)) Sections 4413(a) and 4413(b) of Public Law 105-33 amended sections 1886(b)(3) of the Act in order to permit excluded hospitals and units to elect (``in a form and manner determined by the Secretary'') a rebasing of the target amount for the 12-month cost reporting period beginning during FY 1998 (October 1, 1997 through September 30, 1998). Except for a qualified long-term care hospital, as discussed below, each excluded hospital or unit under present or previous ownership that received Medicare payments during cost reporting periods beginning before October 1, 1990 may submit to its fiscal intermediary a request for rebasing its target amount. The new section 1886(b)(3)(F) of the Act instructs the Secretary to determine the rebased target amount as follows: (1) The Secretary shall determine the hospital's allowable inpatient operating costs ``for each of the 5 cost reporting periods for which the Secretary has the most recent settled cost reports as of the date of enactment (August 5, 1997)''. (2) For each of the 5 cost reporting periods, the Secretary shall update the inpatient operating cost per case to FY 1998 using the update factors cited at section 1886(b)(3)(B) of the Act (Sec. 413.40(c)). (3) The Secretary shall exclude the highest and lowest of the five updated amounts for inpatient operating cost per case. (4) The Secretary shall compute the average for the remaining three updated inpatient operating cost per case. Under the statute the methodology for determining a rebased target amount uses the updated inpatient operating costs per case from the five most recent cost reports that have been settled as of the date of the enactment of the statute (August 5, 1997). For purposes of this provision, we will not recalculate the target amount to reflect cost report reopenings, changes, or other adjustments made after August 5, 1997. Reopenings (or even multiple reopenings) of any of the five settled cost reports at later dates could create a uncertainty of the applicable FY 1998 target amount until well after the end of FY 1998 and uncertainty about target amounts for subsequent years. Accordingly, the hospital must carefully consider the inpatient operating costs per case of its five most recent settled cost reports as of August 5, 1997 in deciding whether to apply for rebasing under this provision. Similarly, if a hospital that received payments during cost reporting periods beginning before October 1, 1990 has reorganized or acquired another similar excluded provider so that its five most recent settled cost reports reflect substantial differences in the size and expenses of the excluded hospital or unit, the same considerations apply. It is not permissible to use fewer than (or more than) the five most recent settled cost reports in an attempt to reflect an operational reorganization. Also, if the hospital elects rebasing under this provision, the revised target amount for FY 1998 continues to be subject to the 75th percentile cap established on the target amount by Section 4414 of Public Law 105-33 (discussed below). Exception payments as governed by Secs. 413.40(g) and (i) will be evaluated based on a comparison of the hospital's operating costs and its costs during the three years used to calculate the rebased target amount. In order to implement the statutory provision, we are adding Sec. 413.40(b)(1)(iv) to describe the manner in which a hospital must request a rebased target amount. The hospital submits the request to its fiscal intermediary. Due to the extremely short timeframe between enactment of Public Law 105-33 on August 5, 1997 and the [[Page 46018]] beginning of FY 1998 (on October 1), we believe it is necessary and appropriate to establish special rules to address those hospitals whose cost reporting periods begin early in FY 1998, in order to treat all hospitals equitably. Therefore, the hospital must submit its request for rebasing by the later of November 1, 1997 or 60 days prior to the beginning of its cost reporting period beginning during FY 1998. We emphasize that the intermediary must receive the request by the deadline. Also, we note that this is a one time request that must be received by the deadline for the FY 1998 cost reporting period. Upon receipt of a request for a rebased FY 1998 target amount, the fiscal intermediary should verify the submitted request and notify the hospital of its FY 1998 target amount. The request for a new base period must include the following: Cover letter, which must include the items listed below. --The name of the excluded hospital or unit; --The Medicare provider number; --The beginning and ending dates for the FY 1998 cost reporting period; --The fiscal year of the existing base period and FY 1998 updated target amount; --A statement requesting a rebased FY 1998 target amount under Sec. 413.40(b)(1)(iv); --A statement of the rebased FY 1998 target amount per discharge with supporting documentation in attachment work papers; --A list of attachments; and --A contact person: name, phone number, and address Attachments --Copies of the Notices of Program Reimbursement for the five most recent settled cost reporting periods --Copies of Worksheet D-1 for the five most recent settled cost reporting periods --A list and/or calculation of the following for each of the five most recent settled cost reporting periods: + Total Medicare inpatient operating costs (excluding pass through costs); + Total Medicare discharges; + Medicare inpatient operating costs per case; and + Medicare inpatient operating costs per case updated to FY 1998 --A list the highest and lowest of the five updated inpatient operating cost per case; and --A calculation of the average for the remaining three updated inpatient operating cost per case Section 4413(b) of Public Law 105-33 also specified a separate rebasing election for a qualified long-term care hospital. The statute defines a qualified long-term care hospital as a long-term care hospital that meets the following two conditions for its two most recent settled cost reports as of August 5, 1997: (1) The hospital's Medicare inpatient operating costs exceed 115 percent of the ceiling; and (2) The hospital would have had a disproportionate patient percentage (as defined in Sec. 412.106) equal to or greater than 70 percent if it were a prospective payment system hospital. A qualified long-term care hospital must submit a request to its fiscal intermediary to have a rebased target amount in the same manner as discussed above for other excluded hospitals. The request must be received by the fiscal intermediary by the later of November 1, 1997 or 60 days prior to the beginning of its cost reporting period during FY 1998. For a qualified long-term care hospital, the methodology for rebasing the target amount differs. The FY 1998 rebased target amount is the hospital's FY 1996 inpatient operating costs updated by the market basket percentage to FY 1997 only, not to FY 1998, subject to the 75th percentile cap. To assist with the application of the updating of the cost per case to the subject fiscal period, the increase in the market basket and the applicable update factors for excluded hospitals and units since FY 1990 are: ------------------------------------------------------------------------ Market Fiscal year basket Update (percent) factor ------------------------------------------------------------------------ 1990.......................................... 5.5 1.055 1991.......................................... 5.3 1.053 1992.......................................... 4.7 1.047 1993.......................................... 4.2 1.042 1994.......................................... 4.3 \1\ 1.043 1995.......................................... 3.7 \1\ 1.037 1996.......................................... 3.4 \1\ 1.034 1997.......................................... 2.5 \1\ 1.025 1998.......................................... 2.7 1.000 ------------------------------------------------------------------------ \1\ See Sec. 413.40(b)(3)(v) for method of determining applicable reduction. We are adding Secs. 413.40(b) (iv) and (v) to set forth the new provisions regarding request for new base periods. 3. Limitation on the Target Amount for Excluded Hospitals and Units (Sec. 413.40(c)) Section 4414 of Public Law 105-33 amended section 1886(b)(3) of the Act, to establish caps on the target amounts for excluded hospitals or units for cost reporting periods beginning on or after October 1, 1997, through September 30, 2002. The caps on the target amounts apply to the following three categories of excluded hospitals: psychiatric hospitals and units, rehabilitation hospitals and units, and long-term care hospitals. For purposes of calculating the caps, the statute requires the Secretary to first ``estimate the 75th percentile of the target amounts for such hospitals within [each] class for cost reporting periods ending during fiscal year 1996''. For cost reporting periods beginning in FY 1998, the Secretary shall update the amount so determined by the market basket percentage increase to FY 1998. For cost reporting periods beginning during FY 1999 through 2002, the Secretary shall update the resulting amount by the market basket percentage. The estimates of the 75th percentile of the target amounts were developed from the best available data on the hospital specific target amounts for cost reporting periods ending during fiscal year 1996 and then updated by the market basket percentage to FY 1998. Given the extraordinarily short time frame between the enactment of Public Law 105-33 (August 5, 1997) and the required publication date of this final rule, we used the best available data that has been reported to HCFA by the fiscal intermediaries for over 3,000 hospitals and units within the classes specified by the statute. When an exact target amount was not available for a particular hospital, we used the best available information to estimate the hospital's target amount. For example, if the hospital's target amount for its cost reporting period ending during FY 1996 was not available but the target amount for FY 1995 was available, we updated the FY 1995 target amount by the applicable percentage increase to determine an estimate of the hospital's target amount for its cost reporting ending during FY 1996. We note that, with respect to long-term care hospitals, we were able to obtain exact target amount figures for virtually all hospitals within the class. A hospital that has a target amount that is capped at the 75th percentile would not be granted an exception payment as governed by Secs. 413.40 (a) and (i) based solely on a comparison of its costs or patient mix in its base year to its costs or patient mix in the payment year. Since the hospital's target amount would not be determined based on its own experience in a base year, any comparison of costs or patient mix in its base year to costs or patient mix in the payment year would be irrelevant. However, exception payments would still be available for hospitals that have target amounts that are determined by the hospital's costs in a base year unaffected by the 75th percentile cap. [[Page 46019]] The 75th percentile of the target amounts for cost reporting periods ending during fiscal year 1996, and updated by the market basket up to FY 1998 are as follows: (1) Psychiatric hospitals and units: $10,188 (2) Rehabilitation hospitals and units: $18,476 (3) Long-term care hospitals: $36,449 We are revising Sec. 413.40(c)(4) (i) and (ii) to set forth the limitation on the ceiling provisions. 4. Bonus and Relief Payments (Sec. 413.40(d)) a. Bonus Payments For cost reporting periods beginning before October 1, 1997, a hospital that had inpatient operating costs less than its ceiling is paid costs plus the lower of 50 percent of the difference between the inpatient operating costs and the ceiling; or 5 percent of the ceiling. Section 4415 of Public Law 105-33 amended section 1886(b)(1)(A) of the Act to provide that for cost reporting periods beginning on or after October 1, 1997, the amount of bonus payment is the lower of the following: (1) 15 percent of the difference between the inpatient operating costs and the ceiling, or (2) 2 percent of the ceiling. In addition, section 4415 of Public Law 105-33 amended Section 1886(b)(2) of the Act to provide for ``continuous improvement bonus payments''. Under this new provision, for cost reporting periods beginning on or after October 1, 1997, an ``eligible hospital'' will receive payments in addition to the bonus payment discussed above. An ``eligible hospital'' is a hospital that been an excluded provider for at least three full cost reporting periods prior to the subject period and whose operating costs per discharge for the subject period are below the lower of its target amount, trended costs (as defined by the statute), or expected costs (as defined by the statute) for the subject period. The amount of the continuous improvement bonus payment will be equal to the lesser of-- (1) 50 percent of the amount by which operating costs were less than the expected costs for the period; or (2) 1 percent of the ceiling. Under the statute, for a hospital with its third or subsequent cost reporting period ending in FY 1996, trended costs are the lesser of allowable inpatient costs per discharge or the target amount in FY 1996, increased (in a compounded manner) for each succeeding fiscal year by the percentage increase in the market basket. For all other hospitals, trended costs are the allowable inpatient operating costs per discharge for its third full cost reporting period increased (in a compounded manner) for each succeeding fiscal year by the percentage increase in the market basket. Expected costs are the lesser of operating costs per discharge or the target amount for the previous cost reporting period, updated by the percentage increase in the market basket for the fiscal year. b. Relief Payments For cost reporting periods beginning on or after October 1, 1984 and before October 1, 1991, hospitals that had inpatient operating costs in excess of their ceiling are to be paid no more than the ceiling. Section 4005(a) of Public Law 101-508 (OBRA 1990, enacted November 5, 1990) amended section 1886(b)(1)(B) of the Act to provide that for cost reporting periods beginning on or after October 1, 1991, a hospital could receive relief payments equal to 50 percent of the costs in excess of the ceiling not to exceed 10 percent of the ceiling (after any exceptions or adjustments). Section 4415 of Public Law 105-33 amended section 1886(b)(1) of the Act to provide that for cost reporting periods beginning on or after October 1, 1997, if a hospital's operating costs are greater than the ceiling but less than 110 percent of the ceiling, payment will be the ceiling. If a hospital's costs are greater than 110 percent of the ceiling, payment will be the ceiling plus 50 percent of the costs in excess of 110 percent of the ceiling. Total payment may not exceed 110 percent of the ceiling. Because section 4415 of Public Law 105-33 does not provide relief for costs that are within 110 percent of the ceiling, we are making a corresponding change to the exception payment provision at Sec. 413.40(g)(1) so that qualification for the amount of an exception payment does not encompass costs within 110 percent of the ceiling. We have revised Secs. 413.40(d)(3) and added (d)(4) and (d)(5) to implement these provisions. 5. New Excluded Hospitals and Units (Sec. 413.40(f)) Under Sec. 413.40(f), a new excluded hospital is exempted from the rate-of-increase ceiling until the end of the first cost reporting period ending at least two years after the hospital accepts its first patient (through the second 12-month cost reporting period). As we discussed in the June 2, 1997 proposed rule (62 FR 29937), the growth of new excluded hospitals increasingly includes a large number of hospitals that are merely reconfigurations of existing facilities. These new providers do not require the same length of time to establish a presence in the marketplace and increase patient load. As a result, there is evidence that the new hospital exemption does not always serve its original purpose to recognize certain cost distortions that may be present as a hospital begins operations. In addition, the new hospital exemption period could create incentives to increase costs in the exempt years. In its March 1, 1997 report, ProPAC recommended that the new hospital exemption period should be eliminated and that Medicare payments for new providers should be based on an average target amount for facilities serving comparable types of patients. With the enactment of sections 4416 and 4419 of Public Law 105-33, which amend section 1886(b)(4) of the Act and add section 1886(b)(7) of the Act, Congress has established a new framework for payments for new excluded providers. First, section 4419(a) amends section 1886(b)(4)(A)(i) of the Act, to eliminate ``exemptions'' for all classes of excluded entities except children's hospitals. This provision applies to entities that first qualify for exclusion for cost reporting periods beginning on or after October 1, 1997. Thus, effective October 1, 1997, we will no longer grant new provider exemptions under section 1886(b)(4) of the Act except with respect to children's hospitals. Second, section 4416 adds a new section 1886(b)(7) of the Act to establish a new statutory payment methodology for certain new hospitals. For purposes of this provision, the statute specifies three classes of hospitals: psychiatric hospitals and units, rehabilitation hospitals and units, and long-term care hospitals. Under the statutory methodology, for a hospital that is within a class of hospitals specified in the statute and which first receives payments on or after October 1, 1997, the amount of payment shall be determined as follows. For each of the first two cost reporting periods, the amount of payment is the lesser of (1) the operating costs per case, or (2) 110 percent of the national median of target amounts for the same class of hospitals for cost reporting periods ending during FY 1996, updated and adjusted for differences in area wage levels. For purposes of computing the target amount for the subsequent cost reporting period, the target amount for the preceding cost reporting period [[Page 46020]] is equal to the amount determined under the methodology above for the preceding period. To determine payments for a new hospital's first two cost reporting periods, the statute requires a calculation of a national median of the target amounts for hospitals in the same class, updated and adjusted. For each class of hospitals, using the best available data we determined the national median of the target amounts for hospitals within the class for cost reporting periods ending during fiscal year 1996. In determining the national median, the Secretary makes adjustments to account for area differences in wage-related costs. Pursuant to the broad authority conferred on the Secretary to determine an appropriate wage adjustment, we are making an adjustment on the basis of the data used to calculate the FY 1998 hospital wage index under the hospital inpatient prospective payment system (see Sec. 412.63), without taking into account reclassifications under section 1886(d)(10) and (d)(8)(B) of the Act. We recognize that wages may differ for prospective payment hospitals and excluded hospitals, but we believe the wage data do reflect area differences in wage- related costs; moreover, in light of the extraordinarily short timeframe for implementing this provision, this is the only feasible data source. We note that, under the statute, the special payment methodology for new hospitals applies for each of the hospital's first 2 cost reporting periods. However, a new hospital might begin operations on a date other than the first day of its ``usual'' cost reporting period, so that its first cost reporting period is a short period. In order to treat these hospitals equitably, we believe the special payment methodology should be applied to the hospital's first two full cost reporting periods. We also note that, under the calculation prescribed in new section 1886(b)(7)(A)(i)(II), the limit on payment for each of the hospital's first two cost reporting periods is based on the national median target amount for cost reporting periods ending during FY 1996, updated by the hospital market basket ``to the fiscal year in which the hospital first received payments''. That is, the limit on payment is not updated by the market basket for the second cost reporting period. For example, if a new rehabilitation hospital commences operation on January 1, 1999 (during FY 1999), it receives the lower of the hospital's operating costs or 110 percent of the applicable national median of target amounts for cost reporting periods ending during FY 1996 updated to FY 1999. For its second 12-month cost reporting period (FY 2000), the limit on payment is the same (110 percent of the applicable national median updated to FY 1999). The statute appears to provide that the target amount for succeeding cost reporting periods will be based on the payment amount in the second 12-month cost reporting period increased by the applicable update factors. Although we are codifying the policies for subsequent cost reporting periods in this final rule with comment period, a technical amendment may be needed to clarify statutory intent. The updating process also raises an issue with respect to hospitals with short cost reporting periods. The statute requires that the national median is updated ``to the fiscal year in which the hospital first received payments.'' Thus, for hospitals with short cost reporting periods, we would calculate the limit based on the beginning of its short cost reporting period, even though the limit would not be applied until its first full cost reporting period (as discussed earlier). We believe these policies treat such hospitals equitably, so that they are neither benefitted nor disadvantaged by the short cost reporting period. We are revising Secs. 413.40(f) (1) and (2) to incorporate these changes for new excluded providers. The table below lists 110 percent of the national median target amounts for each class of excluded hospitals for cost reporting periods ending during FY 1996, adjusted for area wages updated by the market basket to FY 1998. (1) Psychiatric hospitals and units........................... $8,203 (2) Rehabilitation hospitals and units........................ 16,129 (3) Long-term care hospitals.................................. 18,324 6. Capital Payments for Excluded Hospitals and Units (Sec. 413.40(j)) Section 4412 of Public Law 105-33 amended section 1886(g) of the Act to establish a 15 percent reduction on capital payments for certain hospitals and hospital distinct part units excluded from the prospective payment system for portions of cost reporting periods beginning on or after October 1, 1997, through September 30, 2002. The capital reduction applies to psychiatric hospitals and units, rehabilitation hospitals and units, and long-term care hospitals. We are adding Sec. 413.40(j) to set forth the capital reduction provision. 7. Report on Adjustment Payments to the Ceiling (Sec. 413.40(g)) Section 1886(b)(4) of the Act provides for an adjustment (exception) payment to the ceiling if a hospital submits a request to its fiscal intermediary within 180 days of the date of the Notice of Program Reimbursement. Changes in the types of patients served or in- patient care services that distort the comparability of a cost reporting period to the base year are grounds for requesting an adjustment request. The reasons and process for requesting an adjustment request are implemented at Sec. 413.40(g). Section 4419(b) of Public Law 105-33 amended section 1886(b)(4) of the Act. This section requires the Secretary to publish annually, in the Federal Register, a report describing the total adjustment payments made to excluded hospitals and units for cost reporting periods ending during the previous fiscal year. Effective with the FY 1999 notice of changes to the hospital inpatient payment systems, we will publish the total adjustment payments made to excluded hospitals and units by category of hospital (psychiatric, rehabilitation, long-term care, cancer, and children's) during the previous fiscal year. VIII. ProPAC Recommendations As required by law, we reviewed the March 1, 1997 report submitted by ProPAC to Congress and gave its recommendations careful consideration in conjunction with the proposals set forth in the proposed rule. We also responded to the individual recommendations in the proposed rule. The comments we received on the treatment of the ProPAC recommendations are set forth below, along with our responses to those comments. However, if we received no comments from the public concerning a ProPAC recommendation or our response to that recommendation, we have not repeated the recommendation and response in the discussion below. Recommendation 2, concerning the update for the prospective payment system operating payment rates, is discussed in Appendix D of this final rule with comment period. Recommendations 3 and 4, concerning the prospective payment system capital payment rates, are discussed in section III. of the Addendum of this final rule with comment period. Recommendation 13, concerning updating the target amounts for excluded hospitals and distinct part units, is discussed in Appendix D of this final rule with comment period. Recommendation 31, concerning long-term care hospitals within hospitals, is discussed in section VII. of this final rule with comment period. The remaining recommendations on which we received comments are discussed below. [[Page 46021]] A. Improving Medicare's Disproportionate Share Hospital (DSH) Payments and Distribution of those Payments (Recommendation 9, 10, and 11) Recommendation: DSH payments should be concentrated among hospitals with the highest shares of poor patients. Therefore, a minimum threshold should be established for the low-income patient cost share. Hospitals falling just above the threshold should receive only a minimal per case payment, with the amount then increasing as low-income share rises. The same general approach for distributing payments should apply to all PPS hospitals. Response in the Proposed Rule: Congress set the current threshold payments for Medicare disproportionate share hospitals in section 6003(c) of the Omnibus Budget Reconciliation Act of 1989. This provision expanded both the number of hospitals that could qualify for disproportionate share payments as well as the level of those payments for some categories. We note that large urban hospitals already receive payments based on this graduated payment structure. ProPAC notes that 95 percent of the hospitals receiving disproportionate share payments are designated as large urban hospitals. A May 1990 Congressional Budget Office (CBO) report to Congress, found that only large urban hospitals were overburdened by the cost of caring for the indigent population. We agree with ProPAC that the disproportionate share payments should be concentrated on the hospitals in greatest need of assistance. Comment: ProPAC indicated that the goal of DSH payments should be to protect access to hospital care for Medicare beneficiaries, not merely to compensate a hospital for the added costs of treating Medicare patients due to the hospital's indigent patient load. To that end, ProPAC recommended that the same distribution formula be applied to all hospitals, regardless of their size or location. A ProPAC simulation of a payment system based on its recommendations showed that some payments would be redistributed to rural hospitals (largely because the current system imposes a stricter standard for those hospitals to qualify for a DSH payment) and to hospitals with large shares of uncompensated care costs (because the current system does not recognize this important component of the hospital industry's commitment to treating indigent patients). This redistribution would be appropriate, in ProPAC's view, because it would result in DSH payments more closely reflecting the burden borne by hospitals that treat a large share of poor patients. ProPAC's approach to distributing DSH payments is aimed at ensuring that available funds are used to help those hospitals most in need of assistance. Accordingly, it is important to reflect all low-income hospital care in the variable upon which payments will be based, and ProPAC's low-income share measure would capture the costs associated with all Medicaid patient days. However, a system based on ProPAC's recommendations could be designed to distribute any level of DSH funding, and so the inclusion of all Medicaid costs need not have any implications for HCFA's overall expenditures. The number of hospitals receiving payments can also be determined through the choice of the threshold (minimum low-income cost share needed to qualify for a DSH payment). ProPAC firmly agreed with the Secretary's goal of targeting payments to hospitals with the largest shares of low-income patients. But this goal can only be achieved through the development of a comprehensive and consistently measured low-income share indicator. ProPAC's recommended measure reflects all relevant groups of low-income patients (low-income Medicare, Medicaid, local indigent care program, and uncompensated care patients), measured in a consistent fashion that automatically weights each group according to its contribution to the hospital's overall patient care costs. The Commission believes that including bad debts in its recommended measure of low-income costs would not materially weaken the incentive to attempt collection on unpaid accounts. For the majority of hospitals, the amount of additional DSH payment that might be received by foregoing collection efforts would be dwarfed by the amount they stand to gain from the patient. These institutions, therefore, can be expected to continue their collection efforts. On the other hand, those few hospitals with very large low-income shares, rarely serve the type of patients among whom aggressive collection would be worthwhile. ProPAC believes that the data needed to implement the low-income cost share measure it recommends could be obtained by straightforward means. Each hospital's low-income patient cost share could be estimated by dividing the sum of charges for all low-income patient groups by total patient charges. In its simplest form, only five variables would need to be collected from each hospital--aggregate charges for: (1) patients sponsored by Medicaid, (2) patients sponsored by indigent care programs other than Medicaid, (3) Medicare patients, (4) uncompensated care, and (5) all patients. Because hospitals currently must use the same price schedule for all patients, a measure of low-income charges as a percent of total charges would yield reasonable, accurate, and comparable estimates of the proportion of costs devoted to treating low-income patients across all hospitals. Another commenter supported ProPAC's approach to calculating DSH payments, and urged HCFA to include both bad debt and uncompensated care. This commenter supported HCFA's intention to move away from the current DSH formula, which is based on Medicaid and Supplemental Security Income eligibility. Response: We continue to believe that there are inconsistencies in the current Medicare disproportionate share adjustment calculation, because Medicaid data varies from State to State. Therefore, we continue to be interested in ways to improve the data and the calculation to better target those hospitals that treat a disproportionate share of indigent patients. We are reluctant to include bad debts in the calculation because we continue to believe that it provides an incentive for hospitals to discontinue their collection efforts. In addition, examination of bad debt data has shown no correlation between bad debts and hospitals that currently receive some level of a Medicare disproportionate share adjustment. In other words, our examination of the data has shown that a hospital that currently receives a large Medicare disproportionate share adjustment does not necessarily have a correspondingly large amount of bad debt. We also continue to believe that collection of uncompensated care data would be burdensome to both the hospital industry and HCFA and its fiscal intermediaries. In addition, as noted in the proposed rule, HCFA has no means to verify such data. As we have consistently stated on many previous occasions, in order for a data source to be considered usable, it must be nationally available and auditable. Hospitals should also be aware that a change in the formula will almost certainly produce a change in the universe of qualifying hospitals and the levels of the adjustments that these hospitals receive. We note that section 4403(b) of Public Law 105-33 requires us to submit a report to Congress by August 5, 1998 that contains a revised DSH formula. In determining this formula, we must do the following: [[Page 46022]] Establish a single threshold for costs incurred by hospitals in serving low-income patients. Consider the costs incurred by the hospital in serving both Medicare Part A beneficiaries who receive SSI and Medicaid beneficiaries (including those enrolled in managed care organizations) who are not entitled to Medicare Part A benefits. B. Modifying the Tax Equity and Fiscal Responsibility Act (TEFRA) Payment System (Recommendation 14) Recommendation: Congress should consider modifying the TEFRA payment system to correct for the payment disparity between new and old providers. Response in the Proposed Rule: HCFA has developed legislative proposals to modify the TEFRA payment system. Our proposals include rebasing the target rates for excluded hospitals and units using an average of each facility's two most recent cost reporting periods. This measure would realign payment rates with costs for both old and new providers. In conjunction with rebasing, the new target rates would be capped at 150 percent of a national mean rate for each type of facility in order to prevent newer high cost hospitals from receiving excessive target rates. Lower cost hospitals would be protected by establishing a floor of 70 percent of the national mean rate for each type of facility. Incentive payments would be modified by providing that no such payment would be made where a provider incurs costs that are less than or equal to 110 percent of the target amount. Finally, the President's FY 1998 budget proposal would revise the payment of capital costs to excluded hospitals and units by reducing reimbursement for capital to 85 percent of reasonable costs. TEFRA providers are the only hospitals that continue to be reimbursed for capital on a dollar-for- dollar basis; consequently, they have no incentive to control their capital expenditures. This policy would make capital reimbursement policy more consistent among all hospitals and provide a needed incentive for cost control, particularly for newer excluded hospitals and units that may have more resources for capital expenditures because they are not as limited by the target rates on inpatient operating costs. Comment: Based on its analytic framework, ProPAC supported an average update of 2.0 percent for prospective payment system-excluded facilities. ProPAC believes that imposing the prospective payment system update on prospective payment system-excluded facilities is not appropriate. Medicare payment policies for specialty hospitals and units excluded from the prospective payment system differ from those for general acute care hospitals because these provider types historically have treated different patient populations. Likewise, the financial performance of prospective payment system-excluded providers is dissimilar from their prospective payment system counterparts, largely because of the underlying payment policy differences. Consequently, ProPAC maintains that separate methodologies should be used to arrive at appropriate updates. Both the Secretary and ProPAC agree that the payment system for prospective payment system-excluded providers should be modified to correct for the payment disparity between new and old providers. ProPAC will continue to monitor the financial performance of providers paid under this system. Response: We believe that ProPAC's concerns are addressed by Section 4411 of Pub. L. 105-33, which amended sections 1886(b)(3) of the Act regarding the rate-of-increase percentages. We have discussed the statutory changes in section VII of this preamble. C. Prospective Payment System for Skilled Nursing Facilities (SNFs) (Recommendation 19) Recommendation: A case-mix adjusted prospective payment system for skilled nursing facilities should be implemented as soon as possible. Response in the Proposed Rule: We concur with the recommendation to implement a prospective payment system for SNFs as soon as possible. The President's FY 1998 budget includes a provision for a prospective payment system for SNFs to be implemented on July 1, 1998. This system will include payment for all costs (routine, ancillary, and capital) related to the services furnished to beneficiaries under Medicare Part A. By including all costs of services in the payment rates, spending growth per day of care can be contained. In addition, the provision includes authority to adjust payments to providers where inappropriate utilization (that is, excessive lengths of stay) of SNF services is found. Finally, the proposed prospective payment system would include case-mix adjustments using a resident classification system based on resource utilization groups. These resource utilization groups are tied to elements contained on the Minimum Data Set (MDS) 2.0 resident assessment instrument for nursing homes. Comment: ProPAC commended the Secretary's efforts to create a prospective payment system for SNF services, and looks forward to reviewing HCFA's analyses of resource utilization groups and their ability to describe the services provided by SNFs. ProPAC is concerned about the incentive created under a per diem payment system for facilities to increase length of stay, and believes, therefore, that the Secretary should continue efforts to develop a case-mix classification system for use with an admission-based payment system. In addition, ProPAC believes that the Secretary's efforts to discourage inappropriate utilization are particularly important. Response: While the significant copayment associated with the Medicare SNF benefit ($95.00 per day) acts as a powerful force limiting the growth of overall length of stay in SNFs, HCFA is concerned about increases in utilization under the new prospective payment system and plans to study this issue. In addition, HCFA will continue its efforts towards the development of a per diem integrated payment and delivery system that applies to all Medicare post-acute services. This type of system has the greatest potential for providing system-wide financial integrity, while assuring high quality care. D. Home Health Visit Coding (Recommendation 26) Recommendation: Medicare should require consistent home health visit coding. Such information is essential for monitoring and evaluating the home health benefit and developing an effective case-mix adjustment system. Response in the Proposed Rule: Currently, there is no standard definition of what comprises a visit and there is variation in the type of service and length of time for providing those services. We agree such information is critical to developing an effective case-mix measure for a home health prospective payment system. In the case-mix research we are beginning, we will collect information on the length of time and procedures performed during a visit. This information will feed into the development of a prospective payment system and related coding system. We cannot proceed with specific coding refinements until the findings are available and a prospective payment system is designed. We are researching aspects of that approach rather than imposing reporting burdens on all home health agencies. Comment: ProPAC indicated that although the Secretary agrees that information about home health visit length and content is critical to developing an effective case-mix [[Page 46023]] measure, she does not want to proceed with specific coding refinements until the findings from the case-mix demonstration project are available and a prospective payment system is designed. ProPAC is concerned that without uniform coding requirements, the implementation of a prospective payment system would be further delayed. ProPAC notes that there is little information about the types of services that are provided during a visit and that the case-mix demonstration project should guide coding requirements. Concurrent with the research on a prospective payment system, the Commission believes it is important to begin gathering basic data about the content of home health visits, which would be critical in any efforts to improve the payment method. The Medicare Home Health Agency Manual contains a series of aggregate code definitions that would capture some detail about the services that are provided during a visit. HCFA's Common Procedure Coding System (HCPCS) describe some skilled nursing services and a range of therapy services. Time increments also could be useful in understanding visit duration. Response: Section 1895(c) of the Act, as added by section 4603 of Public Law 105-33, requires payment information on all claims for home health services furnished on or after October 1, 1998. All claims for home health services must include a unique physician identifier and a code (or codes) specified by the Secretary that identifies the length of time of the home health visit as measured in 15 minute increments. Since there is no standard definition of what comprises a visit and there is variation in the length of time for providing those services, the new payment information requirements will provide needed information on the length of time required for the provision of home health services. Additionally, as discussed in our previous response in the August 30, 1996 final rule, a contract was awarded to develop a case-mix measurement for a home health prospective payment system. Under the terms of this contract, extensive information about the characteristics of patients and resource utilization will be collected. Information also will be collected about visit lengths and procedures performed during all home health visits during an episode of care. E. Home Health Copayments (Recommendation 27) Recommendation: Modest beneficiary copayments, subject to an annual limit, should be introduced for home health care services. Response in the Proposed Rule: We are concerned about the impact that higher beneficiary out-of-pocket expenses would have on poorer Medicare beneficiaries who are not covered by Medicaid and cannot afford supplemental insurance. Poorer beneficiaries spend a greater proportion of their income on out-of-pocket costs. Our proposed interim system of limits should help control the growth in service use. Comment: The Commission continued to maintain its position that copayments for home health services are appropriate. ProPAC believes that Medicare beneficiaries who receive home health services should participate financially in the payment for those services. Such a policy would be consistent with Medicare cost-sharing requirements for other services and could result in increased involvement by beneficiaries in treatment decisions. Copayments also might limit fraudulent billing practices, since beneficiaries could identify services for which Medicare was billed but that were never delivered. ProPAC recognizes that a copayment policy would have a more direct financial impact on beneficiaries who lack Medicaid or supplemental coverage. Accordingly, ProPAC believes that the copayment amount should be minimal and subject to an annual limit. Response: The issue of copayments was thoroughly considered in the deliberations over Public Law 105-33 and ultimately not adopted in the legislation. We remain concerned about the impact that higher beneficiary out-of-pocket costs would have on poorer Medicare beneficiaries who are not covered by Medicaid and cannot afford supplemental insurance. Our interim system of limits should help control the growth in service use. F. Prospective Payment System for Rehabilitation Hospitals and Distinct-Part Units (Recommendation 29) Recommendation: A case-mix adjusted prospective payment system for rehabilitation hospitals and distinct-part units should be implemented as soon as possible. Response in the Proposed Rule: We have sponsored research on possible patient classification systems for rehabilitation care. In particular, a study by the RAND Corporation evaluated the prospects for a prospective payment system based on the rehabilitation coding system known as Functional Independence Measure (FIM) and the patient classification system known as Function-Related Groups (FRGs). The final report on this research will soon be complete. However, the preliminary results indicate much work would be necessary before a prospective payment system based on FRGs could be implemented. There are at least two important implementation issues: the reliability of the patient status measures and the recognition of patient complications and comorbidities. In addition, implementation of a case- mix payment system for rehabilitation hospitals and units would require significant program resources and impose data reporting and collection requirements on providers. As a result, fewer resources would be available for research into developing an integrated payment approach for payment of rehabilitation care across all settings (excluded hospitals, SNFs, HHAs, comprehensive outpatient rehabilitation facilities, etc.) Thus, we prefer to focus our efforts on developing a coordinated payment system for post-acute care that relies on a core assessment tool. Comment: ProPAC strongly supported coordinating payment methods across postacute sites. The Commission believes that a separate prospective payment system for rehabilitation hospitals and units could be implemented in the near term, however, as an incremental step toward a more comprehensive system for all post-acute care services. ProPAC's understanding is that most Medicare-certified inpatient rehabilitation facilities already collect and use the types of data necessary for the FIM or other standardized patient assessment instruments. Therefore, reporting these data to HCFA would not be an undue burden on providers. Response: Section 4421 of Public Law 105-33 amended section 1886 of the Act by adding a new subsection (j), which provides for implementation of a prospective case-mix payment system for excluded rehabilitation hospitals and units, and begins to phase-in payments under that system for cost reporting periods beginning on or after October 1, 2000. The case-mix payment system is to be fully implemented for cost reporting periods beginning on or after October 1, 2002. We will continue to work on developing a prospective payment system for rehabilitation hospitals and units consistent with this statutory requirement. G. Prospective Payment System for Long-Term Care Hospitals (Recommendation 30) Recommendation: A case-mix adjusted prospective payment system for long-term care hospitals should be developed and implemented as soon as possible. [[Page 46024]] Response in the Proposed Rule: We continually examine data and analyze proposals to simplify payment mechanisms and ensure that Medicare payments reflect efficient and high quality health care. We will be interested in evaluating the results of independent studies on case-mix measurement for long-stay hospital patients. At the same time, it is evident that many long-term care hospitals furnish extensive rehabilitation care that overlaps with care furnished in rehabilitation hospitals. Thus, a prospective payment system for postacute care providers which includes SNFs and rehabilitation hospitals and units could conceivably be used for patients in long-term care hospitals. As a result, we have concerns that the development and implementation of a separate prospective payment system for fewer than 200 Medicare- certified, long-term care hospitals may not be an efficient use of program resources and may result in overlapping complexity and manipulation of payment. Comment: ProPAC asserted that a better understanding of long-term care hospitals with respect to the types of patients they treat, patterns of care, and facility costs would be necessary before these providers could be folded into an integrated payment system. ProPAC, therefore, believes that the Secretary should begin researching patient classification systems and resource use for long-term care hospitals soon. Response: We will continue to examine data and analyze proposals consistent with the requirements of section 4422 of Public Law 105-33. This section requires the Secretary to submit a report to Congress not later than October 1, 1999, regarding different payment methodologies which may be feasible for paying long-term care hospitals under the Medicare program. IX. Other Required Information A. Requests for Data From the Public In order to respond promptly to public requests for data related to the prospective payment system, we have set up a process under which commenters can gain access to the raw data on an expedited basis. Generally, the data are available in computer tape format or cartridges; however, some files are available on diskette, and on the Internet at HTTP://WWW.HCFA.GOV/STATS/PUBFILES.HTML. In our June 2 proposed rule, we published a list of data files that are available for purchase (62 FR 29939). B. Waiver of Notice of Proposed Rulemaking and 30-Day Delay in the Effective Date We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of the rule take effect. However, section 1871(b) of the Act provides that publication of a notice of proposed rulemaking is not required before a rule takes effect where ``a statute establishes a specific deadline for the implementation of the provision and the deadline is less than 150 days after the date of the enactment of the statute in which the deadline is contained.'' In addition, we may waive a notice of proposed rulemaking if we find good cause that notice and comment are impracticable, unnecessary, or contrary to the public interest. On June 2, 1997, we published a proposed rule addressing FY 1998 payment rates and policies for prospective payment system hospitals and excluded hospitals (62 FR 29902). Subsequently, on August 5, 1997, Public Law 105-33 was enacted. Public Law 105-33 contains a number of provisions relating to issues addressed in the proposed rule, as well as issues that were not specifically addressed in the proposed rule. These statutory provisions are generally effective October 1, 1997. In accordance with section 1871(b) of the Act, publication of a notice of proposed rulemaking is not required before implementing the statutory provisions of Public Law 105-33 that take effect on October 1, 1997. In addition, given the extremely short timeframe for implementing these statutory provisions, we find good cause to waive notice and comment procedures with respect to the provisions of this final rule with comment period that implement Public Law 105-33, because it would be impracticable to undertake such procedures before those provisions take effect. We are, however, providing a 60-day period for public comment on those provisions. C. Response to Comments Because of the large number of items of correspondence we normally receive on FR documents published for comment, we are not able to acknowledge or respond to them individually. Comments on the provisions of this final rule that implement provisions of the Balanced Budget Act of 1997 will be considered if we receive them by the date specified in the DATES section of this preamble. We will not consider comments concerning provisions that remain unchanged from the June 2, 1997 proposed rule or that were changed based on public comments. List of Subjects 42 CFR Part 400 Grant programs-health, Health facilities, Health maintenance organizations (HMO), Medicaid, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 409 Health facilities, Medicare. 42 CFR Part 410 Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays. 42 CFR Part 411 Kidney diseases, Medicare, Recovery against third parties, Reporting and recordkeeping requirements, Secondary payments. 42 CFR Part 412 Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements. 42 CFR Part 413 Health facilities, Kidney diseases, Medicare, Puerto Rico, Reporting and recordkeeping requirements. 42 CFR Part 424 Emergency medical services, Health facilities, Health professions, Medicare. 42 CFR Part 440 Grant programs--health, Medicaid. 42 CFR Part 485 Grant programs-health, Health facilities, Medicaid, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 488 Administrative practice and procedure, Forms and guidelines, Health facilities, Survey and certification. 42 CFR Part 489 Health facilities, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 498 Administrative practice and procedure, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements. 42 CFR chapter IV is amended as set forth below: [[Page 46025]] PART 400--INTRODUCTION; DEFINITIONS A. Part 400 is amended as follows: 1. The authority citation for Part 400 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35. 2. In Sec. 400.202, the introductory text is republished, the definitions of ``Essential access community hospital (EACH)'', ``Provider'', and ``Services'' are revised, the definition of ``Rural primary care hospital (RPCH)'' is removed, and a new definition of ``Critical access hospital (CAH)'' is added in alphabetical order, to read as follows: Sec. 400.202 Definitions specific to Medicare. As used in connection with the Medicare program, unless the context indicates otherwise-- * * * * * Critical access hospital (CAH) means a facility designated by HFCA as meeting the applicable requirements of section 1820 of the Act and of subpart F of part 485 of this chapter. * * * * * Essential access community hospital (EACH) means a hospital designated by HCFA as meeting the applicable requirements of section 1820 of the Act and of subpart G of part 412 of this chapter, as in effect on September 30, 1997. * * * * * Provider means a hospital, a CAH, a skilled nursing facility, a comprehensive outpatient rehabilitation facility, a home health agency, or a hospice that has in effect an agreement to participate in Medicare, or a clinic, a rehabilitation agency, or a public health agency that has in effect a similar agreement but only to furnish outpatient physical therapy or speech pathology services, or a community mental health center that has in effect a similar agreement but only to furnish partial hospitalization services. * * * * * Services means medical care or services and items, such as medical diagnosis and treatment, drugs and biologicals, supplies, appliances, and equipment, medical social services, and use of hospital, CAH, or SNF facilities. * * * * * PART 409--HOSPITAL INSURANCE BENEFITS B. Part 409 is amended as follows: 1. The authority citation for Part 409 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart D--Requirements for Coverage of Posthospital SNF Care 2. In Sec. 409.30, the introductory text of paragraph (a) is republished and paragraph (a)(1) is revised to read as follows: Sec. 409.30 Basic requirements. * * * * * (a) Preadmission requirements. The beneficiary must-- (1) Have been hospitalized in a participating or qualified hospital or participating CAH, for medically necessary inpatient hospital or inpatient CAH care, for at least 3 consecutive calendar days, not counting the date of discharge; and * * * * * PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS C. Part 410 is amended as follows: 1. The authority citation for Part 410 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh)), unless otherwise noted. 2. Section 410.2 is amended by revising the definition of ``Participating'' to read as follows: Sec. 410.2 Definitions. * * * * * Participating refers to a hospital, CAH, SNF, HHA, CORF, or hospice that has in effect an agreement to participate in Medicare; or a clinic, rehabilitation agency, or public health agency that has a provider agreement to participate in Medicare but only for purposes of providing outpatient physical therapy, occupational therapy, or speech pathology services; or a CMHC that has in effect a similar agreement but only for purposes of providing partial hospitalization services, and nonparticipating refers to a hospital, CAH, SNF, HHA, CORF, hospice, clinic, rehabilitation agency, public health agency, or CMHC that does not have in effect a provider agreement to participate in Medicare. 3. Section 410.152 is amended by revising paragraph (k) to read as follows: Sec. 410.152 Amounts of payment. * * * * * (k) Amount of payment: Outpatient CAH services. Payment for critical access hospital outpatient services is the reasonable cost of the CAH in providing these services, as determined in accordance with section 1861(v)(1)(A) of the Act and with the applicable principles of cost reimbursement in part 413 and in part 415 of this chapter. Payment for CAH outpatient services is subject to the applicable Medicare Part B deductible and coinsurance amounts, as described in Sec. 413.70(b)(3) of this chapter. Sec. 410.155 [Amended] 4. Section 410.155 is amended by adding the phrase ``; or a critical access hospital (CAH) meeting the requirements of Part 485, subpart F of this chapter'' at the end of the last sentence of paragraph (a); and adding the phrase ``or CAH'' at the end of the last sentence of the introductory text of paragraph (b). D. Part 412 is amended as follows: PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES 1. The authority citation for part 412 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart A--General Provisions 2. In Sec. 412.2, the introductory text of paragraph (f) is republished and paragraph (f)(8) is revised to read as follows: Sec. 412.2 Basis of payment. * * * * * (f) Additional payments to hospitals. In addition to payments based on the prospective payment rates for inpatient operating costs and inpatient capital-related costs, hospitals receive payments for the following: * * * * * (8) For discharges on or after June 19, 1990, and before October 1, 1994, and for discharges on or after October 1, 1997, a payment amount per unit for blood clotting factor provided to Medicare inpatients who have hemophilia. 3. Section 412.8 is amended by revising paragraph (b) to read as follows: Sec. 412.8 Publication of schedules for determining prospective payment rates. * * * * * (b) Annual publication of schedule for determining prospective payment rates. (1) HCFA proposes changes in the methods, amounts, and factors used to determine inpatient prospective payment rates in a Federal Register document published for public comment not later than the April 1 before the beginning of the Federal [[Page 46026]] fiscal year in which the proposed changes would apply. (2) HCFA publishes a Federal Register document setting forth final methods, amounts, and factors for determining inpatient prospective payment rates not later than the August 1 before the Federal fiscal year in which the rates would apply. Subpart B--Hospital Services Subject to and Excluded From the Prospective Payment Systems for Inpatient Operating Costs and Inpatient Capital-Related Costs 4. Section 412.22 is amended by revising paragraph (a) and adding new paragraphs (e), (f), and (g), to read as follows: Sec. 412.22 Excluded hospitals and hospital units: General rules. (a) Criteria. Subject to the criteria set forth in paragraph (e) of this section, a hospital is excluded from the prospective payment systems if it meets the criteria for one or more of the excluded classifications described in Sec. 412.23. * * * * * (e) Hospitals within hospitals. Except as provided in paragraph (f) of this section, for cost reporting periods beginning on or after October 1, 1997, a hospital that occupies space in a building also used by another hospital, or in one or more entire buildings located on the same campus as buildings used by another hospital, must meet the following criteria in order to be excluded from the prospective payment system: (1) Separate governing body. The hospital has a governing body that is separate from the governing body of the hospital occupying space in the same building or on the same campus. The hospital's governing body is not under the control of the hospital occupying space in the same building or on the same campus, or of any third entity that controls both hospitals. (2) Separate chief medical officer. The hospital has a single chief medical officer who reports directly to the governing body and who is responsible for all medical staff activities of the hospital. The chief medical officer of the hospital is not employed by or under contract with either the hospital occupying space in the same building or on the same campus or any third entity that controls both hospitals. (3) Separate medical staff. The hospital has a medical staff that is separate from the medical staff of the hospital occupying space in the same building or on the same campus. The hospital's medical staff is directly accountable to the governing body for the quality of medical care provided in the hospital, and adopts and enforces bylaws governing medical staff activities, including criteria and procedures for recommending to the governing body the privileges to be granted to individual practitioners. (4) Chief executive officer. The hospital has a single chief executive officer through whom all administrative authority flows, and who exercises control and surveillance over all administrative activities of the hospital. The chief executive officer is not employed by, or under contract with, either the hospital occupying space in the same building or on the same campus or any third entity that controls both hospitals. (5) Performance of basic hospital functions. The hospital meets one of the following criteria: (i) The hospital performs the basic functions specified in Secs. 482.21 through 482.27, 482.30, and 482.42 of this chapter through the use of employees or under contracts or other agreements with entities other than the hospital occupying space in the same building or on the same campus, or a third entity that controls both hospitals. Food and dietetic services and housekeeping, maintenance, and other services necessary to maintain a clean and safe physical environment could be obtained under contracts or other agreements with the hospital occupying space in the same building or on the same campus, or with a third entity that controls both hospitals. (ii) For the same period of at least 6 months used to determine compliance with the criterion regarding the age of patients in Sec. 412.23(d)(2) or the length-of-stay criterion in Sec. 412.23(e)(2), or for hospitals other than children's or long-term care hospitals, for a period of at least 6 months immediately preceding the first cost reporting period for which exclusion is sought, the cost of the services that the hospital obtained under contracts or other agreements with the hospital occupying space in the same building or on the same campus, or with a third entity that controls both hospitals, is no more than 15 percent of the hospital's total inpatient operating costs, as defined in Sec. 412.2(c). For purposes of this paragraph (e)(5)(ii), however, the costs of preadmission services are those specified under Sec. 413.40(c)(2) rather than those specified under Sec. 412.2(c)(5). (iii) For the same period of at least 6 months used to determine compliance with the criterion regarding the age of inpatients in Sec. 412.23(d)(2) or the length-of-stay criterion in Sec. 412.23(e)(2), or for hospitals other than children's or long-term care hospitals, for the period of at least 6 months immediately preceding the first cost reporting period for which exclusion is sought, the hospital has an inpatient population of whom at least 75 percent were referred to the hospital from a source other than another hospital occupying space in the same building or on the same campus. (f) Application for certain hospitals. If a hospital has been excluded from the prospective payment systems under this section on or before September 30, 1995, the criteria in paragraph (e) of this section do not apply to the hospital. (g) Definition of control. For purposes of this section, control exists if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution. 5. Section 412.23 is amended by revising paragraphs (e) and (f) to read as follows: Sec. 412.23 Excluded hospitals: Classifications. * * * * * (e) Long-term care hospitals. A long-term care hospital must meet the requirements of paragraphs (e)(1) or (e)(2) of this section, and, where applicable, the additional requirements Sec. 412.22(e). (1) The hospital must have a provider agreement under part 489 of this chapter to participate as a hospital and an average inpatient length of stay greater than 25 days as calculated under paragraph (e)(3) of this section. (2) For cost reporting periods beginning on or after August 5, 1997, a hospital that was first excluded from the prospective payment system under this section in 1986 must have an average inpatient length of stay of greater than 20 days, as calculated under paragraph (e)(3) of this section, and must demonstrate that at least 80 percent of its annual Medicare inpatient discharges in the 12-month cost reporting period ending in fiscal year 1997 have a principal diagnosis that reflects a finding of neoplastic disease as defined in paragraph (f)(1)(iv) of this section. (3) The average inpatient length of stay is calculated-- (i) By dividing the number of total inpatient days (less leave or pass days) by the number of total discharges for the hospital's most recent complete cost reporting period; (ii) If a change in the hospital's average length-of-stay is indicated, by the same method for the immediately preceding 6-month period; or [[Page 46027]] (iii) If a hospital has undergone a change of ownership (as described in Sec. 489.18 of this chapter) at the start of a cost reporting period or at any time within the preceding 6 months, the hospital may be excluded from the prospective payment system as a long- term care hospital for a cost reporting period if, for the 6 months immediately preceding the start of the period (including time before the change of ownership), the hospital has the required average length of stay, continuously operated as a hospital, and continuously participated as a hospital in Medicare. (f) Cancer hospitals--(1) General rule. Except as provided in paragraph (f)(2) of this section, if a hospital meets the following criteria, it is classified as a cancer hospital and is excluded from the prospective payment systems beginning with its first cost reporting period beginning on or after October 1, 1989. A hospital classified after December 19, 1989, is excluded beginning with its first cost reporting period beginning after the date of its classification. (i) It was recognized as a comprehensive cancer center or clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983. (ii) It is classified on or before December 31, 1990, or, if on December 19, 1989, the hospital was located in a State operating a demonstration project under section 1814(b) of the Act, the classification is made on or before December 31, 1991. (iii) It demonstrates that the entire facility is organized primarily for treatment of and research on cancer (that is, the facility is not a subunit of an acute general hospital or university- based medical center). (iv) It shows that at least 50 percent of its total discharges have a principal diagnosis that reflects a finding of neoplastic disease. (The principal diagnosis for this purpose is defined as the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital. For the purposes of meeting this definition, only discharges with ICD-9-CM principal diagnosis codes of 140 through 239, V58.0, V58.1, V66.1, V66.2, or 990 will be considered to reflect neoplastic disease.) (2) Alternative. A hospital that applied for and was denied, on or before December 31, 1990, classification as a cancer hospital under the criteria set forth in paragraph (f)(1) of this section is classified as a cancer hospital and is excluded from the prospective payment systems beginning with its first cost reporting period beginning on or after January 1, 1991, if it meets the criterion set forth in paragraph (f)(1)(i) of this section and the hospital is-- (i) Licensed for fewer than 50 acute care beds as of August 5, 1997; (ii) Is located in a State that as of December 19, 1989, was not operating a demonstration project under section 1814(b) of the Act; and (iii) Demonstrates that, for the 4-year period ending on December 31, 1996, at least 50 percent of its total discharges have a principal diagnosis that reflects a finding of neoplastic disease as defined in paragraph (f)(1)(iv) of this section. * * * * * 6. Section 412.30 is amended by redesignating paragraphs (a) through (d) as paragraphs (b) through (e), respectively, and adding a new paragraph (a). Redesignated paragraph (b) is further amended by redesignating paragraph (b)(4) as paragraph (b)(5), and adding a new paragraph (b)(4). The introductory text of redesignated paragraph (d)(1) is republished and redesignated paragraph (d)(1)(ii) is revised to read as follows: Sec. 412.30 Exclusion of new rehabilitation units and expansion of units already excluded. (a) Bed capacity in units. A decrease in bed capacity must remain in effect for at least a full 12-month cost reporting period before an equal or lesser number of beds can be added to the hospital's licensure and certification and considered ``new'' under paragraph (b) of this section. Thus, when a hospital seeks to establish a new unit under the criteria under paragraph (b) of this section, or to enlarge an existing unit under the criteria under paragraph (d) of this section, the regional office will review its records on the facility to determine whether any beds have been delicensed and decertified during the 12- month cost reporting period before the period for which the hospital seeks to add the beds. To the extent bed capacity was removed from the hospital's licensure and certification during that period, that amount of bed capacity may not be considered ``new'' under paragraph (b) of this section. (b) New units. * * * * * (4) If a hospital that has not previously participated in the Medicare program seeks exclusion of a rehabilitation unit, it may designate certain beds as a new rehabilitation unit for the first full 12-month cost reporting period that occurs after it becomes a Medicare- participating hospital. The written certification described in paragraph (b)(2) of this section also is effective for any cost reporting period of not less than 1 month and not more than 11 months occurring between the date the hospital began participating in Medicare and the start of the hospital's regular 12-month cost reporting period. * * * * * (d) Expansion of excluded rehabilitation units. (1) New bed capacity. The beds that a hospital seeks to add to its excluded rehabilitation unit are considered new beds only if-- * * * * * (ii) The hospital has obtained approval, under State licensure and Medicare certification, for an increase in its hospital bed capacity that is greater than 50 percent of the number of beds it seeks to add to the unit. * * * * * Subpart D--Basic Methodology for Determining Prospective Payment Federal Rates for Inpatient Operating Costs 7. In Sec. 412.63, paragraph (p) is revised, paragraphs (q) through (s) are redesignated as paragraphs (u) through (w), respectively, and new paragraphs (q) through (t) are added to read as follows: Sec. 412.63 Federal rates for inpatient operating costs for fiscal years after Federal fiscal year 1984. * * * * * (p) Applicable percentage change for fiscal year 1998. The applicable percentage change for fiscal year 1998 is 0 percent for hospitals in all areas. (q) Applicable percentage change for fiscal year 1999. The applicable percentage change for fiscal year 1999 is the percentage increase in the market basket index for prospective payment hospitals (as defined in Sec. 413.40(a) of this subchapter) minus 1.9 percentage points for hospitals in all areas. (r) Applicable percentage change for fiscal year 2000. The applicable percentage change for fiscal year 2000 is the percentage increase in the market basket index for prospective payment hospitals (as defined in Sec. 413.40(a) of this chapter) minus 1.8 percentage points for hospitals in all areas. (s) Applicable percentage change for fiscal years 2001 and 2002. The applicable percentage change for fiscal years 2001 and 2002 is the percentage increase in the market basket index for prospective payment hospitals (as defined in Sec. 413.40(a) of this subchapter) minus 1.1 percentage points for hospitals in all areas. [[Page 46028]] (t) Applicable percentage change for fiscal year 2003 and for subsequent years. The applicable percentage change for fiscal year 2003 and for subsequent years is the percentage increase in the market basket index for prospective payment hospitals (as defined in Sec. 413.40(a)) for hospitals in all areas. * * * * * Subpart F--Payment for Outlier Cases 8. Section 412.80 is revised to read as follows: Sec. 412.80 General provisions. (a) Basic rule--(1) Discharges occurring on or after October 1, 1994 and before October 1, 1997. For discharges occurring on or after October 1, 1994, and before October 1, 1997, except as provided in paragraph (b) of this section concerning transferring hospitals, HCFA provides for additional payment, beyond standard DRG payments, to a hospital for covered inpatient hospital services furnished to a Medicare beneficiary if either of the following conditions is met: (i) The beneficiary's length-of-stay (including days at the SNF level of care if a SNF bed is not available in the area) exceeds the mean length-of-stay for the applicable DRG by the lesser of the following: (A) A fixed number of days, as specified by HCFA; or (B) A fixed number of standard deviations, as specified by HCFA. (ii) The beneficiary's length-of-stay does not exceed criteria established under paragraph (a)(1)(i) of this section, but the hospital's charges for covered services furnished to the beneficiary, adjusted to operating costs and capital costs by applying cost-to- charge ratios as described in Sec. 412.84(h), exceed the DRG payment for the case plus a fixed dollar amount (adjusted for geographic variation in costs) as specified by HCFA. (2) Discharges occurring on or after October 1, 1997. For discharges occurring on or after October 1, 1997, except as provided in paragraph (b) of this section concerning transfers, HCFA provides for additional payment, beyond standard DRG payments, to a hospital for covered inpatient hospital services furnished to a Medicare beneficiary if the hospital's charges for covered services, adjusted to operating costs and capital costs by applying cost-to-charge ratios as described in Sec. 412.84(h), exceed the DRG payment for the case plus a fixed dollar amount (adjusted for geographic variation in costs) as specified by HCFA. (b) Outlier cases in transferring hospitals. HCFA provides cost outlier payments to a transferring hospital that does not receive payment under Sec. 412.2(b) for discharges specified in Sec. 412.4(d)(2), if the hospital's charges for covered services furnished to the beneficiary, adjusted to cost by applying a national cost/charge ratio, exceed the DRG payment for the case plus a fixed dollar amount (adjusted for geographic variation in costs) as specified by HCFA, divided by the geometric mean length of stay for the DRG and multiplied by the beneficiary's length of stay plus 1 day. (c) Publication and revision of outlier criteria. HCFA will issue threshold criteria for determining outlier payment in the annual notice of the prospective payment rates published in accordance with Sec. 412.8(b). Sec. 412.82 [Amended] 9. In Sec. 412.82(a), in the first sentence, the word ``If'' is removed and the phrase ``For discharges occurring before October 1, 1997, if'' is added in its place. Sec. 412.84 [Amended] 10. In Sec. 412.84, in the first sentence of paragraph (a), the reference ``Sec. 412.80(a)(1)(ii)'' is revised to read ``Sec. 412.80(a)'', and the last sentence of paragraph (g) is removed. Sec. 412.86 [Amended] 11. In the introductory text to Sec. 412.86, the word ``If'' is removed and the phrase ``For discharges occurring before October 1, 1997, if'' is added in its place. Subpart G--Special Treatment of Certain Facilities Under the Prospective Payment System for Inpatient Operating Costs 12. Section 412.90 is amended by redesignating paragraphs (i) and (j) as paragraphs (j) and (k), respectively, adding a new paragraph (i), and revising newly designated paragraphs (j) and (k), to read as follows: Sec. 412.90 General rules. * * * * * (i) Hospitals that receive an additional update for FYs 1998 and 1999. For FYs 1998 and 1999, HCFA makes an upward adjustment to the standardized amounts for certain hospitals that do not receive indirect medical education or disproportionate share payments and are not Medicare- dependent, small rural hospitals. The criteria for identifying these hospitals are set forth in Sec. 412.107. (j) Medicare-dependent, small rural hospitals. For cost reporting periods beginning on or after April 1, 1990 and ending before October 1, 1994, or beginning on or after October 1, 1997 and ending before October 1, 2001, HCFA adjusts the prospective payment rates for inpatient operating costs determined under subparts D and E of this part if a hospital is classified as a Medicare-dependent, small rural hospital. Criteria for identifying these hospitals are set forth in Sec. 412.108. (k) Essential access community hospitals (EACHs). If a hospital was designated as an EACH by HCFA as described in Sec. 412.109(a) and is located in a rural area as defined in Sec. 412.109(b), HCFA determines the prospective payment rate for that hospital, as it does for sole community hospitals, under Sec. 412.92(d). 13. In Sec. 412.96, the introductory text of paragraph (c)(1) is revised, paragraph (f) is removed and reserved, and paragraph (g) is revised, to read as follows: Sec. 412.96 Special treatment: Referral centers. * * * * * (c) * * * (1) Case-mix index. HCFA sets forth national and regional case-mix index values in each year's annual notice of prospective payment rates published under Sec. 412.8(b). The methodology HCFA uses to calculate these criteria is described in paragraph (g) of this section. The case- mix index value to be used for an individual hospital in the determination of whether it meets the case-mix index criteria is that calculated by HCFA from the hospital's own billing records for Medicare discharges as processed by the fiscal intermediary and submitted to HCFA. The hospital's case-mix index for discharges (not including discharges from units excluded from the prospective payment system under subpart B of this part) during the most recent Federal fiscal year that ended at least one year prior to the beginning of the cost reporting period for which the hospital is seeking referral center status must be at least equal to-- * * * * * (e)-(f) [Reserved] (g) Hospital cancellation of referral center status. (1) A hospital may at any time request cancellation of its status as a referral center and be paid prospective payments per discharge based on the applicable rural rate as determined in accordance with Sec. 412.63, as adjusted by the hospital's area wage index value. (2) The cancellation becomes effective no later than 30 days after the date the hospital submits its request. (3) If a hospital requests that its referral center status be canceled, it may not be reclassified as a referral center unless it meets the qualifying criteria set [[Page 46029]] forth in paragraph (a) of this section in effect at the time it reapplies. * * * * * 14. In Sec. 412.105, paragraphs (a) and (d) are revised, paragraph (f) is removed, paragraph (g) is redesignated as paragraph (f), and a new paragraph (g) is added. In redesignated paragraph (f), paragraph (f)(1)(i) introductory text is republished, paragraph (f)(1)(i)(B) is revised, paragraph (f)(1)(ii) introductory text is republished and paragraph (f)(1)(ii)(C) is revised, paragraph (f)(1)(iv) is revised, and a new paragraph (f)(1)(v) is added, to read as follows: Sec. 412.105 Special treatment: Hospitals that incur indirect costs for graduate medical education programs. * * * * * (a) Basic data. HCFA determines the following for each hospital: (1) The hospital's ratio of full-time equivalent residents, except as limited under paragraph (f) of this section, to the number of beds (as determined in paragraph (b) of this section). For a hospital's cost reporting periods beginning on or after October 1, 1997, this ratio may not exceed the ratio for the hospital's most recent prior cost reporting period. (2) The hospital's DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs, excluding outlier payments for inpatient operating costs determined under subpart F of this part and additional payments made under the provisions of Sec. 412.106 . * * * * * (d) Determination of education adjustment factor. Each hospital's education adjustment factor is calculated as follows: (1) Step one. A factor representing the sum of 1.00 plus the hospital's ratio of full-time equivalent residents to beds, as determined under paragraph (a)(1) of this section, is raised to an exponential power equal to the factor set forth in paragraph (c) of this section. (2) Step two. The factor derived from step one is reduced by 1.00. (3) Step three. The factor derived from completing steps one and two is multiplied by `c', and where `c' is equal to the following: (i) For discharges occurring on or after October 1, 1988, and before October 1, 1997, 1.89. (ii) For discharges occurring during fiscal year 1998, 1.72. (iii) For discharges occurring during fiscal year 1999, 1.6. (iv) For discharges occurring during fiscal year 2000, 1.47. (v) For discharges occurring on or after October 1, 2000, 1.35. * * * * * (f) Determining the total number of full-time equivalent residents for cost reporting periods beginning on or after July 1, 1991. (1) For cost reporting periods beginning on or after July 1, 1991, the count of full-time equivalent residents for the purpose of determining the indirect medical education adjustment is determined as follows: (i) The residents must be enrolled in an approved teaching program. An approved teaching program is one that meets one of the following requirements: * * * * * (B) May count towards certification of the participant in a specialty or subspecialty listed in the current edition of either of the following publications: (1) The Directory of Graduate Medical Education Programs published by the American Medical Association. (2) The Annual Report and Reference Handbook published by the American Board of Medical Specialties. * * * * * (ii) In order to be counted, the resident must be assigned to one of the following areas: * * * * * (C) Effective for discharges occurring on or after October 1, 1997, the time spent by a resident in a nonhospital setting in patient care activities under an approved medical residency training program is counted towards the determination of full-time equivalency if the criteria set forth at Sec. 413.86(f)(1)(iii) are met. * * * * * (iv) Effective for discharges occurring on or after October 1, 1997, the total number of full-time equivalent residents in the fields of allopathic and osteopathic medicine in either a hospital or nonhospital setting that meets the criteria listed in paragraph (f)(1)(ii) of this section may not exceed the number of such full-time equivalent residents in the hospital with respect to the hospital's most recent cost reporting period ending on or before December 31, 1996. (v) For a hospital's cost reporting periods beginning on or after October 1, 1997, and before October 1, 1998, the total number of full- time equivalent residents for payment purposes is equal to the average of the actual full-time equivalent resident counts (subject to the requirements listed in paragraphs (f)(1)(ii)(C) and (f)(1)(iv) of this section) for that cost reporting period and the preceding cost reporting period. For a hospital's cost reporting periods beginning on or after October 1, 1998, the total number of full-time equivalent residents for payment purposes is equal to the average of the actual full-time equivalent resident count (subject to the requirements listed in paragraphs (f)(10)(ii)(C) and (f)(1)(iv) of this section) for that cost reporting period and the preceding two cost reporting periods. * * * * * (g) Indirect medical education payment for managed care enrollees. For portions of cost reporting periods beginning on or after January 1, 1998, a payment is made to a hospital for indirect medical education costs, as determined under paragraph (e) of this section, for discharges associated with individuals who are enrolled under a risk- sharing contract with an eligible organization under section 1876 of the Act or with a Medicare+Choice organization under title XVIII, Part C of the Act during the period. 15. Section 412.106 is amended by revising paragraphs (a)(2) and (d)(1) and adding a new paragraph (e) to read as follows: Sec. 412.106 Special treatment: Hospitals that serve a disproportionate share of low-income patients. (a) General considerations. * * * * * * * * (2) The payment adjustment is applied to the hospital's DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs, excluding outlier payments for inpatient operating costs under subpart F of this part and additional payments made under the provisions of Sec. 412.105. * * * * * (d) Payment adjustment. (1) Method of adjustment. Subject to the reduction factor set forth in paragraph (e) of this section, if a hospital serves a disproportionate number of low-income patients, its DRG revenues for inpatient operating costs are increased by an adjustment factor as specified in paragraph (d)(2) of this section. * * * * * (e) Reduction in payments for FYs 1998 through 2002. The amounts otherwise payable to a hospital under paragraph (d) of this section are reduced by the following: (1) For FY 1998, 1 percent. (2) For FY 1999, 2 percent. (3) For FY 2000, 3 percent. (4) For FY 2001, 4 percent. (5) For FY 2002, 5 percent. (6) For FYs 2003 and thereafter, 0 percent. 16. A new Sec. 412.107 is added to read as follows: [[Page 46030]] Sec. 412.107 Special treatment: Hospitals that receive an additional update for FYs 1998 and 1999. (a) Additional payment update. A hospital that meets the criteria set forth in paragraph (b) of this section receives the following increase to its applicable percentage amount set forth in Sec. 412.63 (p) and (q): (1) For FY 1998, 0.5 percent. (2) For FY 1999, 0.3 percent. (b) Criteria for classification. A hospital is eligible for the additional payment update set forth in paragraph (a) of this section if it meets all of the following criteria: (1) Definition. The hospital is not a Medicare-dependent, small rural hospital as defined in Sec. 412.108(a) and does not receive any additional payment under the following provisions: (i) The indirect medical education adjustment made under Sec. 412.105. (ii) The disproportionate share adjustment made under Sec. 412.106. (2) State criteria. The hospital is located in a State in which the aggregate payment made under Sec. 412.112 (a) and (c) for hospitals described in paragraph (b)(1) of this section for their cost reporting periods beginning in FY 1995 is less than the allowable operating costs described in Sec. 412.2(c) for those hospitals. (3) Hospital criteria. The aggregate payment made to the hospital under Sec. 412.112 (a) and (c) for the hospital's cost reporting period beginning in the fiscal year in which the additional payment update described in paragraph (a) of this section is made is less than the allowable operating cost described in Sec. 412.2(c) for that hospital. 17. In Sec. 412.108 paragraph (a)(1) is revised, the introductory text of paragraphs (c) and (c)(2) are republished, and the introductory text of paragraph (c)(2)(ii) is revised to read as follows: Sec. 412.108 Special treatment: Medicare-dependent, small rural hospitals. (a) Criteria for classification as a Medicare-dependent, small rural hospital. (1) General considerations. For cost reporting periods beginning on or after April 1, 1990 and ending before October 1, 1994, or beginning on or after October 1, 1997 and ending before October 1, 2001, a hospital is classified as a Medicare-dependent, small rural hospital if it is located in a rural area (as defined in Sec. 412.63(b)) and meets all of the following conditions: * * * * * (c) Payment methodology. A hospital that meets the criteria in paragraph (a) of this section is paid for its inpatient operating costs the sum of paragraphs (c)(1) and (c)(2) of this section. * * * * * (2) The amount, if any, determined as follows: * * * * * (ii) For discharges occurring during any subsequent cost reporting period (or portion thereof) and before October 1, 1994, and for discharges occurring on or after October 1, 1997 and before October 1, 2001, 50 percent of the amount that the Federal rate determined under paragraph (c)(1) of this section is exceeded by the higher of the following: * * * * * 18. In Sec. 412.109, paragraph (a) is revised, paragraphs (c) and (d) are removed, paragraphs (e), (f), and (g) are redesignated as paragraphs (c), (d), and (e), respectively, and redesignated paragraphs (c)(3)(ii), (d), and (e) are revised to read as follows: Sec. 412.109 Special treatment: Essential access community hospitals (EACHs). (a) General rule. For payment purposes, HCFA treats as a sole community hospital any hospital that is located in a rural area as described in paragraph (b) of this section and that HCFA designated as an EACH under section 1820(i)(1) of the Act as in effect on September 30, 1997, for as long as the hospital continues to comply with the terms, conditions, and limitations that were applicable at the time HCFA designated the hospital as an EACH. The payment methodology for sole community hospitals is set forth at Sec. 412.92(d). * * * * * (c) Adjustment to the hospital-specific rate for rural EACHs experiencing increased costs. * * * * * (3) Intermediary recommendation. * * * (ii) The intermediary's analysis and recommendation of the request. * * * * * (d) Termination of EACH designation. If HCFA determines that a hospital no longer complies with the terms, conditions, and limitations that were applicable at the time HCFA designated the hospital as an EACH, HCFA will terminate the EACH designation of the hospital, effective with discharges occurring on or after 30 days after the date of the determination. (e) Review of HCFA determination. A determination by HCFA that a hospital's EACH designation should be terminated, is subject to review under part 405, subpart R of this chapter, including the time limits for filing requests for hearings as specified in Secs. 405.1811(a) and 405.1841(a)(1) and (b) of this chapter. Subpart H--Payment to Hospitals Under the Prospective Payment Systems 19. Section 412.115 is amended by revising paragraph (b) to read as follows: Sec. 412.115 Additional payments. * * * * * (b) Administration of blood clotting factor. For discharges occurring on or after June 19, 1990, and before October 1, 1994, and for discharges occurring on or after October 1, 1997, an additional payment is made to a hospital for each unit of blood clotting factor furnished to a Medicare inpatient who is a hemophiliac. * * * * * Subpart K--Prospective Payment System for Inpatient Operating Costs for Hospitals Located in Puerto Rico 20. Section 412.204 is revised to read as follows: Sec. 412.204 Payment to hospitals located in Puerto Rico. (a) FY 1988 through FY 1997. For discharges occurring on or after October 1, 1997, payments for inpatient operating costs to hospitals located in Puerto Rico that are paid under the prospective payment system are equal to the sum of-- (1) 75 percent of the Puerto Rico prospective payment rate for inpatient operating costs, as determined under Sec. 412.208 or Sec. 412.210; and (2) 25 percent of a national prospective payment rate for inpatient operating costs, as determined under Sec. 412.212. (b) FY 1998 and thereafter. For discharges occurring on or after October 1, 1997, payments for inpatient operating costs to hospitals located in Puerto Rico that are paid under the prospective payment system are equal to the sum of-- (1) 50 percent of the Puerto Rico prospective payment rate for inpatient operating costs, as determined under Sec. 412.208 or Sec. 412.210; and (2) 50 percent of a national prospective payment rate for inpatient operating costs, as determined under Sec. 412.212. Sec. 412.210 [Amended] 21. In Sec. 412.210(e), the phrase ``the national average hospital wage level'' is revised to read ``the Puerto Rico average hospital wage level''. [[Page 46031]] Subpart L--The Medicare Geographic Classification Review Board 22. Section 412.230 is amended by revising paragraphs (a)(5)(ii), (e)(1) introductory text, and (e)(1)(iv)(B) and adding new paragraphs (e)(3) and (e)(4), to read as follows: Sec. 412.230 Criteria for an individual hospital seeking redesignation to another rural area or an urban area. (a) * * * (5) * * * (ii) For redesignations effective in fiscal years 1997 and 1998 and 2002 and thereafter, a hospital may not be redesignated for purposes of the standardized amount if the area to which the hospital seeks redesignation does not have a higher standardized amount than the standardized amount the hospital currently receives. * * * * * (e) Use of urban or other rural area's wage index.--(1) Criteria for use of area's wage index. Except as provided in paragraphs (e)(3) and (e)(4) of this section, to use an area's wage index, a hospital must demonstrate the following: * * * * * (iv) One of the following conditions apply: * * * * * (B) For redesignations effective before fiscal year 1999, the hospital's average hourly wage weighted for occupational categories is at least 90 percent of the average hourly wages of hospitals in the area to which it seeks redesignation. * * * * * (3) Rural referral center exception. If a hospital is a rural referral center, it does not have to demonstrate that it meets the criterion set forth in paragraph (e)(1)(iii) of this section concerning its average hourly wage. (4) Special dominating hospital exception. The requirements of paragraph (e)(1)(i) and (e)(1)(iii) of this section do not apply if a hospital meets the following criteria: (i) Its average hourly wage is at least 108 percent of the average hourly wage of all other hospitals in the area in which the hospital is located. (ii) It pays at least 40 percent of the adjusted uninflated wages in the MSA. (iii) It was approved for redesignation under this paragraph (e) for each year from fiscal year 1992 through fiscal year 1997. 23. Section 412.232 is amended by revising paragraph (c)(2) to read as follows: Sec. 412.232 Criteria for all hospitals in a rural county seeking urban redesignation. * * * * * (c) Wage criteria. * * * (2) Aggregate hourly wage weighted for occupational mix. For redesignations effective before fiscal year 1999, the aggregate hourly wage for all hospitals in the rural county, weighted for occupational categories, is at least 90 percent of the average hourly wage in the adjacent urban area. * * * * * 24. Section 412.234 is amended by revising paragraph (b)(2) to read as follows: Sec. 412.234 Criteria for all hospitals in an urban county seeking redesignation to another urban area. * * * * * (b) Wage criteria. * * * (2) Aggregate hourly wage weighted for occupational mix. For redesignations effective before fiscal year 1999, the aggregate average hourly wage for all hospitals in the county, weighted for occupational categories, is at least 90 percent of the average hourly wage in the adjacent urban area. * * * * * 25. In Sec. 412.256, paragraphs (a)(2) and (c)(1) are revised to read as follows: Sec. 412.256 Application requirements. (a) * * * (2) A complete application must be received not later than the first day of the month preceding the Federal fiscal year for which reclassification is requested. * * * * * (c) Opportunity to complete a submitted application. (1) The MGCRB will review an application within 15 days of receipt to determine if the application is complete. If the MGCRB determines that an application is incomplete, the MGCRB will notify the hospital, with a copy to HCFA, within the 15 day period, that it has determined that the application is incomplete and may dismiss the application if a complete application is not filed by September 1 . * * * * * 26. Section 412.274 is amended by revising paragraph (b) to read as follows: Sec. 412.274 Scope and effect of an MGCRB decision. * * * * * (b) Effective date and term of the decision. Any classification change is effective for one year beginning with discharges occurring on the first day (October 1) of the second Federal fiscal year following the Federal fiscal year in which the complete application is filed and ending effective at the end of that Federal fiscal year (the end of the next September 30). * * * * * Subpart M--Prospective Payment System for Inpatient Hospital Capital Costs 27. Section 412.308 is amended by adding new paragraphs (b)(4) and (b)(5) to read as follows: Sec. 412.308 Determining and updating the Federal rate. * * * * * (b) Standard Federal rate. * * * (4) Effective FY 1998, the unadjusted standard Federal capital payment rate in effect on September 30, 1997, used to determine the Federal rate each year under paragraph (c) of this section is reduced by 15.68 percent. (5) For discharges occurring on or after October 1, 1997 through September 30, 2002, the unadjusted standard Federal capital payment rate as in effect on September 30, 1997, used to determine the Federal rate each year under paragraph (c) of this section is further reduced by 2.1 percent. * * * * * 28. Section 412.328 is amended by revising paragraph (e)(4) and adding new paragraphs (e)(5) and (e)(6) to read as follows: Sec. 412.328 Determining and updating the hospital-specific rate. * * * * * (e) Hospital-specific rate. * * * (4) Payment for transfer cases. Effective FY 1996, the intermediary reduces the updated amount determined in paragraph (d) of this section by 0.28 percent to account for the effect of the revised policy for payment of transfers under Sec. 412.4(d). (5) Reduction of rate: FY 1998. Effective FY 1998, the unadjusted hospital-specific rate as in effect on September 30, 1997 described in paragraph (e)(1) of this section is reduced by 15.68 percent. (6) Reduction of rate: FY 1998 through FY 2002. For discharges occurring on or after October 1, 1997 through September 30, 2002, the unadjusted hospital-specific rate in effect on September 30, 1997, described in paragraph (e)(1) of this section is further reduced by 2.1 percent. * * * * * 29. Section 412.348 is amended by revising paragraph (c)(2) to read as follows: Sec. 412.348 Exception payments. * * * * * [[Page 46032]] (c) Minimum payment level by class of hospital. * * * * * (2) When it is necessary to adjust the minimum payment levels set by class of hospitals specified in paragraphs (c)(1)(i) and (g)(6) of this section, HCFA will adjust those levels for each class of hospitals in one percentage point increments as necessary to satisfy the requirement specified in paragraph (h) of this section that total estimated payments under the exception process not exceed 10 percent of the total estimated capital prospective payments (exclusive of hold- harmless payments for old capital) for the same fiscal year. * * * * * 30. Section 412.374 is revised to read as follows: Sec. 412.374 Payments to hospitals located in Puerto Rico. (a) Payments for capital-related costs to hospitals located in Puerto Rico that are paid under the prospective payment system are equal to the sum of the following: (1) 50 percent of a Puerto Rico capital rate based on data from Puerto Rico hospitals only, which is determined in accordance with procedures for developing the Federal rate; and (2) 50 percent of the Federal rate, as determined under Sec. 412.308. (b) Effective for fiscal year 1998, the Puerto Rico capital rate described in paragraph (a) of this section in effect on September 30, 1997, is reduced by 15.68 percent. (c) For discharges occurring on or after October 1, 1997 through September 30, 2002, the Puerto Rico capital rate described in paragraph (a) of this section in effect on September 30, 1997 is further reduced by 2.1 percent. E. Part 413 is amended as set forth below: PART 416--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED NURSING FACILITIES 1. The authority citation for Part 413 continues to read as follows: Authority: Secs. 1102, 1861(v)(1)(A), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395x(v)(1)(A), and 1395hh). 2. Section 413.1 is amended by revising paragraph (a)(1)(ii)(G) to read as follows: Sec. 413.1 Introduction. (a) * * * (ii) * * * (G) Section 1834(g) of the Act provides that payment for critical access hospital (CAH) outpatient services is the reasonable costs of the CAH in providing these services, as determined in accordance with section 1861(v)(1)(A) of the Act and the applicable principles of cost reimbursement in this part and in part 415 of this chapter. * * * * * Sec. 413.13 [Amended] 3. In Sec. 413.13, paragraph (c)(2)(iv) is removed. 4. Section 413.40 is amended by adding new paragraphs (b)(1)(iv) and (b)(1)(v); revising paragraph (c)(3)(vi) and adding new paragraphs (c)(3)(vii) and (c)(3)(viii); revising paragraph (c)(4); revising paragraphs (d)(2) and (d)(3) and adding new paragraphs (d)(4)and (d)(5); revising paragraphs (f)(1), (f)(2), (g)(1), and (g)(5); and adding a new paragraph (j), to read as follows: Sec. 413.40 Ceiling on the rate of increase in hospital inpatient costs. * * * * * (b) Cost reporting periods subject to the rate-of-increase ceiling. (1) * * * (iv) Request for rebased target amount for the cost reporting period beginning on or after October 1, 1997 and on or before September 30, 1998. Except for qualified long-term care hospitals as defined in paragraph (b)(1)(v) of this section, each hospital or unit under present or previous ownership that received payment under section 1886(b) of the Act during cost reporting periods beginning before October 1, 1990, may submit a request to its fiscal intermediary to rebase its target amount. The request must be received by the fiscal intermediary by the later of November 1, 1997 or 60 days before the beginning of its cost reporting period beginning during fiscal year 1998. The rebased target amount for the cost reporting period beginning during fiscal year 1998 is determined as follows: (A) Determine the hospital's inpatient operating costs per case for each of the five most recent settled cost reports as of August 5, 1997. (B) For each of the five cost reports, update the operating costs per case by the applicable update factors up to the hospital's cost reporting period beginning during FY 1998. (C) Exclude the highest and lowest of the five updated amounts determined under paragraph (b)(1)(iv)(B) of this section. (D) Compute the average for the remaining three updated amounts for operating cost per case. (v) Request by qualified long-term care hospital. A qualified long- term care hospital may file a request to its fiscal intermediary for a rebased FY 1998 target amount. The request must be received by the fiscal intermediary by the later of November 1, 1997 or 60 days before the beginning of its cost reporting period beginning during fiscal year 1998. The rebased FY 1998 target amount is the hospital's FY 1996 inpatient operating costs updated to FY 1997. A qualified long-term care hospital means a long-term care hospital that meets the following two conditions for its two most recent settled cost reports as of August 5, 1997: (A) Its Medicare inpatient operating costs exceed 115 percent of the ceiling. (B) The hospital would have had a disproportionate patient percentage (as defined in Sec. 412.106) equal to or greater than 70 percent if it were a prospective payment hospital. * * * * * (c) Costs subject to the ceiling. * * * * * (3) Rate-of-increase percentages and update factors. * * * (vi) Federal fiscal year 1998. The applicable rate-of-increase percentage for cost reporting periods beginning on or after October 1, 1997 is 0 percent. (vii) Federal fiscal year 1999 through Federal fiscal year 2002. The applicable rate-of-increase percentage for cost reporting periods beginning on or after October 1, 1998, and before October 1, 2002, based on data from the most recent available cost report, is: (A) The percentage increase in the market basket, if inpatient operating costs are equal to or exceed the ceiling amount by 10 percent or more of the ceiling. (B) The percentage increase in the market basket minus .25 percentage points for each percentage point by which inpatient operating costs are less than 10 percent over the ceiling (but not less than 0), if inpatient operating costs exceed the ceiling by less than 10 percent of the ceiling. (C) The greater of the percentage increase in the market basket minus 2.5 percentage points or 0 percent, if inpatient operating costs are equal to or less than the ceiling but greater than 66.7 percent of the ceiling. (D) 0 percent, if inpatient operating costs do not exceed 66.7 percent of the ceiling. (viii) Federal fiscal year 2003 and following. The applicable rate- of-increase percentage for cost reporting periods beginning on or after October 1, 2002, is the percentage increase projected by the hospital market basket index. [[Page 46033]] (4) Target amount. The intermediary will establish a target amount for each hospital. The target amount for a cost reporting period is determined as follows: (i) Except as provided in paragraph (c)(4)(iv) of this section, and subject to the provisions of paragraph (c)(4)(iii) of this section, for the first cost reporting period to which this ceiling applies, the target amount equals the hospital's allowable net inpatient operating costs per case for the hospital's base period increased by the update factor for the subject period. (ii) Subject to the provisions of paragraph (c)(4)(iii) of this section, for subsequent cost reporting periods, the target amount equals the hospital's target amount for the previous cost reporting period increased by the update factor for the subject cost reporting period, unless the provisions of paragraph (c)(5)(ii) of this section apply. (iii) In the case of a psychiatric hospital or unit, rehabilitation hospital or unit, or long term care hospital, the target amount may not exceed-- (A) For cost reporting periods beginning during fiscal year 1998, the 75th percentile of target amounts for hospitals in the same class (psychiatric hospital or unit, rehabilitation hospital or unit, or long term care hospital) for cost reporting periods ending during FY 1996, increased by the applicable market basket percentage up to the first cost reporting period beginning on or after October 1, 1997. (B) For cost reporting periods beginning during FYs 1999 through 2002, the amount determined under paragraph (c)(4)(iii)(A) increased by the market basket percentage increase up through the subject period, subject to paragraph (c)(4)(iv) of this section. (iv) In the case of a hospital that received payments under paragraph (f)(2)(ii) of this section, for purposes of determining the hospital's target amount for the hospital's third 12-month cost reporting period, the target amount for the preceding cost reporting period is equal to the amount determined under paragraph (f)(2)(ii)(A) of this section. * * * * * (d) Application of the target amount in determining the amount of payment. * * * (2) Net inpatient operating costs are less than or equal to the ceiling. For cost reporting periods beginning on or after October 1, 1997, if a hospital's allowable net inpatient operating costs do not exceed the hospital's ceiling, payment to the hospital will be determined on the basis of the lower of the-- (i) Net inpatient operating costs plus 15 percent of the difference between inpatient operating costs and the ceiling; or (ii) Net inpatient operating costs plus 2 percent of the ceiling. (3) Net inpatient operating costs are greater than the ceiling. For cost reporting periods beginning on or after October 1, 1997-- (i) If a hospital's allowable net inpatient operating costs do not exceed 110 percent of the ceiling (or the adjusted ceiling, if applicable), payment will be the ceiling (or the adjusted ceiling, if applicable); (ii) If a hospital's allowable net inpatient operating costs are greater than 110 percent of the ceiling (or the adjusted ceiling, if applicable), payment will be the ceiling (or the adjusted ceiling, if applicable) plus the lesser of: (A) 50 percent of the allowable net inpatient operating costs in excess of 110 percent of the ceiling (or the adjusted ceiling, if applicable); or (B) 10 percent of the ceiling (or the adjusted ceiling, if applicable). (4) Continuous improvement bonus payments. For cost reporting periods beginning on or after October 1, 1997, eligible hospitals (as defined in paragraph (d)(5) of this section) receive payments in addition to those in paragraph (d)(2) of this section, as applicable. These payments are equal to the lesser of-- (i) 50 percent of the amount by which the operating costs are less than the expected costs for the period; or (ii) 1 percent of the ceiling. (5) Eligibility requirements for continuous improvement bonus payments. To qualify, a hospital must have been paid as a prospective payment excluded hospital for at least three full cost reporting periods prior to the applicable period, and the hospital's operating costs per discharge for the period must be less than the least of the following: (i) The hospital's target amount. (ii) The hospital's trended costs. (A) For a hospital for which its cost reporting period ending during fiscal year 1996 was its third or subsequent full cost reporting period, trended costs are the lesser of the allowable inpatient operating costs per discharge or the target amount for the cost reporting period ending in fiscal year 1996, increased in a compounded manner for each succeeding fiscal year by the market basket percentage increase; (B) For all other hospitals, trended costs are the allowable inpatient operating costs per discharge for its third full cost reporting period increased in a compounded manner for each succeeding fiscal year by the market basket increase. (iii) The hospital's expected costs. The hospital's expected costs are the lesser of its allowable inpatient operating costs per discharge or the target amount for the previous cost reporting period, updated by the market basket percentage increase for the fiscal year. * * * * * (f) Comparison to the target amount for new hospitals and units-- (1) New hospitals and units--(i) New hospitals. For purposes of this section, a new hospital is a provider of hospital inpatient services that-- (A) Has operated as the type of hospital for which HCFA granted it approval to participate in the Medicare program, under present or previous ownership (or both), for less than 2 full years; and (B) Has provided the type of hospital inpatient services for which HCFA granted it approval to participate in the Medicare program, for less than 2 years. (ii) New units. A newly established unit that is excluded from the prospective payments system under the provisions of Secs. 412.25 through 412.30 of this chapter does not qualify for the exemption afforded to a new hospital under paragraph (f)(2)(i) of this section unless the unit is located in an acute care hospital that, if it were subject to the provisions of this section, would qualify as a new hospital under paragraph (f)(1)(i) of this section. (2) Comparison--(i) Exemptions. (A) A new children's hospital is exempt from the rate-of-increase ceiling imposed under this section. The exemption begins when the hospital accepts its first patient and ends at the end of the first cost reporting period ending at least 2 years after the hospital accepts its first patient. The first cost reporting period of at least 12 months beginning at least 1 year after the hospital accepts its first patient is the base year, in accordance with paragraph (b) of this section. (B) Within 180 days of the date a hospital is excluded from the prospective payment system, the intermediary determines whether the hospital is exempt from the rate-of-increase ceiling. The intermediary notifies the hospital of its determination and the hospital's base period. (C) A decision issued under paragraph (f)(2)(ii)(B) of this section is considered final unless the hospital submits additional information and requests a review of the decision no later than 180 days after the date on the intermediary's notice of the decision. The final [[Page 46034]] decision is subject to review under subpart R of part 405 of this chapter, provided the hospital has received a notice of program reimbursement (NPR) for the cost reporting period in question and the NPR does not reflect an exemption (see the definitions in Sec. 405.1801(a) of this chapter and the provisions regarding a provider's right to a Board hearing in Sec. 405.1835 of this chapter). (ii) Median target amount. (A) For cost reporting periods beginning on or after October 1, 1997, the amount of payment for a new psychiatric hospital or unit, a new rehabilitation hospital or unit, or a new long-term care hospital that was not paid as an excluded hospital prior to October 1, 1997, is the lower of the hospital's net inpatient operating costs per case or 110 percent of the national median of the target amounts for the class of excluded hospitals and units (psychiatric, rehabilitation, long-term care) as adjusted and updated. This methodology applies to the hospital's first two 12-month cost reporting periods. (B) The national median of the target amounts is the FY 1996 median target amount-- (1) Adjusted to account for differences in area wage levels; (2) Updated by the market basket percentage increase to the fiscal year in which the hospital first received payments as an excluded provider. * * * * * (g) Adjustments.--(l) General rule. HCFA may adjust the amount of the operating costs considered in establishing the rate-of-increase ceiling for one or more cost reporting periods, including both periods subject to the ceiling and the hospital's base period, under the circumstances specified below. When an adjustment is requested by the hospital, HCFA makes an adjustment only to the extent that the hospital's operating costs are reasonable, attributable to the circumstances specified separately identified by the hospital, and verified by the intermediary. HCFA may grant an adjustment requested by the hospital only if a hospital's operating costs exceed the rate-of- increase ceiling imposed under this section. The amount of payment made to a hospital after an adjustment under paragraph (g) of this section is based on the difference between the hospital's operating costs and 110 percent of the ceiling. * * * * * (5) Adjustment limitations. For cost reporting periods beginning on or after October 1, 1993, and before October 1, 2003, the payment reductions under paragraph (c)(3)(v) through (c)(3)(vii) of this section will not be considered when determining adjustments under this paragraph. * * * * * (j) Reduction to capital-related costs. For psychiatric hospitals and units, rehabilitation hospitals and units, and long-term hospitals, the amount otherwise payable for capital-related costs is reduced by 15 percent for portions of cost reporting periods occurring on or after October 1, 1997, through September 30, 2002. 5. Section 413.70 is revised to read as follows: Sec. 413.70 Payment for services of a CAH. Payment for inpatient and outpatient services of a CAH is the reasonable costs of the CAH in providing such services, as determined in accordance with section 1861(v)(1)(A) of the Act and the applicable principles of cost reimbursement in this part and in part 415 of this chapter. Subpart F--Specific Categories of Costs 6. In Sec. 413.86, the introductory text of paragraph (b) is republished, paragraph (b) is amended by adding the definition of ``Affiliated group'' in alphabetical order, paragraph (d)(3) is redesignated as paragraph (d)(5) and redesignated paragraph (d)(5) is revised, new paragraphs (d)(3) and (d)(4) are added, paragraph (e)(4)(i)(B) is revised, the introductory text of paragraph (g)(1) is amended by adding a sentence to the end, and new paragraphs (g)(4), (g)(5), (g)(6) and (g)(7) are added, to read as follows: Sec. 413.86 Direct graduate medical education payments. * * * * * (b) Definitions. For purposes of this section, the following definitions apply: Affiliated group means two or more hospitals located in the same geographic wage area (as that term is used under part 412 of this subchapter for the prospective payment system) in which individual residents work at each of the hospitals seeking to be treated as an affiliated group during the course of the approved program; or, if the hospitals are not located in the same geographic wage area, the hospitals are jointly listed as major participating institutions for one or more programs as that term is used in Graduate Medical Education Directory, 1997-1998. * * * * * (d) Calculating payment for graduate medical education costs. * * * (3) Step three. For portions of cost reporting periods beginning on or after January 1, 1998, the product derived in step one is multiplied by the proportion of the hospital's inpatient days attributable to individuals who are enrolled under a risk-sharing contract with an eligible organization under section 1876 of the Act and who are entitled to Medicare Part A or with a Medicare+Choice organization under Title XVIII, Part C of the Act. This amount is multiplied by an applicable payment percentage equal to-- (i) 20 percent for 1998; (ii) 40 percent for 1999; (iii) 60 percent in 2000; (iv) 80 percent in 2001; and (v) 100 percent in 2002 and subsequent years. (4) Step four. Add the results of steps 2 and 3. (5) Step five. The product derived in step two is apportioned between Part A and Part B of Medicare based on the ratio of Medicare's share of reasonable costs excluding graduate medical education costs attributable to each part as determined through the Medicare cost report. * * * * * (e) Determining per resident amounts for the base period. * * * (4) Exceptions. (i) Base period for certain hospitals. * * * * * (B) The mean value of per resident amounts of hospitals located in the same geographic wage area, as that term is used in the prospective payment system under part 412 of this chapter, for cost reporting periods beginning in the same fiscal years. If there are fewer than three amounts that can be used to calculate the mean value, the calculation of the per resident amounts includes all hospitals in the hospital's region as that term is used in Sec. 412.62(f)(1)(i). * * * * * (g) Determining the weighted number of FTE residents. * * * (1) * * * If the resident is enrolled in a combined medical residency training program in which all of the individual programs (that are combined) are for training primary care residents (as defined in paragraph (b) of this section) or obstetrics and gynecology residents, the initial residency period is the time required for individual certification in the longer of the programs plus one year. * * * * * (4) For purposes of determining direct graduate medical education payment, for cost reporting periods beginning on or after October 1, 1997, a hospital's [[Page 46035]] unweighted FTE count for residents in allopathic and osteopathic medicine may not exceed the hospital's unweighted FTE count for these residents for the most recent cost reporting period ending on or before December 31, 1996. If the hospital's number of FTE residents in a cost reporting period beginning on or after October 1, 1997, exceeds the limit described in this paragraph (g), the hospital's weighted FTE count (before application of the limit) will be reduced in the same proportion that the number of FTE residents for that cost reporting period exceeds the number of FTE residents for the most recent cost reporting period ending on or before December 31, 1996. Hospitals that are part of the same affiliated group may elect to apply the limit on an aggregate basis. The fiscal intermediary may make appropriate modifications to apply the provisions of this paragraph (g)(4) based on the equivalent of a 12-month cost reporting period. (5) For purposes of determining direct graduate medical education payment, for the hospital's first cost reporting period beginning on or after October 1, 1997, the hospital's weighted FTE count is equal to the average of the weighted FTE count for the payment year cost reporting period and the preceding cost reporting period. For cost reporting periods beginning on or after October 1, 1998, the hospital's weighted FTE count is equal to the average of the weighted FTE count for the payment year cost reporting period and the preceding two cost reporting periods. The fiscal intermediary may make appropriate modifications to apply the provisions of this paragraph based on the equivalent of 12-month cost reporting periods. (6) If a hospital established a new medical residency training program as defined in this paragraph (g) after January 1, 1995, the hospital's FTE cap described under paragraph (g)(4) of this section may be adjusted as follows: (i) If a hospital had no residents before January 1, 1995, and it establishes a new medical residency training program on or after that date, the hospital's unweighted FTE resident cap under paragraph (g)(4) of this section may be adjusted based on the product of the number of first year residents in the program in the third year of the program's existence and the number of years in which residents are expected to complete that program based on the minimum accredited length for the type of program. For these hospitals, the cap will only be adjusted based on the first program (or programs, if established simultaneously) beginning on or after January 1, 1995. The cap will not be revised for programs subsequently established. (ii) If a hospital had residents in its most recent cost reporting period ending before January 1, 1995, the hospital's unweighted FTE cap may be adjusted for new medical residency training programs established on or after January 1, 1995 and August 5, 1997. Increases in the hospital's FTE resident limit are permitted for the new program based on the product of the number of first-year residents in the third year of the newly established program and the number of years in which residents are expected to complete each program based on the minimum accredited length for the type of program. The hospital's unweighted FTE limit for a cost reporting period may be adjusted to reflect the number of residents in its most recent cost reporting period ending on or before December 31, 1996 and up to the incremental increase in its FTE count only for the newly established programs. (iii) If a hospital with residents in its most recent cost reporting period ending on or before January 1, 1995, is located in a rural area (or other hospitals located in rural areas which added residents under paragraph (g)(6)(i) of this section), the hospital's unweighted FTE limit may be adjusted in the same manner described in paragraph (g)(6)(ii) of this section to reflect the increase for residents in the new medical residency training programs established after August 5, 1997. For these hospitals, the limit will be adjusted for additional new programs but not for expansions of existing or previously existing programs. (iv) A hospital seeking an adjustment to the limit on its unweighted resident count policy must provide documentation to its fiscal intermediary justifying the adjustment. (7) For purposes of paragraph (g) of this section, new medical residency training program means a medical residency training program that receives initial accreditation by the appropriate accrediting body on or after July 1, 1995. * * * * * F. Part 424 is amended as set forth below: PART 424--CONDITIONS FOR MEDICARE PAYMENT 1. The authority citation for Part 424 continues to read as follows: Authority: Section 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 2. In Sec. 424.1(a)(1), the introductory text is republished and a new statutory citation is added in numerical order, to read as follows: Sec. 424.1 Basis and scope. (a) Statutory basis. (1) This part is based on the indicated provisions of the following sections of the Act: * * * * * 1820--Conditions for designating certain hospitals as critical assess hospitals. * * * * * 3. In Sec. 424.15, the section heading and paragraph (a) are revised to read as follows: Sec. 424.15 Requirements for inpatient CAH services. (a) Content of certification. Medicare Part A pays for inpatient CAH services only if a physician certifies that the individual may reasonably be expected to be discharged or transferred to a hospital within 96 hours after admission to the CAH. * * * * * H. Part 485 is amended as set forth below: PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS 1. The authority citation for Part 485 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 2. The heading for Subpart F is revised to read as follows: Subpart F--Conditions of Participation: Critical Access Hospitals (CAHs) 3. In Sec. 485.603, the introductory text is republished, paragraphs (a)(1) and (a)(2) are revised, and a new paragraph (c) is added to read as follows: Sec. 485.603 Rural health network. A rural health network is an organization that meets the following specifications: (a) It includes-- (1) At least one hospital that the State has designated or plans to designate as a CAH; and (2) At least one hospital that furnishes acute care services. * * * * * (c) Each CAH that is a member of the rural health network has an agreement with respect to credentialing and quality assurance with at least-- (1) One hospital that is a member of the network (2) One PRO or equivalent entity; or (3) One other appropriate and qualified entity identified in the State rural health care plan. [[Page 46036]] 4. Section 485.606 is revised to read as follows: Sec. 485.606 Designation of CAHs. (a) Criteria for State designation. (1) A State that has established a Medicare rural hospital flexibility program described in section 1820(c) of the Act may designate one or more facilities as CAHs if each facility meets the CAH conditions of participation in this subpart F. (2) The State must not deny any hospital that is otherwise eligible for designation as a CAH under this paragraph (a) solely because the hospital has entered into an agreement under which the hospital may provide posthospital SNF care as described in Sec. 482.66 of this chapter. (b) Criteria for HCFA designation. HCFA designates a facility as a CAH if-- (1) The facility is designated as a CAH by the State in which it is located; or (2) The facility is a medical assistance facility operating in Montana or a rural primary care hospital designated by HCFA before August 5, 1997, and is otherwise eligible to be designated as a CAH by the State under the rules in this subpart. 5. Section 485.610 is revised to read as follows: Sec. 485.610 Condition of participation: Status and location. (a) Standard: Status. The facility is a public or nonprofit hospital. (b) Standard: Location. The CAH meets the following requirements: (1) The CAH is located outside any area that is a Metropolitan Statistical Area, as defined by the Office of Management and Budget, or that has been recognized as urban under the regulations in Sec. 412.62(f) of this chapter. (2) The CAH is not deemed to be located in an urban area under Sec. 412.63(b) of this chapter. (3) The CAH has not been classified as an urban hospital for purposes of the standardized payment amount by HCFA or the Medicare Geographic Classification Review Board under Sec. 412.230(e) of this chapter, and is not among a group of hospitals that have been redesignated to an adjacent urban area under Sec. 412.232 of this chapter. (4) The CAH is located more than a 35-mile drive (or, in the case of mountainous terrain or in areas with only secondary roads available, a 15-mile drive) from a hospital or another CAH, or the CAH is certified by the State as being a necessary provider of health care services to residents in the area. 6. Section 485.612 is revised to read as follows: Sec. 485.612 Condition of participation: Compliance with hospital requirements at time of application. The hospital has a provider agreement to participate in the Medicare program as a hospital at the time the hospital applies for designation as a CAH. 7. Section 485.614 is removed. 8. Section 485.616 is revised to read as follows: Sec. 485.616 Condition of participation: Agreements. (a) Standard: Agreements with network hospitals. In the case of a CAH that is a member of a rural health network as defined in Sec. 485.603 of this chapter, the CAH has in effect an agreement with at least one hospital that is a member of the network for-- (1) Patient referral and transfer; (2) The development and use of communications systems of the network, including the network's system for the electronic sharing of patient data, and telemetry and medical records, if the network has in operation such a system; and (3) The provision of emergency and nonemergency transportation between the facility and the hospital. (b) Standard: Agreements for credentialing and quality assurance. Each CAH that is a member of a rural health network shall have an agreement with respect to credentialing and quality assurance with at least-- (1) One hospital that is a member of the network; (2) One PRO or equivalent entity; or (3) One other appropriate and qualified entity identified in the State rural health care plan. 9. Section 485.620 is revised to read as follows: Sec. 485.620 Condition of participation: Number of beds and length of stay. (a) Standard: Number of beds. Except as permitted for CAHs having swing-bed agreements under Sec. 485.645 of this chapter, the CAH maintains no more than 15 inpatient beds. (b) Standard: Length of stay. The CAH discharges or transfers each inpatient within 96 hours after admission, unless a longer period is required because transfer to a hospital is precluded because of inclement weather or other emergency conditions. A PRO or equivalent entity may also, on request, waive the 96-hour restriction on a case- by-case basis. 10. In Sec. 485.623, the address under paragraphs (d)(1) and (d)(2) ``HCFA Information Resource Center, 6325 Security Boulevard, Room G-10- A East High Rise Building, Baltimore, MD 21207'' is revised to read ``HCFA Information Resource Center, 7500 Security Boulevard, Room C2- 07-13, Central Building, Baltimore, MD 21244-1850''. 11. In Sec. 485.645, the section heading, the introductory text, paragraphs (a) and the first sentence of the introductory text of paragraph (b) are revised to read as follows: Sec. 485.645 Special requirements for CAH providers of long-term care services (``swing-beds''). A CAH must meet the following requirements in order to be granted an approval from HCFA to provide post-hospital SNF care, as specified in Sec. 409.30 of this chapter, and to be paid for SNF-level services, in accordance with paragraph (b) of this section. (a) Eligibility. A CAH must meet the following eligibility requirements: (1) Effective October 1, 1997, a facility that, at the time it applied to the State for designation as a CAH, had an agreement in effect under Sec. 482.66 of this chapter may continue to use its inpatient facilities for the provision of post-hospital SNF care, so long as the total number of beds that are used at any time for the furnishing of either such services or acute care inpatient services does not exceed 25 beds and the number of beds used at any time for acute care inpatient services does not exceed 15 beds. (2) Notwithstanding paragraph (a)(1) of this section, a CAH that participated in Medicare as a rural primary care hospital (RPCH) on September 30, 1997 and on that date had in effect an approval from HCFA to use its inpatient facilities to provide post-hospital SNF care may continue in that status under the same terms, conditions, and limitations that were applicable at the time those approvals were granted. (3) A CAH that was granted swing-bed approval under paragraph (a)(2) of this section may request that its application to be a CAH and a swing-bed provider be reevaluated under paragraph (a)(1) of this section. If this request is approved, the approval is effective not earlier than October 1, 1997. As of the date of approval, the CAH no longer has any status under paragraph (a)(2) of this section, and may not request reinstatement under paragraph (a)(2) of this section. (4) Any bed of a unit of the facility that is licensed as a distinct-part SNF at the time the facility applies to the State for designation as a CAH is not counted under paragraph (a)(1) of this section. (b) Payment. Payment for inpatient CAH services to a CAH that has qualified as a CAH under the provisions in paragraph (a) of this section is made [[Page 46037]] in accordance with Sec. 413.70 of this chapter. * * * * * * * * H. Part 489 is amended as set forth below: PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL 1. The authority citation for Part 489 continues to read as follows: Authority: Secs. 1102, 1819, 1861, 1864(m), 1866, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, and 1395hh). Sec. 489.27 [Amended] 2. In Sec. 489.27, the reference ``section 1886(a)(1)(M) of the Act'' is revised to read ``section 1866(a)(1)(M) of the Act''. Sec. 489.53 [Amended] 3. In Sec. 489.53, paragraph (a)(14) is removed. Nomenclature Changes 1. In the following sections, ``rural primary care hospital (RPCH)'' is revised to read ``critical access hospital (CAH)'': Sec. 410.150(b)(12) Sec. 440.170(g) heading Sec. 498.2 definition of provider 2. In the following parts or sections, ``rural primary care hospitals (RPCHs)'' is revised to read ``critical access hospital (CAHs)'': Sec. 413.1(a)(2)(i) Sec. 489.2(b)(7) 3. In the following sections or section headings, ``an RPCH'' is revised to read ``a CAH'', wherever it appears: Sec. 409.10(b) Sec. 409.20(c)(3) Sec. 409.27 Sec. 409.60(b)(1)(ii) Sec. 409.61(b) paragraph heading Sec. 409.82(a)(1) Sec. 410.3(a)(1) Sec. 410.10(c) Sec. 410.38(b) Sec. 410.60(b) Sec. 411.15(m)(1) Sec. 440.170 (g)(1) and (g)(2) Sec. 485.601(b) Sec. 485.604 introductory text Sec. 489.20(d) 4. In the following sections, ``RPCH'' is revised to read ``CAH'' wherever it appears: Sec. 409.5 first sentence Sec. 409.10(a) introductory text and (a)(3) Sec. 409.11 (b)(1)(ii), (b)(1)(iii), (b)(3) introductory text, and (b)(3)(ii) Sec. 409.12 section heading, (a), and (b) Sec. 409.13(a) introductory text, (a)(1), (a)(2), (a)(3), and (b) Sec. 409.14(a) introductory text, (a)(1), (a)(2), (b) introductory text, (b)(1), and (b)(2) Sec. 409.15 introductory text Sec. 409.16 introductory text, (a), (b), and (c) Sec. 409.20(a) introductory text Sec. 409.30 introductory text,(a)(2), (b)(1), (b)(2), and footnote 1 Sec. 409.31 (b)(2)(i) and (b)(2)(ii) Sec. 409.60(a) Sec. 409.61(a) paragraph heading, (a)(1)(i), (a)(2), (a)(3), (b), and (c) Sec. 409.64(a)(2)(ii) Sec. 409.65 (a)(1), (a)(3), (a)(4), (d)(1), (d)(2), (d)(3), (e)(1), (e)(2) introductory text, (e)(2)(i), and (e)(2)(ii) Sec. 409.66(b) and (c)(2) Sec. 409.68 heading, (a) introductory text, (a)(1), (a)(2), (a)(3), (a)(4), (b)(2), and (c) Sec. 409.80 (a)(1) and (a)(2) Sec. 409.82(c) Sec. 409.83(a)(1) and (c)(1) Sec. 409.87(a)(3) and (b)(1) Sec. 410.10(d) Sec. 410.28 heading, (a) introductory text, (a)(1), (a)(2), and (a)(4) Sec. 410.32(b)(1) Sec. 410.40(a) in the definitions of ``Appropriate hospital'', ``Hospital inpatient'', ``Locality'', and ``Outside supplier'', (b)(3) introductory text, (b)(3)(i), (c)(1), (c)(2), (c)(3), (e)(1), (e)(2), and (e)(3) Sec. 410.60 (b) and (d) Sec. 410.62 (b) and (c) Sec. 410.150(b)(12) Sec. 410.161(b)(2) Sec. 413.114(b), definition of ``Swing-bed hospital'' Sec. 424.15 (a) and (b) Sec. 424.20 introductory text Sec. 440.170 (g)(1) and (g)(2) Sec. 485.602 Sec. 485.608 introductory text, (a), (c), and (d) Sec. 485.618 introductory text, (b) introductory text, and (e) Sec. 485.623(a), (b) introductory text, (c) introductory text, (c)(4), and (d)(1), (2), (3), and (4) Sec. 485.627(a), (b) introductory text, (b)(1), and (b)(2) Sec. 485.631 (a)(1), (a)(3), (a)(4), (a)(5), (b)(1)(i), (b)(1)(ii), (b)(1)(iii), (b)(2), (c)(1) introductory text, (c)(1)(i), (c)(2)(i), (c)(2)(ii), and (c)(3) Sec. 485.635 (a)(1), (a)(2), (a)(3)(i), (a)(3)(iii), (a)(3)(vii), (a)(4), (b)(1), (b)(2) introductory text, (b)(3), (b)(4), (c)(1) introductory text, (c)(1)(iii), (c)(1)(iv), (c)(2), (c)(3), (c)(4) introductory text, (c)(4)(i), (c)(4)(ii), (d)(1), and (d)(2) Sec. 485.638 (a)(1), (a)(4), (b)(1), and (b)(2) Sec. 485.639 introductory text, (a) introductory text, (b), and (c) introductory text Sec. 485.641(a)(1) introductory text, (a)(1)(i), (a)(1)(iii), (b) introductory text, (b)(3), (b)(4), (b)(5)(i), (b)(5)(ii), and (b)(5)(iii) Sec. 485.645(c) introductory text Sec. 489.20(e) 5. In the following sections, ``RPCHs'' is revised to read ``CAHs'', wherever it appears: Sec. 485.601(a) 6. In the following parts or sections, ``rural primary care hospital'' is revised to read ``critical access hospital'', whenever it appears: Part 409, subpart B heading Sec. 409.1(c) Sec. 414.60(b) Sec. 488.1 in the definition of ``Provider of services'' Sec. 488.10(d) Sec. 488.18(d) Sec. 489.24(b) in the definitions of ``Hospital'' and ``Participating hospital'' Sec. 489.53(a)(10) and (b) introductory text 7. In the following sections, ``rural primary care hospitals'' is revised to read ``critical access hospitals'', wherever it appears: Sec. 413.124(a) Sec. 413.130(j)(1) Sec. 488.6(a) Sec. 489.102(a) (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare--Hospital Insurance; and Program No. 93.774, Medicare-- Supplementary Medical Insurance) Dated: August 22, 1997. Bruce C. Vladeck, Administrator, Health Care Financing Administration. Dated: August 22, 1997. Donna E. Shalala, Secretary. [Editorial Note: The following addendum and appendixes will not appear in the Code of Federal Regulations.] Addendum--Schedule of Standardized Amounts Effective With Discharges Occurring On or After October 1, 1997 and Update Factors and Rate-of- Increase Percentages Effective With Cost Reporting Periods Beginning On or After October 1, 1997 I. Summary and Background In this addendum, we set forth the amounts and factors for determining prospective payment rates for Medicare inpatient operating costs and Medicare inpatient capital-related costs. We also set forth rate-of-increase percentages for updating the target amounts for hospitals and hospital units excluded from the prospective payment system. For discharges occurring on or after October 1, 1997, except for sole community hospitals, Medicare-dependent, small rural hospitals, and [[Page 46038]] hospitals located in Puerto Rico, each hospital's payment per discharge under the prospective payment system will be based on 100 percent of the Federal national rate. Sole community hospitals are paid based on whichever of the following rates yield the greatest aggregate payment: the Federal national rate, the updated hospital-specific rate based on FY 1982 cost per discharge, or the updated hospital-specific rate based on FY 1987 cost per discharge. Medicare-dependent, small rural hospitals are paid based on the Federal national rate or, if higher, the Federal national rate plus 50 percent of the difference between the Federal national rate and the updated hospital-specific rate based on FY 1982 or FY 1987 cost per discharge, whichever is higher. For hospitals in Puerto Rico, the payment per discharge is based on the sum of 50 percent of a Puerto Rico rate and 50 percent of a national rate (section 4406 of Pub. L. 105-33 amended section 1886(d)(9)(A) of the Act to change the basis of the payment per discharge for hospitals in Puerto Rico from 75 percent of a Puerto Rico rate to 50 percent of a Puerto Rico rate and from 25 percent of a national rate to 50 percent of a national rate). As discussed below in section II, we are making changes in the determination of the prospective payment rates for Medicare inpatient operating costs. The changes, to be applied prospectively, affect the calculation of the Federal rates. In section III, we discuss our changes for determining the prospective payment rates for Medicare inpatient capital-related costs. Section IV sets forth our changes for determining the rate-of-increase limits for hospitals excluded from the prospective payment system. The tables to which we refer in the preamble to this final rule are presented at the end of this addendum in section V. II. Changes to Prospective Payment Rates for Inpatient Operating Costs for FY 1998 The basic methodology for determining prospective payment rates for inpatient operating costs is set forth at Sec. 412.63 for hospitals located outside of Puerto Rico. The basic methodology for determining the prospective payment rates for inpatient operating costs for hospitals located in Puerto Rico is set forth at Secs. 412.210 and 412.212. (See section V.I of the preamble for a discussion of the Puerto Rico payment rate.) Below, we discuss the manner in which we are changing some of the factors used for determining the prospective payment rates. The Federal and Puerto Rico rate changes will be effective with discharges occurring on or after October 1, 1997. As required by section 1886(d)(4)(C) of the Act, we must also adjust the DRG classifications and weighting factors for discharges in FY 1998. In summary, the standardized amounts set forth in Tables 1A and 1C of section V of this addendum reflect-- Updates of 0 percent for all areas; An adjustment to ensure budget neutrality as provided for in sections 1886 (d)(4)(C)(iii) and (d)(3)(E) of the Act by applying new budget neutrality adjustment factors to the large urban and other standardized amounts; An adjustment to ensure budget neutrality as provided for in section 1886(d)(8)(D) of the Act by removing the FY 1997 budget neutrality factor and applying a revised factor; An adjustment to apply the revised outlier offset by removing the FY 1997 outlier offsets and applying a new offset; and An adjustment in the Puerto Rico standardized amounts to reflect the application of a Puerto Rico-specific wage index. The standardized amounts set forth in Tables 1E and 1F of section V of this addendum, which apply to ``temporary relief'' hospitals (see section V.D of the preamble for a discussion of these hospitals), reflect updates of 0.5 percent for all areas but otherwise reflect the same adjustments as the national standardized amounts. A. Calculation of Adjusted Standardized Amounts 1. Standardization of Base-Year Costs or Target Amounts Section 1886(d)(2)(A) of the Act required the establishment of base-year cost data containing allowable operating costs per discharge of inpatient hospital services for each hospital. The preamble to the September 1, 1983 interim final rule (48 FR 39763) contains a detailed explanation of how base-year cost data were established in the initial development of standardized amounts for the prospective payment system and how they are used in computing the Federal rates. Section 1886(d)(9)(B)(i) of the Act required that Medicare target amounts be determined for each hospital located in Puerto Rico for its cost reporting period beginning in FY 1987. The September 1, 1987 final rule contains a detailed explanation of how the target amounts were determined and how they are used in computing the Puerto Rico rates (52 FR 33043, 33066). The standardized amounts are based on per discharge averages of adjusted hospital costs from a base period or, for Puerto Rico, adjusted target amounts from a base period, updated and otherwise adjusted in accordance with the provisions of section 1886(d) of the Act. Sections 1886(d)(2) (B) and (C) of the Act required that the base- year per discharge costs be updated for FY 1984 and then standardized in order to remove from the cost data the effects of certain sources of variation in cost among hospitals. These include case mix, differences in area wage levels, cost of living adjustments for Alaska and Hawaii, indirect medical education costs, and payments to hospitals serving a disproportionate share of low-income patients. Under sections 1886 (d)(2)(H) and (d)(3)(E) of the Act, in making payments under the prospective payment system, the Secretary estimates from time to time the proportion of costs that are wages and wage- related costs. Since October 1, 1996, when the market basket was last revised and rebased, we have considered 71.2 percent of costs to be labor-related for purposes of the prospective payment system. As discussed in section IV of the preamble, we are including data not available when the market basket was last rebased to adjust the market basket effective for FY 1998. Based on the proposed revised market basket, we are revising the labor and nonlabor proportions of the standardized amounts. Effective with discharges occurring on or after October 1, 1997, we are establishing a labor-related proportion of 71.1 percent and a nonlabor-related proportion of 28.9 percent. (We are revising the Puerto Rico standardized amounts by the average labor share in Puerto Rico of 71.3 percent. We are revising the discharged- weighted national standardized amount to reflect the proportion of discharges in large urban and other areas from the FY 1996 MedPAR file.) 2. Computing Large Urban and Other Area Averages Sections 1886(d) (2)(D) and (3) of the Act require the Secretary to compute two average standardized amounts for discharges occurring in a fiscal year: one for hospitals located in large urban areas and one for hospitals located in other areas. In addition, under sections 1886(d)(9) (B)(iii) and (C)(i) of the Act, the average standardized amount per discharge must be determined for hospitals located in urban and other areas in Puerto Rico. Hospitals in Puerto Rico are paid a blend of 50 percent of the applicable Puerto Rico standardized [[Page 46039]] amount and 50 percent of a national standardized payment amount. (Section 4406 of Public Law 105-33 amended section 1886(d)(9)(A) of the Act to change the payment for hospitals in Puerto Rico from 75 percent of the applicable Puerto Rico standardized payment amount and 25 percent of the applicable national standardized payment amount to 50 percent of the applicable Puerto Rico standardized payment amount and 50 percent of the applicable national standardized payment amount.) Section 1886(d)(2)(D) of the Act defines ``urban area'' as those areas within a Metropolitan Statistical Area (MSA). A ``large urban area'' is defined as an urban area with a population of more than 1,000,000. In addition, section 4009(i) of Public Law 100-203 provides that a New England County Metropolitan Area (NECMA) with a population of more than 970,000 is classified as a large urban area. As required by section 1886(d)(2)(D) of the Act, population size is determined by the Secretary based on the latest population data published by the Bureau of the Census. Urban areas that do not meet the definition of a ``large urban area'' are referred to as ``other urban areas.'' Areas that are not included in MSAs are considered ``rural areas'' under section 1886(d)(2)(D) of the Act. Payment for discharges from hospitals located in large urban areas will be based on the large urban standardized amount. Payment for discharges from hospitals located in other urban and rural areas will be based on the other standardized amount. Based on 1996 population estimates published by the Bureau of the Census, 60 areas meet the criteria to be defined as large urban areas for FY 1998. These areas are identified by a footnote in Table 4A. We note that the Secretary has chosen to exercise the authority granted by section 4408 of Public Law 105-33 to include Stanly County, North Carolina in the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina MSA for purposes of payment under the prospective payment system. 3. Updating the Average Standardized Amounts Under section 1886(d)(3)(A) of the Act, we update the area average standardized amounts each year. In accordance with section 1886(d)(3)(A)(iv) of the Act, we are updating the large urban and the other areas average standardized amounts for FY 1998 using the applicable percentage increases specified in section 1886(b)(3)(B)(i) of the Act. As amended by section 4401 of Public Law 105-33, Section 1886(b)(3)(B)(i)(XIII) of the Act specifies that, for hospitals in all areas, the update factor for the standardized amounts for FY 1998 is equal to zero percent. Section 4401 of Public Law 105-33 also provides for an update of 0.5 percent for hospitals that are not Medicare- dependent small rural hospitals, that receive no IME or DSH payments, that are located in a State in which aggregate Medicare operating payments for such hospitals were less than their aggregate allowable Medicare operating costs for their cost reporting periods beginning during FY 1995, and whose Medicare operating payments are less than their allowable Medicare operating costs in FY 1998. As in the past, we are adjusting the FY 1997 standardized amounts to remove the effects of the FY 1997 geographic reclassifications and outlier payments before applying the FY 1998 updates. That is, we are increasing the standardized amounts to restore the reductions that were made for the effects of geographic reclassification and outliers in FY 1997. After including new offsets to the standardized amounts for outliers and geographic reclassification for FY 1998, we estimate that there will be an overall decrease of 5.6 percent to the large urban and other area standardized amounts. Although the update factor for FY 1998 is set by law, we are required by section 1886(e)(4)(A) of the Act to report to Congress on our final recommendation of update factors for FY 1998 for both prospective payment hospitals and hospitals excluded from the prospective payment system. We have included our final recommendation in Appendix D to this final rule. 4. Other Adjustments to the Average Standardized Amounts a. Recalibration of DRG Weights and Updated Wage Index--Budget Neutrality Adjustment. Section 1886(d)(4)(C)(iii) of the Act specifies that beginning in FY 1991, the annual DRG reclassification and recalibration of the relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected. As discussed in section II of the preamble, we normalized the recalibrated DRG weights by an adjustment factor, so that the average case weight after recalibration is equal to the average case weight prior to recalibration. Section 1886(d)(3)(E) of the Act specifies that the hospital wage index must be updated on an annual basis beginning October 1, 1993. This provision also requires that any updates or adjustments to the wage index must be made in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. To comply with the requirement of section 1886(d)(4)(C)(iii) of the Act that DRG reclassification and recalibration of the relative weights be budget neutral, and the requirement in section 1886(d)(3)(E) of the Act that the updated wage index be budget neutral, we used historical discharge data to simulate payments and compared aggregate payments using the FY 1997 relative weights and wage index to aggregate payments using the FY 1998 relative weights and wage index. The same methodology was used for the FY 1997 budget neutrality adjustment. (See the discussion in the September 1, 1992 final rule (57 FR 39832).) Based on this comparison, we computed a budget neutrality adjustment factor equal to 0.997731. We adjust the Puerto Rico- specific standardized amounts for the effect of DRG reclassification and recalibration. We computed a budget neutrality adjustment factor for Puerto Rico-specific standardized amounts equal to 0.999117. These budget neutrality adjustment factors are applied to the standardized amounts without removing the effects of the FY 1997 budget neutrality adjustments. We do not remove the prior budget neutrality adjustment because estimated aggregate payments after the changes in the DRG relative weights and wage index should equal estimated aggregate payments prior to the changes. If we removed the prior year adjustment, we would not satisfy this condition. In addition, we will continue to apply the same FY 1998 adjustment factor to the hospital-specific rates that are effective for cost reporting periods beginning on or after October 1, 1997, in order to ensure that we meet the statutory requirement that aggregate payments neither increase nor decrease as a result of the implementation of the FY 1998 DRG weights and updated wage index. (See the discussion in the September 4, 1990 final rule (55 FR 36073).) b. Reclassified Hospitals--Budget Neutrality Adjustment. Section 1886(d)(8)(B) of the Act provides that certain rural hospitals are deemed urban effective with discharges occurring on or after October 1, 1988. In addition, section 1886(d)(10) of the Act provides for the reclassification of hospitals based on determinations by the Medicare Geographic Classification Review Board (MGCRB). Under section 1886(d)(10) of the Act, a hospital may be [[Page 46040]] reclassified for purposes of the standardized amount or the wage index, or both. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that total aggregate payments under the prospective payment system after implementation of the provisions of sections 1886(d)(8) (B) and (C) and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. To calculate this budget neutrality factor, we used historical discharge data to simulate payments, and compared total prospective payments (including IME and DSH payments) prior to any reclassifications to total prospective payments after reclassifications. We are applying an adjustment factor of 0.994720 to ensure that the effects of reclassification are budget neutral. The adjustment factor is applied to the standardized amounts after removing the effects of the FY 1997 budget neutrality adjustment factor. We note that the FY 1998 adjustment reflects wage index and standardized amount reclassifications approved by the MGCRB or the Administrator as of February 27, 1997. The effects of additional reclassification changes resulting from appeals and reviews of the MGCRB decisions for FY 1998 or from a hospital's request for the withdrawal of a reclassification request are reflected in the final budget neutrality adjustment required under section 1886(d)(8)(D) of the Act and published in the final rule for FY 1998. c. Outliers. Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for ``outlier'' cases, cases involving extraordinarily high costs (cost outliers) or long lengths of stay (day outliers). Section 1886(d)(3)(B) of the Act requires the Secretary to adjust both the large urban and other area national standardized amounts by the same factor to account for the estimated proportion of total DRG payments made to outlier cases. Similarly, section 1886(d)(9)(B)(iv) of the Act requires the Secretary to adjust the large urban and other standardized amounts applicable to hospitals in Puerto Rico to account for the estimated proportion of total DRG payments made to outlier cases. Furthermore, under section 1886(d)(5)(A)(iv) of the Act, outlier payments for any year must be projected to be not less than 5 percent nor more than 6 percent of total payments based on DRG prospective payment rates. Beginning with FY 1995, section 1886(d)(5)(A) of the Act requires the Secretary to phase out payments for day outliers (correspondingly, payments for cost outliers would increase). Under the requirements of section 1886(d)(5)(A)(v), the proportion of day outlier payments to total outlier payments is reduced from FY 1994 levels as follows: 75 percent of FY 1994 levels in FY 1995, 50 percent of FY 1994 levels in FY 1996, and 25 percent of FY 1994 levels in FY 1997. For discharges occurring after September 30, 1997, the Secretary will no longer pay for day outliers under the provisions of section 1886(d)(5)(A)(i) of the Act. i. FY 1998 Outlier Payment Thresholds. For FY 1997, the day outlier threshold is the geometric mean length of stay for each DRG plus the lesser of 24 days or 3.0 standard deviations. The marginal cost factor for day outliers (the percent of Medicare's average per diem payment paid for each outlier day) is 33 percent for FY 1997. The fixed loss cost outlier threshold is equal to the prospective payment for the DRG plus $9,700 ($8,850 for hospitals that have not yet entered the prospective payment system for capital-related costs). The marginal cost factor for cost outliers (the percent of costs paid after costs for the case exceed the threshold) is 80 percent. We applied an outlier adjustment to the FY 1997 standardized amounts of 0.948766 for the large urban and other areas rates and 0.9481 for the capital Federal rate. As noted above, section 1886(d)(5)(A)(v) of the Act provides that payment will not be made for day outliers beginning with discharges occurring in FY 1998. In the proposed rule, we proposed to establish a fixed loss cost outlier threshold in FY 1998 equal to the prospective payment rate for the DRG plus $7,600 ($6,950 for hospitals that have not yet entered the prospective payment system for capital-related costs). In addition, we proposed to maintain the marginal cost factor for cost outliers at 80 percent. Section 4405 of Public Law 105-33 amended section 1886(d)(5)(A)(ii) of the Act to revise the definition of the cost outlier threshold. For FY 1997, the statute required the fixed loss cost outlier threshold to be based on ``the applicable DRG prospective payment rate plus a fixed dollar amount determined by the Secretary''. Public Law 105-33 provides that, beginning in FY 1998, the fixed loss cost outlier threshold is based on ``the sum of the applicable DRG prospective payment rate plus any amounts payable under subparagraphs (B) [IME payments] and (F) [DSH payments] plus a fixed dollar amount determined by the Secretary''. Consistent with this statutory change, the methodology for setting the final FY 1998 cost outlier threshold differs from the methodology used for the proposed rule because we no longer adjust hospital costs to exclude IME and DSH payments (see section V.A. of the preamble). In addition, in setting the final FY 1998 outlier thresholds, we used updated data and revised cost inflation factor (discussed below). Thus, for FY 1998, in order for a case to qualify for cost outlier payments, the costs must exceed the prospective payment rate for the DRG plus the IME and DSH payments plus $11,050 ($10,080 for hospitals that have not yet entered the prospective payment system for capital-related costs). We are also establishing a marginal cost factor for cost outliers of 80 percent, as proposed. In accordance with section 1886(d)(5)(A)(iv) of the Act, we calculated outlier thresholds so that outlier payments are projected to equal 5.1 percent of total payments based on DRG prospective payment rates. In accordance with section 1886(d)(3)(E), we reduced the FY 1998 standardized amounts by the same percentage to account for the projected proportion of payments paid to outliers. As stated in the September 1, 1993 final rule (58 FR 46348), we establish outlier thresholds that are applicable to both inpatient operating costs and inpatient capital-related costs. When we modeled the combined operating and capital outlier payments, we found that using a common set of thresholds resulted in a higher percentage of outlier payments for capital-related costs than for operating costs. We project that the proposed thresholds for FY 1998 will result in outlier payments equal to 5.1 percent of operating DRG payments and 6.2 percent of capital payments based on the Federal rate. The proposed outlier adjustment factors applied to the standardized amounts for FY 1998 were as follows: ------------------------------------------------------------------------ Operating Capital standardized federal amounts rate ------------------------------------------------------------------------ National....................................... 0.949117 0.9449 Puerto Rico.................................... 0.961448 0.9449 ------------------------------------------------------------------------ The final outlier adjustment factors applied to the standardized amounts for FY 1998 are as follows: ------------------------------------------------------------------------ Operating Capital standardized federal amounts rate ------------------------------------------------------------------------ National....................................... 0.948840 0.9382 [[Page 46041]] Puerto Rico.................................... 0.971967 0.9598 ------------------------------------------------------------------------ As in the proposed rule, we apply the outlier adjustment factors after removing the effects of the FY 1997 outlier adjustment factors on the standardized amounts. ii. Other Changes Concerning Outliers. Table 8A in section V of this addendum contains the updated Statewide average operating cost-to- charge ratios for urban hospitals and for rural hospitals to be used in calculating cost outlier payments for those hospitals for which the intermediary is unable to compute a reasonable hospital-specific cost- to-charge ratio. These Statewide average ratios would replace the ratios published in the August 30, 1996 final rule (61 FR 46302), effective October 1, 1997. Table 8B contains comparable Statewide average capital cost-to-charge ratios. These average ratios would be used to calculate cost outlier payments for those hospitals for which the intermediary computes operating cost-to-charge ratios lower than 0.227808 or greater than 1.29731 and capital cost-to-charge ratios lower than 0.01270 or greater than 0.18955. This range represents 3.0 standard deviations (plus or minus) from the mean of the log distribution of cost-to-charge ratios for all hospitals. We note that the cost-to-charge ratios in Tables 8A and 8B will be used for all cost reports settled during FY 1998 (regardless of the actual cost reporting period) when hospital-specific cost-to-charge ratios are either not available or outside the three standard deviations range. iii. FY 1996 and FY 1997 Outlier Payments. In the August 30, 1996 final rule (61 FR 46229), we stated that, based on available data, we estimated that actual FY 1996 outlier payments would be approximately 4.0 percent of actual total DRG payments. This was computed by simulating payments using actual FY 1995 bill data available at the time. That is, the estimate of actual FY 1996 outlier payments did not reflect actual FY 1996 bills but instead reflected the application of FY 1996 rates and policies to available FY 1995 bills. Our current estimate, using available FY 1996 bills, is that actual outlier payments for FY 1996 were approximately 4.2 percent of actual total DRG payments. We note that the MedPAR file for FY 1996 discharges continues to be updated. We currently estimate that actual outlier payments for FY 1997 will be approximately 4.8 percent of actual total DRG payments (slightly lower than the 5.1 percent we projected in setting outlier policies for FY 1997). This estimate is based on simulations using the June 1997 update of the provider-specific file and the June 1997 update of the FY 1996 MedPAR file (discharge data for FY 1996 bills). We used these data to calculate an estimate of the actual outlier percentage for FY 1997 by applying FY 1997 rates and policies to available FY 1996 bills. In FY 1994, we began using a cost inflation factor rather than a charge inflation factor to update billed charges for purposes of estimating outlier payments. This refinement was made to improve our estimation methodology. We believe that actual FY 1996 and FY 1997 outlier payments as a percentage of total DRG payments may be lower than expected in part because actual hospital costs may be lower than reflected in the methodology used to set outlier thresholds for those years. Our most recent data on hospital costs show that rates of increase are continuing to decline. Thus, the cost inflation factor of 0.871 percent used to set FY 1996 outlier policy (based on the best data then available) appears to have been overstated. For FY 1997, we used a cost inflation factor of minus 1.906 percent (a cost per case decrease of 1.906 percent). In the proposed rule, based on data then available, we used a cost inflation factor of minus 1.969 percent to set outlier thresholds for FY 1998. Based on the most recent data available, we are using a cost inflation factor of minus 2.005 percent for purposes of setting the final 1998 outlier thresholds. Although we estimate that FY 1996 outlier payments will approximate 4.2 percent of total DRG payments, we note that the estimate of the market basket rate of increase used to set the FY 1996 rates was 3.5 percentage points, while the latest FY 1996 market basket rate of increase forecast is 2.7 percent. Thus, the net effect is that hospitals received higher FY 1996 payments than would have been established based on a more recent forecast of the market basket rate of increase. Comment: One commenter modeled the outlier payments and was able to replicate HCFA's result of 5.1 percent for operating outlier payments, but the commenter's analysis yielded only 5.3 percent for capital outlier payments as compared with HCFA's result of 5.5 percent. Response: Although we are unable to analyze the commenter's modeling methodology before publication of this document, we will attempt to ascertain the source of the discrepancy between the commenter's outlier model and HCFA's outlier model before next year's proposed rule. 5. FY 1998 Standardized Amounts The adjusted standardized amounts are divided into labor and nonlabor portions. Table 1A (and Table 1E for ``temporary relief'' hospitals) contain the standardized amounts that are applicable to all hospitals, except for hospitals in Puerto Rico. Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico payment rate is based on the discharge-weighted average of the national large urban standardized amount and the national other standardized amount (as set forth in Tables 1A and 1E). The labor and nonlabor portions of the national average standardized amounts for Puerto Rico hospitals are set forth in Table 1C (and Table 1F for ``temporary relief'' hospitals). These tables also include the Puerto Rico standardized amounts. The Puerto Rico standardized amounts reflect application of a Puerto Rico-specific wage index for FY 1998. Thus, before application of the wage index, the FY 1998 Puerto Rico standardized amounts are lower than the FY 1997 standardized amounts. However, after application of the wage index, the FY 1998 Puerto Rico rate is higher than the rate for FY 1997. This is due to the higher Puerto Rico wage index values that will be applied to these standardized amounts in calculating the FY 1998 Puerto Rico rate. Below, we use two wage areas to illustrate that the FY 1998 Puerto Rico wage-adjusted standardized amounts are higher than the FY 1997 Puerto Rico wage-adjusted standardized amounts. Puerto Rico Standardized Amounts ---------------------------------------------------------------------------------------------------------------- FY 1997 FY 1998 Area --------------------------------------------------------------- Labor Nonlabor Labor Nonlabor ---------------------------------------------------------------------------------------------------------------- Large Urban..................................... $2,488.70 $518.65 $1,323.01 $532.55 Other Areas..................................... $2,449.31 $510.45 $1,302.07 $524.11 ---------------------------------------------------------------------------------------------------------------- [[Page 46042]] Puerto Rico Wage-Adjusted Standardized Amount for the San Juan MSA and Rural Puerto Rico ------------------------------------------------------------------------ FY 1997 FY 1998 ------------------------------------------------------------------------ San Juan Wage Index............................. 0.4506 1.0156 Wage-Adjusted Standardized Amount............... $1,640.06 $1,877.44 Rural Wage Index................................ 0.4026 0.9291 Wage-Adjusted Standardized Amount............... $1,496.54 $1,735.01 ------------------------------------------------------------------------ Table 1E contains the two national standardized amounts that are applicable to the ``temporary relief'' hospitals discussed in section V.D of the preamble to this rule, except those located in Puerto Rico. The labor and nonlabor portions of the national average standardized amounts for hospitals in that group that are located in Puerto Rico are set forth in Table 1F. This table also includes the Puerto Rico standardized amounts for hospitals in that group. B. Adjustments for Area Wage Levels and Cost-of-Living Tables 1A, 1C, 1E and 1F, as set forth in this addendum, contain the labor-related and nonlabor-related shares used to calculate the prospective payment rates for hospitals located in the 50 States, the District of Columbia, and Puerto Rico. This section addresses two types of adjustments to the standardized amounts that are made in determining the prospective payment rates as described in this addendum. 1. Adjustment for Area Wage Levels Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require that an adjustment be made to the labor-related portion of the prospective payment rates to account for area differences in hospital wage levels. This adjustment is made by multiplying the labor-related portion of the adjusted standardized amounts by the appropriate wage index for the area in which the hospital is located. In section III of the preamble, we discuss certain revisions we are making to the wage index. These changes include the calculation of a Puerto Rico-specific wage index that are being applied to the Puerto Rico standardized amounts. The wage index is set forth in Tables 4A through 4F of this addendum. 2. Adjustment for Cost-of-Living in Alaska and Hawaii Section 1886(d)(5)(H) of the Act authorizes an adjustment to take into account the unique circumstances of hospitals in Alaska and Hawaii. Higher labor-related costs for these two States are taken into account in the adjustment for area wages described above. For FY 1998, we adjusted the payments for hospitals in Alaska and Hawaii by multiplying the nonlabor portion of the standardized amounts by the appropriate adjustment factor contained in the table below. Table of Cost-of-Living Adjustment Factors, Alaska and Hawaii Hospitals Alaska--All areas............................................... 1.25 Hawaii: County of Honolulu.......................................... 1.225 County of Hawaii............................................ 1.225 County of Kauai............................................. 1.225 County of Maui.............................................. 1.225 County of Kalawao........................................... 1.225 (The above factors are based on data obtained from the U.S. Office of Personnel Management.) C. DRG Relative Weights As discussed in section II of the preamble, we have developed a classification system for all hospital discharges, assigning them into DRGs, and have developed relative weights for each DRG that reflect the resource utilization of cases in each DRG relative to Medicare cases in other DRGs. Table 5 of section V of this addendum contains the relative weights that we will use for discharges occurring in FY 1998. These factors have been recalibrated as explained in section II of the preamble. One commenter noted that there was a typographical error in the proposed Table 5. The proposed relative weight for DRG 92 was incorrectly printed as .1929 rather than 1.1929. The final weight is 1.1947. D. Calculation of Prospective Payment Rates for FY 1998 General Formula for Calculation of Prospective Payment Rates for FY 1998 Prospective payment rate for all hospitals located outside Puerto Rico except sole community hospitals and Medicare-dependent, small rural hospitals = Federal rate. Prospective payment rate for sole community hospitals = Whichever of the following rates yields the greatest aggregate payment: 100 percent of the Federal rate, 100 percent of the updated FY 1982 hospital-specific rate, or 100 percent of the updated FY 1987 hospital- specific rate. Prospective payment rate for Medicare-dependent, small rural hospitals = 100 percent of the Federal rate plus, if the greater of the updated FY 1982 hospital-specific rate or the updated FY 1987 hospital- specific rate is higher than the Federal rate, 50 percent of the difference between the applicable hospital-specific rate and the Federal rate. Prospective payment rate for Puerto Rico = 50 percent of the Puerto Rico rate + 50 percent of a discharge-weighted average of the national large urban standardized amount and the national other standardized amount. 1. Federal Rate For discharges occurring on or after October 1, 1997 and before October 1, 1998, except for sole community hospitals, Medicare- dependent small rural hospitals, and hospitals in Puerto Rico, the hospital's payment is based exclusively on the Federal national rate. Section 1866(d)(1)(A)(iii) of the Act provides that the Federal rate is comprised of 100 percent of the Federal national rate. The payment amount is determined as follows: Step 1--Select the appropriate national standardized amount considering the type of hospital and designation of the hospital as large urban or other (see Tables 1A or 1E, section V of this addendum). Step 2--Multiply the labor-related portion of the standardized amount by the applicable wage index for the geographic area in which the hospital is located (see Tables 4A, 4B, and 4C of section V of this addendum). Step 3--For hospitals in Alaska and Hawaii, multiply the nonlabor- related portion of the standardized amount by the appropriate cost-of- living adjustment factor. Step 4--Add the amount from Step 2 and the nonlabor-related portion of the standardized amount (adjusted if appropriate under Step 3). Step 5--Multiply the final amount from Step 4 by the relative weight corresponding to the appropriate DRG (see Table 5 of section V of this addendum). 2. Hospital-Specific Rate (Applicable Only to Sole Community Hospitals and Medicare-Dependent, Small Rural Hospitals) Sections 1886(d)(5)(D)(i) and (b)(3)(C) of the Act provide that sole community hospitals are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal rate, the updated hospital-specific rate based on FY 1982 cost per discharge, or the updated hospital-specific rate based on FY 1987 cost per discharge. Sections 1886(d)(5)(G) and (b)(3)(D) of the Act (as amended by section 4204 of Publ. L. 105-33) provide that Medicare-dependent, small rural hospitals are [[Page 46043]] paid based on whichever of the following rates yields the greatest aggregate payment: The Federal rate or the Federal rate plus 50 percent of the difference between the Federal rate and the greater of the updated hospital-specific rate based on FY 1982 and FY 1987 cost per discharge. Hospital-specific rates have been determined for each of these hospitals based on both the FY 1982 cost per discharge and the FY 1987 cost per discharge. For a more detailed discussion of the calculation of the FY 1982 hospital-specific rate and the FY 1987 hospital-specific rate, we refer the reader to the September 1, 1983 interim final rule (48 FR 39772); the April 20, 1990 final rule with comment period (55 FR 15150); and the September 4, 1990 final rule (55 FR 35994). a. Updating the FY 1982 and FY 1987 Hospital-Specific Rates for FY 1998. We are increasing the hospital-specific rates by 0 percent for sole community hospitals and Medicare-dependent, small rural hospitals located in all areas for FY 1998. Section 1886(b)(3)(C)(iv) of the Act provides that the update factor applicable to the hospital-specific rates for sole community hospitals equals the update factor provided under section 1886(b)(3)(B)(iv) of the Act, which, as amended by section 4401 of Pub. L. 105-33, is 0 percent for FY 1998. Section 1886(b)(3)(D) of the Act (as amended by section 4204 of Publ. L. 105- 33) provides that the update factor applicable to the hospital-specific rates for Medicare-dependent, small rural hospitals equals the update factor provided under section 1886(b)(3)(B)(iv) of the Act, which, as amended by section 4401 of Pub. L. 105-33, is 0 percent for FY 1998. b. Calculation of Hospital-Specific Rate. For sole community hospitals and Medicare-dependent, small rural hospitals, the applicable FY 1998 hospital-specific rate would be calculated by increasing the hospital's hospital-specific rate for the preceding fiscal year by the applicable update factor (0 percent), which is the same as the update for all prospective payment hospitals except temporary relief hospitals. In addition, the hospital-specific rate would be adjusted by the budget neutrality adjustment factor (that is, 0.997731) as discussed in section II.A.4.a of this Addendum. This resulting rate would be used in determining under which rate a sole community hospital or Medicare-dependent, small rural hospital is paid for its discharges beginning on or after October 1, 1997, based on the formulas set forth above. 3. General Formula for Calculation of Prospective Payment Rates for Hospitals Located in Puerto Rico Beginning On or After October 1, 1997 and Before October 1, 1998 a. Puerto Rico Rate. The Puerto Rico prospective payment rate is determined as follows: Step 1--Select the appropriate adjusted average standardized amount considering the large urban or other designation of the hospital (see Table 1C or 1F of section V of the addendum). Step 2--Multiply the labor-related portion of the standardized amount by the appropriate Puerto Rico-specific wage index (see Table 4F of section V of the addendum). Step 3--Add the amount from Step 2 and the nonlabor-related portion of the standardized amount. Step 4--Multiply the result in Step 3 by 50 percent. Step 5--Multiply the amount from Step 4 by the appropriate DRG relative weight (see Table 5 of section V of the addendum). b. National Rate. The national prospective payment rate is determined as follows: Step 1--Multiply the labor-related portion of the national average standardized amount (see Table 1C or 1F of section V of the addendum) by the appropriate national wage index (see Tables 4A and 4B of section V of the addendum). Step 2--Add the amount from Step 1 and the nonlabor-related portion of the national average standardized amount. Step 3--Multiply the result in Step 2 by 50 percent. Step 4--Multiply the amount from Step 3 by the appropriate DRG relative weight (see Table 5 of section V of the addendum). The sum of the Puerto Rico rate and the national rate computed above equals the prospective payment for a given discharge for a hospital located in Puerto Rico. III. Changes to Payment Rates for Inpatient Capital-Related Costs for FY 1998 The prospective payment system for hospital inpatient capital- related costs was implemented for cost reporting periods beginning on or after October 1, 1991. Effective with that cost reporting period and during a 10-year transition period extending through FY 2001, hospital inpatient capital-related costs are paid on the basis of an increasing proportion of the capital prospective payment system Federal rate and a decreasing proportion of a hospital's historical costs for capital. The basic methodology for determining Federal capital prospective rates is set forth at Secs. 412.308 through 412.352. Below we discuss the factors that we used to determine the Federal rate and the hospital-specific rates for FY 1998. The rates are effective for discharges occurring on or after October 1, 1997. For FY 1992, we computed the standard Federal payment rate for capital-related costs under the prospective payment system by updating the FY 1989 Medicare inpatient capital cost per case by an actuarial estimate of the increase in Medicare inpatient capital costs per case. Each year after FY 1992 we update the standard Federal rate, as provided in Sec. 412.308(c)(1), to account for capital input price increases and other factors. Also, Sec. 412.308(c)(2) provides that the Federal rate is adjusted annually by a factor equal to the estimated proportion of outlier payments under the Federal rate to total capital payments under the Federal rate. In addition, Sec. 412.308(c)(3) requires that the Federal rate be reduced by an adjustment factor equal to the estimated proportion of payments for exceptions under Sec. 412.348. Furthermore, Sec. 412.308(c)(4)(ii) requires that the Federal rate be adjusted so that the annual DRG reclassification and the recalibration of DRG weights and changes in the geographic adjustment factor are budget neutral. For FYs 1992 through 1995, Sec. 412.352 required that the Federal rate also be adjusted by a budget neutrality factor so that aggregate payments for inpatient hospital capital costs were projected to equal 90 percent of the payments that would have been made for capital-related costs on a reasonable cost basis during the fiscal year. That provision expired in FY 1996. Finally, Sec. 412.308(b)(2) describes the 7.4 percent reduction to the rate which was made in FY 1994, and Sec. 412.308(b)(3) describes the 0.28 percent reduction to the rate made in FY 1996 as a result of the revised policy of paying for transfers. In this final rule with comment period we are implementing section 4402 of Public Law 105-33, which requires that, effective for discharges occurring on or after October 1, 1997, and before October 1, 2002, the unadjusted standard Federal rate shall be reduced by 17.78 percent. Part of that reduction will be restored effective October 1, 2002. For each hospital, the hospital-specific rate was calculated by dividing the hospital's Medicare inpatient capital-related costs for a specified base year by its Medicare discharges (adjusted for transfers), and dividing the [[Page 46044]] result by the hospital's case mix index (also adjusted for transfers). The resulting case-mix adjusted average cost per discharge was then updated to FY 1992 based on the national average increase in Medicare's inpatient capital cost per discharge and adjusted by the exceptions payment adjustment factor and the budget neutrality adjustment factor to yield the FY 1992 hospital-specific rate. Since FY 1992, the hospital-specific rate has been updated annually for inflation and for changes in the exceptions payment adjustment factor. For FYs 1992 through 1995, the hospital-specific rate was also adjusted by a budget neutrality adjustment factor. In this final rule with comment period we are implementing section 4402 of Public Law 105-33, which requires that, effective for discharges occurring on or after October 1, 1997, and before October 1, 2002, the unadjusted hospital specific rate shall be reduced by 17.78 percent. Part of that reduction will be restored effective October 1, 2002. To determine the appropriate budget neutrality adjustment factor and the exceptions payment adjustment factor, we developed a dynamic model of Medicare inpatient capital-related costs, that is, a model that projects changes in Medicare inpatient capital-related costs over time. With the expiration of the budget neutrality provision, the model is still used to estimate the exceptions payment adjustment and other factors. The model and its application are described in greater detail in Appendix B. In accordance with section 1886(d)(9)(A) of the Act, under the prospective payment system for inpatient operating costs, hospitals located in Puerto Rico are paid for operating costs under a special payment formula. These hospitals are paid a blended rate that comprises 75 percent of the applicable standardized amount specific to Puerto Rico hospitals and 25 percent of the applicable national average standardized amount. Under Sec. 412.374, the methodology for payments to Puerto Rico hospitals under the prospective payment system for inpatient capital-related costs parallels the blended payment methodology for operating payments to Puerto Rico hospitals. Effective October 1, 1997, as a result of section 4406 of Public Law 105-33, operating payments to hospitals in Puerto Rico shall be based on a blend of 50 percent of the applicable standardized amount specific to Puerto Rico hospitals and 50 percent of the applicable national average standardized amount. However, in conjunction with this change to the operating blend percentage, effective with discharges on or after October 1, 1997, we are computing capital payments to hospitals in Puerto Rico based on a blend of 50 percent of the Puerto Rico rate and 50 percent of the Federal rate. A. Determination of Federal Inpatient Capital-Related Prospective Payment Rate Update For FY 1997, the Federal rate was $438.92. In the proposed rule, we stated that the proposed FY 1998 Federal rate was $438.43. In this final rule with comment period, we are establishing a FY 1998 Federal rate of $371.51. In the discussion that follows, we explain the factors that were used to determine the FY 1998 Federal rate. In particular, we explain why the FY 1998 Federal rate has decreased 15.36 percent compared to the FY 1997 Federal rate. The major factor contributing to the decrease in the FY 1998 rate in comparison to the FY 1997 rate is the 17.78 percent reduction to the Federal rate required by Public Law 105-33. Also, capital payments per case are estimated to decrease 8.92 percent. Taking into account the effects of increases in projected discharges, we estimate that aggregate capital payments will decrease 6.74 percent. Total payments to hospitals under the prospective payment system are relatively unaffected by changes in the capital prospective payments. Since capital payments constitute about 10 percent of hospital payments, a 1 percent change in the capital Federal rate yields only about 0.1 percent change in actual payments to hospitals. 1. Reduction to the Standard Federal Rate Section 4402 of Pub. L. 105-33 requires that for discharges occurring after October 1, 1997 the unadjusted standard Federal rate be reduced by 15.68 percent, and by an additional 2.1 percent from October 1, 1997 through September 30, 2002. Thus, the unadjusted standard Federal rate used to set the Federal rate each year is reduced a total of 17.78 percent from October 1, 1997 through September 30, 2002. After that date the 2.1 percent reduction to the rate will be restored. The regulation changes we are making to implement this statutory requirement are discussed in section VI.C of the preamble. Here we discuss the effects of the required reduction in computing the FY 1998 Federal capital rate. Under Sec. 412.308(b), HCFA determines the standard Federal rate by adjusting the FY 1992 updated national average cost per discharge by a factor so that estimated payments based on the standard Federal rate, adjusted by the payment adjustments described in Sec. 412.312(b), equal estimated aggregate payments based solely on the national average cost per discharge. Section 412.308(c) provides further that the standard Federal rate is updated for inflation each Federal fiscal year and adjusted each year by an outlier payment adjustment factor, and an exceptions payment adjustment factor, to determine the Federal capital payment rate for that year. The standard Federal rate is to be distinguished from the annual Federal rate actually used in making payment under the capital prospective payment system. The standard Federal rate is, in effect, the underlying or base rate used to determine the annual Federal rate by means of the formula in Sec. 412.308(c). Because the 17.78 percent reduction applies to the standard Federal rate before the application of the adjustment factors for outliers, exceptions, and budget neutrality, the reduction to the standard Federal rate does not have the effect of simply lowering the FY 1998 Federal rate by 17.78 percent compared to FY 1997. Rather, the 17.78 percent reduction is one factor contributing to the overall 15.36 percent reduction in the FY 1998 Federal rate compared to FY 1997. The FY 1998 exceptions reduction factor increases the rate by 3.22 percent relative to the FY 1997 exceptions reduction factor. For a more complete description of changes to the Federal rate, see the table that compares the FY 1997 rate with the FY 1998 rate later in this addendum. As discussed in the proposed rule, ProPAC recommended that the rate be adjusted to a more appropriate level (Recommendation 3). They indicated that the FY 1997 rate was 15 to 17 percent too high and attributed this to the overstatement of the 1992 base payment rates and the method used to update the rates prior to implementation of the update framework. ProPAC outlined several possible approaches we could use for adjusting the rate by regulation. In our response, we agreed with ProPAC that the capital rates were too high and noted that the President's FY 1998 budget included a provision to reduce the base Federal and hospital-specific rates by approximately the magnitude suggested by ProPAC. We restated our belief that it was most appropriate to make such adjustments to the capital rates in the context of a comprehensive package of Medicare program changes. We therefore did not propose to implement a revision to the base capital rates by regulation for FY 1998. [[Page 46045]] Comment: ProPAC noted that both HCFA and ProPAC had recommended that the base capital rate should be cut. They also noted that a proposal to cut the rate was included in the President's budget under consideration by the Congress. However, ProPAC expressed its belief that absent action by the Congress to cut the capital rate, the Secretary should cut the rate using her regulatory authority. Response: After ProPAC commented, the Congress passed Public Law 105-33 and the President signed it into law in early August. As anticipated, the legislation included a reduction to the unadjusted standard Federal rate and the unadjusted hospital specific rate along with several other changes to the Medicare program. As discussed previously, we are implementing the reduction to the rate as part of this final rule with comment period. Comment: One State hospital association expressed its opposition to a reduction in capital payments. The association stated that reducing capital payments to hospitals would likely increase borrowing costs by making hospitals less attractive to investors, and inhibit hospital's abilities to modernize their physical plants. The commenter was especially concerned about the impact of a rate cut on low volume rural hospitals. Response: As we noted in our response to ProPAC's previous comment, we did not propose to cut the capital rate by regulation in the proposed rule. We stated our belief that the capital rate should be addressed by the Congress in conjunction with other changes to the Medicare program. The Congress included a 17.78 percent reduction to the capital rate and the hospital specific rate in Public Law 105-33, which we are implementing in this final rule with comment period. We have stated on several occasions that due to a variety of factors capital payments to hospitals are over-stated and should be reduced. Based on data we updated for this final rule with comment period, we estimate that for FY 1997 Medicare capital payments to hospitals exceeded Medicare capital costs by 8.7 percent. Many small rural hospitals are also low cost hospitals that have benefitted from the introduction of a capital prospective payment system. Many of these hospitals are paid on the full prospective payment methodology and capital payments are based on an increasing percentage of the Federal rate during the transition to fully prospective capital payment system, where the Federal rate is higher than the hospital specific rate. However, because capital payments are determined on a per discharge basis, hospitals with few discharges will necessarily receive payments that are consistent with the number of Medicare patients they serve. We note however, that sole community hospitals benefit from a higher minimum payment threshold for purposes of capital exceptions payments. Further, together with this capital rate reduction provision, Congress has made other changes that affect small rural hospitals. For example, as of October 1, 1997, the Medicare-dependent hospital provisions are reinstated and the Critical Access Hospital Program is established nationwide. 2. Standard Federal Rate Update a. Description of the Update Framework. Section 412.308(c)(1) provides that the standard Federal rate is updated on the basis of an analytical framework that takes into account changes in a capital input price index and other factors. The update framework consists of a capital input price index (CIPI) and several policy adjustment factors. Specifically, we have adjusted the projected CIPI rate of increase as appropriate each year for case-mix index related changes, for intensity, and for errors in previous CIPI forecasts. The proposed rule reflected an update factor of 1.1 percent, based on data available at that time. The final update factor for FY 1998 under that framework is 0.9 percent. This update factor is based on a projected 1.1 percent increase in the CIPI, and on policy adjustment factors of -0.2. We explain the basis for the FY 1998 CIPI projection in section D of this addendum. Here we describe the policy adjustments that have been applied. The case-mix index is the measure of the average DRG weight for cases paid under the prospective payment system. Because the DRG weight determines the prospective payment for each case, any percentage increase in the case-mix index corresponds to an equal percentage increase in hospital payments. The case-mix index can change for any of several reasons: The average resource use of Medicare patients changes (``real'' case-mix change); Changes in hospital coding of patient records result in higher weight DRG assignments (``coding effects''); and The annual DRG reclassification and recalibration changes may not be budget neutral (``reclassification effect''). We define real case-mix change as actual changes in the mix (and resource requirements) of Medicare patients as opposed to changes in coding behavior that result in assignment of cases to higher-weighted DRGs, but do not reflect higher resource requirements. In the update framework for the prospective payment system for operating costs, we adjust the update upwards to allow for real case-mix change, but remove the effects of coding changes on the case-mix index. We also remove the effect on total payments of prior changes to the DRG classifications and relative weights, in order to retain budget neutrality for all case-mix index-related changes other than patient severity. (For example, we adjusted for the effects of the FY 1992 DRG reclassification and recalibration as part of our FY 1994 update recommendation.) The operating adjustment consists of a reduction for total observed case-mix change, an increase for the portion of case-mix change that we determine is due to real case-mix change rather than coding modifications, and an adjustment for the effect of prior DRG reclassification and recalibration changes. We have adopted this case- mix index adjustment in the capital update framework as well. For FY 1998, we are projecting a 1.0 percent increase in the case- mix index. We estimate that real case-mix increase will equal 0.8 percent in FY 1998. Therefore, the net adjustment for case-mix change in FY 1998 is -0.2 percentage points. We estimate that DRG reclassification and recalibration resulted in a 0.0 percent change in the case mix when compared with the case-mix index that would have resulted if we had not made the reclassification and recalibration changes to the DRGs. The current operating update framework contains an adjustment for forecast error. The input price index forecast is based on historical trends and relationships ascertainable at the time the update factor is established for the upcoming year. In any given year, there may be unanticipated price fluctuations that may result in differences between the actual increase in prices faced by hospitals and the forecast used in calculating the update factors. In setting a prospective payment rate under this framework, we make an adjustment for forecast error only if our estimate of the capital input price index rate of increase for any year is off by 0.25 percentage points or more. There is a 2- year lag between the forecast and the measurement of the forecast error. Thus, for example, we would adjust for a forecast error made in FY 1996 through an adjustment to the FY 1998 update. Because we only introduced this analytical framework in FY 1996, FY [[Page 46046]] 1998 is the first year in which a forecast error adjustment could be required. We estimate that the FY 1996 CIPI was .20 percentage points higher than our current data show, which means that we estimate a forecast error of .20 percentage points for FY 1996. Therefore no adjustment for forecast error will be made in FY 1998. Under the capital prospective payment system framework, we also make an adjustment for changes in intensity. We calculate this adjustment using the same methodology and data as in the framework for the operating prospective payment system. The intensity factor for the operating update framework reflects how hospital services are utilized to produce the final product, that is, the discharge. This component accounts for changes in the use of quality-enhancing services, changes in within-DRG severity, and expected modification of practice patterns to remove cost-ineffective services. We calculate case-mix constant intensity as the change in total charges per admission, adjusted for price level changes (the CPI hospital component), and changes in real case mix. The use of total charges in the calculation of the proposed intensity factor makes it a total intensity factor, that is, charges for capital services are already built into the calculation of the factor. We have, therefore, incorporated the intensity adjustment from the operating update framework into the capital update framework. Without reliable estimates of the proportions of the overall annual intensity increases that are due, respectively, to ineffective practice patterns and to the combination of quality-enhancing new technologies and within-DRG complexity, we assume, as in the revised operating update framework, that one-half of the annual increase is due to each of these factors. The capital update framework thus provides an add-on to the input price index rate of increase of one-half of the estimated annual increase in intensity to allow for within-DRG severity increases and the adoption of quality-enhancing technology. For FY 1998, we have developed a Medicare-specific intensity measure based on a 5-year average using FY 1991-1995. In determining case-mix constant intensity, we found that observed case-mix increase was 2.8 percent in FY 1991, 1.8 percent in FY 1992, 0.9 percent in FY 1993, 0.8 percent in FY 1994, 1.7 percent in FY 1995, and 1.6 percent in FY 1996. For FY 1992, FY 1995, and FY 1996, we estimate that real case-mix increase was 1.0 to 1.4 percent each year. The estimate for those years is supported by past studies of case-mix change by the RAND Corporation. The most recent study was ``Has DRG Creep Crept Up? Decomposing the Case Mix Index Change Between 1987 and 1988'' by G. M. Carter, J. P. Newhouse, and D. A. Relles, R-4098-HCFA/ProPAC(1991). The study suggested that real case-mix change was not dependent on total change, but was rather a fairly steady 1.0 to 1.5 percent per year. We use 1.4 percent as the upper bound because the RAND study did not take into account that hospitals may have induced doctors to document medical records more completely in order to improve payment. Following that study, we consider up to 1.4 percent of observed case-mix change as real for FY 1991 through FY 1995. Based on this analysis, we believe that all of the observed case-mix increase for FY 1993 and FY 1994 is real. We calculate case-mix constant intensity as the change in total charges per admission, adjusted for price level changes (the CPI hospital component), and changes in real case-mix. Given estimates of real case-mix increase of 1.0 percent for FY 1992, 0.9 percent for FY 1993, 0.8 percent for FY 1994, 1.0 percent for FY 1995, and 1.0 percent for FY 1996, we estimate that case-mix constant intensity declined by an average 1.4 percent during FYs 1992 through 1996, for a cumulative decrease of 7.0 percent. If we assume that real case-mix increase was 1.4 percent for FY 1992, 0.9 percent for FY 1993, 0.8 percent for FY 1994, 1.4 percent for FY 1995, and 1.4 percent for FY 1996, we estimate that case-mix constant intensity declined by an average 1.6 percent during FYs 1992 through 1996, for a cumulative decrease of 7.5 percent. Since we estimate that intensity has declined during that period, we are recommending a 0.0 percent intensity adjustment for FY 1998. b. Comparison of HCFA and ProPAC Update Recommendations. In Recommendation 4 of the proposed rule, ProPAC recommended a zero update to the standard Federal rate, and we recommended a 1.1 percent update. (See the June 2, 2997 proposed rule for a discussion of the differences between the ProPAC and HCFA update frameworks (62 FR 29950). In this final rule with comment period, as discussed in the previous section, we are implementing a 0.9 update to the capital rate. ProPAC recommended a zero update to the rate for FY 1998 because it believed that a zero update applied to revised base rates would permit hospitals to maintain quality of care while meeting Medicare's responsibility to act as a prudent purchaser. Comment: In response to our statements in the proposed rule about why we recommended an update to the capital rate, ProPAC stated that it had applied the same reasoning for recommending a zero update to the capital rate that it had used in recommending a zero update to the operating rate. ProPAC restated its belief that a zero update was appropriate for both the operating and capital rates. Response: As required by Pub. L. 105-33, we are implementing a 17.78 percent reduction to the unadjusted standard Federal capital payment rate and the unadjusted hospital-specific rate effective October 1, 1997. To the extent this statutory reduction to the base capital rate addresses the issues of the rates being overstated, we believe we should not, at the same time, further address the issue through the update framework. 2. Outlier Payment Adjustment Factor Section 412.312(c) establishes a unified outlier methodology for inpatient operating and inpatient capital-related costs. A single set of thresholds is used to identify outlier cases for both inpatient operating and inpatient capital-related payments. We note that as indicated in section V of the preamble, in conjunction with our policy of a unified outlier methodology for operating and capital, we are adopting the change required by Pub. L. 105-33 concerning outlier payments. The law requires the fixed loss cost outlier threshold to be based on the sum of the base DRG payment, indirect medical education (IME) payment and the disproportionate share hospital (DSH) payment effective with discharges occurring on or after October 1, 1997. Outlier payments are made only on the portion of the Federal rate that is used to calculate the hospital's inpatient capital-related payments (for example, 70 percent for cost reporting periods beginning in FY 1998 for hospitals paid under the fully prospective methodology). Section 412.308(c)(2) provides that the standard Federal rate for inpatient capital-related costs be reduced by an adjustment factor equal to the estimated proportion of outlier payments under the Federal rate to total inpatient capital-related payments under the Federal rate. The outlier thresholds are set so that operating outlier payments are projected to be 5.1 percent of total operating DRG payments. The inpatient capital-related outlier reduction factor reflects the inpatient capital-related outlier [[Page 46047]] payments that would be made if all hospitals were paid according to 100 percent of the Federal rate. For purposes of calculating the outlier thresholds and the outlier reduction factor, we model all hospitals as if they were paid 100 percent of the Federal rate because, as explained above, outlier payments are made only on the portion of the Federal rate that is included in the hospital's inpatient capital-related payments. In the August 30, 1996 final rule, we estimated that outlier payments for capital in FY 1997 would equal 5.19 percent of inpatient capital-related payments based on the Federal rate. Accordingly, we applied an outlier adjustment factor of 0.9481 to the Federal rate. Based on the thresholds as set forth in section II.A.4.d of this Addendum, we estimate that outlier payments for capital will equal 6.18 percent of inpatient capital-related payments based on the Federal rate in FY 1998. We are, therefore, applying an outlier adjustment factor of 0.9382 to the Federal rate. Thus, estimated capital outlier payments for FY 1998 represent a higher percentage of total capital standard payments than for FY 1997. The outlier reduction factors are not built permanently into the rates; that is, they are not applied cumulatively in determining the Federal rate. Therefore, the net change in the outlier adjustment to the Federal rate for FY 1998 is 0.9896 (0.9382/0.9481). Thus, the outlier adjustment decreases the FY 1998 Federal rate by 1.04 percent (1 -0.9896) compared with the FY 1997 outlier adjustment. 3. Budget Neutrality Adjustment Factor for Changes in DRG Classifications and Weights and the Geographic Adjustment Factor Section 412.308(c)(4)(ii) requires that the Federal rate be adjusted so that aggregate payments for the fiscal year based on the Federal rate after any changes resulting from the annual DRG reclassification and recalibration, and changes in the geographic adjustment factor (GAF) are projected to equal aggregate payments that would have been made on the basis of the Federal rate without such changes. We use the actuarial model described in Appendix B to estimate the aggregate payments that would have been made on the basis of the Federal rate without changes in the DRG classifications and weights and in the GAF. We also use the model to estimate aggregate payments that would be made on the basis of the Federal rate as a result of those changes. We then use these figures to compute the adjustment required to maintain budget neutrality for changes in DRG weights and in the GAF. For FY 1997, we calculated a GAF/DRG budget neutrality factor of 0.9987. In the proposed rule for FY 1998, we proposed a GAF/DRG budget neutrality factor of 1.0001. In this final rule with comment period, based on calculations using updated data, we are applying a factor of 0.9989 to meet this requirement. The GAF/DRG budget neutrality factors are built permanently into the rates; that is, they are applied cumulatively in determining the Federal rate. This follows from the requirement that estimated aggregate payments each year be no more or less than they would have been in the absence of the annual DRG reclassification and recalibration and changes in the GAF. The incremental change in the adjustment from FY 1997 to FY 1998 is 0.9989. The cumulative change in the rate due to this adjustment is 1.0001 (the product of the incremental factors for FY 1993, FY 1994, FY 1995, FY 1996, FY 1997, and FY 1998: 0.9980 x 1.0053 x 0.9998 x 0.9994 x 0.9987 x 0.9989=1.0001). This factor accounts for DRG reclassifications and recalibration and for changes in the GAF. It also incorporates the effects on the GAF of FY 1998 geographic reclassification decisions made by the MGCRB compared to FY 1997 decisions. However, it does not account for changes in payments due to changes in the disproportionate share and indirect medical education adjustment factors or in the large urban add-on. 4. Exceptions Payment Adjustment Factor Section 412.308(c)(3) requires that the standard Federal rate for inpatient capital-related costs be reduced by an adjustment factor equal to the estimated proportion of additional payments for exceptions under Sec. 412.348 relative to total payments under the hospital- specific rate and Federal rate. We use an actuarial model described in Appendix B to determine the exceptions payment adjustment factor. For FY 1997, we estimated that exceptions payments would equal 6.42 percent of aggregate payments based on the Federal rate and the hospital-specific rate. Therefore, we applied an exceptions reduction factor of 0.9358 (1--0.0642) in determining the FY 1997 Federal rate. For FY 1998, we estimated in the June 2, 1997 proposed rule that exceptions payments would equal 7.24 percent of aggregate payments based on the Federal rate and the hospital-specific rate. Therefore we proposed to apply an exceptions payment reduction factor of .9276 (1-- 0.0724) to determine the FY 1998 Federal rate. For this final rule with comment period, we estimate that exceptions payments for FY 1998 will equal 3.41 percent of aggregate payments based on the Federal rate and the hospital-specific rate. We are, therefore, applying an exceptions payment reduction factor of 0.9659 (1--0.0341) to the Federal rate for FY 1998. The final exceptions reduction factor for FY 1998 is thus 3.22 percent higher than the factor for FY 1997 and 4.13 percent higher than the factor in the FY 1998 proposed rule. This change is due to a modeling refinement we have implemented since publication of the proposed rule described in Appendix B. The exceptions reduction factors are not built permanently into the rates; that is, the factors are not applied cumulatively in determining the Federal rate. Therefore, the net adjustment for exceptions to the FY 1998 Federal rate over the FY 1997 Federal rate is 0.9659/0.9358, or 1.0322. 5. Standard Capital Federal Rate for FY 1998 For FY 1997, the capital Federal rate was $438.92. With the changes we proposed to the factors used to establish the Federal rate, we proposed that the FY 1998 Federal rate would be $438.43. In this final rule with comment period, we are establishing a FY 1998 Federal rate of $371.51. The Federal rate for FY 1998 was calculated as follows: The FY 1998 update factor is .0090, that is, the update is 0.9 percent. The FY 1998 budget neutrality adjustment factor that is applied to the standard Federal payment rate for changes in the DRG relative weights and in the GAF is 0.9989. The FY 1998 outlier adjustment factor is 0.9382. The FY 1998 exceptions payments adjustment factor is 0.9659. Since the Federal rate has already been adjusted for differences in case mix, wages, cost of living, indirect medical education costs, and payments to hospitals serving a disproportionate share of low-income patients, we have made no additional adjustments in the standard Federal rate for these factors other than the budget neutrality factor for changes in the DRG relative weights and the GAF. We are providing a chart that shows how each of the factors and adjustments for FY 1998 affected the computation of the FY 1998 Federal rate in comparison to the FY 1997 Federal rate. We have added the effect of the 17.78 percent reduction to the rate required by Public Law 105-33 to the chart. The FY 1998 update factor has the effect of increasing the Federal rate by 0.90 percent [[Page 46048]] compared to the rate in FY 1997, while the final geographic and DRG budget neutrality factor has the effect of decreasing the Federal rate by 0.11 percent. The FY 1998 outlier adjustment factor has the effect of decreasing the Federal rate by 1.04 percent compared to FY 1997. The FY 1998 exceptions reduction factor has the effect of increasing the Federal rate by 3.22 percent compared to the exceptions reduction for FY 1997. The combined effect of all the changes is to decrease the Federal rate by 15.36 percent compared to the Federal rate for FY 1997. Comparison of Factors and Adjustments: FY 1997 Federal Rate and FY 1998 Federal Rate ---------------------------------------------------------------------------------------------------------------- FY 97 FY 98 Change Percent change ---------------------------------------------------------------------------------------------------------------- Public Law 105-33 Standard Federal Rate Reduction...................................... NA 0.8222 0.8222 -17.78 Update factor 1................................. 1.0070 1.0090 1.0090 0.90 GAF/DRG Adjustment Factor 1..................... 0.9987 0.9989 0.9989 -0.11 Outlier Adjustment Factor 2..................... 0.9481 0.9382 0.9896 -1.04 Exceptions Adjustment Factor 2.................. 0.9358 0.9659 1.0322 3.22 Federal Rate.................................... $438.92 $371.51 0.8464 -15.36 ---------------------------------------------------------------------------------------------------------------- \1\ The update factor and the GAF/DRG budget neutrality factors are built permanently into the rates. Thus, for example, the incremental change from FY 1997 to FY 1998 resulting from the application of the 0.9989 GAF/DRG budget neutrality factor for FY 1998 is 0.9989. \2\ The outlier reduction factor and the exceptions reduction factor are not built permanently into the rates; that is, these factors are not applied cumulatively in determining the rates. Thus, for example, the net change resulting from the application of the FY 1998 outlier reduction factor is 0.9382/0.9481, or 0.9896. We are also providing a chart that shows how the final FY 1998 Federal rate differs from the proposed FY 1998 Federal rate. Comparison of Factors and Adjustments: Proposed FY 1998 Federal Rate and Final FY 1998 Federal Rate ---------------------------------------------------------------------------------------------------------------- Proposed FY 98 Final FY 98 Change Percent change ---------------------------------------------------------------------------------------------------------------- Public Law 105-33 Standard Federal Rate Reduction...................................... NA 0.8222 0.8222 -17.78 Update factor................................... 1.0110 1.0090 0.9980 -0.20 GAF/DRG Adjustment Factor....................... 1.0001 0.9989 0.9988 -0.12 Outlier Adjustment Factor....................... 0.9449 0.9382 0.9929 -0.71 Exceptions Adjustment Factor.................... 0.9276 0.9659 1.0413 4.13 Federal Rate.................................... $438.43 $371.51 0.8474 -15.26 ---------------------------------------------------------------------------------------------------------------- 6. Special Rate for Puerto Rico Hospitals As explained at the beginning of this section, in the past, hospitals in Puerto Rico were paid based on 75 percent of the Puerto Rico rate and 25 percent of the Federal rate. To parallel the change to the Puerto Rico blended payment amount mandated for operating payments by Public Law 105-33, effective with discharges on or after October 1, 1997, capital payments to hospitals in Puerto Rico will be based on 50 percent of the Puerto Rico capital rate and 50 percent of the Federal rate. The Puerto Rico rate is derived from the costs of Puerto Rico hospitals only, while the Federal rate is derived from the costs of all acute care hospitals participating in the prospective payment system (including Puerto Rico). To adjust hospitals' capital payments for geographic variations in capital costs, we apply a GAF to both portions of the blended rate. The GAF is calculated using the operating PPS wage index, and varies depending on the MSA or rural area in which the hospital is located. Since the GAF is based on the wage index, we are revising the method of accounting for geographical variation in Puerto Rico, to parallel the change that is being proposed on the operating rate, where a Puerto Rico-specific wage index is being calculated (see section III.B. of this preamble). Specifically, we used the new Puerto Rico wage index to determine the GAF for the Puerto Rico part of the capital blended rate, and retained the use of the national wage index to determine the GAF for the national part of the blended rate. As noted above, effective October 1, 1997, hospitals in Puerto Rico will be paid based on 50 percent of the Puerto Rico rate and 50 percent of the Federal rate. This means that, in computing the payment for a particular Puerto Rico hospital, the Puerto Rico portion of the rate will be multiplied by the Puerto Rico-specific GAF for the MSA in which the hospital is located, and the national portion of the rate will be multiplied by the national GAF for the MSA in which the hospital is located (which is computed from national data for all hospitals in the United States and Puerto Rico). We have adjusted the Puerto Rico rate to account for the application of Puerto Rico-specific GAFs. We did this in order to be consistent with the method by which we originally determined the national and Puerto Rico rates. This resulting standard Puerto Rico rate does not translate into a reduction in payments to Puerto Rico hospitals. The Puerto Rico-specific GAFs are higher than the national GAFs because they use the Puerto Rico mean only rather than the national mean. As a result, application of Puerto Rico-specific GAFs means Puerto Rico hospitals receive more money. For FY 1997, before application of the GAF, the special rate for Puerto Rico hospitals was $337.63. With the changes we proposed to the factors used to determine the rate, the proposed FY 1998 special rate for Puerto Rico was $204.46. In this final rule with comment period, the FY 1998 capital rate for Puerto Rico is $177.57. Since publication of the proposed rule, the Puerto Rico rate has declined because of the effect of the 17.78 percent reduction to the rate implemented as a result of Public Law 105-33. B. Determination of Hospital-Specific Rate Update Section 412.328(e) of the regulations provides that the hospital- specific rate for FY 1998 be determined by adjusting the FY 1997 hospital-specific rate by the [[Page 46049]] hospital-specific rate update factor and the exceptions payment adjustment factor. Before application of these factors the FY 1997 unadjusted hospital-specific rate was reduced 17.78 percent to comply with the provisions of Public Law 105-33. The 17.78 percent reduction will be in force from October 1, 1997 through September 30, 2002. A 15.68 percent reduction to the unadjusted hospital specific rate will remain in effect from October 1, 2002 onward. 1. Impact of Public Law 105-33 Public Law 105-33 reduces the hospital specific rate 17.78 percent through September 30, 2002. After that date a 15.68 percent reduction to the rate shall remain in effect. 2. Hospital-Specific Rate Update Factor The hospital-specific rate is updated in accordance with the update factor for the standard Federal rate determined under Sec. 412.308(c)(1). For FY 1998, we have updated the hospital-specific rate by a factor of 1.0090. 3. Exceptions Payment Adjustment Factor For FYs 1992 through 2001, the updated hospital-specific rate is multiplied by an adjustment factor to account for estimated exceptions payments for capital-related costs under Sec. 412.348, which is determined as a proportion of the total amount of payments under the hospital-specific rate and the Federal rate. For FY 1998, we estimated in the proposed rule that exceptions payments would be 7.24 percent of aggregate payments based on the Federal rate and the hospital-specific rate. We therefore proposed that the updated hospital-specific rate be reduced by a factor of 0.9276. In this final rule with comment period, we estimate that exceptions payments will be 3.53 percent of aggregate payments based on the Federal rate and the hospital specific rate. We are applying an exceptions reduction factor of 0.9659 to the hospital- specific rate. The exceptions reduction factors are not built permanently into the rates; that is, the factors are not applied cumulatively in determining the hospital-specific rate. Therefore, the net adjustment to the FY 1998 hospital-specific rate is 0.9659/0.9358, or 1.0322. 4. Net Change to Hospital-Specific Rate We are providing a chart to show the net change to the hospital- specific rate. The chart shows the factors for FY 1997 and FY 1998 and the net adjustment for each factor. It also shows that the cumulative net adjustment from FY 1997 to FY 1998 is 0.8563, which represents a decrease of 13.66 percent to the hospital-specific rate. For each hospital, the FY 1998 hospital-specific rate is determined by multiplying the FY 1997 hospital-specific rate by the cumulative net adjustment of 0.8563. FY 1998 Update and Adjustments to Hospital-Specific Rates ---------------------------------------------------------------------------------------------------------------- FY 97 FY 98 Net adjustment Percent change ---------------------------------------------------------------------------------------------------------------- Public Law 105-33 Hospital-Specific Rate Reduction...................................... (\1\) 0.8222 0.8222 -17.78 Update Factor................................... 1.0070 1.0090 1.0090 0.90 Exceptions Payment Adjustment Factor............ 0.9358 0.9659 1.0322 3.22 Cumulative Adjustments.......................... 0.9424 0.8070 0.8563 -14.37 ---------------------------------------------------------------------------------------------------------------- \1\ Not applicable. Note: The update factor for the hospital-specific rate is applied cumulatively in determining the rates. Thus, the incremental increase in the update factor from FY 1997 to FY 1998 is 1.0090. In contrast, the exceptions payment adjustment factor is not applied cumulatively. Thus, for example, the incremental increase in the exceptions reduction factor from FY 1997 to FY 1998 is 0.9659/ 0.9358, or 1.0322. C. Calculation of Inpatient Capital-Related Prospective Payments for FY 1998 During the capital prospective payment system transition period, a hospital is paid for the inpatient capital-related costs under one of two alternative payment methodologies; the fully prospective payment methodology or the hold-harmless methodology. The payment methodology applicable to a particular hospital is determined when a hospital comes under the prospective payment system for capital-related costs by comparing its hospital-specific rate to the Federal rate applicable to the hospital's first cost reporting period under the prospective payment system. The applicable Federal rate was determined by making adjustments as follows: For outliers by dividing the standard Federal rate by the outlier reduction factor for that fiscal year; and, For the payment adjustment factors applicable to the hospital (that is, the hospital's GAF, the disproportionate share adjustment factor, and the indirect medical education adjustment factor, when appropriate). If the hospital-specific rate is above the applicable Federal rate, the hospital is paid under the hold-harmless methodology. If the hospital-specific rate is below the applicable Federal rate, the hospital is paid under the fully prospective methodology. For purposes of calculating payments for each discharge under both the hold-harmless payment methodology and the fully prospective payment methodology, the standard Federal rate is adjusted as follows: (Standard Federal Rate) x (DRG weight) x (GAF) x (Large Urban Add-on, if applicable) x (COLA adjustment for hospitals located in Alaska and Hawaii) x (1 + Disproportionate Share Adjustment Factor + IME Adjustment Factor, if applicable). The result is termed the adjusted Federal rate. Payments under the hold-harmless methodology are determined under one of two formulas. A hold-harmless hospital is paid the higher of: 100 percent of the adjusted Federal rate for each discharge; or An old capital payment equal to 85 percent (100 percent for sole community hospitals) of the hospital's allowable Medicare inpatient old capital costs per discharge for the cost reporting period plus a new capital payment based on a percentage of the adjusted Federal rate for each discharge. The percentage of the adjusted Federal rate equals the ratio of the hospital's allowable Medicare new capital costs to its total Medicare inpatient capital-related costs in the cost reporting period. Once a hospital receives payment based on 100 percent of the adjusted Federal rate in a cost reporting period beginning on or after October 1, 1994 (or the first cost reporting period after obligated capital that is recognized as old capital under Sec. 412.302(c) is put in use for patient care, if later), the hospital continues to receive capital prospective payment system payments on that basis for the remainder of the transition period. Payment for each discharge under the fully prospective methodology is the sum of: [[Page 46050]] The hospital-specific rate multiplied by the DRG relative weight for the discharge and by the applicable hospital-specific transition blend percentage for the cost reporting period; and The adjusted Federal rate multiplied by the Federal transition blend percentage. The blend percentages for cost reporting periods beginning in FY 1998 are 70 percent of the adjusted Federal rate and 30 percent of the hospital-specific rate. Hospitals may also receive outlier payments for those cases that qualify under the thresholds established for each fiscal year. Section 412.312(c) provides for a single set of thresholds to identify outlier cases for both inpatient operating and inpatient capital-related payments. Outlier payments are made only on that portion of the Federal rate that is used to calculate the hospital's inpatient capital-related payments. For fully prospective hospitals, that portion is 70 percent of the Federal rate for discharges occurring in cost reporting periods beginning during FY 1998. Thus, a fully prospective hospital will receive 70 percent of the capital-related outlier payment calculated for the case for discharges occurring in cost reporting periods beginning in FY 1998. For hold-harmless hospitals paid 85 percent of their reasonable costs for old inpatient capital, the portion of the Federal rate that is included in the hospital's outlier payments is based on the hospital's ratio of Medicare inpatient costs for new capital to total Medicare inpatient capital costs. For hold-harmless hospitals that are paid 100 percent of the Federal rate, 100 percent of the Federal rate is included in the hospital's outlier payments. The outlier thresholds for FY 1998 are published in section II.A.4.c of this Addendum. For FY 1998, a case qualifies as a cost outlier if the cost for the case is greater than the sum of the prospective payment rate for the DRG plus IME and DSH payments plus $11,050. During the capital prospective payment system transition period, a hospital may also receive an additional payment under an exceptions process if its total inpatient capital-related payments are less than a minimum percentage of its allowable Medicare inpatient capital-related costs. The minimum payment level is established by class of hospital under Sec. 412.348. The minimum payment levels for portions of cost reporting periods occurring in FY 1998 are: Sole community hospitals (located in either an urban or rural area), 90 percent; Urban hospitals with at least 100 beds and a disproportionate share patient percentage of at least 20.2 percent; and Urban hospitals with at least 100 beds that qualify for disproportionate share payments under Sec. 412.106(c)(2), 80 percent; and All other hospitals, 70 percent. Under Sec. 412.348(d), the amount of the exceptions payment is determined by comparing the cumulative payments made to the hospital under the capital prospective payment system to the cumulative minimum payment levels applicable to the hospital for each cost reporting period subject to that system. Any amount by which the hospital's cumulative payments exceed its cumulative minimum payment is deducted from the additional payment that would otherwise be payable for a cost reporting period. New hospitals are exempted from the capital prospective payment system for their first 2 years of operation and are paid 85 percent of their reasonable costs during that period. A new hospital's old capital costs are its allowable costs for capital assets that were put in use for patient care on or before the later of December 31, 1990 or the last day of the hospital's base year cost reporting period, and are subject to the rules pertaining to old capital and obligated capital as of the applicable date. Effective with the third year of operation, we will pay the hospital under either the fully prospective methodology, using the appropriate transition blend in that Federal fiscal year, or the hold-harmless methodology. If the hold-harmless methodology is applicable, the hold-harmless payment for assets in use during the base period would extend for 8 years, even if the hold-harmless payments extend beyond the normal transition period. D. Capital Input Price Index 1. Background Like the prospective payment hospital operating input price index, the Capital Input Price Index (CIPI) is a fixed-weight price index. A fixed-weight price index measures how much it would cost at a later date to purchase the same mix of goods and services purchased in the base period. For the prospective payment hospital operating and capital input price indices, the base period is selected and cost category weights are determined using available data on hospitals. Next, appropriate price proxy indices are chosen for each cost category. Then a price proxy index level for each expenditure category is multiplied by the comparable cost category weight. The sum of these products (that is, weights multiplied by price proxy index levels) for all cost categories yields the composite index level of the market basket for a given year. Repeating the step for other years produces a time series of composite market basket index levels. Dividing an index level by a later index level produces a rate of growth in the input price index. Since the percent change is computed for the fixed mix of total capital inputs with a 1992 base, the index is fixed-weight. Like the operating input price index, the CIPI measures the price changes associated with costs during a given year. In order to do so, the CIPI must differ from the operating input price index in one important aspect. The CIPI must reflect the vintage nature of capital, which is the acquisition and use of capital over time. Capital expenses in any given year are determined by the stock of capital in that year (that is, capital that remains on hand from all current and prior capital acquisitions). An index measuring capital price changes needs to reflect this vintage nature of capital. Therefore, the CIPI was developed to capture the vintage nature of capital by using a weighted- average of past capital purchase prices up to and including the current year. Using Medicare cost reports, AHA data, and Securities Data Corporation data, a vintage-weighted price index was developed to measure price increases associated with capital expenses. We periodically update the base year for the operating and capital input prices to reflect the changing composition of inputs for operating and capital expenses. Currently, the CIPI is based to FY 1992 and was last rebased in 1997. The most recent explanation of the CIPI was discussed in the proposed rule for FY 1998 published in the June 2, 1997 Federal Register (62 FR 29953). The following Federal Register documents also describe development and revisions of the methodology involved with the construction of the CIPI: September 1, 1992 (57 FR 40016), May 26, 1993 (58 FR 30448), September 1, 1993 (58 FR 46490), May 27, 1994 (59 FR 27876), September 1, 1994 (59 FR 45517), June 2, 1995 (60 FR 29229), and September 1, 1995 (60 FR 45815), May 31, 1996 (61 FR 27466), and August 30, 1996 (61 FR 46196). 2. Research on Reweighting the CIPI After analyzing various data sources and methodologies for determining capital weights for the HCFA PPS CIPI, we will continue to use the weights published in the August 30, 1996 Federal Register (61 FR 46196). We [[Page 46051]] explained in the June 2, 1997 proposed rule that we had decided not to use the 1992 Department of Commerce Asset and Expenditure data to revise the cost category weights in the CIPI. The three reasons why we are staying with the current HCFA PPS CIPI cost category weights are: (1) HCFA's prefers to continue to use the Medicare Cost Reports for the Medicare subset of hospitals (PPS only); (2) the detail needed for future rebasing of the index will be available from the Medicare Cost Reports; and (3) the CIPI cost shares are similar to those provided by the 1992 Asset and Expenditures Survey. We received no comments on this issue. 3. Forecast of the CIPI for Federal Fiscal Year 1998 DRI forecasts a 1.1 percent increase in the CIPI for FY 1998. This is the outcome of a projected 2.2 percent increase in vintage-weighted depreciation prices (building and fixed equipment, and movable equipment) and a 3.2 percent increase in other capital expense prices in FY 1998, partially offset by a 2.0 percent decline in vintage- weighted interest rates in FY 1998. The weighted average of these three factors produces the 1.1 percent increase for the CIPI as a whole. IV. Changes to Payment Rates for Excluded Hospitals and Hospital Units: Rate-of-Increase Percentages A. Rate-of-Increase Percentages for Excluded Hospitals and Hospital Units The inpatient operating costs of hospitals and hospital units excluded from the prospective payment system are subject to rate-of- increase limits established under the authority of section 1886(b) of the Act, which is implemented in Sec. 413.40 of the regulations. Under these limits, an annual target amount (expressed in terms of the inpatient operating cost per discharge) is set for each hospital, based on the hospital's own historical cost experience trended forward by the applicable rate-of-increase percentages (update factors). The target amount is multiplied by the number of Medicare discharges in a hospital's cost reporting period, yielding the ceiling on aggregate Medicare inpatient operating costs for the cost reporting period. Each hospital's target amount is adjusted annually, at the beginning of its cost reporting period, by an applicable rate-of- increase percentage. Section 1886(b)(3)(B) of the Act provides that for cost reporting periods beginning on or after October 1, 1997 and before October 1, 1998, the rate- of-increase percentage is 0. In order to determine a hospital's target amount for its cost reporting period beginning in FY 1998, the hospital's target amount for its cost reporting period that began in FY 1997 is increased by 0. In addition, as indicated in section VII of the preamble, Public Law 105-33 significantly altered several aspects of payments for excluded hospitals and units, effective for cost reporting periods beginning on or after October 1, 1997. Section 4413 of Public Law 105-33 permits certain excluded hospitals--hospitals that were excluded for the cost reporting period beginning before October 1, 1990 and are within certain specified classes, as well as ``qualified long-term care hospitals''--to elect a rebasing of the hospital's target amount for the 12-month cost reporting period beginning during FY 1998. The rebased target amount for a hospital would reflect operating costs in recent cost reporting periods. Section 4414 establishes a cap on target amounts for certain classes of excluded hospitals, based on target amounts for hospitals in the same class, for cost reporting periods beginning during FY 1998. Section 4415 revises the formulas for determining bonus and relief payments for excluded hospitals and also establishes an additional bonus payment for continuous improvement, for cost reporting periods beginning during FY 1998. Finally, sections 4416 and 4419 establish a new statutory payment methodology for new hospitals, effective October 1, 1997. B. Wage Index Exceptions for Excluded Hospitals and Units In the August 30, 1991 final rule (56 FR 43232), we set forth our policy for target amount adjustments for significant wage increases. Effective with cost reporting periods beginning on or after April 1, 1990, significant increases in wages since the base period are recognized as a basis for an adjustment in the target amount under Sec. 413.40(g). To qualify for an adjustment, the excluded hospital or hospital unit must be located in a labor market area for which the average hourly wage increased significantly more than the national average hourly wage between the hospital's base period and the period subject to the ceiling. We use the hospital wage index for prospective payment hospitals to determine the rate of increase in the average hourly wage in the labor market area. For a hospital to qualify for an adjustment, the wage index value for the cost reporting period subject to the ceiling must be at least 8 percent higher than the wage index based on wage survey data collected for the base year cost reporting period. If survey data are not available for one (or both) of the cost reporting periods used in the comparison, the wage index based on the latest available survey data collected before that cost reporting period will be used. For example, to make the comparison between a 1983 base period and a hospital's cost reporting period beginning in FY 1995, we would use the rate of increase between the wage index based on 1982 wage data and the wage index based on the FY 1994 data, since the FY 1994 data are the most recent data currently available. Further, the comparison is made without regard to geographic reclassifications made by the MGCRB under sections 1886(d) (8) and (10) of the Act. Therefore, the comparison is made based on the wage index value of the labor market area in which the hospital is actually located. We determine the amount of the adjustment for wage increases by considering three factors for the time between the base period and the period for which an adjustment is requested: the rate of increase in the hospital's average hourly wage; the rate of increase in the average hourly wage in the labor market area in which the hospital is located; and, the rate of increase in the national average hourly wage for hospital workers. The adjustment is limited to the amount by which the lower of the hospital's or the labor market area's rate of increase in average hourly wages significantly exceeds the national increase (that is, exceeds the national rate of increase by more than 8 percent). For purposes of computing the adjustment, the relative rate of increase in the average hourly wage for the labor market area is assumed to have been the same over each of the intervening years between the wage surveys. To determine the rate of increase in the national average hourly wage, we use the average hourly earnings (AHE) component of the wages and salaries portion of the market basket. This measure is derived from the 1982-based market basket since the 1987-based market basket uses the employment cost index (ECI) for hospital workers as the price proxy for this component. Unlike the AHE, the ECI for hospital workers can be measured historically only back to 1986. In addition, the ECI does not adjust for skill-mix shifts and, therefore, measures only the change in wage rates per hour. The average hourly earnings for hospital workers show the following increases: 1992 = 4.8 percent 1993 = 3.6 percent 1994 = 2.7 percent 1995 = 3.3 percent [[Page 46052]] 1996 = 3.1 percent 1997 = 2.2 percent 1998 = 3.2 percent We note that this section merely provides updated information with respect to areas that would qualify for the wage index adjustment under Sec. 413.30(g). This information was calculated in accordance with established policy and does not reflect any change in that policy. The geographic areas in which the percentage difference in wage indexes was sufficient to qualify for a wage index adjustment are listed in Table 10 of section V of the addendum to this final rule with comment period. V. Tables This section contains the tables referred to throughout the preamble to this final rule with comment period and in this Addendum. For purposes of this final rule with comment period, and to avoid confusion, we have retained the designations of Tables 1 through 5 that were first used in the September 1, 1983 initial prospective payment final rule (48 FR 39844). Tables 1A, 1C, 1D, 1E, 1F, 3C, 4A, 4B, 4C, 4D, 4E, 4F, 5, 6A, 6B, 6C, 6D, 6E, 6F, 7A, 7B, 8A, 8B, and 10 are presented below. The tables presented below are as follows: Table 1A--National Adjusted Operating Standardized Amounts, Labor/ Nonlabor Table 1C--Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor Table 1D--Capital Standard Federal Payment Rate Table 1E--National Adjusted Operating Standardized Amounts for ``Temporary Relief'' Hospitals, Labor/Nonlabor Table 1F--Adjusted Operating Standardized Amounts for ``Temporary Relief'' Hospitals in Puerto Rico, Labor/Nonlabor Table 3C--Hospital Case Mix Indexes for Discharges Occurring in Federal Fiscal Year 1996 and Hospital Average Hourly Wage for Federal Fiscal Year 1998 Wage Index Table 4A--Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas Table 4B--Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas Table 4C--Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified Table 4D--Average Hourly Wage for Urban Areas Table 4E--Average Hourly Wage for Rural Areas Table 4F--Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) Table 5--List of Diagnosis Related Groups (DRGs), Relative Weighting Factors, Geometric Mean Length of Stay, and Arithmetic Mean Length of Stay Points Used in the Prospective Payment System Table 6A--New Diagnosis Codes Table 6B--New Procedure Codes Table 6C--Invalid Diagnosis Codes Table 6D--Revised Diagnosis Code Titles Table 6E--Additions to the CC Exclusions List Table 6F--Deletions to the CC Exclusions List Table 7A--Medicare Prospective Payment System Selected Percentile Lengths of Stay FY 96 MEDPAR Update 06/97 GROUPER V14.0 Table 7B--Medicare Prospective Payment System Selected Percentile Lengths of Stay FY 96 MEDPAR Update 06/97 GROUPER V15.0 Table 8A--Statewide Average Operating Cost-to-Charge Ratios for Urban and Rural Hospitals (Case Weighted) August 1997 Table 8B--Statewide Average Capital Cost-to-Charge Ratios (Case Weighted) August 1997 Table 10--Percentage Difference in Wage Indexes for Areas that Qualify for a Wage Index Exception for Excluded Hospitals and Units Table 1A.--National Adjusted Operating Standardized Amounts, Labor/Nonlabor ---------------------------------------------------------------------------------------------------------------- Large urban areas Other areas ---------------------------------------------------------------------------------------------------------------- Labor-related Nonlabor-related Labor-related Nonlabor-related ---------------------------------------------------------------------------------------------------------------- 2,776.21................... 1,128.44 2,732.26 1,110.58 ---------------------------------------------------------------------------------------------------------------- Table 1C.--Adjusted Operating Standardized Amounts For Puerto Rico, Labor/Nonlabor ---------------------------------------------------------------------------------------------------------------- Large urban areas Other areas --------------------------------------------------- Labor Nonlabor Labor Nonlabor ---------------------------------------------------------------------------------------------------------------- National.................................................... 2,752.36 1,118.74 2,752.36 1,118.74 Puerto Rico................................................. 1,323.01 532.55 1,302.07 524.11 ---------------------------------------------------------------------------------------------------------------- Table 1D.--Capital Standard Federal Payment Rate ------------------------------------------------------------------------ Rate ------------------------------------------------------------------------ National................................................... 371.51 Puerto Rico................................................ 177.57 ------------------------------------------------------------------------ Table 1E.--National Adjusted Operating Standardized Amounts For ``Temporary Relief'' Hospitals, Labor/Nonlabor ---------------------------------------------------------------------------------------------------------------- Large urban areas Other areas ---------------------------------------------------------------------------------------------------------------- Labor-related Nonlabor-related Labor-related Nonlabor-related ---------------------------------------------------------------------------------------------------------------- 2,790.09................... 1,134.08 2,745.92 1,116.13 ---------------------------------------------------------------------------------------------------------------- [[Page 46053]] Table 1F.--Adjusted Operating Standardized Amounts For ``Temporary Relief'' Hospitals In Puerto Rico, Labor/ Nonlabor ---------------------------------------------------------------------------------------------------------------- Large urban areas Other areas --------------------------------------------------- Labor Nonlabor Labor Nonlabor ---------------------------------------------------------------------------------------------------------------- National.................................................... 2,766.12 1,124.33 2,766.12 1,124.33 Puerto Rico................................................. 1,329.63 535.21 1,308.58 526.73 ---------------------------------------------------------------------------------------------------------------- [[Page 46054]] Table 3C.--Hospital Case Mix Indexes for Discharges Occurring in Federal Fiscal Year 1996; Hospital Average Hourly Wage for Federal Fiscal Year 1998 Wage Index Page 1 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 010001....................... 01.4825 15.78 010095.......... 00.9801 12.06 030004......... 01.0972 13.75 040002......... 01.1973 12.84 040107......... 01.2002 15.29 010004....................... 00.9676 11.63 010097.......... 00.9079 14.47 030006......... 01.5610 18.02 040003......... 01.0165 12.72 040109......... 01.1817 13.56 010005....................... 01.2091 15.74 010098.......... 01.2489 11.65 030007......... 01.3193 16.96 040004......... 01.6332 15.84 040114......... 01.8852 17.60 010006....................... 01.4496 15.81 010099.......... 01.1682 14.38 030008......... 02.3016 19.75 040005......... 01.0097 12.83 040116......... 01.3704 19.05 010007....................... 01.0711 13.52 010100.......... 01.2651 15.26 030009......... 01.3458 16.25 040007......... 01.8429 17.91 040118......... 01.2209 14.54 010008....................... 01.1607 12.11 010101.......... 01.0607 14.05 030010......... 01.4373 17.79 040008......... 01.0327 11.22 040119......... 01.1544 14.58 010009....................... 01.1291 15.17 010102.......... 01.0052 13.60 030011......... 01.5237 18.32 040010......... 01.3176 15.80 040124......... 01.1341 13.82 010010....................... 01.0737 14.78 010103.......... 01.8566 18.70 030012......... 01.2358 16.41 040011......... 00.9916 10.85 040126......... 00.9510 11.98 010011....................... 01.6409 19.62 010104.......... 01.7062 18.20 030013......... 01.2716 19.56 040014......... 01.1905 16.40 040132......... 00.5050 11.69 010012....................... 01.3020 16.65 010108.......... 01.2341 14.48 030014......... 01.4919 18.50 040015......... 01.2941 13.52 050002......... 01.5829 26.90 010015....................... 01.0958 13.70 010109.......... 01.1081 13.36 030016......... 01.2453 17.47 040016......... 01.6692 16.02 050006......... 01.4566 19.54 010016....................... 01.2749 16.88 010110.......... 01.0520 14.12 030017......... 01.5067 18.11 040017......... 01.3301 11.89 050007......... 01.6171 27.21 010018....................... 00.9370 16.77 010112.......... 01.1867 15.28 030018......... 01.8034 19.31 040018......... 01.2275 18.03 050008......... 01.5161 26.68 010019....................... 01.3226 14.52 010113.......... 01.6944 15.80 030019......... 01.2819 19.75 040019......... 01.1380 13.94 050009......... 01.7352 29.57 010021....................... 01.2524 15.75 010114.......... 01.3212 16.45 030022......... 01.4840 17.44 040020......... 01.6069 15.06 050013......... 01.8362 22.18 010022....................... 01.0183 17.25 010115.......... 00.8516 12.02 030023......... 01.3266 18.26 040021......... 01.2523 14.96 050014......... 01.1738 22.16 010023....................... 01.6476 15.43 010117.......... 00.8712 13.59 030024......... 01.7156 20.56 040022......... 01.6750 14.96 050015......... 01.3849 23.94 010024....................... 01.4637 15.95 010118.......... 01.3326 18.41 030025......... 01.1285 14.24 040024......... 01.0635 14.26 050016......... 01.1630 17.90 010025....................... 01.4608 13.24 010119.......... 00.9630 18.53 030027......... 01.0548 15.39 040025......... 00.9145 12.38 050017......... 02.0535 25.36 010027....................... 00.8284 14.12 010120.......... 00.9715 15.39 030030......... 01.7308 18.21 040026......... 01.6072 16.65 050018......... 01.3072 20.37 010029....................... 01.5709 15.54 010121.......... 01.3052 15.80 030033......... 01.2274 15.72 040027......... 01.2943 12.96 050021......... 01.5250 25.59 010031....................... 01.2310 15.57 010123.......... 01.3119 15.81 030034......... 01.0042 15.05 040028......... 01.0928 11.93 050022......... 01.5018 23.58 010032....................... 00.9628 12.86 010124.......... 01.3732 13.53 030035......... 01.2917 18.82 040029......... 01.2903 15.78 050024......... 01.3075 21.10 010033....................... 01.9450 17.81 010125.......... 01.0057 15.83 030036......... 01.1928 18.51 040030......... 00.9400 11.36 050025......... 01.6846 21.84 010034....................... 01.0855 12.64 010126.......... 01.1881 14.11 030037......... 02.0983 19.86 040032......... 00.9578 10.60 050026......... 01.4621 28.03 010035....................... 01.2533 15.94 010127.......... 01.3531 16.36 030038......... 01.6478 18.39 040035......... 00.9687 10.26 050028......... 01.3819 15.43 010036....................... 01.1301 16.08 010128.......... 01.0004 12.39 030040......... 01.1504 16.07 040036......... 01.5195 17.87 050029......... 01.4308 22.42 010038....................... 01.3196 17.78 010129.......... 01.0814 14.62 030041......... 00.9799 13.77 040037......... 01.1132 11.92 050030......... 01.3244 20.23 010039....................... 01.6833 17.26 010130.......... 01.0341 14.47 030043......... 01.2492 17.86 040039......... 01.2296 13.00 050032......... 01.2349 26.01 010040....................... 01.5892 18.14 010131.......... 01.3381 18.57 030044......... 01.0792 16.15 040040......... 00.9709 14.02 050033......... 01.4525 26.08 010043....................... 01.1319 10.75 010134.......... 00.8561 10.10 030046......... 00.9632 18.53 040041......... 01.3631 15.91 050036......... 01.6825 19.57 010044....................... 01.1616 14.54 010137.......... 01.2998 16.93 030047......... 00.9556 20.45 040042......... 01.2352 14.76 050038......... 01.4592 28.87 010045....................... 01.1903 13.53 010138.......... 00.9272 10.96 030049......... 00.9882 14.67 040044......... 01.0303 11.22 050039......... 01.6258 21.59 010046....................... 01.5214 16.79 010139.......... 01.6887 19.60 030054......... 00.8543 12.51 040045......... 01.0246 15.07 050040......... 01.2705 22.01 010047....................... 00.9795 10.30 010143.......... 01.2910 16.04 030055......... 01.2188 16.56 040047......... 01.1375 15.13 050042......... 01.3518 20.78 010049....................... 01.1616 14.77 010144.......... 01.3015 16.55 030059......... 01.3958 18.88 040048......... 01.1836 14.02 050043......... 01.6121 30.35 010050....................... 01.1221 13.88 010145.......... 01.3023 15.68 030060......... 01.1372 16.21 040050......... 01.1593 12.27 050045......... 01.2807 18.28 010051....................... 00.8513 09.93 010146.......... 01.1750 15.81 030061......... 01.6808 17.13 040051......... 01.0998 12.97 050046......... 01.2665 21.20 010052....................... 01.0489 09.88 010148.......... 01.0002 12.52 030062......... 01.2672 15.94 040053......... 01.1245 13.04 050047......... 01.5727 31.60 010053....................... 01.0767 13.31 010149.......... 01.3649 16.73 030064......... 01.7564 18.53 040054......... 01.0611 12.44 050051......... 01.0491 17.04 010054....................... 01.2094 17.02 010150.......... 01.1059 16.28 030065......... 01.7363 19.65 040055......... 01.4707 15.29 050054......... 01.2156 20.60 010055....................... 01.4429 16.99 010152.......... 01.4925 17.56 030067......... 01.0534 15.78 040058......... 01.0324 13.64 050055......... 01.4024 27.81 010056....................... 01.4318 18.78 010155.......... 01.0502 06.99 030068......... 01.0784 15.77 040060......... 00.9853 10.20 050056......... 01.3688 29.73 010058....................... 01.0898 12.93 020001.......... 01.5629 26.31 030069......... 01.3333 20.13 040062......... 01.6840 15.85 050057......... 01.5572 19.64 010059....................... 01.1095 14.92 020002.......... 01.2556 23.88 030071......... 00.9698 ....... 040064......... 01.0541 11.01 050058......... 01.4522 21.47 010061....................... 01.1895 15.20 020004.......... 01.1115 25.46 030072......... 00.8317 ....... 040066......... 01.2232 15.86 050060......... 01.5351 20.46 010062....................... 01.0358 14.36 020005.......... 00.8208 25.53 030073......... 01.0031 ....... 040067......... 01.0943 12.18 050061......... 01.4652 21.87 010064....................... 01.8034 18.52 020006.......... 01.2585 25.07 030074......... 00.9004 ....... 040069......... 01.1556 14.87 050063......... 01.4029 21.02 010065....................... 01.3457 15.39 020007.......... 01.0349 22.76 030075......... 00.8568 ....... 040070......... 00.9323 13.68 050065......... 01.6381 22.82 010066....................... 00.9479 10.41 020008.......... 01.1380 28.97 030076......... 01.0931 ....... 040071......... 01.6768 15.73 050066......... 01.2678 20.99 010068....................... 01.3086 16.70 020009.......... 00.9789 21.88 030077......... 00.8398 ....... 040072......... 01.1038 13.94 050067......... 01.3721 21.53 010069....................... 01.1938 13.10 020010.......... 01.0878 26.44 030078......... 01.1397 ....... 040074......... 01.3224 14.39 050068......... 01.0669 18.92 010072....................... 01.2125 13.45 020011.......... 00.9374 22.61 030079......... 00.8800 ....... 040075......... 01.1151 11.73 050069......... 01.6487 24.14 010073....................... 01.0216 10.41 020012.......... 01.2409 24.23 030080......... 01.5987 21.05 040076......... 01.0521 16.33 050070......... 01.2795 33.06 010078....................... 01.2745 16.51 020013.......... 01.0509 24.21 030083......... 01.3190 21.06 040077......... 00.9301 11.30 050071......... 01.3314 32.76 010079....................... 01.2576 15.43 020014.......... 01.1842 22.13 030084......... 01.0306 ....... 040078......... 01.5579 17.77 050072......... 01.3261 32.63 010080....................... 01.0093 11.89 020017.......... 01.6662 24.50 030085......... 01.5587 23.63 040080......... 01.1206 14.65 050073......... 01.3306 32.62 010081....................... 01.8574 14.84 020018.......... 00.7773 ....... 030086......... 01.3371 18.01 040081......... 00.9499 10.75 050074......... 01.3610 38.56 010083....................... 01.0102 15.43 020019.......... 00.7868 ....... 030087......... 01.6346 18.93 040082......... 01.1559 14.31 050075......... 01.3921 32.75 010084....................... 01.4836 17.66 020020.......... 00.7621 ....... 030088......... 01.4134 19.07 040084......... 01.1216 14.18 050076......... 01.8221 32.11 010085....................... 01.2703 17.11 020021.......... 00.9121 ....... 030089......... 01.5854 19.68 040085......... 01.1894 14.81 050077......... 01.5831 22.86 010086....................... 01.0808 13.70 020024.......... 01.0845 23.72 030092......... 01.6117 20.36 040088......... 01.4011 14.36 050078......... 01.2955 24.76 010087....................... 01.8483 18.51 020025.......... 00.9808 24.32 030093......... 01.4070 17.81 040090......... 00.9226 13.54 050079......... 01.5781 29.34 010089....................... 01.2615 15.60 020026.......... 01.3051 ....... 030094......... 01.3544 18.46 040091......... 01.2623 19.82 050080......... 01.3947 20.59 010090....................... 01.5853 17.57 020027.......... 01.0980 ....... 030095......... 01.1437 18.24 040093......... 01.0361 10.11 050081......... 01.7055 22.17 010091....................... 01.0099 14.57 030001.......... 01.3356 20.07 030098......... 00.9923 ....... 040100......... 01.3209 13.29 050082......... 01.5529 21.60 010092....................... 01.4076 16.61 030002.......... 01.8070 21.04 030099......... 00.9435 ....... 040105......... 01.0256 13.29 050084......... 01.6782 23.55 010094....................... 01.2351 15.11 030003.......... 01.9769 20.37 040001......... 01.1189 12.95 040106......... 01.2151 14.08 050088......... 01.0377 23.02 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46055]] Page 2 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 050089....................... 01.4267 20.50 050188.......... 01.3813 26.63 050298......... 01.2567 21.05 050421......... 01.3719 24.84 050546......... 00.7784 22.14 050090....................... 01.2947 23.06 050189.......... 01.0628 21.87 050299......... 01.3551 22.62 050423......... 01.0305 19.52 050547......... 00.8743 21.94 050091....................... 01.1912 22.02 050191.......... 01.4969 20.99 050300......... 01.3966 22.60 050424......... 01.8245 22.86 050549......... 01.7309 25.79 050092....................... 00.9918 15.98 050192.......... 01.1894 18.17 050301......... 01.3386 22.43 050425......... 01.3271 33.00 050550......... 01.5817 23.60 050093....................... 01.5676 23.44 050193.......... 01.3103 23.13 050302......... 01.3707 27.57 050426......... 01.3357 22.53 050551......... 01.2992 24.63 050095....................... 00.7794 29.00 050194.......... 01.2778 28.00 050305......... 01.5747 30.80 050427......... 00.8258 17.79 050552......... 01.2447 21.99 050096....................... 01.3087 19.75 050195.......... 01.6036 32.79 050307......... 01.3606 21.59 050430......... 00.8488 17.06 050557......... 01.5742 21.58 050097....................... 01.4627 18.53 050196.......... 01.4084 17.33 050308......... 01.5170 30.55 050431......... 01.0903 19.94 050559......... 01.4058 24.92 050099....................... 01.4724 23.23 050197.......... 01.8388 28.44 050309......... 01.3687 24.92 050432......... 01.6738 24.04 050560......... 01.4220 ...... 050100....................... 01.7325 28.66 050204.......... 01.5056 24.18 050310......... 01.2220 19.66 050433......... 01.1020 17.37 050561......... 01.1895 32.17 050101....................... 01.4330 28.42 050205.......... 01.3804 17.74 050312......... 01.9988 24.11 050434......... 01.2082 20.09 050564......... 01.1459 17.84 050102....................... 01.4247 18.79 050207.......... 01.2943 19.79 050313......... 01.2235 21.97 050435......... 01.2970 23.02 050565......... 01.1268 21.68 050103....................... 01.6353 26.99 050208.......... 00.9009 28.76 050315......... 01.2143 19.97 050436......... 00.9665 14.81 050566......... 00.9128 23.47 050104....................... 01.5264 22.61 050211.......... 01.3133 30.44 050317......... 01.3259 18.92 050438......... 01.7470 25.46 050567......... 01.6154 24.19 050107....................... 01.4795 20.75 050213.......... 01.5197 21.12 050320......... 01.3153 27.83 050440......... 01.3246 21.46 050568......... 01.3628 19.64 050108....................... 01.7215 21.54 050214.......... 01.4983 20.90 050324......... 01.9108 25.52 050441......... 02.0088 28.23 050569......... 01.3434 23.05 050109....................... 02.4142 23.68 050215.......... 01.5327 28.12 050325......... 01.2376 21.42 050443......... 00.9266 16.07 050570......... 01.7746 23.41 050110....................... 01.3004 19.33 050217.......... 01.3523 20.45 050327......... 01.5961 22.32 050444......... 01.3956 23.98 050571......... 01.4447 22.36 050111....................... 01.3067 19.21 050219.......... 01.1281 20.76 050328......... 01.5403 30.01 050446......... 00.9652 21.02 050573......... 01.6566 23.85 050112....................... 01.5376 24.56 050222.......... 01.5805 30.02 050329......... 01.3549 22.38 050447......... 01.1512 19.37 050575......... 01.1815 ...... 050113....................... 01.3358 28.10 050224.......... 01.6094 22.29 050331......... 01.4005 26.07 050448......... 01.2546 20.75 050577......... 01.4076 19.70 050114....................... 01.4946 20.53 050225.......... 01.4968 20.67 050333......... 01.1112 19.36 050449......... 01.3307 20.38 050578......... 01.2150 24.65 050115....................... 01.5823 20.21 050226.......... 01.3707 23.58 050334......... 01.7852 31.52 050454......... 01.8478 27.56 050579......... 01.5024 27.75 050116....................... 01.4891 23.17 050228.......... 01.3742 27.09 050335......... 01.4100 21.78 050455......... 01.8811 21.07 050580......... 01.3773 26.95 050117....................... 01.3288 20.76 050230.......... 01.2962 25.94 050336......... 01.4158 20.42 050456......... 01.1970 20.18 050581......... 01.3786 24.80 050118....................... 01.2326 23.37 050231.......... 01.6983 24.69 050337......... 01.1495 ....... 050457......... 01.9759 28.16 050583......... 01.6338 23.49 050121....................... 01.3924 19.17 050232.......... 01.7470 25.52 050342......... 01.3596 18.03 050459......... 01.2153 28.95 050584......... 01.3161 19.70 050122....................... 01.7008 25.77 050233.......... 01.2032 27.97 050343......... 01.0652 16.57 050464......... 01.8583 23.28 050585......... 01.3144 25.79 050124....................... 01.2435 19.10 050234.......... 01.3174 22.79 050348......... 01.6833 23.57 050468......... 01.4947 16.95 050586......... 01.3705 21.47 050125....................... 01.3780 27.26 050235.......... 01.6162 27.60 050349......... 00.9539 14.75 050469......... 01.1172 18.34 050588......... 01.3156 27.41 050126....................... 01.4894 23.86 050236.......... 01.4925 23.47 050350......... 01.3637 23.74 050470......... 01.1185 18.14 050589......... 01.3256 24.78 050127....................... 01.3466 23.71 050238.......... 01.5330 22.98 050351......... 01.4729 25.97 050471......... 01.8600 22.75 050590......... 01.4116 23.26 050128....................... 01.6460 23.71 050239.......... 01.5401 23.40 050352......... 01.3231 23.99 050476......... 01.3719 21.89 050591......... 01.3412 24.97 050129....................... 01.6057 20.66 050240.......... 01.4210 25.28 050353......... 01.6090 24.23 050477......... 01.5088 26.49 050592......... 01.3612 10.96 050131....................... 01.2856 30.45 050241.......... 01.1957 25.59 050355......... 00.9765 14.97 050478......... 00.9877 20.58 050593......... 01.2930 29.77 050132....................... 01.3951 24.69 050242.......... 01.4391 28.77 050357......... 01.6573 22.99 050481......... 01.4382 25.47 050594......... 01.7808 24.64 050133....................... 01.3417 21.73 050243.......... 01.5626 20.95 050359......... 01.3024 19.88 050482......... 00.9894 17.87 050597......... 01.2691 22.40 050135....................... 01.4325 26.20 050245.......... 01.4680 22.03 050360......... 01.4636 31.81 050483......... 01.2210 22.32 050598......... 01.3740 28.26 050136....................... 01.3721 22.84 050248.......... 01.2419 24.55 050366......... 01.4377 20.59 050485......... 01.6259 22.39 050599......... 01.6899 23.22 050137....................... 01.4279 33.54 050251.......... 01.0788 18.41 050367......... 01.2687 27.02 050486......... 01.4102 24.19 050601......... 01.5778 29.22 050138....................... 01.8973 33.14 050253.......... 00.4249 18.80 050369......... 01.3261 23.77 050488......... 01.3907 29.71 050603......... 01.4323 20.95 050139....................... 01.3177 32.31 050254.......... 01.1834 20.57 050373......... 01.4652 23.73 050491......... 01.2715 24.39 050604......... 01.5612 32.65 050140....................... 01.3995 31.70 050256.......... 01.7909 19.46 050376......... 01.5358 29.05 050492......... 01.3788 21.96 050607......... 01.1803 21.26 050144....................... 01.6110 25.92 050257.......... 01.1487 21.76 050377......... 01.0097 16.14 050494......... 01.3412 24.67 050608......... 01.3296 18.75 050145....................... 01.3651 30.22 050260.......... 00.9841 19.43 050378......... 01.1780 21.42 050496......... 01.7003 32.52 050609......... 01.4420 33.78 050146....................... 01.3676 ....... 050261.......... 01.2252 18.54 050379......... 01.2054 16.93 050497......... 00.7910 ....... 050613......... 01.1557 19.90 050147....................... 00.7180 22.54 050262.......... 01.9975 26.95 050380......... 01.6598 29.85 050498......... 01.2875 22.93 050615......... 01.6623 25.67 050148....................... 01.0774 19.07 050264.......... 01.4160 28.04 050382......... 01.4271 22.15 050502......... 01.6469 21.94 050616......... 01.3571 21.21 050149....................... 01.5033 22.14 050267.......... 01.6376 27.72 050385......... 01.3306 23.94 050503......... 01.3565 23.35 050618......... 01.1709 20.05 050150....................... 01.2365 22.69 050270.......... 01.3329 22.02 050388......... 00.9186 18.08 050506......... 01.3762 24.67 050623......... 01.1288 23.78 050152....................... 01.4223 25.51 050272.......... 01.3322 20.79 050390......... 01.2318 22.09 050510......... 01.3492 32.12 050624......... 01.3769 22.51 050153....................... 01.6645 27.98 050274.......... 00.9860 19.47 050391......... 01.3459 23.34 050512......... 01.5448 33.56 050625......... 01.6065 24.95 050155....................... 01.1105 25.69 050276.......... 01.1316 26.93 050392......... 00.9991 18.23 050515......... 01.3429 31.82 050630......... 01.4308 21.07 050158....................... 01.3725 25.37 050277.......... 01.5097 19.57 050393......... 01.4471 23.72 050516......... 01.5785 24.92 050633......... 01.2932 21.92 050159....................... 01.3833 21.88 050278.......... 01.6190 22.89 050394......... 01.6194 20.12 050517......... 01.3047 20.14 050635......... 01.3192 32.09 050167....................... 01.2762 22.00 050279.......... 01.2257 21.00 050396......... 01.6165 22.02 050522......... 01.3442 31.46 050636......... 01.4725 22.11 050168....................... 01.5431 23.71 050280.......... 01.6873 24.62 050397......... 01.0470 18.22 050523......... 01.3228 28.96 050638......... 01.0334 19.35 050169....................... 01.5183 22.75 050281.......... 01.4700 15.36 050401......... 01.1317 19.06 050526......... 01.3231 24.45 050641......... 01.1948 18.27 050170....................... 01.5727 21.33 050282.......... 01.3631 23.18 050404......... 01.1069 16.60 050528......... 01.3531 21.06 050643......... 00.7614 ...... 050172....................... 01.2438 18.44 050283.......... 01.1136 26.91 050406......... 01.0309 15.92 050531......... 01.1935 20.24 050644......... 00.8951 22.79 050173....................... 01.3490 20.24 050286.......... 00.9444 17.82 050407......... 01.3244 28.37 050534......... 01.4117 24.32 050660......... 01.3514 ...... 050174....................... 01.6348 29.60 050289.......... 01.8946 26.67 050410......... 01.0841 16.71 050535......... 01.4595 22.87 050661......... 00.8437 20.15 050175....................... 01.3591 27.08 050290.......... 01.6535 20.42 050411......... 01.3692 31.16 050537......... 01.2746 21.53 050662......... 00.8759 22.31 050177....................... 01.2483 20.35 050291.......... 01.2360 25.51 050414......... 01.3039 24.60 050539......... 01.2817 22.25 050663......... 01.1244 25.63 050179....................... 01.3109 19.55 050292.......... 01.0631 21.76 050417......... 01.3222 20.22 050541......... 01.5423 32.88 050666......... 00.8852 20.95 050180....................... 01.6207 31.19 050293.......... 01.1601 20.14 050418......... 01.3206 22.71 050542......... 01.2228 14.92 050667......... 00.9877 25.58 050183....................... 01.1383 20.36 050295.......... 01.4631 21.39 050419......... 01.3474 20.46 050543......... 00.9027 21.76 050668......... 01.1152 28.90 050186....................... 01.3308 23.83 050296.......... 01.2093 22.43 050420......... 01.5283 23.03 050545......... 00.7751 21.20 050670......... 00.8585 ...... ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46056]] Page 3 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 050674....................... 01.2985 30.04 060047.......... 01.1034 11.84 080004......... 01.3471 18.69 100071......... 01.3332 16.21 100167......... 01.4606 19.21 050675....................... 01.8407 17.60 060049.......... 01.4796 17.34 080005......... 01.3302 18.53 100072......... 01.3115 16.55 100168......... 01.3946 20.23 050676....................... 00.9699 14.37 060050.......... 01.2714 14.36 080006......... 01.3735 19.73 100073......... 01.7705 21.99 100169......... 01.8544 16.46 050677....................... 01.4370 34.53 060052.......... 01.0914 13.04 080007......... 01.4046 17.29 100075......... 01.5930 18.14 100170......... 01.4624 16.86 050678....................... 01.1143 24.44 060053.......... 01.0018 14.81 090001......... 01.5345 21.36 100076......... 01.3531 16.80 100172......... 01.3777 13.93 050680....................... 01.2283 26.19 060054.......... 01.3927 17.69 090002......... 01.2858 19.74 100077......... 01.4074 16.10 100173......... 01.6794 16.87 050682....................... 00.9226 15.55 060056.......... 00.9237 14.05 090003......... 01.3454 20.56 100078......... 01.1916 16.86 100174......... 01.5820 20.80 050684....................... 01.2016 21.85 060057.......... 01.0693 21.47 090004......... 01.8143 23.95 100079......... 01.6005 20.49 100175......... 01.2618 16.65 050685....................... 01.2131 28.69 060058.......... 00.9407 13.87 090005......... 01.3518 17.58 100080......... 01.6309 23.98 100176......... 02.1175 22.94 050686....................... 01.3154 32.30 060060.......... 00.8480 12.53 090006......... 01.3509 19.77 100081......... 01.0598 17.93 100177......... 01.3710 18.76 050688....................... 01.2787 27.87 060062.......... 00.9361 14.11 090007......... 01.2828 20.38 100082......... 01.4572 17.52 100179......... 01.6384 19.38 050689....................... 01.3938 29.96 060063.......... 00.9516 11.82 090008......... 01.5419 23.59 100083......... 01.3327 17.98 100180......... 01.3734 19.01 050690....................... 01.5106 32.26 060064.......... 01.4668 20.71 090010......... 01.1704 22.39 100084......... 01.4579 18.10 100181......... 01.2699 19.10 050693....................... 01.6216 28.58 060065.......... 01.3170 21.03 090011......... 01.9805 25.13 100085......... 01.4188 18.83 100183......... 01.3911 19.62 050694....................... 01.5184 22.78 060066.......... 00.9696 12.79 090015......... 01.1274 ....... 100086......... 01.3132 22.05 100187......... 01.4032 18.31 050695....................... 01.0993 25.42 060068.......... 01.1323 13.46 100001......... 01.5737 18.08 100087......... 01.8737 21.91 100189......... 01.4251 20.96 050696....................... 02.1091 28.17 060070.......... 01.0209 16.03 100002......... 01.4879 19.10 100088......... 01.7306 17.43 100191......... 01.3109 18.63 050697....................... 01.2473 18.05 060071.......... 01.2383 14.39 100004......... 01.0696 13.13 100090......... 01.4094 16.46 100199......... 01.4361 18.30 050698....................... 00.8012 ....... 060073.......... 00.9705 15.25 100006......... 01.6454 19.01 100092......... 01.4490 16.27 100200......... 01.3447 22.72 050699....................... 00.6001 23.01 060075.......... 01.3327 21.20 100007......... 01.8737 19.63 100093......... 01.5386 15.36 100203......... 01.3411 19.70 050700....................... 01.4904 32.32 060076.......... 01.4838 16.86 100008......... 01.7737 20.00 100098......... 01.1592 18.36 100204......... 01.6730 21.27 050701....................... 01.3580 29.00 060085.......... 00.9510 10.30 100009......... 01.5015 19.22 100099......... 01.2974 13.12 100206......... 01.4404 19.98 050702....................... 00.9243 19.02 060087.......... 01.7036 21.04 100010......... 01.5351 22.50 100102......... 01.0900 17.62 100207......... 01.0774 20.37 050704....................... 01.0845 20.41 060088.......... 01.0231 13.86 100012......... 01.6899 16.77 100103......... 01.0706 15.41 100208......... 01.5784 16.92 050707....................... 01.0506 25.90 060090.......... 00.8731 14.19 100014......... 01.4574 18.79 100105......... 01.4631 18.87 100209......... 01.6095 18.40 050708....................... 00.9919 27.17 060096.......... 01.0859 21.65 100015......... 01.3414 18.06 100106......... 01.1228 16.92 100210......... 01.6357 19.34 050709....................... 01.3400 20.44 060100.......... 01.4754 21.75 100017......... 01.5625 16.86 100107......... 01.4044 18.26 100211......... 01.3504 18.47 050710....................... 01.3425 ....... 060103.......... 01.3627 22.66 100018......... 01.3521 20.31 100108......... 01.0646 13.74 100212......... 01.6492 18.75 050711....................... 02.0900 ....... 060104.......... 01.2956 21.84 100019......... 01.5370 18.40 100109......... 01.3642 18.44 100213......... 01.5697 18.46 050712....................... 01.5251 ....... 060107.......... 01.0652 ....... 100020......... 01.3432 20.82 100110......... 01.4230 17.14 100217......... 01.2974 ...... 050713....................... 00.8063 ....... 070001.......... 01.7289 26.42 100022......... 01.8823 23.14 100112......... 01.0152 12.61 100220......... 01.9425 18.82 050714....................... 01.3579 ....... 070002.......... 01.7836 26.03 100023......... 01.3698 16.89 100113......... 02.1189 19.34 100221......... 01.6934 19.65 050715....................... 02.1945 ....... 070003.......... 01.1170 25.30 100024......... 01.4033 19.26 100114......... 01.4437 19.70 100222......... 01.3988 18.63 060001....................... 01.6077 20.29 070004.......... 01.2533 23.33 100025......... 01.8800 16.92 100117......... 01.3112 18.77 100223......... 01.4942 17.42 060003....................... 01.2643 18.34 070005.......... 01.4033 25.79 100026......... 01.7115 16.88 100118......... 01.2401 17.18 100224......... 01.4283 21.35 060004....................... 01.3542 20.06 070006.......... 01.3414 28.36 100027......... 00.9127 14.31 100121......... 01.3095 15.75 100225......... 01.4063 20.63 060006....................... 01.1533 16.89 070007.......... 01.4048 23.69 100028......... 01.2619 17.30 100122......... 01.3639 16.54 100226......... 01.4196 17.73 060007....................... 01.2498 14.98 070008.......... 01.2617 23.02 100029......... 01.3384 19.04 100124......... 01.3668 18.33 100228......... 01.3737 20.28 060008....................... 01.0677 14.75 070009.......... 01.3499 23.68 100030......... 01.4021 18.54 100125......... 01.2986 16.50 100229......... 01.3312 16.87 060009....................... 01.4393 19.81 070010.......... 01.6244 23.63 100032......... 01.9493 18.08 100126......... 01.4869 19.41 100230......... 01.4397 19.70 060010....................... 01.5808 21.74 070011.......... 01.3465 25.98 100034......... 01.7164 18.88 100127......... 01.6995 18.39 100231......... 01.6894 16.90 060011....................... 01.2815 20.17 070012.......... 01.2220 23.53 100035......... 01.6455 17.26 100128......... 02.1390 21.19 100232......... 01.2868 18.29 060012....................... 01.4711 17.66 070013.......... 01.3776 26.05 100038......... 01.5655 21.34 100129......... 01.2599 17.91 100234......... 01.5399 19.22 060013....................... 01.3100 19.42 070015.......... 01.4402 24.61 100039......... 01.5702 21.69 100130......... 01.2298 19.48 100235......... 01.4441 18.19 060014....................... 01.7947 22.41 070016.......... 01.3413 24.32 100040......... 01.6728 17.79 100131......... 01.3976 19.68 100236......... 01.4010 18.30 060015....................... 01.5818 20.04 070017.......... 01.3508 24.82 100043......... 01.4510 15.12 100132......... 01.3755 15.46 100237......... 02.1834 21.32 060016....................... 01.1928 13.66 070018.......... 01.4211 27.48 100044......... 01.4336 19.86 100134......... 01.0399 14.63 100238......... 01.5873 17.06 060018....................... 01.2683 16.89 070019.......... 01.1945 25.50 100045......... 01.4240 16.32 100135......... 01.6183 16.63 100239......... 01.4590 19.01 060020....................... 01.6399 16.15 070020.......... 01.3551 25.82 100046......... 01.4939 18.40 100137......... 01.3818 21.08 100240......... 00.9266 19.10 060022....................... 01.6763 18.46 070021.......... 01.2943 25.42 100047......... 01.8198 18.47 100138......... 00.9577 12.12 100241......... 00.9718 13.68 060023....................... 01.6681 18.98 070022.......... 01.8465 24.06 100048......... 00.9769 12.80 100139......... 01.0680 14.97 100242......... 01.4999 16.47 060024....................... 01.7950 23.68 070024.......... 01.3757 24.79 100049......... 01.3204 18.49 100140......... 01.1672 17.64 100243......... 01.4291 17.93 060027....................... 01.6711 20.38 070025.......... 01.8612 25.92 100050......... 01.2284 15.21 100142......... 01.3319 18.12 100244......... 01.4738 18.36 060028....................... 01.5301 20.69 070026.......... 01.1913 25.91 100051......... 01.1799 17.96 100144......... 01.2106 15.29 100246......... 01.4064 21.86 060029....................... 00.8982 11.90 070027.......... 01.2398 25.65 100052......... 01.3791 15.15 100145......... 01.3341 19.01 100248......... 01.7042 17.76 060030....................... 01.2955 18.79 070028.......... 01.5045 24.91 100053......... 01.3588 17.17 100146......... 01.0803 16.01 100249......... 01.3760 19.41 060031....................... 01.6946 18.97 070029.......... 01.4122 22.06 100054......... 01.3015 17.75 100147......... 01.0947 13.18 100252......... 01.2387 19.72 060032....................... 01.5169 17.36 070030.......... 01.3122 26.51 100055......... 01.4205 17.02 100150......... 01.4309 19.30 100253......... 01.4817 19.73 060033....................... 01.0987 12.53 070031.......... 01.2814 22.20 100056......... 01.5137 18.89 100151......... 01.7824 19.37 100254......... 01.6114 17.99 060034....................... 01.4683 22.34 070033.......... 01.3695 26.22 100057......... 01.3921 16.01 100154......... 01.6732 19.96 100255......... 01.2325 19.80 060036....................... 01.0990 14.70 070034.......... 01.3677 27.52 100060......... 01.8118 15.28 100156......... 01.1559 19.34 100256......... 01.9087 18.78 060037....................... 01.0476 13.16 070035.......... 01.4409 23.11 100061......... 01.4753 20.71 100157......... 01.6173 20.46 100258......... 01.6458 21.27 060038....................... 01.0363 12.96 070036.......... 01.6080 27.46 100062......... 01.7555 17.75 100159......... 00.9163 12.79 100259......... 01.4904 17.31 060041....................... 00.9054 14.99 070038.......... 00.6569 ....... 100063......... 01.3311 16.56 100160......... 01.2200 18.48 100260......... 01.4650 20.13 060042....................... 01.1304 16.83 070039.......... 00.9101 ....... 100067......... 01.4572 16.77 100161......... 01.7317 20.07 100262......... 01.4430 18.60 060043....................... 00.9371 13.31 080001.......... 01.6742 24.79 100068......... 01.3780 16.37 100162......... 01.4422 17.78 100263......... 01.4125 17.42 060044....................... 01.2746 16.98 080002.......... 01.2519 17.15 100069......... 01.3870 17.95 100165......... 01.1791 17.55 100264......... 01.3958 17.27 060046....................... 01.0985 16.64 080003.......... 01.3456 20.79 100070......... 01.4506 18.13 100166......... 01.5356 20.44 100265......... 01.3923 14.58 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46057]] Page 4 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 100266....................... 01.3567 16.53 110066.......... 01.5392 18.78 110163......... 01.4700 18.54 130010......... 00.9235 15.97 140043......... 01.2331 17.04 100267....................... 01.3515 15.67 110069.......... 01.2619 19.05 110164......... 01.4737 19.49 130011......... 01.3075 17.11 140045......... 01.0692 13.11 100268....................... 01.2095 23.23 110070.......... 01.0212 12.19 110165......... 01.3694 18.35 130012......... 01.0283 20.53 140046......... 01.3163 14.79 100269....................... 01.4373 19.39 110071.......... 01.1784 10.43 110166......... 01.5345 17.45 130013......... 01.2638 17.73 140047......... 01.1477 14.21 100270....................... 00.8362 14.31 110072.......... 01.0009 12.37 110168......... 01.7282 21.92 130014......... 01.3868 16.50 140048......... 01.4278 22.08 100271....................... 01.7347 20.00 110073.......... 01.2226 13.04 110169......... 01.1751 21.80 130015......... 00.8545 13.50 140049......... 01.5605 20.48 100275....................... 01.4042 21.30 110074.......... 01.4618 18.47 110171......... 01.4770 23.10 130016......... 00.9422 17.37 140051......... 01.5469 19.42 100276....................... 01.2982 22.26 110075.......... 01.3606 15.50 110172......... 01.4150 19.98 130017......... 01.1854 12.16 140052......... 01.3706 18.11 100277....................... 01.0751 13.03 110076.......... 01.4355 19.08 110174......... 00.9636 13.19 130018......... 01.7030 17.05 140053......... 01.9782 18.04 100279....................... 01.3599 18.73 110078.......... 01.7043 20.66 110176......... 01.4585 20.47 130019......... 01.1185 14.30 140054......... 01.3506 24.77 100280....................... 01.3734 16.76 110079.......... 01.4037 19.53 110177......... 01.5652 26.92 130021......... 01.0006 11.89 140055......... 01.0313 12.61 100281....................... 01.2594 20.52 110080.......... 01.2684 18.15 110178......... 01.4061 17.41 130022......... 01.2169 16.88 140058......... 01.2470 15.74 100282....................... 01.1224 14.86 110082.......... 02.0407 20.53 110179......... 01.2257 21.81 130024......... 01.1092 16.52 140059......... 01.1860 13.96 110001....................... 01.3100 17.26 110083.......... 01.7837 20.63 110181......... 00.9756 12.32 130025......... 01.0874 14.90 140061......... 01.0964 14.14 110002....................... 01.3087 15.75 110086.......... 01.2402 16.50 110183......... 01.4248 19.97 130026......... 01.1228 18.80 140062......... 01.2675 25.30 110003....................... 01.3377 12.66 110087.......... 01.3393 19.53 110184......... 01.2670 18.82 130027......... 00.9792 17.34 140063......... 01.4672 24.56 110004....................... 01.3711 14.62 110088.......... 00.9425 12.52 110185......... 01.1241 12.44 130028......... 01.2707 18.86 140064......... 01.3583 17.02 110005....................... 01.1453 19.77 110089.......... 01.2363 16.07 110186......... 01.3818 16.69 130029......... 01.0342 15.77 140065......... 01.5866 23.89 110006....................... 01.3772 17.90 110091.......... 01.3388 20.17 110187......... 01.3395 18.27 130030......... 01.0073 17.62 140066......... 01.3048 14.92 110007....................... 01.5469 15.29 110092.......... 01.1788 12.84 110188......... 01.4320 18.16 130031......... 01.0779 12.21 140067......... 01.7828 18.84 110008....................... 01.3463 16.25 110093.......... 00.9510 12.42 110189......... 01.1175 18.39 130034......... 00.9862 17.80 140068......... 01.2205 18.58 110009....................... 00.9912 13.65 110094.......... 01.0040 11.90 110190......... 01.1014 14.95 130035......... 01.0837 19.75 140069......... 01.0061 14.69 110010....................... 02.1198 21.49 110095.......... 01.3281 14.45 110191......... 01.3767 18.34 130036......... 01.3041 13.11 140070......... 01.2445 16.86 110011....................... 01.2429 16.73 110096.......... 01.1410 13.95 110192......... 01.4551 18.88 130037......... 01.1847 16.09 140074......... 00.9695 14.23 110013....................... 01.1032 14.97 110097.......... 01.0230 13.43 110193......... 01.2501 17.43 130043......... 01.0073 15.45 140075......... 01.4790 20.98 110014....................... 01.0237 14.25 110098.......... 01.0524 12.75 110194......... 01.0069 13.81 130044......... 01.1645 12.49 140077......... 01.1879 16.68 110015....................... 01.2373 16.42 110100.......... 01.0948 12.76 110195......... 01.0547 11.35 130045......... 01.0068 12.07 140079......... 01.2407 19.72 110016....................... 01.3097 14.79 110101.......... 01.1680 11.58 110198......... 01.3714 24.04 130048......... 01.0818 13.31 140080......... 01.6437 21.22 110017....................... 00.8642 13.54 110103.......... 00.9614 10.15 110200......... 01.8297 17.05 130049......... 01.2812 18.00 140081......... 01.0873 13.46 110018....................... 01.1504 17.79 110104.......... 01.0884 14.01 110201......... 01.5086 17.52 130054......... 00.8937 17.61 140082......... 01.4347 19.59 110020....................... 01.3479 16.21 110105.......... 01.1841 14.60 110203......... 00.9967 17.25 130056......... 00.8733 11.05 140083......... 01.2436 17.22 110023....................... 01.3398 18.43 110107.......... 01.8230 18.50 110204......... 00.8066 14.34 130058......... 00.7670 14.21 140084......... 01.2282 18.60 110024....................... 01.4870 16.41 110108.......... 00.9444 11.26 110205......... 01.1252 17.06 130060......... 01.3323 19.41 140086......... 01.0865 14.36 110025....................... 01.4319 17.54 110109.......... 01.0931 13.63 110207......... 01.0857 14.02 130061......... 00.9433 ....... 140087......... 01.3968 16.15 110026....................... 01.2107 14.59 110111.......... 01.0973 16.55 110208......... 00.9420 16.97 130062......... 00.6589 ....... 140088......... 01.6745 24.52 110027....................... 01.0937 13.41 110112.......... 01.0839 11.88 110209......... 00.7487 16.39 140001......... 01.2820 14.89 140089......... 01.2535 16.59 110028....................... 01.6530 19.36 110113.......... 01.0936 12.40 110211......... 00.8898 ....... 140002......... 01.3159 18.78 140090......... 01.5327 27.83 110029....................... 01.4107 18.29 110114.......... 01.0737 14.35 110212......... 01.1691 ....... 140003......... 01.0178 14.52 140091......... 01.8062 17.60 110030....................... 01.3315 17.58 110115.......... 01.6022 18.84 110213......... 00.5284 ....... 140004......... 01.1142 16.34 140093......... 01.2077 17.01 110031....................... 01.3091 19.99 110118.......... 00.9737 13.49 120001......... 01.8272 25.27 140005......... 00.9615 09.56 140094......... 01.3943 19.46 110032....................... 01.2694 12.68 110120.......... 01.0244 12.28 120002......... 01.1994 21.80 140007......... 01.4823 21.10 140095......... 01.4094 20.09 110033....................... 01.4346 19.79 110121.......... 01.2007 12.83 120003......... 01.0674 22.69 140008......... 01.5818 19.43 140097......... 00.9670 12.49 110034....................... 01.6452 17.89 110122.......... 01.3894 16.17 120004......... 01.2661 21.72 140010......... 01.3786 22.90 140100......... 01.2485 18.78 110035....................... 01.4345 20.02 110124.......... 01.0847 15.63 120005......... 01.2518 18.94 140011......... 01.1969 16.24 140101......... 01.2227 18.49 110036....................... 01.6988 18.37 110125.......... 01.2361 15.97 120006......... 01.3096 24.62 140012......... 01.2719 18.60 140102......... 01.1121 14.37 110037....................... 01.1697 11.02 110127.......... 00.9362 18.26 120007......... 01.6811 20.90 140013......... 01.5844 15.59 140103......... 01.3623 16.25 110038....................... 01.4667 15.98 110128.......... 01.1766 19.01 120009......... 01.0424 20.40 140014......... 01.1687 16.19 140105......... 01.3043 20.28 110039....................... 01.3795 18.62 110129.......... 01.7851 15.69 120010......... 01.8716 22.71 140015......... 01.2876 14.20 140107......... 01.0708 11.82 110040....................... 01.1215 15.52 110130.......... 01.1632 11.11 120011......... 01.2451 31.56 140016......... 00.9556 11.89 140108......... 01.3553 21.81 110041....................... 01.2723 15.82 110132.......... 01.1253 12.99 120012......... 00.8969 20.20 140018......... 01.3988 19.38 140109......... 01.1761 13.08 110042....................... 01.2739 14.92 110134.......... 00.8917 12.19 120014......... 01.4437 22.59 140019......... 01.1687 12.65 140110......... 01.1910 17.31 110043....................... 01.7887 16.83 110135.......... 01.2956 14.04 120015......... 00.9237 22.77 140024......... 01.0067 13.99 140112......... 01.2391 13.42 110044....................... 01.1492 14.51 110136.......... 01.1900 17.74 120016......... 00.8833 24.58 140025......... 01.0608 16.65 140113......... 01.5191 17.90 110045....................... 01.3219 21.18 110140.......... 01.0284 16.75 120018......... 00.9540 20.92 140026......... 01.2846 15.90 140114......... 01.3524 19.55 110046....................... 01.3460 17.14 110141.......... 00.9531 12.29 120019......... 01.2500 19.16 140027......... 01.3405 16.37 140115......... 01.3228 19.66 110048....................... 01.3732 13.59 110142.......... 00.9502 11.78 120021......... 00.9273 18.74 140029......... 01.3589 21.43 140116......... 01.3016 20.98 110049....................... 01.1274 14.58 110143.......... 01.4557 20.77 120022......... 01.7000 20.74 140030......... 01.8079 21.56 140117......... 01.5393 20.42 110050....................... 01.2024 13.35 110144.......... 01.1608 17.41 120026......... 01.2756 24.26 140031......... 01.2719 13.76 140118......... 01.6536 23.74 110051....................... 01.0340 16.68 110146.......... 01.1436 15.09 120027......... 01.5804 23.43 140032......... 01.2657 16.71 140119......... 01.7239 23.27 110052....................... 01.1173 10.83 110149.......... 01.1587 16.88 120028......... 01.0146 ....... 140033......... 01.2783 19.82 140120......... 01.4592 15.45 110054....................... 01.3574 16.85 110150.......... 01.3259 17.62 130001......... 01.0126 15.75 140034......... 01.1745 17.31 140121......... 01.5391 11.54 110056....................... 01.1733 14.40 110152.......... 01.1022 14.44 130002......... 01.4330 15.30 140035......... 00.9305 11.22 140122......... 01.6581 21.47 110059....................... 01.3155 13.38 110153.......... 01.0153 19.87 130003......... 01.3679 19.28 140036......... 01.2088 16.60 140124......... 01.2722 23.81 110061....................... 01.0721 12.61 110154.......... 00.8230 13.98 130005......... 01.5281 19.70 140037......... 01.1042 12.49 140125......... 01.3597 15.71 110062....................... 00.8945 10.97 110155.......... 01.0562 13.62 130006......... 01.8420 17.59 140038......... 01.1785 16.23 140127......... 01.3922 17.32 110063....................... 01.1481 12.76 110156.......... 01.0376 12.34 130007......... 01.6306 18.20 140040......... 01.2942 14.72 140128......... 01.1103 14.92 110064....................... 01.3339 17.46 110161.......... 01.3272 21.00 130008......... 01.0035 11.00 140041......... 01.3305 16.02 140129......... 01.2226 14.94 110065....................... 01.0391 13.40 110162.......... 00.8006 ....... 130009......... 00.9620 10.74 140042......... 01.0137 14.16 140130......... 01.3646 21.74 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46058]] Page 5 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 140132....................... 01.4451 19.03 140230.......... 00.9258 10.84 150043......... 01.0838 21.96 150127......... 01.0241 13.90 160073......... 00.9761 12.18 140133....................... 01.3392 21.21 140231.......... 01.5927 20.80 150044......... 01.2610 18.32 150128......... 01.2162 19.14 160074......... 01.0986 14.36 140135....................... 01.3065 14.91 140233.......... 01.7888 18.47 150045......... 01.0998 15.68 150129......... 01.2317 22.47 160075......... 01.1442 13.73 140137....................... 01.0630 14.58 140234.......... 01.2898 16.47 150046......... 01.5284 15.90 150130......... 01.3599 16.61 160076......... 01.0731 15.50 140138....................... 00.9835 12.15 140236.......... 00.9644 13.24 150047......... 01.5639 22.77 150132......... 01.4214 19.24 160077......... 01.1723 10.60 140139....................... 01.1361 14.70 140239.......... 01.6836 18.73 150048......... 01.2057 16.52 150133......... 01.2178 14.12 160079......... 01.4096 16.28 140140....................... 01.1398 13.06 140240.......... 01.4851 20.44 150049......... 01.1663 13.29 150134......... 01.1751 17.17 160080......... 01.2022 16.06 140141....................... 01.2514 13.76 140242.......... 01.6293 21.68 150050......... 01.2047 14.73 150136......... 01.0683 18.42 160081......... 01.0670 14.77 140143....................... 01.1478 16.64 140245.......... 01.1694 14.47 150051......... 01.4788 18.34 150138......... 01.2073 17.33 160082......... 01.8242 17.03 140144....................... 01.0291 17.83 140246.......... 01.0832 12.05 150052......... 01.1504 14.14 150139......... 01.4731 14.62 160083......... 01.6850 18.37 140145....................... 01.1791 15.14 140250.......... 01.3797 21.98 150053......... 01.0508 18.10 160001......... 01.2891 17.61 160085......... 01.0802 11.50 140146....................... 01.0442 16.38 140251.......... 01.3829 19.16 150054......... 01.1554 12.55 160002......... 01.1697 13.74 160086......... 00.9984 13.93 140147....................... 01.2801 16.29 140252.......... 01.4473 23.41 150056......... 01.7839 22.38 160003......... 01.0195 12.61 160088......... 01.1633 12.75 140148....................... 01.8518 17.11 140253.......... 01.4156 17.49 150057......... 02.3206 18.94 160005......... 01.1311 13.80 160089......... 01.1873 14.80 140150....................... 01.6279 25.55 140258.......... 01.5772 20.93 150058......... 01.7195 19.57 160007......... 01.0323 12.37 160090......... 00.9797 15.58 140151....................... 01.1103 16.64 140271.......... 01.0850 13.01 150059......... 01.4121 19.81 160008......... 01.1305 14.02 160091......... 01.0810 10.80 140152....................... 01.1184 22.91 140275.......... 01.2390 16.50 150060......... 01.1657 14.93 160009......... 01.2378 13.73 160092......... 01.0879 13.23 140155....................... 01.2969 16.96 140276.......... 01.9603 21.37 150061......... 01.2378 15.73 160012......... 01.0294 13.15 160093......... 01.2058 13.86 140158....................... 01.3077 21.36 140280.......... 01.3142 17.16 150062......... 01.0996 16.55 160013......... 01.2266 15.35 160094......... 01.1302 14.17 140160....................... 01.2232 15.93 140281.......... 01.6474 20.89 150063......... 01.0938 17.57 160014......... 01.0125 12.59 160095......... 01.0915 12.79 140161....................... 01.2168 17.76 140285.......... 01.2802 15.37 150064......... 01.2141 15.84 160016......... 01.2505 16.32 160097......... 01.1409 13.00 140162....................... 01.7542 17.96 140286.......... 01.1253 17.93 150065......... 01.1631 18.49 160018......... 00.9298 13.27 160098......... 00.9679 14.81 140164....................... 01.3924 17.44 140288.......... 01.8518 23.17 150066......... 00.9993 15.93 160020......... 01.0718 12.38 160099......... 00.9671 11.69 140165....................... 01.1383 12.90 140289.......... 01.3190 15.79 150067......... 01.1295 15.48 160021......... 01.0703 13.57 160101......... 01.1730 18.64 140166....................... 01.3636 17.21 140290.......... 01.4617 21.07 150069......... 01.2618 16.90 160023......... 01.0386 12.35 160102......... 01.3886 17.51 140167....................... 01.1286 14.97 140291.......... 01.4126 22.95 150070......... 01.0279 14.83 160024......... 01.5221 18.06 160103......... 01.0399 13.57 140168....................... 01.1895 15.57 140292.......... 01.1602 20.63 150071......... 01.1162 13.86 160026......... 01.0593 14.43 160104......... 01.3168 17.37 140170....................... 01.1141 12.53 140294.......... 01.1859 16.20 150072......... 01.2089 15.48 160027......... 01.1570 13.19 160106......... 01.0620 14.03 140171....................... 00.9150 13.87 140297.......... 01.5673 27.06 150073......... 01.0134 19.47 160028......... 01.3255 17.39 160107......... 01.1797 14.12 140172....................... 01.6091 18.71 140300.......... 01.4471 18.71 150074......... 01.5964 18.80 160029......... 01.5134 18.14 160108......... 01.2018 14.95 140173....................... 00.9277 13.77 150001.......... 01.1125 17.36 150075......... 01.1711 14.49 160030......... 01.3852 17.37 160109......... 01.0406 12.35 140174....................... 01.5683 18.33 150002.......... 01.5434 18.35 150076......... 01.2164 20.39 160031......... 01.1197 13.37 160110......... 01.5234 17.97 140176....................... 01.3064 21.33 150003.......... 01.7180 19.57 150077......... 01.1796 16.58 160032......... 01.0998 15.56 160111......... 01.0272 11.04 140177....................... 01.1644 16.52 150004.......... 01.4342 19.97 150078......... 01.0840 15.66 160033......... 01.7885 16.80 160112......... 01.4213 15.00 140179....................... 01.3195 20.12 150005.......... 01.1913 18.43 150079......... 01.1368 13.96 160034......... 01.2092 14.53 160113......... 01.0022 12.03 140180....................... 01.5086 21.03 150006.......... 01.2242 17.31 150082......... 01.5181 17.44 160035......... 01.0318 12.57 160114......... 01.0662 14.21 140181....................... 01.3825 19.20 150007.......... 01.2036 17.98 150084......... 01.8769 22.28 160036......... 00.9707 14.66 160115......... 01.0262 14.32 140182....................... 01.3711 20.67 150008.......... 01.3534 20.70 150086......... 01.3365 16.45 160037......... 01.1614 15.14 160116......... 01.1790 15.68 140184....................... 01.2542 14.26 150009.......... 01.3747 17.26 150088......... 01.3466 17.20 160039......... 01.0809 15.84 160117......... 01.4518 15.96 140185....................... 01.4152 16.78 150010.......... 01.1825 15.87 150089......... 01.4284 18.43 160040......... 01.3187 16.30 160118......... 01.0205 13.15 140186....................... 01.3530 17.75 150011.......... 01.2266 17.83 150090......... 01.2517 18.72 160041......... 01.0854 13.45 160120......... 01.0296 10.62 140187....................... 01.4893 16.54 150012.......... 01.6946 21.01 150091......... 01.1381 15.75 160043......... 01.0374 13.44 160122......... 01.1314 16.24 140188....................... 01.0402 10.77 150013.......... 01.1254 13.90 150092......... 01.0304 15.04 160044......... 01.3190 13.86 160123......... 01.0588 13.19 140189....................... 01.1952 16.64 150014.......... 01.5059 20.39 150094......... 01.0148 16.85 160045......... 01.7651 17.72 160124......... 01.2799 15.87 140190....................... 01.1402 15.99 150015.......... 01.2169 18.32 150095......... 01.1048 17.97 160046......... 01.0014 12.75 160126......... 01.0198 13.59 140191....................... 01.4511 21.87 150017.......... 01.8651 17.20 150096......... 01.1653 17.34 160047......... 01.3677 15.37 160129......... 01.0290 13.75 140193....................... 01.0432 13.31 150018.......... 01.2899 18.23 150097......... 01.1381 17.09 160048......... 01.0373 11.54 160130......... 01.1777 13.02 140197....................... 01.2610 16.96 150019.......... 01.1022 15.47 150098......... 01.1494 13.03 160049......... 00.9485 12.21 160131......... 01.0519 13.55 140199....................... 01.1014 15.72 150020.......... 01.1488 12.96 150099......... 01.2905 17.79 160050......... 01.0755 14.64 160134......... 01.0482 11.84 140200....................... 01.4765 21.79 150021.......... 01.6386 18.34 150100......... 01.7163 17.65 160051......... 00.9646 13.54 160135......... 01.0968 13.67 140202....................... 01.3540 19.71 150022.......... 01.0910 16.65 150101......... 01.1111 14.50 160052......... 01.0875 14.79 160138......... 01.1290 14.36 140203....................... 01.1609 19.32 150023.......... 01.5116 18.19 150102......... 01.0431 14.93 160054......... 01.0755 12.37 160140......... 01.1716 14.76 140205....................... 00.8789 13.64 150024.......... 01.4348 15.82 150103......... 01.0075 15.02 160055......... 00.9798 12.37 160142......... 01.0866 13.98 140206....................... 01.1121 20.81 150025.......... 01.3892 17.57 150104......... 01.0990 15.63 160056......... 01.0863 13.11 160143......... 01.0270 14.24 140207....................... 01.3959 20.01 150026.......... 01.1868 18.29 150105......... 01.3508 16.20 160057......... 01.3465 16.15 160145......... 01.1210 14.16 140208....................... 01.6948 24.07 150027.......... 01.0461 15.55 150106......... 01.0805 16.06 160058......... 01.7461 19.00 160146......... 01.4322 14.59 140209....................... 01.6697 15.99 150029.......... 01.3137 20.17 150109......... 01.4613 16.85 160060......... 01.0442 13.44 160147......... 01.3056 16.09 140210....................... 01.1194 14.00 150030.......... 01.2098 16.69 150110......... 01.0000 17.16 160061......... 01.0428 14.27 160151......... 01.0503 13.74 140211....................... 01.1916 20.84 150031.......... 01.0741 15.56 150111......... 01.1642 14.02 160062......... 00.9492 12.22 160152......... 00.9935 13.78 140212....................... 01.2953 22.47 150032.......... 01.8880 19.50 150112......... 01.3074 17.80 160063......... 01.1653 15.88 160153......... 01.7437 17.53 140213....................... 01.2782 22.67 150033.......... 01.6073 21.09 150113......... 01.2230 17.88 160064......... 01.7113 17.38 170001......... 01.1849 16.35 140215....................... 01.1308 13.49 150034.......... 01.3884 21.18 150114......... 01.0122 14.58 160065......... 01.0284 14.73 170004......... 01.0730 13.57 140217....................... 01.3185 21.67 150035.......... 01.5318 18.97 150115......... 01.3808 17.55 160066......... 01.1723 14.74 170006......... 01.1492 15.02 140218....................... 00.9966 13.65 150036.......... 01.0412 17.43 150122......... 01.1253 17.11 160067......... 01.4125 17.13 170008......... 01.0265 14.53 140220....................... 01.0925 15.16 150037.......... 01.2684 18.20 150123......... 01.2043 12.98 160068......... 01.0660 13.52 170009......... 01.1988 16.31 140223....................... 01.6457 28.66 150038.......... 01.4044 17.22 150124......... 01.1085 15.97 160069......... 01.4620 16.42 170010......... 01.2496 15.77 140224....................... 01.3885 22.97 150039.......... 00.9657 16.33 150125......... 01.3906 18.69 160070......... 01.0507 14.47 170011......... 01.2378 15.40 140228....................... 01.6939 18.22 150042.......... 01.2975 16.00 150126......... 01.5082 20.17 160072......... 01.0756 11.60 170012......... 01.4732 16.08 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46059]] Page 6 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 170013....................... 01.3228 15.33 170098.......... 01.0500 17.00 180023......... 00.8812 13.12 180122......... 01.0903 15.01 190088......... 01.3480 ...... 170014....................... 01.0365 16.40 170099.......... 01.2666 11.34 180024......... 01.3911 17.24 180123......... 01.4774 20.98 190089......... 01.0784 11.47 170015....................... 01.0652 14.36 170100.......... 00.9917 14.47 180025......... 01.2141 17.17 180124......... 01.4878 16.52 190090......... 01.1650 16.84 170016....................... 01.6876 19.52 170101.......... 00.9485 13.26 180026......... 01.2402 12.39 180125......... 00.9976 16.46 190092......... 01.3982 ...... 170017....................... 01.2527 15.34 170102.......... 00.9926 13.11 180027......... 01.2873 15.58 180126......... 01.2371 12.22 190095......... 01.0677 14.66 170018....................... 01.1576 13.13 170103.......... 01.2089 15.62 180028......... 00.9959 16.39 180127......... 01.4053 17.22 190098......... 01.5464 18.86 170019....................... 01.2248 15.65 170104.......... 01.4508 19.81 180029......... 01.2772 15.97 180128......... 01.1761 16.64 190099......... 01.1522 17.98 170020....................... 01.2898 14.98 170105.......... 01.0962 15.91 180030......... 01.2383 13.31 180129......... 01.0116 14.45 190102......... 01.5617 17.77 170022....................... 01.1756 14.80 170106.......... 00.8948 12.18 180031......... 01.2070 12.60 180130......... 01.4718 17.91 190103......... 00.8823 09.75 170023....................... 01.4656 16.42 170109.......... 01.0364 14.50 180032......... 00.9250 15.83 180132......... 01.2950 15.20 190106......... 01.1721 17.69 170024....................... 01.1515 12.84 170110.......... 00.9577 13.67 180033......... 01.1365 12.86 180133......... 01.3505 24.67 190109......... 01.2153 13.50 170025....................... 01.2269 15.81 170112.......... 00.9853 13.90 180034......... 01.2655 14.14 180134......... 01.0389 13.87 190110......... 00.9437 12.43 170026....................... 01.0417 12.83 170113.......... 01.1475 14.95 180035......... 01.5526 18.73 180136......... 01.6029 16.47 190111......... 01.5997 18.33 170027....................... 01.3447 15.50 170114.......... 01.0128 13.80 180036......... 01.2050 17.11 180137......... 01.8119 18.38 190112......... 01.5901 19.46 170030....................... 01.0153 13.99 170115.......... 01.0238 11.34 180037......... 01.3414 19.79 180138......... 01.2091 17.99 190113......... 01.3584 18.49 170031....................... 00.9092 12.62 170116.......... 01.0473 15.74 180038......... 01.4104 15.04 180139......... 01.1543 18.64 190114......... 01.0182 12.20 170032....................... 01.1647 14.89 170117.......... 00.9415 13.50 180040......... 02.0226 19.20 180140......... 00.8743 ....... 190115......... 01.2236 18.33 170033....................... 01.3701 14.59 170119.......... 00.9812 12.09 180041......... 01.1036 13.42 180141......... 01.8022 ....... 190116......... 01.1871 ...... 170034....................... 00.9962 14.61 170120.......... 01.2988 16.06 180042......... 01.1987 13.59 190001......... 00.8702 17.98 190118......... 01.0964 12.38 170035....................... 00.8580 14.82 170122.......... 01.7447 19.93 180043......... 01.0028 15.84 190002......... 01.6861 18.15 190120......... 01.0003 13.75 170036....................... 00.9007 13.19 170123.......... 01.7667 19.02 180044......... 01.1644 16.29 190003......... 01.3867 17.41 190122......... 01.2265 15.70 170037....................... 01.2485 16.31 170124.......... 01.0109 14.25 180045......... 01.2627 16.79 190004......... 01.4153 15.24 190124......... 01.6508 20.23 170038....................... 00.9237 11.46 170126.......... 00.9445 11.50 180046......... 01.2348 16.65 190005......... 01.6473 17.60 190125......... 01.5592 17.99 170039....................... 01.1505 13.62 170128.......... 00.9794 14.42 180047......... 01.0286 13.80 190006......... 01.2974 14.32 190128......... 01.0852 18.56 170040....................... 01.6026 18.83 170131.......... 01.2140 09.38 180048......... 01.2851 16.17 190007......... 01.0081 13.52 190130......... 01.0318 12.09 170041....................... 00.9985 11.29 170133.......... 01.1285 14.20 180049......... 01.3320 15.45 190008......... 01.6674 17.72 190131......... 01.2019 16.12 170043....................... 01.0095 13.49 170134.......... 00.9462 12.48 180050......... 01.2528 16.12 190009......... 01.1614 13.79 190133......... 00.9749 12.08 170044....................... 01.1045 14.42 170137.......... 01.1888 17.30 180051......... 01.4299 14.78 190010......... 01.0337 16.62 190134......... 01.0188 14.79 170045....................... 01.0555 10.72 170139.......... 01.0392 11.82 180053......... 01.0895 14.30 190011......... 01.1664 14.41 190135......... 01.4616 22.58 170049....................... 01.2898 18.28 170142.......... 01.3501 16.49 180054......... 01.1107 13.76 190013......... 01.3986 15.95 190136......... 01.2005 11.22 170051....................... 00.9202 13.66 170143.......... 01.1128 13.82 180055......... 01.1648 14.00 190014......... 01.1133 15.35 190138......... 00.8846 17.51 170052....................... 01.0589 12.60 170144.......... 01.6127 14.73 180056......... 01.0761 16.38 190015......... 01.2521 17.78 190140......... 01.0146 12.16 170053....................... 00.9478 15.39 170145.......... 01.1395 14.83 180058......... 00.9870 12.63 190017......... 01.4478 16.02 190142......... 00.9041 12.39 170054....................... 01.0865 13.19 170146.......... 01.5244 19.54 180059......... 00.9160 12.59 190018......... 01.1910 15.92 190144......... 01.3101 15.22 170055....................... 01.0974 14.55 170147.......... 01.2724 20.70 180060......... 01.0317 10.17 190019......... 01.6081 18.39 190145......... 00.9987 13.66 170056....................... 00.9193 13.72 170148.......... 01.4120 17.64 180063......... 00.9916 10.79 190020......... 01.1829 15.85 190146......... 01.6349 19.61 170057....................... 01.0283 13.90 170150.......... 01.0938 13.41 180064......... 01.3317 14.03 190025......... 01.3560 13.62 190147......... 01.0237 13.69 170058....................... 01.1682 15.80 170151.......... 01.0380 11.66 180065......... 01.0472 10.82 190026......... 01.4931 16.17 190148......... 00.9081 12.77 170060....................... 01.0543 13.41 170152.......... 00.9840 12.99 180066......... 01.1561 18.09 190027......... 01.5790 16.49 190149......... 01.0591 11.47 170061....................... 01.1320 12.90 170160.......... 00.9790 11.17 180067......... 01.8053 16.40 190029......... 01.1538 15.40 190151......... 01.2260 11.73 170063....................... 00.8933 10.92 170164.......... 00.9859 14.42 180069......... 01.0138 15.33 190033......... 00.9378 09.66 190152......... 01.5161 21.27 170064....................... 01.0420 12.09 170166.......... 01.2016 13.65 180070......... 01.1195 14.66 190034......... 01.2429 ....... 190155......... 01.0392 12.29 170066....................... 00.9793 12.58 170168.......... 00.9222 09.33 180072......... 01.0649 13.91 190035......... 01.3660 ....... 190156......... 00.8732 11.99 170067....................... 01.1302 11.76 170171.......... 01.0731 11.22 180075......... 01.0012 14.13 190036......... 01.6990 19.10 190158......... 01.1877 21.59 170068....................... 01.3080 15.24 170175.......... 01.3540 17.53 180078......... 01.1591 17.57 190037......... 00.8934 10.84 190160......... 01.3255 17.03 170069....................... 00.8338 14.01 170176.......... 01.6200 19.83 180079......... 01.3352 13.03 190039......... 01.4034 17.21 190161......... 01.1212 12.65 170070....................... 01.0108 12.56 170182.......... 01.2299 19.43 180080......... 01.0543 15.57 190040......... 01.4397 19.32 190162......... 01.0388 18.47 170073....................... 01.0663 14.67 170183.......... 02.0361 ....... 180085......... 02.2480 17.70 190041......... 01.5692 19.72 190164......... 01.2269 16.05 170074....................... 01.2456 14.34 170184.......... 01.1905 ....... 180087......... 01.1722 13.74 190043......... 01.0383 11.79 190166......... 00.9327 14.04 170075....................... 00.9439 10.67 180001.......... 01.2323 17.03 180088......... 01.5598 19.99 190044......... 01.1678 17.11 190167......... 01.2338 18.49 170076....................... 01.0546 11.60 180002.......... 01.0634 16.78 180092......... 01.2627 15.25 190045......... 01.4070 20.17 190170......... 00.9454 13.08 170077....................... 00.9418 12.07 180004.......... 01.1027 14.47 180093......... 01.3756 16.05 190046......... 01.4636 17.58 190173......... 01.4730 20.12 170079....................... 01.0260 12.66 180005.......... 01.1767 18.54 180094......... 01.0358 11.51 190048......... 01.2833 13.72 190175......... 01.3200 20.26 170080....................... 00.9806 10.65 180006.......... 00.9857 08.51 180095......... 01.2459 12.94 190049......... 00.9962 15.70 190176......... 01.7427 19.11 170081....................... 01.0204 10.44 180007.......... 01.5365 16.29 180099......... 01.3192 12.31 190050......... 01.0311 14.58 190177......... 01.6579 22.84 170082....................... 01.0284 10.80 180009.......... 01.4058 19.11 180101......... 01.3237 18.01 190053......... 01.0753 12.11 190178......... 00.9581 10.87 170084....................... 00.9539 10.93 180010.......... 01.8565 18.19 180102......... 01.4761 16.43 190054......... 01.3375 14.09 190182......... 00.9681 20.02 170085....................... 00.9648 12.69 180011.......... 01.2791 15.29 180103......... 02.1571 17.93 190059......... 00.9187 13.44 190183......... 01.1238 14.79 170086....................... 01.7259 18.50 180012.......... 01.4064 17.51 180104......... 01.5751 18.07 190060......... 01.4553 15.43 190184......... 01.0796 13.09 170087....................... 16.1090 18.78 180013.......... 01.4569 16.63 180105......... 01.0042 12.82 190064......... 01.6010 18.33 190185......... 01.3600 18.53 170088....................... 00.9759 10.80 180014.......... 01.7118 19.99 180106......... 00.8943 12.27 190065......... 01.4987 14.71 190186......... 00.9457 13.16 170089....................... 00.9506 15.53 180015.......... 01.3127 15.02 180108......... 00.8561 13.54 190071......... 00.8980 12.15 190189......... 01.0752 13.17 170090....................... 01.0397 09.80 180016.......... 01.3243 14.50 180115......... 01.0271 15.07 190077......... 00.9526 13.65 190190......... 00.9250 12.66 170092....................... 00.8270 11.80 180017.......... 01.3423 13.87 180116......... 01.4484 15.66 190078......... 01.1690 11.60 190191......... 01.3301 17.54 170093....................... 00.9986 11.76 180018.......... 01.2533 14.59 180117......... 01.1145 17.03 190079......... 01.2555 16.98 190196......... 00.8663 16.29 170094....................... 00.9536 15.42 180019.......... 01.3260 16.70 180118......... 01.0362 12.03 190081......... 00.9078 10.23 190197......... 01.2380 18.98 170095....................... 01.1349 13.69 180020.......... 01.0728 15.86 180120......... 01.0568 13.12 190083......... 01.0600 15.02 190199......... 01.1999 16.26 170097....................... 01.0695 13.17 180021.......... 01.1131 13.69 180121......... 01.2249 13.68 190086......... 01.4128 15.47 190200......... 01.5575 21.70 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46060]] Page 7 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 190201....................... 01.2734 18.93 210015.......... 01.2807 18.58 220051......... 01.2093 20.56 230019......... 01.5032 22.60 230118......... 01.2187 16.37 190202....................... 01.4760 17.85 210016.......... 01.7192 23.30 220052......... 01.3214 23.88 230020......... 01.7231 22.21 230119......... 01.3042 22.31 190203....................... 01.5075 20.83 210017.......... 01.2275 14.51 220053......... 01.2594 19.48 230021......... 01.6150 17.90 230120......... 01.1809 17.47 190204....................... 01.5863 20.85 210018.......... 01.2493 21.26 220055......... 01.3462 23.52 230022......... 01.3615 18.27 230121......... 01.2510 19.69 190205....................... 01.9236 17.90 210019.......... 01.4990 18.17 220057......... 01.4076 21.39 230024......... 01.4369 23.71 230122......... 01.4028 19.20 190206....................... 01.5515 21.53 210022.......... 01.4499 20.79 220058......... 01.0836 16.26 230027......... 01.1510 15.73 230124......... 01.1633 16.89 190207....................... 01.2969 16.42 210023.......... 01.3678 20.78 220060......... 01.3041 25.32 230029......... 01.5797 20.36 230125......... 01.2952 14.51 190208....................... 00.8122 11.17 210024.......... 01.5604 19.73 220062......... 00.5838 18.49 230030......... 01.2204 16.47 230128......... 01.3852 21.24 190218....................... 01.1988 15.33 210025.......... 01.4143 18.21 220063......... 01.2285 19.40 230031......... 01.4361 19.72 230129......... 01.7824 19.92 190223....................... 00.4249 16.58 210026.......... 01.3749 19.52 220064......... 01.2338 20.51 230032......... 01.7412 19.08 230130......... 01.6730 23.74 190227....................... 00.8255 10.56 210027.......... 01.3029 18.58 220065......... 01.2265 19.58 230034......... 01.2288 17.99 230132......... 01.4154 23.25 190231....................... 01.3079 16.00 210028.......... 01.2217 17.19 220066......... 01.3350 20.73 230035......... 01.1178 16.17 230133......... 01.2207 15.07 190233....................... 02.1157 ....... 210029.......... 01.3174 17.99 220067......... 01.2868 22.58 230036......... 01.2775 18.79 230134......... 01.1074 17.91 190234....................... 01.0506 ....... 210030.......... 01.1539 19.44 220068......... 00.5263 16.67 230037......... 01.1284 17.40 230135......... 01.2642 20.25 190235....................... 01.2869 ....... 210031.......... 01.5487 16.42 220070......... 01.2498 18.77 230038......... 01.7083 21.21 230137......... 01.1949 18.51 190236....................... 01.2668 ....... 210032.......... 01.1789 17.90 220071......... 01.9236 21.67 230040......... 01.2243 20.53 230141......... 01.6822 22.44 200001....................... 01.3804 16.92 210033.......... 01.2620 18.58 220073......... 01.4101 24.14 230041......... 01.2174 20.75 230142......... 01.2188 18.90 200002....................... 01.0723 17.70 210034.......... 01.3689 20.34 220074......... 01.1894 22.82 230042......... 01.2231 19.32 230143......... 01.3145 16.58 200003....................... 01.0974 16.02 210035.......... 01.2687 18.11 220075......... 01.2619 19.51 230046......... 01.8844 25.32 230144......... 01.2250 21.19 200006....................... 01.0590 14.97 210037.......... 01.2433 17.38 220076......... 01.1859 25.46 230047......... 01.3420 20.37 230145......... 01.1856 15.96 200007....................... 01.1251 17.01 210038.......... 01.3320 21.63 220077......... 01.7917 22.92 230053......... 01.6445 24.16 230146......... 01.3105 19.56 200008....................... 01.2258 20.19 210039.......... 01.1897 17.55 220079......... 01.1692 21.68 230054......... 01.8208 21.45 230147......... 01.4445 19.70 200009....................... 01.8129 19.95 210040.......... 01.3323 21.01 220080......... 01.2719 19.58 230055......... 01.1628 18.26 230149......... 01.1767 15.51 200012....................... 01.1117 16.55 210043.......... 01.3063 21.32 220081......... 01.0044 24.81 230056......... 00.9866 14.55 230151......... 01.3931 22.02 200013....................... 01.1261 15.69 210044.......... 01.2665 19.38 220082......... 01.3096 23.04 230058......... 01.1539 18.69 230153......... 01.1329 19.70 200015....................... 01.2305 17.41 210045.......... 01.0746 11.42 220083......... 01.1972 20.43 230059......... 01.4456 19.01 230154......... 00.9371 12.43 200016....................... 01.0109 15.76 210048.......... 01.2050 23.30 220084......... 01.3134 23.23 230060......... 01.3047 17.97 230155......... 00.9383 16.62 200017....................... 01.2501 17.94 210049.......... 01.1551 17.77 220086......... 01.6491 26.01 230062......... 01.0249 14.41 230156......... 01.7141 22.91 200018....................... 01.1961 15.20 210051.......... 01.4237 20.03 220088......... 01.6090 22.68 230063......... 01.3178 19.15 230157......... 01.2020 20.15 200019....................... 01.2392 18.59 210054.......... 01.3311 21.05 220089......... 01.3337 22.69 230065......... 01.3391 19.44 230159......... 01.5106 19.64 200020....................... 01.1405 20.96 210055.......... 01.2655 24.26 220090......... 01.2575 20.95 230066......... 01.3879 20.58 230162......... 01.0467 15.60 200021....................... 01.1723 17.78 210056.......... 01.3809 17.67 220092......... 01.2336 20.66 230068......... 01.4483 22.15 230165......... 01.8519 21.91 200023....................... 00.9047 16.15 210057.......... 01.4140 25.76 220094......... 01.4156 19.82 230069......... 01.1621 21.95 230167......... 01.7996 19.23 200024....................... 01.3279 19.84 210058.......... 01.5351 18.09 220095......... 01.2483 19.06 230070......... 01.5713 19.57 230169......... 01.3465 20.88 200025....................... 01.0790 19.51 210059.......... 01.2620 21.44 220098......... 01.2576 19.71 230071......... 01.1340 22.00 230171......... 01.0260 14.42 200026....................... 01.0265 15.97 210060.......... 01.1836 23.61 220100......... 01.2637 23.69 230072......... 01.2305 19.32 230172......... 01.2797 18.87 200027....................... 01.1183 17.27 210061.......... 01.1780 17.65 220101......... 01.4392 23.41 230075......... 01.4720 19.41 230174......... 01.2978 19.50 200028....................... 00.9729 16.24 220001.......... 01.2880 21.80 220104......... 01.3000 24.79 230076......... 01.3501 22.67 230175......... 03.1496 11.15 200031....................... 01.2812 15.26 220002.......... 01.5420 23.02 220105......... 01.2698 22.16 230077......... 02.0635 18.62 230176......... 01.2352 20.69 200032....................... 01.3456 18.90 220003.......... 01.0746 16.71 220106......... 01.2620 22.14 230078......... 01.1336 15.79 230178......... 01.0050 17.92 200033....................... 01.7912 20.16 220004.......... 01.1627 18.66 220107......... 01.1929 19.21 230080......... 01.2285 20.74 230180......... 01.1057 15.79 200034....................... 01.2381 18.05 220006.......... 01.4307 21.04 220108......... 01.1992 21.13 230081......... 01.2949 16.73 230184......... 01.1534 17.45 200037....................... 01.1963 16.09 220008.......... 01.2955 20.45 220110......... 02.0108 31.74 230082......... 01.2055 15.97 230186......... 01.2243 17.37 200038....................... 01.1101 18.23 220010.......... 01.3125 21.44 220111......... 01.2703 21.76 230085......... 01.1164 17.76 230188......... 01.1813 16.01 200039....................... 01.2718 19.03 220011.......... 01.1494 27.00 220116......... 02.0069 24.40 230086......... 01.0061 14.88 230189......... 00.9246 14.93 200040....................... 01.1080 17.37 220012.......... 01.3759 30.46 220118......... 02.0709 27.44 230087......... 01.0463 17.12 230190......... 01.0342 20.21 200041....................... 01.0933 16.19 220015.......... 01.2323 20.94 220119......... 01.3231 24.27 230089......... 01.2842 21.86 230191......... 00.9118 16.65 200043....................... 00.5276 16.46 220016.......... 01.3819 20.87 220123......... 01.0394 22.86 230092......... 01.3128 18.29 230193......... 01.2127 16.97 200050....................... 01.1870 17.84 220017.......... 01.3926 23.16 220126......... 01.3385 20.63 230093......... 01.2211 18.91 230194......... 01.1254 15.94 200051....................... 00.9682 18.29 220019.......... 01.1521 17.57 220128......... 01.2038 22.97 230095......... 01.1969 16.51 230195......... 01.3147 21.44 200052....................... 00.9788 14.12 220020.......... 01.2411 18.68 220133......... 00.8368 29.15 230096......... 01.1728 20.60 230197......... 01.3474 21.41 200055....................... 01.1748 15.29 220021.......... 01.3635 23.88 220135......... 01.2397 24.67 230097......... 01.5928 19.03 230199......... 01.1846 16.61 200062....................... 00.9125 15.03 220023.......... 01.1724 19.92 220153......... 00.9842 19.37 230099......... 01.1191 18.90 230201......... 01.1826 14.03 200063....................... 01.2548 18.27 220024.......... 01.2011 20.61 220154......... 01.0025 20.72 230100......... 01.2050 14.82 230204......... 01.3955 20.13 200066....................... 01.2157 15.65 220025.......... 01.2146 19.07 220162......... 01.1174 ....... 230101......... 01.0781 17.28 230205......... 01.0457 13.00 210001....................... 01.4359 19.45 220028.......... 01.4903 21.29 220163......... 02.0494 24.21 230103......... 01.0526 17.37 230207......... 01.2669 21.19 210002....................... 02.0301 16.46 220029.......... 01.1504 23.54 220171......... 01.6465 21.72 230104......... 01.6096 21.24 230208......... 01.2412 18.18 210003....................... 01.5454 22.78 220030.......... 01.1142 17.02 230001......... 01.1916 18.72 230105......... 01.6864 19.47 230211......... 00.9096 14.11 210004....................... 01.3604 21.20 220031.......... 02.0045 29.21 230002......... 01.2641 18.80 230106......... 01.3011 18.64 230212......... 01.0720 22.89 210005....................... 01.2337 18.52 220033.......... 01.3844 19.62 230003......... 01.1456 18.79 230107......... 00.9245 11.54 230213......... 01.0473 13.19 210006....................... 01.0987 17.09 220035.......... 01.3148 19.49 230004......... 01.6847 24.03 230108......... 01.2350 18.02 230216......... 01.6086 19.50 210007....................... 01.6811 20.55 220036.......... 01.5951 22.33 230005......... 01.2549 18.69 230110......... 01.3936 17.31 230217......... 01.2395 19.60 210008....................... 01.3385 19.03 220038.......... 01.2902 21.60 230006......... 01.1078 15.91 230111......... 00.9900 17.97 230219......... 00.9318 16.58 210009....................... 01.8256 19.93 220041.......... 01.2145 21.02 230007......... 01.0590 17.82 230113......... 00.9699 18.07 230221......... 01.1033 17.78 210010....................... 01.1897 16.40 220042.......... 01.2037 25.43 230012......... 00.9618 11.92 230114......... 00.6644 25.66 230222......... 01.3910 18.46 210011....................... 01.2790 21.24 220046.......... 01.3759 23.55 230013......... 01.3026 20.55 230115......... 01.0034 15.79 230223......... 01.3134 21.86 210012....................... 01.6303 21.50 220049.......... 01.3204 21.16 230015......... 01.1338 19.54 230116......... 00.9514 14.84 230227......... 01.4686 22.63 210013....................... 01.2454 18.65 220050.......... 01.0930 18.78 230017......... 01.5755 20.51 230117......... 01.9294 25.77 230230......... 01.6739 21.30 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46061]] Page 8 of 16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Avg. Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 230232....................... 00.9775 18.31 240065.......... 01.0639 10.79 240152......... 01.0432 18.30 250057......... 01.2901 14.84 260012......... 01.1120 12.21 230235....................... 01.0780 14.12 240066.......... 01.4080 18.87 240153......... 01.0196 15.01 250058......... 01.1584 13.20 260013......... 01.1128 13.85 230236....................... 01.3039 21.82 240069.......... 01.2138 18.58 240154......... 01.0483 14.45 250059......... 01.0879 14.15 260014......... 01.7531 18.62 230239....................... 01.1599 16.38 240071.......... 01.1332 17.67 240155......... 00.9544 16.25 250060......... 00.7832 10.79 260015......... 01.3476 12.13 230241....................... 01.1124 17.56 240072.......... 01.0874 17.53 240157......... 01.1163 11.54 250061......... 00.8589 09.59 260017......... 01.2927 14.90 230244....................... 01.3635 21.20 240073.......... 00.9506 15.03 240160......... 00.9811 15.61 250063......... 00.8529 12.96 260018......... 00.9297 10.14 230253....................... 00.9665 18.09 240075.......... 01.1877 19.26 240161......... 00.9741 14.77 250065......... 00.9859 11.60 260019......... 01.0453 12.50 230254....................... 01.2864 21.85 240076.......... 01.1076 20.82 240162......... 00.9992 15.08 250066......... 00.9305 14.05 260020......... 01.6738 20.95 230257....................... 00.8638 18.77 240077.......... 00.9344 12.01 240163......... 00.9475 14.68 250067......... 01.1461 15.22 260021......... 01.5109 18.46 230259....................... 01.1898 19.63 240078.......... 01.5036 21.81 240166......... 01.0721 15.70 250068......... 00.8507 09.05 260022......... 01.2923 16.51 230264....................... 01.0486 19.01 240079.......... 01.0478 13.53 240169......... 00.9590 15.46 250069......... 01.4098 13.92 260023......... 01.3274 16.81 230269....................... 01.3682 22.82 240080.......... 01.4004 21.73 240170......... 01.1711 14.40 250071......... 00.9012 10.90 260024......... 00.9475 12.58 230270....................... 01.2231 20.42 240082.......... 01.0933 15.87 240171......... 01.0599 14.30 250072......... 01.3508 16.19 260025......... 01.2408 14.22 230273....................... 01.5791 21.61 240083.......... 01.3701 16.80 240172......... 01.0622 14.86 250076......... 01.5698 08.95 260027......... 01.5512 20.66 230275....................... 00.5037 16.62 240084.......... 01.3013 17.76 240173......... 00.9750 14.79 250077......... 00.9415 11.54 260029......... 01.1498 16.88 230276....................... 00.6974 17.39 240085.......... 00.9624 15.55 240179......... 01.0875 15.05 250078......... 01.4511 14.35 260030......... 01.1773 10.28 230277....................... 01.2458 21.07 240086.......... 01.0731 15.22 240184......... 01.0888 11.77 250079......... 00.8988 13.59 260031......... 01.5415 18.47 230278....................... 01.8501 21.54 240087.......... 01.1736 15.74 240187......... 01.1716 18.89 250081......... 01.3350 15.13 260032......... 01.6162 18.24 230279....................... 00.6949 15.06 240088.......... 01.4370 18.72 240193......... 01.0850 15.54 250082......... 01.2696 12.99 260034......... 01.0286 15.30 230280....................... 01.0876 14.88 240089.......... 00.9741 15.79 240196......... 00.6148 22.86 250083......... 01.0209 10.67 260035......... 01.0432 11.67 240001....................... 01.5822 22.07 240090.......... 01.0671 13.53 240200......... 00.9038 13.54 250084......... 01.1159 15.95 260036......... 01.0354 18.28 240002....................... 01.7315 20.58 240093.......... 01.3382 16.86 240205......... 01.0346 ....... 250085......... 00.9834 12.43 260037......... 01.4487 15.56 240004....................... 01.5268 21.05 240094.......... 00.9928 17.38 240206......... 00.9570 ....... 250088......... 00.9081 14.66 260039......... 01.1663 12.17 240005....................... 01.0266 15.07 240096.......... 00.9783 14.74 240207......... 01.2804 22.23 250089......... 01.1680 13.27 260040......... 01.6549 15.94 240006....................... 01.1154 20.02 240097.......... 01.1033 18.17 240210......... 01.2460 22.69 250093......... 01.1083 12.75 260042......... 01.2618 16.78 240007....................... 01.0769 15.81 240098.......... 00.9425 16.39 240211......... 01.0014 11.52 250094......... 01.2614 14.92 260044......... 01.0934 14.86 240008....................... 01.0662 16.32 240099.......... 01.0621 10.76 250001......... 01.4559 16.92 250095......... 01.0168 14.72 260047......... 01.4644 15.90 240009....................... 01.0015 14.35 240100.......... 01.2967 18.25 250002......... 00.8370 14.44 250096......... 01.2783 15.77 260048......... 01.2365 19.25 240010....................... 01.9744 21.16 240101.......... 01.1792 17.70 250003......... 01.0137 15.14 250097......... 01.3211 13.86 260050......... 01.0968 14.63 240011....................... 01.1601 15.71 240102.......... 00.9227 12.87 250004......... 01.4726 16.68 250098......... 00.8662 14.72 260052......... 01.3373 16.89 240013....................... 01.3128 16.96 240103.......... 01.0701 13.76 250005......... 01.0613 10.43 250099......... 01.3168 12.67 260053......... 01.1651 10.83 240014....................... 01.0839 19.10 240104.......... 01.1850 21.72 250006......... 00.9608 14.73 250100......... 01.2729 14.27 260054......... 01.3178 14.83 240016....................... 01.3772 16.31 240105.......... 01.0170 12.35 250007......... 01.2974 18.24 250101......... 00.8766 09.75 260055......... 01.0236 08.93 240017....................... 01.2008 15.66 240106.......... 01.3884 23.85 250008......... 00.9270 11.91 250102......... 01.6510 14.56 260057......... 01.1559 14.12 240018....................... 01.3331 17.17 240107.......... 00.9699 14.74 250009......... 01.1951 15.81 250104......... 01.4468 16.31 260059......... 01.2358 11.75 240019....................... 01.1997 20.69 240108.......... 00.9753 12.35 250010......... 01.0272 11.88 250105......... 00.9242 11.52 260061......... 01.1323 11.91 240020....................... 01.1545 20.05 240109.......... 00.9763 12.06 250012......... 00.9493 13.18 250107......... 00.8879 14.99 260062......... 01.2004 17.75 240021....................... 01.0040 13.13 240110.......... 00.9880 14.66 250015......... 01.1025 10.43 250109......... 00.9619 12.97 260063......... 01.1235 15.61 240022....................... 01.1171 18.13 240111.......... 01.0264 15.65 250017......... 00.9743 14.92 250112......... 00.9503 14.95 260064......... 01.3135 15.06 240023....................... 01.1030 16.17 240112.......... 01.0120 14.22 250018......... 01.0885 11.21 250117......... 01.0158 13.39 260065......... 01.7978 16.07 240025....................... 01.1265 14.54 240114.......... 00.8971 13.21 250019......... 01.4948 16.51 250119......... 01.1128 11.94 260066......... 01.0288 15.31 240027....................... 01.0280 15.50 240115.......... 01.6575 21.53 250020......... 00.9503 11.47 250120......... 01.0898 13.47 260067......... 00.9511 10.89 240028....................... 01.1803 18.14 240116.......... 00.9560 12.54 250021......... 00.9206 08.33 250122......... 01.2659 ....... 260068......... 01.6925 19.07 240029....................... 01.2190 17.00 240117.......... 01.1415 17.40 250023......... 00.8554 ....... 250123......... 01.3245 18.31 260070......... 01.0637 12.16 240030....................... 01.2864 17.33 240119.......... 00.8838 17.45 250024......... 00.9613 08.37 250124......... 00.9107 11.28 260073......... 01.0411 11.87 240031....................... 00.9918 13.83 240121.......... 00.9377 17.85 250025......... 01.1325 15.43 250125......... 01.3265 18.00 260074......... 01.3241 17.22 240036....................... 01.5677 19.89 240122.......... 01.0774 16.25 250027......... 01.0193 11.14 250126......... 00.9963 13.81 260077......... 01.7094 16.86 240037....................... 01.0459 17.05 240123.......... 01.0887 13.80 250029......... 00.8793 11.91 250127......... 00.7981 10.67 260078......... 01.2180 14.84 240038....................... 01.4768 24.33 240124.......... 00.9980 16.84 250030......... 00.9894 11.26 250128......... 01.1054 11.86 260079......... 01.0338 11.96 240040....................... 01.1838 19.00 240125.......... 00.9119 12.16 250031......... 01.3401 17.65 250131......... 00.9853 10.41 260080......... 01.0487 10.85 240041....................... 01.2688 15.42 240127.......... 01.0956 12.16 250032......... 01.2651 15.27 250134......... 00.9847 15.67 260081......... 01.5242 18.50 240043....................... 01.2180 17.60 240128.......... 01.1103 14.99 250033......... 01.1179 12.63 250136......... 00.9293 15.06 260082......... 01.1931 13.85 240044....................... 01.1777 16.75 240129.......... 01.0683 13.13 250034......... 01.6275 13.70 250138......... 01.2493 16.52 260085......... 01.5683 18.89 240045....................... 01.1170 18.25 240130.......... 01.0694 15.14 250035......... 00.8775 13.38 250141......... 01.2384 16.11 260086......... 00.9991 13.83 240047....................... 01.5112 19.66 240132.......... 01.2511 21.26 250036......... 01.0177 10.97 250145......... 00.9805 ....... 260089......... 01.0806 12.16 240048....................... 01.2509 21.83 240133.......... 01.1407 16.89 250037......... 00.8394 09.52 250146......... 01.0293 12.44 260091......... 01.6447 20.21 240049....................... 01.7860 21.16 240135.......... 00.9022 11.98 250038......... 00.9491 12.49 250148......... 01.1361 14.14 260094......... 01.2142 17.53 240050....................... 01.1382 22.26 240137.......... 01.2280 15.99 250039......... 01.0330 12.23 250149......... 00.9158 12.56 260095......... 01.4130 15.92 240051....................... 00.9385 14.60 240138.......... 00.9613 12.39 250040......... 01.3378 16.36 260001......... 01.6347 16.79 260096......... 01.5959 23.01 240052....................... 01.2651 18.14 240139.......... 00.9705 14.07 250042......... 01.2431 13.72 260002......... 01.4563 20.60 260097......... 01.1569 16.79 240053....................... 01.5135 19.37 240141.......... 01.1692 18.92 250043......... 01.0021 11.48 260003......... 00.9752 13.10 260100......... 01.0555 13.31 240056....................... 01.2694 21.66 240142.......... 01.1055 15.56 250044......... 00.9974 14.17 260004......... 01.0307 12.81 260102......... 01.0467 17.58 240057....................... 01.7845 21.08 240143.......... 01.1220 11.76 250045......... 01.1352 17.75 260005......... 01.6959 20.17 260103......... 01.3939 16.96 240058....................... 00.9705 08.83 240144.......... 01.0129 13.66 250047......... 00.9859 11.39 260006......... 01.4637 16.81 260104......... 01.7038 18.80 240059....................... 01.1096 19.63 240145.......... 00.9274 12.01 250048......... 01.5334 14.39 260007......... 01.6391 14.42 260105......... 01.8450 21.41 240061....................... 01.7813 21.05 240146.......... 00.9883 18.68 250049......... 00.9044 11.19 260008......... 01.2715 16.18 260107......... 01.4336 19.39 240063....................... 01.5152 22.26 240148.......... 01.0915 08.84 250050......... 01.2911 12.79 260009......... 01.2277 15.64 260108......... 01.8662 18.57 240064....................... 01.2556 20.39 240150.......... 00.8854 12.16 250051......... 00.8720 08.88 260011......... 01.6403 17.12 260109......... 00.9885 11.86 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46062]] Page 9 of 16 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Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 260110....................... 01.5703 14.92 270035.......... 01.0128 16.94 280050......... 00.9679 13.74 290021......... 01.6450 19.51 310041......... 01.3388 21.96 260113....................... 01.0828 14.31 270036.......... 00.9373 09.94 280051......... 01.2066 13.85 290022......... 01.6828 20.47 310042......... 01.2149 22.13 260115....................... 01.2400 14.59 270039.......... 01.0684 12.96 280052......... 00.9828 12.52 290027......... 00.9732 15.03 310043......... 01.2896 19.99 260116....................... 01.1030 13.89 270040.......... 01.0918 19.79 280054......... 01.2703 16.10 290029......... 00.8983 ....... 310044......... 01.3360 20.03 260119....................... 01.1917 13.28 270041.......... 01.0796 11.52 280055......... 00.9249 12.19 290032......... 01.4471 18.24 310045......... 01.4249 27.62 260120....................... 01.2217 14.60 270044.......... 01.1485 14.40 280056......... 01.0135 13.28 290036......... 01.0870 13.90 310047......... 01.3531 24.05 260122....................... 01.1474 13.40 270046.......... 00.9270 13.70 280057......... 00.9801 15.61 290038......... 00.9351 17.61 310048......... 01.2560 21.34 260123....................... 01.0221 12.27 270048.......... 01.0968 14.13 280058......... 01.3647 14.36 290039......... 01.3412 ....... 310049......... 01.3224 23.91 260127....................... 00.9860 13.88 270049.......... 01.8343 19.33 280060......... 01.5785 18.24 300001......... 01.3841 21.03 310050......... 01.2281 21.48 260128....................... 01.0214 09.22 270050.......... 01.0747 17.43 280061......... 01.4895 15.95 300003......... 01.8856 21.59 310051......... 01.3357 23.27 260129....................... 01.2018 13.53 270051.......... 01.3399 19.12 280062......... 01.1451 12.55 300005......... 01.2741 19.13 310052......... 01.2886 21.19 260131....................... 01.4057 15.91 270052.......... 01.0912 12.73 280064......... 01.0800 13.94 300006......... 01.1402 17.36 310054......... 01.3056 23.97 260134....................... 01.1561 14.28 270053.......... 00.9396 09.78 280065......... 01.2745 17.49 300007......... 01.1618 17.04 310056......... 01.3867 20.63 260137....................... 01.5544 14.25 270057.......... 01.2164 18.21 280066......... 01.0357 11.48 300008......... 01.2110 18.30 310057......... 01.2922 23.67 260138....................... 01.8949 21.17 270058.......... 00.9476 11.51 280068......... 01.0870 09.89 300009......... 01.1504 18.16 310058......... 01.0906 26.79 260141....................... 01.9549 17.43 270059.......... 00.8656 15.65 280070......... 01.0149 11.63 300010......... 01.2297 17.88 310060......... 01.2000 18.73 260142....................... 01.2382 13.99 270060.......... 00.9067 13.00 280073......... 01.0115 13.94 300011......... 01.3613 22.07 310061......... 01.2538 20.23 260143....................... 00.9915 11.96 270063.......... 00.9363 14.23 280074......... 01.1316 13.76 300012......... 01.3381 21.42 310062......... 01.2965 24.98 260147....................... 01.0190 12.74 270068.......... 00.9009 15.59 280075......... 01.2322 13.10 300013......... 01.1476 17.06 310063......... 01.3660 21.28 260148....................... 00.9522 09.30 270072.......... 00.7740 11.39 280076......... 01.0519 12.93 300014......... 01.2209 19.36 310064......... 01.2783 22.29 260158....................... 01.1057 11.77 270073.......... 01.1623 11.16 280077......... 01.3421 17.26 300015......... 01.1797 18.08 310067......... 01.3279 23.76 260159....................... 01.0850 19.81 270074.......... 00.8787 ....... 280079......... 01.2143 10.42 300016......... 01.2009 15.73 310069......... 01.2838 20.03 260160....................... 01.0947 11.84 270075.......... 00.9757 ....... 280080......... 01.0583 12.11 300017......... 01.2344 21.96 310070......... 01.4058 22.98 260162....................... 01.5751 19.55 270076.......... 00.7949 ....... 280081......... 01.6898 18.79 300018......... 01.2172 19.62 310072......... 01.2874 20.57 260163....................... 01.3342 15.35 270079.......... 00.9165 13.66 280082......... 01.0127 13.48 300019......... 01.2814 18.78 310073......... 01.6854 23.77 260164....................... 00.9984 12.17 270080.......... 01.2060 15.54 280083......... 01.1020 14.54 300020......... 01.2710 20.72 310074......... 01.4715 22.61 260166....................... 01.2345 21.39 270081.......... 01.0741 12.39 280084......... 01.0433 11.01 300021......... 01.1849 15.34 310075......... 01.3895 23.13 260172....................... 00.9976 12.72 270082.......... 01.0736 14.48 280088......... 01.7915 17.98 300022......... 01.1134 17.22 310076......... 01.4399 28.74 260173....................... 01.0104 11.78 270083.......... 01.0503 16.28 280089......... 01.0285 14.37 300023......... 01.2978 19.78 310077......... 01.5635 23.51 260175....................... 01.1633 14.99 270084.......... 00.9318 14.12 280090......... 00.9935 13.49 300024......... 01.1828 16.74 310078......... 01.3027 24.59 260176....................... 01.7313 18.43 280001.......... 01.1150 12.98 280091......... 01.2088 14.18 300028......... 01.2388 16.75 310081......... 01.2885 21.29 260177....................... 01.3273 20.42 280003.......... 02.0371 19.15 280092......... 00.8942 12.18 300029......... 01.3275 22.39 310083......... 01.2987 22.33 260178....................... 01.4928 18.91 280005.......... 01.4351 17.19 280094......... 01.0535 14.07 300033......... 01.1132 13.69 310084......... 01.3541 21.20 260179....................... 01.6451 18.70 280009.......... 01.7538 17.25 280097......... 01.0852 12.27 300034......... 02.0364 23.29 310086......... 01.2266 21.30 260180....................... 01.7006 20.07 280011.......... 00.8644 11.91 280098......... 00.9677 10.40 310001......... 01.7992 26.40 310087......... 01.2818 19.26 260183....................... 01.5643 16.14 280012.......... 01.3040 15.43 280101......... 01.0917 13.18 310002......... 01.7327 26.31 310088......... 01.2278 20.64 260186....................... 01.2995 15.97 280013.......... 01.8405 20.57 280102......... 01.1442 12.76 310003......... 01.2627 24.08 310090......... 01.2294 25.46 260188....................... 01.2526 18.64 280014.......... 00.9583 13.39 280104......... 00.9763 10.84 310005......... 01.2319 20.54 310091......... 01.3343 20.80 260189....................... 00.8480 11.26 280015.......... 01.0124 15.19 280105......... 01.3758 17.28 310006......... 01.2052 19.62 310092......... 01.3108 20.70 260190....................... 01.2528 18.90 280017.......... 01.1012 13.94 280106......... 00.9288 13.93 310008......... 01.3806 22.73 310093......... 01.1706 19.79 260191....................... 01.2514 17.92 280018.......... 01.0931 13.35 280107......... 01.0876 11.13 310009......... 01.2807 22.80 310096......... 01.8668 23.17 260193....................... 01.2323 18.75 280020.......... 01.6154 18.93 280108......... 01.2167 13.96 310010......... 01.2537 20.92 310105......... 01.2442 23.63 260195....................... 01.1679 14.49 280021.......... 01.3263 15.49 280109......... 00.9153 09.80 310011......... 01.2873 21.55 310108......... 01.4315 21.85 260197....................... 01.1444 20.98 280022.......... 01.0087 12.52 280110......... 01.0169 11.19 310012......... 01.5915 24.33 310110......... 01.2368 20.38 260198....................... 01.3378 15.86 280023.......... 01.4093 15.69 280111......... 01.2161 15.63 310013......... 01.2770 21.84 310111......... 01.3068 20.46 260200....................... 01.3613 19.10 280024.......... 00.9413 13.05 280114......... 00.9765 12.99 310014......... 01.7131 24.26 310112......... 01.3241 21.02 270002....................... 01.2856 15.06 280025.......... 00.9422 12.14 280115......... 00.9474 14.77 310015......... 01.9529 24.97 310113......... 01.2395 20.60 270003....................... 01.2214 19.98 280026.......... 01.0265 15.28 280117......... 01.1921 14.47 310016......... 01.2564 22.34 310115......... 01.2923 19.31 270004....................... 01.7045 19.96 280028.......... 01.0549 14.53 280118......... 00.9889 15.17 310017......... 01.3661 23.40 310116......... 01.2370 21.96 270006....................... 01.0898 14.78 280029.......... 01.2195 14.02 280119......... 00.8659 ....... 310018......... 01.1268 20.55 310118......... 01.2551 22.53 270007....................... 00.9224 13.18 280030.......... 01.7278 24.40 280123......... 00.9506 15.63 310019......... 01.6124 23.53 310119......... 01.6198 30.37 270009....................... 01.0810 15.34 280031.......... 01.0191 13.10 290001......... 01.6662 21.85 310020......... 01.2521 21.55 310120......... 01.0709 17.44 270011....................... 01.0719 15.52 280032.......... 01.3303 15.57 290002......... 00.9831 17.79 310021......... 01.3931 22.03 310121......... 01.1650 20.34 270012....................... 01.6741 17.63 280033.......... 01.0971 14.24 290003......... 01.6600 20.74 310022......... 01.2806 21.47 320001......... 01.4682 17.14 270013....................... 01.4138 17.77 280034.......... 01.3131 13.86 290005......... 01.4915 19.03 310024......... 01.3560 22.85 320002......... 01.3511 20.74 270014....................... 01.7987 16.83 280035.......... 00.9238 11.81 290006......... 01.1731 16.15 310025......... 01.2619 22.27 320003......... 01.1841 15.65 270016....................... 00.9321 13.23 280037.......... 01.0168 14.28 290007......... 01.9114 27.06 310026......... 01.2312 22.67 320004......... 01.2645 17.19 270017....................... 01.3064 18.66 280038.......... 01.0809 14.53 290008......... 01.1790 18.73 310027......... 01.3355 20.94 320005......... 01.3203 18.87 270019....................... 01.0378 14.02 280039.......... 01.1314 13.99 290009......... 01.5603 22.25 310028......... 01.1787 21.21 320006......... 01.3638 15.96 270021....................... 01.1545 16.23 280040.......... 01.6214 18.67 290010......... 01.1286 11.93 310029......... 01.9766 22.49 320009......... 01.5899 16.52 270023....................... 01.3584 20.28 280041.......... 00.9179 11.80 290011......... 01.0396 14.67 310031......... 02.8736 24.35 320011......... 01.0253 17.06 270024....................... 00.9913 13.05 280042.......... 01.1032 13.11 290012......... 01.3984 20.71 310032......... 01.3445 21.17 320012......... 00.9834 16.21 270026....................... 00.9309 12.95 280043.......... 01.0605 14.76 290013......... 01.0682 15.39 310034......... 01.2696 21.26 320013......... 01.1618 19.19 270027....................... 01.0785 11.91 280045.......... 01.2844 13.63 290014......... 01.0288 16.38 310036......... 01.1474 19.86 320014......... 01.1042 13.79 270028....................... 01.0841 15.37 280046.......... 01.1494 11.04 290015......... 01.0036 15.04 310037......... 01.3407 26.92 320016......... 01.1839 13.77 270029....................... 00.9507 16.24 280047.......... 01.0939 15.54 290016......... 01.2251 19.81 310038......... 02.0204 24.49 320017......... 01.1548 16.85 270032....................... 01.1189 15.80 280048.......... 01.1833 12.06 290019......... 01.3517 19.06 310039......... 01.2885 21.42 320018......... 01.5098 17.37 270033....................... 00.8853 12.22 280049.......... 01.0480 13.94 290020......... 01.0868 17.08 310040......... 01.2597 24.06 320019......... 01.5443 22.95 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46063]] Page 10 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 320021....................... 01.7533 17.31 330057.......... 01.6977 16.97 330167......... 01.7092 28.82 330265......... 01.3607 16.53 340021......... 01.2689 16.22 320022....................... 01.2423 16.07 330058.......... 01.3103 15.76 330169......... 01.4110 32.57 330267......... 01.2246 23.35 340022......... 01.0375 14.98 320023....................... 00.9909 16.72 330059.......... 01.5940 29.90 330171......... 01.3203 21.95 330268......... 01.0334 14.44 340023......... 01.4060 17.97 320030....................... 01.0487 18.27 330061.......... 01.3131 23.60 330175......... 01.1554 14.35 330270......... 01.9732 32.47 340024......... 01.1772 15.07 320031....................... 00.9027 12.36 330062.......... 01.1628 15.58 330177......... 01.0005 13.74 330273......... 01.3707 23.35 340025......... 01.1840 14.99 320032....................... 00.9301 15.10 330064.......... 01.4496 29.63 330179......... 00.8725 14.38 330275......... 01.3082 18.58 340027......... 01.1891 15.59 320033....................... 01.1267 20.90 330065.......... 01.1872 17.24 330180......... 01.1898 16.40 330276......... 01.1936 17.02 340028......... 01.5458 17.32 320035....................... 00.9731 14.58 330066.......... 01.3095 17.55 330181......... 01.3087 30.46 330277......... 01.1398 16.32 340030......... 02.0708 20.58 320037....................... 01.2157 15.59 330067.......... 01.3397 20.60 330182......... 02.4691 28.41 330279......... 01.3457 18.52 340031......... 01.0081 11.97 320038....................... 01.2291 13.85 330072.......... 01.3517 27.84 330183......... 01.5101 18.74 330285......... 01.7862 22.52 340032......... 01.3860 18.60 320046....................... 01.2573 18.15 330073.......... 01.1565 14.87 330184......... 01.3734 26.85 330286......... 01.3224 24.25 340035......... 01.1828 15.73 320048....................... 01.3064 17.40 330074.......... 01.2166 18.14 330185......... 01.3291 25.44 330290......... 01.7785 29.90 340036......... 01.2472 17.33 320056....................... 00.9777 ....... 330075.......... 01.0853 17.25 330186......... 00.8858 19.79 330293......... 01.1588 13.48 340037......... 01.1215 15.85 320057....................... 00.9860 ....... 330078.......... 01.3888 17.05 330188......... 01.2089 18.28 330304......... 01.2571 27.34 340038......... 01.0707 15.42 320058....................... 00.8563 ....... 330079.......... 01.2315 17.05 330189......... 01.4328 16.85 330306......... 01.4672 27.44 340039......... 01.2910 19.52 320059....................... 01.1562 ....... 330080.......... 01.4550 27.21 330191......... 01.3345 17.14 330307......... 01.2474 19.43 340040......... 01.7921 18.22 320060....................... 00.9435 ....... 330084.......... 01.0610 16.46 330193......... 01.3182 27.97 330308......... 01.2507 29.68 340041......... 01.2364 17.24 320061....................... 01.1137 ....... 330085.......... 01.3273 18.64 330194......... 01.8320 29.32 330309......... 01.2698 24.10 340042......... 01.1970 14.01 320062....................... 00.9094 ....... 330086.......... 01.2423 24.99 330195......... 01.6507 29.85 330314......... 01.4593 22.18 340044......... 01.0253 13.44 320063....................... 01.2911 16.46 330088.......... 01.0571 24.62 330196......... 01.3114 00.34 330315......... 16.1090 25.23 340045......... 00.9968 09.61 320065....................... 01.3721 17.00 330090.......... 01.5514 16.76 330197......... 01.0574 14.99 330316......... 01.2635 21.85 340047......... 01.8734 18.38 320067....................... 00.8637 17.64 330091.......... 01.3268 18.50 330198......... 01.4037 22.87 330327......... 00.9920 16.17 340048......... 00.8186 14.02 320068....................... 00.8763 15.36 330092.......... 01.1180 14.07 330199......... 01.4010 25.87 330331......... 01.2269 29.77 340049......... 00.6961 13.94 320069....................... 00.9960 10.67 330094.......... 01.1768 16.51 330201......... 01.6465 27.62 330332......... 01.2958 26.61 340050......... 01.1941 17.37 320070....................... 00.9059 ....... 330095.......... 01.2330 17.55 330202......... 01.6534 28.76 330333......... 01.2526 23.81 340051......... 01.3394 16.08 320074....................... 01.0785 17.04 330096.......... 01.0917 15.45 330203......... 01.3909 19.06 330336......... 01.3450 28.99 340052......... 01.0093 18.41 320079....................... 01.1533 17.22 330097.......... 01.2483 15.36 330204......... 01.4006 30.31 330338......... 01.2358 23.09 340053......... 01.6663 19.08 330001....................... 01.1757 25.49 330100.......... 00.7182 26.07 330205......... 01.1539 20.29 330339......... 00.8847 18.73 340054......... 01.1083 13.09 330002....................... 01.4142 25.22 330101.......... 01.7684 33.56 330208......... 01.2513 24.55 330340......... 01.1880 21.17 340055......... 01.1907 17.40 330003....................... 01.3152 17.67 330102.......... 01.3513 17.47 330209......... 01.2154 23.11 330350......... 01.8015 28.27 340060......... 01.1491 16.69 330004....................... 01.3320 19.08 330103.......... 01.2733 16.46 330211......... 01.1993 17.23 330353......... 01.3368 30.33 340061......... 01.7040 19.91 330005....................... 01.7984 20.49 330104.......... 01.3905 26.74 330212......... 01.1041 21.12 330354......... 01.5264 ....... 340063......... 01.0417 13.08 330006....................... 01.2710 23.92 330106.......... 01.5962 34.42 330213......... 01.1771 16.58 330357......... 01.3809 33.49 340064......... 01.2144 17.12 330007....................... 01.3464 17.71 330107.......... 01.3262 25.92 330214......... 01.7550 29.72 330359......... 00.9243 19.54 340065......... 01.3430 14.39 330008....................... 01.2061 15.62 330108.......... 01.2139 16.28 330215......... 01.2276 15.66 330372......... 01.2018 24.47 340067......... 01.2792 15.88 330009....................... 01.3815 30.32 330111.......... 01.0633 14.81 330218......... 01.1335 17.94 330381......... 01.1971 28.03 340068......... 01.2351 14.77 330010....................... 01.2801 15.07 330114.......... 00.9802 16.13 330219......... 01.6778 19.13 330385......... 01.1776 -2.89 340069......... 01.7382 19.47 330011....................... 01.3290 17.81 330115.......... 01.2248 15.23 330221......... 01.3386 27.53 330386......... 01.2009 22.53 340070......... 01.3823 17.57 330012....................... 01.7038 31.01 330116.......... 00.9813 14.21 330222......... 01.2772 17.64 330387......... 01.0268 23.95 340071......... 01.0851 15.08 330013....................... 02.0608 17.36 330118.......... 01.6299 18.94 330223......... 01.0642 15.37 330389......... 01.7489 29.43 340072......... 01.0654 15.20 330014....................... 01.3788 30.31 330119.......... 01.7640 33.48 330224......... 01.2453 20.32 330390......... 01.2900 30.36 340073......... 01.5496 20.23 330016....................... 01.0547 15.47 330121.......... 01.0392 16.10 330225......... 01.1722 24.43 330393......... 01.7141 27.22 340075......... 01.2024 16.26 330019....................... 01.2902 25.33 330122.......... 01.0867 21.84 330226......... 01.2740 17.05 330394......... 01.5390 17.96 340080......... 01.0607 12.72 330020....................... 01.0620 15.26 330125.......... 01.8729 19.78 330229......... 01.3074 15.73 330395......... 01.3045 30.64 340084......... 01.0587 15.61 330023....................... 01.2479 23.30 330126.......... 01.1881 22.34 330230......... 01.4285 28.69 330396......... 01.3520 24.91 340085......... 01.1720 15.65 330024....................... 01.8143 30.17 330127.......... 01.3437 24.82 330231......... 01.0938 30.02 330397......... 01.2858 25.47 340087......... 01.1024 16.01 330025....................... 01.1813 18.51 330128.......... 01.3917 28.29 330232......... 01.2394 16.42 330398......... 01.2749 26.92 340088......... 01.1388 16.42 330027....................... 01.4780 30.17 330132.......... 01.0770 14.60 330233......... 01.5512 29.70 330399......... 01.2737 29.65 340089......... 01.0348 12.85 330028....................... 01.4234 24.95 330133.......... 01.3665 30.50 330234......... 02.2563 29.60 340001......... 01.5504 19.47 340090......... 01.1542 17.15 330029....................... 01.0148 19.09 330135.......... 01.1572 18.28 330235......... 01.1452 18.33 340002......... 01.8974 18.38 340091......... 01.7238 19.42 330030....................... 01.2083 14.75 330136.......... 01.2992 16.54 330236......... 01.4044 27.87 340003......... 01.1484 17.08 340093......... 01.0733 12.10 330033....................... 01.2824 13.81 330140.......... 01.7638 17.79 330238......... 01.2306 14.19 340004......... 01.4886 17.16 340094......... 01.4431 17.65 330034....................... 00.7369 32.72 330141.......... 01.3548 24.27 330239......... 01.1936 15.39 340005......... 01.1591 13.24 340096......... 01.1673 17.33 330036....................... 01.2231 22.66 330144.......... 00.9791 13.70 330240......... 01.3305 28.41 340006......... 01.0881 14.60 340097......... 01.1830 16.61 330037....................... 01.1592 14.92 330148.......... 01.0830 14.58 330241......... 01.9102 22.54 340007......... 01.1617 16.20 340098......... 01.7209 19.46 330038....................... 01.2065 14.81 330151.......... 01.0751 14.55 330242......... 01.3802 23.99 340008......... 01.1475 16.97 340099......... 01.1578 12.70 330039....................... 00.8432 14.25 330152.......... 01.4444 28.88 330245......... 01.3022 17.51 340009......... 01.4763 19.70 340101......... 01.1697 11.80 330041....................... 01.3306 30.19 330153.......... 01.7128 17.15 330246......... 01.3541 25.33 340010......... 01.3236 16.97 340104......... 00.8600 12.36 330043....................... 01.3108 26.60 330154.......... 01.6429 ....... 330247......... 00.7659 29.15 340011......... 01.1355 14.36 340105......... 01.3859 17.94 330044....................... 01.2722 17.63 330157.......... 01.3608 19.48 330249......... 01.1711 15.98 340012......... 01.3193 15.92 340106......... 01.2109 18.52 330045....................... 01.4075 26.13 330158.......... 01.4129 23.06 330250......... 01.3086 16.89 340013......... 01.2557 15.63 340107......... 01.4165 16.65 330046....................... 01.4956 29.75 330159.......... 01.3177 17.67 330252......... 00.8785 15.72 340014......... 01.5864 22.01 340109......... 01.3485 16.84 330047....................... 01.2551 16.37 330160.......... 01.4457 29.16 330254......... 01.1651 15.21 340015......... 01.3037 17.05 340111......... 01.1783 13.75 330048....................... 01.2230 16.94 330161.......... 00.7222 16.75 330258......... 01.3696 26.99 340016......... 01.2047 15.58 340112......... 01.0683 13.87 330049....................... 01.3252 17.74 330162.......... 01.2585 26.51 330259......... 01.5046 22.78 340017......... 01.2671 16.06 340113......... 02.0121 21.03 330053....................... 01.1943 15.15 330163.......... 01.2523 18.88 330261......... 01.2906 25.24 340018......... 01.1777 15.29 340114......... 01.5618 19.74 330055....................... 01.4882 31.04 330164.......... 01.3928 19.40 330263......... 01.0194 18.52 340019......... 01.0467 13.86 340115......... 01.5417 18.15 330056....................... 01.3144 27.86 330166.......... 01.0011 15.11 330264......... 01.2443 23.18 340020......... 01.2083 17.65 340116......... 01.8211 20.54 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46064]] Page 11 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 340119....................... 01.2911 16.28 350041.......... 00.9769 14.99 360062......... 01.5165 19.27 360143......... 01.3986 18.13 370012......... 00.8913 09.07 340120....................... 01.0917 12.31 350042.......... 01.0876 11.16 360063......... 01.1515 18.08 360144......... 01.3179 20.90 370013......... 01.7919 19.41 340121....................... 01.1182 15.36 350043.......... 01.7067 16.69 360064......... 01.6063 21.61 360145......... 01.6494 17.67 370014......... 01.2905 18.49 340123....................... 01.1194 16.92 350044.......... 00.8710 10.29 360065......... 01.2762 17.59 360147......... 01.2388 15.85 370015......... 01.2695 14.88 340124....................... 01.0603 13.70 350047.......... 01.1747 16.78 360066......... 01.4343 18.88 360148......... 01.1249 17.65 370016......... 01.4272 15.52 340125....................... 01.4926 18.36 350049.......... 01.2578 10.74 360067......... 01.2705 12.77 360149......... 01.2285 17.72 370017......... 01.0956 11.48 340126....................... 01.4258 16.47 350050.......... 00.9330 10.74 360068......... 01.7423 22.41 360150......... 01.2490 19.17 370018......... 01.3350 16.66 340127....................... 01.2939 15.72 350051.......... 00.9947 15.46 360069......... 01.1370 16.74 360151......... 01.3513 17.46 370019......... 01.2757 13.17 340129....................... 01.2939 17.50 350053.......... 01.0948 10.34 360070......... 01.7333 17.18 360152......... 01.4715 17.88 370020......... 01.3047 12.51 340130....................... 01.4419 17.78 350055.......... 00.8596 12.12 360071......... 01.3523 16.78 360153......... 01.1796 14.12 370021......... 00.8951 09.76 340131....................... 01.5338 17.10 350056.......... 00.9765 12.81 360072......... 01.2124 16.99 360154......... 01.0368 12.79 370022......... 01.2941 16.91 340132....................... 01.4383 13.48 350058.......... 00.8563 12.32 360074......... 01.3725 19.42 360155......... 01.3327 19.43 370023......... 01.3248 15.36 340133....................... 01.0956 14.59 350060.......... 00.7725 07.81 360075......... 01.4496 20.74 360156......... 01.3468 17.17 370025......... 01.3637 16.03 340137....................... 01.1410 16.93 350061.......... 01.0745 14.05 360076......... 01.3490 17.88 360159......... 01.2231 19.63 370026......... 01.4154 16.34 340138....................... 01.0567 14.77 350063.......... 00.8461 ....... 360077......... 01.5389 19.34 360161......... 01.2521 19.38 370028......... 01.9042 19.01 340141....................... 01.6716 19.46 350064.......... 00.9598 ....... 360078......... 01.3080 20.54 360162......... 01.2452 18.42 370029......... 01.2199 13.67 340142....................... 01.2340 14.52 350066.......... 00.4249 ....... 360079......... 01.8681 21.00 360163......... 01.8349 19.83 370030......... 01.2212 15.66 340143....................... 01.4482 17.07 360001.......... 01.3384 16.97 360080......... 01.1083 15.47 360164......... 00.9007 14.82 370032......... 01.5792 15.46 340144....................... 01.3645 18.62 360002.......... 01.2162 16.93 360081......... 01.3841 19.32 360165......... 01.1742 14.70 370033......... 01.0221 11.30 340145....................... 01.4125 16.83 360003.......... 01.7712 21.00 360082......... 01.3414 20.33 360166......... 01.2030 14.95 370034......... 01.2616 13.35 340146....................... 01.0456 12.52 360006.......... 01.7607 20.88 360083......... 01.2828 16.28 360170......... 01.3775 17.38 370035......... 01.6378 16.49 340147....................... 01.3150 18.57 360007.......... 01.0849 16.02 360084......... 01.6067 19.41 360172......... 01.3901 16.51 370036......... 01.1174 10.48 340148....................... 01.5007 18.58 360008.......... 01.2525 17.40 360085......... 01.7980 20.40 360174......... 01.3088 17.57 370037......... 01.7461 17.69 340151....................... 01.2148 15.08 360009.......... 01.3939 17.80 360086......... 01.4480 18.21 360175......... 01.2520 18.78 370038......... 00.9834 11.67 340153....................... 01.8980 19.07 360010.......... 01.1941 16.42 360087......... 01.4085 17.90 360176......... 01.1680 14.85 370039......... 01.4126 14.24 340155....................... 01.4119 20.03 360011.......... 01.3105 18.17 360088......... 01.2530 16.38 360177......... 01.2971 16.97 370040......... 01.0732 12.21 340156....................... 00.8453 ....... 360012.......... 01.2907 19.29 360089......... 01.1458 17.82 360178......... 01.1892 16.88 370041......... 01.0325 14.17 340158....................... 01.2122 16.64 360013.......... 01.1167 17.72 360090......... 01.2435 19.06 360179......... 01.2990 19.34 370042......... 00.8601 12.67 340159....................... 01.1730 17.58 360014.......... 01.1749 17.98 360091......... 01.2344 19.17 360180......... 02.1407 22.61 370043......... 00.9385 13.83 340160....................... 01.1167 13.34 360016.......... 01.5907 17.92 360092......... 01.1738 18.70 360184......... 00.4826 16.57 370045......... 01.0062 10.45 340162....................... 01.1881 17.44 360017.......... 01.8253 20.42 360093......... 01.2307 16.69 360185......... 01.2327 17.09 370046......... 01.0062 11.67 340164....................... 01.5860 18.61 360018.......... 01.6307 19.25 360094......... 01.3184 19.51 360186......... 01.1293 14.23 370047......... 01.3674 15.46 340166....................... 01.3553 19.31 360019.......... 01.2457 19.11 360095......... 01.2967 17.00 360187......... 01.3884 16.45 370048......... 01.2342 14.10 340168....................... 00.5173 14.86 360020.......... 01.4476 19.77 360096......... 01.1102 16.11 360188......... 00.9743 15.83 370049......... 01.3882 15.65 340171....................... 01.1321 20.34 360021.......... 01.2174 17.75 360098......... 01.3556 17.96 360189......... 01.0811 16.02 370051......... 00.9683 12.64 340173....................... 01.2798 ....... 360024.......... 01.4071 18.60 360099......... 01.0454 15.01 360192......... 01.3259 20.42 370054......... 01.4885 15.15 350001....................... 01.0123 11.96 360025.......... 01.2808 18.44 360100......... 01.2628 16.54 360193......... 01.3581 16.93 370056......... 01.5839 18.24 350002....................... 01.7471 15.76 360026.......... 01.3129 15.99 360101......... 01.5606 19.00 360194......... 01.2097 16.98 370057......... 01.1540 13.78 350003....................... 01.1860 16.16 360027.......... 01.5042 19.53 360102......... 01.3166 20.31 360195......... 01.1428 18.15 370059......... 01.1079 17.59 350004....................... 01.9396 17.55 360028.......... 01.4059 16.15 360103......... 01.3796 19.64 360197......... 01.2406 18.15 370060......... 01.0892 12.84 350005....................... 01.1759 12.94 360029.......... 01.1959 17.00 360106......... 01.0886 14.96 360200......... 01.0117 14.16 370063......... 01.0280 13.43 350006....................... 01.4658 15.92 360030.......... 01.3039 16.35 360107......... 01.2908 17.73 360203......... 01.1555 15.13 370064......... 01.0078 10.63 350007....................... 00.9387 11.95 360031.......... 01.3375 18.56 360108......... 01.0396 15.34 360204......... 01.1930 17.97 370065......... 00.9975 15.50 350008....................... 00.9673 15.65 360032.......... 01.0924 18.26 360109......... 01.0923 17.32 360210......... 01.1623 19.78 370071......... 01.0650 11.99 350009....................... 01.2044 15.95 360034.......... 01.2896 13.90 360112......... 01.8045 22.51 360211......... 01.2500 18.78 370072......... 00.9083 12.83 350010....................... 01.1975 12.15 360035.......... 01.5988 20.13 360113......... 01.3367 19.20 360212......... 01.3950 19.17 370076......... 01.2782 12.00 350011....................... 01.9030 17.35 360036.......... 01.3855 17.71 360114......... 01.0906 17.10 360213......... 01.1504 17.17 370077......... 01.1968 16.27 350012....................... 01.2136 11.99 360037.......... 02.0437 20.51 360115......... 01.2874 17.65 360218......... 01.3232 16.46 370078......... 01.6803 14.49 350013....................... 01.0734 15.32 360038.......... 01.5766 18.07 360116......... 01.1189 16.64 360230......... 01.5121 19.37 370079......... 00.9507 12.41 350014....................... 01.0049 15.46 360039.......... 01.3052 16.07 360118......... 01.3818 18.32 360231......... 01.0866 12.11 370080......... 00.9633 11.68 350015....................... 01.6959 15.63 360040.......... 01.4268 17.31 360121......... 01.2342 17.90 360234......... 01.3527 18.54 370082......... 00.8647 13.46 350016....................... 01.0278 10.92 360041.......... 01.3556 18.33 360123......... 01.1997 18.37 360236......... 01.2897 17.59 370083......... 00.9410 11.35 350017....................... 01.4347 15.24 360042.......... 01.1551 17.62 360125......... 01.0747 17.38 360239......... 01.3234 19.51 370084......... 01.1272 11.02 350018....................... 01.0690 11.21 360044.......... 01.1741 15.64 360126......... 01.2090 20.09 360241......... 00.5799 18.86 370085......... 00.8936 14.52 350019....................... 01.6318 18.43 360045.......... 01.5348 20.90 360127......... 01.2236 16.48 360242......... 01.6800 ....... 370086......... 01.1242 07.79 350020....................... 01.7038 20.24 360046.......... 01.1457 17.85 360128......... 01.2053 14.73 360243......... 00.7547 15.52 370089......... 01.2565 13.16 350021....................... 01.0657 11.41 360047.......... 01.1558 13.65 360129......... 01.0204 14.59 360244......... 00.6212 15.74 370091......... 01.7693 17.18 350023....................... 00.9056 12.86 360048.......... 01.7911 21.55 360130......... 01.1377 15.59 360245......... 00.7563 14.33 370092......... 01.0486 14.38 350024....................... 01.0901 15.40 360049.......... 01.2049 18.18 360131......... 01.3624 17.38 360247......... 00.4249 ....... 370093......... 01.8714 18.71 350025....................... 01.0197 13.34 360050.......... 01.1543 12.37 360132......... 01.3101 18.78 360248......... 01.7716 ....... 370094......... 01.4088 17.00 350027....................... 00.9438 12.32 360051.......... 01.6080 21.90 360133......... 01.4858 18.44 370001......... 01.7032 18.73 370095......... 00.9450 11.66 350029....................... 00.8818 13.02 360052.......... 01.7565 18.41 360134......... 01.7139 19.43 370002......... 01.2588 13.98 370097......... 01.4520 18.02 350030....................... 00.9794 15.93 360054.......... 01.2912 15.83 360135......... 01.1809 16.82 370004......... 01.3080 15.35 370099......... 01.1924 12.65 350033....................... 00.9672 14.33 360055.......... 01.2726 19.12 360136......... 01.0773 15.96 370005......... 01.0106 13.12 370100......... 00.9622 13.45 350034....................... 00.9622 18.05 360056.......... 01.4296 16.47 360137......... 01.6206 18.82 370006......... 01.2229 15.45 370103......... 00.9375 15.07 350035....................... 00.8570 09.95 360057.......... 01.1168 13.87 360140......... 01.0258 16.19 370007......... 01.2061 13.82 370105......... 01.9923 16.23 350038....................... 01.0479 14.07 360058.......... 01.3461 16.66 360141......... 01.4692 21.06 370008......... 01.4030 16.68 370106......... 01.5356 16.46 350039....................... 01.0484 13.84 360059.......... 01.5754 20.39 360142......... 00.9969 15.98 370011......... 01.0547 12.95 370108......... 01.0528 11.73 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46065]] Page 12 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 370112....................... 01.0771 13.21 380029.......... 01.1586 18.45 390032......... 01.2762 18.10 390115......... 01.3809 22.31 390205......... 01.4138 20.63 370113....................... 01.2416 16.23 380031.......... 01.0219 18.48 390035......... 01.2570 17.79 390116......... 01.2586 21.78 390206......... 01.4057 20.14 370114....................... 01.6787 15.49 380033.......... 01.7402 24.13 390036......... 01.4202 18.06 390117......... 01.1972 15.62 390209......... 01.0481 15.09 370121....................... 01.1451 17.38 380035.......... 01.3725 19.01 390037......... 01.3360 18.93 390118......... 01.2115 16.26 390211......... 01.2749 16.99 370122....................... 01.1357 07.58 380036.......... 01.0566 20.26 390039......... 01.1244 15.66 390119......... 01.3748 17.59 390213......... 01.0016 16.41 370123....................... 01.2119 12.32 380037.......... 01.1645 19.53 390040......... 00.9686 13.13 390121......... 01.3448 17.47 390215......... 01.2812 21.06 370125....................... 01.0097 13.37 380038.......... 01.3393 22.64 390041......... 01.3187 17.07 390122......... 01.0693 17.57 390217......... 01.2357 18.51 370126....................... 00.9543 15.34 380039.......... 01.3779 29.30 390042......... 01.5624 21.73 390123......... 01.3537 20.71 390219......... 01.3287 19.67 370131....................... 01.0012 12.88 380040.......... 01.2637 19.96 390043......... 01.1719 14.85 390125......... 01.2284 15.61 390220......... 01.1983 19.08 370133....................... 01.1472 10.09 380042.......... 01.1612 20.57 390044......... 01.6556 19.63 390126......... 01.2945 21.03 390222......... 01.3122 20.33 370138....................... 01.1325 15.23 380047.......... 01.7067 22.12 390045......... 01.7661 18.05 390127......... 01.2538 20.96 390223......... 01.5528 23.17 370139....................... 01.1354 12.56 380048.......... 01.0410 14.68 390046......... 01.6117 19.79 390128......... 01.2119 18.14 390224......... 00.9223 13.35 370140....................... 00.9528 10.99 380050.......... 01.3901 17.45 390047......... 01.7852 28.26 390130......... 01.1560 17.20 390225......... 01.2083 17.19 370141....................... 01.3715 17.30 380051.......... 01.5648 20.05 390048......... 01.1647 16.60 390131......... 01.2907 16.30 390226......... 01.7768 24.15 370146....................... 01.0085 10.73 380052.......... 01.1918 16.61 390049......... 01.6474 20.69 390132......... 01.3448 15.42 390228......... 01.2582 19.38 370148....................... 01.5151 18.46 380055.......... 01.1757 24.14 390050......... 02.1314 22.39 390133......... 01.8281 21.71 390231......... 01.3348 25.11 370149....................... 01.2706 15.35 380056.......... 01.0666 17.36 390051......... 02.2272 25.28 390135......... 01.3066 21.05 390233......... 01.3161 17.22 370153....................... 01.1557 14.05 380060.......... 01.4373 21.98 390052......... 01.2179 19.41 390136......... 01.1980 15.39 390235......... 01.6702 24.38 370154....................... 00.9897 13.05 380061.......... 01.5351 22.07 390054......... 01.2347 16.08 390137......... 01.5015 16.35 390236......... 01.2217 15.88 370156....................... 01.0800 12.49 380062.......... 01.1543 14.40 390055......... 01.8450 21.81 390138......... 01.3173 17.93 390237......... 01.5935 20.36 370158....................... 00.9865 11.75 380063.......... 01.2864 19.01 390056......... 01.1639 16.81 390139......... 01.5607 23.54 390238......... 01.4213 16.51 370159....................... 01.2594 15.59 380064.......... 01.3688 21.25 390057......... 01.2716 18.70 390142......... 01.6526 23.18 390242......... 01.2889 18.48 370163....................... 00.8591 12.16 380065.......... 01.0800 22.49 390058......... 01.3370 18.67 390145......... 01.3905 19.48 390244......... 00.8920 09.83 370165....................... 01.2006 12.46 380066.......... 01.4293 18.58 390060......... 01.1510 16.92 390146......... 01.2882 16.44 390245......... 01.3803 24.05 370166....................... 01.1406 16.32 380068.......... 01.0516 19.05 390061......... 01.4893 19.08 390147......... 01.2376 19.08 390246......... 01.2473 17.25 370169....................... 01.1037 11.25 380069.......... 01.1438 18.59 390062......... 01.2096 16.01 390150......... 01.1109 18.10 390247......... 01.0371 18.26 370170....................... 01.0855 . 380070.......... 01.3961 21.24 390063......... 01.7640 19.24 390151......... 01.2813 18.58 390249......... 00.9800 12.06 370171....................... 01.0678 ....... 380071.......... 01.3440 20.07 390065......... 01.2780 19.30 390152......... 01.0750 18.81 390256......... 01.8586 23.45 370172....................... 00.9962 ....... 380072.......... 00.9537 14.66 390066......... 01.3186 17.77 390153......... 01.2419 22.46 390258......... 01.2671 20.08 370173....................... 01.1933 ....... 380075.......... 01.4047 19.72 390067......... 01.7794 18.91 390154......... 01.2332 16.67 390260......... 01.2216 21.17 370174....................... 01.1211 ....... 380078.......... 01.1150 17.41 390068......... 01.2742 17.23 390155......... 01.2835 19.44 390262......... 02.1059 17.77 370176....................... 01.1972 15.29 380081.......... 01.0847 18.84 390069......... 01.2051 17.75 390156......... 01.4396 21.37 390263......... 01.4786 19.16 370177....................... 01.0146 10.09 380082.......... 01.3405 22.96 390070......... 01.2858 20.39 390157......... 01.3451 17.99 390265......... 01.2976 18.82 370178....................... 01.0055 10.96 380083.......... 01.2349 20.06 390071......... 01.1351 13.68 390158......... 01.5819 18.96 390266......... 01.1930 16.81 370179....................... 00.8169 17.33 380084.......... 01.3216 21.43 390072......... 01.0913 15.91 390160......... 01.2468 18.50 390267......... 01.2771 19.80 370180....................... 00.9740 ....... 380087.......... 01.0052 15.38 390073......... 01.6266 19.03 390161......... 01.1266 14.43 390268......... 01.3964 20.44 370183....................... 01.0165 12.06 380088.......... 01.0315 16.16 390074......... 01.3127 16.05 390162......... 01.4556 19.59 390270......... 01.3202 16.67 370186....................... 01.0206 13.15 380089.......... 01.3738 22.25 390075......... 01.3025 16.41 390163......... 01.2420 15.99 390272......... 00.5074 ...... 370189....................... 00.9532 07.82 380090.......... 01.3211 25.71 390076......... 01.3566 21.07 390164......... 02.1542 20.37 390277......... 00.4880 22.55 370190....................... 01.5794 15.31 380091.......... 01.2631 25.13 390078......... 01.0424 16.88 390166......... 01.1022 18.31 390278......... 00.6661 18.42 370192....................... 01.3093 17.57 390001.......... 01.3373 18.25 390079......... 01.7564 16.81 390167......... 01.3544 21.30 390279......... 01.0584 15.32 370194....................... 01.8180 ....... 390002.......... 01.3644 18.62 390080......... 01.3323 19.14 390168......... 01.2625 18.43 390281......... 02.6697 ...... 370195....................... 01.7401 ....... 390003.......... 01.2554 15.88 390081......... 01.3776 22.88 390169......... 01.2856 18.72 390282......... 02.9409 ...... 370196....................... 01.1671 ....... 390004.......... 01.4319 18.12 390083......... 01.1662 22.01 390170......... 01.9087 21.25 400001......... 01.3065 08.65 370197....................... 01.0898 ....... 390005.......... 01.0806 14.24 390084......... 01.1944 15.57 390173......... 01.1949 16.79 400002......... 01.6129 11.34 380001....................... 01.3616 21.21 390006.......... 01.7592 18.17 390086......... 01.2005 15.86 390174......... 01.7675 25.41 400003......... 01.2768 08.61 380002....................... 01.1954 19.35 390007.......... 01.1638 21.90 390088......... 01.3124 22.62 390176......... 01.1748 18.14 400004......... 01.1628 08.18 380003....................... 01.2096 20.71 390008.......... 01.1579 15.47 390090......... 01.8633 18.97 390178......... 01.2993 18.44 400005......... 01.0828 06.61 380004....................... 01.7682 23.34 390009.......... 01.6174 17.81 390091......... 01.1348 17.40 390179......... 01.3019 22.12 400006......... 01.1998 07.59 380005....................... 01.2457 21.15 390010.......... 01.1940 17.10 390093......... 01.1530 14.99 390180......... 01.5552 23.40 400007......... 01.2160 07.46 380006....................... 01.3673 19.26 390011.......... 01.2706 16.82 390095......... 01.1941 14.46 390181......... 01.0669 18.59 400009......... 01.0124 07.71 380007....................... 01.5837 23.43 390012.......... 01.2607 19.75 390096......... 01.3470 17.00 390183......... 01.2194 18.03 400010......... 00.9370 08.53 380008....................... 01.0565 17.83 390013.......... 01.2410 16.90 390097......... 01.3270 21.56 390184......... 01.1453 18.07 400011......... 00.9932 08.12 380009....................... 01.8640 23.30 390015.......... 01.1668 13.12 390098......... 01.7998 20.75 390185......... 01.2099 16.34 400012......... 01.2679 07.40 380010....................... 01.1177 20.67 390016.......... 01.2448 16.40 390100......... 01.6693 20.03 390189......... 01.0930 16.73 400013......... 01.2504 07.44 380011....................... 01.0880 20.97 390017.......... 01.1347 15.43 390101......... 01.2430 16.62 390191......... 01.1775 14.33 400014......... 01.3895 08.92 380013....................... 01.2741 17.76 390018.......... 01.3507 20.05 390102......... 01.3992 20.51 390192......... 01.1868 16.36 400015......... 01.2239 09.83 380014....................... 01.5560 20.77 390019.......... 01.1182 15.59 390103......... 01.1030 18.00 390193......... 01.2146 16.13 400016......... 01.3497 10.89 380017....................... 01.8253 23.17 390022.......... 01.3276 21.40 390104......... 01.0899 14.99 390194......... 01.1010 18.91 400017......... 01.2425 07.70 380018....................... 01.7644 21.22 390023.......... 01.3010 18.98 390106......... 01.0768 15.15 390195......... 01.8873 22.93 400018......... 01.2993 09.67 380019....................... 01.3170 19.33 390024.......... 00.9898 23.26 390107......... 01.2972 19.04 390196......... 01.4406 ....... 400019......... 01.8030 09.34 380020....................... 01.4406 21.43 390025.......... 00.6308 15.97 390108......... 01.3512 20.08 390197......... 01.3014 18.49 400021......... 01.4988 08.78 380021....................... 01.2983 19.44 390026.......... 01.2830 20.94 390109......... 01.1606 14.14 390198......... 01.2247 15.75 400022......... 01.3222 10.01 380022....................... 01.2344 21.01 390027.......... 01.8940 25.88 390110......... 01.5989 18.05 390199......... 01.3118 15.40 400024......... 00.9975 07.79 380023....................... 01.2476 17.43 390028.......... 01.9133 17.78 390111......... 01.8414 27.88 390200......... 01.0929 14.88 400026......... 00.9746 05.66 380025....................... 01.2534 22.55 390029.......... 01.9558 18.83 390112......... 01.1966 12.26 390201......... 01.2589 19.26 400027......... 01.1943 09.06 380026....................... 01.1657 17.54 390030.......... 01.2417 17.37 390113......... 01.2118 16.25 390203......... 01.3873 20.96 400028......... 01.0387 07.89 380027....................... 01.3334 23.09 390031.......... 01.1640 17.15 390114......... 01.2644 22.27 390204......... 01.2800 18.56 400029......... 01.1383 ...... ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46066]] Page 13 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 400031....................... 01.1913 08.38 420053.......... 01.2774 14.99 430056......... 00.8741 09.56 440068......... 01.2254 17.28 440205......... 01.1096 15.47 400032....................... 01.1933 08.21 420054.......... 01.2603 17.08 430057......... 00.9229 10.73 440070......... 01.1011 14.28 440206......... 01.0829 13.80 400044....................... 01.2118 09.14 420055.......... 01.0222 14.59 430060......... 00.9262 08.64 440071......... 01.3979 16.32 440208......... 01.9916 ...... 400048....................... 01.2251 ....... 420056.......... 01.1518 13.66 430062......... 00.8090 10.50 440072......... 01.4186 14.81 440209......... 01.7802 ...... 400061....................... 01.5945 13.14 420057.......... 01.1676 15.20 430064......... 01.1664 12.48 440073......... 01.3463 18.39 440211......... 00.7914 ...... 400079....................... 01.2989 08.37 420059.......... 00.9864 13.80 430065......... 01.0035 10.34 440078......... 01.0317 13.14 450002......... 01.5261 18.75 400087....................... 01.4162 08.10 420061.......... 01.1701 16.99 430066......... 00.9891 11.87 440081......... 01.1820 15.86 450004......... 01.2254 12.21 400094....................... 01.1058 09.07 420062.......... 01.3804 16.51 430073......... 01.0158 13.25 440082......... 02.0430 21.47 450005......... 01.2221 14.82 400098....................... 01.2338 07.55 420064.......... 01.1545 14.32 430076......... 00.9849 10.30 440083......... 01.1480 12.16 450007......... 01.2626 13.51 400102....................... 01.2188 07.59 420065.......... 01.3538 17.37 430077......... 01.6495 16.77 440084......... 01.1833 12.89 450008......... 01.3661 14.74 400103....................... 01.4253 09.13 420066.......... 00.9250 15.38 430079......... 00.9968 11.63 440090......... 00.8532 11.62 450010......... 01.4024 15.12 400104....................... 01.4137 09.01 420067.......... 01.2687 16.48 430081......... 00.9338 ....... 440091......... 01.6477 16.91 450011......... 01.5959 17.67 400105....................... 01.3250 09.05 420068.......... 01.3430 17.25 430082......... 00.9221 ....... 440100......... 01.0678 13.60 450014......... 01.0411 14.53 400106....................... 01.2027 07.87 420069.......... 01.0606 14.29 430083......... 00.7736 ....... 440102......... 01.0777 12.64 450015......... 01.5299 15.25 400109....................... 01.4914 09.67 420070.......... 01.2890 15.76 430084......... 00.9792 ....... 440103......... 01.2605 16.57 450016......... 01.6408 17.49 400110....................... 01.1463 08.39 420071.......... 01.3340 17.29 430085......... 00.9069 ....... 440104......... 01.6987 18.53 450018......... 01.5929 21.98 400111....................... 01.1311 08.52 420072.......... 01.0354 11.94 430087......... 00.9333 08.64 440105......... 01.0989 16.52 450020......... 01.0246 16.23 400112....................... 01.2492 08.03 420073.......... 01.3185 18.17 430089......... 00.8346 ....... 440109......... 01.1123 12.71 450021......... 01.8352 21.68 400113....................... 01.2692 07.41 420074.......... 00.9857 11.49 440001......... 01.1456 12.99 440110......... 00.9587 16.41 450023......... 01.4560 16.45 400114....................... 01.0613 07.55 420075.......... 00.9638 14.51 440002......... 01.6285 16.75 440111......... 01.4009 18.75 450024......... 01.3308 16.74 400115....................... 01.0254 07.86 420078.......... 01.8003 19.92 440003......... 01.1383 15.46 440114......... 01.0824 12.28 450025......... 01.5918 15.72 400117....................... 01.1717 09.01 420079.......... 01.5954 18.15 440006......... 01.4804 18.40 440115......... 01.0713 15.34 450028......... 01.5626 18.19 400118....................... 01.2078 09.52 420080.......... 01.3386 21.29 440007......... 00.9713 11.94 440120......... 01.5429 18.26 450029......... 01.4570 14.12 400120....................... 01.3175 09.23 420081.......... 01.2360 19.59 440008......... 01.0206 12.34 440125......... 01.4791 18.20 450031......... 01.5193 19.54 400121....................... 01.0939 06.53 420082.......... 01.4171 19.00 440009......... 01.2679 14.38 440130......... 01.2138 13.33 450032......... 01.2471 12.89 400122....................... 01.0230 06.66 420083.......... 01.2856 17.31 440010......... 00.9448 10.15 440131......... 01.1302 13.71 450033......... 01.6126 17.70 400123....................... 01.1446 09.36 420085.......... 01.5083 17.52 440011......... 01.3301 16.51 440132......... 01.1419 14.75 450034......... 01.7095 18.08 400124....................... 02.3583 11.31 420086.......... 01.3750 16.96 440012......... 01.5155 18.04 440133......... 01.5684 18.67 450035......... 01.5326 19.16 410001....................... 01.3371 22.95 420087.......... 01.6990 16.86 440014......... 01.1200 09.84 440135......... 01.2866 17.25 450037......... 01.6270 18.03 410004....................... 01.3139 21.15 420088.......... 01.1999 15.27 440015......... 01.7323 18.12 440137......... 01.0171 13.14 450039......... 01.3288 17.37 410005....................... 01.3535 22.61 420089.......... 01.2336 20.60 440016......... 00.9970 12.59 440141......... 01.0474 14.12 450040......... 01.5635 17.73 410006....................... 01.3134 20.75 420091.......... 01.2895 18.32 440017......... 01.6425 20.72 440142......... 01.0235 11.05 450042......... 01.7513 15.78 410007....................... 01.7033 21.60 420093.......... 01.0290 ....... 440018......... 01.4087 17.06 440143......... 01.1029 16.45 450044......... 01.6323 19.72 410008....................... 01.2207 21.52 420094.......... 01.0142 ....... 440019......... 01.7245 17.21 440144......... 01.2377 18.01 450046......... 01.3332 15.81 410009....................... 01.3152 21.03 430004.......... 01.1098 15.06 440020......... 01.2198 15.78 440145......... 00.9917 14.42 450047......... 01.1063 13.46 410010....................... 01.0663 25.32 430005.......... 01.3635 14.44 440022......... 01.1220 14.01 440147......... 01.5380 23.56 450050......... 01.0051 14.35 410011....................... 01.2322 23.54 430007.......... 01.0876 12.77 440023......... 01.0845 13.04 440148......... 01.1478 15.54 450051......... 01.6238 18.53 410012....................... 01.8243 20.26 430008.......... 01.1139 13.56 440024......... 01.3163 16.88 440149......... 01.1533 15.28 450052......... 01.0402 13.01 410013....................... 01.3321 27.36 430010.......... 01.1619 11.70 440025......... 01.1310 13.54 440150......... 01.2975 19.97 450053......... 01.0950 13.82 420002....................... 01.3781 20.19 430011.......... 01.2805 14.49 440029......... 01.2898 16.88 440151......... 01.3044 16.20 450054......... 01.6713 21.71 420004....................... 01.8270 18.16 430012.......... 01.2848 15.08 440030......... 01.2286 12.15 440152......... 01.8133 17.68 450055......... 01.1386 13.89 420005....................... 01.2076 14.51 430013.......... 01.2924 15.39 440031......... 01.0158 13.14 440153......... 01.2942 15.19 450056......... 01.6924 17.92 420006....................... 01.1694 17.19 430014.......... 01.3101 17.03 440032......... 01.0561 14.47 440156......... 01.5826 19.18 450058......... 01.5836 16.46 420007....................... 01.4966 16.92 430015.......... 01.2209 15.17 440033......... 01.1140 14.61 440157......... 01.0397 13.83 450059......... 01.2884 13.85 420009....................... 01.2382 16.92 430016.......... 01.8665 17.78 440034......... 01.5576 17.68 440159......... 01.3156 14.02 450063......... 00.9369 10.66 420010....................... 01.1211 15.13 430018.......... 00.9509 13.13 440035......... 01.3309 16.53 440161......... 01.8754 20.06 450064......... 01.4910 15.57 420011....................... 01.1251 15.28 430022.......... 00.9348 11.95 440039......... 01.6969 17.44 440166......... 01.5786 18.25 450065......... 01.1163 14.73 420014....................... 01.0959 14.36 430023.......... 00.9495 10.34 440040......... 01.0122 10.81 440168......... 01.0442 12.43 450068......... 01.8865 21.36 420015....................... 01.3676 16.84 430024.......... 00.9521 12.07 440041......... 01.0586 12.23 440173......... 01.5485 17.50 450072......... 01.2275 18.67 420016....................... 01.0741 14.21 430026.......... 01.0086 11.24 440046......... 01.2850 15.30 440174......... 01.0180 12.74 450073......... 01.1003 12.06 420018....................... 01.8145 20.00 430027.......... 01.7854 17.63 440047......... 00.9397 14.52 440175......... 01.1775 18.60 450076......... 01.6678 ...... 420019....................... 01.1995 14.70 430028.......... 01.1346 13.29 440048......... 01.8500 17.82 440176......... 01.4502 19.17 450078......... 00.9703 11.75 420020....................... 01.3498 16.94 430029.......... 00.9654 13.84 440049......... 01.6746 16.37 440178......... 01.2514 17.07 450079......... 01.4563 21.93 420023....................... 01.4485 18.50 430031.......... 00.9226 11.58 440050......... 01.3461 16.28 440180......... 01.2307 16.96 450080......... 01.2802 15.99 420026....................... 01.8750 18.16 430033.......... 01.0529 13.10 440051......... 00.9678 13.82 440181......... 01.0352 12.37 450081......... 01.0888 14.50 420027....................... 01.3572 16.82 430034.......... 01.1129 11.59 440052......... 01.1948 14.76 440182......... 01.0190 12.53 450082......... 01.0035 14.70 420030....................... 01.2764 17.28 430036.......... 01.0216 11.83 440053......... 01.3459 16.28 440183......... 01.5114 19.69 450083......... 01.7818 19.58 420031....................... 00.9784 11.88 430037.......... 00.9883 13.15 440054......... 01.2016 14.55 440184......... 01.3997 18.96 450085......... 01.0862 17.24 420033....................... 01.1614 18.91 430038.......... 01.0476 10.83 440056......... 01.1017 13.57 440185......... 01.2202 17.48 450087......... 01.4647 19.68 420036....................... 01.3499 16.42 430040.......... 01.0233 12.64 440057......... 01.0237 12.15 440186......... 01.0746 15.77 450090......... 01.2180 13.26 420037....................... 01.2802 20.66 430041.......... 00.9677 12.47 440058......... 01.2495 16.30 440187......... 01.1420 14.58 450092......... 01.2103 14.59 420038....................... 01.2725 14.80 430043.......... 01.2163 11.82 440059......... 01.3842 14.85 440189......... 01.5092 19.13 450094......... 01.3336 17.87 420039....................... 01.1654 15.64 430044.......... 00.8361 14.07 440060......... 01.3027 14.20 440192......... 01.1999 15.37 450096......... 01.5711 17.19 420042....................... 01.1386 14.05 430047.......... 01.0845 11.92 440061......... 01.1956 15.89 440193......... 01.2971 18.60 450097......... 01.4826 18.51 420043....................... 01.2699 19.12 430048.......... 01.2958 15.48 440063......... 01.6377 17.90 440194......... 01.2212 17.13 450098......... 01.1761 15.10 420048....................... 01.1477 15.56 430049.......... 00.9275 12.70 440064......... 01.1174 14.56 440197......... 01.3749 19.23 450099......... 01.3103 14.66 420049....................... 01.2069 15.89 430051.......... 00.9280 13.84 440065......... 01.2888 17.78 440200......... 01.0979 15.64 450101......... 01.4893 15.44 420051....................... 01.6352 18.06 430054.......... 01.0393 12.79 440067......... 01.2835 14.99 440203......... 00.9109 13.09 450102......... 01.7046 17.87 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46067]] Page 14 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 450104....................... 01.2431 14.23 450219.......... 01.1560 14.78 450379......... 01.5227 21.62 450591......... 01.1493 18.92 450713......... 01.4979 20.85 450107....................... 01.6232 22.05 450221.......... 01.1643 14.40 450381......... 00.9920 12.86 450596......... 01.3891 17.15 450715......... 01.3738 18.59 450108....................... 00.9827 12.48 450222.......... 01.6034 18.35 450388......... 01.8109 17.12 450597......... 01.0350 14.53 450716......... 01.2943 19.56 450109....................... 00.9150 14.72 450224.......... 01.3620 20.66 450389......... 01.3265 17.71 450603......... 00.7116 16.81 450717......... 01.2538 23.86 450110....................... 01.2792 19.30 450229.......... 01.5626 15.41 450393......... 01.3164 19.70 450604......... 01.4372 14.00 450718......... 01.2333 19.03 450111....................... 01.2174 18.93 450231.......... 01.6412 18.25 450395......... 01.0473 16.49 450605......... 01.3880 17.67 450723......... 01.3871 18.22 450112....................... 01.3183 14.31 450234.......... 00.9989 13.07 450399......... 01.0599 15.59 450609......... 00.9188 11.77 450724......... 01.3696 17.44 450113....................... 01.3022 17.93 450235.......... 01.0302 13.46 450400......... 01.1885 11.76 450610......... 01.5475 17.21 450725......... 00.9390 17.49 450118....................... 01.5826 20.36 450236.......... 01.2206 15.28 450403......... 01.3015 21.22 450614......... 01.0086 12.53 450727......... 01.1724 10.80 450119....................... 01.3813 17.13 450237.......... 01.6258 16.83 450411......... 00.9144 12.20 450615......... 01.0918 12.80 450728......... 00.9311 12.62 450121....................... 01.5556 19.99 450239.......... 01.0605 13.70 450417......... 01.0947 19.31 450617......... 01.3521 20.12 450730......... 01.3241 21.46 450123....................... 01.0933 15.98 450241.......... 00.9279 12.67 450418......... 01.4996 21.43 450620......... 01.1348 12.16 450733......... 01.3628 16.88 450124....................... 01.7210 19.68 450243.......... 00.7767 11.59 450419......... 01.2762 20.34 450623......... 01.1891 16.71 450735......... 01.0637 12.02 450126....................... 01.3625 16.01 450246.......... 00.9464 17.09 450422......... 00.8249 24.65 450626......... 01.0634 16.57 450742......... 01.2932 19.47 450128....................... 01.1955 15.37 450249.......... 00.9676 09.95 450423......... 01.5850 21.56 450628......... 00.9320 12.34 450743......... 01.4228 17.79 450130....................... 01.4846 16.93 450250.......... 00.9480 11.36 450424......... 01.2492 17.77 450630......... 01.6658 23.25 450746......... 01.0195 13.81 450131....................... 01.4057 18.24 450253.......... 01.3024 11.92 450429......... 01.1208 12.87 450631......... 01.7515 20.15 450747......... 01.3610 17.04 450132....................... 01.7205 16.46 450258.......... 01.1072 10.85 450431......... 01.6315 18.76 450632......... 00.9769 11.39 450749......... 01.0118 14.63 450133....................... 01.6057 17.90 450259.......... 01.1636 18.29 450438......... 01.2603 13.51 450633......... 01.6399 20.20 450750......... 01.0231 12.20 450135....................... 01.6757 23.54 450264.......... 00.8806 13.08 450446......... 00.6453 12.67 450634......... 01.6147 23.56 450751......... 01.3418 15.58 450137....................... 01.4998 22.19 450269.......... 01.0765 13.96 450447......... 01.3882 18.07 450638......... 01.5883 22.00 450754......... 00.9546 13.49 450140....................... 00.9941 17.44 450270.......... 01.2477 10.42 450451......... 01.1574 16.96 450639......... 01.4387 22.12 450755......... 01.1688 15.54 450142....................... 01.4544 20.28 450271.......... 01.2655 14.84 450457......... 01.7817 17.61 450641......... 01.0408 13.24 450757......... 00.9466 13.62 450143....................... 01.0340 11.10 450272.......... 01.3466 15.38 450460......... 01.0539 12.46 450643......... 01.2270 17.43 450758......... 02.0193 21.92 450144....................... 01.0933 15.29 450276.......... 01.0101 12.63 450462......... 01.7722 20.49 450644......... 01.5090 19.07 450760......... 01.2573 18.35 450145....................... 00.8163 13.36 450278.......... 00.9870 13.64 450464......... 01.0035 15.14 450646......... 01.6539 31.36 450761......... 01.1320 09.57 450146....................... 00.9883 20.32 450280.......... 01.5303 23.09 450465......... 01.3391 17.10 450647......... 01.9577 23.27 450763......... 01.0156 16.60 450147....................... 01.4189 17.72 450283.......... 01.1089 12.43 450467......... 00.9711 14.01 450648......... 00.9835 09.48 450766......... 02.0719 20.76 450148....................... 01.2604 20.21 450286.......... 01.0057 16.36 450469......... 01.3759 17.25 450649......... 01.0406 14.06 450769......... 00.9957 13.40 450149....................... 01.4207 19.76 450288.......... 01.2705 13.67 450473......... 00.9937 15.03 450651......... 01.7505 22.80 450770......... 01.0417 14.57 450150....................... 00.9250 13.75 450289.......... 01.4339 19.14 450475......... 01.1405 14.96 450652......... 00.8637 13.96 450771......... 01.7803 22.32 450151....................... 01.1248 14.16 450292.......... 01.2470 21.03 450484......... 01.4469 18.14 450653......... 01.2233 15.20 450774......... 01.0767 21.24 450152....................... 01.2600 15.74 450293.......... 00.9767 12.41 450488......... 01.3234 16.08 450654......... 00.9499 12.28 450775......... 01.2796 17.09 450153....................... 01.6196 18.44 450296.......... 01.3759 18.76 450489......... 01.0173 12.72 450656......... 01.5367 17.19 450776......... 00.9194 11.18 450154....................... 01.1960 13.12 450299.......... 01.3431 16.01 450497......... 01.1693 12.88 450658......... 00.9719 12.32 450777......... 01.0464 16.60 450155....................... 01.0291 14.09 450303.......... 00.9927 11.50 450498......... 01.0512 13.15 450659......... 01.5366 20.23 450779......... 01.2621 21.36 450157....................... 00.9708 13.25 450306.......... 01.2219 12.82 450508......... 01.4218 16.12 450661......... 01.2306 18.51 450780......... 01.4049 16.91 450160....................... 00.9428 21.47 450307.......... 00.7803 14.25 450514......... 01.1886 18.47 450662......... 01.6164 17.38 450781......... 01.5749 11.01 450162....................... 01.2530 18.76 450309.......... 01.0613 14.17 450517......... 00.9025 11.11 450665......... 00.9129 12.95 450785......... 01.0228 16.39 450163....................... 01.1402 16.82 450315.......... 01.0420 18.63 450518......... 01.5700 16.38 450666......... 01.3361 19.17 450788......... 01.4500 19.31 450164....................... 01.1323 12.83 450320.......... 01.3553 18.45 450523......... 01.5823 19.45 450668......... 01.5988 19.60 450794......... 01.4278 16.20 450165....................... 01.0215 14.19 450321.......... 01.0170 13.51 450530......... 01.3726 14.27 450669......... 01.3407 19.26 450795......... 00.8686 20.22 450166....................... 01.0279 13.06 450322.......... 00.8184 16.61 450534......... 01.0374 18.02 450670......... 01.3131 17.24 450797......... 00.7374 16.67 450169....................... 01.0085 13.79 450324.......... 01.7039 15.66 450535......... 01.2951 21.25 450672......... 01.6229 20.69 450798......... 00.8393 08.88 450170....................... 00.9944 12.46 450325.......... 00.9022 11.47 450537......... 01.3071 19.69 450673......... 01.0518 12.14 450801......... 01.4832 ...... 450176....................... 01.2956 15.32 450327.......... 01.0130 12.60 450538......... 01.2091 20.77 450674......... 00.9801 19.88 450802......... 01.2272 ...... 450177....................... 01.2760 13.52 450330.......... 01.1514 15.62 450539......... 01.4094 14.67 450675......... 01.5223 20.99 450803......... 00.8612 ...... 450178....................... 01.0251 15.84 450334.......... 01.0501 12.11 450544......... 01.3519 19.25 450677......... 01.4273 23.91 450804......... 01.5602 ...... 450181....................... 01.0644 14.13 450337.......... 01.1588 14.10 450545......... 01.2665 20.93 450678......... 01.5041 20.85 450807......... 00.9215 ...... 450184....................... 01.5239 17.20 450340.......... 01.3279 14.68 450547......... 01.1549 15.13 450683......... 01.3412 20.91 450808......... 01.2870 ...... 450185....................... 01.0771 08.69 450341.......... 01.0487 15.87 450550......... 01.0679 18.37 450684......... 01.3022 21.41 450809......... 01.6785 ...... 450187....................... 01.2404 16.51 450346.......... 01.4354 16.05 450551......... 01.2276 13.01 450686......... 01.6066 14.14 450810......... 01.1663 ...... 450188....................... 01.0902 12.80 450347.......... 01.1515 16.68 450558......... 01.7260 20.85 450688......... 01.3635 19.63 450811......... 02.1655 ...... 450190....................... 01.1702 ....... 450348.......... 00.9841 11.20 450559......... 00.9350 12.26 450690......... 01.4068 21.41 450812......... 01.5923 ...... 450191....................... 01.0843 15.87 450351.......... 01.1952 17.71 450561......... 01.6864 17.18 450691......... 00.9630 ....... 460001......... 01.8027 20.73 450192....................... 01.2918 17.51 450352.......... 01.1041 16.53 450563......... 01.2755 23.92 450694......... 01.1412 18.16 460003......... 01.6975 17.86 450193....................... 02.0470 21.80 450353.......... 01.2638 16.98 450565......... 01.2685 16.10 450696......... 01.9768 22.02 460004......... 01.7352 21.45 450194....................... 01.2664 17.65 450355.......... 01.1492 13.03 450570......... 01.0784 15.39 450697......... 01.4936 13.82 460005......... 01.6823 18.56 450196....................... 01.4866 17.04 450358.......... 02.0820 21.20 450571......... 01.4774 15.53 450698......... 00.9737 11.65 460006......... 01.4506 19.40 450200....................... 01.4247 17.40 450362.......... 01.1670 13.83 450573......... 01.0633 14.35 450700......... 00.9478 13.15 460007......... 01.3572 20.40 450201....................... 01.0028 15.45 450369.......... 01.0555 13.10 450574......... 00.9359 11.73 450702......... 01.5794 19.02 460008......... 01.3920 15.91 450203....................... 01.2237 17.46 450370.......... 01.2731 12.87 450575......... 01.0769 16.62 450703......... 01.5445 18.46 460009......... 01.8544 19.39 450209....................... 01.5068 21.78 450371.......... 01.1668 12.16 450578......... 00.9338 12.99 450704......... 01.4195 18.02 460010......... 02.0179 20.86 450210....................... 01.1673 12.30 450372.......... 01.3120 21.02 450580......... 01.1396 13.29 450705......... 00.9145 18.50 460011......... 01.4594 16.34 450211....................... 01.4145 16.70 450373.......... 01.1592 13.38 450583......... 00.9779 13.04 450706......... 01.2505 22.63 460013......... 01.5172 16.74 450213....................... 01.6568 18.26 450374.......... 00.9104 11.66 450584......... 01.1828 13.02 450709......... 01.3415 19.78 460014......... 01.1366 15.12 450214....................... 01.4227 19.51 450376.......... 01.4817 17.78 450586......... 01.0491 11.16 450711......... 01.5989 18.18 460015......... 01.2168 20.40 450217....................... 01.0015 11.56 450378.......... 01.1022 19.87 450587......... 01.2528 16.14 450712......... 00.7871 13.25 460016......... 00.9547 12.50 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46068]] Page 15 of 16 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Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 460017....................... 01.5589 16.40 490032.......... 01.7716 19.42 490127......... 01.0048 14.52 500094......... 00.9101 15.30 510068......... 01.1159 14.34 460018....................... 01.0027 15.45 490033.......... 01.2338 16.00 490129......... 01.1961 19.20 500096......... 00.9886 19.50 510070......... 01.3303 15.86 460019....................... 01.1127 14.45 490035.......... 01.1321 13.02 490130......... 01.3038 15.07 500097......... 01.2189 17.46 510071......... 01.3254 15.64 460020....................... 01.0418 16.33 490037.......... 01.2365 14.06 490131......... 00.9879 14.74 500098......... 01.0355 15.44 510072......... 01.0592 14.37 460021....................... 01.3866 19.46 490038.......... 01.2628 13.62 490132......... 01.0313 ....... 500101......... 01.0064 15.92 510077......... 01.1916 15.36 460022....................... 00.9383 19.23 490040.......... 01.4798 21.72 500001......... 01.3669 21.66 500102......... 01.0209 19.46 510080......... 01.2132 11.53 460023....................... 01.2243 21.08 490041.......... 01.2703 16.22 500002......... 01.4343 19.10 500104......... 01.3276 19.88 510081......... 01.1592 12.97 460024....................... 01.0133 14.78 490042.......... 01.3532 15.75 500003......... 01.3891 25.32 500106......... 00.9016 20.08 510082......... 01.2166 12.89 460025....................... 00.8149 13.73 490043.......... 01.4482 24.19 500005......... 01.8255 21.58 500107......... 01.1533 15.79 510084......... 00.9560 13.24 460026....................... 00.9812 17.03 490044.......... 01.3527 17.15 500007......... 01.3881 21.79 500108......... 01.7163 21.74 510085......... 01.3533 17.90 460027....................... 00.9409 19.08 490045.......... 01.2333 19.25 500008......... 01.9493 23.18 500110......... 01.2349 19.44 510086......... 01.0754 15.08 460029....................... 01.0389 18.60 490046.......... 01.4948 17.80 500011......... 01.4304 22.64 500118......... 01.1761 21.92 520002......... 01.2174 18.84 460030....................... 01.1784 17.32 490047.......... 01.0934 16.50 500012......... 01.4822 21.18 500119......... 01.3376 20.39 520003......... 01.1191 15.41 460032....................... 01.0291 21.16 490048.......... 01.6100 17.44 500014......... 01.4987 20.92 500122......... 01.2814 21.99 520004......... 01.1859 16.78 460033....................... 00.9787 17.97 490050.......... 01.4629 21.02 500015......... 01.3772 21.85 500123......... 00.8526 18.56 520006......... 01.0231 18.17 460035....................... 00.9265 12.17 490052.......... 01.6086 15.45 500016......... 01.4764 23.26 500124......... 01.3158 22.83 520007......... 01.2287 14.55 460036....................... 01.0267 20.05 490053.......... 01.2701 14.77 500019......... 01.3370 21.38 500125......... 01.0071 11.61 520008......... 01.5786 22.49 460037....................... 00.9886 17.48 490054.......... 01.0984 14.36 500021......... 01.5616 21.91 500129......... 01.7389 23.35 520009......... 01.6559 17.31 460039....................... 01.0874 20.37 490057.......... 01.5488 17.69 500023......... 01.2117 19.53 500132......... 00.9561 18.51 520010......... 01.1793 19.33 460041....................... 01.2644 20.90 490059.......... 01.6184 19.41 500024......... 01.6823 22.23 500134......... 00.6989 15.59 520011......... 01.2164 16.85 460042....................... 01.4809 17.04 490060.......... 01.0834 17.79 500025......... 01.8739 23.44 500138......... 04.3602 ....... 520013......... 01.3851 18.80 460043....................... 01.2702 21.71 490063.......... 01.7059 23.01 500026......... 01.4032 23.85 500139......... 01.5089 21.71 520014......... 01.1387 16.08 460044....................... 01.1922 19.83 490066.......... 01.3652 18.00 500027......... 01.5357 25.23 500141......... 01.3249 22.22 520015......... 01.1912 16.72 460046....................... 00.9068 12.27 490067.......... 01.2287 15.82 500028......... 01.1235 14.69 500143......... 00.7297 15.20 520016......... 01.1027 13.21 460047....................... 01.7394 19.82 490069.......... 01.4526 14.96 500029......... 00.9578 13.71 500146......... 01.2100 26.11 520017......... 01.1523 17.45 460049....................... 01.9737 17.85 490071.......... 01.5023 17.40 500030......... 01.5287 22.55 510001......... 01.8263 17.35 520018......... 01.1219 16.17 460050....................... 01.2736 21.99 490073.......... 01.4717 17.55 500031......... 01.3434 20.58 510002......... 01.2917 14.18 520019......... 01.3048 16.63 460051....................... 01.2890 32.89 490074.......... 01.3704 16.77 500033......... 01.2738 18.41 510004......... 01.1211 13.65 520021......... 01.3120 19.90 470001....................... 01.1596 18.73 490075.......... 01.3998 16.37 500036......... 01.3200 19.95 510005......... 00.9588 14.19 520024......... 01.0460 13.11 470003....................... 01.7896 20.83 490077.......... 01.2583 17.87 500037......... 01.1678 18.70 510006......... 01.2972 17.42 520025......... 01.1099 18.58 470004....................... 01.1094 15.85 490079.......... 01.3234 15.15 500039......... 01.3890 22.10 510007......... 01.4902 17.98 520026......... 01.0837 17.49 470005....................... 01.2726 20.26 490083.......... 00.7754 15.02 500041......... 01.2884 23.23 510008......... 01.1461 15.55 520027......... 01.2448 19.27 470006....................... 01.2455 17.83 490084.......... 01.3006 15.43 500042......... 01.3514 22.37 510012......... 01.1013 14.37 520028......... 01.3020 17.76 470008....................... 01.1896 16.76 490085.......... 01.2407 13.39 500043......... 01.1913 17.16 510013......... 01.1685 15.80 520029......... 00.9692 16.94 470010....................... 01.1226 19.03 490088.......... 01.1873 14.44 500044......... 01.9855 20.99 510015......... 00.9465 12.51 520030......... 01.6462 21.19 470011....................... 01.1940 19.82 490089.......... 01.1298 16.18 500045......... 01.1331 20.81 510016......... 00.9182 12.66 520031......... 01.1241 15.24 470012....................... 01.2425 17.88 490090.......... 01.2038 15.17 500048......... 00.9599 16.46 510018......... 01.1815 15.26 520032......... 01.2406 15.25 470015....................... 01.2207 16.67 490091.......... 01.2790 18.78 500049......... 01.5178 19.24 510020......... 01.1178 10.56 520033......... 01.1692 16.22 470018....................... 01.2215 20.53 490092.......... 01.2061 15.13 500050......... 01.4336 20.96 510022......... 01.8968 19.16 520034......... 01.1969 17.64 470020....................... 00.9818 15.18 490093.......... 01.3619 15.83 500051......... 01.6724 23.18 510023......... 01.2001 16.62 520035......... 01.3383 15.87 470023....................... 01.2839 19.08 490094.......... 01.1741 14.52 500052......... 01.3139 ....... 510024......... 01.4367 18.43 520037......... 01.6525 19.06 470024....................... 01.1460 18.26 90095........... 01.4744 16.79 500053......... 01.3079 20.42 510026......... 01.0247 12.33 520038......... 01.3145 16.45 490001....................... 01.2421 19.51 490097.......... 01.1556 14.52 500054......... 01.8795 21.08 510027......... 00.9512 14.62 520039......... 00.9955 16.33 490002....................... 01.0970 14.56 490098.......... 01.2294 11.89 500055......... 01.1303 20.13 510028......... 01.0802 18.99 520040......... 01.4720 19.34 490003....................... 00.5817 17.38 490099.......... 00.9524 16.51 500057......... 01.3033 17.22 510029......... 01.2896 16.78 520041......... 01.1755 14.93 490004....................... 01.2321 16.97 490100.......... 01.4519 17.21 500058......... 01.5239 20.32 510030......... 01.0520 14.39 520042......... 01.0959 16.42 490005....................... 01.5901 16.31 490101.......... 01.2184 23.01 500059......... 01.1465 20.76 510031......... 01.4816 15.97 520044......... 01.4077 16.15 490006....................... 01.1325 13.82 490104.......... 00.8468 16.07 500060......... 01.4066 23.27 510033......... 01.3557 15.30 520045......... 01.7375 18.68 490007....................... 02.0908 17.16 490105.......... 00.6278 18.83 500061......... 01.0337 18.19 510035......... 01.3544 16.81 520047......... 00.9924 15.41 490009....................... 01.8662 18.25 490106.......... 00.8531 16.48 500062......... 01.1280 18.80 510036......... 01.0700 11.64 520048......... 01.4686 18.11 490010....................... 01.1620 17.32 490107.......... 01.3316 22.98 500064......... 01.5976 22.08 510038......... 01.1634 13.36 520049......... 02.0343 18.52 490011....................... 01.4246 17.33 490108.......... 00.9024 15.63 500065......... 01.2132 18.72 510039......... 01.3333 15.48 520051......... 01.7979 20.21 490012....................... 01.2241 15.30 490109.......... 00.9343 17.44 500068......... 01.0323 18.40 510043......... 00.9309 11.52 520053......... 01.1225 15.45 490013....................... 01.2162 16.87 490110.......... 01.4172 15.07 500069......... 01.2241 19.76 510046......... 01.2754 15.91 520054......... 01.0821 17.03 490014....................... 01.4751 22.42 490111.......... 01.2461 15.83 500071......... 01.2885 19.80 510047......... 01.2479 18.06 520056......... 01.7830 18.87 490015....................... 01.4306 18.76 490112.......... 01.6008 18.51 500072......... 01.2068 22.83 510048......... 01.0995 18.22 520057......... 01.1240 16.59 490017....................... 01.3604 16.73 490113.......... 01.3485 21.59 500073......... 01.0538 16.74 510050......... 01.5736 16.11 520058......... 01.1053 18.17 490018....................... 01.2979 17.15 490114.......... 01.1423 15.47 500074......... 01.1566 15.67 510053......... 01.0292 14.12 520059......... 01.4116 18.74 490019....................... 01.1915 16.46 490115.......... 01.2238 15.28 500077......... 01.3828 21.68 510055......... 01.2750 19.68 520060......... 01.4316 15.26 490020....................... 01.2068 15.76 490116.......... 01.3302 15.48 500079......... 01.3693 21.40 510058......... 01.1979 17.03 520062......... 01.3513 16.73 490021....................... 01.2417 17.33 490117.......... 01.1816 12.41 500080......... 00.8662 11.72 510059......... 01.4663 14.25 520063......... 01.1984 17.63 490022....................... 01.4384 19.33 490118.......... 01.7802 21.05 500084......... 01.1803 20.78 510060......... 01.1522 15.55 520064......... 01.7055 20.15 490023....................... 01.2952 18.01 490119.......... 01.3722 16.80 500085......... 01.0712 19.55 510061......... 01.0354 13.37 520066......... 01.5293 18.82 490024....................... 01.8236 16.47 490120.......... 01.3270 17.49 500086......... 01.3028 20.03 510062......... 01.1776 15.77 520068......... 00.9933 16.85 490027....................... 01.1664 13.62 490122.......... 01.4656 21.27 500088......... 01.3456 23.37 510063......... 00.9557 16.84 520069......... 01.1907 17.13 490028....................... 01.3111 20.18 490123.......... 01.1882 15.29 500089......... 01.0257 15.05 510065......... 01.0484 11.49 520070......... 01.6330 17.38 490030....................... 01.1733 10.83 490124.......... 01.2019 17.12 500090......... 00.9484 13.67 510066......... 01.1361 11.93 520071......... 01.1630 17.53 490031....................... 01.1165 13.00 490126.......... 01.4239 14.85 500092......... 01.0566 17.86 510067......... 01.2728 17.97 520074......... 01.0679 15.42 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ [[Page 46069]] Page 16 of 16 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Avg. Avg. Avg. Avg. Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour Provider Case mix hour index wage index wage index wage index wage index wage ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 520075....................... 01.4659 18.02 520178.......... 01.0937 15.23 520076....................... 01.1585 15.11 530002.......... 01.1955 19.16 520077....................... 00.8551 14.03 530003.......... 01.0202 12.47 520078....................... 01.6233 18.63 530004.......... 00.9991 14.18 520082....................... 01.2821 16.43 530005.......... 01.0060 13.47 520083....................... 01.6785 21.60 530006.......... 01.1364 16.52 520084....................... 01.0951 16.87 530007.......... 01.0868 12.98 520087....................... 01.6994 18.12 530008.......... 01.3367 16.82 520088....................... 01.3078 17.98 530009.......... 01.0070 16.77 520089....................... 01.5203 19.50 530010.......... 01.4089 16.12 520090....................... 01.2399 16.18 530011.......... 01.1090 16.94 520091....................... 01.3644 18.13 530012.......... 01.5439 18.11 520092....................... 01.1184 15.74 530014.......... 01.4219 15.18 520094....................... 00.7907 16.12 530015.......... 01.2693 18.00 520095....................... 01.3677 17.93 530016.......... 01.2968 14.93 520096....................... 01.4350 18.94 530017.......... 00.8748 16.97 520097....................... 01.3153 18.65 530018.......... 01.0355 18.67 520098....................... 01.8227 20.17 530019.......... 01.0131 15.32 520100....................... 01.2523 16.72 530022.......... 01.0905 16.71 520101....................... 01.1235 16.09 530023.......... 00.8558 18.57 520102....................... 01.2023 19.37 530025.......... 01.2400 18.76 520103....................... 01.3272 17.94 530026.......... 01.0951 15.48 520107....................... 01.3034 17.50 530027.......... 00.9181 10.62 520109....................... 01.0055 17.63 530029.......... 01.0278 13.46 520110....................... 01.1560 17.94 530031.......... 00.8952 11.67 520111....................... 00.9540 16.01 530032.......... 01.0887 18.13 520112....................... 01.1157 16.89 520113....................... 01.2035 19.18 520114....................... 01.0837 13.27 520115....................... 01.2596 16.02 520116....................... 01.2507 18.13 520117....................... 01.0605 15.78 520118....................... 00.9421 10.53 520120....................... 00.8814 12.70 520121....................... 00.9486 15.67 520122....................... 00.9718 14.73 520123....................... 01.0916 16.93 520124....................... 01.1417 14.93 520130....................... 01.0461 13.47 520131....................... 01.0271 16.78 520132....................... 01.1689 14.48 520134....................... 01.0798 15.97 520135....................... 00.9421 17.28 520136....................... 01.5062 19.05 520138....................... 01.8573 19.44 520139....................... 01.2790 19.89 520140....................... 01.6111 21.15 520141....................... 01.0486 15.86 520142....................... 00.8690 13.20 520144....................... 01.0297 16.42 520145....................... 00.9171 16.59 520146....................... 01.0863 13.94 520148....................... 01.0827 15.34 520149....................... 00.9713 13.44 520151....................... 01.0919 15.42 520152....................... 01.1594 17.07 520153....................... 00.9221 13.81 520154....................... 01.0972 17.71 520156....................... 01.1062 16.69 520157....................... 01.0427 13.77 520159....................... 00.9343 16.85 520160....................... 01.7979 19.07 520161....................... 01.0019 15.94 520170....................... 01.2386 19.95 520171....................... 00.9327 13.23 520173....................... 01.1538 18.34 520174....................... 01.3545 21.51 520177....................... 01.5931 20.16 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Note: Case mix indexes do not include discharges from PPS-exempt units. Case mix indexes include cases received in HCFA central office through December 1996. [[Page 46070]] Table 4a.--Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas ------------------------------------------------------------------------ Wage Urban Area (Constituent Counties) index GAF ------------------------------------------------------------------------ 0040 Abilene, TX................................... 0.8287 0.8793 Taylor, TX 0060 \2\ Aguadilla, PR............................. 0.4224 0.5542 Aguada, PR Aguadilla, PR Moca, PR 0080 Akron, OH..................................... 0.9728 0.9813 Portage, OH Summit, OH 0120 Albany, GA.................................... 0.7914 0.8520 Dougherty, GA Lee, GA 0160 Albany-Schenectady-Troy, NY................... 0.8480 0.8932 Albany, NY Montgomery, NY Rensselaer, NY Saratoga, NY Schenectady, NY Schoharie, NY 0200 Albuquerque, NM............................... 0.9329 0.9535 Bernalillo, NM Sandoval, NM Valencia, NM 0220 Alexandria, LA................................ 0.8269 0.8780 Rapides, LA 0240 Allentown-Bethlehem-Easton, PA................ 1.0086 1.0059 Carbon, PA Lehigh, PA Northampton, PA 0280 Altoona, PA................................... 0.9137 0.9401 Blair, PA 0320 Amarillo,..................................... TX Potter, TX 0.9425 0.9603 Randall, TX 0380 Anchorage, AK................................. 1.2998 1.1967 Anchorage, AK 0440 Ann Arbor, MI................................. 1.1785 1.1190 Lenawee, MI Livingston, MI Washtenaw, MI 0450 Anniston, AL.................................. 0.8266 0.8777 Calhoun, AL 0460 Appleton-Oshkosh-Neenah, WI................... 0.8996 0.9301 Calumet, WI Outagamie, WI Winnebago, WI 0470 \2\ Arecibo, PR............................... 0.4224 0.5542 Arecibo, PR Camuy, PR Hatillo, PR 0480 Asheville, NC................................. 0.9072 0.9355 Buncombe, NC Madison, NC 0500 Athens, GA.................................... 0.9087 0.9365 Clarke, GA Madison, GA Oconee, GA 0520 \1\ Atlanta, GA............................... 0.9823 0.9878 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-Cape May, NJ......................... 1.0724 1.0490 Atlantic, NJ Cape May, NJ 0600 Augusta-Aiken, GA-SC.......................... 0.9333 0.9538 Columbia, GA McDuffie, GA Richmond, GA Aiken, SC Edgefield, SC 0640 \1\ Austin-San Marcos, TX..................... 0.9133 0.9398 Bastrop, TX Caldwell, TX Hays, TX Travis, TX Williamson, TX 0680 Bakersfield, CA............................... 1.0014 1.0010 Kern, CA 0720 \1\ Baltimore, MD............................. 0.9689 0.9786 Anne Arundel, MD Baltimore, MD Baltimore City, MD Carroll, MD Harford, MD Howard, MD Queen Anne's, MD 0733 Bangor, ME.................................... 0.9478 0.9640 Penobscot, ME 0743 Barnstable-Yarmouth, MA....................... 1.4291 1.2770 Barnstable, MA 0760 Baton Rouge, LA............................... 0.8382 0.8862 Ascension, LA East Baton Rouge, LA Livingston, LA West Baton Rouge, LA 0840 Beaumont-Port Arthur, TX...................... 0.8593 0.9014 Hardin, TX Jefferson, TX Orange, TX 0860 Bellingham, WA................................ 1.1221 1.0821 Whatcom, WA 0870 \2\ Benton Harbor, MI......................... 0.8923 0.9249 Berrien, MI 0875 \1\ Bergen-Passaic, NJ........................ 1.1570 1.1050 Bergen, NJ Passaic, NJ 0880 Billings, MT.................................. 0.9783 0.9851 Yellowstone, MT 0920 Biloxi-Gulfport-Pascagoula, MS................ 0.8415 0.8885 Hancock, MS Harrison, MS Jackson, MS 0960 Binghamton, NY................................ 0.8914 0.9243 Broome, NY Tioga, NY 1000 Birmingham, AL................................ 0.9005 0.9307 Blount, AL Jefferson, AL St. Clair, AL Shelby, AL 1010 Bismarck, ND.................................. 0.7859 0.8479 Burleigh, ND Morton, ND 1020 Bloomington, IN............................... 0.9128 0.9394 Monroe, IN 1040 Bloomington-Normal, IL........................ 0.8733 0.9114 McLean, IL 1080 Boise City, ID................................ 0.8887 0.9224 Ada, ID Canyon, ID 1123 \1\ Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH.............................................. 1.1436 1.0962 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.......................... 1.0015 1.0010 Boulder, CO 1145 Brazoria, TX.................................. 0.9129 0.9395 Brazoria, TX 1150 Bremerton, WA................................. 1.0999 1.0674 Kitsap, WA 1240 Brownsville-Harlingen-San Benito, TX.......... 0.8740 0.9119 Cameron, TX 1260 Bryan-College Station, TX..................... 0.8571 0.8998 Brazos, TX 1280 \1\ Buffalo-Niagara Falls, NY................. 0.9272 0.9496 Erie, NY Niagara, NY 1303 Burlington, VT................................ 1.0142 1.0097 Chittenden, VT Franklin, VT Grand Isle, VT 1310 Caguas, PR.................................... 0.4508 0.5795 Caguas, PR Cayey, PR Cidra, PR Gurabo, PR San Lorenzo, PR 1320 Canton-Massillon, OH.......................... 0.8961 0.9276 [[Page 46071]] Carroll, OH Stark, OH 1350 Casper, WY.................................... 0.9013 0.9313 Natrona, WY 1360 Cedar Rapids, IA.............................. 0.8529 0.8968 Linn, IA 1400 Champaign-Urbana, IL.......................... 0.8824 0.9179 Champaign, IL 1440 Charleston-North Charleston, SC............... 0.8807 0.9167 Berkeley, SC Charleston, SC Dorchester, SC 1480 Charleston, WV................................ 0.9142 0.9404 Kanawha, WV Putnam, WV 1520 \1\ Charlotte-Gastonia-Rock Hill, NC-SC....... 0.9710 0.9800 Cabarrus, NC Gaston, NC Lincoln, NC Mecklenburg, NC Rowan, NC Stanly, NC Union, NC York, SC 1540 Charlottesville, VA........................... 0.9051 0.9340 Albemarle, VA Charlottesville City, VA Fluvanna, VA Greene, VA 1560 Chattanooga, TN-GA............................ 0.8658 0.9060 Catoosa, GA Dade, GA Walker, GA Hamilton, TN Marion, TN 1580 \2\ Cheyenne, WY.............................. 0.8247 0.8764 Laramie, WY 1600\1\ Chicago, IL................................. 1.0860 1.0581 Cook, IL DeKalb, IL DuPage, IL Grundy, IL Kane, IL Kendall, IL Lake, IL McHenry, IL Will, IL 1620 Chico-Paradise, CA............................ 1.0429 1.0292 Butte, CA 1640\1\ Cincinnati, OH-KY-IN........................ 0.9521 0.9669 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............... 0.7852 0.8474 Christian, KY Montgomery, TN 1680\1\ Cleveland-Lorain-Elyria, OH................. 0.9804 0.9865 Ashtabula, OH Cuyahoga, OH Geauga, OH Lake, OH Lorain, OH Medina, OH 1720 Colorado Springs, CO.......................... 0.9316 0.9526 El Paso, CO 1740 Columbia, MO.................................. 0.9001 0.9305 Boone, MO 1760 Columbia, SC.................................. 0.9192 0.9439 Lexington, SC Richland, SC 1800 Columbus, GA-AL............................... 0.8288 0.8793 Russell, AL Chattahoochee, GA Harris, GA Muscogee, GA 1840\1\ Columbus, OH................................ 0.9793 0.9858 Delaware, OH Fairfield, OH Franklin, OH Licking, OH Madison, OH Pickaway, OH 1880 Corpus Christi, TX............................ 0.8945 0.9265 Nueces, TX San Patricio, TX 1900 Cumberland, MD-WV............................. 0.8822 0.9178 Allegany, MD Mineral, WV 1920 \1\ Dallas, TX................................ 0.9674 0.9776 Collin, TX Dallas, TX Denton, TX Ellis, TX Henderson, TX Hunt, TX Kaufman, TX Rockwall, TX 1950 Danville, VA.................................. 0.8146 0.8690 Danville City, VA Pittsylvania, VA 1960 Davenport-Moline-Rock Island, IA-IL........... 0.8405 0.8878 Scott, IA Henry, IL Rock Island, IL 2000 Dayton-Springfield, OH........................ 0.9279 0.9500 Clark, OH Greene, OH Miami, OH Montgomery, OH 2020 \2\ Daytona Beach, FL......................... 0.8838 0.9189 Flagler, FL Volusia, FL 2030 Decatur, AL................................... 0.8286 0.8792 Lawrence, AL Morgan, AL 2040 Decatur, IL................................... 0.7915 0.8520 Macon, IL 2080 \1\ Denver, CO................................ 1.0386 1.0263 Adams, CO Arapahoe, CO Denver, CO Douglas, CO Jefferson, CO 2120 Des Moines, IA................................ 0.8837 0.9188 Dallas, IA Polk, IA Warren, IA 2160\1\ Detroit, MI................................. 1.0840 1.0568 Lapeer, MI Macomb, MI Monroe, MI Oakland, MI St. Clair, MI Wayne, MI 2180 Dothan, AL.................................... 0.8070 0.8634 Dale, AL Houston, AL 2190 Dover, DE..................................... 0.9303 0.9517 Kent, DE 2200 Dubuque, IA................................... 0.8088 0.8647 Dubuque, IA 2240 Duluth-Superior, MN-WI........................ 0.9779 0.9848 St. Louis, MN Douglas, WI 2281 Dutchess County, NY........................... 1.0632 1.0429 Dutchess, NY 2290 Eau Claire, WI................................ 0.8764 0.9136 Chippewa, WI Eau Claire, WI 2320 El Paso, TX................................... 1.0123 1.0084 El Paso, TX 2330 Elkhart-Goshen, IN............................ 0.9081 0.9361 Elkhart, IN 2335 \2\ Elmira, NY................................ 0.8401 0.8875 Chemung, NY 2340 Enid, OK...................................... 0.7962 0.8555 Garfield, OK 2360 Erie, PA...................................... 0.8862 0.9206 Erie, PA 2400 Eugene-Springfield, OR........................ 1.1659 1.1108 Lane, OR 2440 Evansville-Henderson, IN-KY................... 0.8641 0.9048 Posey, IN Vanderburgh, IN Warrick, IN Henderson, KY 2520 Fargo-Moorhead, ND-MN......................... 0.8837 0.9188 [[Page 46072]] Clay, MN Cass, ND 2560 Fayetteville, NC.............................. 0.8734 0.9115 Cumberland, NC 2580 Fayetteville-Springdale-Rogers, AR............ 0.7461 0.8183 Benton, AR Washington, AR 2620 Flagstaff, AZ-UT.............................. 0.9115 0.9385 Coconino, AZ Kane, UT 2640 Flint, MI..................................... 1.1171 1.0788 Genesee, MI 2650 Florence, AL.................................. 0.7716 0.8373 Colbert, AL Lauderdale, AL 2655 Florence, SC.................................. 0.8711 0.9098 Florence, SC 2670 Fort Collins-Loveland, CO..................... 1.0248 1.0169 Larimer, CO 2680 \1\ Ft. Lauderdale, FL........................ 1.0487 1.0331 Broward, FL 2700 \2\ Fort Myers-Cape Coral, FL................. 0.8838 0.9189 Lee, FL 2710 Fort Pierce-Port St. Lucie, FL................ 1.0257 1.0175 Martin, FL St. Lucie, FL 2720 Fort Smith, AR-OK............................. 0.7769 0.8412 Crawford, AR Sebastian, AR Sequoyah, OK 2750 \2\ Fort Walton Beach, FL..................... 0.8838 0.9189 Okaloosa, FL 2760 Fort Wayne, IN................................ 0.8901 0.9234 Adams, IN Allen, IN De Kalb, IN Huntington, IN Wells, IN Whitley, IN 2800 \1\ Forth Worth-Arlington, TX................. 0.9997 0.9998 Hood, TX Johnson, TX Parker, TX Tarrant, TX 2840 Fresno, CA.................................... 1.0607 1.0412 Fresno, CA Madera, CA 2880 Gadsden, AL................................... 0.8815 0.9173 Etowah, AL 2900 Gainesville, FL............................... 0.9616 0.9735 Alachua, FL 2920 Galveston-Texas City, TX...................... 1.0564 1.0383 Galveston, TX 2960 Gary, IN...................................... 0.9270 0.9494 Lake, IN Porter, IN 2975 \2\ Glens Falls, NY........................... 0.8401 0.8875 Warren, NY Washington, NY 2980 Goldsboro, NC................................. 0.8443 0.8906 Wayne, NC 2985 Grand Forks, ND-MN............................ 0.8815 0.9173 Polk, MN Grand Forks, ND 2995 Grand Junction, CO............................ 0.9491 0.9649 Mesa, CO 3000 \1\ Grand Rapids-Muskegon-Holland, MI......... 1.0147 1.0100 Allegan, MI Kent, MI Muskegon, MI Ottawa, MI 3040 Great Falls, MT............................... 0.9306 0.9519 Cascade, MT 3060 Greeley, CO................................... 1.0097 1.0066 Weld, CO 3080 Green Bay, WI................................. 0.9585 0.9714 Brown, WI 3120 \1\ Greensboro-Winston-Salem-High Point, NC... 0.9351 0.9551 Alamance, NC Davidson, NC Davie, NC Forsyth, NCGuilford, NC Randolph, NC Stokes, NC Yadkin, NC 3150 Greenville, NC................................ 0.9064 0.9349 Pitt, NC 3160 Greenville-Spartanburg-Anderson, SC........... 0.9059 0.9346 Anderson, SC Cherokee, SC Greenville, SC Pickens, SC Spartanburg, SC 3180 Hagerstown, MD................................ 0.9681 0.9780 Washington, MD 3200 Hamilton-Middletown, OH....................... 0.8767 0.9138 Butler, OH 3240 Harrisburg-Lebanon-Carlisle, PA............... 1.0187 1.0128 Cumberland, PA Dauphin, PA Lebanon, PA Perry, PA 3283 1,2Hartford, CT............................... 1.2617 1.1726 Hartford, CT Litchfield, CT Middlesex, CT Tolland, CT 3285 Hattiesburg, MS............................... 0.7192 0.7979 Forrest, MS Lamar, MS 3290 Hickory-Morganton-Lenoir, NC.................. 0.8285 0.8791 Alexander, NC Burke, NC Caldwell, NC Catawba, NC 3320 Honolulu, HI.................................. 1.1817 1.1211 Honolulu, HI 3350 Houma, LA..................................... 0.7854 0.8475 Lafourche, LA Terrebonne, LA 3360 \1\ Houston, TX............................... 0.9855 0.9900 Chambers, TX Fort Bend, TX Harris, TX Liberty, TX Montgomery, TX Waller, TX 3400 Huntington-Ashland, WV-KY-OH.................. 0.9160 0.9417 Boyd, KY Carter, KY Greenup, KY Lawrence, OH Cabell, WV Wayne, WV 3440 Huntsville, AL................................ 0.8485 0.8936 Limestone, AL Madison, AL 3480 \1\ Indianapolis, IN.......................... 0.9848 0.9896 Boone, IN Hamilton, IN Hancock, IN Hendricks, IN Johnson, IN Madison, IN Marion, IN Morgan, IN Shelby, IN 3500 Iowa City, IA................................. 0.9401 0.9586 Johnson, IA 3520 Jackson, MI................................... 0.9052 0.9341 Jackson, MI 3560 Jackson, MS................................... 0.7790 0.8428 Hinds, MS Madison, MS Rankin, MS 3580 Jackson, TN................................... 0.8522 0.8963 Madison, TN Chester, TN 3600 \1\ Jacksonville, FL.......................... 0.8969 0.9282 Clay, FL Duval, FL Nassau, FL St. Johns, FL 3605 \2\ Jacksonville, NC.......................... 0.7939 0.8538 Onslow, NC 3610 \2\ Jamestown, NY............................. 0.8401 0.8875 Chautauqua, NY 3620 Janesville-Beloit, WI......................... 0.8824 0.9179 Rock, WI 3640 Jersey City, NJ............................... 1.1412 1.0947 Hudson, NJ 3660 Johnson City-Kingsport-Bristol, TN-VA......... 0.9114 0.9384 Carter, TN Hawkins, TN Sullivan, TN [[Page 46073]] Unicoi, TN Washington, TN Bristol City, VA Scott, VA Washington, VA 3680 \2\ Johnstown, PA............................. 0.8421 0.8890 Cambria, PA Somerset, PA 3700 Jonesboro, AR................................. 0.7443 0.8169 Craighead, AR 3710 Joplin, MO.................................... 0.7541 0.8243 Jasper, MO Newton, MO 3720 Kalamazoo-Battlecreek, MI..................... 1.0668 1.0453 Calhoun, MI Kalamazoo, MI Van Buren, MI 3740 Kankakee, IL.................................. 0.8653 0.9057 Kankakee, IL 3760 \1\ Kansas City, KS-MO........................ 0.9564 0.9699 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................................... 0.9196 0.9442 Kenosha, WI 3810 Killeen-Temple, TX............................ 1.0252 1.0172 Bell, TX Coryell, TX 3840 Knoxville, TN................................. 0.8831 0.9184 Anderson, TN Blount, TN Knox, TN Loudon, TN Sevier, TN Union, TN 3850 Kokomo, IN.................................... 0.8416 0.8886 Howard, IN Tipton, IN 3870 La Crosse, WI-MN.............................. 0.8749 0.9125 Houston, MN La Crosse, WI 3880 Lafayette, LA................................. 0.8227 0.8749 Acadia, LA Lafayette, LA St. Landry, LA St. Martin, LA 3920 Lafayette, IN................................. 0.9174 0.9427 Clinton, IN Tippecanoe, IN 3960 Lake Charles, LA.............................. 0.7776 0.8418 Calcasieu, LA 3980 \2\ Lakeland-Winter Haven, FL................. 0.8838 0.9189 Polk, FL 4000 Lancaster, PA................................. 0.9481 0.9642 Lancaster, PA 4040 Lansing-East Lansing, MI...................... 1.0088 1.0060 Clinton, MI Eaton, MI Ingham, MI 4080 \2\ Laredo, TX................................ 0.7404 0.8140 Webb, TX 4100 Las Cruces, NM................................ 0.8658 0.9060 Dona Ana, NM 4120 \1\ Las Vegas, NV-AZ.......................... 1.0592 1.0402 Mohave, AZ Clark, NV Nye, NV 4150 Lawrence, KS.................................. 0.8608 0.9024 Douglas, KS 4200 Lawton, OK.................................... 0.9045 0.9336 Comanche, OK 4243 Lewiston-Auburn, ME........................... 0.9536 0.9680 Androscoggin, ME 4280 Lexington, KY................................. 0.8416 0.8886 Bourbon, KY Clark, KY Fayette, KY Jessamine, KY Madison, KY Scott, KY Woodford, KY 4320 Lima, OH...................................... 0.9185 0.9434 Allen, OH Auglaize, OH 4360 Lincoln, NE................................... 0.9231 0.9467 Lancaster, NE 4400 Little Rock-North Little Rock, AR............. 0.8490 0.8940 Faulkner, AR Lonoke, AR Pulaski, AR Saline, AR 4420 Longview-Marshall, TX......................... 0.8613 0.9028 Gregg, TX Harrison, TX Upshur, TX 4480\1\ Los Angeles-Long Beach, CA.................. 1.2268 1.1503 Los Angeles, CA 4520 Louisville, KY-IN............................. 0.9507 0.9660 Clark, IN Floyd, IN Harrison, IN Scott, IN Bullitt, KY Jefferson, KY Oldham, KY 4600 Lubbock, TX................................... 0.8400 0.8875 Lubbock, TX 4640 Lynchburg, VA................................. 0.8228 0.8750 Amherst, VA Bedford, VA Bedford City, VA Campbell, VA Lynchburg City, VA 4680 Macon, GA..................................... 0.9227 0.9464 Bibb, GA Houston, GA Jones, GA Peach, GA Twiggs, GA 4720 Madison, WI................................... 1.0055 1.0038 Dane, WI 4800 Mansfield, OH................................. 0.8639 0.9047 Crawford, OH Richland, OH 4840 Mayaguez, PR.................................. 0.4475 0.5766 Anasco, PR Cabo Rojo, PR Hormigueros, PR Mayaguez, PR Sabana Grande, PR San German, PR 4880 McAllen-Edinburg-Mission, TX.................. 0.8371 0.8854 Hidalgo, TX 4890 Medford-Ashland, OR........................... 1.0354 1.0241 Jackson, OR 4900\2\ Melbourne-Titusville-Palm Bay, FL........... 0.8838 0.9189 Brevard, FL 4920 \1\ Memphis, TN-AR-MS......................... 0.8589 0.9011 Crittenden, AR DeSoto, MS Fayette, TN Shelby, TN Tipton, TN 4940 Merced, CA.................................... 1.0947 1.0639 Merced, CA 5000 \1\ Miami, FL................................. 0.9859 0.9903 Dade, FL 5015 \1\ Middlesex-Somerset-Hunterdon, NJ.......... 1.0875 1.0591 Hunterdon, NJ Middlesex, NJ Somerset, NJ 5080 \1\ Milwaukee-Waukesha, WI.................... 0.9819 0.9876 Milwaukee, WI Ozaukee, WI Washington, WI Waukesha, WI 5120 \1\ Minneapolis-St. Paul, MN-WI............... 1.0733 1.0496 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.................................... 0.8455 0.8914 Baldwin, AL Mobile, AL 5170 Modesto, CA................................... 1.0377 1.0257 [[Page 46074]] Stanislaus, CA 5190 \1\ Monmouth-Ocean, NJ........................ 1.0934 1.0631 Monmouth, NJ Ocean, NJ 5200 Monroe, LA.................................... 0.8414 0.8885 Ouachita, LA 5240 Montgomery, AL................................ 0.7813 0.8445 Autauga, AL Elmore, AL Montgomery, AL 5280 Muncie, IN.................................... 0.9173 0.9426 Delaware, IN 5330 Myrtle Beach, SC.............................. 0.8072 0.8636 Horry, SC 5345 Naples, FL.................................... 1.0109 1.0075 Collier, FL 5360 \1\ Nashville, TN............................. 0.9182 0.9432 Cheatham, TN Davidson, TN Dickson, TN Robertson, TN Rutherford, TN Sumner, TN Williamson, TN Wilson, TN 5380 \1\ Nassau-Suffolk, NY........................ 1.3807 1.2472 Nassau, NY Suffolk, NY 5483 \1\ New Haven-Bridgeport-Stamford-Waterbury-.. 1.2619 1.1727 Danbury, CT Fairfield, CT New Haven, CT 5523 \2\ New London-Norwich, CT.................... 1.2617 1.1726 New London, CT 5560 \1\ New Orleans, LA........................... 0.9566 0.9701 Jefferson, LA Orleans, LA Plaquemines, LA St. Bernard, LA St. Charles, LA St. James, LA St. John The Baptist, LA St. Tammany, LA 5600 \1\ New York, NY.............................. 1.3982 1.2580 Bronx, NY Kings, NY New York, NY Putnam, NY Queens, NY Richmond, NY Rockland, NY Westchester, NY 5640 \1\ Newark, NJ................................ 1.1111 1.0748 Essex, NJ Morris, NJ Sussex, NJ Union, NJ Warren, NJ 5660 Newburgh, NY-PA............................... 1.1283 1.0862 Orange, NY Pike, PA 5720 \1\ Norfolk-Virginia Beach-Newport News, VA-NC. 0.8316 0.8814 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 \1\ Oakland, CA............................... 1.5158 1.3295 Alameda, CA Contra Costa, CA 5790 Ocala, FL..................................... 0.9032 0.9327 Marion, FL 5800 Odessa-Midland, TX............................ 0.8660 0.9062 Ector, TX Midland, TX 5880 \1\ Oklahoma City, OK......................... 0.8481 0.8933 Canadian, OK Cleveland, OK Logan, OK McClain, OK Oklahoma, OK Pottawatomie, OK 5910 Olympia, WA................................... 1.0901 1.0609 Thurston, WA 5920 Omaha, NE-IA.................................. 0.9421 0.9600 Pottawattamie, IA Cass, NE Douglas, NE Sarpy, NE Washington, NE 5945\1\ Orange County, CA........................... 1.1532 1.1025 Orange, CA 5960\1\ Orlando, FL................................. 0.9397 0.9583 Lake, FL Orange, FL Osceola, FL Seminole, FL 5990\2\ Owensboro, KY............................... 0.7772 0.8415 Daviess, KY 6015\2\ Panama City, FL............................. 0.8838 0.9189 Bay, FL 6020\2\ Parkersburg-Marietta, WV-OH (West Virginia Hospitals)......................................... 0.8046 0.8617 Washington, OH Wood, WV 6020\2\ Parkersburg-Marietta, WV-OH (Ohio Hospitals) 0.8434 0.8899 Washington, OH Wood, WV 6080\2\ Pensacola, FL............................... 0.8838 0.9189 Escambia, FL Santa Rosa, FL 6120 Peoria-Pekin, IL.............................. 0.8586 0.9009 Peoria, IL Tazewell, IL Woodford, IL 6160\1\ Philadelphia, PA-NJ......................... 1.1379 1.0925 Burlington, NJ Camden, NJ Gloucester, NJ Salem, NJ Bucks, PA Chester, PA Delaware, PA Montgomery, PA Philadelphia, PA 6200\1\ Phoenix-Mesa, AZ............................ 0.9606 0.9728 Maricopa, AZ Pinal, AZ 6240 Pine Bluff, AR................................ 0.7826 0.8455 Jefferson, AR 6280\1\ Pittsburgh, PA.............................. 0.9725 0.9811 Allegheny, PA Beaver, PA Butler, PA Fayette, PA Washington, PA Westmoreland, PA 6323 Pittsfield, MA................................ 1.0960 1.0648 Berkshire, MA 6340 Pocatello, ID................................. 0.9586 0.9715 Bannock, ID 6360 Ponce, PR..................................... 0.4589 0.5866 Guayanilla, PR Juana Diaz, PR Penuelas, PR Ponce, PR Villalba, PR Yauco, PR 6403 Portland, ME.................................. 0.9627 0.9743 Cumberland, ME Sagadahoc, ME York, ME 6440\1\ Portland-Vancouver, OR-WA................... 1.1344 1.0902 Clackamas, OR Columbia, OR Multnomah, OR Washington, OR Yamhill, OR Clark, WA 6483\1\ Providence-Warwick-Pawtucket, RI............ 1.1049 1.0707 Bristol, RI Kent, RI Newport, RI Providence, RI Washington, RI 6520 Provo-Orem, UT................................ 1.0073 1.0050 Utah, UT 6560 Pueblo, CO.................................... 0.8450 0.8911 Pueblo, CO [[Page 46075]] 6580\2\ Punta Gorda, FL............................. 0.8838 0.9189 Charlotte, FL 6600 Racine, WI.................................... 0.8934 0.9257 Racine, WI 6640\1\ Raleigh-Durham-Chapel Hill, NC.............. 0.9818 0.9875 Chatham, NC Durham, NC Franklin, NC Johnston, NC Orange, NC Wake, NC 6660 Rapid City, SD................................ 0.8345 0.8835 Pennington, SD 6680 Reading, PA................................... 0.9516 0.9666 Berks, PA 6690 Redding, CA................................... 1.1790 1.1194 Shasta, CA 6720 Reno, NV...................................... 1.0768 1.0520 Washoe, NV 6740\2\ Richland-Kennewick-Pasco, WA................ 1.0221 1.0151 Benton, WA Franklin, WA 6760 Richmond-Petersburg, VA....................... 0.9152 0.9411 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 \1\ Riverside-San Bernardino, CA.............. 1.1145 1.0771 Riverside, CA San Bernardino, CA 6800 Roanoke, VA................................... 0.8402 0.8876 Botetourt, VA Roanoke, VA Roanoke City, VA Salem City, VA 6820 Rochester, MN................................. 1.0502 1.0341 Olmsted, MN 6840 \1\ Rochester, NY............................. 0.9524 0.9672 Genesee, NY Livingston, NY Monroe, NY Ontario, NY Orleans, NY Wayne, NY 6880 Rockford, IL.................................. 0.9081 0.9361 Boone, IL Ogle, IL Winnebago, IL 6895 Rocky Mount, NC............................... 0.9029 0.9324 Edgecombe, NC Nash, NC 6920 \1\ Sacramento, CA............................ 1.2202 1.1460 El Dorado, CA Placer, CA Sacramento, CA 6960 Saginaw-Bay City-Midland, MI.................. 0.9564 0.9699 Bay, MI Midland, MI Saginaw, MI 6980 St. Cloud, MN................................. 0.9544 0.9685 Benton, MN Stearns, MN 7000 St. Joseph, MO................................ 0.8366 0.8850 Andrew, MO Buchanan, MO 7040 \1\ St. Louis, MO-IL.......................... 0.9130 0.9396 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 \2\ Salem, OR................................. 0.9976 0.9984 Marion, OR Polk, OR 7120 Salinas, CA................................... 1.4513 1.2905 Monterey, CA 7160\1\ Salt Lake City-Ogden, UT.................... 0.9862 0.9905 Davis, UT Salt Lake, UT Weber, UT 7200 San Angelo, TX................................ 0.7780 0.8421 Tom Green, TX 7240 \1\ San Antonio, TX........................... 0.8499 0.8946 Bexar, TX Comal, TX Guadalupe, TX Wilson, TX 7320 \1\ San Diego, CA............................. 1.2225 1.1475 San Diego, CA 7360 \1\ San Francisco, CA......................... 1.4091 1.2647 Marin, CA San Francisco, CA San Mateo, CA 7400 \1\ San Jose, CA.............................. 1.4332 1.2795 Santa Clara, CA 7440 \1\ San Juan-Bayamon, PR...................... 0.4618 0.5891 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.... 1.1374 1.0922 San Luis Obispo, CA 7480 Santa Barbara-Santa Maria-Lompoc, CA.......... 1.0688 1.0466 Santa Barbara, CA 7485 Santa Cruz-Watsonville, CA.................... 1.4187 1.2706 Santa Cruz, CA 7490 Santa Fe, NM.................................. 1.0332 1.0226 Los Alamos, NM Santa Fe, NM 7500 Santa Rosa, CA................................ 1.2267 1.1502 Sonoma, CA 7510 Sarasota-Bradenton, FL........................ 0.9757 0.9833 Manatee, FL Sarasota, FL 7520 Savannah, GA.................................. 0.8638 0.9046 Bryan, GA Chatham, GA Effingham, GA 7560 Scranton--Wilkes-Barre--Hazleton, PA.......... 0.8539 0.8975 Columbia, PA Lackawanna, PA Luzerne, PA Wyoming, PA 7600 \1\ Seattle-Bellevue-Everett, WA.............. 1.1375 1.0922 Island, WA King, WA Snohomish, WA 7610 Sharon, PA.................................... 0.8783 0.9150 Mercer, PA 7620 \2\ Sheboygan, WI............................. 0.8471 0.8926 Sheboygan, WI 7640 Sherman-Denison, TX........................... 0.8499 0.8946 Grayson, TX 7680 Shreveport-Bossier City, LA................... 0.9381 0.9572 [[Page 46076]] Bossier, LA Caddo, LA Webster, LA 7720 Sioux City, IA-NE............................. 0.8031 0.8606 Woodbury, IA Dakota, NE 7760 Sioux Falls, SD............................... 0.8712 0.9099 Lincoln, SD Minnehaha, SD 7800 South Bend, IN................................ 0.9880 0.9918 St. Joseph, IN 7840 Spokane, WA................................... 1.0486 1.0330 Spokane, WA 7880 Springfield, IL............................... 0.8713 0.9100 Menard, IL Sangamon, IL 7920 Springfield, MO............................... 0.8036 0.8609 Christian, MO Greene, MO Webster, MO 8003 \2\ Springfield, MA........................... 1.0718 1.0486 Hampden, MA Hampshire, MA 8050 State College, PA............................. 0.9635 0.9749 Centre, PA 8080 Steubenville-Weirton, OH-WV................... 0.8645 0.9051 Jefferson, OH Brooke, WV Hancock, WV 8120 Stockton-Lodi, CA............................. 1.1518 1.1016 San Joaquin, CA 8140 \2\ Sumter, SC................................ 0.7921 0.8525 Sumter, SC 8160 Syracuse, NY.................................. 0.9480 0.9641 Cayuga, NY Madison, NY Onondaga, NY Oswego, NY 8200 Tacoma, WA.................................... 1.1016 1.0685 Pierce, WA 8240 \2\ Tallahassee, FL........................... 0.8838 0.9189 Gadsden, FL Leon, FL 8280 \1\ Tampa-St. Petersburg-Clearwater, FL....... 0.9196 0.9442 Hernando, FL Hillsborough, FL Pasco, FL Pinellas, FL 8320 Terre Haute, IN............................... 0.8614 0.9029 Clay, IN Vermillion, IN Vigo, IN 8360 Texarkana, AR-Texarkana, TX................... 0.8699 0.9090 Miller, AR Bowie, TX 8400 Toledo, OH.................................... 1.0140 1.0096 Fulton, OH Lucas, OH Wood, OH 8440 Topeka, KS.................................... 0.9438 0.9612 Shawnee, KS 8480 Trenton, NJ................................... 1.0380 1.0259 Mercer, NJ 8520 Tucson, AZ.................................... 0.9180 0.9431 Pima, AZ 8560 Tulsa, OK..................................... 0.8074 0.8637 Creek, OK Osage, OK Rogers, OK Tulsa, OK Wagoner, OK 8600 Tuscaloosa, AL................................ 0.8187 0.8720 Tuscaloosa, AL 8640 Tyler, TX..................................... 0.9567 0.9701 Smith, TX 8680 \2\ Utica-Rome, NY............................ 0.8401 0.8875 Herkimer, NY Oneida, NY 8720 Vallejo-Fairfield-Napa, CA.................... 1.3528 1.2299 Napa, CA Solano, CA 8735 Ventura, CA................................... 1.0544 1.0369 Ventura, CA 8750 Victoria, TX.................................. 0.8474 0.8928 Victoria, TX 8760 Vineland-Millville-Bridgeton, NJ.............. 1.0110 1.0075 Cumberland, NJ 8780 \2\ Visalia-Tulare-Porterville, CA............ 0.9977 0.9984 Tulare, CA 8800 Waco, TX...................................... 0.7696 0.8358 McLennan, TX 8840 \1\ Washington, DC-MD-VA-WV................... 1.0780 1.0528 District of Columbia, DC Calvert, MD Charles, MD Frederick, MD Montgomery, MD Prince Georges, MD Alexandria City, VA Arlington, VA Clarke, VA Culpeper, 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...................... 0.8643 0.9050 Black Hawk, IA 8940 Wausau, WI.................................... 1.0545 1.0370 Marathon, WI 8960 West Palm Beach-Boca Raton, FL................ 1.0309 1.0211 Palm Beach, FL 9000 \2\ Wheeling, OH-WV (West Virginia Hospitals). 0.7966 0.8558 Belmont, OH Marshall, WV Ohio, WV 9000 \2\ Wheeling, OH-WV (Ohio Hospitals).......... 0.8434 0.8899 Belmont, OH Marshall, WV Ohio, WV 9040 Wichita, KS................................... 0.9403 0.9587 Butler, KS Harvey, KS Sedgwick, KS 9080 Wichita Falls, TX............................. 0.7646 0.8321 Archer, TX Wichita, TX 9140 Williamsport, PA.............................. 0.8548 0.8981 Lycoming, PA 9160 Wilmington-Newark, DE-MD...................... 1.1538 1.1029 New Castle, DE Cecil, MD 9200 Wilmington, NC................................ 0.9322 0.9531 New Hanover, NC Brunswick, NC 9260 \2\ Yakima, WA................................ 1.0221 1.0151 Yakima, WA 9270 Yolo, CA...................................... 1.1431 1.0959 Yolo, CA 9280 York, PA...................................... 0.9415 0.9596 York, PA 9320 Youngstown-Warren, OH......................... 0.9937 0.9957 Columbiana, OH Mahoning, OH Trumbull, OH 9340 Yuba City, CA................................. 1.0324 1.0221 Sutter, CA Yuba, CA 9360 Yuma, AZ...................................... 0.9732 0.9816 Yuma, AZ ------------------------------------------------------------------------ \1\ Large Urban Area \2\ Hospitals geographically located in the area are assigned the statewide rural wage index for FY 1998. Table 4B.--Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas ------------------------------------------------------------------------ Wage Nonurban area index GAF ------------------------------------------------------------------------ Alabama............................................. 0.7260 0.8031 Alaska.............................................. 1.2302 1.1524 Arizona............................................. 0.7989 0.8575 Arkansas............................................ 0.6995 0.7829 [[Page 46077]] California.......................................... 0.9977 0.9984 Colorado............................................ 0.8129 0.8677 Connecticut......................................... 1.2617 1.1726 Delaware............................................ 0.8925 0.9251 Florida............................................. 0.8838 0.9189 Georgia............................................. 0.7761 0.8407 Hawaii.............................................. 1.0229 1.0156 Idaho............................................... 0.8221 0.8745 Illinois............................................ 0.7644 0.8320 Indiana............................................. 0.8161 0.8701 Iowa................................................ 0.7391 0.8130 Kansas.............................................. 0.7203 0.7988 Kentucky............................................ 0.7772 0.8415 Louisiana........................................... 0.7383 0.8124 Maine............................................... 0.8468 0.8924 Maryland............................................ 0.8617 0.9031 Massachusetts....................................... 1.0718 1.0486 Michigan............................................ 0.8923 0.9249 Minnesota........................................... 0.8180 0.8715 Mississippi......................................... 0.6911 0.7765 Missouri............................................ 0.7207 0.7991 Montana............................................. 0.8302 0.8804 Nebraska............................................ 0.7401 0.8137 Nevada.............................................. 0.8914 0.9243 New Hampshire....................................... 0.9724 0.9810 New Jersey \1\...................................... ........ ........ New Mexico.......................................... 0.8110 0.8664 New York............................................ 0.8401 0.8875 North Carolina...................................... 0.7939 0.8538 North Dakota........................................ 0.7360 0.8107 Ohio................................................ 0.8434 0.8899 Oklahoma............................................ 0.7072 0.7888 Oregon.............................................. 0.9976 0.9984 Pennsylvania........................................ 0.8421 0.8890 Puerto Rico......................................... 0.4224 0.5542 Rhode Island \1\.................................... ........ ........ South Carolina...................................... 0.7921 0.8525 South Dakota........................................ 0.6983 0.7820 Tennessee........................................... 0.7353 0.8101 Texas............................................... 0.7404 0.8140 Utah................................................ 0.8926 0.9251 Vermont............................................. 0.9314 0.9525 Virginia............................................ 0.7782 0.8422 Washington.......................................... 1.0221 1.0151 West Virginia....................................... 0.7966 0.8558 Wisconsin........................................... 0.8471 0.8926 Wyoming............................................. 0.8247 0.8764 ------------------------------------------------------------------------ \1\ All counties within the State are classified as urban. Table 4C.--Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified ------------------------------------------------------------------------ Wage Urban area index GAF ------------------------------------------------------------------------ Abilene, TX......................................... 0.8287 0.8793 Albuquerque, NM..................................... 0.9329 0.9535 Alexandria, LA...................................... 0.8269 0.8780 Amarillo, TX........................................ 0.9277 0.9499 Anchorage, AK....................................... 1.2998 1.1967 Asheville, NC....................................... 0.9072 0.9355 Athens, GA.......................................... 0.9087 0.9365 Atlanta, GA......................................... 0.9823 0.9878 Austin-San Marcos, TX............................... 0.9133 0.9398 Bangor, ME.......................................... 0.9478 0.9640 Barnstable-Yarmouth, MA............................. 1.3827 1.2484 Baton Rouge, LA..................................... 0.8382 0.8862 Benton Harbor, MI................................... 0.8923 0.9249 Bergen-Passaic, NJ.................................. 1.1570 1.1050 Billings, MT........................................ 0.9609 0.9731 Birmingham, AL...................................... 0.9005 0.9307 Bismarck, ND........................................ 0.7859 0.8479 Boise City, ID...................................... 0.8887 0.9224 Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH.... 1.1436 1.0962 Caguas, PR.......................................... 0.4508 0.5795 Casper, WY.......................................... 0.9013 0.9313 Champaign-Urbana, IL................................ 0.8706 0.9095 Charlotte-Gastonia-Rock Hill, NC-SC................. 0.9710 0.9800 Charlottesville, VA................................. 0.8885 0.9222 Chattanooga, TN-GA.................................. 0.8658 0.9060 Chicago, IL......................................... 1.0759 1.0514 Cincinnati, OH-KY-IN................................ 0.9521 0.9669 Cleveland-Lorain-Elyria, OH......................... 0.9804 0.9865 Columbia, MO........................................ 0.8759 0.9133 Columbus, OH........................................ 0.9793 0.9858 Dallas, TX.......................................... 0.9674 0.9776 Davenport-Moline-Rock Island, IA-IL................. 0.8405 0.8878 Denver, CO.......................................... 1.0386 1.0263 Des Moines, IA...................................... 0.8837 0.9188 Detroit, MI......................................... 1.0840 1.0568 Duluth-Superior, MN-WI.............................. 0.9779 0.9848 Dutchess County, NY................................. 1.0364 1.0248 Eugene-Springfield, OR.............................. 1.1659 1.1108 Fargo-Moorhead, ND-MN............................... 0.8729 0.9111 Fayetteville, NC.................................... 0.8491 0.8940 Flint, MI........................................... 1.1171 1.0788 Florence, AL........................................ 0.7716 0.8373 Florence, SC........................................ 0.8711 0.9098 Ft. Lauderdale, FL.................................. 1.0487 1.0331 Fort Pierce-Port St. Lucie, FL...................... 1.0008 1.0005 Fort Walton Beach, FL............................... 0.8653 0.9057 Forth Worth-Arlington, TX........................... 0.9997 0.9998 Gadsden, AL......................................... 0.8815 0.9173 Gainesville, FL..................................... 0.9616 0.9735 Gary, IN............................................ 0.9114 0.9384 Grand Forks, ND-MN.................................. 0.8815 0.9173 Grand Junction, CO.................................. 0.9491 0.9649 Great Falls, MT..................................... 0.9306 0.9519 Greeley, CO......................................... 0.9791 0.9856 Green Bay, WI....................................... 0.9585 0.9714 Greensboro-Winston-Salem-High Point, NC............. 0.9351 0.9551 Harrisburg-Lebanon-Carlisle, PA..................... 1.0076 1.0052 Honolulu, HI........................................ 1.1817 1.1211 Houma, LA........................................... 0.7854 0.8475 Houston, TX......................................... 0.9855 0.9900 Huntington-Ashland, WV-KY-OH........................ 0.9160 0.9417 Huntsville, AL...................................... 0.8485 0.8936 Indianapolis, IN.................................... 0.9848 0.9896 Iowa City, IA....................................... 0.9198 0.9444 Jackson, MS......................................... 0.7790 0.8428 Johnson City-Kingsport-Bristol, TN-VA............... 0.9114 0.9384 Jonesboro, AR....................................... 0.7443 0.8169 Joplin, MO.......................................... 0.7541 0.8243 Kalamazoo-Battlecreek, MI........................... 1.0668 1.0453 Kansas City, KS-MO.................................. 0.9564 0.9699 Knoxville, TN....................................... 0.8831 0.9184 Lafayette, LA....................................... 0.8227 0.8749 Lafayette, IN....................................... 0.9174 0.9427 Lansing-East Lansing, MI............................ 1.0088 1.0060 Las Cruces, NM...................................... 0.8658 0.9060 Las Vegas, NV-AZ.................................... 1.0592 1.0402 Lexington, KY....................................... 0.8416 0.8886 Lima, OH............................................ 0.9185 0.9434 Lincoln, NE......................................... 0.9035 0.9329 Little Rock-North Little Rock, AR................... 0.8490 0.8940 Longview-Marshall, TX............................... 0.8509 0.8953 Los Angeles-Long Beach, CA.......................... 1.2268 1.1503 Louisville, KY-IN................................... 0.9507 0.9660 Macon, GA........................................... 0.9227 0.9464 Madison, WI......................................... 1.0055 1.0038 Mansfield, OH....................................... 0.8639 0.9047 Medford-Ashland, OR................................. 1.0354 1.0241 Memphis, TN-AR-MS................................... 0.8589 0.9011 Milwaukee-Waukesha, WI.............................. 0.9819 0.9876 Minneapolis-St. Paul, MN-WI......................... 1.0733 1.0496 Monroe, LA.......................................... 0.8414 0.8885 Montgomery, AL...................................... 0.7813 0.8445 Nashville, TN....................................... 0.9182 0.9432 New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT. 1.2619 1.1727 New London-Norwich, CT.............................. 1.2258 1.1496 New Orleans, LA..................................... 0.9566 0.9701 New York, NY........................................ 1.3982 1.2580 Newark, NJ.......................................... 1.1111 1.0748 Newburgh, NY-PA..................................... 1.1283 1.0862 Oakland, CA......................................... 1.5158 1.3295 Odessa-Midland, TX.................................. 0.8516 0.8958 Oklahoma City, OK................................... 0.8481 0.8933 Omaha, NE-IA........................................ 0.9421 0.9600 Orange County, CA................................... 1.1532 1.1025 Peoria-Pekin, IL.................................... 0.8586 0.9009 Philadelphia, PA-NJ................................. 1.1379 1.0925 Pittsburgh, PA...................................... 0.9583 0.9713 Pocatello, ID....................................... 0.9000 0.9304 Portland, ME........................................ 0.9627 0.9743 Portland-Vancouver, OR-WA........................... 1.1344 1.0902 Provo-Orem, UT...................................... 1.0073 1.0050 Raleigh-Durham-Chapel Hill, NC...................... 0.9818 0.9875 Rapid City, SD...................................... 0.8345 0.8835 Rochester, MN....................................... 1.0502 1.0341 Rockford, IL........................................ 0.9081 0.9361 Sacramento, CA...................................... 1.2202 1.1460 [[Page 46078]] Saginaw-Bay City-Midland, MI........................ 0.9564 0.9699 St. Cloud, MN....................................... 0.9544 0.9685 St. Louis, MO-IL.................................... 0.9130 0.9396 Salinas, CA......................................... 1.4299 1.2775 Salt Lake City-Ogden, UT............................ 0.9862 0.9905 San Diego, CA....................................... 1.2225 1.1475 San Francisco, CA................................... 1.4091 1.2647 Santa Fe, NM........................................ 1.0007 1.0005 Santa Rosa, CA...................................... 1.2146 1.1424 Seattle-Bellevue-Everett, WA........................ 1.1375 1.0922 Sherman-Denison, TX................................. 0.8324 0.8819 Sioux City, IA-NE................................... 0.8031 0.8606 Sioux Falls, SD..................................... 0.8607 0.9024 South Bend, IN...................................... 0.9880 0.9918 Spokane, WA......................................... 1.0311 1.0212 Springfield, IL..................................... 0.8610 0.9026 Springfield, MO..................................... 0.8036 0.8609 Stockton-Lodi, CA................................... 1.1518 1.1016 Syracuse, NY........................................ 0.9480 0.9641 Tampa-St. Petersburg-Clearwater, FL................. 0.9196 0.9442 Texarkana, AR-Texarkana, TX......................... 0.8699 0.9090 Topeka, KS.......................................... 0.9310 0.9522 Tucson, AZ.......................................... 0.9180 0.9431 Tulsa, OK........................................... 0.8074 0.8637 Tyler, TX........................................... 0.9421 0.9600 Vallejo-Fairfield-Napa, CA.......................... 1.3528 1.2299 Washington, DC-MD-VA-WV............................. 1.0780 1.0528 Waterloo-Cedar Falls, IA............................ 0.8643 0.9050 Wausau, WI.......................................... 0.9845 0.9894 Wichita, KS......................................... 0.9157 0.9415 Wichita Falls, TX................................... 0.7646 0.8321 Rural Florida....................................... 0.8838 0.9189 Rural Louisiana..................................... 0.7383 0.8124 Rural Minnesota..................................... 0.8180 0.8715 Rural Missouri...................................... 0.7207 0.7991 Rural New Hampshire................................. 0.9724 0.9810 Rural New Mexico.................................... 0.8110 0.8664 Rural North Carolina................................ 0.7939 0.8538 Rural Oregon........................................ 0.9976 0.9984 Rural Washington.................................... 1.0221 1.0151 Rural West Virginia................................. 0.7966 0.8558 Rural Wyoming....................................... 0.8247 0.8764 ------------------------------------------------------------------------ Table 4D.--Average Hourly Wage for Urban Areas ------------------------------------------------------------------------ Average Urban area hourly wage ------------------------------------------------------------------------ Abilene, TX.................................................. 16.6537 Aguadilla, PR................................................ 8.4161 Akron, OH.................................................... 19.6368 Albany, GA................................................... 15.9028 Albany-Schenectady-Troy, NY.................................. 17.0398 Albuquerque, NM.............................................. 18.7069 Alexandria, LA............................................... 16.4017 Allentown-Bethlehem-Easton, PA............................... 20.2671 Altoona, PA.................................................. 18.3612 Amarillo, TX................................................. 18.9399 Anchorage, AK................................................ 25.8065 Ann Arbor, MI................................................ 23.6829 Anniston, AL................................................. 16.6112 Appleton-Oshkosh-Neenah, WI.................................. 18.0782 Arecibo, PR.................................................. 8.4753 Asheville, NC................................................ 18.2293 Athens, GA................................................... 18.2596 Atlanta, GA.................................................. 19.7400 Atlantic-Cape May, NJ........................................ 22.4152 Augusta-Aiken, GA-SC......................................... 18.7555 Austin-San Marcos, TX........................................ 18.3520 Bakersfield, CA.............................................. 20.1222 Baltimore, MD................................................ 19.4693 Bangor, ME................................................... 19.0461 Barnstable-Yarmouth, MA...................................... 28.7181 Baton Rouge, LA.............................................. 16.8431 Beaumont-Port Arthur, TX..................................... 17.2676 Bellingham, WA............................................... 22.5492 Benton Harbor, MI............................................ 17.3503 Bergen-Passaic, NJ........................................... 24.4277 Billings, MT................................................. 19.6586 Biloxi-Gulfport-Pascagoula, MS............................... 16.9110 Binghamton, NY............................................... 17.9128 Birmingham, AL............................................... 18.0953 Bismarck, ND................................................. 15.4640 Bloomington, IN.............................................. 18.3421 Bloomington-Normal, IL....................................... 17.5497 Boise City, ID............................................... 17.7955 Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH............. 22.9992 Boulder-Longmont, CO......................................... 20.1260 Brazoria, TX................................................. 18.7704 Bremerton, WA................................................ 22.1033 Brownsville-Harlingen-San Benito, TX......................... 17.5624 Bryan-College Station, TX.................................... 17.2226 Buffalo-Niagara Falls, NY.................................... 18.6331 Burlington, VT............................................... 20.3813 Caguas, PR................................................... 8.9610 Canton-Massillon, OH......................................... 18.0078 Casper, WY................................................... 18.1110 Cedar Rapids, IA............................................. 17.1383 Champaign-Urbana, IL......................................... 17.7326 Charleston-North Charleston, SC.............................. 17.6972 Charleston, WV............................................... 18.3703 Charlotte-Gastonia-Rock Hill, NC-SC.......................... 19.5119 Charlottesville, VA.......................................... 18.1882 Chattanooga, TN-GA........................................... 17.3976 Cheyenne, WY................................................. 15.1808 Chicago, IL.................................................. 21.8239 Chico-Paradise, CA........................................... 20.9567 Cincinnati, OH-KY-IN......................................... 19.0379 Clarksville-Hopkinsville, TN-KY.............................. 15.7785 Cleveland-Lorain-Elyria, OH.................................. 19.7003 Colorado Springs, CO......................................... 18.7205 Columbia, MO................................................. 18.0868 Columbia, SC................................................. 18.4707 Columbus, GA-AL.............................................. 16.6542 Columbus, OH................................................. 19.6781 Corpus Christi, TX........................................... 17.9745 Cumberland, MD-WV............................................ 17.7280 Dallas, TX................................................... 19.4990 Danville, VA................................................. 16.3692 Davenport-Moline-Rock Island, IA-IL.......................... 16.8903 Dayton-Springfield, OH....................................... 19.2596 Daytona Beach, FL............................................ 16.8298 Decatur, AL.................................................. 16.6503 Decatur, IL.................................................. 15.9047 Denver, CO................................................... 20.8698 Des Moines, IA............................................... 17.7579 Detroit, MI.................................................. 21.7532 Dothan, AL................................................... 16.2160 Dover, DE.................................................... 18.6953 Dubuque, IA.................................................. 16.2530 Duluth-Superior, MN-WI....................................... 19.6500 Dutchess County, NY.......................................... 21.3657 Eau Claire, WI............................................... 17.6122 El Paso, TX.................................................. 20.3430 Elkhart-Goshen, IN........................................... 18.2474 Elmira, NY................................................... 16.5714 Enid, OK..................................................... 16.0002 Erie, PA..................................................... 17.8087 Eugene-Springfield, OR....................................... 22.9777 Evansville, Henderson, IN-KY................................. 17.3648 Fargo-Moorhead, ND-MN........................................ 17.7585 Fayetteville, NC............................................. 17.5510 Fayetteville-Springdale-Rogers, AR........................... 14.9924 Flagstaff, AZ-UT............................................. 18.3168 Flint, MI.................................................... 22.4472 Florence, AL................................................. 15.1732 Florence, SC................................................. 17.5055 Fort Collins-Loveland, CO.................................... 20.5933 Fort Lauderdale, FL.......................................... 20.9943 Fort Myers-Cape Coral, FL.................................... 17.6604 Fort Pierce-Port St. Lucie, FL............................... 20.6112 Fort Smith, AR-OK............................................ 15.6127 Fort Walton Beach, FL........................................ 17.6128 Fort Wayne, IN............................................... 17.8865 Fort Worth-Arlington, TX..................................... 20.0524 Fresno, CA................................................... 21.3156 Gadsden, AL.................................................. 17.7134 Gainesville, FL.............................................. 19.3227 Galveston-Texas City, TX..................................... 21.2286 Gary, IN..................................................... 19.3581 Glens Falls, NY.............................................. 16.8524 Goldsboro, NC................................................ 16.9659 Grand Forks, ND-MN........................................... 17.5737 Grand Junction, CO........................................... 18.2668 Grand Rapids-Muskegon-Holland, MI............................ 20.3894 Great Falls, MT.............................................. 17.6888 Greeley, CO.................................................. 20.2891 Green Bay, WI................................................ 18.2802 Greensboro-Winston-Salem-High Point, NC...................... 18.7911 Greenville, NC............................................... 18.2150 Greenville-Spartanburg-Anderson, SC.......................... 18.2047 Hagerstown, MD............................................... 19.4546 Hamilton-Middletown, OH...................................... 17.6176 Harrisburg-Lebanon-Carlisle, PA.............................. 20.4715 Hartford, CT................................................. 25.2442 Hattiesburg, MS.............................................. 14.4517 Hickory-Morganton-Lenoir, NC................................. 17.4555 Honolulu, HI................................................. 23.7434 Houma, LA.................................................... 15.7820 Houston, TX.................................................. 19.8028 Huntington-Ashland, WV-KY-OH................................. 18.4061 Huntsville, AL............................................... 17.0504 Indianapolis, IN............................................. 19.7891 Iowa City, IA................................................ 18.8914 Jackson, MI.................................................. 18.1893 Jackson, MS.................................................. 15.5941 [[Page 46079]] Jackson, TN.................................................. 17.1259 Jacksonville, FL............................................. 18.0231 Jacksonville, NC............................................. 14.0121 Jamestown, NY................................................ 15.1763 Janesville-Beloit, WI........................................ 17.7327 Jersey City, NJ.............................................. 22.9317 Johnson City-Kingsport-Bristol, TN-VA........................ 18.3137 Johnstown, PA................................................ 16.8349 Jonesboro, AR................................................ 14.9575 Joplin, MO................................................... 15.0911 Kalamazoo-Battlecreek, MI.................................... 21.4383 Kankakee, IL................................................. 17.3875 Kansas City, KS-MO........................................... 19.2182 Kenosha, WI.................................................. 18.4799 Killeen-Temple, TX........................................... 20.6010 Knoxville, TN................................................ 17.7457 Kokomo, IN................................................... 16.9123 La Crosse, WI-MN............................................. 17.5812 Lafayette, LA................................................ 16.4896 Lafayette, IN................................................ 18.4349 Lake Charles, LA............................................. 15.6250 Lakeland-Winter Haven, FL.................................... 17.6957 Lancaster, PA................................................ 19.0528 Lansing-East Lansing, MI..................................... 20.2720 Laredo, TX................................................... 14.7188 Las Cruces, NM............................................... 17.3739 Las Vegas, NV-AZ............................................. 21.2843 Lawrence, KS................................................. 17.2986 Lawton, OK................................................... 18.1767 Lewiston-Auburn, ME.......................................... 19.1630 Lexington, KY................................................ 16.8604 Lima, OH..................................................... 18.4571 Lincoln, NE.................................................. 18.5501 Little Rock-North Little Rock, AR............................ 17.0606 Longview-Marshall, TX........................................ 17.3073 Los Angeles-Long Beach, CA................................... 24.5811 Louisville, KY-IN............................................ 19.1041 Lubbock, TX.................................................. 16.8801 Lynchburg, VA................................................ 16.5342 Macon, GA.................................................... 18.5414 Madison, WI.................................................. 20.2048 Mansfield, OH................................................ 17.3603 Mayaguez, PR................................................. 8.9928 McAllen-Edinburg-Mission, TX................................. 16.8206 Medford-Ashland, OR.......................................... 20.8059 Melbourne-Titusville-Palm Bay, FL............................ 17.7216 Memphis, TN-AR-MS............................................ 17.2589 Merced, CA................................................... 21.9978 Miami, FL.................................................... 19.8109 Middlesex-Somerset-Hunterdon, NJ............................. 22.2234 Milwaukee-Waukesha, WI....................................... 19.7306 Minneapolis-St. Paul, MN-WI.................................. 21.5680 Mobile, AL................................................... 16.9905 Modesto, CA.................................................. 21.6914 Monmouth-Ocean, NJ........................................... 21.9716 Monroe, LA................................................... 16.9075 Montgomery, AL............................................... 15.4155 Muncie, IN................................................... 18.4325 Myrtle Beach, SC............................................. 16.2206 Naples, FL................................................... 20.3132 Nashville, TN................................................ 18.4503 Nassau-Suffolk, NY........................................... 27.7455 New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT.......... 25.3561 New London-Norwich, CT....................................... 24.1396 New Orleans, LA.............................................. 19.2230 New York, NY................................................. 28.1700 Newark, NJ................................................... 24.0742 Newburgh, NY-PA.............................................. 22.6737 Norfolk-Virginia Beach-Newport News, VA-NC................... 16.7115 Oakland, CA.................................................. 30.2802 Ocala, FL.................................................... 18.1497 Odessa-Midland, TX........................................... 17.4016 Oklahoma City, OK............................................ 17.0417 Olympia, WA.................................................. 21.9051 Omaha, NE-IA................................................. 18.9312 Orange County, CA............................................ 23.3199 Orlando, FL.................................................. 18.8833 Owensboro, KY................................................ 15.0313 Panama City, FL.............................................. 16.7539 Parkersburg-Marietta, WV-OH.................................. 16.1677 Pensacola, FL................................................ 16.4635 Peoria-Pekin, IL............................................. 17.2543 Philadelphia, PA-NJ.......................................... 22.8669 Phoenix-Mesa, AZ............................................. 19.3025 Pine Bluff, AR............................................... 15.7267 Pittsburgh, PA............................................... 19.5430 Pittsfield, MA............................................... 22.0237 Pocatello, ID................................................ 19.2628 Ponce, PR.................................................... 9.2209 Portland, ME................................................. 19.3456 Portland-Vancouver, OR-WA.................................... 22.7959 Providence-Warwick, RI....................................... 22.2031 Provo-Orem, UT............................................... 20.2420 Pueblo, CO................................................... 16.9797 Punta Gorda, FL.............................................. 17.5323 Racine, WI................................................... 17.9536 Raleigh-Durham-Chapel Hill, NC............................... 19.7297 Rapid City, SD............................................... 16.7698 Reading, PA.................................................. 19.1233 Redding, CA.................................................. 23.6924 Reno, NV..................................................... 21.6378 Richland-Kennewick-Pasco, WA................................. 19.9294 Richmond-Petersburg, VA...................................... 18.3907 Riverside-San Bernardino, CA................................. 22.7212 Roanoke, VA.................................................. 16.8848 Rochester, MN................................................ 21.1030 Rochester, NY................................................ 19.1384 Rockford, IL................................................. 18.2476 Rocky Mount, NC.............................................. 18.1440 Sacramento, CA............................................... 24.5203 Saginaw-Bay City-Midland, MI................................. 19.2180 St. Cloud, MN................................................ 19.1778 St. Joseph, MO............................................... 16.8108 St. Louis, MO-IL............................................. 18.3475 Salem, OR.................................................... 19.9649 Salinas, CA.................................................. 29.1634 Salt Lake City-Ogden, UT..................................... 19.8077 San Angelo, TX............................................... 15.6340 San Antonio, TX.............................................. 17.0791 San Diego, CA................................................ 24.5018 San Francisco, CA............................................ 28.4956 San Jose, CA................................................. 28.8011 San Juan-Bayamon, PR......................................... 9.2790 San Luis Obispo-Atascadero-Paso Robles, CA................... 22.8552 Santa Barbara-Santa Maria-Lompoc, CA......................... 21.4774 Santa Cruz-Watsonville, CA................................... 28.5090 Santa Fe, NM................................................. 20.7615 Santa Rosa, CA............................................... 25.7526 Sarasota-Bradenton, FL....................................... 19.6072 Savannah, GA................................................. 17.3582 Scranton-Wilkes Barre-Hazleton, PA........................... 17.1601 Seattle-Bellevue-Everett, WA................................. 22.7858 Sharon, PA................................................... 17.6500 Sheboygan, WI................................................ 15.7984 Sherman-Denison, TX.......................................... 17.0784 Shreveport-Bossier City, LA.................................. 18.8520 Sioux City, IA-NE............................................ 16.1387 Sioux Falls, SD.............................................. 17.5067 South Bend, IN............................................... 19.8290 Spokane, WA.................................................. 21.0721 Springfield, IL.............................................. 17.5080 Springfield, MO.............................................. 16.0540 Springfield, MA.............................................. 21.4074 State College, PA............................................ 19.3613 Steubenville-Weirton, OH-WV.................................. 17.3728 Stockton-Lodi, CA............................................ 23.1020 Sumter, SC................................................... 15.7585 Syracuse, NY................................................. 19.0186 Tacoma, WA................................................... 22.1357 Tallahassee, FL.............................................. 16.7434 Tampa-St. Petersburg-Clearwater, FL.......................... 18.2926 Terre Haute, IN.............................................. 17.3093 Texarkana, AR-Texarkana, TX.................................. 17.4104 Toledo, OH................................................... 20.8792 Topeka, KS................................................... 18.9662 Trenton, NJ.................................................. 20.8592 Tucson, AZ................................................... 18.4477 Tulsa, OK.................................................... 16.2252 Tuscaloosa, AL............................................... 16.4520 Tyler, TX.................................................... 19.2259 Utica-Rome, NY............................................... 16.8763 Vallejo-Fairfield-Napa, CA................................... 27.6380 Ventura, CA.................................................. 21.9959 Victoria, TX................................................. 17.0294 Vineland-Millville-Bridgeton, NJ............................. 20.3170 Visalia-Tulare-Porterville, CA............................... 19.9417 Waco, TX..................................................... 15.4645 Washington, DC-MD-VA-WV...................................... 21.6632 Waterloo-Cedar Falls, IA..................................... 17.3631 Wausau, WI................................................... 21.1907 West Palm Beach-Boca Raton, FL............................... 20.8423 Wheeling, OH-WV.............................................. 15.4868 Wichita, KS.................................................. 18.8949 Wichita Falls, TX............................................ 15.3642 Williamsport, PA............................................. 17.1768 Wilmington-Newark, DE-MD..................................... 23.1858 Wilmington, NC............................................... 18.7325 Yakima, WA................................................... 20.2994 Yolo, CA..................................................... 22.9704 York, PA..................................................... 18.9189 Youngstown-Warren, OH........................................ 19.9688 Yuba City, CA................................................ 20.7466 Yuma, AZ..................................................... 19.5572 ------------------------------------------------------------------------ Table 4E.--Average Hourly Wage for Rural Areas ------------------------------------------------------------------------ Average Nonurban area hourly wage ------------------------------------------------------------------------ Alabama...................................................... 14.5882 Alaska....................................................... 24.7201 Arizona...................................................... 16.0545 Arkansas..................................................... 14.0570 California................................................... 20.0484 Colorado..................................................... 16.3349 Connecticut.................................................. 25.3532 [[Page 46080]] Delaware..................................................... 17.9354 Florida...................................................... 17.7600 Georgia...................................................... 15.5949 Hawaii....................................................... 20.5550 Idaho........................................................ 16.5193 Illinois..................................................... 15.3604 Indiana...................................................... 16.3993 Iowa......................................................... 14.8515 Kansas....................................................... 14.4750 Kentucky..................................................... 15.6180 Louisiana.................................................... 14.8369 Maine........................................................ 17.0166 Maryland..................................................... 17.3152 Massachusetts................................................ 21.5382 Michigan..................................................... 17.9306 Minnesota.................................................... 16.4358 Mississippi.................................................. 13.8878 Missouri..................................................... 14.4791 Montana...................................................... 16.6820 Nebraska..................................................... 14.8733 Nevada....................................................... 17.9119 New Hampshire................................................ 19.5257 New Jersey \1\............................................... ......... New Mexico................................................... 16.2165 New York..................................................... 16.8824 North Carolina............................................... 15.9493 North Dakota................................................. 14.7904 Ohio......................................................... 16.9480 Oklahoma..................................................... 14.2120 Oregon....................................................... 20.0438 Pennsylvania................................................. 16.9213 Puerto Rico.................................................. 8.4891 Rhode Island \1\............................................. ......... South Carolina............................................... 15.9167 South Dakota................................................. 14.0318 Tennessee.................................................... 14.7759 Texas........................................................ 14.8782 Utah......................................................... 17.9362 Vermont...................................................... 18.7155 Virginia..................................................... 15.6378 Washington................................................... 20.5396 West Virginia................................................ 15.9511 Wisconsin.................................................... 17.0229 Wyoming...................................................... 16.5729 ------------------------------------------------------------------------ \1\ All counties within the State are classified as urban. Table 4F.--Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) ---------------------------------------------------------------------------------------------------------------- Wage index-- Area Wage index GAF reclass. GAF--reclass. hospitals hospitals ---------------------------------------------------------------------------------------------------------------- Aguadilla, PR \1\..................................... 0.9291 0.9509 ............... ............. Arecibo, PR \1\....................................... 0.9291 0.9509 ............... ............. Caguas, PR............................................ 0.9914 0.9941 0.9914 0.9941 Mayaguez, PR.......................................... 0.9843 0.9892 ............... ............. Ponce, PR............................................. 1.0093 1.0064 ............... ............. San Juan-Bayamon, PR.................................. 1.0156 1.0107 ............... ............. Rural Puerto Rico..................................... 0.9291 0.9509 ............... ............. ---------------------------------------------------------------------------------------------------------------- \1\ Hospitals geographically located in the area are assigned the statewide rural wage index for FY 1998. Table 5.--List of Diagnosis Related Groups (DRGs), Relative Weighting Factors, Geometric and Arithmetic Mean Length of Stay ---------------------------------------------------------------------------------------------------------------- Relative Geometric Arithmetic weights mean LOS mean LOS ---------------------------------------------------------------------------------------------------------------- 1............... 01 SURG CRANIOTOMY AGE >17 EXCEPT 3.0907 7.2 10.3 FOR TRAUMA. 2............... 01 SURG CRANIOTOMY FOR TRAUMA AGE 3.0511 7.9 10.6 >17. 3............... 01 SURG * CRANIOTOMY AGE 0-17...... 1.9484 12.7 12.7 4............... 01 SURG SPINAL PROCEDURES.......... 2.3858 5.5 8.5 5............... 01 SURG EXTRACRANIAL VASCULAR 1.5041 2.9 3.9 PROCEDURES. 6............... 01 SURG CARPAL TUNNEL RELEASE...... .7582 2.2 3.3 7............... 01 SURG PERIPH & CRANIAL NERVE & 2.4717 7.3 11.4 OTHER NERV SYST PROC W CC. 8............... 01 SURG PERIPH & CRANIAL NERVE & 1.2142 2.2 3.2 OTHER NERV SYST PROC W/O CC. 9............... 01 MED SPINAL DISORDERS & INJURIES 1.2646 5.1 7.2 10.............. 01 MED NERVOUS SYSTEM NEOPLASMS W 1.2184 5.3 7.4 CC. 11.............. 01 MED NERVOUS SYSTEM NEOPLASMS W/ .7879 3.2 4.3 O CC. 12.............. 01 MED DEGENERATIVE NERVOUS SYSTEM .9370 5.0 6.8 DISORDERS. 13.............. 01 MED MULTIPLE SCLEROSIS & .7832 4.7 5.8 CEREBELLAR ATAXIA. 14.............. 01 MED SPECIFIC CEREBROVASCULAR 1.1889 5.1 6.8 DISORDERS EXCEPT TIA. 15.............. 01 MED TRANSIENT ISCHEMIC ATTACK & .7241 3.2 4.1 PRECEREBRAL OCCLUSIONS. 16.............. 01 MED NONSPECIFIC CEREBROVASCULAR 1.0452 4.6 6.1 DISORDERS W CC. 17.............. 01 MED NONSPECIFIC CEREBROVASCULAR .6161 2.8 3.7 DISORDERS W/O CC. 18.............. 01 MED CRANIAL & PERIPHERAL NERVE .9399 4.5 5.9 DISORDERS W CC. 19.............. 01 MED CRANIAL & PERIPHERAL NERVE .6293 3.2 4.1 DISORDERS W/O CC. 20.............. 01 MED NERVOUS SYSTEM INFECTION 2.5786 8.0 10.8 EXCEPT VIRAL MENINGITIS. 21.............. 01 MED VIRAL MENINGITIS........... 1.4866 5.4 7.1 22.............. 01 MED HYPERTENSIVE ENCEPHALOPATHY .8594 3.7 4.8 23.............. 01 MED NONTRAUMATIC STUPOR & COMA. .7777 3.3 4.6 24.............. 01 MED SEIZURE & HEADACHE AGE >17 .9578 3.9 5.3 W CC. 25.............. 01 MED SEIZURE & HEADACHE AGE >17 .5821 2.8 3.6 W/O CC. 26.............. 01 MED SEIZURE & HEADACHE AGE 0-17 .9601 3.6 4.9 27.............. 01 MED TRAUMATIC STUPOR & COMA, 1.2670 3.4 5.5 COMA >1 HR. 28.............. 01 MED TRAUMATIC STUPOR & COMA, 1.1707 4.4 6.4 COMA <1 HR AGE >17 W CC. 29.............. 01 MED TRAUMATIC STUPOR & COMA, .6383 2.8 3.7 COMA <1 HR AGE >17 W/O CC. [[Page 46081]] 30.............. 01 MED * TRAUMATIC STUPOR & COMA, .3295 2.0 2.0 COMA <1 HR AGE 0-17. 31.............. 01 MED CONCUSSION AGE >17 W CC.... .8369 3.4 4.8 32.............. 01 MED CONCUSSION AGE >17 W/O CC.. .5109 2.2 3.1 33.............. 01 MED * CONCUSSION AGE 0-17...... .2071 1.6 1.6 34.............. 01 MED OTHER DISORDERS OF NERVOUS 1.0385 4.2 5.8 SYSTEM W CC. 35.............. 01 MED OTHER DISORDERS OF NERVOUS .5941 3.0 3.9 SYSTEM W/O CC. 36.............. 02 SURG RETINAL PROCEDURES......... .6265 1.3 1.5 37.............. 02 SURG ORBITAL PROCEDURES......... .9725 2.6 3.9 38.............. 02 SURG PRIMARY IRIS PROCEDURES.... .4826 1.9 2.7 39.............. 02 SURG LENS PROCEDURES WITH OR .5406 1.5 2.0 WITHOUT VITRECTOMY. 40.............. 02 SURG EXTRAOCULAR PROCEDURES .7341 2.2 3.3 EXCEPT ORBIT AGE >17. 41.............. 02 SURG * EXTRAOCULAR PROCEDURES .3354 1.6 1.6 EXCEPT ORBIT AGE 0-17. 42.............. 02 SURG INTRAOCULAR PROCEDURES .5676 1.5 2.0 EXCEPT RETINA, IRIS & LENS. 43.............. 02 MED HYPHEMA.................... .4119 2.9 4.0 44.............. 02 MED ACUTE MAJOR EYE INFECTIONS. .6072 4.3 5.3 45.............. 02 MED NEUROLOGICAL EYE DISORDERS. .6730 2.9 3.6 46.............. 02 MED OTHER DISORDERS OF THE EYE .7234 3.7 4.9 AGE >17 W CC. 47.............. 02 MED OTHER DISORDERS OF THE EYE .4623 2.7 3.6 AGE >17 W/O CC. 48.............. 02 MED * OTHER DISORDERS OF THE .2955 2.9 2.9 EYE AGE 0-17. 49.............. 03 SURG MAJOR HEAD & NECK 1.8074 3.9 5.3 PROCEDURES. 50.............. 03 SURG SIALOADENECTOMY............ .8143 1.7 2.1 51.............. 03 SURG SALIVARY GLAND PROCEDURES .8367 1.9 2.9 EXCEPT SIALOADENECTOMY. 52.............. 03 SURG CLEFT LIP & PALATE REPAIR.. 1.2768 2.2 3.2 53.............. 03 SURG SINUS & MASTOID PROCEDURES 1.0682 2.3 3.6 AGE >17. 54.............. 03 SURG * SINUS & MASTOID .4790 3.2 3.2 PROCEDURES AGE 0-17. 55.............. 03 SURG MISCELLANEOUS EAR, NOSE, .8366 2.0 2.9 MOUTH & THROAT PROCEDURES. 56.............. 03 SURG RHINOPLASTY................ .8830 2.1 2.8 57.............. 03 SURG T&A PROC, EXCEPT 1.0182 2.7 4.0 TONSILLECTOMY &/OR ADENOIDECTOMY ONLY, AGE >17. 58.............. 03 SURG * T&A PROC, EXCEPT .2720 1.5 1.5 TONSILLECTOMY &/OR ADENOIDECTOMY ONLY, AGE 0- 17. 59.............. 03 SURG TONSILLECTOMY &/OR .8238 2.3 3.3 ADENOIDECTOMY ONLY, AGE >17. 60.............. 03 SURG * TONSILLECTOMY &/OR .2072 1.5 1.5 ADENOIDECTOMY ONLY, AGE 0- 17. 61.............. 03 SURG MYRINGOTOMY W TUBE 1.1181 2.8 4.5 INSERTION AGE >17. 62.............. 03 SURG * MYRINGOTOMY W TUBE .2933 1.3 1.3 INSERTION AGE 0-17. 63.............. 03 SURG OTHER EAR, NOSE, MOUTH & 1.2444 3.1 4.6 THROAT O.R. PROCEDURES. 64.............. 03 MED EAR, NOSE, MOUTH & THROAT 1.1568 4.4 6.7 MALIGNANCY. 65.............. 03 MED DYSEQUILIBRIUM............. .5177 2.5 3.2 66.............. 03 MED EPISTAXIS.................. .5605 2.8 3.5 67.............. 03 MED EPIGLOTTITIS............... .7866 3.1 3.8 68.............. 03 MED OTITIS MEDIA & URI AGE >17 .6831 3.5 4.3 W CC. 69.............. 03 MED OTITIS MEDIA & URI AGE >17 .5160 2.9 3.5 W/O CC. 70.............. 03 MED OTITIS MEDIA & URI AGE 0-17 .3892 2.7 3.3 71.............. 03 MED LARYNGOTRACHEITIS.......... .6688 3.0 3.9 72.............. 03 MED NASAL TRAUMA & DEFORMITY... .6364 2.7 3.5 73.............. 03 MED OTHER EAR, NOSE, MOUTH & .7660 3.4 4.7 THROAT DIAGNOSES AGE >17. 74.............. 03 MED * OTHER EAR, NOSE, MOUTH & .3332 2.1 2.1 THROAT DIAGNOSES AGE 0-17. 75.............. 04 SURG MAJOR CHEST PROCEDURES..... 3.1958 8.3 10.6 76.............. 04 SURG OTHER RESP SYSTEM O.R. 2.6427 8.7 11.7 PROCEDURES W CC. 77.............. 04 SURG OTHER RESP SYSTEM O.R. 1.1150 3.5 5.1 PROCEDURES W/O CC. 78.............. 04 MED PULMONARY EMBOLISM......... 1.4264 6.6 7.7 79.............. 04 MED RESPIRATORY INFECTIONS & 1.6258 6.8 8.7 INFLAMMATIONS AGE >17 W CC. 80.............. 04 MED RESPIRATORY INFECTIONS & .9121 4.9 6.1 INFLAMMATIONS AGE >17 W/O CC. 81.............. 04 MED * RESPIRATORY INFECTIONS & 1.5091 6.1 6.1 INFLAMMATIONS AGE 0-17. 82.............. 04 MED RESPIRATORY NEOPLASMS...... 1.3329 5.4 7.4 83.............. 04 MED MAJOR CHEST TRAUMA W CC.... .9716 4.6 5.9 84.............. 04 MED MAJOR CHEST TRAUMA W/O CC.. .5260 2.8 3.5 85.............. 04 MED PLEURAL EFFUSION W CC...... 1.2212 5.3 6.9 86.............. 04 MED PLEURAL EFFUSION W/O CC.... .6715 3.1 4.1 87.............. 04 MED PULMONARY EDEMA & 1.3639 4.9 6.5 RESPIRATORY FAILURE. 88.............. 04 MED CHRONIC OBSTRUCTIVE .9705 4.6 5.7 PULMONARY DISEASE. [[Page 46082]] 89.............. 04 MED SIMPLE PNEUMONIA & PLEURISY 1.1006 5.4 6.6 AGE >17 W CC. 90.............. 04 MED SIMPLE PNEUMONIA & PLEURISY .6773 4.0 4.7 AGE >17 W/O CC. 91.............. 04 MED SIMPLE PNEUMONIA & PLEURISY .7940 3.7 4.4 AGE 0-17. 92.............. 04 MED INTERSTITIAL LUNG DISEASE W 1.1947 5.3 6.7 CC. 93.............. 04 MED INTERSTITIAL LUNG DISEASE W/ .7423 3.7 4.7 O CC. 94.............. 04 MED PNEUMOTHORAX W CC.......... 1.1857 5.1 6.7 95.............. 04 MED PNEUMOTHORAX W/O CC........ .5974 3.2 4.0 96.............. 04 MED BRONCHITIS & ASTHMA AGE >17 .8005 4.2 5.1 W CC. 97.............. 04 MED BRONCHITIS & ASTHMA AGE >17 .5887 3.3 4.0 W/O CC. 98.............. 04 MED BRONCHITIS & ASTHMA AGE 0- .6298 2.3 3.8 17. 99.............. 04 MED RESPIRATORY SIGNS & .6710 2.4 3.2 SYMPTOMS W CC. 100............. 04 MED RESPIRATORY SIGNS & .5109 1.8 2.2 SYMPTOMS W/O CC. 101............. 04 MED OTHER RESPIRATORY SYSTEM .8518 3.5 4.7 DIAGNOSES W CC. 102............. 04 MED OTHER RESPIRATORY SYSTEM .5295 2.3 2.9 DIAGNOSES W/O CC. 103............. 05 SURG HEART TRANSPLANT........... 16.5746 32.1 48.2 104............. 05 SURG CARDIAC VALVE PROCEDURES W 7.3563 10.8 13.3 CARDIAC CATH. 105............. 05 SURG CARDIAC VALVE PROCEDURES W/ 5.7109 8.3 10.2 O CARDIAC CATH. 106............. 05 SURG CORONARY BYPASS W CARDIAC 5.5843 9.8 11.1 CATH. 107............. 05 SURG CORONARY BYPASS W/O CARDIAC 4.0812 7.3 8.3 CATH. 108............. 05 SURG OTHER CARDIOTHORACIC 6.1282 9.4 12.1 PROCEDURES. 109............. ....... NO LONGER VALID............ .0000 .0 .0 110............. 05 SURG MAJOR CARDIOVASCULAR 4.1964 7.7 10.2 PROCEDURES W CC. 111............. 05 SURG MAJOR CARDIOVASCULAR 2.2409 5.4 6.2 PROCEDURES W/O CC. 112............. 05 SURG PERCUTANEOUS CARDIOVASCULAR 2.0025 3.1 4.2 PROCEDURES. 113............. 05 SURG AMPUTATION FOR CIRC SYSTEM 2.6579 9.7 13.2 DISORDERS EXCEPT UPPER LIMB & TOE. 114............. 05 SURG UPPER LIMB & TOE AMPUTATION 1.5363 6.4 8.8 FOR CIRC SYSTEM DISORDERS. 115............. 05 SURG PERM PACE IMPLNT W AMI, HRT 3.5476 6.7 9.2 FAIL OR SHOCK OR AICD LEAD OR GEN PROC. 116............. 05 SURG OTH PERM CARDIAC PACEMAKER 2.5321 3.5 4.7 IMPLANT OR PTCA W CORONARY ART STENT. 117............. 05 SURG CARDIAC PACEMAKER REVISION 1.1950 2.7 4.0 EXCEPT DEVICE REPLACEMENT. 118............. 05 SURG CARDIAC PACEMAKER DEVICE 1.5889 2.0 3.0 REPLACEMENT. 119............. 05 SURG VEIN LIGATION & STRIPPING.. 1.1997 3.1 5.1 120............. 05 SURG OTHER CIRCULATORY SYSTEM 1.9158 5.0 8.5 O.R. PROCEDURES. 121............. 05 MED CIRCULATORY DISORDERS W AMI 1.6537 6.0 7.3 & MAJOR COMP DISCH ALIVE. 122............. 05 MED CIRCULATORY DISORDERS W AMI 1.1446 3.9 4.7 W/O MAJOR COMP DISCH ALIVE. 123............. 05 MED CIRCULATORY DISORDERS W 1.4695 2.7 4.5 AMI, EXPIRED. 124............. 05 MED CIRCULATORY DISORDERS 1.3565 3.6 4.6 EXCEPT AMI, W CARD CATH & COMPLEX DIAG. 125............. 05 MED CIRCULATORY DISORDERS .9738 2.3 2.9 EXCEPT AMI, W CARD CATH W/ O COMPLEX DIAG. 126............. 05 MED ACUTE & SUBACUTE 2.4879 10.0 13.1 ENDOCARDITIS. 127............. 05 MED HEART FAILURE & SHOCK...... 1.0199 4.5 5.8 128............. 05 MED DEEP VEIN THROMBOPHLEBITIS. .7807 5.6 6.4 129............. 05 MED CARDIAC ARREST, UNEXPLAINED 1.1414 1.9 3.2 130............. 05 MED PERIPHERAL VASCULAR .9410 5.1 6.3 DISORDERS W CC. 131............. 05 MED PERIPHERAL VASCULAR .6040 4.1 4.9 DISORDERS W/O CC. 132............. 05 MED ATHEROSCLEROSIS W CC....... .6749 2.7 3.3 133............. 05 MED ATHEROSCLEROSIS W/O CC..... .5360 2.1 2.7 134............. 05 MED HYPERTENSION............... .5760 2.8 3.6 135............. 05 MED CARDIAC CONGENITAL & .8336 3.4 4.5 VALVULAR DISORDERS AGE >17 W CC. 136............. 05 MED CARDIAC CONGENITAL & .5709 2.4 3.1 VALVULAR DISORDERS AGE >17 W/O CC. 137............. 05 MED * CARDIAC CONGENITAL & .8131 3.3 3.3 VALVULAR DISORDERS AGE 0- 17. 138............. 05 MED CARDIAC ARRHYTHMIA & .7962 3.2 4.2 CONDUCTION DISORDERS W CC. 139............. 05 MED CARDIAC ARRHYTHMIA & .4982 2.2 2.7 CONDUCTION DISORDERS W/O CC. 140............. 05 MED ANGINA PECTORIS............ .5993 2.6 3.2 141............. 05 MED SYNCOPE & COLLAPSE W CC.... .7005 3.1 4.1 142............. 05 MED SYNCOPE & COLLAPSE W/O CC.. .5231 2.3 2.9 143............. 05 MED CHEST PAIN................. .5200 1.9 2.4 144............. 05 MED OTHER CIRCULATORY SYSTEM 1.0904 3.9 5.4 DIAGNOSES W CC. 145............. 05 MED OTHER CIRCULATORY SYSTEM .6401 2.3 3.0 DIAGNOSES W/O CC. 146............. 06 SURG RECTAL RESECTION W CC...... 2.7356 9.3 10.5 147............. 06 SURG RECTAL RESECTION W/O CC.... 1.5885 6.3 6.9 148............. 06 SURG MAJOR SMALL & LARGE BOWEL 3.3883 10.6 12.6 PROCEDURES W CC. 149............. 06 SURG MAJOR SMALL & LARGE BOWEL 1.5495 6.5 7.1 PROCEDURES W/O CC. 150............. 06 SURG PERITONEAL ADHESIOLYSIS W 2.7109 9.1 11.1 CC. 151............. 06 SURG PERITONEAL ADHESIOLYSIS W/O 1.2645 4.9 6.1 CC. 152............. 06 SURG MINOR SMALL & LARGE BOWEL 1.9139 7.2 8.5 PROCEDURES W CC. 153............. 06 SURG MINOR SMALL & LARGE BOWEL 1.1634 5.2 5.8 PROCEDURES W/O CC. [[Page 46083]] 154............. 06 SURG STOMACH, ESOPHAGEAL & 4.1851 10.8 14.1 DUODENAL PROCEDURES AGE >17 W CC. 155............. 06 SURG STOMACH, ESOPHAGEAL & 1.3350 3.9 5.0 DUODENAL PROCEDURES AGE >17 W/O CC. 156............. 06 SURG * STOMACH, ESOPHAGEAL & .8374 6.0 6.0 DUODENAL PROCEDURES AGE 0- 17. 157............. 06 SURG ANAL & STOMAL PROCEDURES W 1.1824 4.0 5.6 CC. 158............. 06 SURG ANAL & STOMAL PROCEDURES W/ .6272 2.2 2.8 O CC. 159............. 06 SURG HERNIA PROCEDURES EXCEPT 1.2548 3.8 5.1 INGUINAL & FEMORAL AGE >17 W CC. 160............. 06 SURG HERNIA PROCEDURES EXCEPT .7177 2.3 2.8 INGUINAL & FEMORAL AGE >17 W/O CC. 161............. 06 SURG INGUINAL & FEMORAL HERNIA 1.0573 3.0 4.2 PROCEDURES AGE >17 W CC. 162............. 06 SURG INGUINAL & FEMORAL HERNIA .5856 1.7 2.1 PROCEDURES AGE >17 W/O CC. 163............. 06 SURG HERNIA PROCEDURES AGE 0-17. .8660 3.1 4.7 164............. 06 SURG APPENDECTOMY W COMPLICATED 2.3412 7.5 8.7 PRINCIPAL DIAG W CC. 165............. 06 SURG APPENDECTOMY W COMPLICATED 1.2270 4.7 5.4 PRINCIPAL DIAG W/O CC. 166............. 06 SURG APPENDECTOMY W/O 1.4582 4.3 5.4 COMPLICATED PRINCIPAL DIAG W CC. 167............. 06 SURG APPENDECTOMY W/O .8373 2.5 3.0 COMPLICATED PRINCIPAL DIAG W/O CC. 168............. 03 SURG MOUTH PROCEDURES W CC...... 1.1187 3.2 4.7 169............. 03 SURG MOUTH PROCEDURES W/O CC.... .6903 2.0 2.6 170............. 06 SURG OTHER DIGESTIVE SYSTEM O.R. 2.7587 8.1 11.8 PROCEDURES W CC. 171............. 06 SURG OTHER DIGESTIVE SYSTEM O.R. 1.1146 3.7 5.1 PROCEDURES W/O CC. 172............. 06 MED DIGESTIVE MALIGNANCY W CC.. 1.2867 5.3 7.4 173............. 06 MED DIGESTIVE MALIGNANCY W/O CC .6744 2.9 4.0 174............. 06 MED G.I. HEMORRHAGE W CC....... .9925 4.1 5.2 175............. 06 MED G.I. HEMORRHAGE W/O CC..... .5366 2.7 3.2 176............. 06 MED COMPLICATED PEPTIC ULCER... 1.1011 4.5 5.8 177............. 06 MED UNCOMPLICATED PEPTIC ULCER .8556 3.8 4.7 W CC. 178............. 06 MED UNCOMPLICATED PEPTIC ULCER .6241 2.8 3.3 W/O CC. 179............. 06 MED INFLAMMATORY BOWEL DISEASE. 1.1100 5.2 6.7 180............. 06 MED G.I. OBSTRUCTION W CC...... .9153 4.4 5.7 181............. 06 MED G.I. OBSTRUCTION W/O CC.... .5204 3.1 3.7 182............. 06 MED ESOPHAGITIS, GASTROENT & .7664 3.5 4.6 MISC DIGEST DISORDERS AGE >17 W CC. 183............. 06 MED ESOPHAGITIS, GASTROENT & .5496 2.6 3.2 MISC DIGEST DISORDERS AGE >17 W/O CC. 184............. 06 MED ESOPHAGITIS, GASTROENT & .5930 2.7 3.6 MISC DIGEST DISORDERS AGE 0-17. 185............. 03 MED DENTAL & ORAL DIS EXCEPT .8424 3.5 4.8 EXTRACTIONS & RESTORATIONS, AGE >17. 186............. 03 MED * DENTAL & ORAL DIS EXCEPT .3192 2.9 2.9 EXTRACTIONS & RESTORATIONS, AGE 0-17. 187............. 03 MED DENTAL EXTRACTIONS & .7049 3.0 4.0 RESTORATIONS. 188............. 06 MED OTHER DIGESTIVE SYSTEM 1.0727 4.3 5.8 DIAGNOSES AGE >17 W CC. 189............. 06 MED OTHER DIGESTIVE SYSTEM .5488 2.5 3.4 DIAGNOSES AGE >17 W/O CC. 190............. 06 MED OTHER DIGESTIVE SYSTEM .8786 3.3 4.9 DIAGNOSES AGE 0-17. 191............. 07 SURG PANCREAS, LIVER & SHUNT 4.3490 11.1 14.9 PROCEDURES W CC. 192............. 07 SURG PANCREAS, LIVER & SHUNT 1.7057 5.6 7.1 PROCEDURES W/O CC. 193............. 07 SURG BILIARY TRACT PROC EXCEPT 3.2666 10.6 13.0 ONLY CHOLECYST W OR W/O C.D.E. W CC. 194............. 07 SURG BILIARY TRACT PROC EXCEPT 1.6688 5.9 7.5 ONLY CHOLECYST W OR W/O C.D.E. W/O CC. 195............. 07 SURG CHOLECYSTECTOMY W C.D.E. W 2.7112 8.2 9.8 CC. 196............. 07 SURG CHOLECYSTECTOMY W C.D.E. W/ 1.6075 5.5 6.3 O CC. 197............. 07 SURG CHOLECYSTECTOMY EXCEPT BY 2.3085 7.2 8.7 LAPAROSCOPE W/O C.D.E. W CC. 198............. 07 SURG CHOLECYSTECTOMY EXCEPT BY 1.1693 4.1 4.7 LAPAROSCOPE W/O C.D.E. W/O CC. 199............. 07 SURG HEPATOBILIARY DIAGNOSTIC 2.3523 7.9 10.7 PROCEDURE FOR MALIGNANCY. 200............. 07 SURG HEPATOBILIARY DIAGNOSTIC 3.0210 7.5 11.3 PROCEDURE FOR NON- MALIGNANCY. 201............. 07 SURG OTHER HEPATOBILIARY OR 3.4752 11.1 15.2 PANCREAS O.R. PROCEDURES. 202............. 07 MED CIRRHOSIS & ALCOHOLIC 1.3255 5.3 7.2 HEPATITIS. 203............. 07 MED MALIGNANCY OF HEPATOBILIARY 1.2605 5.2 7.2 SYSTEM OR PANCREAS. 204............. 07 MED DISORDERS OF PANCREAS 1.2117 4.9 6.4 EXCEPT MALIGNANCY. 205............. 07 MED DISORDERS OF LIVER EXCEPT 1.2144 5.0 6.8 MALIG, CIRR, ALC HEPA W CC. 206............. 07 MED DISORDERS OF LIVER EXCEPT .6543 3.2 4.2 MALIG, CIRR, ALC HEPA W/O CC. 207............. 07 MED DISORDERS OF THE BILIARY 1.0507 4.1 5.3 TRACT W CC. 208............. 07 MED DISORDERS OF THE BILIARY .6039 2.4 3.0 TRACT W/O CC. 209............. 08 SURG MAJOR JOINT & LIMB 2.2337 5.3 5.9 REATTACHMENT PROCEDURES OF LOWER EXTREMITY. 210............. 08 SURG HIP & FEMUR PROCEDURES 1.8265 6.5 7.6 EXCEPT MAJOR JOINT AGE >17 W CC. [[Page 46084]] 211............. 08 SURG HIP & FEMUR PROCEDURES 1.2541 5.0 5.6 EXCEPT MAJOR JOINT AGE >17 W/O CC. 212............. 08 SURG HIP & FEMUR PROCEDURES 1.1311 3.9 5.2 EXCEPT MAJOR JOINT AGE 0- 17. 213............. 08 SURG AMPUTATION FOR 1.6513 6.4 8.8 MUSCULOSKELETAL SYSTEM & CONN TISSUE DISORDERS. 214............. 08 SURG NO LONGER VALID............ .0000 .0 .0 215............. 08 SURG NO LONGER VALID............ .0000 .0 .0 216............. 08 SURG BIOPSIES OF MUSCULOSKELETAL 2.1082 7.4 10.3 SYSTEM & CONNECTIVE TISSUE. 217............. 08 SURG WND DEBRID & SKN GRFT 2.8033 9.2 13.8 EXCEPT HAND, FOR MUSCSKELET & CONN TISS DIS. 218............. 08 SURG LOWER EXTREM & HUMER PROC 1.4576 4.4 5.6 EXCEPT HIP, FOOT, FEMUR AGE >17 W CC. 219............. 08 SURG LOWER EXTREM & HUMER PROC .9631 2.9 3.4 EXCEPT HIP, FOOT, FEMUR AGE >17 W/O CC. 220............. 08 SURG * LOWER EXTREM & HUMER PROC .5800 5.3 5.3 EXCEPT HIP, FOOT, FEMUR AGE 0-17. 221............. 08 SURG NO LONGER VALID............ .0000 .0 .0 222............. 08 SURG NO LONGER VALID............ .0000 .0 .0 223............. 08 SURG MAJOR SHOULDER/ELBOW PROC, .9007 2.1 2.7 OR OTHER UPPER EXTREMITY PROC W CC. 224............. 08 SURG SHOULDER, ELBOW OR FOREARM .7466 1.8 2.1 PROC, EXC MAJOR JOINT PROC, W/O CC. 225............. 08 SURG FOOT PROCEDURES............ 1.0124 3.1 4.6 226............. 08 SURG SOFT TISSUE PROCEDURES W CC 1.4095 4.1 6.3 227............. 08 SURG SOFT TISSUE PROCEDURES W/O .7729 2.2 2.9 CC. 228............. 08 SURG MAJOR THUMB OR JOINT PROC, .9542 2.3 3.5 OR OTH HAND OR WRIST PROC W CC. 229............. 08 SURG HAND OR WRIST PROC, EXCEPT .6706 1.8 2.4 MAJOR JOINT PROC, W/O CC. 230............. 08 SURG LOCAL EXCISION & REMOVAL OF 1.1296 3.3 5.0 INT FIX DEVICES OF HIP & FEMUR. 231............. 08 SURG LOCAL EXCISION & REMOVAL OF 1.2727 3.1 4.8 INT FIX DEVICES EXCEPT HIP & FEMUR. 232............. 08 SURG ARTHROSCOPY................ 1.0629 2.5 4.2 233............. 08 SURG OTHER MUSCULOSKELET SYS & 2.0329 5.7 8.3 CONN TISS O.R. PROC W CC. 234............. 08 SURG OTHER MUSCULOSKELET SYS & 1.1126 2.9 3.9 CONN TISS O.R. PROC W/O CC. 235............. 08 MED FRACTURES OF FEMUR......... .7710 4.2 5.9 236............. 08 MED FRACTURES OF HIP & PELVIS.. .7338 4.3 5.7 237............. 08 MED SPRAINS, STRAINS, & .5952 3.2 4.2 DISLOCATIONS OF HIP, PELVIS & THIGH. 238............. 08 MED OSTEOMYELITIS.............. 1.3250 7.0 9.5 239............. 08 MED PATHOLOGICAL FRACTURES & .9865 5.3 7.0 MUSCULOSKELETAL & CONN TISS MALIGNANCY. 240............. 08 MED CONNECTIVE TISSUE DISORDERS 1.2098 5.1 7.0 W CC. 241............. 08 MED CONNECTIVE TISSUE DISORDERS .5862 3.3 4.2 W/O CC. 242............. 08 MED SEPTIC ARTHRITIS........... 1.0501 5.5 7.2 243............. 08 MED MEDICAL BACK PROBLEMS...... .7158 4.0 5.1 244............. 08 MED BONE DISEASES & SPECIFIC .7199 4.0 5.4 ARTHROPATHIES W CC. 245............. 08 MED BONE DISEASES & SPECIFIC .5002 3.0 4.0 ARTHROPATHIES W/O CC. 246............. 08 MED NON-SPECIFIC ARTHROPATHIES. .5713 3.3 4.2 247............. 08 MED SIGNS & SYMPTOMS OF .5587 2.8 3.7 MUSCULOSKELETAL SYSTEM & CONN TISSUE. 248............. 08 MED TENDONITIS, MYOSITIS & .7428 3.7 5.0 BURSITIS. 249............. 08 MED AFTERCARE, MUSCULOSKELETAL .6559 2.7 4.0 SYSTEM & CONNECTIVE TISSUE. 250............. 08 MED FX, SPRN, STRN & DISL OF .6995 3.4 4.7 FOREARM, HAND, FOOT AGE >17 W CC. 251............. 08 MED FX, SPRN, STRN & DISL OF .4517 2.3 3.0 FOREARM, HAND, FOOT AGE >17 W/O CC. 252............. 08 MED * FX, SPRN, STRN & DISL OF .2520 1.8 1.8 FOREARM, HAND, FOOT AGE 0- 17. 253............. 08 MED FX, SPRN, STRN & DISL OF .7265 3.9 5.3 UPARM, LOWLEG EX FOOT AGE >17 W CC. 254............. 08 MED FX, SPRN, STRN & DISL OF .4350 2.8 3.5 UPARM, LOWLEG EX FOOT AGE >17 W/O CC. 255............. 08 MED * FX, SPRN, STRN & DISL OF .2934 2.9 2.9 UPARM, LOWLEG EX FOOT AGE 0-17. 256............. 08 MED OTHER MUSCULOSKELETAL .7826 4.0 5.7 SYSTEM & CONNECTIVE TISSUE DIAGNOSES. 257............. 09 SURG TOTAL MASTECTOMY FOR .9276 2.6 3.2 MALIGNANCY W CC. 258............. 09 SURG TOTAL MASTECTOMY FOR .7162 2.0 2.3 MALIGNANCY W/O CC. 259............. 09 SURG SUBTOTAL MASTECTOMY FOR .8874 2.1 3.2 MALIGNANCY W CC. 260............. 09 SURG SUBTOTAL MASTECTOMY FOR .6092 1.4 1.7 MALIGNANCY W/O CC. 261............. 09 SURG BREAST PROC FOR NON- .8961 1.8 2.2 MALIGNANCY EXCEPT BIOPSY & LOCAL EXCISION. [[Page 46085]] 262............. 09 SURG BREAST BIOPSY & LOCAL .7820 2.6 4.0 EXCISION FOR NON- MALIGNANCY. 263............. 09 SURG SKIN GRAFT &/OR DEBRID FOR 2.0221 8.9 12.6 SKN ULCER OR CELLULITIS W CC. 264............. 09 SURG SKIN GRAFT &/OR DEBRID FOR 1.0773 5.4 7.3 SKN ULCER OR CELLULITIS W/ O CC. 265............. 09 SURG SKIN GRAFT &/OR DEBRID 1.5166 4.6 7.3 EXCEPT FOR SKIN ULCER OR CELLULITIS W CC. 266............. 09 SURG SKIN GRAFT &/OR DEBRID .7909 2.6 3.6 EXCEPT FOR SKIN ULCER OR CELLULITIS W/O CC. 267............. 09 SURG PERIANAL & PILONIDAL .8424 2.7 4.1 PROCEDURES. 268............. 09 SURG SKIN, SUBCUTANEOUS TISSUE & 1.0090 2.4 3.5 BREAST PLASTIC PROCEDURES. 269............. 09 SURG OTHER SKIN, SUBCUT TISS & 1.5733 5.9 8.5 BREAST PROC W CC. 270............. 09 SURG OTHER SKIN, SUBCUT TISS & .7061 2.2 3.2 BREAST PROC W/O CC. 271............. 09 MED SKIN ULCERS................ 1.0259 6.0 7.8 272............. 09 MED MAJOR SKIN DISORDERS W CC.. .9950 5.1 6.7 273............. 09 MED MAJOR SKIN DISORDERS W/O CC .6618 4.0 5.4 274............. 09 MED MALIGNANT BREAST DISORDERS 1.1229 5.0 7.2 W CC. 275............. 09 MED MALIGNANT BREAST DISORDERS .5882 2.5 3.9 W/O CC. 276............. 09 MED NON-MALIGANT BREAST .6122 3.8 4.7 DISORDERS. 277............. 09 MED CELLULITIS AGE >17 W CC.... .8322 5.1 6.2 278............. 09 MED CELLULITIS AGE >17 W/O CC.. .5574 4.0 4.8 279............. 09 MED * CELLULITIS AGE 0-17...... .7309 4.2 4.2 280............. 09 MED TRAUMA TO THE SKIN, SUBCUT .6757 3.4 4.7 TISS & BREAST AGE >17 W CC. 281............. 09 MED TRAUMA TO THE SKIN, SUBCUT .4558 2.5 3.4 TISS & BREAST AGE >17 W/O CC. 282............. 09 MED * TRAUMA TO THE SKIN, .2551 2.2 2.2 SUBCUT TISS & BREAST AGE 0- 17. 283............. 09 MED MINOR SKIN DISORDERS W CC.. .6936 3.8 5.0 284............. 09 MED MINOR SKIN DISORDERS W/O CC .4371 2.7 3.6 285............. 10 SURG AMPUTAT OF LOWER LIMB FOR 2.1556 8.8 12.1 ENDOCRINE, NUTRIT, & METABOL DISORDERS. 286............. 10 SURG ADRENAL & PITUITARY 2.2671 5.8 7.3 PROCEDURES. 287............. 10 SURG SKIN GRAFTS & WOUND DEBRID 1.8727 8.6 12.1 FOR ENDOC, NUTRIT & METAB DISORDERS. 288............. 10 SURG O.R. PROCEDURES FOR OBESITY 2.0255 4.9 6.2 289............. 10 SURG PARATHYROID PROCEDURES..... .9827 2.4 3.5 290............. 10 SURG THYROID PROCEDURES......... .8970 2.0 2.6 291............. 10 SURG THYROGLOSSAL PROCEDURES.... .7372 1.7 2.2 292............. 10 SURG OTHER ENDOCRINE, NUTRIT & 2.5483 7.6 11.2 METAB O.R. PROC W CC. 293............. 10 SURG OTHER ENDOCRINE, NUTRIT & 1.2297 3.8 5.6 METAB O.R. PROC W/O CC. 294............. 10 MED DIABETES AGE >35........... .7546 4.0 5.3 295............. 10 MED DIABETES AGE 0-35.......... .7359 3.2 4.1 296............. 10 MED NUTRITIONAL & MISC .8657 4.3 5.8 METABOLIC DISORDERS AGE >17 W CC. 297............. 10 MED NUTRITIONAL & MISC .5188 3.0 3.9 METABOLIC DISORDERS AGE >17 W/O CC. 298............. 10 MED NUTRITIONAL & MISC .4207 2.0 2.5 METABOLIC DISORDERS AGE 0- 17. 299............. 10 MED INBORN ERRORS OF METABOLISM .8716 3.9 5.5 300............. 10 MED ENDOCRINE DISORDERS W CC... 1.0810 5.1 6.6 301............. 10 MED ENDOCRINE DISORDERS W/O CC. .5941 3.1 4.4 302............. 11 SURG KIDNEY TRANSPLANT.......... 3.7570 9.2 10.9 303............. 11 SURG KIDNEY, URETER & MAJOR 2.6139 7.8 9.5 BLADDER PROCEDURES FOR NEOPLASM. 304............. 11 SURG KIDNEY, URETER & MAJOR 2.3982 6.9 9.6 BLADDER PROC FOR NON-NEOPL W CC. 305............. 11 SURG KIDNEY, URETER & MAJOR 1.1695 3.4 4.3 BLADDER PROC FOR NON-NEOPL W/O CC. 306............. 11 SURG PROSTATECTOMY W CC......... 1.2168 4.0 5.8 307............. 11 SURG PROSTATECTOMY W/O CC....... .6455 2.1 2.5 308............. 11 SURG MINOR BLADDER PROCEDURES W 1.5120 4.3 6.4 CC. 309............. 11 SURG MINOR BLADDER PROCEDURES W/ .8760 2.1 2.6 O CC. 310............. 11 SURG TRANSURETHRAL PROCEDURES W 1.0248 3.0 4.3 CC. 311............. 11 SURG TRANSURETHRAL PROCEDURES W/ .5866 1.7 2.1 O CC. 312............. 11 SURG URETHRAL PROCEDURES, AGE .9732 3.1 4.7 >17 W CC. 313............. 11 SURG URETHRAL PROCEDURES, AGE .5783 1.8 2.3 >17 W/O CC. 314............. 11 SURG * URETHRAL PROCEDURES, AGE .4916 2.3 2.3 0-17. 315............. 11 SURG OTHER KIDNEY & URINARY 2.0601 4.9 8.5 TRACT O.R. PROCEDURES. 316............. 11 MED RENAL FAILURE.............. 1.3089 5.1 7.1 317............. 11 MED ADMIT FOR RENAL DIALYSIS... .5489 2.0 2.9 318............. 11 MED KIDNEY & URINARY TRACT 1.1594 4.7 6.7 NEOPLASMS W CC. 319............. 11 MED KIDNEY & URINARY TRACT .5808 2.0 2.8 NEOPLASMS W/O CC. 320............. 11 MED KIDNEY & URINARY TRACT .8782 4.7 5.9 INFECTIONS AGE >17 W CC. 321............. 11 MED KIDNEY & URINARY TRACT .5838 3.6 4.3 INFECTIONS AGE >17 W/O CC. 322............. 11 MED KIDNEY & URINARY TRACT .5342 3.4 4.3 INFECTIONS AGE 0-17. 323............. 11 MED URINARY STONES W CC, &/OR .7555 2.5 3.4 ESW LITHOTRIPSY. [[Page 46086]] 324............. 11 MED URINARY STONES W/O CC...... .4298 1.7 2.0 325............. 11 MED KIDNEY & URINARY TRACT .6207 3.1 4.2 SIGNS & SYMPTOMS AGE >17 W CC. 326............. 11 MED KIDNEY & URINARY TRACT .4188 2.3 2.9 SIGNS & SYMPTOMS AGE >17 W/ O CC. 327............. 11 MED KIDNEY & URINARY TRACT .3516 2.3 3.5 SIGNS & SYMPTOMS AGE 0-17. 328............. 11 MED URETHRAL STRICTURE AGE >17 .6878 2.9 3.9 W CC. 329............. 11 MED URETHRAL STRICTURE AGE >17 .5080 1.9 2.3 W/O CC. 330............. 11 MED * URETHRAL STRICTURE AGE 0- .3167 1.6 1.6 17. 331............. 11 MED OTHER KIDNEY & URINARY 1.0009 4.4 5.9 TRACT DIAGNOSES AGE >17 W CC. 332............. 11 MED OTHER KIDNEY & URINARY .5964 2.7 3.7 TRACT DIAGNOSES AGE >17 W/ O CC. 333............. 11 MED OTHER KIDNEY & URINARY .8389 4.0 5.7 TRACT DIAGNOSES AGE 0-17. 334............. 12 SURG MAJOR MALE PELVIC 1.6359 4.8 5.4 PROCEDURES W CC. 335............. 12 SURG MAJOR MALE PELVIC 1.2190 3.7 4.1 PROCEDURES W/O CC. 336............. 12 SURG TRANSURETHRAL PROSTATECTOMY .8870 2.9 3.8 W CC. 337............. 12 SURG TRANSURETHRAL PROSTATECTOMY .6129 2.1 2.4 W/O CC. 338............. 12 SURG TESTES PROCEDURES, FOR 1.0950 3.3 5.1 MALIGNANCY. 339............. 12 SURG TESTES PROCEDURES, NON- 1.0038 3.1 4.6 MALIGNANCY AGE >17. 340............. 12 SURG * TESTES PROCEDURES, NON- .2815 2.4 2.4 MALIGNANCY AGE 0-17. 341............. 12 SURG PENIS PROCEDURES........... 1.1089 2.2 3.1 342............. 12 SURG CIRCUMCISION AGE >17....... .8511 2.9 3.6 343............. 12 SURG * CIRCUMCISION AGE 0-17.... .1529 1.7 1.7 344............. 12 SURG OTHER MALE REPRODUCTIVE 1.0298 2.1 3.1 SYSTEM O.R. PROCEDURES FOR MALIGNANCY. 345............. 12 SURG OTHER MALE REPRODUCTIVE .8552 2.7 3.8 SYSTEM O.R. PROC EXCEPT FOR MALIGNANCY. 346............. 12 MED MALIGNANCY, MALE .9573 4.5 6.3 REPRODUCTIVE SYSTEM, W CC. 347............. 12 MED MALIGNANCY, MALE .4603 2.2 3.0 REPRODUCTIVE SYSTEM, W/O CC. 348............. 12 MED BENIGN PROSTATIC .6958 3.3 4.5 HYPERTROPHY W CC. 349............. 12 MED BENIGN PROSTATIC .4154 2.1 2.7 HYPERTROPHY W/O CC. 350............. 12 MED INFLAMMATION OF THE MALE .6797 3.8 4.6 REPRODUCTIVE SYSTEM. 351............. 12 MED * STERILIZATION, MALE...... .2347 1.3 1.3 352............. 12 MED OTHER MALE REPRODUCTIVE .6263 2.9 4.0 SYSTEM DIAGNOSES. 353............. 13 SURG PELVIC EVISCERATION, 2.1179 6.4 8.3 RADICAL HYSTERECTOMY & RADICAL VULVECTOMY. 354............. 13 SURG UTERINE, ADNEXA PROC FOR 1.4963 5.0 6.0 NON-OVARIAN/ADNEXAL MALIG W CC. 355............. 13 SURG UTERINE, ADNEXA PROC FOR .9180 3.4 3.6 NON-OVARIAN/ADNEXAL MALIG W/O CC. 356............. 13 SURG FEMALE REPRODUCTIVE SYSTEM .7701 2.5 2.8 RECONSTRUCTIVE PROCEDURES. 357............. 13 SURG UTERINE & ADNEXA PROC FOR 2.4309 7.6 9.3 OVARIAN OR ADNEXAL MALIGNANCY. 358............. 13 SURG UTERINE & ADNEXA PROC FOR 1.2021 3.8 4.5 NON-MALIGNANCY W CC. 359............. 13 SURG UTERINE & ADNEXA PROC FOR .8452 2.9 3.1 NON-MALIGNANCY W/O CC. 360............. 13 SURG VAGINA, CERVIX & VULVA .8708 2.7 3.3 PROCEDURES. 361............. 13 SURG LAPAROSCOPY & INCISIONAL 1.1872 2.6 3.7 TUBAL INTERRUPTION. 362............. 13 SURG * ENDOSCOPIC TUBAL .3000 1.4 1.4 INTERRUPTION. 363............. 13 SURG D&C, CONIZATION & RADIO- .7485 2.6 3.5 IMPLANT, FOR MALIGNANCY. 364............. 13 SURG D&C, CONIZATION EXCEPT FOR .6985 2.5 3.5 MALIGNANCY. 365............. 13 SURG OTHER FEMALE REPRODUCTIVE 1.7085 4.7 7.2 SYSTEM O.R. PROCEDURES. 366............. 13 MED MALIGNANCY, FEMALE 1.1857 4.9 7.1 REPRODUCTIVE SYSTEM W CC. 367............. 13 MED MALIGNANCY, FEMALE .5309 2.1 2.9 REPRODUCTIVE SYSTEM W/O CC. 368............. 13 MED INFECTIONS, FEMALE .9698 4.9 6.2 REPRODUCTIVE SYSTEM. 369............. 13 MED MENSTRUAL & OTHER FEMALE .5367 2.5 3.4 REPRODUCTIVE SYSTEM DISORDERS. 370............. 14 SURG CESAREAN SECTION W CC...... 1.0587 4.3 5.5 371............. 14 SURG CESAREAN SECTION W/O CC.... .7054 3.3 3.6 372............. 14 MED VAGINAL DELIVERY W .5590 2.4 3.1 COMPLICATING DIAGNOSES. 373............. 14 MED VAGINAL DELIVERY W/O .3987 1.7 2.0 COMPLICATING DIAGNOSES. 374............. 14 SURG VAGINAL DELIVERY W .7625 2.3 2.9 STERILIZATION &/OR D&C. 375............. 14 SURG * VAGINAL DELIVERY W O.R. .6809 4.4 4.4 PROC EXCEPT STERIL &/OR D&C. 376............. 14 MED POSTPARTUM & POST ABORTION .4822 2.3 3.2 DIAGNOSES W/O O.R. PROCEDURE. 377............. 14 SURG POSTPARTUM & POST ABORTION 1.0517 2.5 4.0 DIAGNOSES W O.R. PROCEDURE. 378............. 14 MED ECTOPIC PREGNANCY.......... .8126 2.3 2.6 379............. 14 MED THREATENED ABORTION........ .4028 2.1 2.9 380............. 14 MED ABORTION W/O D&C........... .3501 1.5 1.8 381............. 14 SURG ABORTION W D&C, ASPIRATION .4809 1.7 2.3 CURETTAGE OR HYSTEROTOMY. 382............. 14 MED FALSE LABOR................ .2086 1.2 1.3 383............. 14 MED OTHER ANTEPARTUM DIAGNOSES .4636 2.8 3.8 W MEDICAL COMPLICATIONS. [[Page 46087]] 384............. 14 MED OTHER ANTEPARTUM DIAGNOSES .3539 2.0 2.8 W/O MEDICAL COMPLICATIONS. 385............. 15 * NEONATES, DIED OR 1.3665 1.8 1.8 TRANSFERRED TO ANOTHER ACUTE CARE FACILITY. 386............. 15 * EXTREME IMMATURITY OR 4.5063 17.9 17.9 RESPIRATORY DISTRESS SYNDROME, NEONATE. 387............. 15 * PREMATURITY W MAJOR 3.0777 13.3 13.3 PROBLEMS. 388............. 15 * PREMATURITY W/O MAJOR 1.8570 8.6 8.6 PROBLEMS. 389............. 15 FULL TERM NEONATE W MAJOR 1.4862 5.1 6.3 PROBLEMS. 390............. 15 * NEONATE W OTHER 1.3058 3.4 3.4 SIGNIFICANT PROBLEMS. 391............. 15 * NORMAL NEWBORN........... .1515 3.1 3.1 392............. 16 SURG SPLENECTOMY AGE >17........ 3.1695 8.1 10.6 393............. 16 SURG * SPLENECTOMY AGE 0-17..... 1.3386 9.1 9.1 394............. 16 SURG OTHER O.R. PROCEDURES OF 1.6479 4.5 7.5 THE BLOOD AND BLOOD FORMING ORGANS. 395............. 16 MED RED BLOOD CELL DISORDERS .8181 3.6 5.0 AGE >17. 396............. 16 MED RED BLOOD CELL DISORDERS .6284 2.7 4.0 AGE 0-17. 397............. 16 MED COAGULATION DISORDERS...... 1.2679 4.2 5.8 398............. 16 MED RETICULOENDOTHELIAL & 1.2242 4.9 6.3 IMMUNITY DISORDERS W CC. 399............. 16 MED RETICULOENDOTHELIAL & .6836 3.2 4.0 IMMUNITY DISORDERS W/O CC. 400............. 17 SURG LYMPHOMA & LEUKEMIA W MAJOR 2.6402 6.3 9.7 O.R. PROCEDURE. 401............. 17 SURG LYMPHOMA & NON-ACUTE 2.5653 8.1 11.7 LEUKEMIA W OTHER O.R. PROC W CC. 402............. 17 SURG LYMPHOMA & NON-ACUTE 1.0145 2.9 4.2 LEUKEMIA W OTHER O.R. PROC W/O CC. 403............. 17 MED LYMPHOMA & NON-ACUTE 1.6964 6.0 8.6 LEUKEMIA W CC. 404............. 17 MED LYMPHOMA & NON-ACUTE .7917 3.3 4.6 LEUKEMIA W/O CC. 405............. 17 * ACUTE LEUKEMIA W/O MAJOR 1.8978 4.9 4.9 O.R. PROCEDURE AGE 0-17. 406............. 17 SURG MYELOPROLIF DISORD OR 2.6147 7.3 10.1 POORLY DIFF NEOPL W MAJ O.R.PROC W CC. 407............. 17 SURG MYELOPROLIF DISORD OR 1.1516 3.5 4.4 POORLY DIFF NEOPL W MAJ O.R. PROC W/O CC. 408............. 17 SURG MYELOPROLIF DISORD OR 1.7294 4.7 7.6 POORLY DIFF NEOPL W OTHER O.R.PROC. 409............. 17 MED RADIOTHERAPY............... .9534 4.3 5.9 410............. 17 MED CHEMOTHERAPY W/O ACUTE .7968 2.6 3.4 LEUKEMIA AS SECONDARY DIAGNOSIS. 411............. 17 MED HISTORY OF MALIGNANCY W/O .4214 1.8 2.3 ENDOSCOPY. 412............. 17 MED HISTORY OF MALIGNANCY W .5175 2.4 3.4 ENDOSCOPY. 413............. 17 MED OTHER MYELOPROLIF DIS OR 1.3777 5.7 8.1 POORLY DIFF NEOPL DIAG W CC. 414............. 17 MED OTHER MYELOPROLIF DIS OR .7041 3.2 4.6 POORLY DIFF NEOPL DIAG W/O CC. 415............. 18 SURG O.R. PROCEDURE FOR 3.5166 10.8 14.9 INFECTIOUS & PARASITIC DISEASES. 416............. 18 MED SEPTICEMIA AGE >17......... 1.4797 5.8 7.7 417............. 18 MED SEPTICEMIA AGE 0-17........ .7688 3.3 4.3 418............. 18 MED POSTOPERATIVE & POST- .9679 5.0 6.3 TRAUMATIC INFECTIONS. 419............. 18 MED FEVER OF UNKNOWN ORIGIN AGE .8831 4.1 5.2 >17 W CC. 420............. 18 MED FEVER OF UNKNOWN ORIGIN AGE .6064 3.2 4.0 >17 W/O CC. 421............. 18 MED VIRAL ILLNESS AGE >17...... .7069 3.3 4.2 422............. 18 MED VIRAL ILLNESS & FEVER OF .5347 2.7 3.8 UNKNOWN ORIGIN AGE 0-17. 423............. 18 MED OTHER INFECTIOUS & 1.5690 5.8 8.0 PARASITIC DISEASES DIAGNOSES. 424............. 19 SURG O.R. PROCEDURE W PRINCIPAL 2.4581 9.9 16.8 DIAGNOSES OF MENTAL ILLNESS. 425............. 19 MED ACUTE ADJUST REACT & .6857 3.2 4.4 DISTURBANCES OF PSYCHOSOCIAL DYSFUNCTION. 426............. 19 MED DEPRESSIVE NEUROSES........ .5648 3.7 5.2 427............. 19 MED NEUROSES EXCEPT DEPRESSIVE. .5818 3.6 5.3 428............. 19 MED DISORDERS OF PERSONALITY & .6975 4.9 7.7 IMPULSE CONTROL. 429............. 19 MED ORGANIC DISTURBANCES & .8728 5.4 7.9 MENTAL RETARDATION. 430............. 19 MED PSYCHOSES.................. .8073 6.5 9.1 431............. 19 MED CHILDHOOD MENTAL DISORDERS. .8371 5.5 8.9 432............. 19 MED OTHER MENTAL DISORDER .7647 3.7 5.9 DIAGNOSES. 433............. 20 ALCOHOL/DRUG ABUSE OR .3053 2.4 3.3 DEPENDENCE, LEFT AMA. 434............. 20 ALC/DRUG ABUSE OR DEPEND, .6865 4.0 5.3 DETOX OR OTH SYMPT TREAT W CC. 435............. 20 ALC/DRUG ABUSE OR DEPEND, .4015 3.6 4.5 DETOX OR OTH SYMPT TREAT W/ O CC. 436............. 20 ALC/DRUG DEPENDENCE W .8110 11.5 14.1 REHABILITATION THERAPY. 437............. 20 ALC/DRUG DEPENDENCE, .7343 8.3 9.9 COMBINED REHAB & DETOX THERAPY. 438............. ....... NO LONGER VALID............ .0000 .0 .0 439............. 21 SURG SKIN GRAFTS FOR INJURIES... 1.6391 5.4 8.5 440............. 21 SURG WOUND DEBRIDEMENTS FOR 1.8456 6.0 9.6 INJURIES. 441............. 21 SURG HAND PROCEDURES FOR .9298 2.2 3.4 INJURIES. 442............. 21 SURG OTHER O.R. PROCEDURES FOR 2.1818 5.4 8.3 INJURIES W CC. [[Page 46088]] 443............. 21 SURG OTHER O.R. PROCEDURES FOR .9116 2.5 3.4 INJURIES W/O CC. 444............. 21 MED TRAUMATIC INJURY AGE >17 W .7007 3.7 4.8 CC. 445............. 21 MED TRAUMATIC INJURY AGE >17 W/ .4842 2.6 3.7 O CC. 446............. 21 MED * TRAUMATIC INJURY AGE 0-17 .2942 2.4 2.4 447............. 21 MED ALLERGIC REACTIONS AGE >17. .4927 2.0 2.6 448............. 21 MED ALLERGIC REACTIONS AGE 0-17 .0968 1.0 1.0 449............. 21 MED POISONING & TOXIC EFFECTS .7860 2.8 4.1 OF DRUGS AGE >17 W CC. 450............. 21 MED POISONING & TOXIC EFFECTS .4406 1.7 2.2 OF DRUGS AGE >17 W/O CC. 451............. 21 MED * POISONING & TOXIC EFFECTS .2613 2.1 2.1 OF DRUGS AGE 0-17. 452............. 21 MED COMPLICATIONS OF TREATMENT .9476 3.7 5.2 W CC. 453............. 21 MED COMPLICATIONS OF TREATMENT .4960 2.3 3.1 W/O CC. 454............. 21 MED OTHER INJURY, POISONING & .9035 3.3 5.2 TOXIC EFFECT DIAG W CC. 455............. 21 MED OTHER INJURY, POISONING & .4453 2.0 2.7 TOXIC EFFECT DIAG W/O CC. 456............. 22 BURNS, TRANSFERRED TO 1.7396 3.7 7.3 ANOTHER ACUTE CARE FACILITY. 457............. 22 MED EXTENSIVE BURNS W/O O.R. 1.5860 2.5 4.9 PROCEDURE. 458............. 22 SURG NON-EXTENSIVE BURNS W SKIN 3.5746 11.1 16.0 GRAFT. 459............. 22 SURG NON-EXTENSIVE BURNS W WOUND 1.5588 6.5 9.3 DEBRIDEMENT OR OTHER O.R. PROC. 460............. 22 MED NON-EXTENSIVE BURNS W/O .9421 4.4 6.3 O.R. PROCEDURE. 461............. 23 SURG O.R. PROC W DIAGNOSES OF 1.0123 2.5 4.6 OTHER CONTACT W HEALTH SERVICES. 462............. 23 MED REHABILITATION............. 1.4041 10.5 13.1 463............. 23 MED SIGNS & SYMPTOMS W CC...... .6907 3.6 4.8 464............. 23 MED SIGNS & SYMPTOMS W/O CC.... .4872 2.7 3.4 465............. 23 MED AFTERCARE W HISTORY OF .5858 2.2 3.8 MALIGNANCY AS SECONDARY DIAGNOSIS. 466............. 23 MED AFTERCARE W/O HISTORY OF .6336 2.6 4.7 MALIGNANCY AS SECONDARY DIAGNOSIS. 467............. 23 MED OTHER FACTORS INFLUENCING .4669 2.3 4.2 HEALTH STATUS. 468............. ....... EXTENSIVE O.R. PROCEDURE 3.6202 9.9 14.2 UNRELATED TO PRINCIPAL DIAGNOSIS. 469............. ....... ** PRINCIPAL DIAGNOSIS .0000 .0 .0 INVALID AS DISCHARGE DIAGNOSIS. 470............. ....... ** UNGROUPABLE............. .0000 .0 .0 471............. 08 SURG BILATERAL OR MULTIPLE MAJOR 3.4771 5.8 6.7 JOINT PROCS OF LOWER EXTREMITY. 472............. 22 SURG EXTENSIVE BURNS W O.R. 10.2429 11.8 24.2 PROCEDURE. 473............. 17 ACUTE LEUKEMIA W/O MAJOR 3.4853 7.9 13.6 O.R. PROCEDURE AGE >17. 474............. ....... NO LONGER VALID............ .0000 .0 .0 475............. 04 MED RESPIRATORY SYSTEM 3.7291 8.2 11.6 DIAGNOSIS WITH VENTILATOR SUPPORT. 476............. ....... SURG PROSTATIC O.R. PROCEDURE 2.2234 9.5 12.7 UNRELATED TO PRINCIPAL DIAGNOSIS. 477............. ....... SURG NON-EXTENSIVE O.R. 1.7461 5.5 8.6 PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS. 478............. 05 SURG OTHER VASCULAR PROCEDURES W 2.2981 5.2 7.7 CC. 479............. 05 SURG OTHER VASCULAR PROCEDURES W/ 1.4113 3.2 4.2 O CC. 480............. ....... SURG LIVER TRANSPLANT........... 11.4672 19.0 25.3 481............. ....... SURG BONE MARROW TRANSPLANT..... 11.2821 26.5 30.2 482............. ....... SURG TRACHEOSTOMY FOR FACE, 3.5999 10.5 13.5 MOUTH & NECK DIAGNOSES. 483............. ....... SURG TRACHEOSTOMY EXCEPT FOR 16.0451 33.8 43.5 FACE, MOUTH & NECK DIAGNOSES. 484............. 24 SURG CRANIOTOMY FOR MULTIPLE 5.7762 10.6 15.4 SIGNIFICANT TRAUMA. 485............. 24 SURG LIMB REATTACHMENT, HIP AND 3.1562 8.3 10.6 FEMUR PROC FOR MULTIPLE SIGNIFICANT TR. 486............. 24 SURG OTHER O.R. PROCEDURES FOR 4.8882 8.8 13.5 MULTIPLE SIGNIFICANT TRAUMA. 487............. 24 MED OTHER MULTIPLE SIGNIFICANT 2.0229 5.9 8.3 TRAUMA. 488............. 25 SURG HIV W EXTENSIVE O.R. 4.5078 12.1 18.0 PROCEDURE. 489............. 25 MED HIV W MAJOR RELATED 1.8009 6.7 9.8 CONDITION. 490............. 25 MED HIV W OR W/O OTHER RELATED .9952 4.2 6.1 CONDITION. 491............. 08 SURG MAJOR JOINT & LIMB 1.6579 3.3 3.9 REATTACHMENT PROCEDURES OF UPPER EXTREMITY. 492............. 17 MED CHEMOTHERAPY W ACUTE 4.6393 11.9 18.0 LEUKEMIA AS SECONDARY DIAGNOSIS. 493............. 07 SURG LAPAROSCOPIC 1.7561 4.1 5.7 CHOLECYSTECTOMY W/O C.D.E. W CC. 494............. 07 SURG LAPAROSCOPIC .9400 1.8 2.4 CHOLECYSTECTOMY W/O C.D.E. W/O CC. 495............. ....... SURG LUNG TRANSPLANT............ 9.5171 14.8 17.9 496............. 08 SURG COMBINED ANTERIOR/POSTERIOR 5.5214 9.2 11.6 SPINAL FUSION. 497............. 08 SURG SPINAL FUSION W CC......... 2.7692 5.3 6.8 498............. 08 SURG SPINAL FUSION W/O CC....... 1.6171 3.1 3.8 499............. 08 SURG BACK & NECK PROCS EXCEPT 1.4827 4.1 5.3 SPINAL FUSION W CC. 500............. 08 SURG BACK & NECK PROCS EXCEPT .9708 2.6 3.1 SPINAL FUSION W/O CC. 501............. 08 SURG KNEE PROC W PDX OF 2.5660 8.7 11.3 INFECTION W CC. [[Page 46089]] 502............. 08 SURG KNEE PROC W PDX OF 1.6004 5.9 7.1 INFECTION W/O CC. 503............. 08 SURG KNEE PROCEDURES W/O PDX OF 1.2380 3.4 4.4 INFECTION. ---------------------------------------------------------------------------------------------------------------- * Medicare data have been supplemented by data from 19 states for low volume DRGs. ** DRGs 469 and 470 contain cases which could not be assigned to valid DRGs. Note: Geometric mean is used only to determine payment for transfer cases. Note: Arithmetic mean is used only to determine payment for outlier cases. Note: Relative weights are based on medicare patient data and may not be appropriate for other patients. Table 6A.--New Diagnosis Codes ---------------------------------------------------------------------------------------------------------------- Diagnosis code Description CC MDC DRG ---------------------------------------------------------------------------------------------------------------- 007.4....... Other protozoal intestinal N 6 182, 183, 184 diseases, cryptosporidiosis. 031.2....... Disease due to N 18 423 disseminated 25 489 \1\ mycobacterium avium- intracellulare complex (DMAC). 038.10...... Staphylococcal septicemia, Y 15 387, 389 \2\ unspecified. 18 416, 417 25 489 \1\ 038.11...... Staphylococcus aureus Y 15 387, 389 \2\ septicemia. 18 416, 417 25 489 \1\ 038.19...... Other staphylococcal Y 15 387, 389 \2\ septicemia. 18 416, 417 25 489 \1\ 275.40...... Unspecified disorder of N 10 296, 297, 298 calcium metabolism. 275.41...... Hypocalcemia.............. N 10 296, 297, 298 275.42...... Hypercalcemia............. N 10 296, 297, 298 275.49...... Other disorder of calcium N 10 296, 297, 298 metabolism. 438.0....... Late effect of N 1 12 cerebrovascular disease, cognitive deficits. 438.10...... Late effect of N 1 12 cerebrovascular disease, speech and language deficits, unspecified. 438.11...... Late effect of N 1 12 cerebrovascular disease, speech and language deficits, aphasia. 438.12...... Late effect of N 1 12 cerebrovascular disease, speech and language deficits, dysphasia. 438.19...... Late effect of N 1 12 cerebrovascular disease, other speech and language deficits. 438.20...... Late effect of N 1 12 cerebrovascular disease, hemiplegia affecting unspecified side. 438.21...... Late effect of N 1 12 cerebrovascular disease, hemiplegia affecting dominant side. 438.22...... Late effect of N 1 12 cerebrovascular disease, hemiplegia affecting nondominant side. 438.30...... Late effect of N 1 12 cerebrovascular disease, monoplegia of upper limb affecting unspecified side. 438.31...... Late effect of N 1 12 cerebrovascular disease, monoplegia of upper limb affecting dominant side. 438.32...... Late effect of N 1 12 cerebrovascular disease, monoplegia of upper limb affecting nondominant side. 438.40...... Late effect of N 1 12 cerebrovascular disease, monoplegia of lower limb affecting unspecified side. 438.41...... Late effect of N 1 12 cerebrovascular disease, monoplegia of lower limb affecting dominant side. 438.42...... Late effect of N 1 12 cerebrovascular disease, monoplegia of lower limb affecting nondominant side. 438.50...... Late effect of N 1 12 cerebrovascular disease, other paralytic syndrome affecting unspecified side. 438.51...... Late effect of N 1 12 cerebrovascular disease, other paralytic syndrome affecting dominant side. 438.52...... Late effect of N 1 12 cerebrovascular disease, other paralytic syndrome affecting nondominant side. 438.81...... Other late effect of N 1 12 cerebrovascular disease, apraxia. 438.82...... Other late effect of N 1 12 cerebrovascular disease, dysphagia. 438.89...... Other late effects of N 1 12 cerebrovascular disease. 438.9....... Unspecified late effects N 1 12 of cerebrovascular disease. 458.8....... Other specified N 5 144, 145 hypotension. 121 \3\ [[Page 46090]] 474.00...... Chronic tonsillitis....... N pre 482 3 68, 69, 70 474.01...... Chronic adenoiditis....... N pre 482 3 68, 69, 70 474.02...... Chronic tonsillitis and N pre 482 adenoiditis. 3 68, 69, 70 482.84...... Legionnaires' disease..... Y 4 79, 80, 81 518.6....... Allergic bronchopulmonary Y 4 92, 93 aspergillosis. 655.70...... Decreased fetal movements N 14 469 unspecified as to episode of care or not applicable. 655.71...... Decreased fetal movements N 14 370, 371, 372, 373, 374, 375 delivered, with or without mention of antepartum condition. 655.73...... Decreased fetal movements N 14 383, 384 antepartum condition or complication. 686.00...... Other local infection of N 9 277, 278, 279 skin and subcutaneous tissue, pyoderma, unspecified. 686.01...... Other local infection of N 9 277, 278, 279 skin and subcutaneous tissue, pyoderma gangrenosum. 686.09...... Other local infection of N 9 277, 278, 279 skin and subcutaneous tissue, other pyoderma. 756.70...... Congenital anomaly of N 6 188, 189, 190 abdominal wall, unspecified. 756.71...... Congenital anomaly of N 6 188, 189, 190 abdominal wall, prune belly syndrome. 756.79...... Other congenital anomalies N 6 188, 189, 190 of abdominal wall. 780.31...... Febrile convulsions....... Y 1 24, 25, 26 15 387, 389 \2\ 780.39...... Other convulsions......... Y 1 24, 25, 26 15 387, 389 \2\ 790.94...... Other nonspecific findings N 23 463, 464 on examination of blood, euthyroid sick syndrome. 796.5....... Abnormal findings on N 14 383, 384 antenatal screening. 959.01...... Head injury, unspecified.. N pre 482 21 444, 445, 446 24 significant trauma list 959.09...... Injury of face and neck... N pre 482 21 444, 445, 446 24 significant trauma list V02.60...... Viral hepatitis carrier, N 7 205, 206 unspecified. V02.61...... Hepatitis B carrier....... N 7 205, 206 V02.62...... Hepatitis C carrier....... N 7 205, 206 V02.69...... Other viral hepatitis N 7 205, 206 carrier. V12.40...... Personal history of N 23 467 unspecified disorder of nervous system and sense organs. V12.41...... Personal history of benign N 23 467 neoplasm of the brain. V12.49...... Personal history of other N 23 467 disorder of nervous system and sense organs. V16.40...... Family history of N 23 467 malignant neoplasm of genital organ, unspecified. V16.41...... Family history of N 23 467 malignant neoplasm of ovary. V16.42...... Family history of N 23 467 malignant neoplasm of prostate. V16.43...... Family history of N 23 467 malignant neoplasm of testis. V16.49...... Family history of other N 23 467 malignant neoplasm. V28.6....... Antenatal screening for N 23 467 streptococcus B. V42.81...... Organ or tissue replaced Y 16 398, 399 by transplant, bone marrow. V42.82...... Organ or tissue replaced Y 16 398, 399 by transplant, peripheral stem cells. V42.83...... Organ or tissue replaced Y 7 204 by transplant, pancreas. V42.89...... Other organ or tissue Y 23 467 replaced by transplant. V45.61...... Cataract extraction status N 23 467 V45.69...... Other states following N 23 467 surgery of eye and adnexa. V45.71...... Acquired absence of breast N 23 467 V45.72...... Acquired absence of N 23 467 intestine (large) (small). V45.73...... Acquired absence of kidney N 23 467 V53.01...... Fitting and adjustment of N 23 467 cerebral ventricular (communicating) shunt. V53.02...... Fitting and adjustment of N 23 467 neuropacemaker (brain) (peripheral nerve) (Spinal cord). V53.09...... Fitting and adjustment of N 23 467 other devices related to nervous system and special senses. V64.4....... Laparoscopic surgical N 23 467 procedure converted to open procedure. V76.10...... Screening for malignant N 23 467 neoplasm, breast screening, unspecified. V76.11...... Screening mammogram for N 23 467 high-risk patient, malignant neoplasm of breast. V76.12...... Other screening mammogram N 23 467 for malignant neoplasm of breast. V76.19...... Other screening breast N 23 467 examination for malignant neoplasm. ---------------------------------------------------------------------------------------------------------------- \1\ HIV major related condition in this DRG. \2\ Classified as a ``major problem''in these DRGs. \3\ Classified as a ``major complication'' in this DRG. [[Page 46091]] Table 6B.--New Procedure Codes ---------------------------------------------------------------------------------------------------------------- Procedure code Description OR MDC DRG ---------------------------------------------------------------------------------------------------------------- 37.35............................. Partial ventriculectomy... Y 5 108 41.05............................. Allogeneic hematopoietic Y pre 481 stem cell transplant. 41.06............................. Cord blood stem cell Y pre 481 transplant. ---------------------------------------------------------------------------------------------------------------- Table 6C.--Invalid Diagnosis Codes ---------------------------------------------------------------------------------------------------------------- Diagnosis code Description CC MDC DRG ---------------------------------------------------------------------------------------------------------------- 038.1....... Staphylococcal septicemia. Y 15 387, 389 \1\ 18 416, 417 25 489 \2\ 275.4....... Disorders of calcium N 10 296, 297, 298 metabolism. 438......... Late effects of N 1 12 cerebrovascular disease. 474.0....... Chronic tonsillitis and N pre 482 adenoiditis. 3 68, 69, 70 686.0....... Other local infections of N 9 277, 278, 279 skin and subcutaneous tissue, pyoderma. 756.7....... Other congenital anomalies N 6 188, 189, 190 of abdominal wall. 780.3....... Convulsions............... Y 1 24, 25, 26 15 387, 389 \1\ 959.0....... Injury, other and N pre 482 unspecified of head, 21 444, 445, 446 face, and neck. 24 significant trauma list V02.6....... Carrier or suspected N 7 205, 206 carrier of viral hepatitis. V12.4....... Personal history of N 23 467 disorders of nervous system and sense organs. V16.4....... Family history of N 23 467 malignant neoplasm of genital organs. V42.8....... Unspecified organ or Y 7 205, 206 tissue replaced by transplant. V45.6....... Other postsurgical state N 23 467 following surgery of eye and adnexa. V53.0....... Fitting and adjustment of N 23 467 devices related to nervous system and special senses. V76.1....... Special screening for N 23 467 malignant neoplasm of the breast. ---------------------------------------------------------------------------------------------------------------- \1\ Classified as a ``major problem'' in these DRGs. \2\ HIV major related condition in this DRG. Table 6D.--Revised Diagnosis Code Titles ---------------------------------------------------------------------------------------------------------------- Diagnosis code Description CC MDC DRG ---------------------------------------------------------------------------------------------------------------- 041.04...... Streptococcus infection in N 18 423 conditions classified elsewhere and of unspecified site, Group D (Enterococcus). ---------------------------------------------------------------------------------------------------------------- [[Page 46092]] Table 6E.--Additions to the CC Exclusions List Page 1 of 5 Pages CCs that are added to the list are in Table 6E--Additions to the CC Exclusions List. Each of the principal diagnoses is shown with an asterisk, and the revisions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. ------------------------------------------------------------------------ ------------------------------------------------------------------------ *0031 48284 48284 48284 01176 01354 01643 01771 03810 *01140 *01186 *01795 01180 01355 01644 01772 03811 48284 48284 48284 01181 01356 01645 01773 03819 *01141 *01190 *01796 01182 01360 01646 01774 *0074 48284 48284 48284 01183 01361 01650 01775 00841 *01142 *01191 *0202 01184 01362 01651 01776 00842 48284 48284 03810 01185 01363 01652 01780 00843 *01143 *01192 03811 01186 01364 01653 01781 00844 48284 48284 03819 01190 01365 01654 01782 00845 *01144 *01193 *0212 01191 01366 01655 01783 00846 48284 48284 48284 01192 01380 01656 01784 00847 *01145 *01194 *0310 01193 01381 01660 01785 00849 48284 48284 48284 01194 01382 01661 01786 *01100 *01146 *01195 *0312 01195 01383 01662 01790 48284 48284 48284 01100 01196 01384 01663 01791 *01101 *01150 *01196 01101 01200 01385 01664 01792 48284 48284 48284 01102 01201 01386 01665 01793 *01102 *01151 *01200 01103 01202 01390 01666 01794 48284 48284 48284 01104 01203 01391 01670 01795 *01103 *01152 *01201 01105 01204 01392 01671 01796 48284 48284 48284 01106 01205 01393 01672 01800 *01104 *01153 *01202 01110 01206 01394 01673 01801 48284 48284 48284 01111 01210 01395 01674 01802 *01105 *01154 *01203 01112 01211 01396 01675 01803 48284 48284 48284 01113 01212 01400 01676 01804 *01106 *01155 *01204 01114 01213 01401 01690 01805 48284 48284 48284 01115 01214 01402 01691 01806 *01110 *01156 *01205 01116 01215 01403 01692 01880 48284 48284 48284 01120 01216 01404 01693 01881 *01111 *01160 *01206 01121 01300 01405 01694 01882 48284 48284 48284 01122 01301 01406 01695 01883 *01112 *01161 *01210 01123 01302 01480 01696 01884 48284 48284 48284 01124 01303 01482 01720 01885 *01113 *01162 *01211 01125 01304 01483 01721 01886 48284 48284 48284 01126 01305 01484 01722 01890 *01114 *01163 *01212 01130 01306 01485 01723 01891 48284 48284 48284 01131 01310 01486 01724 01892 *01115 *01164 *01213 01132 01311 01600 01725 01893 48284 48284 48284 01133 01312 01601 01726 01894 *01116 *01165 *01214 01134 01313 01602 01730 01895 48284 48284 48284 01135 01314 01603 01731 01896 *01120 *01166 *01215 01136 01315 01604 01732 0310 48284 48284 48284 01140 01316 01605 01733 *0362 *01121 *01170 *01216 01141 01320 01606 01734 03810 48284 48284 48284 01142 01321 01610 01735 03811 *01122 *01171 *01280 01143 01322 01611 01736 03819 48284 48284 48284 01144 01323 01612 01740 *0380 *01123 *01172 *01281 01145 01324 01613 01741 03810 48284 48284 48284 01146 01325 01614 01742 03811 *01124 *01173 *01282 01150 01326 01615 01743 03819 48284 48284 48284 01151 01330 01616 01744 *03810 *01125 *01174 *01283 01152 01331 01620 01745 0362 48284 48284 48284 01153 01332 01621 01746 0380 *01126 *01175 *01284 01154 01333 01622 01750 03810 48284 48284 48284 01155 01334 01623 01751 03811 *01130 *01176 *01285 01156 01335 01624 01752 03819 48284 48284 48284 01160 01336 01625 01753 0382 *01131 *01180 *01286 01161 01340 01626 01754 0383 48284 48284 48284 01162 01341 01630 01755 03840 *01132 *01181 *01790 01163 01342 01631 01756 03841 48284 48284 48284 01164 01343 01632 01760 03842 *01133 *01182 *01791 01165 01344 01633 01761 03843 48284 48284 48284 01170 01345 01634 01762 03844 *01134 *01183 *01792 01171 01346 01635 01763 03849 48284 48284 48284 01172 01350 01636 01764 0388 *01135 *01184 *01793 01173 01351 01640 01765 0389 48284 48284 48284 01174 01352 01641 01766 0545 *01136 *01185 *01794 01175 01353 01642 01770 *03811 ------------------------------------------------------------------------ [[Page 46093]] Page 2 of 5 Pages ------------------------------------------------------------------------ ------------------------------------------------------------------------ 0362 *0391 03819 *34550 48284 01196 *4838 48284 0380 48284 *04182 78031 *48283 01200 48284 *5078 03810 *04089 03810 78039 48284 01201 *4841 48284 03811 03810 03811 *34551 *48284 01202 48284 *5080 03819 03811 03819 78031 01100 01203 *4843 48284 0382 03819 *04183 78039 01101 01204 48284 *5081 0383 *04100 03810 *34560 01102 01205 *4845 48284 03840 03810 03811 78031 01103 01206 48284 *5088 03841 03811 03819 78039 01104 01210 *4846 48284 03842 03819 *04184 *34561 01105 01211 48284 *5089 03843 *04101 03810 78031 01106 01212 *4847 48284 03844 03810 03811 78039 01110 01213 48284 *5171 03849 03811 03819 *34570 01111 01214 *4848 48284 0388 03819 *04185 78031 01112 01215 48284 *5178 0389 *04102 03810 78039 01113 01216 *485 48284 0545 03810 03811 *34571 01114 0310 48284 *5186 *03819 03811 03819 78031 01115 11505 *486 5186 0362 03819 *04186 78039 01116 11515 48284 *51889 0380 *04103 03810 *34580 01120 1304 *4870 48284 03810 03810 03811 78031 01121 1363 48284 *5198 03811 03811 03819 78039 01122 481 *4871 48284 03819 03819 *04189 *34581 01123 4820 48284 5186 0382 *04104 03810 78031 01124 4821 *494 *5199 0383 03810 03811 78039 01125 4822 48284 48284 03840 03811 03819 *34590 01126 48230 *4950 5186 03841 03819 *0419 78031 01130 48231 48284 *5990 03842 *04105 03810 78039 01131 48232 *4951 99664 03843 03810 03811 *34591 01132 48239 48284 *65570 03844 03811 03819 78031 01133 4824 *4952 66500 03849 03819 *0545 78039 01134 48281 48284 66501 0388 *04109 03810 *3488 01135 48282 *4953 66503 0389 03810 03811 78031 01136 48283 48284 66510 0545 03811 03819 78039 01140 48284 *4954 66511 *0382 03819 *11505 *3489 01141 48289 48284 *65571 03810 *04110 48284 78031 01142 4829 *4955 66500 03811 03810 *11515 78039 01143 4830 48284 66501 03819 03811 48284 *34989 01144 4831 *4956 66503 *0383 03819 *11595 78031 01145 4838 48284 66510 03810 *04111 48284 78039 01146 4841 *4957 66511 03811 03810 *1221 *3499 01150 4843 48284 *65573 03819 03811 48284 78031 01151 4845 *4958 66500 *03840 03819 *1304 78039 01152 4846 48284 66501 03810 *04119 48284 *4800 01153 4847 *4959 66503 03811 03810 *1363 48284 01154 4848 48284 66510 03819 03811 48284 *4801 01155 485 *496 66511 *03841 03819 *1398 48284 01156 486 48284 *68600 03810 *0412 03810 *4802 01160 4870 *500 6800 03811 03810 03811 48284 01161 4950 48284 6801 03819 03811 03819 *4808 01162 4951 *501 6802 *03842 03819 *34500 48284 01163 4952 48284 6803 03810 *0413 78031 *4809 01164 4953 *502 6804 03811 03810 78039 48284 01165 4954 48284 6805 03819 03811 *34501 *481 01166 4955 *503 6806 *03843 03819 78031 48284 01170 4956 48284 6807 03810 *0414 78039 *4820 01171 4957 *504 6808 03811 03810 *34510 48284 01172 4958 48284 6809 03819 03811 78031 *4821 01173 4959 *505 6820 *03844 03819 78039 48284 01174 5060 48284 6821 03810 *0415 *34511 *4822 01175 5061 *5060 6822 03811 03810 78031 48284 01176 5070 48284 6823 03819 03811 78039 *48230 01180 5071 *5061 6825 *03849 03819 *3452 48284 01181 5078 48284 6826 03810 *0416 78031 *48231 01182 5080 *5062 6827 03811 03810 78039 48284 01183 5081 48284 6828 03819 03811 *3453 *48232 01184 5171 *5063 6829 *0388 03819 78031 48284 01185 *48289 48284 684 03810 *0417 78039 *48239 01186 48284 *5064 *68601 03811 03810 *34540 48284 01190 *4829 48284 6800 03819 03811 78031 *4824 01191 48284 *5069 6801 *0389 03819 78039 48284 01192 *4830 48284 6802 03810 *04181 *34541 *48281 01193 48284 *5070 6803 03811 03810 78031 48284 01194 *4831 48284 6804 03819 03811 78039 *48282 01195 48284 *5071 6805 ------------------------------------------------------------------------ [[Page 46094]] Page 3 of 5 Pages ------------------------------------------------------------------------ ------------------------------------------------------------------------ 6806 80019 80110 80220 80359 80450 85132 85223 6807 80020 80111 80221 80360 80451 85133 85224 6808 80021 80112 80222 80361 80452 85134 85225 6809 80022 80113 80223 80362 80453 85135 85226 6820 80023 80114 80224 80363 80454 85136 85229 6821 80024 80115 80225 80364 80455 85139 85230 6822 80025 80116 80226 80365 80456 85140 85231 6823 80026 80119 80227 80366 80459 85141 85232 6825 80029 80120 80228 80369 80460 85142 85233 6826 80030 80121 80229 80370 80461 85143 85234 6827 80031 80122 80230 80371 80462 85144 85235 6828 80032 80123 80231 80372 80463 85145 85236 6829 80033 80124 80232 80373 80464 85146 85239 684 80034 80125 80233 80374 80465 85149 85240 *68609 80035 80126 80234 80375 80466 85150 85241 6800 80036 80129 80235 80376 80469 85151 85242 6801 80039 80130 80236 80379 80470 85152 85243 6802 80040 80131 80237 80380 80471 85153 85244 6803 80041 80132 80238 80381 80472 85154 85245 6804 80042 80133 80239 80382 80473 85155 85246 6805 80043 80134 8024 80383 80474 85156 85249 6806 80044 80135 8025 80384 80475 85159 85250 6807 80045 80136 8026 80385 80476 85160 85251 6808 80046 80139 8027 80386 80479 85161 85252 6809 80049 80140 8028 80389 80480 85162 85253 6820 80050 80141 8029 80390 80481 85163 85254 6821 80051 80142 80300 80391 80482 85164 85255 6822 80052 80143 80301 80392 80483 85165 85256 6823 80053 80144 80302 80393 80484 85166 85259 6825 80054 80145 80303 80394 80485 85169 85300 6826 80055 80146 80304 80395 80486 85170 85301 6827 80056 80149 80305 80396 80489 85171 85302 6828 80059 80150 80306 80399 80490 85172 85303 6829 80060 80151 80309 80400 80491 85173 85304 684 80061 80152 80310 80401 80492 85174 85305 *74861 80062 80153 80311 80402 80493 85175 85306 48284 80063 80154 80312 80403 80494 85176 85309 *7790 80064 80155 80313 80404 80495 85179 85310 78031 80065 80156 80314 80405 80496 85180 85311 78039 80066 80159 80315 80406 80499 85181 85312 *7791 80069 80160 80316 80409 8500 85182 85313 78031 80070 80161 80319 80410 8501 85183 85314 78039 80071 80162 80320 80411 8502 85184 85315 *78031 80072 80163 80321 80412 8503 85185 85316 78031 80073 80164 80322 80413 8504 85186 85319 78039 80074 80165 80323 80414 8505 85189 85400 *78039 80075 80166 80324 80415 8509 85190 85401 78031 80076 80169 80325 80416 85100 85191 85402 78039 80079 80170 80326 80419 85101 85192 85403 *7809 80080 80171 80329 80420 85102 85193 85404 78031 80081 80172 80330 80421 85103 85194 85405 78039 80082 80173 80331 80422 85104 85195 85406 *79094 80083 80174 80332 80423 85105 85196 85409 7907 80084 80175 80333 80424 85106 85199 85410 *7998 80085 80176 80334 80425 85109 85200 85411 78031 80086 80179 80335 80426 85110 85201 85412 78039 80089 80180 80336 80429 85111 85202 85413 *95901 80090 80181 80339 80430 85112 85203 85414 80000 80091 80182 80340 80431 85113 85204 85415 80001 80092 80183 80341 80432 85114 85205 85416 80002 80093 80184 80342 80433 85115 85206 85419 80003 80094 80185 80343 80434 85116 85209 9251 80004 80095 80186 80344 80435 85119 85210 9252 80005 80096 80189 80345 80436 85120 85211 *95909 80006 80099 80190 80346 80439 85121 85212 80000 80009 80100 80191 80349 80440 85122 85213 80001 80010 80101 80192 80350 80441 85123 85214 80002 80011 80102 80193 80351 80442 85124 85215 80003 80012 80103 80194 80352 80443 85125 85216 80004 80013 80104 80195 80353 80444 85126 85219 80005 80014 80105 80196 80354 80445 85129 85220 80006 80015 80106 80199 80355 80446 85130 85221 80009 80016 80109 8021 80356 80449 85131 85222 80010 ------------------------------------------------------------------------ [[Page 46095]] Page 4 of 5 Pages ------------------------------------------------------------------------ ------------------------------------------------------------------------ 80011 80102 80193 80351 80442 85124 85215 V4282 80012 80103 80194 80352 80443 85125 85216 V4283 80013 80104 80195 80353 80444 85126 85219 V4289 80014 80105 80196 80354 80445 85129 85220 *99685 80015 80106 80199 80355 80446 85130 85221 V4281 80016 80109 8021 80356 80449 85131 85222 *99686 80019 80110 80220 80359 80450 85132 85223 V4283 80020 80111 80221 80360 80451 85133 85224 *99689 80021 80112 80222 80361 80452 85134 85225 V4289 80022 80113 80223 80362 80453 85135 85226 *V090 80023 80114 80224 80363 80454 85136 85229 03810 80024 80115 80225 80364 80455 85139 85230 03811 80025 80116 80226 80365 80456 85140 85231 03819 80026 80119 80227 80366 80459 85141 85232 *V091 80029 80120 80228 80369 80460 85142 85233 03810 80030 80121 80229 80370 80461 85143 85234 03811 80031 80122 80230 80371 80462 85144 85235 03819 80032 80123 80231 80372 80463 85145 85236 *V092 80033 80124 80232 80373 80464 85146 85239 03810 80034 80125 80233 80374 80465 85149 85240 03811 80035 80126 80234 80375 80466 85150 85241 03819 80036 80129 80235 80376 80469 85151 85242 *V093 80039 80130 80236 80379 80470 85152 85243 03810 80040 80131 80237 80380 80471 85153 85244 03811 80041 80132 80238 80381 80472 85154 85245 03819 80042 80133 80239 80382 80473 85155 85246 *V094 80043 80134 8024 80383 80474 85156 85249 03810 80044 80135 8025 80384 80475 85159 85250 03811 80045 80136 8026 80385 80476 85160 85251 03819 80046 80139 8027 80386 80479 85161 85252 *V0950 80049 80140 8028 80389 80480 85162 85253 03810 80050 80141 8029 80390 80481 85163 85254 03811 80051 80142 80300 80391 80482 85164 85255 03819 80052 80143 80301 80392 80483 85165 85256 *V0951 80053 80144 80302 80393 80484 85166 85259 03810 80054 80145 80303 80394 80485 85169 85300 03811 80055 80146 80304 80395 80486 85170 85301 03819 80056 80149 80305 80396 80489 85171 85302 *V096 80059 80150 80306 80399 80490 85172 85303 03810 80060 80151 80309 80400 80491 85173 85304 03811 80061 80152 80310 80401 80492 85174 85305 03819 80062 80153 80311 80402 80493 85175 85306 *V0970 80063 80154 80312 80403 80494 85176 85309 03810 80064 80155 80313 80404 80495 85179 85310 03811 80065 80156 80314 80405 80496 85180 85311 03819 80066 80159 80315 80406 80499 85181 85312 *V0971 80069 80160 80316 80409 8500 85182 85313 03810 80070 80161 80319 80410 8501 85183 85314 03811 80071 80162 80320 80411 8502 85184 85315 03819 80072 80163 80321 80412 8503 85185 85316 *V0980 80073 80164 80322 80413 8504 85186 85319 03810 80074 80165 80323 80414 8505 85189 85400 03811 80075 80166 80324 80415 8509 85190 85401 03819 80076 80169 80325 80416 85100 85191 85402 *V0981 80079 80170 80326 80419 85101 85192 85403 03810 80080 80171 80329 80420 85102 85193 85404 03811 80081 80172 80330 80421 85103 85194 85405 03819 80082 80173 80331 80422 85104 85195 85406 *V0990 80083 80174 80332 80423 85105 85196 85409 03810 80084 80175 80333 80424 85106 85199 85410 03811 80085 80176 80334 80425 85109 85200 85411 03819 80086 80179 80335 80426 85110 85201 85412 *V0991 80089 80180 80336 80429 85111 85202 85413 03810 80090 80181 80339 80430 85112 85203 85414 03811 80091 80182 80340 80431 85113 85204 85415 03819 80092 80183 80341 80432 85114 85205 85416 *V4283 80093 80184 80342 80433 85115 85206 85419 V4283 80094 80185 80343 80434 85116 85209 9251 *V4289 80095 80186 80344 80435 85119 85210 9252 V420 80096 80189 80345 80436 85120 85211 *99664 V421 80099 80190 80346 80439 85121 85212 5990 V422 80100 80191 80349 80440 85122 85213 *99680 V426 80101 80192 80350 80441 85123 85214 V4281 V427 ------------------------------------------------------------------------ [[Page 46096]] Page 5 of 5 Pages ------------------------------------------------------------------------ ------------------------------------------------------------------------ V4289 *V429 V4281 V4282 V4283 V4289 ------------------------------------------------------------------------ [[Page 46097]] Table 6F.--Deletions to the CC Exclusions List Page 1 of 2 Pages CCs that are deleted from the list are in Table 6F--Deletions to the CC Exclusions List. Each of the principal diagnoses is shown with an asterisk, and the revisions to the CC Exclusions List are provided in an indented column immediately following the affected principal diagnosis. ------------------------------------------------------------------------ ------------------------------------------------------------------------ *0031 0381 7803 80039 80123 80226 80360 80444 0381 *0414 *34989 80040 80124 80227 80361 80445 *0202 0381 7803 80041 80125 80228 80362 80446 0381 *0415 *3499 80042 80126 80229 80363 80449 *0362 0381 7803 80043 80129 80230 80364 80450 0381 *0416 *6860 80044 80130 80231 80365 80451 *0380 0381 6800 80045 80131 80232 80366 80452 0381 *0417 6801 80046 80132 80233 80369 80453 *0381 0381 6802 80049 80133 80234 80370 80454 0362 *04181 6803 80050 80134 80235 80371 80455 0380 0381 6804 80051 80135 80236 80372 80456 0381 *04182 6805 80052 80136 80237 80373 80459 0382 0381 6806 80053 80139 80238 80374 80460 0383 *04183 6807 80054 80140 80239 80375 80461 03840 0381 6808 80055 80141 8024 80376 80462 03841 *04184 6809 80056 80142 8025 80379 80463 03842 0381 6820 80059 80143 8026 80380 80464 03843 *04185 6821 80060 80144 8027 80381 80465 03844 0381 6822 80061 80145 8028 80382 80466 03849 *04186 6823 80062 80146 8029 80383 80469 0388 0381 6825 80063 80149 80300 80384 80470 0389 *04189 6826 80064 80150 80301 80385 80471 0545 0381 6827 80065 80151 80302 80386 80472 *0382 *0419 6828 80066 80152 80303 80389 80473 0381 0381 6829 80069 80153 80304 80390 80474 *0383 *0545 684 80070 80154 80305 80391 80475 0381 0381 *7790 80071 80155 80306 80392 80476 *03840 *1398 7803 80072 80156 80309 80393 80479 0381 0381 *7791 80073 80159 80310 80394 80480 *03841 *34500 7803 80074 80160 80311 80395 80481 0381 7803 *7803 80075 80161 80312 80396 80482 *03842 *34501 7803 80076 80162 80313 80399 80483 0381 7803 *7809 80079 80163 80314 80400 80484 *03843 *34510 7803 80080 80164 80315 80401 80485 0381 7803 *7998 80081 80165 80316 80402 80486 *03844 *34511 7803 80082 80166 80319 80403 80489 0381 7803 *9590 80083 80169 80320 80404 80490 *03849 *3452 80000 80084 80170 80321 80405 80491 0381 7803 80001 80085 80171 80322 80406 80492 *0388 *3453 80002 80086 80172 80323 80409 80493 0381 7803 80003 80089 80173 80324 80410 80494 *0389 *34540 80004 80090 80174 80325 80411 80495 0381 7803 80005 80091 80175 80326 80412 80496 *04089 *34541 80006 80092 80176 80329 80413 80499 0381 7803 80009 80093 80179 80330 80414 8500 *04100 *34550 80010 80094 80180 80331 80415 8501 0381 7803 80011 80095 80181 80332 80416 8502 *04101 *34551 80012 80096 80182 80333 80419 8503 0381 7803 80013 80099 80183 80334 80420 8504 *04102 *34560 80014 80100 80184 80335 80421 8505 0381 7803 80015 80101 80185 80336 80422 8509 *04103 *34561 80016 80102 80186 80339 80423 85100 0381 7803 80019 80103 80189 80340 80424 85101 *04104 *34570 80020 80104 80190 80341 80425 85102 0381 7803 80021 80105 80191 80342 80426 85103 *04105 *34571 80022 80106 80192 80343 80429 85104 0381 7803 80023 80109 80193 80344 80430 85105 *04109 *34580 80024 80110 80194 80345 80431 85106 0381 7803 80025 80111 80195 80346 80432 85109 *04110 *34581 80026 80112 80196 80349 80433 85110 0381 7803 80029 80113 80199 80350 80434 85111 *04111 *34590 80030 80114 8021 80351 80435 85112 0381 7803 80031 80115 80220 80352 80436 85113 *04119 *34591 80032 80116 80221 80353 80439 85114 0381 7803 80033 80119 80222 80354 80440 85115 *0412 *3488 80034 80120 80223 80355 80441 85116 0381 7803 80035 80121 80224 80356 80442 85119 *0413 *3489 80036 80122 80225 80359 80443 85120 ------------------------------------------------------------------------ [[Page 46098]] Page 2 of 2 Pages ------------------------------------------------------------------------ ------------------------------------------------------------------------ 85121 85212 V428 85122 85213 *99686 85123 85214 V428 85124 85215 *99689 85125 85216 V428 85126 85219 *V090 85129 85220 0381 85130 85221 *V091 85131 85222 0381 85132 85223 *V092 85133 85224 0381 85134 85225 *V093 85135 85226 0381 85136 85229 *V094 85139 85230 0381 85140 85231 *V0950 85141 85232 0381 85142 85233 *V0951 85143 85234 0381 85144 85235 *V096 85145 85236 0381 85146 85239 *V0970 85149 85240 0381 85150 85241 *V0971 85151 85242 0381 85152 85243 *V0980 85153 85244 0381 85154 85245 *V0981 85155 85246 0381 85156 85249 *V0990 85159 85250 0381 85160 85251 *V0991 85161 85252 0381 85162 85253 *V428 85163 85254 V420 85164 85255 V421 85165 85256 V422 85166 85259 V426 85169 85300 V427 85170 85301 V428 85171 85302 *V429 85172 85303 V428 85173 85304 85174 85305 85175 85306 85176 85309 85179 85310 85180 85311 85181 85312 85182 85313 85183 85314 85184 85315 85185 85316 85186 85319 85189 85400 85190 85401 85191 85402 85192 85403 85193 85404 85194 85405 85195 85406 85196 85409 85199 85410 85200 85411 85201 85412 85202 85413 85203 85414 85204 85415 85205 85416 85206 85419 85209 9251 85210 9252 85211 *99680 ------------------------------------------------------------------------ [[Page 46099]] Table 7A.--Medicare Prospective Payment System; Selected Percentile Lengths of Stay [FY96 MEDPAR Update 06/97 Grouper V14.0] -------------------------------------------------------------------------------------------------------------------------------------------------------- Number Arithmetic 10th 25th 50th 75th 90th DRG discharges mean LOS percentile percentile percentile percentile percentile -------------------------------------------------------------------------------------------------------------------------------------------------------- 1....................................... 36951 10.0648 2 4 7 13 21 2....................................... 6901 10.5740 3 5 8 13 21 3....................................... 2 50.5000 1 1 100 100 100 4....................................... 6300 8.4741 2 3 6 10 18 5....................................... 103092 3.9356 1 2 3 4 8 6....................................... 421 3.2470 1 1 2 4 7 7....................................... 12078 11.7014 3 5 8 13 22 8....................................... 2117 3.8427 1 1 3 5 8 9....................................... 1748 7.1070 1 3 5 9 14 10...................................... 20265 7.2705 2 3 5 9 15 11...................................... 2958 4.2559 1 2 3 6 9 12...................................... 26164 6.8367 2 3 5 8 13 13...................................... 6421 5.7728 2 3 5 7 10 14...................................... 377267 6.7453 2 3 5 8 13 15...................................... 145885 4.0663 1 2 3 5 7 16...................................... 14071 6.0968 2 3 5 7 11 17...................................... 3095 3.6927 1 2 3 5 7 18...................................... 24288 5.7924 2 3 4 7 11 19...................................... 6604 4.0893 1 2 3 5 8 20...................................... 8247 9.3961 2 4 7 12 19 21...................................... 1192 7.1032 2 3 5 9 14 22...................................... 2904 4.7600 2 2 4 6 9 23...................................... 6081 4.5469 1 2 3 6 9 24...................................... 58223 5.3289 1 2 4 6 10 25...................................... 22286 3.6092 1 2 3 4 7 26...................................... 42 5.0952 1 2 4 7 11 27...................................... 3845 5.5004 1 1 3 7 13 28...................................... 12715 6.3270 1 2 4 8 13 29...................................... 4005 3.7231 1 2 3 5 7 30...................................... 1 4.0000 4 4 4 4 4 31...................................... 3086 4.7664 1 2 3 6 9 32...................................... 1434 3.0718 1 1 2 3 6 34...................................... 18587 5.8145 1 3 4 7 11 35...................................... 3733 3.9207 1 2 3 5 7 36...................................... 6765 1.5441 1 1 1 2 2 37...................................... 1771 3.9283 1 1 3 5 8 38...................................... 197 2.7411 1 1 2 3 5 39...................................... 2564 2.0035 1 1 1 2 4 40...................................... 2657 3.4159 1 1 2 4 7 42...................................... 5414 1.9762 1 1 1 2 4 43...................................... 111 3.9910 1 2 3 5 7 44...................................... 1477 5.2275 2 3 4 7 9 45...................................... 2356 3.6006 1 2 3 5 7 46...................................... 3021 4.8431 1 2 4 6 9 47...................................... 1182 3.9619 1 1 3 4 7 49...................................... 2389 5.2704 1 2 4 6 10 50...................................... 3294 2.1072 1 1 2 2 3 51...................................... 351 2.8775 1 1 2 3 6 52...................................... 91 3.0000 1 1 2 4 7 53...................................... 3107 3.6028 1 1 2 4 8 54...................................... 2 5.0000 1 1 9 9 9 55...................................... 1907 2.9240 1 1 2 3 6 56...................................... 749 2.8451 1 1 2 3 6 57...................................... 659 3.9484 1 1 2 4 8 58...................................... 1 2.0000 2 2 2 2 2 59...................................... 106 3.3302 1 1 2 4 6 60...................................... 3 1.0000 1 1 1 1 1 61...................................... 243 4.5473 1 1 3 5 11 63...................................... 3794 4.6009 1 2 3 5 9 64...................................... 3378 6.6442 1 2 5 8 14 65...................................... 29490 3.1698 1 2 3 4 6 66...................................... 6602 3.4727 1 2 3 4 6 67...................................... 495 3.8061 1 2 3 5 7 68...................................... 10227 4.3213 2 2 4 5 8 69...................................... 2963 3.4715 1 2 3 4 6 70...................................... 40 3.3000 1 2 3 4 5 71...................................... 128 3.9297 1 2 3 5 7 72...................................... 725 3.4897 1 2 3 4 7 73...................................... 6260 4.6725 1 2 4 6 9 74...................................... 4 3.2500 1 1 2 3 7 [[Page 46100]] 75...................................... 41372 10.5497 4 5 8 13 20 76...................................... 41405 11.7204 3 6 9 14 22 77...................................... 2204 5.0912 1 2 4 7 10 78...................................... 31193 7.6312 3 5 7 9 13 79...................................... 239360 8.6345 3 4 7 11 16 80...................................... 8157 6.0829 2 3 5 7 11 81...................................... 22 10.2727 1 6 8 11 15 82...................................... 71319 7.3214 2 3 6 9 14 83...................................... 7516 5.8950 2 3 5 7 11 84...................................... 1542 3.4540 1 2 3 4 6 85...................................... 20847 6.8707 2 3 5 9 13 86...................................... 1389 4.0662 1 2 3 5 8 87...................................... 67801 6.4419 1 3 5 8 12 88...................................... 361166 5.6526 2 3 5 7 10 89...................................... 430920 6.5608 3 4 5 8 12 90...................................... 37020 4.6802 2 3 4 6 8 91...................................... 77 5.1818 2 3 4 7 9 92...................................... 13624 6.6358 2 3 5 8 12 93...................................... 1172 4.6860 1 2 4 6 9 94...................................... 13846 6.6439 2 3 5 8 13 95...................................... 1449 3.9786 1 2 3 5 7 96...................................... 59271 5.0562 2 3 4 6 9 97...................................... 24153 3.9977 1 2 3 5 7 98...................................... 29 2.8621 1 1 2 4 6 99...................................... 26718 3.1667 1 1 2 4 6 100..................................... 10247 2.2335 1 1 2 3 4 101..................................... 20620 4.7299 1 2 4 6 9 102..................................... 4570 2.8967 1 1 2 4 5 103..................................... 538 47.8662 9 15 32 72 105 104..................................... 26488 13.3264 5 8 11 16 24 105..................................... 23028 10.2064 5 6 8 12 18 106..................................... 107702 11.0480 6 7 9 13 18 107..................................... 68747 8.3098 5 6 7 9 13 108..................................... 7536 12.0882 4 7 10 15 23 110..................................... 63731 10.0931 3 6 8 12 19 111..................................... 5575 6.1189 2 4 6 7 9 112..................................... 219732 4.2374 1 2 3 6 8 113..................................... 48124 13.1573 4 6 9 16 26 114..................................... 9126 8.8386 2 4 7 11 17 115..................................... 11726 10.2988 4 6 8 13 18 116..................................... 88158 5.0220 1 2 4 6 10 117..................................... 3828 4.0470 1 1 3 5 9 118..................................... 6772 3.0371 1 1 2 4 7 119..................................... 1690 5.1065 1 1 3 7 11 120..................................... 39847 8.4640 1 2 5 11 19 121..................................... 167101 6.9259 2 4 6 9 12 122..................................... 91350 4.6310 1 2 4 6 8 123..................................... 46249 4.4859 1 1 2 6 11 124..................................... 153500 4.5902 1 2 4 6 9 125..................................... 61076 2.9372 1 1 2 4 6 126..................................... 5166 12.8142 4 6 10 16 26 127..................................... 709234 5.7990 2 3 5 7 11 128..................................... 18597 6.3449 3 4 6 7 10 129..................................... 4489 3.1644 1 1 1 3 7 130..................................... 100017 6.2985 2 4 5 8 11 131..................................... 25586 4.8476 1 3 5 6 8 132..................................... 165201 3.3138 1 2 3 4 6 133..................................... 6160 2.7940 1 1 2 3 5 134..................................... 29603 3.6026 1 2 3 4 7 135..................................... 8086 4.4369 1 2 3 5 8 136..................................... 1150 3.0504 1 1 2 4 6 137..................................... 5 6.6000 2 2 4 8 16 138..................................... 208756 4.1947 1 2 3 5 8 139..................................... 65753 2.7449 1 1 2 3 5 140..................................... 135211 3.1677 1 2 3 4 6 141..................................... 78555 4.0801 1 2 3 5 7 142..................................... 35677 2.9447 1 1 2 4 5 143..................................... 138162 2.3966 1 1 2 3 4 144..................................... 76696 5.3747 1 2 4 7 11 145..................................... 6380 2.9914 1 1 2 4 6 [[Page 46101]] 146..................................... 9882 10.5266 6 7 9 12 17 147..................................... 1674 6.9050 4 5 7 8 10 148..................................... 149728 12.6192 6 7 10 15 22 149..................................... 14277 7.1339 4 5 7 8 10 150..................................... 24560 11.1072 4 6 9 14 20 151..................................... 4267 6.1198 2 3 6 8 11 152..................................... 4715 8.4846 4 5 7 10 14 153..................................... 1651 5.7965 3 4 6 7 9 154..................................... 35216 14.0534 4 7 11 17 27 155..................................... 4555 5.0119 1 2 4 7 9 156..................................... 4 10.7500 3 3 4 5 31 157..................................... 9472 5.6010 1 2 4 7 11 158..................................... 4361 2.7845 1 1 2 4 6 159..................................... 18297 5.0699 1 2 4 6 10 160..................................... 9547 2.7709 1 1 2 4 5 161..................................... 14988 4.2180 1 2 3 5 9 162..................................... 7391 2.0894 1 1 1 3 4 163..................................... 11 4.4545 1 1 2 6 10 164..................................... 5375 8.7116 4 5 7 10 15 165..................................... 1597 5.4264 2 3 5 7 8 166..................................... 3365 5.4155 2 3 4 7 10 167..................................... 2278 2.9622 1 2 3 4 5 168..................................... 1877 4.7475 1 2 3 6 9 169..................................... 952 2.5620 1 1 2 3 5 170..................................... 13057 11.7430 2 5 9 15 23 171..................................... 1059 5.0888 1 2 4 6 10 172..................................... 33117 7.3971 2 3 5 9 15 173..................................... 2099 3.9700 1 2 3 5 8 174..................................... 240184 5.1454 2 3 4 6 9 175..................................... 21544 3.2351 1 2 3 4 6 176..................................... 17948 5.7574 2 3 4 7 11 177..................................... 11802 4.7312 2 3 4 6 8 178..................................... 3790 3.3570 1 2 3 4 6 179..................................... 12184 6.7228 2 3 5 8 13 180..................................... 89240 5.6541 2 3 4 7 11 181..................................... 21350 3.7182 1 2 3 5 7 182..................................... 239229 4.5646 1 2 4 6 8 183..................................... 70013 3.1776 1 2 3 4 6 184..................................... 89 3.7191 1 2 3 4 7 185..................................... 4134 4.8181 1 2 4 6 10 186..................................... 3 3.6667 2 2 4 5 5 187..................................... 932 3.9635 1 2 3 5 8 188..................................... 70899 5.7808 1 3 4 7 11 189..................................... 7941 3.3871 1 1 3 4 7 190..................................... 99 4.8990 1 2 3 6 11 191..................................... 11157 14.8611 4 7 11 18 30 192..................................... 780 7.1346 2 4 6 9 12 193..................................... 8380 12.9029 5 7 11 16 23 194..................................... 663 7.5053 2 4 6 9 13 195..................................... 8780 9.8539 4 6 8 12 17 196..................................... 631 6.3376 3 4 6 8 10 197..................................... 27389 8.6974 3 5 7 10 15 198..................................... 7098 4.7201 2 3 4 6 8 199..................................... 2177 10.7184 3 5 8 14 22 200..................................... 1549 11.2608 2 4 8 14 23 201..................................... 1562 15.0506 4 7 11 19 29 202..................................... 28593 7.0940 2 3 5 9 14 203..................................... 29628 7.1561 2 3 6 9 14 204..................................... 53350 6.3392 2 3 5 8 12 205..................................... 23158 6.7829 2 3 5 8 14 206..................................... 1672 4.2189 1 2 3 5 8 207..................................... 37032 5.2825 1 2 4 7 10 208..................................... 9961 3.0344 1 1 2 4 6 209..................................... 358501 5.8935 3 4 5 7 9 210..................................... 143703 7.6287 4 5 6 9 13 211..................................... 26316 5.6097 3 4 5 7 9 212..................................... 41 6.1220 3 4 5 7 9 213..................................... 7179 8.7551 2 4 7 11 17 214..................................... 58431 5.8904 2 3 5 7 11 215..................................... 45646 3.2827 1 2 3 4 6 [[Page 46102]] 216..................................... 6407 10.2995 2 4 8 13 21 217..................................... 20940 13.7538 3 5 9 17 29 218..................................... 24873 5.6276 2 3 4 7 10 219..................................... 18972 3.4441 1 2 3 4 6 220..................................... 4 4.7500 1 1 4 4 10 221..................................... 5180 7.1959 2 3 5 9 14 222..................................... 3506 3.8189 1 2 3 5 7 223..................................... 19625 2.6998 1 1 2 3 5 224..................................... 8139 2.1058 1 1 2 3 4 225..................................... 5926 4.6232 1 2 3 6 10 226..................................... 5570 6.2548 1 2 4 7 13 227..................................... 4376 2.8551 1 1 2 3 5 228..................................... 2997 3.4525 1 1 2 4 7 229..................................... 1232 2.3612 1 1 2 3 4 230..................................... 2492 4.9767 1 2 3 6 10 231..................................... 11066 4.7603 1 2 3 6 10 232..................................... 556 4.2248 1 1 2 5 9 233..................................... 4761 8.2728 2 3 6 10 17 234..................................... 2195 3.8893 1 2 3 5 8 235..................................... 5557 5.8101 1 3 4 6 11 236..................................... 39976 5.5846 2 3 4 7 10 237..................................... 1669 4.2151 1 2 3 5 8 238..................................... 7672 9.3749 3 4 7 11 17 239..................................... 60788 6.9705 2 3 5 8 13 240..................................... 13393 6.9364 2 3 5 8 14 241..................................... 3016 4.2338 1 2 3 5 8 242..................................... 2855 7.1338 2 3 5 9 14 243..................................... 80934 5.1228 2 3 4 6 9 244..................................... 12524 5.4313 1 3 4 6 10 245..................................... 4417 4.0906 1 2 3 5 7 246..................................... 1276 4.2226 1 2 3 5 8 247..................................... 11504 3.6954 1 2 3 5 7 248..................................... 7427 4.9740 1 2 4 6 9 249..................................... 10422 3.9731 1 1 3 5 8 250..................................... 3591 4.6441 1 2 3 5 9 251..................................... 2139 3.0108 1 1 2 4 5 253..................................... 19173 5.2500 1 3 4 6 10 254..................................... 9369 3.5203 1 2 3 4 6 255..................................... 1 6.0000 6 6 6 6 6 256..................................... 4438 5.6717 1 2 4 7 11 257..................................... 22791 3.2063 1 2 3 4 6 258..................................... 17069 2.2799 1 1 2 3 4 259..................................... 4037 3.1962 1 1 2 3 7 260..................................... 4576 1.6635 1 1 1 2 3 261..................................... 2262 2.2396 1 1 2 3 4 262..................................... 669 3.9746 1 1 3 5 8 263..................................... 29336 12.5322 3 5 9 15 24 264..................................... 3380 7.2843 2 3 6 9 14 265..................................... 4205 7.2542 1 2 5 8 15 266..................................... 2585 3.5528 1 1 2 5 7 267..................................... 226 4.1770 1 1 2 5 8 268..................................... 1218 3.7373 1 1 2 4 7 269..................................... 10131 8.4881 2 3 6 11 17 270..................................... 3100 3.2032 1 1 2 4 7 271..................................... 23041 7.7309 3 4 6 9 14 272..................................... 6022 6.6724 2 3 5 8 13 273..................................... 1397 5.3672 1 2 4 6 11 274..................................... 2648 7.1650 1 3 5 9 15 275..................................... 243 3.8477 1 1 2 5 8 276..................................... 953 4.7408 1 3 4 6 8 277..................................... 80661 6.2256 2 3 5 7 11 278..................................... 24965 4.8286 2 3 4 6 8 279..................................... 7 4.4286 2 2 4 6 6 280..................................... 14005 4.6941 1 2 3 6 9 281..................................... 5939 3.3597 1 1 3 4 6 282..................................... 5 12.0000 1 1 3 14 41 283..................................... 5325 5.0186 1 2 4 6 10 284..................................... 1764 3.5595 1 2 3 5 7 285..................................... 5653 12.0637 3 5 9 15 23 286..................................... 2085 7.1947 3 4 5 8 13 [[Page 46103]] 287..................................... 6742 12.2094 3 5 8 14 24 288..................................... 1244 5.8457 3 4 5 6 9 289..................................... 5512 3.4799 1 1 2 3 7 290..................................... 8856 2.5833 1 1 2 3 4 291..................................... 93 2.1720 1 1 2 3 4 292..................................... 5234 11.2042 2 4 8 14 22 293..................................... 276 5.8406 1 2 4 7 11 294..................................... 84535 5.2478 2 3 4 6 10 295..................................... 3739 4.1038 1 2 3 5 8 296..................................... 233162 5.7612 2 3 4 7 11 297..................................... 32036 3.8589 1 2 3 5 7 298..................................... 122 3.1066 1 1 2 4 6 299..................................... 1152 5.4852 1 2 4 7 11 300..................................... 15755 6.6292 2 3 5 8 13 301..................................... 1988 4.3622 1 2 3 5 8 302..................................... 8343 10.9475 5 6 8 13 19 303..................................... 19359 9.4651 4 5 8 11 17 304..................................... 13173 9.5951 2 4 7 12 19 305..................................... 2468 4.3302 1 2 4 5 8 306..................................... 11672 5.7598 1 2 4 7 12 307..................................... 2489 2.5372 1 1 2 3 4 308..................................... 9750 6.3917 1 2 4 8 13 309..................................... 3377 2.5579 1 1 2 3 5 310..................................... 27613 4.3385 1 2 3 5 9 311..................................... 8533 2.0550 1 1 2 2 4 312..................................... 1880 4.6824 1 2 3 6 10 313..................................... 664 2.2846 1 1 2 3 5 315..................................... 28798 8.5390 1 2 5 11 19 316..................................... 85489 6.9920 2 3 5 9 14 317..................................... 858 2.9231 1 1 2 3 6 318..................................... 6203 6.6381 1 3 5 8 13 319..................................... 433 2.8730 1 1 2 4 6 320..................................... 176972 5.8722 2 3 5 7 10 321..................................... 23634 4.2737 2 3 4 5 7 322..................................... 102 4.4706 2 2 3 5 9 323..................................... 17539 3.3728 1 1 2 4 7 324..................................... 8050 2.0060 1 1 2 2 4 325..................................... 7041 4.1976 1 2 3 5 8 326..................................... 2111 2.9019 1 1 2 4 5 327..................................... 15 3.1333 1 1 2 3 12 328..................................... 678 3.9189 1 2 3 5 8 329..................................... 108 2.4352 1 1 2 3 5 331..................................... 44368 5.8405 2 3 4 7 11 332..................................... 4485 3.5376 1 1 3 5 7 333..................................... 348 5.6063 1 2 4 7 12 334..................................... 19424 5.4204 3 4 5 6 8 335..................................... 9808 4.0533 2 3 4 5 6 336..................................... 59377 3.7626 1 2 3 4 7 337..................................... 34315 2.4154 1 2 2 3 4 338..................................... 3738 5.0698 1 2 3 6 11 339..................................... 2131 4.5861 1 2 3 6 10 340..................................... 1 1.0000 1 1 1 1 1 341..................................... 5981 3.1155 1 1 2 3 6 342..................................... 194 4.1649 1 2 3 6 8 344..................................... 3544 3.1168 1 1 2 3 6 345..................................... 1364 3.8043 1 1 3 5 8 346..................................... 5207 6.2906 1 3 5 8 12 347..................................... 382 2.9503 1 1 2 4 6 348..................................... 3220 4.4851 1 2 3 5 8 349..................................... 744 2.6788 1 1 2 3 5 350..................................... 6367 4.6220 2 3 4 6 8 351..................................... 2 2.5000 2 2 3 3 3 352..................................... 551 3.9800 1 1 3 5 8 353..................................... 2722 8.3420 3 4 6 9 16 354..................................... 10008 5.9796 3 3 5 7 10 355..................................... 5600 3.6289 2 3 3 4 5 356..................................... 29930 2.8076 1 2 3 3 4 357..................................... 6625 9.3250 4 5 7 11 17 358..................................... 28909 4.4699 2 3 4 5 7 359..................................... 28338 3.0915 2 2 3 4 4 [[Page 46104]] 360..................................... 18232 3.2826 1 2 3 4 5 361..................................... 680 3.6721 1 1 2 4 8 362..................................... 1 1.0000 1 1 1 1 1 363..................................... 3930 3.4725 1 2 2 3 7 364..................................... 1869 3.4912 1 1 2 4 7 365..................................... 2454 7.1520 1 2 4 9 16 366..................................... 4504 6.9896 1 3 5 9 15 367..................................... 546 2.9579 1 1 2 4 6 368..................................... 2396 6.2371 2 3 5 8 12 369..................................... 2388 3.4317 1 1 2 4 7 370..................................... 1223 5.5078 2 3 4 5 9 371..................................... 1108 3.5903 2 3 3 4 5 372..................................... 909 3.1177 1 2 2 3 5 373..................................... 4166 2.0290 1 1 2 2 3 374..................................... 170 2.8824 1 2 2 3 4 375..................................... 7 8.4286 1 2 5 9 15 376..................................... 219 3.2055 1 1 2 4 7 377..................................... 51 4.0196 1 1 2 4 9 378..................................... 195 2.6256 1 2 2 3 4 379..................................... 374 2.9278 1 1 2 3 5 380..................................... 101 1.8317 1 1 1 2 4 381..................................... 184 2.2935 1 1 1 2 5 382..................................... 48 1.3333 1 1 1 1 2 383..................................... 1616 3.8342 1 2 3 5 8 384..................................... 142 2.8380 1 1 2 3 6 385..................................... 5 4.6000 1 1 2 4 15 386..................................... 1 49.0000 49 49 49 49 49 387..................................... 1 62.0000 62 62 62 62 62 389..................................... 24 7.1667 3 3 5 10 13 390..................................... 12 5.3333 2 3 4 7 7 392..................................... 2562 10.5863 4 5 8 13 21 393..................................... 2 11.0000 7 7 15 15 15 394..................................... 1814 7.5232 1 2 5 9 16 395..................................... 68196 4.9807 1 2 4 6 10 396..................................... 20 4.1500 1 1 2 7 7 397..................................... 16987 5.7650 1 2 4 7 11 398..................................... 18423 6.2558 2 3 5 8 12 399..................................... 1310 4.0099 1 2 3 5 7 400..................................... 7882 9.7265 2 3 7 12 21 401..................................... 6799 11.6851 2 5 9 15 24 402..................................... 1510 4.2391 1 1 3 6 9 403..................................... 39216 8.5824 2 3 6 11 18 404..................................... 3829 4.6453 1 2 4 6 9 406..................................... 3486 10.0688 3 4 7 13 21 407..................................... 700 4.4243 1 2 4 6 8 408..................................... 2860 7.6731 1 2 5 9 18 409..................................... 5606 5.9144 2 3 4 6 12 410..................................... 74662 3.3563 1 2 3 4 5 411..................................... 34 2.2941 1 1 1 3 6 412..................................... 30 3.3667 1 1 2 5 7 413..................................... 8828 8.0319 2 3 6 10 16 414..................................... 735 4.5456 1 2 3 6 10 415..................................... 44981 14.8907 4 7 11 18 29 416..................................... 220088 7.6836 2 4 6 9 14 417..................................... 55 4.5818 1 2 4 6 9 418..................................... 20660 6.3190 2 3 5 8 12 419..................................... 14953 5.2321 2 3 4 6 10 420..................................... 2640 3.9807 1 2 3 5 7 421..................................... 10782 4.2452 1 2 3 5 8 422..................................... 90 3.7889 1 2 3 4 5 423..................................... 10952 7.9356 2 3 6 9 16 424..................................... 1953 16.5996 2 6 10 19 31 425..................................... 15583 4.3857 1 2 3 5 8 426..................................... 4758 5.2222 1 2 4 6 11 427..................................... 1712 5.2652 1 2 4 7 11 428..................................... 944 7.6684 1 3 5 9 16 429..................................... 42557 7.8378 2 3 5 9 15 430..................................... 56337 9.0138 2 4 7 11 18 431..................................... 222 8.8694 2 3 5 9 17 432..................................... 412 5.8422 1 2 3 7 12 [[Page 46105]] 433..................................... 8265 3.2904 1 1 2 4 7 434..................................... 22732 5.2870 2 3 4 6 10 435..................................... 16634 4.5310 1 2 4 5 8 436..................................... 3556 13.7657 4 8 13 20 26 437..................................... 15721 9.9200 4 6 9 13 18 439..................................... 1050 8.4581 1 3 6 10 18 440..................................... 4863 9.5690 2 3 6 11 20 441..................................... 617 3.4376 1 1 2 4 7 442..................................... 15740 8.2971 1 3 6 10 17 443..................................... 3008 3.3597 1 1 2 4 7 444..................................... 3385 4.7634 1 2 4 6 9 445..................................... 1251 3.6922 1 1 3 4 6 447..................................... 4174 2.6416 1 1 2 3 5 448..................................... 29 1.0000 1 1 1 1 1 449..................................... 28968 4.0303 1 1 3 5 8 450..................................... 6370 2.2462 1 1 1 2 4 451..................................... 4 3.0000 1 1 1 2 8 452..................................... 21590 5.1530 1 2 4 6 10 453..................................... 3635 3.0908 1 1 2 4 6 454..................................... 3990 5.1709 1 2 3 6 10 455..................................... 908 2.7555 1 1 2 3 6 456..................................... 215 7.2930 1 1 3 7 16 457..................................... 113 4.8938 1 1 2 6 14 458..................................... 1680 15.9685 3 6 12 21 33 459..................................... 576 9.3247 2 4 7 12 19 460..................................... 2331 6.3218 1 3 5 8 13 461..................................... 3249 4.5940 1 1 2 5 11 462..................................... 10116 12.9741 4 6 11 17 24 463..................................... 13488 4.7710 1 2 4 6 9 464..................................... 3208 3.4439 1 2 3 4 7 465..................................... 214 3.7477 1 1 2 4 7 466..................................... 1783 4.6983 1 1 2 5 10 467..................................... 1616 4.2092 1 1 2 4 8 468..................................... 63517 13.9982 3 6 11 18 28 471..................................... 11672 6.7301 3 4 5 8 11 472..................................... 203 24.2217 1 5 18 34 57 473..................................... 8739 13.3296 2 4 7 19 34 475..................................... 101069 11.4529 2 5 9 15 22 476..................................... 6630 12.6427 3 7 11 16 23 477..................................... 30337 8.0163 1 2 6 10 16 478..................................... 127616 7.6905 1 3 6 10 16 479..................................... 17990 4.1819 1 2 3 5 8 480..................................... 552 28.5435 9 12 20 36 61 481..................................... 157 34.0064 19 23 30 41 54 482..................................... 7059 13.4577 5 7 10 15 24 483..................................... 40160 43.1397 14 22 34 52 79 484..................................... 407 15.4496 3 7 11 20 30 485..................................... 3514 10.5552 4 5 8 12 20 486..................................... 2589 13.2503 1 6 10 17 26 487..................................... 4371 8.1078 2 3 6 10 16 488..................................... 1774 16.5141 4 7 12 20 32 489..................................... 19038 9.5586 2 4 7 12 20 490..................................... 5460 6.0205 1 2 4 7 12 491..................................... 10763 3.9181 2 2 3 4 7 492..................................... 2229 17.9740 4 5 14 28 37 493..................................... 56791 5.6668 1 2 4 7 11 494..................................... 25112 2.3755 1 1 2 3 5 495..................................... 140 16.9714 8 11 15 20 30 ---------------- 11173210 -------------------------------------------------------------------------------------------------------------------------------------------------------- Table 7B.--Medicare Prospective Payment System; Selected Percentile Lengths of Stay [FY96 MEDPAR Update 06/97 Grouper V15.0] -------------------------------------------------------------------------------------------------------------------------------------------------------- Number Arithmetic 10th 25th 50th 75th 90th DRG discharges mean LOS percentile percentile percentile percentile percentile -------------------------------------------------------------------------------------------------------------------------------------------------------- 1....................................... 35984 10.2675 2 4 7 13 21 2....................................... 6901 10.5740 3 5 8 13 21 [[Page 46106]] 3....................................... 2 50.5000 1 1 100 100 100 4....................................... 6301 8.4750 2 3 6 10 18 5....................................... 103092 3.9356 1 2 3 4 8 6....................................... 421 3.2470 1 1 2 4 7 7....................................... 12609 11.3616 2 4 8 13 21 8....................................... 2940 3.2000 1 1 2 4 7 9....................................... 1754 7.1249 1 3 5 9 14 10...................................... 20278 7.2768 2 3 5 9 15 11...................................... 2956 4.2534 1 2 3 6 9 12...................................... 26180 6.8448 2 3 5 8 13 13...................................... 6419 5.7747 2 3 5 7 10 14...................................... 377399 6.7458 2 3 5 8 13 15...................................... 145920 4.0669 1 2 3 5 7 16...................................... 14076 6.0979 2 3 5 7 11 17...................................... 3098 3.6927 1 2 3 5 7 18...................................... 25872 5.8632 2 3 4 7 11 19...................................... 7162 4.1086 1 2 3 5 8 20...................................... 6113 10.4880 2 5 8 14 21 21...................................... 1193 7.1073 2 3 5 9 14 22...................................... 2905 4.7621 2 2 4 6 9 23...................................... 6083 4.5463 1 2 3 6 9 24...................................... 58312 5.3301 1 2 4 6 10 25...................................... 22307 3.6053 1 2 3 4 7 26...................................... 47 4.7872 1 2 3 6 10 27...................................... 3910 5.4939 1 1 3 7 13 28...................................... 12971 6.3277 1 2 4 8 13 29...................................... 4104 3.7210 1 2 3 5 7 31...................................... 3167 4.8244 1 2 3 6 9 32...................................... 1486 3.0606 1 1 2 3 6 34...................................... 18601 5.8148 1 3 4 7 11 35...................................... 3728 3.9144 1 2 3 5 7 36...................................... 6766 1.5443 1 1 1 2 2 37...................................... 1771 3.9283 1 1 3 5 8 38...................................... 198 2.7374 1 1 2 3 5 39...................................... 2565 2.0035 1 1 1 2 4 40...................................... 2546 3.3342 1 1 2 4 7 42...................................... 5437 1.9847 1 1 1 2 4 43...................................... 112 3.9643 1 2 3 5 7 44...................................... 1479 5.2427 2 3 4 7 9 45...................................... 2358 3.6014 1 2 3 5 7 46...................................... 3070 4.8485 1 2 4 6 9 47...................................... 1208 3.9305 1 1 3 4 7 49...................................... 2389 5.2704 1 2 4 6 10 50...................................... 3294 2.1072 1 1 2 2 3 51...................................... 351 2.8775 1 1 2 3 6 52...................................... 109 3.2202 1 1 2 4 7 53...................................... 3177 3.6116 1 1 2 4 8 54...................................... 2 5.0000 1 1 9 9 9 55...................................... 1907 2.9240 1 1 2 3 6 56...................................... 749 2.8451 1 1 2 3 6 57...................................... 627 3.9888 1 2 2 5 8 58...................................... 1 2.0000 2 2 2 2 2 59...................................... 106 3.3302 1 1 2 4 6 60...................................... 3 1.0000 1 1 1 1 1 61...................................... 243 4.5473 1 1 3 5 11 63...................................... 3794 4.6009 1 2 3 5 9 64...................................... 3378 6.6442 1 2 5 8 14 65...................................... 29508 3.1713 1 2 3 4 6 66...................................... 6602 3.4727 1 2 3 4 6 67...................................... 495 3.8061 1 2 3 5 7 68...................................... 10234 4.3211 2 2 4 5 8 69...................................... 2957 3.4711 1 2 3 4 6 70...................................... 40 3.3000 1 2 3 4 5 71...................................... 128 3.9297 1 2 3 5 7 72...................................... 754 3.5000 1 2 3 4 7 73...................................... 6264 4.6727 1 2 4 6 9 74...................................... 4 3.2500 1 1 2 3 7 75...................................... 41373 10.5498 4 5 8 13 20 76...................................... 41421 11.7212 3 6 9 14 22 77...................................... 2200 5.0882 1 2 4 7 10 [[Page 46107]] 78...................................... 31195 7.6312 3 5 7 9 13 79...................................... 239461 8.6355 3 4 7 11 16 80...................................... 8097 6.0569 2 3 5 7 11 81...................................... 8 6.6250 2 3 6 7 10 82...................................... 71327 7.3212 2 3 6 9 14 83...................................... 7548 5.8922 2 3 5 7 11 84...................................... 1550 3.4510 1 2 3 4 6 85...................................... 20846 6.8720 2 3 5 9 13 86...................................... 1392 4.0560 1 2 3 5 8 87...................................... 67808 6.4421 1 3 5 8 12 88...................................... 361207 5.6530 2 3 5 7 10 89...................................... 431130 6.5624 3 4 5 8 12 90...................................... 36919 4.6667 2 3 4 6 8 91...................................... 44 4.3409 2 2 4 5 9 92...................................... 13630 6.6374 2 3 5 8 12 93...................................... 1171 4.6866 1 2 4 6 9 94...................................... 13860 6.6431 2 3 5 8 13 95...................................... 1450 3.9807 1 2 3 5 7 96...................................... 59294 5.0564 2 3 4 6 9 97...................................... 24137 3.9948 1 2 3 5 7 98...................................... 23 3.8261 1 1 2 4 10 99...................................... 26720 3.1667 1 1 2 4 6 100..................................... 10247 2.2335 1 1 2 3 4 101..................................... 20640 4.7304 1 2 4 6 9 102..................................... 4568 2.8956 1 1 2 4 5 103..................................... 532 48.1579 9 15 32 72 105 104..................................... 26477 13.3305 5 8 11 16 24 105..................................... 23042 10.2029 5 6 8 12 18 106..................................... 107689 11.0481 6 7 9 13 18 107..................................... 68745 8.3095 5 6 7 9 13 108..................................... 7570 12.1110 4 7 10 15 23 110..................................... 63724 10.0893 3 6 8 12 19 111..................................... 5565 6.1146 2 4 6 7 9 112..................................... 143226 4.2143 1 2 3 6 8 113..................................... 48124 13.1573 4 6 9 16 26 114..................................... 9126 8.8386 2 4 7 11 17 115..................................... 13920 9.2104 2 4 8 12 17 116..................................... 163845 4.7278 1 2 4 6 9 117..................................... 3828 4.0470 1 1 3 5 9 118..................................... 6772 3.0371 1 1 2 4 7 119..................................... 1690 5.1065 1 1 3 7 11 120..................................... 39847 8.4640 1 2 5 11 19 121..................................... 171781 6.9297 2 4 6 9 12 122..................................... 86714 4.5006 1 2 4 6 8 123..................................... 46259 4.4861 1 1 2 6 11 124..................................... 153509 4.5906 1 2 4 6 9 125..................................... 61083 2.9375 1 1 2 4 6 126..................................... 5166 12.8142 4 6 10 16 26 127..................................... 709301 5.7991 2 3 5 7 11 128..................................... 18599 6.3459 3 4 6 7 10 129..................................... 4491 3.1639 1 1 1 3 7 130..................................... 100064 6.2988 2 4 5 8 11 131..................................... 25546 4.8443 1 3 5 6 8 132..................................... 165210 3.3140 1 2 3 4 6 133..................................... 6158 2.7943 1 1 2 3 5 134..................................... 29610 3.6023 1 2 3 4 7 135..................................... 8098 4.4395 1 2 3 5 8 136..................................... 1153 3.0590 1 1 2 4 6 137..................................... 3 9.0000 3 3 8 16 16 138..................................... 208875 4.1968 1 2 3 5 8 139..................................... 65773 2.7441 1 1 2 3 5 140..................................... 135217 3.1677 1 2 3 4 6 141..................................... 78828 4.0833 1 2 3 5 7 142..................................... 35793 2.9455 1 1 2 4 5 143..................................... 138166 2.3966 1 1 2 3 4 144..................................... 76722 5.3753 1 2 4 7 11 145..................................... 6376 2.9864 1 1 2 4 6 146..................................... 9883 10.5263 6 7 9 12 17 147..................................... 1673 6.9050 4 5 7 8 10 148..................................... 149749 12.6194 6 7 10 15 22 [[Page 46108]] 149..................................... 14256 7.1282 4 5 7 8 10 150..................................... 24565 11.1079 4 6 9 14 20 151..................................... 4262 6.1100 2 3 6 8 11 152..................................... 4725 8.4855 4 5 7 10 14 153..................................... 1641 5.7776 3 4 6 7 9 154..................................... 35223 14.0521 4 7 11 17 27 155..................................... 4548 5.0079 1 2 4 7 9 156..................................... 4 10.7500 3 3 4 5 31 157..................................... 9475 5.6004 1 2 4 7 11 158..................................... 4358 2.7838 1 1 2 4 6 159..................................... 18293 5.0712 1 2 4 6 10 160..................................... 9550 2.7693 1 1 2 4 5 161..................................... 14988 4.2188 1 2 3 5 9 162..................................... 7392 2.0878 1 1 1 3 4 163..................................... 10 4.7000 1 1 2 8 10 164..................................... 5382 8.7124 4 5 7 10 15 165..................................... 1590 5.4094 2 3 5 7 8 166..................................... 3367 5.4164 2 3 4 7 10 167..................................... 2276 2.9587 1 2 3 4 5 168..................................... 1840 4.7288 1 2 3 6 9 169..................................... 933 2.5638 1 1 2 3 5 170..................................... 13057 11.7430 2 5 9 15 23 171..................................... 1059 5.0888 1 2 4 6 10 172..................................... 33120 7.3970 2 3 5 9 15 173..................................... 2099 3.9700 1 2 3 5 8 174..................................... 240349 5.1449 2 3 4 6 9 175..................................... 21405 3.2299 1 2 3 4 6 176..................................... 17949 5.7572 2 3 4 7 11 177..................................... 11857 4.7298 2 3 4 6 8 178..................................... 3735 3.3414 1 2 3 4 6 179..................................... 12182 6.7201 2 3 5 8 13 180..................................... 89279 5.6551 2 3 4 7 11 181..................................... 21316 3.7131 1 2 3 5 7 182..................................... 239438 4.5657 1 2 4 6 8 183..................................... 69818 3.1716 1 2 3 4 6 184..................................... 88 3.6364 1 2 3 4 7 185..................................... 4173 4.8174 1 2 4 6 10 186..................................... 3 3.6667 2 2 4 5 5 187..................................... 932 3.9635 1 2 3 5 8 188..................................... 70915 5.7802 1 3 4 7 11 189..................................... 7922 3.3871 1 1 3 4 7 190..................................... 99 4.9192 1 2 3 5 11 191..................................... 11183 14.8821 4 7 11 18 30 192..................................... 780 7.1308 2 4 6 9 12 193..................................... 8399 12.9303 5 7 11 16 23 194..................................... 660 7.4924 2 4 6 9 13 195..................................... 8782 9.8539 4 6 8 12 17 196..................................... 629 6.3259 3 4 6 8 10 197..................................... 27404 8.6998 3 5 7 10 15 198..................................... 7093 4.7194 2 3 4 6 8 199..................................... 2178 10.7140 3 5 8 14 22 200..................................... 1551 11.2863 2 4 8 14 23 201..................................... 1566 15.0811 4 7 11 19 29 202..................................... 28611 7.1039 2 3 5 9 14 203..................................... 29634 7.1581 2 3 6 9 14 204..................................... 53354 6.3393 2 3 5 8 12 205..................................... 23176 6.8016 2 3 5 8 14 206..................................... 1669 4.2109 1 2 3 5 8 207..................................... 37050 5.2852 1 2 4 7 10 208..................................... 9948 3.0293 1 1 2 4 6 209..................................... 358501 5.8935 3 4 5 7 9 210..................................... 143742 7.6286 4 5 6 9 13 211..................................... 26310 5.6081 3 4 5 7 9 212..................................... 10 5.2000 2 3 3 5 6 213..................................... 7179 8.7551 2 4 7 11 17 216..................................... 6407 10.2995 2 4 8 13 21 217..................................... 20940 13.7538 3 5 9 17 29 218..................................... 24871 5.6287 2 3 4 7 10 219..................................... 18974 3.4430 1 2 3 4 6 220..................................... 5 4.2000 1 1 4 4 10 [[Page 46109]] 223..................................... 19625 2.6998 1 1 2 3 5 224..................................... 8139 2.1058 1 1 2 3 4 225..................................... 5926 4.6232 1 2 3 6 10 226..................................... 5569 6.2550 1 2 4 7 13 227..................................... 4377 2.8556 1 1 2 3 5 228..................................... 2997 3.4525 1 1 2 4 7 229..................................... 1232 2.3612 1 1 2 3 4 230..................................... 2492 4.9767 1 2 3 6 10 231..................................... 11065 4.7605 1 2 3 6 10 232..................................... 556 4.2248 1 1 2 5 9 233..................................... 4762 8.2740 2 3 6 10 17 234..................................... 2194 3.8847 1 2 3 5 8 235..................................... 5563 5.8068 1 3 4 6 11 236..................................... 40042 5.5871 2 3 4 7 10 237..................................... 1673 4.2110 1 2 3 5 8 238..................................... 7672 9.3749 3 4 7 11 17 239..................................... 60793 6.9705 2 3 5 8 13 240..................................... 13396 6.9369 2 3 5 8 14 241..................................... 3013 4.2273 1 2 3 5 8 242..................................... 2855 7.1338 2 3 5 9 14 243..................................... 80990 5.1239 2 3 4 6 9 244..................................... 12531 5.4307 1 3 4 6 10 245..................................... 4414 4.0888 1 2 3 5 7 246..................................... 1275 4.2235 1 2 3 5 8 247..................................... 11507 3.6954 1 2 3 5 7 248..................................... 7430 4.9732 1 2 4 6 9 249..................................... 10425 3.9777 1 1 3 5 8 250..................................... 3638 4.6564 1 2 3 5 9 251..................................... 2168 3.0152 1 1 2 4 5 253..................................... 19268 5.2492 1 3 4 6 10 254..................................... 9406 3.5232 1 2 3 4 6 256..................................... 4463 5.6626 1 2 4 7 11 257..................................... 22791 3.2065 1 2 3 4 6 258..................................... 17067 2.2797 1 1 2 3 4 259..................................... 4037 3.1962 1 1 2 3 7 260..................................... 4576 1.6635 1 1 1 2 3 261..................................... 2263 2.2391 1 1 2 3 4 262..................................... 668 3.9790 1 1 3 5 8 263..................................... 29345 12.5324 3 5 9 15 24 264..................................... 3371 7.2691 2 3 6 9 14 265..................................... 4204 7.2552 1 2 5 8 15 266..................................... 2586 3.5526 1 1 2 5 7 267..................................... 229 4.1441 1 1 2 5 8 268..................................... 967 3.5274 1 1 2 4 7 269..................................... 10146 8.4862 2 3 6 11 17 270..................................... 3100 3.1906 1 1 2 4 7 271..................................... 23041 7.7309 3 4 6 9 14 272..................................... 6024 6.6718 2 3 5 8 13 273..................................... 1395 5.3677 1 2 4 6 11 274..................................... 2647 7.1598 1 3 5 9 15 275..................................... 243 3.8477 1 1 2 5 8 276..................................... 953 4.7408 1 3 4 6 8 277..................................... 80718 6.2272 2 3 5 7 11 278..................................... 24912 4.8206 2 3 4 6 8 279..................................... 4 4.5000 2 2 2 6 8 280..................................... 14160 4.6971 1 2 3 6 9 281..................................... 6013 3.3597 1 1 3 4 6 282..................................... 1 1.0000 1 1 1 1 1 283..................................... 5329 5.0197 1 2 4 6 10 284..................................... 1761 3.5548 1 2 3 5 7 285..................................... 5653 12.0637 3 5 9 15 23 286..................................... 2049 7.2674 3 4 5 8 13 287..................................... 6697 12.1784 3 5 8 14 24 288..................................... 1289 6.2289 2 4 5 6 9 289..................................... 5512 3.4799 1 1 2 3 7 290..................................... 8856 2.5833 1 1 2 3 4 291..................................... 93 2.1720 1 1 2 3 4 292..................................... 5255 11.1772 2 4 8 14 22 293..................................... 292 5.6301 1 2 4 7 11 294..................................... 84523 5.2489 2 3 4 6 10 [[Page 46110]] 295..................................... 3775 4.0919 1 2 3 5 8 296..................................... 233450 5.7617 2 3 4 7 11 297..................................... 31861 3.8491 1 2 3 5 7 298..................................... 104 2.5192 1 1 2 3 5 299..................................... 1152 5.4852 1 2 4 7 11 300..................................... 15757 6.6296 2 3 5 8 13 301..................................... 1988 4.3622 1 2 3 5 8 302..................................... 8343 10.9475 5 6 8 13 19 303..................................... 19359 9.4651 4 5 8 11 17 304..................................... 13176 9.5956 2 4 7 12 19 305..................................... 2465 4.3209 1 2 4 5 8 306..................................... 11670 5.7599 1 2 4 7 12 307..................................... 2492 2.5385 1 1 2 3 4 308..................................... 9657 6.4205 1 2 4 8 13 309..................................... 3324 2.5827 1 1 2 3 5 310..................................... 27618 4.3383 1 2 3 5 9 311..................................... 8538 2.0546 1 1 2 2 4 312..................................... 1883 4.6893 1 2 3 6 10 313..................................... 670 2.2881 1 1 2 3 5 315..................................... 28828 8.5433 1 2 5 11 19 316..................................... 85493 6.9922 2 3 5 9 14 317..................................... 858 2.9231 1 1 2 3 6 318..................................... 6207 6.6441 1 3 5 8 13 319..................................... 432 2.7940 1 1 2 4 6 320..................................... 177076 5.8728 2 3 5 7 10 321..................................... 23569 4.2659 2 3 4 5 7 322..................................... 93 4.2796 2 2 3 5 8 323..................................... 17541 3.3743 1 1 2 4 7 324..................................... 8048 2.0035 1 1 2 2 4 325..................................... 7066 4.1930 1 2 3 5 8 326..................................... 2130 2.8793 1 1 2 3 5 327..................................... 15 3.4667 1 1 2 3 12 328..................................... 681 3.9236 1 2 3 5 8 329..................................... 107 2.3458 1 1 2 3 5 331..................................... 44033 5.8414 2 3 4 7 11 332..................................... 4874 3.6574 1 1 3 5 7 333..................................... 362 5.7127 1 2 4 7 12 334..................................... 19427 5.4203 3 4 5 6 8 335..................................... 9804 4.0529 2 3 4 5 6 336..................................... 58837 3.7630 1 2 3 4 7 337..................................... 34043 2.4114 1 2 2 3 4 338..................................... 3738 5.0698 1 2 3 6 11 339..................................... 2130 4.5873 1 2 3 6 10 340..................................... 2 1.5000 1 1 2 2 2 341..................................... 5981 3.1155 1 1 2 3 6 342..................................... 1004 3.5926 1 2 3 4 7 344..................................... 3544 3.1168 1 1 2 3 6 345..................................... 1364 3.8043 1 1 3 5 8 346..................................... 5207 6.2906 1 3 5 8 12 347..................................... 382 2.9503 1 1 2 4 6 348..................................... 3220 4.4969 1 2 3 5 8 349..................................... 744 2.6788 1 1 2 3 5 350..................................... 6367 4.6220 2 3 4 6 8 351..................................... 2 2.5000 2 2 3 3 3 352..................................... 551 3.9800 1 1 3 5 8 353..................................... 2722 8.3420 3 4 6 9 16 354..................................... 10004 5.9826 3 3 5 7 10 355..................................... 5604 3.6253 2 3 3 4 5 356..................................... 29892 2.8081 1 2 3 3 4 357..................................... 6625 9.3250 4 5 7 11 17 358..................................... 28910 4.4709 2 3 4 5 7 359..................................... 28337 3.0904 2 2 3 4 4 360..................................... 18232 3.2826 1 2 3 4 5 361..................................... 680 3.6721 1 1 2 4 8 362..................................... 1 1.0000 1 1 1 1 1 363..................................... 3930 3.4725 1 2 2 3 7 364..................................... 1869 3.4912 1 1 2 4 7 365..................................... 2454 7.1520 1 2 4 9 16 366..................................... 4507 6.9907 1 3 5 9 15 367..................................... 543 2.9263 1 1 2 4 6 [[Page 46111]] 368..................................... 2396 6.2371 2 3 5 8 12 369..................................... 2424 3.4125 1 1 2 4 7 370..................................... 1224 5.5074 2 3 4 5 9 371..................................... 1107 3.5890 2 3 3 4 5 372..................................... 909 3.1177 1 2 2 3 5 373..................................... 4166 2.0290 1 1 2 2 3 374..................................... 170 2.8824 1 2 2 3 4 375..................................... 7 8.4286 1 2 5 9 15 376..................................... 219 3.2055 1 1 2 4 7 377..................................... 51 4.0196 1 1 2 4 9 378..................................... 195 2.6256 1 2 2 3 4 379..................................... 374 2.9278 1 1 2 3 5 380..................................... 101 1.8317 1 1 1 2 4 381..................................... 184 2.2935 1 1 1 2 5 382..................................... 48 1.3333 1 1 1 1 2 383..................................... 1616 3.8342 1 2 3 5 8 384..................................... 142 2.8380 1 1 2 3 6 385..................................... 3 6.6667 1 1 4 15 15 386..................................... 1 49.0000 49 49 49 49 49 387..................................... 1 62.0000 62 62 62 62 62 389..................................... 16 6.2500 3 3 5 7 12 390..................................... 7 5.1429 2 2 3 4 7 392..................................... 2562 10.5863 4 5 8 13 21 393..................................... 2 11.0000 7 7 15 15 15 394..................................... 1814 7.5232 1 2 5 9 16 395..................................... 68205 4.9806 1 2 4 6 10 396..................................... 18 4.0000 1 1 2 7 7 397..................................... 16988 5.7650 1 2 4 7 11 398..................................... 18434 6.2525 2 3 5 8 12 399..................................... 1304 4.0107 1 2 3 5 8 400..................................... 7870 9.7126 2 3 7 12 21 401..................................... 6799 11.6883 2 5 9 15 24 402..................................... 1513 4.2412 1 1 3 6 9 403..................................... 39143 8.5499 2 3 6 11 17 404..................................... 3818 4.6239 1 2 4 6 9 406..................................... 3473 10.1005 3 4 7 13 21 407..................................... 695 4.4460 1 2 4 6 8 408..................................... 2876 7.6203 1 2 5 9 18 409..................................... 5607 5.9162 2 3 4 6 12 410..................................... 74657 3.3553 1 2 3 4 5 411..................................... 34 2.2941 1 1 1 3 6 412..................................... 30 3.3667 1 1 2 5 7 413..................................... 8827 8.0314 2 3 6 10 16 414..................................... 735 4.5456 1 2 3 6 10 415..................................... 44947 14.8941 4 7 11 18 29 416..................................... 220123 7.6840 2 4 6 9 14 417..................................... 42 4.2857 1 2 3 6 8 418..................................... 20661 6.3189 2 3 5 8 12 419..................................... 14969 5.2323 2 3 4 6 10 420..................................... 2624 3.9737 1 2 3 5 7 421..................................... 10783 4.2452 1 2 3 5 8 422..................................... 90 3.7444 1 2 3 4 5 423..................................... 10953 7.9358 2 3 6 9 16 424..................................... 1883 16.7642 2 6 10 19 31 425..................................... 15587 4.3867 1 2 3 5 8 426..................................... 4759 5.2227 1 2 4 6 11 427..................................... 1713 5.2668 1 2 4 7 11 428..................................... 944 7.6684 1 3 5 9 16 429..................................... 42603 7.8417 2 3 5 9 15 430..................................... 56355 9.0159 2 4 7 11 18 431..................................... 222 8.8694 2 3 5 9 17 432..................................... 412 5.8422 1 2 3 7 12 433..................................... 8270 3.2895 1 1 2 4 7 434..................................... 22762 5.2873 2 3 4 6 10 435..................................... 16653 4.5296 1 2 4 5 8 436..................................... 3557 13.7641 4 8 13 20 26 437..................................... 15724 9.9197 4 6 9 13 18 439..................................... 1050 8.4581 1 3 6 10 18 440..................................... 4863 9.5690 2 3 6 11 20 441..................................... 617 3.4376 1 1 2 4 7 [[Page 46112]] 442..................................... 15702 8.3069 1 3 6 10 17 443..................................... 2996 3.3621 1 1 2 4 7 444..................................... 3390 4.7661 1 2 4 6 9 445..................................... 1251 3.6843 1 1 3 4 6 447..................................... 4174 2.6416 1 1 2 3 5 448..................................... 29 1.0000 1 1 1 1 1 449..................................... 28988 4.0309 1 1 3 5 8 450..................................... 6372 2.2461 1 1 1 2 4 451..................................... 4 3.0000 1 1 1 2 8 452..................................... 21599 5.1541 1 2 4 6 10 453..................................... 3633 3.0790 1 1 2 4 6 454..................................... 3997 5.1711 1 2 3 6 10 455..................................... 916 2.7424 1 1 2 3 6 456..................................... 215 7.2930 1 1 3 7 16 457..................................... 113 4.8938 1 1 2 6 14 458..................................... 1680 15.9685 3 6 12 21 33 459..................................... 576 9.3247 2 4 7 12 19 460..................................... 2332 6.3203 1 3 5 8 13 461..................................... 3239 4.5952 1 1 2 5 11 462..................................... 10116 12.9741 4 6 11 17 24 463..................................... 13497 4.7743 1 2 4 6 9 464..................................... 3208 3.4286 1 2 3 4 7 465..................................... 214 3.7477 1 1 2 4 7 466..................................... 1784 4.6962 1 1 2 5 10 467..................................... 1617 4.2084 1 1 2 4 8 468..................................... 60561 14.1162 3 6 11 18 28 471..................................... 11672 6.7301 3 4 5 8 11 472..................................... 203 24.2217 1 5 18 34 57 473..................................... 8739 13.3313 2 4 7 19 34 475..................................... 101087 11.4533 2 5 9 15 22 476..................................... 6647 12.6556 3 7 11 16 23 477..................................... 30187 8.6072 1 3 6 11 18 478..................................... 126280 7.6802 1 3 6 10 16 479..................................... 17952 4.1791 1 2 3 5 8 480..................................... 417 25.2686 8 12 18 30 50 481..................................... 257 30.2490 17 21 26 36 50 482..................................... 7059 13.4577 5 7 10 15 24 483..................................... 40197 43.1598 14 22 34 53 79 484..................................... 407 15.4496 3 7 11 20 30 485..................................... 3514 10.5552 4 5 8 12 20 486..................................... 2518 13.3761 1 6 10 17 27 487..................................... 4435 8.1150 2 3 6 10 16 488..................................... 920 17.9750 4 7 13 22 37 489..................................... 19832 9.7897 2 4 7 12 20 490..................................... 5520 6.0612 1 2 4 7 12 491..................................... 10763 3.9181 2 2 3 4 7 492..................................... 2229 17.9740 4 5 14 28 37 493..................................... 56802 5.6674 1 2 4 7 11 494..................................... 25101 2.3728 1 1 2 3 5 495..................................... 99 17.8081 7 11 15 23 31 496..................................... 695 11.5885 4 6 9 13 22 497..................................... 20050 6.8113 2 4 5 8 12 498..................................... 10596 3.7558 1 2 3 5 7 499..................................... 37778 5.2993 2 3 4 6 10 500..................................... 34957 3.1295 1 2 3 4 6 501..................................... 1652 11.2125 4 6 9 13 20 502..................................... 424 7.0825 3 4 6 8 12 503..................................... 6610 4.4082 1 2 4 5 8 ---------------- 11173095 -------------------------------------------------------------------------------------------------------------------------------------------------------- [[Page 46113]] Table 8A.--Statewide Average Operating Cost-to-Charge Ratios for Urban and Rural Hospitals (Case Weighted) August 1997 ------------------------------------------------------------------------ State Urban Rural ------------------------------------------------------------------------ ALABAMA............................................... 0.400 0.449 ALASKA................................................ 0.516 0.780 ARIZONA............................................... 0.397 0.562 ARKANSAS.............................................. 0.542 0.491 CALIFORNIA............................................ 0.382 0.489 COLORADO.............................................. 0.477 0.554 CONNECTICUT........................................... 0.551 0.555 DELAWARE.............................................. 0.505 0.489 DISTRICT OF COLUMBIA.................................. 0.520 ....... FLORIDA............................................... 0.398 0.397 GEORGIA............................................... 0.508 0.510 HAWAII................................................ 0.458 0.531 IDAHO................................................. 0.557 0.618 ILLINOIS.............................................. 0.474 0.587 INDIANA............................................... 0.559 0.596 IOWA.................................................. 0.526 0.663 KANSAS................................................ 0.429 0.659 KENTUCKY.............................................. 0.503 0.529 LOUISIANA............................................. 0.464 0.523 MAINE................................................. 0.619 0.578 MARYLAND.............................................. 0.764 0.815 MASSACHUSETTS......................................... 0.557 0.597 MICHIGAN.............................................. 0.484 0.586 MINNESOTA............................................. 0.553 0.618 MISSISSIPPI........................................... 0.495 0.514 MISSOURI.............................................. 0.445 0.535 MONTANA............................................... 0.485 0.599 NEBRASKA.............................................. 0.495 0.660 NEVADA................................................ 0.329 0.522 NEW HAMPSHIRE......................................... 0.574 0.597 NEW JERSEY............................................ 0.455 ....... NEW MEXICO............................................ 0.461 0.551 NEW YORK.............................................. 0.561 0.647 NORTH CAROLINA........................................ 0.533 0.478 NORTH DAKOTA.......................................... 0.619 0.669 OHIO.................................................. 0.545 0.589 OKLAHOMA.............................................. 0.475 0.549 OREGON................................................ 0.577 0.638 PENNSYLVANIA.......................................... 0.407 0.540 PUERTO RICO........................................... 0.478 0.522 RHODE ISLAND.......................................... 0.577 ....... SOUTH CAROLINA........................................ 0.474 0.496 SOUTH DAKOTA.......................................... 0.542 0.639 TENNESSEE............................................. 0.508 0.551 TEXAS................................................. 0.443 0.546 UTAH.................................................. 0.598 0.641 VERMONT............................................... 0.610 0.564 VIRGINIA.............................................. 0.493 0.509 WASHINGTON............................................ 0.663 0.666 WEST VIRGINIA......................................... 0.599 0.544 WISCONSIN............................................. 0.595 0.653 WYOMING............................................... 0.514 0.751 ------------------------------------------------------------------------ Table 8B.--Statewide Average Capital Cost-to-Charge Ratios (Case Weighted) August 1997 ------------------------------------------------------------------------ State Ratio ------------------------------------------------------------------------ ALABAMA........................................................ 0.054 ALASKA......................................................... 0.073 ARIZONA........................................................ 0.047 ARKANSAS....................................................... 0.055 CALIFORNIA..................................................... 0.039 COLORADO....................................................... 0.053 CONNECTICUT.................................................... 0.039 DELAWARE....................................................... 0.056 DISTRICT OF COLUMBIA........................................... 0.040 FLORIDA........................................................ 0.047 GEORGIA........................................................ 0.048 HAWAII......................................................... 0.046 IDAHO.......................................................... 0.054 ILLINOIS....................................................... 0.044 INDIANA........................................................ 0.059 IOWA........................................................... 0.055 KANSAS......................................................... 0.054 KENTUCKY....................................................... 0.054 LOUISIANA...................................................... 0.067 MAINE.......................................................... 0.040 MARYLAND....................................................... 0.013 MASSACHUSETTS.................................................. 0.064 MICHIGAN....................................................... 0.048 MINNESOTA...................................................... 0.058 MISSISSIPPI.................................................... 0.056 MISSOURI....................................................... 0.051 MONTANA........................................................ 0.057 NEBRASKA....................................................... 0.057 NEVADA......................................................... 0.034 NEW HAMPSHIRE.................................................. 0.067 NEW JERSEY..................................................... 0.043 NEW MEXICO..................................................... 0.049 NEW YORK....................................................... 0.053 NORTH CAROLINA................................................. 0.049 NORTH DAKOTA................................................... 0.074 OHIO........................................................... 0.056 OKLAHOMA....................................................... 0.055 OREGON......................................................... 0.054 PENNSYLVANIA................................................... 0.042 PUERTO RICO.................................................... 0.090 RHODE ISLAND................................................... 0.038 SOUTH CAROLINA................................................. 0.055 SOUTH DAKOTA................................................... 0.062 TENNESSEE...................................................... 0.058 TEXAS.......................................................... 0.053 UTAH........................................................... 0.058 VERMONT........................................................ 0.053 VIRGINIA....................................................... 0.058 WASHINGTON..................................................... 0.067 WEST VIRGINIA.................................................. 0.055 WISCONSIN...................................................... 0.048 WYOMING........................................................ 0.065 ------------------------------------------------------------------------ Table 10.--Percentage Difference in Wage Indexes for Areas That Qualify for a Wage Index Exception for Excluded Hospitals and Units -------------------------------------------------------------------------------------------------------------------------------------------------------- 1982-1994 1984-1994 1988-1984 1990-1994 1991-1994 1992-1994 1993-1994 Area difference difference difference difference difference difference difference -------------------------------------------------------------------------------------------------------------------------------------------------------- Connecticut.................................................. 21.5862 24.0000 ........... ........... ........... ........... ........... Delaware..................................................... ........... 8.6774 ........... ........... ........... ........... ........... Hawaii....................................................... ........... 15.7127 ........... ........... ........... ........... ........... Maryland..................................................... ........... 8.1722 ........... ........... ........... ........... ........... Massachusetts................................................ 23.9560 27.9921 11.2140 ........... ........... ........... ........... New Hampshire................................................ ........... 9.5243 ........... ........... ........... ........... ........... Oregon....................................................... ........... ........... ........... 8.6010 8.1066 ........... ........... South Carolina............................................... ........... 10.0774 ........... ........... ........... ........... ........... Vermont...................................................... ........... 10.6667 ........... ........... ........... ........... ........... Washington................................................... ........... ........... ........... 9.9002 ........... ........... ........... Amarillo, TX................................................. ........... ........... ........... 8.6330 9.8229 ........... ........... Anderson, SC................................................. ........... ........... 15.1961 24.3721 ........... 8.9005 ........... Arecibo, PR.................................................. ........... ........... ........... 13.7540 11.0585 ........... ........... Athens, GA................................................... 10.8688 16.5565 9.5058 9.4259 ........... ........... ........... Atlantic City, NJ............................................ ........... 13.2602 ........... ........... ........... ........... ........... Augusta, GA-SC............................................... ........... ........... ........... ........... 8.0453 ........... ........... Benton Harbor, MI............................................ ........... ........... ........... 8.8777 ........... ........... ........... Bergen-Passaic, NJ........................................... 14.0017 15.9481 17.9622 ........... ........... ........... ........... Billings, MT................................................. ........... ........... ........... 8.6879 12.2161 12.3837 ........... Biloxi-Gulfport, MS.......................................... ........... ........... ........... 8.0594 ........... ........... ........... Bloomington, IN.............................................. ........... ........... ........... ........... ........... 8.2928 ........... Boston-Lowell-Brockton-Lawrence-Salem, MA.................... ........... 8.1568 ........... ........... ........... ........... ........... [[Page 46114]] Bremerton, WA................................................ 12.9725 14.8961 15.2452 15.3177 13.7318 ........... ........... Bridgeport-Stamford-Norwalk-Danbury, CT...................... 10.3293 14.6913 ........... ........... ........... ........... ........... Burlington, NC............................................... 11.6113 14.9594 9.7961 ........... ........... ........... ........... Burlington, VT............................................... ........... 9.3174 9.6092 ........... ........... 10.8280 ........... Caguas, PR................................................... ........... 12.2326 ........... ........... ........... ........... ........... Charlotte-Gastonia-Rock Hill, NC-SC.......................... 9.2601 16.3979 ........... ........... ........... ........... ........... Clarksville-Hopkinsville, TN-KY.............................. ........... 8.0204 ........... 14.9297 ........... ........... ........... Columbia, SC................................................. ........... 8.8584 ........... ........... ........... ........... ........... Columbus, GA-AL.............................................. ........... 12.8079 10.6690 9.7894 ........... ........... ........... Cumberland, MD-WVA........................................... ........... ........... ........... 8.7659 9.2778 ........... ........... Danville, VA................................................. ........... ........... 8.4254 ........... ........... ........... ........... Decatur, AL.................................................. ........... 12.0335 10.5832 ........... ........... ........... ........... El Paso, TX.................................................. 8.1286 13.8951 16.0628 ........... 17.4634 9.2489 ........... Eugene-Springfield, OR....................................... ........... 12.1188 12.4054 20.4953 8.0302 ........... ........... Florence, SC................................................. 14.2426 13.0711 ........... ........... ........... ........... ........... Gadsden, AL.................................................. ........... ........... ........... 13.8007 9.0695 ........... ........... Gainesville, FL.............................................. ........... 9.7617 8.7895 ........... 8.5675 ........... ........... Galveston-Texas City, TX..................................... ........... ........... 11.9186 ........... ........... ........... ........... Greeley, CO.................................................. ........... ........... ........... 15.7515 8.6166 10.3980 ........... Greensboro-Winston-Salem-High Point, NC...................... ........... 9.9322 ........... ........... ........... ........... ........... Hagerstown, MD............................................... ........... 11.0716 ........... 9.5260 8.2039 ........... ........... Hartford-Middletown-NewBritain, CT........................... 10.4740 14.2519 ........... ........... ........... ........... ........... Houma-Thibodaux, LA.......................................... ........... ........... 9.3263 ........... ........... ........... ........... Jackson, TN.................................................. 8.5190 12.7249 ........... ........... ........... ........... ........... Jersey City, NJ.............................................. ........... ........... 8.3144 ........... ........... ........... ........... Killeen-Temple, TX........................................... 16.7787 ........... ........... ........... ........... ........... ........... Lafayette, IN................................................ ........... ........... ........... ........... 8.7871 10.0572 ........... Laredo, TX................................................... ........... ........... ........... 11.5765 ........... 8.5185 ........... Las Cruse, NM................................................ ........... ........... 9.2218 ........... ........... ........... ........... Lawton, OK................................................... ........... ........... ........... ........... ........... ........... 8.1162 Lima, OH..................................................... ........... ........... 13.8166 8.6982 ........... ........... ........... Macon-Warner Robins, GA...................................... ........... 18.2494 ........... ........... ........... ........... ........... Manchester-Nashua, NH........................................ 11.5134 12.8915 ........... ........... ........... ........... ........... McAllen-Edinburg-Mission, TX................................. ........... 9.0116 8.4046 ........... ........... ........... ........... Medford, OR.................................................. ........... ........... ........... 11.0706 ........... ........... ........... Merced, CA................................................... ........... 8.8820 ........... 9.1317 11.0694 ........... ........... Middlesex-Somerset-Hunterdon, NJ............................. ........... 11.3808 ........... ........... ........... ........... ........... Mobile, AL................................................... ........... ........... ........... 8.2725 9.5491 8.3835 ........... Monmouth-Ocean, NJ........................................... 11.0502 16.4802 10.3441 ........... ........... ........... ........... Monroe, LA................................................... ........... ........... ........... ........... 9.9294 ........... ........... Muncie, IN................................................... ........... ........... 13.5975 ........... ........... ........... ........... Muskegon, MI................................................. 10.1698 9.3800 13.1266 11.0394 10.3157 ........... ........... Nassau-Suffolk, NY........................................... ........... 14.0415 ........... ........... ........... ........... ........... New Bedford-Fall River-Attleboro, MA......................... 15.8880 18.8100 12.4963 ........... ........... ........... ........... New Haven-West Haven-Waterbury, CT........................... 10.3424 14.6360 ........... ........... ........... ........... ........... New London-Norwich, CT....................................... 9.0604 12.5972 ........... ........... ........... ........... ........... Newark, NJ................................................... ........... 10.9661 ........... ........... ........... ........... ........... Ocala, FL.................................................... ........... 10.9174 ........... ........... ........... ........... ........... Orange County, NY............................................ 22.3089 26.7753 16.7892 10.2286 10.6828 ........... ........... Panama City, FL.............................................. ........... ........... ........... ........... 10.5996 ........... ........... Parkersburg-Marietta, WV-OH.................................. ........... ........... ........... 8.3806 ........... 8.4505 ........... Portsmouth-Dover-Rochester, NH............................... 10.1946 9.0222 ........... ........... ........... ........... ........... Poughkeepsie, NY............................................. ........... 9.2928 ........... ........... ........... ........... ........... Providence-Pawtucket-Woonsocket, RI.......................... ........... 13.4977 ........... ........... ........... ........... ........... Provo-Orem, UT............................................... ........... 8.6038 ........... ........... ........... ........... ........... Redding, CA.................................................. ........... 19.0789 11.6583 ........... ........... ........... ........... Salinas-Seaside-Monterey, CA................................. 16.3647 15.3473 11.1937 ........... ........... ........... ........... San Angelo, TX............................................... ........... ........... ........... ........... 9.0858 ........... ........... Santa Cruz, CA............................................... 15.0235 15.1075 10.8706 11.2183 ........... ........... ........... Santa Fe, NM................................................. ........... 8.8954 12.9551 ........... ........... ........... ........... Tacoma, WA................................................... ........... ........... ........... 8.4039 ........... ........... ........... Texarkana, TX-Texarkana, AR.................................. ........... ........... 9.6848 8.7486 9.5184 ........... ........... Vallejo-Fairfield-Napa, CA................................... ........... 12.0671 ........... 10.2260 ........... ........... ........... Wausau, WI................................................... ........... 9.6382 8.0763 ........... ........... ........... ........... West Palm Beach-Boca Raton-Delray Beach, FL.................. ........... 9.5017 ........... ........... ........... ........... ........... Wilmington, DE-NJ-MD......................................... 8.3587 10.7306 ........... ........... ........... ........... ........... Wilmington, NC............................................... ........... 15.7476 8.5665 ........... ........... ........... ........... [[Page 46115]] Worcester-Fitchburg-Leomister, MA............................ ........... 13.3694 ........... ........... ........... ........... ........... Yuma, AZ..................................................... ........... ........... 9.4344 ........... 12.1844 ........... ........... -------------------------------------------------------------------------------------------------------------------------------------------------------- Appendix A--Regulatory Impact Analysis I. Introduction Section 804(2) of Title 5, United States Code (as added by section 251 of Public Law 104-121), specifies that a ``major rule'' is any rule that the Office of Management and Budget finds is likely to result in-- An annual effect on the economy of $100 million or more; A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or Significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. We estimate that the impact of this final rule with comment period will be to decrease payments to hospitals by approximately $6 billion in FY 1998, compared to the payments that would have been made in FY 1998 if Public Law 105-33 had not been enacted. Therefore, this rule is a major rule as defined in Title 5, United States Code, section 804(2). We have examined the impacts of this final rule with comment period as required by Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L. 96-354). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). The RFA requires agencies to analyze options for regulatory relief for small businesses. For purposes of the RFA, most hospitals, and most other providers, physicians, and health care suppliers are small entities, either by nonprofit status or by having revenues of $5 million or less annually. Also, section 1102(b) of the Social Security Act requires us to prepare a regulatory impact analysis for any final rule with comment period that may have a significant impact on the operations of a substantial number of small rural hospitals. Such an analysis must conform to the provisions of section 603 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital with fewer than 100 beds that is located outside of a Metropolitan Statistical Area (MSA) or New England County Metropolitan Area (NECMA). Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent NECMA. Thus, for purposes of the prospective payment system, we classify these hospitals as urban hospitals. It is clear that the changes being made in this document will affect both a substantial number of small rural hospitals as well as other classes of hospitals, and the effects on some may be significant. Therefore, the discussion below, in combination with the rest of this final rule with comment period, constitutes a combined regulatory impact analysis and regulatory flexibility analysis. In accordance with the provisions of Executive Order 12866, this final rule with comment period was reviewed by the Office of Management and Budget. II. Changes in the Final Rule With Comment Period After we published the proposed rule, Public Law 105-33 was enacted. (A summary of the provisions related to the prospective payment system for hospitals appears under section I.D. of this preamble.) Several provisions of Public Law 105-33 make significant changes in inpatient hospital payments for the operating and capital prospective payment systems during FY 1998. The provisions that have significant payment impacts for FY 1998 include the following: The update factors for the inpatient operating standardized amounts and the hospital-specific rate for FY 1998 are 0 percent. Hospitals that do not receive disproportionate share (DSH) or indirect medial education (IME) payments and are not designated as a Medicare-dependent, small rural hospital (MDH) (referred to hereafter as ``temporary relief'' hospitals) will receive a 0.5 percent update to their applicable standardized amounts if-- The hospital is in a State in which the aggregate operating prospective payments to these types of hospitals are less than the aggregate allowable operating costs for inpatient services for FY 1995 cost reporting periods (eligible States are identified in section V.D of the preamble), and The hospital itself has a negative operating prospective payment margin in the payment year. The unadjusted standard Federal capital rate and hospital- specific capital rate are reduced by 17.78 percent for FY 1998. The additional DSH payments made to eligible hospitals under the operating prospective payment system are reduced by 1 percent. The IME formula is revised to reduce the IME adjustment factor from approximately a 7.7 percent increase for every 10 percent increase in a hospital's resident-to-bed ratio to a 7.0 percent increase. IME and DSH payments will be made only on the base DRG payment rates, not on the sum of base DRG payments and outlier payments. Also, in determining outlier payments, the estimated cost of a case will no longer be adjusted for IME and DSH. The national share of the Puerto Rico payment rate is increased from 25 to 50 percent. Thus, these hospitals will be paid based on 50 percent of the national standardized amount (a discharge- weighted average of the large urban and other urban national standardized amounts) and 50 percent of the Puerto Rico standardized amount. The wage index for an urban hospital may not be lower than the Statewide area rural wage index. The special treatment of MDHs is reinstated. If the hospital-specific rate for an eligible MDH is higher than the Federal rate, the hospital receives 50 percent of the difference between the Federal rate and the hospital-specific rate. Any hospital classified as a rural referral center (RRC) for FY 1991 must continue to be classified as an RRC for FY 1998 and subsequent fiscal years. [[Page 46116]] The update factor for prospective payment system excluded hospitals for FY 1998 is 0 percent. The target amounts for psychiatric and rehabilitation hospitals and units, and long-term care hospitals are capped at the 75th percentile of target amounts for within the same class. The seven State EACH/RPCH program is being replaced by the Critical Access Hospital (CAH) program, a national program that allows States to designate specified rural hospitals as critical access hospitals. Payment to these hospitals is on the basis of reasonable costs. III. Limitations of Our Analysis As has been the case in previously published regulatory impact analyses, the following quantitative analysis presents the projected effects of our policy changes, as well as statutory changes effective for FY 1998, on various hospital groups. We estimate the effects of individual policy changes by estimating payments per case while holding all other payment policies constant. We use the best data available, but we do not attempt to predict behavioral responses to our policy changes, and we do not make adjustments for future changes in such variables as admissions, lengths of stay, or case mix. We received no comments on the methodology used for the impact analysis in the proposed rule. IV. Hospitals Included in and Excluded From the Prospective Payment System A. Included and Excluded Hospitals The prospective payment systems for hospital inpatient operating and capital-related costs encompass nearly all general, short-term, acute care hospitals that participate in the Medicare program. There were 46 Indian Health Service hospitals in our database, which we excluded from the analysis due to the special characteristics of the prospective payment method for these hospitals. Among other short-term, acute care hospitals, only the 50 such hospitals in Maryland remain excluded from the prospective payment system under the waiver at section 1814(b)(3) of the Act. Thus, as of August 1997, we have included 5,088 hospitals in our analysis. (This is 41 fewer hospitals than were included in the impact analysis in the FY 1997 final rule (61 FR 46305).) This represents about 82 percent of all Medicare- participating hospitals. The majority of this impact analysis focuses on this set of hospitals. The remaining 18 percent are specialty hospitals that are excluded from the prospective payment system and continue to be paid on the basis of their reasonable costs (subject to a rate-of-increase ceiling on their inpatient operating costs per discharge). These hospitals include psychiatric, rehabilitation, long-term care, children's, and cancer hospitals. B. Critical Access Hospitals (CAHs) (established by Pub. L. 105-33) As explained earlier in this preamble, section 4201 of Public Law 105-33 replaced the EACH program with a CAH program. The CAH program is not limited to seven States, but is available to any State that both submits the necessary assurances and complies with the other statutory requirements for designation of hospitals as CAHs. Facilities that participated in Medicare as RPCHs before the date of enactment of Public Law 105-33 (August 5, 1997), and that are otherwise eligible to be designated by the States as CAHs, are deemed to be CAHs. There are currently approximately 38 facilities participating as RPCHs. In addition, the 13 facilities currently operating under the Medical Assistance Facility (MAF) demonstration in Montana are deemed to have been certified by HCFA as CAHs, if otherwise eligible for designation by the State as CAHs. Because of the small number of facilities now participating as RPCHs or MAFs, we do not expect the interim final rule to have a significant impact on a substantial number of small rural hospitals. Moreover, in preparing the regulations applicable to CAHs, we have included only those changes that are required to implement the new legislation. Nonetheless, we are informing the public of our projections of the likely effects of the rules, for those hospitals and beneficiaries who may be affected. For the currently participating facilities, the primary effect will be greater flexibility, since these facilities will be able to maintain up to 15 inpatient beds, rather than 6, and will be able to keep patients for as long as 96 hours, rather than an average of 72 hours. Patients in these facilities should benefit from this, since there should be fewer cases requiring patient transfer to other facilities due to lack of beds or need for longer periods of care. However, with an expected increase in utilization due to an increase in numbers and lengths of stay, costs to the Medicare program for care in these facilities may be expected to rise. Some or all of this increase may be offset by savings from cases in which the changes make transfer to another hospital unnecessary. Changes in the swing-bed provisions will also increase facility flexibility and patient access to care. These new provisions are less complex than those imposed by prior law, and should simplify program administration. The changes in payment methodology may also increase Medicare spending for care in these facilities, since payment will now be based on reasonable costs. Fee schedules and blended rates for outpatient care will not apply. However, the elimination of the EACH designation may avoid many unnecessary costs and offset any added spending for CAH care. While the removal of the seven State limitation will undoubtedly lead to greater participation in the program, we are not able to estimate reliably how many additional States will establish limited- service hospital programs, or how many hospitals in those States will choose to participate in them. To the extent that there is increased participation, beneficiary convenience and access to care in remote rural areas would increase. Medicare spending, however, would also increase, since additional hospitals would be paid on a basis other than the prospective payment system. As noted above, some or all of these increases may be offset by prompt access to treatment in the local community, thus avoiding the need for care in full-service hospitals. V. Impact on Excluded Hospitals and Units As of August 1997, there were 1,102 specialty hospitals excluded from the prospective payment system and instead paid on a reasonable cost basis subject to the rate-of-increase ceiling under Sec. 413.40. This group included 631 psychiatric hospitals, 192 rehabilitation hospitals, 192 long-term care hospitals, 70 children's hospitals and 17 Christian Science sanitoria. In addition, there were 1,472 psychiatric units and 880 rehabilitation units in hospitals otherwise subject to the prospective payment system. These excluded units are also paid in accordance with Sec. 413.40. The market basket percentage increase for excluded hospitals and units for FY 1998 is 2.7 percent. However, as a result of section 4411 of Public Law 105-33 the update factor for FY 1998 is 0 percent. The impact on excluded hospitals and units of the update in the rate-of-increase limit depends on the cumulative cost increases experienced by each excluded hospital or unit since its applicable base period. For excluded hospitals and units that have maintained their cost increases at a level [[Page 46117]] below the percentage increases in the rate-of-increase limits since their base period, the major effect will be on the level of incentive payments these hospitals and units receive. Conversely, for excluded hospitals and units with per-case cost increases above the cumulative update in their rate-of-increase limits, the major effect will be the amount of excess costs that would not be reimbursed. In this context, we note that, under Sec. 413.40(d)(3) as revised, an excluded hospital or unit whose costs exceed 110 percent of the ceiling receives its ceiling plus 50 percent of the difference between its costs and 110 percent of the ceiling, not to exceed 110 percent of the ceiling. In addition, under the various provisions set forth in Sec. 413.40, certain excluded hospitals and units can obtain payment adjustments for justifiable increases in operating costs that exceed the limit. At the same time, however, by generally limiting payment increases, we continue to provide an incentive for excluded hospitals and units to restrain the growth in their spending for patient services. Section 4414 of Public Law 105-33 establishes a cap at the 75th percentile on the target amounts for psychiatric, rehabilitation, and long-term care hospitals. Because the cap is based on an estimate of the 75th percentile, we estimate that 25 percent of the providers will have target amounts in excess of the cap. We have broken down the estimated impact of that reduction as follows: Percent of Providers Above Cap ------------------------------------------------------------------------ Free- Type of hospital/unit standing Hospital- hospitals based units ------------------------------------------------------------------------ Rehabilitation................................ 23.2 76.8 Psychiatric................................... 42.5 57.5 Long-term care................................ 25.0 (1) ------------------------------------------------------------------------ \1\ Not applicable. Percent of Total Providers ------------------------------------------------------------------------ Large Other Type of hospital/unit urban urban Rural ------------------------------------------------------------------------ Rehabilitation............................... 48.8 38.7 12.5 Psychiatric.................................. 49.2 32.2 18.6 Long-term care............................... 74.3 17.8 7.9 ------------------------------------------------------------------------ Percent of Providers Above the Cap ------------------------------------------------------------------------ Large Other Type of hospital/unit urban urban Rural ------------------------------------------------------------------------ Rehabilitation............................... 54.4 35.5 10.1 Psychiatric.................................. 62.6 25.7 11.7 Long-term care............................... 95.8 4.2 0.0 ------------------------------------------------------------------------ These tables show, of those hospitals affected by the cap, the estimated percentage of each type of provider affected, and the proportion of these hospitals that are located in urban or rural areas. Although a higher percentage of hospital-based units may be affected by the cap than freestanding hospitals, there are many more units than hospitals. For instance, there are twice as many hospital-based psychiatric units than freestanding hospitals and five times as many hospital-based rehabilitation units as freestanding hospitals. With regard to the geographic impact of the provision on long-term care hospitals, hospitals in large urban areas are affected in greater proportion than hospitals in other areas. This is not unexpected because the target amount cap is not adjusted for differences in area wage levels. We also observed that long-term care hospitals certified before 1990 were less likely to be affected by the 75th percentile provision than older long-term care hospitals. Psychiatric and rehabilitation facilities appear slightly more likely to be affected by the limit on the target amount if they were certified after 1990 or are located in large urban areas. It is important to note that while these hospitals and units will have their target amounts reduced to the 75th percentile, the impact on a specific provider will depend on the level of its operating costs per discharge in relation to its reduced target amount. We are extending certain exclusion criteria that currently apply only to long-term care hospitals to all other categories of excluded facilities. These criteria define a minimum level of independence and separate control that a facility must have in order to be excluded as a ``hospital within a hospital.'' We expect that this provision will result in a very small decrease in aggregate payment levels (other things being equal) by, for example, preventing new hospital units from inappropriately qualifying for the exemption from the-rate-of-increase ceiling that is available only to new hospitals. To our knowledge, there are fewer than 50 facilities that would be affected by this proposal. VI. Quantitative Impact Analysis of the Policy Changes Under the Prospective Payment System for Operating Costs A. Basis and Methodology of Estimates In this final rule with comment period, we are announcing policy changes and payment rate updates for the prospective payment systems for operating and capital-related costs. We have prepared separate analyses of the changes to each system. This section deals with changes to the operating prospective payment system. The data used in developing the quantitative analyses presented below are taken from the FY 1996 MedPAR file and the most current provider-specific file that is used for payment purposes. Although the analyses of the changes to the operating prospective payment system do not incorporate cost data, the most recently available hospital cost report data were used to create some of the variables by which hospitals are categorized. Our analysis has several qualifications. First, we do not make adjustments for behavioral changes that hospitals may adopt in response to these policy changes. Second, due to the interdependent nature of the prospective payment system, it is very difficult to precisely quantify the impact associated with each change. Third, we draw upon various sources for the data used to categorize hospitals in the tables. In some cases, particularly the number of beds, there is a fair degree of variation in the data from different sources. We have attempted to construct these variables with the best available source overall. For individual hospitals, however, some miscategorizations are possible. Using cases in the FY 1996 MedPAR file, we simulated payments under the operating prospective payment system given various combinations of payment parameters. Any short-term, acute care hospitals not paid under the general prospective payment systems (Indian Health Service hospitals and hospitals in Maryland) are excluded from the simulations. Payments under the capital prospective payment system, or payments for costs other than inpatient operating costs, are not analyzed here. Estimated payment impacts of the FY 1998 changes to the capital prospective payment system are discussed below in section VII of this Appendix. The changes discussed separately below are the following: The effects of the changes enacted by Public Law 105-33. Although we are not able to precisely simulate the effect of every provision of this legislation that may influence hospital payment, we have simulated the payment effects of [[Page 46118]] each of the significant provisions noted above. The effects of the annual reclassification of diagnoses and procedures and the recalibration of the DRG relative weights required by section 1886(d)(4)(C) of the Act. The effects of changes in hospitals' wage index values reflecting the FY 1998 wage index update (using FY 1994 data). The effects of implementing the Puerto Rico-specific wage index to be applied to the Puerto Rico standardized amounts. The effects of completing the phase-out of payments for extraordinarily lengthy cases (day outlier cases) with a corresponding increase in payments for extraordinarily costly cases (cost outliers), in accordance with section 1886(d)(5)(A)(v) of the Act. The effects of geographic reclassifications by the MGCRB that will be effective in FY 1998. The total change in payments based on FY 1998 policies relative to payments based on FY 1997 policies. To illustrate the impacts of the changes resulting from Pub. L. 105-33, our analysis begins with a FY 1998 baseline simulation model using the policies as they existed before enactment of Public Law 105- 33 including a 2.7 percent (full market basket) update to the standardized amounts; the FY 1997 GROUPER (version 14.0); the FY 1997 wage index; national wage index values applied to the Puerto Rico standardized amounts; FY 1997 outlier policy (75 percent phase-out of day outlier payments); and no MGCRB reclassifications. Outlier payments are set at 5.1 percent of total DRG payments. From this baseline, we move to a simulation model reflecting the policies enacted by Public Law 105-33. For operating payments, these are: zero update to the standardized amounts and the hospital-specific rate, except for temporary relief hospitals which receive a 0.5 percent update; an increase in payments to Puerto Rico by changing the portion of their payments based on the higher national standardized amount from 25 percent to 50 percent; reductions in IME and DSH payments; the elimination of IME and DSH payments attributable to outliers and the corresponding change of no longer standardizing charges for IME and DSH when identifying outlier cases; reinstating the MDH provision; and the reinstatement of RRCs that lost their status due to the triennial review or MGCRB reclassification. One change enacted by Public Law 105- 33 that is not included in this simulation is the floor on the area wage index for urban hospitals. This change is required to be budget neutral so we did not introduce it into the simulation model until we calculated the wage index and DRG budget neutrality factor. Therefore, in our impact analysis, this change is introduced when we bring the new (FY 1994) wage data into the model. Each additional policy change is then added incrementally to this baseline model, finally arriving at an FY 1998 model incorporating all of the changes. This allows us to isolate the effects of each change. Our final comparison illustrates the percent change in payments per case from FY 1997 to FY 1998. Three factors have significant impacts here. First is the changes enacted by Public Law 105-33, with the exception of the impact of the zero updates for FY 1998 (which results in a zero change from FY 1997). A second significant factor that has an impact on hospitals' payments per case from FY 1997 to FY 1998 is a change in MGCRB reclassification status from one year to the next. That is, hospitals reclassified for FY 1997 that are no longer reclassified for FY 1998 may have a negative payment impact going from FY 1997 to FY 1998; conversely, hospitals not reclassified for FY 1997 that are reclassified for FY 1998 may have a positive impact. In some cases these impacts can be quite substantial, so if a relatively small number of hospitals in a particular category lose their reclassification status, the percentage increase in payments for the category may be below the national mean. A third significant factor is that we currently estimate actual outlier payments during FY 1997 will be 4.8 percent of actual total DRG payments. When the FY 1997 final rule was published, we projected FY 1997 outlier payments would be 5.1 percent of total DRG payments, and the standardized amounts were reduced correspondingly. The effects of the slightly lower than expected outlier payments during FY 1997 (as discussed in the Addendum to this proposed rule) are reflected in the analyses below comparing our current estimates of FY 1997 payments per case to estimated FY 1998 payments per case. Table I demonstrates the results of our analysis. The table categorizes hospitals by various geographic and special payment consideration groups to illustrate the varying impacts on different types of hospitals. The top row of the table shows the overall estimated impact on the 5,088 hospitals included in the analysis. The next four rows of Table I contain hospitals categorized according to their geographic location (all urban, which is further divided into large urban and other urban, or rural). There are 2,858 hospitals located in urban areas (MSAs or NECMAs) included in our analysis. Among these, there are 1,630 hospitals located in large urban areas (populations over 1 million), and 1,228 hospitals in other urban areas (populations of 1 million or fewer). The analysis includes 49 hospitals classified as large urban hospitals that were classified as other urban hospitals in the proposed rule. These hospitals are in four MSAs that have become large urban areas since publication of the proposed rule. There are 2,230 hospitals in rural areas. The next two groupings are by bed-size categories, shown separately for urban and rural hospitals. The final groupings by geographic location are by census divisions, also shown separately for urban and rural hospitals. The second part of Table I shows hospital groups based on hospitals' FY 1998 payment classifications, including any reclassifications under section 1886(d)(10) of the Act. For example, the rows labeled urban, large urban, other urban, and rural show the numbers of hospitals being paid based on these categorizations (after consideration of geographic reclassifications) are 2,948, 1,776, 1,172, and 2,140, respectively. The next three groupings examine the impacts of the proposed changes on hospitals grouped by whether or not they have residency programs (teaching hospitals that receive an IME adjustment), receive DSH payments, or some combination of these two adjustments. There are 3,993 nonteaching hospitals in our analysis, 856 teaching hospitals with fewer than 100 residents, and 239 teaching hospitals with 100 or more residents. In the DSH categories, hospitals are grouped according to their DSH payment status, and whether they are considered urban or rural after MGCRB reclassifications. Hospitals in the rural DSH categories, therefore, represent hospitals that were not reclassified for purposes of the standardized amount. (They may, however, have been reclassified for purposes of the wage index.) The next category groups hospitals considered urban after geographic reclassification, in terms of whether they receive the IME adjustment, the DSH adjustment, both, or neither. The next row separately examines hospitals that available data show may qualify for the provision granting a 0.5 percent update to the standardized amounts for FY 1998 (section 4401(b) of [[Page 46119]] Pub. L. 105-33). To be eligible, a hospital must not receive either IME or DSH, nor may it be an MDH. It must also experience a negative margin on its operating prospective payments during FY 1998. We estimated eligible hospitals based on whether they had a negative operating margin on their FY 1995 cost report. Finally, to qualify, a hospital must be located in a State where the aggregate FY 1995 operating prospective payments were less than the aggregate associated costs for all of the non-IME, non-DSH, non-MDH hospitals in the State. There are 360 hospitals in this row. The next five rows examine the impacts of the proposed changes on rural hospitals by special payment groups (SCHs, RRCs, MDHs, and EACHs), as well as rural hospitals not receiving a special payment designation. The RRCs (158), SCH/EACHs (642), MDHs (368), and SCH/EACH and RRCs (57) shown here were not reclassified for purposes of the standardized amount. Section 4202(b)(1) of Public Law 105-33 allowed for reinstatement of RRCs that lost their status since FY 1991. As a result, there are 63 more hospitals in this row than were included in the proposed rule. Similarly, there are 16 more hospitals in the SCH/ RRC row than appeared in that row in the proposed rule. There are three SCHs that will be reclassified for the standardized amount in FY 1998 that, therefore, are not included in these rows. There are seven EACHs included in our analysis and three EACH/RRCs. The next two groupings are based on type of ownership and the hospital's Medicare utilization expressed as a percent of total patient days. These data are taken primarily from the FY 1995 Medicare cost report files, if available (otherwise FY 1994 data are used). Data needed to determine ownership status or Medicare utilization percentages were unavailable for 117 hospitals. For the most part, these are either new hospitals or hospitals filing manual cost reports that are not yet entered into the database. The next series of groupings concern the geographic reclassification status of hospitals. The first three groupings display hospitals that were reclassified by the MGCRB for both FY 1997 and FY 1998, or for either of those 2 years, by urban/rural status. The next rows illustrate the overall number of FY 1998 reclassifications, as well as the numbers of reclassified hospitals grouped by urban and rural location. The final row in Table I contains hospitals located in rural counties but deemed to be urban under section 1886(d)(8)(B) of the Act. Table I.--Impact Analysis of Changes for FY 1998 Operating Prospective Payment System [Percent changes in payments per case] -------------------------------------------------------------------------------------------------------------------------------------------------------- Puerto Balanced Combined Rico Day Number of Budget DRG New wage wage & specific outlier MGCRB All FY 98 hosps.\1\ Act \2\ recalibration data \4\ recal.\5\ wage phase-out reclassification changes \3\ index \6\ \7\ \8\ \9\ (0) (1) (2) (3) (4) (5) (6) (7) (8) -------------------------------------------------------------------------------------------------------------------------------------------------------- (BY GEOGRAPHIC LOCATION): ALL HOSPITALS.................. 5,088 -3.9 0.1 0.1 0.0 0.0 0.0 0.0 0.9 URBAN HOSPITALS................ 2,858 -3.9 0.1 0.1 0.0 0.0 0.0 -0.4 -1.0 LARGE URBAN............... 1,630 -4.0 0.1 0.0 -0.1 0.0 -0.1 -0.4 -1.2 OTHER URBAN............... 1,228 -3.8 0.2 0.2 0.2 0.0 0.1 -0.3 -0.7 RURAL HOSPITALS................ 2,230 -3.4 -0.3 0.4 -0.1 0.0 0.1 2.2 -0.4 BED SIZE (URBAN): 0-99 BEDS.................. 724 -3.6 -0.3 0.1 -0.4 0.0 0.1 -0.5 -0.9 100-199 BEDS............... 954 -3.7 -0.1 0.1 -0.2 0.0 0.1 -0.4 -0.7 200-299 BEDS............... 570 -3.8 0.1 0.1 -0.1 0.0 0.1 -0.3 -0.8 300-499 BEDS............... 457 -4.0 0.2 0.2 0.2 0.0 0.0 -0.4 -1.0 500 OR MORE BEDS........... 153 -4.3 0.4 0.0 0.2 0.0 -0.2 -0.3 -1.3 BED SIZE (RURAL): 0-49 BEDS.................. 1,170 -3.0 -0.6 0.4 -0.4 0.0 0.1 0.1 -0.3 50-99 BEDS................. 657 -3.1 -0.4 0.4 -0.2 0.0 0.1 1.1 -0.3 100-149 BEDS............... 235 -3.4 -0.3 0.4 -0.1 0.0 0.1 3.2 -0.5 150-199 BEDS............... 93 -3.7 -0.2 0.4 0.0 0.0 0.1 2.6 -0.4 200 OR MORE BEDS........... 75 -3.6 0.0 0.3 0.1 0.0 0.2 4.2 -0.8 URBAN BY CENSUS DIVISION: NEW ENGLAND................ 159 -4.2 0.1 -0.3 -0.4 0.0 0.1 -0.3 -1.9 MIDDLE ATLANTIC............ 431 -4.4 0.1 0.3 0.1 0.0 -0.7 -0.4 -2.0 SOUTH ATLANTIC............. 420 -3.8 0.2 -0.2 -0.2 0.0 0.2 -0.3 -0.8 EAST NORTH CENTRAL......... 475 -4.0 0.1 0.3 0.2 0.0 0.2 -0.3 -0.7 EAST SOUTH CENTRAL......... 163 -3.8 0.2 1.0 1.0 0.0 0.2 -0.5 0.2 WEST NORTH CENTRAL......... 191 -4.0 0.2 0.2 0.2 0.0 0.2 -0.4 -0.6 WEST SOUTH CENTRAL......... 367 -3.8 0.2 0.2 0.1 0.0 0.2 -0.5 -0.5 MOUNTAIN................... 129 -3.7 0.3 -0.2 -0.1 0.0 0.2 -0.4 -0.6 PACIFIC.................... 475 -3.6 0.1 -0.3 -0.4 0.0 0.2 -0.3 -0.9 PUERTO RICO................ 48 3.1 -0.2 0.3 -0.1 3.7 -0.1 -0.4 12.2 RURAL BY CENSUS DIVISION: NEW ENGLAND................ 53 -3.9 -0.2 0.6 0.1 0.0 0.2 2.1 -0.6 MIDDLE ATLANTIC............ 85 -3.3 -0.3 -0.4 -0.9 0.0 -0.1 1.1 -0.9 SOUTH ATLANTIC............. 297 -3.6 -0.2 0.4 0.0 0.0 0.1 2.4 -1.0 EAST NORTH CENTRAL......... 302 -3.3 -0.2 0.5 0.0 0.0 0.2 1.4 -0.7 EAST SOUTH CENTRAL......... 275 -3.4 -0.3 0.6 0.1 0.0 0.2 2.5 0.0 WEST NORTH CENTRAL......... 512 -3.2 -0.4 0.2 -0.4 0.0 0.1 2.5 0.0 [[Page 46120]] WEST SOUTH CENTRAL......... 347 -3.2 -0.4 0.3 -0.3 0.0 0.1 3.3 -0.3 MOUNTAIN................... 213 -3.1 -0.2 0.3 -0.2 0.0 0.1 1.6 0.3 PACIFIC.................... 141 -3.3 -0.2 1.1 0.6 0.0 0.1 2.1 -0.1 PUERTO RICO................ 5 4.9 -0.6 2.4 1.5 4.4 0.1 1.5 15.3 BY PAYMENT CATEGORIES: URBAN HOSPITALS................ 2,948 -3.9 0.1 0.1 0.0 0.0 0.0 -0.3 -1.0 LARGE URBAN................ 1,776 -4.0 0.1 0.0 -0.1 0.0 -0.1 -0.2 -1.1 OTHER URBAN................ 1,172 -3.8 0.2 0.2 0.2 0.0 0.1 -0.4 -0.6 RURAL HOSPITALS................ 2,140 -3.3 -0.3 0.4 -0.1 0.0 0.1 1.9 -0.5 TEACHING STATUS: NON-TEACHING............... 3,993 -3.6 -0.1 0.2 -0.1 0.0 0.1 0.3 -0.6 LESS THAN 100 RES.......... 856 -3.9 0.2 0.1 0.1 0.0 0.1 -0.3 -0.8 100+ RESIDENTS............. 239 -4.4 0.3 0.0 0.2 0.0 -0.3 -0.2 -1.6 DISPROPORTIONATE SHARE HOSPITALS (DSH): NON-DSH.................... 3,185 -3.8 0.0 0.2 0.0 0.0 0.1 0.2 -0.8 URBAN DSH: 100 BEDS OR MORE....... 1,413 -3.9 0.2 0.1 0.0 0.0 -0.1 -0.3 -1.0 FEWER THAN 100 BEDS.... 89 -3.7 -0.4 0.3 -0.4 0.0 0.2 -0.4 -0.8 RURAL DSH: SOLE COMMUNITY (SCH)... 155 -3.1 -0.5 0.3 -0.4 0.0 0.0 0.2 -0.4 REFERRAL CENTERS (RRC). 50 -2.8 -0.1 0.5 0.2 0.0 0.1 3.4 0.6 OTHER RURAL DSH HOSP.: 100 BEDS OR MORE....... 66 -3.6 -0.3 0.7 0.1 0.0 0.2 2.3 -1.4 FEWER THAN 100 BEDS.... 130 -3.4 -0.6 0.7 -0.1 0.0 0.1 0.8 -0.2 URBAN TEACHING AND DSH: BOTH TEACHING AND DSH...... 708 -4.1 0.2 0.0 0.1 0.0 -0.2 -0.4 -1.2 TEACHING AND NO DSH........ 330 -4.2 0.3 0.3 0.3 0.0 0.1 -0.2 -1.0 NO TEACHING AND DSH........ 794 -3.6 0.0 0.1 -0.1 0.0 0.1 -0.1 -0.5 NO TEACHING AND NO DSH..... 1,116 -3.7 0.0 0.0 -0.2 0.0 0.2 -0.3 -0.8 SPECIAL UPDATE HOSPITALS (UNDER SEC. 4401(b) OF PUBLIC LAW 105- 33)........................... 360 -3.8 -0.1 0.6 0.2 0.1 0.2 0.2 -0.6 RURAL HOSPITAL TYPES: NONSPECIAL STATUS HOSPITALS 915 -3.5 -0.4 0.5 -0.1 0.0 0.1 1.5 -0.8 RRC........................ 158 -3.7 -0.1 0.5 0.2 0.0 0.2 4.3 -0.5 SCH/EACH................... 642 -3.0 -0.4 0.2 -0.5 0.0 0.0 0.6 -0.4 MDH........................ 368 -2.0 -0.5 0.4 -0.3 0.0 0.1 0.5 0.8 SCH/EACH AND RRC........... 57 -3.2 -0.2 0.2 -0.2 0.0 0.0 0.8 -0.5 TYPE OF OWNERSHIP: VOLUNTARY.................. 2,924 -3.9 0.1 0.1 0.0 0.0 0.0 -0.1 -1.0 PROPRIETARY................ 701 -3.6 0.0 0.0 -0.2 0.1 0.2 0.3 -0.6 GOVERNMENT................. 1,346 -3.7 0.0 0.4 0.2 0.0 0.1 0.2 -0.4 UNKNOWN.................... 117 -4.0 0.0 -0.5 -0.7 0.2 -1.5 -0.5 -2.4 MEDICARE UTILIZATION AS A PERCENT OF INPATIENT DAYS: 0-25....................... 266 -3.6 0.1 -0.3 -0.5 0.0 -0.1 -0.3 -1.2 25-50...................... 1,307 -4.0 0.2 0.0 0.0 0.0 0.0 -0.2 -1.0 50-65...................... 1,988 -3.8 0.1 0.3 0.1 0.0 0.1 0.2 -0.8 OVER 65.................... 1,410 -3.7 -0.1 0.2 -0.2 0.0 0.1 0.1 -0.9 [[Page 46121]] UNKNOWN.................... 117 -4.0 0.0 -0.5 -0.7 0.2 -1.5 -0.5 -2.4 HOSPITALS RECLASSIFIED BY THE MEDICARE GEOGRAPHIC REVIEW BOARD: RECLASSIFICATION STATUS DURING FY97 AND FY98: RECLASSIFIED DURING BOTH FY97 AND FY98............. 333 -3.9 0.0 0.5 0.3 0.0 0.2 6.2 -0.9 URBAN.................. 96 -4.2 0.1 0.5 0.4 0.0 0.1 3.6 -1.1 RURAL.................. 237 -3.7 -0.1 0.4 0.1 0.0 0.2 9.0 -0.6 RECLASSIFIED DURING FY98 ONLY...................... 89 -3.6 0.0 0.5 0.3 0.1 0.2 4.0 5.3 URBAN.................. 13 -3.7 0.4 0.7 0.9 0.2 0.2 0.0 2.8 RURAL.................. 76 -3.4 -0.3 0.3 -0.2 0.0 0.2 7.3 7.3 RECLASSIFIED DURING FY97 ONLY...................... 211 -4.0 0.0 0.6 0.3 0.0 0.0 -0.9 -4.2 URBAN.................. 94 -4.2 0.1 0.6 0.5 0.0 -0.1 -1.0 -4.0 RURAL.................. 117 -3.6 -0.2 0.5 0.0 0.0 0.2 -0.2 -4.7 FY 98 RECLASSIFICATIONS: ALL RECLASSIFIED HOSP...... 423 -3.9 0.0 0.5 0.3 0.0 0.2 5.8 -0.1 STAND. AMOUNT ONLY..... 94 -4.1 0.0 0.4 0.2 0.0 0.1 1.3 -0.9 WAGE INDEX ONLY........ 282 -3.7 0.0 0.5 0.3 0.0 0.2 7.9 0.2 BOTH................... 47 -4.2 0.0 0.3 0.1 0.0 0.3 5.5 0.2 NONRECLASSIFIED........ 4,638 -3.9 0.1 0.1 0.0 0.0 0.0 -0.5 -1.0 ALL URBAN RECLASS.......... 109 -4.1 0.1 0.5 0.4 0.0 0.1 3.2 -0.7 STAND. AMOUNT ONLY..... 45 -4.0 0.1 0.4 0.3 0.0 0.0 0.6 -0.9 WAGE INDEX ONLY........ 31 -4.2 0.3 0.8 0.8 0.0 0.2 6.0 -0.8 BOTH................... 33 -4.2 0.1 0.4 0.2 0.0 0.2 3.3 -0.1 NONRECLASSIFIED........ 2,749 -3.9 0.1 0.1 0.0 0.0 0.0 -0.5 -1.0 ALL RURAL RECLASS.......... 314 -3.6 -0.1 0.4 0.1 0.0 0.2 8.7 0.6 STAND. AMOUNT ONLY..... 49 -4.2 -0.3 0.3 -0.2 0.0 0.3 4.3 -1.1 WAGE INDEX ONLY........ 251 -3.5 -0.1 0.4 0.1 0.0 0.2 8.6 0.6 BOTH................... 14 -4.4 -0.1 0.2 -0.1 0.0 0.4 18.0 2.2 NONRECLASSIFIED........ 1,889 -3.2 -0.3 0.4 -0.2 0.0 0.1 -0.4 -0.9 OTHER RECLASSIFIED HOSPITALS (SECTION 1886(d)(8)(B))....... 27 -3.6 -0.3 0.7 0.2 0.0 0.1 0.7 0.1 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the national total. Discharge data are from FY 1996, and hospital cost report data are from reporting periods beginning in FY 1994 and FY 1995. \2\ This column displays the impact of the changes enacted by Public Law 105-33. The most significant of those in terms of their impacts here are the zero update, the reduction to the IME adjustment, and no longer paying an IME and DSH adjustment for outliers. \3\ This column displays the payment impact of the recalibration of the DRG weights, based on FY 1996 MedPAR data and the DRG classification changes, in accordance with section 1886(d)(4)(C) of the Act. \4\ This column shows the payment effects of updating the data used to calculate the wage index with data from the FY 1994 cost reports and the Public Law 105-33 provision establishing a floor on the area wage index for urban hospitals. \5\ This column displays the combined impact of the reclassification and recalibration of the DRGs, the updated wage data used to calculate the wage index, and the budget neutrality adjustment factor for these two changes, in accordance with sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act. Thus, it represents the combined impacts shown in columns 2 and 3, and the FY 1998 budget neutrality factor of 0.997731. \6\ This column illustrates the payment impact of the Puerto Rico-specific wage index, applied to the Puerto Rico-specific standardized amounts. \7\ This column illustrates the payment impact of completing the phase-out of day outlier payments, and increasing cost outlier payments, in accordance with section 1886(d)(5) of the Act. \8\ Shown here are the combined effects of geographic reclassification by the Medicare Geographic Classification Review Board (MGCRB). The effects shown here demonstrate the FY 1998 payment impact of going from no reclassifications to the reclassifications scheduled to be in effect for FY 1998. Reclassification for prior years has no bearing on the payment impact shown here. \9\ This column shows changes in payments from FY 1997 to FY 1998. It incorporates all of the changes displayed in columns 4 through 7 (the changes displayed in columns 2 and 3 are included in column 4). It also displays the impact of the changes shown in column 1, less the 2.7 percent negative impact of the zero update. Finally, it shows the impact of changes in hospitals' reclassification status in FY 1998 compared to FY 1997, and the difference in outlier payments from FY 1997 to FY 1998. The sum of these columns may be different from the percentage changes shown here due to rounding and interactive effects. [[Page 46122]] B. Impact of Changes Enacted by Public Law 105-33 (Column 1) Public Law 105-33 contained several provisions that significantly impact hospitals' payments under the operating prospective payment system during FY 1998, relative to payments if Public Law 105-33 had not been enacted. Certainly the largest single impact is the zero update for the standardized amounts and the hospital-specific rate. Prior to this change, the law provided that hospitals were to receive the full market basket of 2.7 percent. As indicated above, temporary relief hospitals do receive an update of 0.5 percent. Freezing the standardized amounts and the hospital-specific rates at their FY 1997 levels (prior to any budget neutrality calculations) is the largest impact evident in column 1. As discussed previously, to illustrate the impacts of the changes resulting from Public Law 105-33, we begin with a FY 1998 baseline payment model using a 2.7 percent update; the FY 1997 GROUPER; the FY 1997 wage index; no MGCRB reclassifications; outlier payments based on 25 percent day outliers and factoring IME and DSH into DRG payments plus outlier payments; no MDHs; and Puerto Rico hospitals receive 25 percent of the national Puerto Rico amount and 75 percent of the Puerto Rico amount. From this baseline we moved to a payment simulation model incorporating all but one of the changes enacted by Public Law 105-33; we did not include the floor on the wage index for urban hospitals because that change was required to be budget neutral. Therefore, this change is included in the new (FY 1994) wage data column. The overall impact on hospital operating payments per case due to Public Law 105-33 is a 3.9 percent reduction in payments. As pointed out above, 2.7 percent of this decline relates to the freeze in the update. This negative impact is evident across all hospital categories, although it is offset to a small degree among those hospitals that receive the special 0.5 percent update. However, this update provision has an insignificant impact overall. In fact, the 360 temporary relief hospitals that qualify for this special update have only a slightly smaller decrease in payments (3.8 percent) than the national average. This is largely due to the change that eliminated the IME and DSH adjustments attributable to outlier payments. Although these hospitals by definition do not receive IME or DSH payments, they are negatively impacted by the redistribution of outlier payments that result from the change. Because we no longer standardize the charges of cases by hospitals' IME and DSH factors, the outlier thresholds are higher and there is a substantial redistribution of outlier payments toward hospitals that also receive IME and DSH and away from non-IME, non-DSH hospitals. The negative impact of this change on the latter group of hospitals is approximately 1.8 percent. The change in outlier policy also affects overall payments. Because IME and DSH are now based only on the base DRG amount, total payments are less than they would be before this change. The net impact of this change is to reduce the overall average payment per case by approximately 0.6 percent. The reduction in the IME adjustment also reduces payments by approximately 0.6 percent overall. The combined impacts of these changes and the other, less significant changes result in an overall decrease in hospitals' average payment per case due to Public Law 105-33 of 3.9 percent. The only hospital categories demonstrating a net increase in payments in column 1 are urban and rural Puerto Rico hospitals (3.1 percent and 4.9 percent, respectively). This is due to the change in the formula for calculating payments for Puerto Rico hospitals from 25 percent of the national amount and 75 percent of the Puerto Rico amount, to a 50/50 blend of the two amounts. Because the national amount is more than twice the Puerto Rico amount, the change in the blend more than offsets the 2.7 percent decrease in the amounts after Public Law 105-33. The smaller increase among urban Puerto Rico hospitals is explained at least in part by the fact that, because the national Puerto Rico amount is the same for large urban and other area hospitals while the large urban Puerto Rico amount is greater than the other area Puerto Rico amount, large urban Puerto Rico hospitals gain slightly less than other Puerto Rican hospitals from the formula change. The hospital category with the smallest negative impact in this column is MDHs. Their payments overall drop by only 2.0 percent. Over 30 hospitals in this category have payment increases after being reinstated as an MDH, despite the zero update and the fact that they receive only 50 percent of the difference between their hospital- specific rate and the Federal rate. The greatest negative impact in this column is a 4.4 percent drop in payments among teaching hospitals with more than 100 residents and urban hospitals in the Middle Atlantic census division (due to the concentration of teaching hospitals in this census division). This effect is due to the reduction in the IME adjustment, although the decrease in the IME adjustment factor is offset for these hospitals to some extent by the outlier changes which result in higher outlier payments to teaching and disproportionate share hospitals. Without the change to remove the IME and DSH adjustments from the outlier calculation, payments to major teaching hospitals would have fallen by approximately 1.0 percent more. Finally, the decline in payments shown here among rural hospitals is generally not as great as the decline among urban hospitals. Overall, rural hospitals' payments decline by 3.4 percent, compared to 3.9 percent for urban hospitals. This result is attributable to those rural hospitals paid on the basis of their hospital-specific rate, particularly SCHs. Because hospitals receiving their hospital-specific rate do not receive outliers, IME, or DSH, they are unaffected by the policy changes related to these additional payments. Therefore, their net change in payments after Pub. L. 105-33 is generally limited to the 2.7 percent reduction in the update for FY 1998 (from full market basket percentage increase to 0). C. Impact of the Changes to the DRG Classifications and Relative Weights (Column 2) In column 2 of Table I, we present the combined effects of the DRG reclassifications and recalibration, as discussed in section II of the preamble to this final rule with comment period. Section 1886(d)(4)(C)(i) of the Act requires us each year to make appropriate classification changes and to recalibrate the DRG weights in order to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. We compared aggregate payments using the FY 1997 DRG relative weights (GROUPER version 14) to aggregate payments using the FY 1998 DRG relative weights (GROUPER version 15). Overall, payments increase by 0.1 percent due to the DRG changes, although this is prior to applying the budget neutrality factor for DRG and wage index changes (see column 4). Consistent with the minor changes we are implementing for the FY 1998 GROUPER, the redistributional impacts of DRG reclassifications and recalibration across hospital groups are small (a 0.1 percent increase for large urban hospitals; a 0.2 percent increase for other urban hospitals; and a 0.3 percent decrease among rural hospitals). [[Page 46123]] Within hospital categories, the net effects for urban hospitals are small positive changes for larger hospitals (200 or more beds), and slightly negative changes for urban hospitals with fewer than 200 beds. Among rural hospitals, the smallest rural hospitals (fewer than 50 beds) experience a decrease of 0.6 percent. For other rural bed size categories, slight negative impacts prevail. Only the largest rural hospitals (200 or more beds) avoid any negative impact from the changes. The breakdowns by urban census division show that the increase among urban hospitals is spread across all census categories except Puerto Rico, with the largest increase (0.3 percent) for hospitals in the Mountain census division. For rural hospitals, the largest decrease is 0.4 percent for hospitals in the West North Central and West South Central census divisions and 0.6 percent for the five rural hospitals in Puerto Rico. Rural hospitals in all other census regions experience decreases of 0.2 or 0.3 percent. This pattern of negative impacts upon small and rural hospitals is also apparent when examining the effects of DRG changes on hospitals according to special payment categories, with the largest decreases (0.5 percent) among MDHs, rural DSH SCHs, and rural DSH hospitals with fewer than 100 beds (0.6 percent decrease). Overall, we attribute the changes associated with DRG recalibration to the increasing gap between the relative weights for medical, diagnostic, and less complicated surgical DRGs and the weights for the more complicated surgical DRGs. Since the cases associated with the former DRGs tend to be treated more often in smaller hospitals with fewer resources available, lower relative weights associated with those cases would disproportionately affect these hospitals. In general, small hospitals that serve a disproportionate share of low-income patients fit this definition. In contrast, larger hospitals in both urban and rural areas, which tend to treat the latter group of DRGs, would experience small payment increases. Teaching hospitals, which also treat the more complicated cases, experience similar effects. We note, however, that both the positive and negative impacts are relatively minor, in almost all categories they are 0.5 percent or less. D. Impact of Updating the Wage Data (Column 3) Section 1886(d)(3)(E) of the Act requires that, beginning October 1, 1993, we annually update the wage data used to calculate the wage index. In accordance with this requirement, the final wage index for FY 1998 is based on data submitted for hospital cost reporting periods beginning on or after October 1, 1993 and before October 1, 1994. As with the previous column, the impact of the new data on hospital payments is isolated by holding the other payment parameters constant in the two simulations. That is, column 3 shows the percentage changes in payments when going from a model using the FY 1997 wage index based on FY 1993 wage data before geographic reclassifications to a model using the FY 1998 prereclassification wage index based on FY 1994 wage data. Also included in the model using the FY 1994 wage data are the effects of the provision of Public Law 105-33 that urban hospitals' wage indexes may not be below the wage index of the rural areas in the State in which the urban hospital is located. The results indicate that the impact of the new wage data is a 0.1 percent increase overall in hospital payments (prior to applying the budget neutrality factor, see column 4). Rural and other urban hospitals generally appear to benefit from the update with payments increasing 0.4 and 0.2 percent, respectively. The increases for rural hospitals are attributable to relatively large increases in the wage index values for the rural areas of particular States (although none increased by more than 5 percent). The increases for other urban hospitals, 0.2 percent compared to 0.1 percent in FY 1997 and in the FY 1998 proposed wage index, appear to be attributable in large part to the requirement that the wage index values for urban hospitals be at least equal to the rural wage index values for the States in which they are located. Hospitals in 32 urban areas experienced increases in their wage index values as a result of that provision. Hospitals in nine of the urban areas experienced increases of more than 5 percent as a result of the provision for a Statewide rural wage index floor for urban hospitals. Some of the largest changes in payments are found among both urban and rural hospitals grouped by census division, although in almost all cases payments change by less than 1 percent. Our review of the wage data indicates that the changes are attributable to improved reporting, as well as relative changes in labor costs. Among the urban census divisions, payments change by 0.3 percent or less in all census divisions except one. The East South Central census division experiences an increase of 1.0 percent which stems largely from wage index increases of 5.9 and 5.2 percent in the Mobile, Alabama and the Tuscaloosa, Alabama MSAs. Among the rural hospitals, all census divisions experience increases except for the Middle Atlantic census division which experiences a slight decrease of 0.4 percent. The largest increase occurs in the Pacific (and Puerto Rico, discussed separately below) census division which experiences an increase of 1.1 percent. Here, Oregon's rural wage index value rises by 3.2 percent, and Washington's rural wage index value increases by 2.9 percent. The next largest increase (0.6 percent) occurs in the rural New England and the East South Central census divisions. In the New England census division, the rural Vermont wage index value increases by 4.4 percent, and the rural Maine wage index value increases by 1.8 percent. In the East South Central census division, the rural Alabama wage index value increases by 1.9 percent, and the rural Mississippi wage index value increases by 1.7 percent. In Puerto Rico, payments increase by 0.3 percent for the urban hospitals and by 2.4 percent for the five rural hospitals. Although column 5 shows the isolated effects of introducing the Puerto Rico- specific wage index, it is also included in the payment simulations here showing the impacts of the new wage data. Of the six urban areas in Puerto Rico, two experience increases in their national wage index values, including the San Juan-Bayamon area (2.5 percent), which contains the majority of the urban Puerto Rico hospitals (29 of 48), and the Mayaguez area (6.2 percent). The rural Puerto Rico area experiences an increase in its national wage index value of 4.9 percent. The following chart compares the shifts in wage index values for labor market areas for FY 1998 with those from FY 1997. The majority of labor market areas (334) experience less than a 5 percent change. A total of 33 labor market areas experience a change between 5 and 10 percent; 24 of those experience increases. Still fewer labor markets experience a change of more than 10 percent; two experience increases, and one experiences a decrease. In two urban labor market areas which include both West Virginia and Ohio hospitals, the Ohio hospitals receive their State's rural wage index value. In one of those labor market areas, the Ohio hospitals experience an increase of more than 10 percent. In the other labor market area, the Ohio hospitals experience an increase between 5 and 10 percent. We reviewed the data for any area that experienced a wage index change of 5 [[Page 46124]] percent or more to determine the reason for the fluctuation. ------------------------------------------------------------------------ No. of labor market areas Percentage change in area wage index ------------------------------- values FY 1998 FY 1997 ------------------------------------------------------------------------ Increase more than 10 percent........... 2 0 Increase between 5 and 10 percent (inclusive)............................ 24 14 Increase or decrease less than 5 percent 334 341 Decrease between 5 and 10 percent (inclusive)............................ 9 11 Decrease more than 10 percent........... 1 2 ------------------------------------------------------------------------ Under the FY 1998 wage index, 95.3 percent of urban hospitals and 99.9 percent of rural hospitals will experience a change in their wage index value of less than 5 percent. Among urban hospitals, 128 will experience a change of between 5 and 10 percent (97 increasing and 31 decreasing), while only 3 rural hospitals fall into this category, all decreasing. Eight urban hospitals and no rural hospitals will experience a change of more than 10 percent. The following chart shows the projected impact for urban and rural hospitals. ------------------------------------------------------------------------ No. of hospitals Percentage change in area wage index values ----------------- Urban Rural ------------------------------------------------------------------------ Increase more than 10 percent......................... 4 0 Increase between 5 and 10 percent (inclusive)......... 97 0 Increase or decrease less than 5 percent.............. 2763 2236 Decrease between 5 and 10 percent (inclusive)......... 31 3 Decrease more than 10 percent......................... 4 0 ------------------------------------------------------------------------ E. Combined Impact of DRG and Wage Index Changes-- Including Budget Neutrality Adjustment (Column 4) The impact of DRG reclassifications and recalibration on aggregate payments is required by section 1886(d)(4)(C)(iii) of the Act to be budget neutral. In addition, section 1886(d)(3)(E) of the Act specifies that any updates or adjustments to the wage index are to be budget neutral. Furthermore, as noted above, section 4410 of Pub. L. 105-33 required the implementation of the wage index floor to be budget neutral. We compared aggregate payments using the FY 1997 DRG relative weights and wage index to aggregate payments using the FY 1998 DRG relative weights and wage index, including the wage index floor. Based on this comparison, we computed a wage and recalibration budget neutrality factor of 0.997731. In Table I, the combined overall impacts of the effects of both the DRG reclassifications and recalibration and the updated wage index are shown in column 4. The 0.0 percent impact for all hospitals demonstrates that these changes, in combination with the budget neutrality factor, are budget neutral. For the most part, the changes in this column are the sum of the changes in columns 2 and 3, minus the approximately 0.2 percent decrease attributable to the budget neutrality factor. There may be some variation of plus or minus 0.1 percent due to rounding. F. Puerto Rico-Specific Wage Index (Column 5) As described in section III. of the preamble to this final rule with comment period, we are adopting a Puerto Rico-specific wage index for FY 1998. These wage index values will be applied to the Puerto Rico standardized amounts. Column 5 shows the effect of implementing this change results in no payment impact for all hospitals. In Puerto Rico, payments increase by 3.7 percent among urban hospitals, and 4.4 percent among rural hospitals. As shown in Table 4F of the Addendum, the Puerto Rico-specific wage index values are considerably higher than Puerto Rico's national wage index values (shown in Table 4A of the Addendum). This results in the increases shown in this column. However, these increases are less than those shown in the proposed rule as a result of the change to the Puerto Rico payment formula. The amount attributable to the Puerto Rico payment amount (and which is adjusted by the Puerto Rico-specific wage index) is now 50 percent instead of 75 percent. As indicated above, this change is shown in isolation here for ease in reading Table I. To actually calculate the national DRG and wage index budget neutrality factors, the Puerto Rico-specific wage index was included. As described in the Addendum, we also computed a DRG reclassification and recalibration budget neutrality adjustment for the Puerto Rico standardized amounts equal to 0.999117. G. Outlier Changes (Column 6) Currently, Medicare provides extra payment in addition to the basic DRG payment amount for extremely costly or extraordinarily lengthy cases (cost outliers and day outliers, respectively). Beginning with FY 1995, section 1886(d)(5)(A) of the Act requires the Secretary to phase- out payments for day outliers. Under the requirements of section 1886(d)(5)(A)(v), the proportion of day outlier payments to total outlier payments is reduced from FY 1994 levels as follows: 75 percent of FY 1994 levels in FY 1995, 50 percent of FY 1994 levels in FY 1996, and 25 percent of FY 1994 levels in FY 1997. For discharges occurring after September 30, 1997, the Secretary will no longer pay for day outliers under the provisions of section 1886(d)(5)(A)(I) of the Act. This reduction in day outlier payments will be offset by an increase in cost outlier payments. As discussed in the Addendum, for FY 1998, a case would receive cost outlier payments if its costs exceed the DRG payment amount plus any IME and DSH payments by at least $11,050. We are also maintaining the marginal cost factor for cost outliers at 80 percent. The payment impacts of these changes are minimal. Hospital categories negatively affected by phasing-out day outliers are consistent with the categories negatively affected in previous years: urban Middle Atlantic census division (0.7 percent decline); urban hospitals with 500 or more beds (0.2 percent decline); teaching hospitals with 100 or more residents (0.3 percent decline); and hospitals for which data were unavailable to calculate Medicare utilization rates (1.5 percent decline). This last category contains a number of New York City public hospitals that file manual cost reports. Because the changes to the outlier policy result in a shift in payments from cases paid as day outliers to cases paid as cost outliers, this indicates that these categories have higher percentages of day outliers. [[Page 46125]] H. Impact of MGCRB Reclassifications (Column 7) Our impact analysis to this point has assumed hospitals are paid on the basis of their actual geographic location (with the exception of ongoing policies that provide that certain hospitals receive payments on bases other than where they are geographically located, such as hospitals in rural counties that are deemed urban under section 1886(d)(8)(B) of the Act). The changes in column 7 reflect the per case payment impact of moving from this baseline to a simulation incorporating the MGCRB decisions for FY 1998. As noted below, these decisions affect hospitals' standardized amount and wage index area assignments. In addition, rural hospitals reclassified for purposes of the standardized amount qualify to be treated as urban for purposes of the DSH adjustment. By March 30 of each year, the MGCRB makes reclassification determinations that will be effective for the next fiscal year, which begins on October 1. The MGCRB may approve a hospital's reclassification request for the purpose of using the other area's standardized amount, wage index value, or both. The FY 1998 wage index values incorporate all of the MGCRB's reclassification decisions for FY 1998 as of the publication of this final rule with comment period. The wage index values also reflect any decisions made by the HCFA Administrator through the appeals and review process for MGCRB decisions for FY 1998. The overall effect of geographic reclassification is required to be budget neutral by section 1886(d)(8)(D) of the Act. Therefore, we applied an adjustment of 0.994720 to ensure that the effects of reclassification are budget neutral. (See section II.A.4 of the Addendum to this final rule with comment period.) As a group, rural hospitals benefit from geographic reclassification. Their payments rise 2.2 percent, while payments to urban hospitals decline 0.4 percent. Large urban hospitals lose 0.4 percent because, as a group, they have the smallest percentage of hospitals that are reclassified (fewer than 2 percent of large urban hospitals are reclassified). There are enough hospitals in other urban areas that are reclassified to limit the decrease in payments to urban hospitals stemming from the budget neutrality offset to 0.3 percent. Among urban hospital groups generally (that is, bed size, census division, and special payment status), payments fall by between 0.3 and 0.5 percent. A positive impact is evident among all rural hospital groups. The smallest effect among the rural census divisions is 1.1 percent for the Middle Atlantic division. The largest impact is for the West South Central division, with an increase of 3.3 percent. Among rural hospitals designated as RRCs, 65 hospitals are reclassified for purposes of the wage index only, leading to the 4.3 percent increase in payments among RRCs overall. This positive impact on RRCs is also reflected in the category of rural hospitals with 200 or more beds, which has a 4.2 percent increase in payments. Rural hospitals reclassified for FY 1997 and FY 1998 experience a 9.0 percent increase in payments. This may be due to the fact that these hospitals have the most to gain from reclassification and have been reclassified for a period of years. Rural hospitals reclassified for FY 1998 only experience a 7.3 percent increase in payments, while rural hospitals reclassified for FY 1997 only experience a 0.2 decrease in payments. Urban hospitals reclassified for FY 1997 but not FY 1998 experience a 1.0 percent decline in payments overall. This appears to be due to the combined impacts of the budget neutrality adjustment, and a number of Bergen-Passaic, New Jersey hospitals in this category that experience a 4.8 percent drop in their wage index after reclassification. Urban hospitals reclassified for FY 1998 but not for FY 1997 experience no overall change in their payments. The FY 1998 Reclassification rows of Table I show the changes in payments per case for all FY 1998 reclassified and nonreclassified hospitals in urban and rural locations for each of the three reclassification categories (standardized amount only, wage index only, or both). The table illustrates that the largest impact for reclassified rural hospitals is for those hospitals reclassified for both the standardized amount and the wage index. These hospitals receive an 18.0 percent increase in payments. In addition, rural hospitals reclassified just for the wage index receive an 8.6 percent payment increase. The overall impact on reclassified hospitals is to increase their payments per case by an average of 5.8 percent for FY 1998. Among the 27 rural hospitals deemed to be urban under section 1886(d)(8)(B) of the Act, payments increase 0.7 percent due to MGCRB reclassification. This is because, although these hospitals are treated as being attached to an urban area in our baseline (their redesignation is ongoing, rather than annual like the MGCRB reclassifications), they are eligible for MGCRB reclassification. For FY 1998, one hospital in this category reclassified to a large urban area. The reclassification of hospitals primarily affects payment to nonreclassified hospitals through changes in the wage index and the geographic reclassification budget neutrality adjustment required by section 1886(d)(8)(D) of the Act. Among hospitals that are not reclassified, the overall impact of hospital reclassifications is an average decrease in payments per case of about 0.5 percent, which corresponds closely with the geographic reclassification budget neutrality factor. Rural nonreclassified hospitals decrease slightly less, experiencing a 0.4 percent decrease. This occurs because the wage index values in some rural areas increase after reclassified hospitals are excluded from the calculation of those indexes. The foregoing analysis was based on MGCRB and HCFA Administrator decisions made by March 29, 1997. In addition, changes to some MGCRB decisions through the appeals, review, and applicant withdrawal process are also included. I. All Changes (Column 8) Column 8 compares our estimate of payments per case, incorporating all changes reflected in this final rule with comment period for FY 1998 (including statutory changes), to our estimate of payments per case in FY 1997. It includes the effects of the changes enacted by Public Law 105-33, and reflects the 0.3 percentage point difference between the projected outlier payments in FY 1998 (5.1 percent of total DRG payments) and the current estimate of the percentage of actual outlier payments in FY 1997 (4.8 percent), as described in the introduction to this Appendix and the Addendum. Column 8 also includes the impacts of FY 1998 MGCRB reclassifications compared to the payment impacts of FY 1997 reclassifications. (Column 7 shows the impact of going from no MGCRB reclassifications to the FY 1998 reclassifications.) When comparing FY 1998 payments to FY 1997 payments, the percent changes due to FY 1998 reclassifications shown in column 7 need to be offset by the effects of reclassification on hospitals' FY 1997 payments (column 4 of Table 1, September 1, 1996 final rule; 61 FR 46306). For example, the impact of MGCRB reclassifications on rural hospitals' FY 1997 payments was approximately a 2.3 percent increase, offsetting the 2.2 percent increase in column 7. Therefore, the net change in FY 1998 payments due to [[Page 46126]] reclassification for rural hospitals is actually closer to a decrease of 0.1 percent relative to FY 1997. However, last year's analysis contained a somewhat different set of hospitals, so this might affect the numbers slightly. To factor in the effects of the changes from Public Law 105-33 from column 1 into the overall changes shown in this column, it is first necessary to deduct the impact of the zero update included in column 1. Because column 1 compares a FY 1998 baseline after Public Law 105-33 to a FY 1998 baseline before this law was enacted, it includes the impact of going from a FY 1998 update of 2.7 percent to a zero update. Of course, this 2.7 percent update for FY 1998 does not affect FY 1997 payments, so it does not show up in column 8. The impacts of the other changes, however, such as reducing the IME factor and eliminating the IME and DSH adjustments from outlier payments, are reflected in this column. Finally, there might also be interactive effects among the various factors comprising the payment system that we are not able to isolate. For these reasons, the values in column 8 may not equal the sum of the changes in column 1, minus 2.7, plus the changes in columns 4 through 7 (plus the other impacts that we are able to identify). The overall payment change from FY 1998 to FY 1997 for all hospitals is a 0.9 percent decrease. This reflects the 0.0 percent net change in total payments due to the proposed changes for FY 1998 shown in columns 4 through 7, the zero update for FY 1998, the 0.3 percent higher outlier payments in FY 1998 compared to FY 1997, as discussed above, and the 1.2 percent decline in payments due to Public Law 105-33 (3.9 percent decrease in column 1 minus 2.7 percent for the FY 1998 update). This 1.2 percent decline is attributable largely to reducing IME and eliminating IME and DSH from outlier payments. Hospitals in urban areas experience a 1.0 percent drop in payments per case from FY 1997. Similar to all hospitals nationally, this is primarily due to the factors discussed above. Urban hospitals' 0.4 negative impact in FY 1998 due to reclassification is offset by a similar impact from FY 1997 reclassifications. Hospitals in large and other urban areas experience 1.2 percent and 0.7 percent decreases, respectively. The larger decrease for large urban hospitals is primarily due to the reduction in IME payments. Overall payments per case among this group of hospitals would be approximately 0.8 percent higher without this reduction. Hospitals in rural areas generally fare better during FY 1998 than do urban hospitals. Overall, rural hospitals experience a decrease of 0.4 percent. This smaller decrease for rural hospitals appears to be primarily attributable to the special category rural hospitals. In particular, the 368 rural hospitals categorized as MDHs experience a 0.8 percent average payment increase. As noted previously, hospitals paid on the basis of the hospital-specific rate generally see less negative impact due to the changes in Public Law 105-33 because they do not receive IME, DSH, or outliers. Puerto Rico stands out as having large payment increases for FY 1998, with urban Puerto Rico hospitals' payments increasing by 12.2 percent, and rural Puerto Rico hospitals' payments increasing by 15.3 percent. As noted above, this is largely due to the implementation of the Puerto Rico-specific wage index during FY 1998 and the change to the payment formula for Puerto Rico hospitals in Public Law 105-33. Among census divisions, East South Central displays the only increase among urban hospitals, 0.2 percent. This is related to the 1.0 percent overall increase due to the new wage data. On the other hand, the urban Middle Atlantic and New England hospitals lose 2.0 percent and 1.9 percent per case, respectively. This is largely related to the concentration of teaching hospitals in these census areas. In addition, the Middle Atlantic hospitals lose 0.7 percent due to the elimination of day outlier payments, and the New England hospitals lose 0.3 percent as a result of the new wage data. Among rural census divisions, the Mountain division displays an overall increase of 0.3 percent. This positive impact is largely due to hospitals reclassified during FY 1998 that were not reclassified during FY 1997. Hospitals in the South Atlantic are the biggest losers among the rural census divisions, with FY 1998 average payments per case falling by 1.0 percent from FY 1997. Twenty hospitals reclassified here during FY 1997 are no longer reclassified during FY 1998. Rural Middle Atlantic hospitals are negatively impacted by the DRG recalibration, new wage data, and eliminating the day outlier payments, all leading to their 0.9 percent decrease in FY 1998 payments. As expected, large teaching hospitals as a group experience the largest payment reductions. Those with more than 100 residents see payments per case decrease by 1.6 percent. Urban hospitals receiving both IME and DSH experience 1.2 percent payment reductions. Hospitals for which we were unable to determine ownership designation or Medicare utilization due to a lack of cost report data, lose 2.4 percent in payments. As indicated previously, this category contains a number of public New York City hospitals, many of which have large teaching programs. The largest negative payment impacts from FY 1997 to FY 1998 are among hospitals that were reclassified for FY 1997 and are not reclassified for FY 1998. Overall, these hospitals lose 4.2 percent. On the other hand, hospitals reclassified for FY 1998 that were not reclassified for FY 1997 would experience the greatest payment increases (aside from Puerto Rico hospitals): 7.3 percent for 76 rural hospitals in this category and 2.8 percent for 13 urban hospitals. Table II.--Impact Analysis of Changes for FY 1998 Operating Prospective Payment System [Payments per case] ---------------------------------------------------------------------------------------------------------------- Average FY Average FY No. of 1997 1998 hospitals payment per payment per All changes case case (1) (2) \1\ (3) \1\ (4) ---------------------------------------------------------------------------------------------------------------- (BY GEOGRAPHIC LOCATION): ALL HOSPITALS........................................... 5,088 6,771 6,711 -0.9 URBAN HOSPITALS......................................... 2,858 7,347 7,276 -1.0 LARGE URBAN AREAS....................................... 1,630 7,899 7,808 -1.2 OTHER URBAN AREAS....................................... 1,228 6,588 6,545 -0.7 [[Page 46127]] RURAL AREAS............................................. 2,230 4,451 4,432 -0.4 BED SIZE (URBAN): 0-99 BEDS............................................... 724 4,921 4,878 -0.9 100-199 BEDS............................................ 954 6,159 6,115 -0.7 200-299 BEDS............................................ 570 6,926 6,868 -0.8 300-499 BEDS............................................ 457 7,874 7,794 -1.0 500 OR MORE BEDS........................................ 153 9,660 9,535 -1.3 BED SIZE (RURAL): 0-49 BEDS............................................... 1,170 3,650 3,639 -0.3 50-99 BEDS.............................................. 657 4,152 4,141 -0.3 100-149 BEDS............................................ 235 4,615 4,594 -0.5 150-199 BEDS............................................ 93 4,794 4,775 -0.4 200 OR MORE BEDS........................................ 75 5,612 5,570 -0.8 URBAN BY CENSUS DIV.: NEW ENGLAND............................................ 159 7,913 7,766 -1.9 MIDDLE ATLANTIC......................................... 431 8,137 7,971 -2.0 SOUTH ATLANTIC.......................................... 420 7,008 6,953 -0.8 EAST NORTH CENTRAL...................................... 475 7,057 7,004 -0.7 EAST SOUTH CENTRAL...................................... 163 6,518 6,530 0.2 WEST NORTH CENTRAL...................................... 191 6,948 6,905 -0.6 WEST SOUTH CENTRAL...................................... 367 6,830 6,797 -0.5 MOUNTAIN................................................ 129 7,084 7,041 -0.6 PACIFIC................................................. 475 8,422 8,343 -0.9 PUERTO RICO............................................. 48 2,694 3,022 12.2 RURAL BY CENSUS DIV.: NEW ENGLAND............................................. 53 5,283 5,249 -0.6 MIDDLE ATLANTIC......................................... 85 4,752 4,708 -0.9 SOUTH ATLANTIC.......................................... 297 4,631 4,582 -1.0 EAST NORTH CENTRAL...................................... 302 4,502 4,470 -0.7 EAST SOUTH CENTRAL...................................... 275 4,115 4,116 0.0 WEST NORTH CENTRAL...................................... 512 4,140 4,138 0.0 WEST SOUTH CENTRAL...................................... 347 4,005 3,994 -0.3 MOUNTAIN................................................ 213 4,772 4,787 0.3 PACIFIC................................................. 141 5,582 5,578 -0.1 PUERTO RICO............................................. 5 2,072 2,390 15.3 (BY PAYMENT CATEGORIES): URBAN HOSPITALS......................................... 2,948 7,309 7,239 -1.0 LARGE URBAN AREAS....................................... 1,776 7,763 7,675 -1.1 OTHER URBAN AREAS....................................... 1,172 6,590 6,548 -0.6 RURAL AREAS............................................. 2,140 4,429 4,409 -0.5 TEACHING STATUS: NON-TEACHING............................................ 3,993 5,494 5,462 -0.6 FEWER THAN 100 RESIDENTS................................ 856 7,216 7,158 -0.8 100 OR MORE RESIDENTS................................... 239 11,051 10,869 -1.6 DISPROPORTIONATE SHARE HOSPITALS (DSH): NON-DSH................................................. 3,185 5,801 5,755 -0.8 URBAN DSH--100 BEDS OR MORE............................. 1,413 7,997 7,917 -1.0 FEWER THAN 100 BEDS..................................... 89 5,081 5,041 -0.8 RURAL DSH SOLE COMMUNITY (SCH).......................... 155 4,229 4,211 -0.4 REFERRAL CENTERS (RRC).................................. 50 5,203 5,232 0.6 OTHER RURAL DSH HOSP.--100 BEDS OR MORE................. 66 4,198 4,138 -1.4 FEWER THAN 100 BEDS..................................... 130 3,565 3,557 -0.2 URBAN TEACHING AND DSH: BOTH TEACHING AND DSH................................... 708 8,994 8,884 -1.2 TEACHING AND NO DSH..................................... 330 7,377 7,301 -1.0 NO TEACHING AND DSH..................................... 794 6,413 6,381 -0.5 NO TEACHING AND NO DSH.................................. 1,116 5,664 5,621 -0.8 SPECIAL UPDATE HOSPITALS (UNDER SEC. 4401(b) OF PUBLIC LAW 105-33..................................................... 360 5,276 5,247 -0.6 RURAL HOSPITAL TYPES: NONSPECIAL STATUS HOSPITALS............................. 915 3,945 3,915 -0.8 RRC..................................................... 158 5,132 5,107 -0.5 SCH/EACH................................................ 642 4,533 4,514 -0.4 MDH..................................................... 368 3,511 3,540 0.8 SCH/EACH AND RRC........................................ 57 5,315 5,291 -0.5 TYPE OF OWNERSHIP: VOLUNTARY............................................... 2,924 6,945 6,876 -1.0 [[Page 46128]] PROPRIETARY............................................. 701 6,154 6,120 -0.6 GOVERNMENT.............................................. 1,346 6,278 6,250 -0.4 UNKNOWN................................................. 117 8,176 7,979 -2.4 MEDICARE UTILIZATION AS A PERCENT OF INPATIENT DAYS: 0-25.................................................... 266 8,955 8,850 -1.2 25-50................................................... 1,307 8,229 8,148 -1.0 50-65................................................... 1,988 6,180 6,133 -0.8 OVER 65................................................. 1,410 5,243 5,196 -0.9 UNKNOWN................................................. 117 8,176 7,979 -2.4 HOSPITALS RECLASSIFIED BY THE MEDICARE GEOGRAPHIC REVIEW BOARD RECLASSIFICATION STATUS DURING FY97 AND FY98: RECLASSIFIED DURING BOTH FY97 AND FY98: 333 6,137 6,083 -0.9 URBAN............................................... 96 7,297 7,215 -1.1 RURAL............................................... 237 5,253 5,221 -0.6 RECLASSIFIED DURING FY98 ONLY 89 5,199 5,475 5.3 URBAN............................................... 13 6,729 6,920 2.8 RURAL............................................... 76 4,389 4,710 7.3 RECLASSIFIED DURING FY97 ONLY 211 6,047 5,793 -4.2 URBAN............................................... 94 6,981 6,704 -4.0 RURAL............................................... 117 4,726 4,504 -4.7 FY 98 RECLASSIFICATIONS: ALL RECLASSIFIED HOSP.: 423 5,994 5,990 -0.1 STAND. AMT. ONLY.................................... 94 5,941 5,885 -0.9 WAGE INDEX ONLY..................................... 282 5,923 5,936 0.2 BOTH................................................ 47 6,333 6,348 0.2 NONRECLASS.......................................... 4,638 6,855 6,788 -1.0 ALL URBAN RECLASS.: 109 7,226 7,178 -0.7 STAND. AMT. ONLY.................................... 45 6,449 6,390 -0.9 WAGE INDEX ONLY..................................... 31 9,160 9,085 -0.8 BOTH................................................ 33 6,578 6,568 -0.1 NONRECLASS.......................................... 2,749 7,353 7,281 -1.0 ALL RURAL RECLASS.: 314 5,104 5,133 0.6 STAND. AMT. ONLY.................................... 49 4,530 4,480 -1.1 WAGE INDEX ONLY..................................... 251 5,162 5,195 0.6 BOTH................................................ 14 5,356 5,472 2.2 NONRECLASS.......................................... 1,889 4,212 4,175 -0.9 OTHER RECLASSIFIED HOSPITALS (SECTION 1886(d)(8)(B))........ 27 4,740 4,744 0.1 ---------------------------------------------------------------------------------------------------------------- \1\ These payment amounts per case do not reflect any estimates of annual case-mix increase. Table II presents the projected impact of the changes for FY 1998 for urban and rural hospitals and for the different categories of hospitals shown in Table I. It compares the projected payments per case for FY 1998 with the average estimated per case payments for FY 1997, as calculated under our models. Thus, this table presents, in terms of the average dollar amounts paid per discharge, the combined effects of the changes presented in Table I. The percentage changes shown in the last column of Table II equal the percentage changes in average payments from column 8 of Table I. VII. Impact of Changes in the Capital Prospective Payment System A. General Considerations We now have data that were unavailable in previous impact analyses for the capital prospective payment system. Specifically, we have cost report data for the fourth year of the capital prospective payment system (cost reports beginning in FY 1995) available through the June 13, 1997 update of the Health Care Provider Cost Report Information System (HCRIS). We also have updated information on the projected aggregate amount of obligated capital approved by the fiscal intermediaries. However, our impact analysis of payment changes for capital-related costs is still limited by the lack of hospital-specific data on several items. These are the hospital's projected new capital costs for each year and its projected old capital costs for each year. The lack of this information affects our impact analysis in the following ways: Major investment in hospital capital assets (for example in building and major fixed equipment) occurs at irregular intervals. As a result, there can be significant variation in the growth rates of Medicare capital-related costs per case among hospitals. We do not have the necessary hospital-specific budget data to project the hospital capital growth rate for individual hospitals. Moreover, our policy of recognizing certain obligated capital as old capital makes it difficult to project future capital- related costs for individual hospitals. Under Sec. 412.302(c), a hospital [[Page 46129]] is required to notify its intermediary that it has obligated capital by the later of October 1, 1992, or 90 days after the beginning of the hospital's first cost reporting period under the capital prospective payment system. The intermediary must then notify the hospital of its determination whether the criteria for recognition of obligated capital have been met by the later of the end of the hospital's first cost reporting period subject to the capital prospective payment system or 9 months after the receipt of the hospital's notification. The amount that is recognized as old capital is limited to the lesser of the actual allowable costs when the asset is put in use for patient care or the estimated costs of the capital expenditure at the time it was obligated. We have substantial information regarding intermediary determinations of projected aggregate obligated capital amounts. However, we still do not know when these projects will actually be put into use for patient care, the actual amount that will be recognized as obligated capital when the project is put into use, or the Medicare share of the recognized costs. Therefore, we do not know actual obligated capital commitments for purposes of the FY 1998 capital cost projections. We discuss in Appendix B the assumptions and computations we employ to generate the amount of obligated capital commitments for use in the FY 1998 capital cost projections. In Table III of this appendix, we present the redistributive effects that are expected to occur between ``hold-harmless'' hospitals and ``fully prospective'' hospitals in FY 1998. In addition, we have integrated sufficient hospital-specific information into our actuarial model to project the impact of the FY 1998 capital payment policies by the standard prospective payment system hospital groupings. We caution that while we now have actual information on the effects of the transition payment methodology and interim payments under the capital prospective payment system and cost report data for most hospitals, we need to randomly generate numbers for the change in old capital costs, new capital costs for each year, and obligated amounts that will be put in use for patient care services and recognized as old capital each year. We continue to be unable to predict accurately FY 1998 capital costs for individual hospitals, but with the more recent data on the experience to date under the capital prospective payment system, there is adequate information to estimate the aggregate impact on most hospital groupings. We have revised Table III since the publication of the proposed rule to provide some information on the effects of the Balanced Budget Act of 1997. Section 4402 of Public Law 105-33 requires a 17.78 percent reduction to the unadjusted standard Federal rate for discharges occurring on or after October 1, 1997. Specifically, we are presenting separate blocks in Table III to show (1) what the effects on FY 1998 payments would have been in the absence of the 17.78 percent reduction to the standard Federal rate, and (2) the effects of all changes, including the 17.78 percent reduction to the standard rate, on payments in FY 1998. In Table III, we used the same outlier effects that we used in conjunction with setting the final rate for FY 1998 (that is, the rate with the effects of the 17.78 percent reduction to the standard rate). If we had recalibrated outliers for the unreduced Federal rate, the estimated rate might have been slightly different. However, the estimates in Table III of the effects without the reduction to the standard Federal rate are adequate for the purpose of evaluating the relative impact of the Balanced Budget Act of 1997. We present the transition payment methodology by hospital grouping in Table IV. In Table V we present the results of the cross-sectional analysis using the results of our actuarial model. This table presents the aggregate impact of the FY 1998 payment policies. We have also revised Table V to provide information on the effects of the Balanced Budget Act of 1997. Specifically, we have added two additional columns to Table V. The first additional column presents the average FY 1998 payments per case without the effects of the Balanced Budget Act of 1997. The second column presents changes attributable solely to the Balanced Budget Act of 1997. B. Projected Impact Based on the FY 1998 Actuarial Model 1. Assumptions In this impact analysis, we model dynamically the impact of the capital prospective payment system from FY 1997 to FY 1998 using a capital cost model. The FY 1998 model, described in Appendix B of this final rule with comment period, integrates actual data from individual hospitals with randomly generated capital cost amounts. We have capital cost data from cost reports beginning in FY 1989 through FY 1995 received through the June 13, 1997 update of HCRIS, interim payment data for hospitals already receiving capital prospective payments through PRICER, and data reported by the intermediaries that include the hospital-specific rate determinations that have been made through July 1, 1997 in the provider-specific file. We used these data to determine the FY 1998 capital rates. However, we do not have individual hospital data on old capital changes, new capital formation, and actual obligated capital costs. We have data on costs for capital in use in FY 1995, and we age that capital by a formula described in Appendix B. We therefore need to randomly generate only new capital acquisitions for any year after FY 1995. All Federal rate payment parameters are assigned to the applicable hospital. Recently available cost report data indicate that old capital costs are declining faster than we previously projected. Consequently, for FY 1998 we are projecting faster declines in old capital. To make up for the larger declines in old capital, we are projecting faster growth in new capital. The combination of these two factors will make the 100- percent Federal rate higher than the hold-harmless rate for some hold- harmless hospitals. Therefore, we are now projecting that more hospitals will move to the 100-percent Federal rate than previously projected. For purposes of this impact analysis, the FY 1998 actuarial model includes the following assumptions: Medicare inpatient capital costs per discharge are projected to change at the following rates during these periods: ------------------------------------------------------------------------ Average percentage change in capital costs per discharge ------------------------------------------------------------------------- Percentage Fiscal year change ------------------------------------------------------------------------ 1996....................................................... -2.84 1997....................................................... 4.46 1998....................................................... 4.50 ------------------------------------------------------------------------ The Medicare case-mix index will increase by 0.5 percent in FY 1997 and by 1.0 in FY 1998. Beginning in FY 1996 (with the expiration of budget neutrality), the Federal capital rate and hospital-specific rate were updated by an analytical framework that considers changes in the prices associated with capital-related costs, and adjustments to account for forecast error, changes in the case-mix index, allowable changes in intensity, and other factors. The final FY 1998 update for inflation is 0.90 percent (see section III of the Addendum). [[Page 46130]] 2. Results We have used the actuarial model to estimate the change in payment for capital-related costs from FY 1997 to FY 1998. Table III shows the effect of the capital prospective payment system on low capital cost hospitals and high capital cost hospitals. We consider a hospital to be a low capital cost hospital if, based on a comparison of its initial hospital-specific rate and the applicable Federal rate, it will be paid under the fully prospective payment methodology. A high capital cost hospital is a hospital that, based on its initial hospital-specific rate, will be paid under the hold-harmless payment methodology. Based on our actuarial model, the breakdown of hospitals is as follows: ---------------------------------------------------------------------------------------------------------------- Capital transition payment methodology ----------------------------------------------------------------------------------------------------------------- FY 1998 FY 1998 Percent of FY 1998 percent of percent of Type of hospital hospitals percent of capital capital discharges costs payments ---------------------------------------------------------------------------------------------------------------- Low Cost Hospital........................................... 66 62 56 58 High Cost Hospital.......................................... 34 38 44 42 ---------------------------------------------------------------------------------------------------------------- A low capital cost hospital may request to have its hospital- specific rate redetermined based on old capital costs in the current year, through the later of the hospital's cost reporting period beginning in FY 1994 or the first cost reporting period beginning after obligated capital comes into use (within the limits established in Sec. 412.302(e) for putting obligated capital in use for patient care). If the redetermined hospital-specific rate is greater than the adjusted Federal rate, these hospitals will be paid under the hold-harmless payment methodology. Regardless of whether the hospital became a hold- harmless payment hospital as a result of a redetermination, we have continued to show these hospitals as low capital cost hospitals in Table III. Assuming no behavioral changes in capital expenditures, Table III displays the percentage change in payments from FY 1997 to FY 1998 using the above described actuarial model. With the final FY 1998 Federal rate, we estimate aggregate Medicare capital payments will decrease by 6.74 percent in FY 1998. The main reason for this decrease is the impact of the 17.78 percent reduction to the Federal rate and the hospital-specific rate. Table III.--Impact of Final Changes for FY 1998 on Payments per Discharge -------------------------------------------------------------------------------------------------------------------------------------------------------- Percent No. of Adjusted Average Hospital Hold Exceptions Total change hospitals Discharges Federal Federal specific harmless payment payment over FY payment percent payment payment 1997 -------------------------------------------------------------------------------------------------------------------------------------------------------- FY 1997 Payments per Discharge Low Cost Hospitals...................................... 3,331 6,898,994 464.25 63.57 135.71 3.07 11.79 614.82 ........ Fully Prospective................................... 3,078 6,246,888 436.83 60.00 149.88 ........ 12.52 599.23 ........ 100% Federal Rate................................... 235 609,412 752.47 100.00 ........ ........ 3.30 755.77 ........ Hold Harmless....................................... 18 42,693 362.22 48.77 ........ 496.62 25.67 884.51 ........ High Cost Hospitals..................................... 1,684 4,226,709 733.06 97.27 ........ 26.00 8.63 767.69 ........ 100% Federal Rate................................... 1,522 3,963,050 757.10 100.00 ........ ........ 6.29 763.39 ........ Hold Harmless....................................... 162 263,659 371.65 52.95 ........ 416.84 43.77 832.26 ........ ----------------------------------------------------------------------------------------------- Total Hospitals................................... 5,015 11,125,703 566.37 76.62 84.15 11.78 10.59 672.90 ........ =============================================================================================== FY 1998 Payments per Discharge Before Effects of the Balanced Budget Act of 1997 Low Cost Hospitals...................................... 3,331 7,064,036 568.02 72.69 108.16 2.43 10.80 689.41 12.13 Fully Prospective................................... 3,078 6,396,330 545.02 70.00 119.46 ........ 11.49 675.96 12.81 100% Federal Rate................................... 241 632,394 806.40 100.00 ........ ........ 2.75 809.15 7.06 Hold Harmless....................................... 12 35,312 464.85 54.94 ........ 486.07 30.35 981.26 10.94 High Cost Hospitals..................................... 1,684 4,327,823 808.62 98.86 ........ 11.55 10.34 830.51 8.18 100% Federal Rate................................... 1,591 4,191,128 819.68 100.00 ........ ........ 8.26 827.95 8.46 Hold Harmless....................................... 93 136,695 469.57 61.33 ........ 365.62 73.98 909.17 9.24 ----------------------------------------------------------------------------------------------- Total Hospitals................................... 5,015 11,391,859 659.42 82.91 67.07 5.89 10.63 743.02 10.42 =============================================================================================== FY 1998 Payments per Discharge After Effects of the Balanced Budget Act of 1997 Low Cost Hospitals...................................... 3,331 7,064,036 458.51 72.64 87.16 2.73 22.08 570.48 -7.21 Fully Prospective................................... 3,078 6,396,330 440.41 70.00 96.25 ........ 23.19 559.85 -6.57 100% Federal Rate................................... 238 626,061 650.85 100.00 ........ ........ 7.55 658.40 -12.88 Hold Harmless....................................... 15 41,645 348.31 53.30 ........ 462.72 69.84 880.87 -0.41 High Cost Hospitals..................................... 1,684 4,327,823 643.55 97.70 ........ 20.40 18.16 682.10 -11.15 100% Federal Rate................................... 1,528 4,070,204 662.07 100.00 ........ ........ 15.37 677.44 -11.26 Hold Harmless....................................... 156 257,620 351.00 57.92 ........ 342.67 62.11 755.78 -9.19 ----------------------------------------------------------------------------------------------- Total Hospitals................................... 5,015 11,391,859 528.81 82.41 54.04 9.44 20.59 612.88 -8.92 -------------------------------------------------------------------------------------------------------------------------------------------------------- [[Page 46131]] We project that low capital cost hospitals paid under the fully prospective payment methodology will experience an average decrease in payments per case of 6.57 percent, and that high capital cost hospitals will experience an average decrease of 11.15 percent. For hospitals paid under the fully prospective payment methodology, the Federal rate payment percentage will increase from 60 percent to 70 percent and the hospital-specific rate payment percentage will decrease from 40 to 30 percent in FY 1998. The Federal rate payment percentage for hospitals paid under the hold-harmless payment methodology is based on the hospital's ratio of new capital costs to total capital costs. The average Federal rate payment percentage for high cost hospitals receiving a hold-harmless payment for old capital will increase from 52.95 percent to 57.92 percent. Without the effects of the Balanced Budget Act of 1997, we estimate that this figure would have increased to 61.33 percent. We estimate the percentage of hold-harmless hospitals paid based on 100 percent of the Federal rate will increase from 90.7 percent to 91.2 percent. Excluding the effects of the Balanced Budget Act of 1997, we estimate that the percentage of hold-harmless hospitals paid based on 100 percent of the Federal rate would have increased to 94.6 percent. We expect that the average hospital-specific rate payment per discharge will decrease from $84.15 in FY 1997 to $54.04 in FY 1998. This is partly due to the decrease in the hospital-specific rate payment percentage from 40 percent in FY 1997 to 30 percent in FY 1998. Excluding the effects of the Balanced Budget Act of 1997, we estimate that the average hospital-specific payment per discharge would have decreased less dramatically to $67.07 in FY 1998. For FY 1998, the minimum payment levels are: 90 percent for sole community hospitals; 80 percent for urban hospitals with 100 or more beds and a disproportionate share patient percentage of 20.2 percent or more; or 70 percent for all other hospitals. We estimate that exceptions payments will increase from 1.57 percent of total capital payments in FY 1997 to 3.36 percent of payments in FY 1998. These figures are lower than prior estimates due to refinements to our actuarial model. For a further explanation of these refinements, refer to Section B of this Appendix. The projected distribution of the payments is shown in the table below: ------------------------------------------------------------------------ Estimated FY 1998 exceptions payments ------------------------------------------------------------------------- Percent of Type of hospital No. of exceptions hospitals payments ------------------------------------------------------------------------ Low Capital Cost.............................. 314 67 High Capital Cost............................. 198 33 ------------------------- Total................................... 512 100 ------------------------------------------------------------------------ C. Cross-Sectional Comparison of Capital Prospective Payment Methodologies Table IV presents a cross-sectional summary of hospital groupings by capital prospective payment methodology. This distribution is generated by our actuarial model. Table IV.--Distribution by Method of Payment (Hold-Harmless/Fully Prospective) of Hospitals Receiving Capital Payments ---------------------------------------------------------------------------------------------------------------- (2) Hold-harmless -------------------------- (3) (1) Total Percentage Percentage Percentage No. of paid hold- paid fully paid fully hospitals harmless federal prospective (A) (B) rate ---------------------------------------------------------------------------------------------------------------- By Geographic Location: All hospitals........................................... 5,015 3.4 35.2 61.4 Large urban areas (populations over 1 million).......... 1,590 3.9 42.7 53.4 Other urban areas (populations of 1 million or fewer)... 1,209 4.2 43.4 52.4 Rural areas............................................. 2,216 2.6 25.4 72.0 Urban hospitals......................................... 2,799 4.0 43.0 52.9 0-99 beds........................................... 674 4.7 36.8 58.5 100-199 beds........................................ 946 5.6 48.9 45.5 200-299 beds........................................ 569 3.3 43.8 52.9 300-499 beds........................................ 457 1.8 40.3 58.0 500 or more beds.................................... 153 0.7 39.2 60.1 Rural hospitals......................................... 2,216 2.6 25.4 72.0 0-49 beds........................................... 1,158 2.2 17.6 80.1 50-99 beds.......................................... 655 3.4 30.1 66.6 100-149 beds........................................ 235 2.1 40.4 57.4 150-199 beds........................................ 93 4.3 31.2 64.5 200 or more beds.................................... 75 1.3 49.3 49.3 By Region: Urban by Region......................................... 2,799 4.0 43.0 52.9 New England......................................... 158 0.0 27.8 72.2 Middle Atlantic..................................... 426 1.6 36.9 61.5 South Atlantic...................................... 414 4.1 55.1 40.8 East North Central.................................. 471 3.8 33.5 62.6 East South Central.................................. 159 5.7 52.8 41.5 West North Central.................................. 188 4.8 38.3 56.9 West South Central.................................. 344 10.2 58.4 31.4 Mountain............................................ 124 3.2 51.6 45.2 Pacific............................................. 467 2.6 39.4 58.0 Puerto Rico......................................... 48 4.2 25.0 70.8 Rural by Region......................................... 2,216 2.6 25.4 72.0 New England......................................... 53 0.0 22.6 77.4 [[Page 46132]] Middle Atlantic..................................... 84 2.4 29.8 67.9 South Atlantic...................................... 293 2.0 33.4 64.5 East North Central.................................. 301 1.3 20.9 77.7 East South Central.................................. 273 2.2 34.8 63.0 West North Central.................................. 511 2.7 17.8 79.5 West South Central.................................. 345 2.6 28.7 68.7 Mountain............................................ 211 6.2 19.9 73.9 Pacific............................................. 140 2.9 25.7 71.4 Large urban areas (populations over 1 million).............. 1,735 3.6 42.6 53.8 Other urban areas (populations of 1 million or fewer)....... 1,153 4.3 42.8 52.9 Rural areas................................................. 2,127 2.7 25.1 72.2 Teaching Status: Non-teaching............................................ 3,922 3.5 34.9 61.6 Fewer than 100 Residents................................ 855 3.9 37.5 58.6 100 or more Residents................................... 238 0.4 31.9 67.6 Disproportionate share hospitals (DSH): Non-DSH................................................. 3,129 3.6 31.3 65.2 Urban DSH: 100 or more beds.................................... 1,408 3.3 45.7 51.0 Less than 100 beds.................................. 81 2.5 34.6 63.0 Rural DSH: Sole Community (SCH/EACH)........................... 154 4.5 20.8 74.7 Referral Center (RRC/EACH).......................... 50 2.0 52.0 46.0 Other Rural: 100 or more beds................................ 66 1.5 39.4 59.1 Less than 100 beds.............................. 127 0.8 26.0 73.2 Urban teaching and DSH: Both teaching and DSH................................... 707 2.3 38.0 59.7 Teaching and no DSH..................................... 329 4.6 32.8 62.6 No teaching and DSH..................................... 782 4.2 51.4 44.4 No teaching and no DSH.................................. 1,070 4.6 42.3 53.1 Rural Hospital Types: Non special status hospitals............................ 905 1.3 26.5 72.2 RRC/EACH................................................ 158 1.3 41.8 57.0 SCH/EACH................................................ 641 5.8 22.5 71.8 Medicare-dependent hospitals (MDH)...................... 366 0.8 17.8 81.4 SCH, RRC and EACH....................................... 57 7.0 33.3 59.6 Type of Ownership: Voluntary............................................... 2,912 3.1 34.9 62.1 Proprietary............................................. 684 8.2 60.4 31.4 Government.............................................. 1,344 1.8 22.8 75.4 Medicare Utilization as a Percent of Inpatient Days: 0-25.................................................... 254 3.5 33.5 63.0 25-50................................................... 1,300 4.4 42.3 53.3 50-65................................................... 1,982 3.3 35.3 61.5 Over 65................................................. 1,404 2.8 28.5 68.7 ---------------------------------------------------------------------------------------------------------------- As we explain in Appendix B, we were not able to determine a hospital-specific rate for 73 of the 5,088 hospitals in our database. Consequently, the payment methodology distribution is based on 5,015 hospitals. These data should be fully representative of the payment methodologies that will be applicable to hospitals. The cross-sectional distribution of hospital by payment methodology is presented by: (1) Geographic location, (2) region, and (3) payment classification. This provides an indication of the percentage of hospitals within a particular hospital grouping that will be paid under the fully prospective payment methodology and under the hold-harmless methodology. The percentage of hospitals paid fully Federal (100 percent of the Federal rate) as hold-harmless hospitals is expected to increase to 35.2 percent in FY 1998. Table IV indicates that 61.4 percent of hospitals will be paid under the fully prospective payment methodology. (This figure, unlike the figure of 66 percent for low cost capital hospitals in the previous section, takes account of the effects of redeterminations. In other words, this figure does not include low cost hospitals that, following a hospital-specific rate redetermination, are now paid under the hold- harmless methodology.) As expected, a relatively higher percentage of rural and governmental hospitals (72.0 percent and 75.4 percent, respectively by payment classification) are being paid under the fully prospective methodology. This is a reflection of their lower than average capital costs [[Page 46133]] per case. In contrast, only 31.4 percent of proprietary hospitals are being paid under the fully prospective methodology. This is a reflection of their higher than average capital costs per case. (We found at the time of the August 30, 1991 final rule (56 FR 43430) that 62.7 percent of proprietary hospitals had a capital cost per case above the national average cost per case.) D. Cross-Sectional Analysis of Changes in Aggregate Payments We used our FY 1998 actuarial model to estimate the potential impact of changes for FY 1998 on total capital payments per case, using a universe of 5,015 hospitals. The individual hospital payment parameters are taken from the best available data, including: The July 1, 1997 update to the provider-specific file, cost report data, and audit information supplied by intermediaries. Table V presents estimates of payments per case under our model for FY 1997 (column 2). For FY 1998, we present estimates of payments per case both before and after the effects of the 17.78 percent reduction to the standard Federal and hospital-specific rates. Column 5 shows the total percentage change in payments from FY 1997 to FY 1998 (after the effects of the Balanced Budget Act of 1997). Column 6 presents the percentage change that can be attributed to the Balanced Budget Act of 1997 (the 17.78 percent reduction). Column 7 presents the percentage change in payments that can be attributed to Federal rate changes. Federal rate changes represented in Column 7 include the 15.36 percent decrease in the Federal rate which includes the Balanced Budget Act reduction, a 1.0 percent increase in case mix, changes in the adjustments to the Federal rate (for example, the effect of the new hospital wage index on the geographic adjustment factor), and reclassifications by the MGCRB. Column 5 includes the effects of the Federal rate changes represented in column 7. Column 5 also reflects the effects of all other changes, including: the change from 60 percent to 70 percent in the portion of the Federal rate for fully prospective hospitals, the hospital-specific rate update, changes in the proportion of new to total capital for hold-harmless hospitals, changes in old capital (for example, obligated capital put in use), hospital-specific rate redeterminations, and exceptions. The comparisons are provided by: (1) Geographic location, (2) region, and (3) payment classification. The simulation results show that, on average, capital payments per case can be expected to decrease 8.9 percent in FY 1998. The results show that the effect of the Balanced Budget Act of 1997 is to decrease payments by 17.5 percent. The results show that the effect of the Federal rate changes is to decrease payments by 11.0 percent. (This figure includes the effects of the Balanced Budget Act of 1997, but also includes the other payment adjustments which offset the magnitude of the 17.78 percent reduction.) In addition to the 11.0 percent decrease attributable to the Federal rate changes, a 2.1 percent increase is attributable to the effects of all other changes. Our comparison by geographic location shows that capital payments per case to urban and rural hospitals experience similar rates of decrease (8.8 percent and 9.9 percent, respectively). Payments per case for urban hospitals will decrease at about the same rate as payments per case for rural hospitals (11.0 percent and 11.4 percent, respectively) from the Federal rate changes alone. Urban hospitals will gain approximately the same as rural hospitals (2.2 percent and 1.5 percent, respectively) from the effects of all other changes. By region, there are variations in the change in payments per case. All regions are estimated to receive decreases in total capital payments per case, due to the reduction to the rate and due to the increased share of payments that are based on the Federal rate (from 60 to 70 percent). Changes by region vary from the smallest decrease of 5.1 percent (rural New England region) to the largest decrease of 11.4 percent (urban Puerto Rico hospitals). Overall, Puerto Rico hospitals are affected less by the change to the Federal rate and by the rate reduction due to the Balanced Budget Act of 1997 than other hospitals are nationally. Puerto Rico hospitals are projected to experience a slightly larger decrease in overall payments per case than other regions due to the other factors. We project a reduction in exceptions payments to Puerto Rico hospitals relative to the rest of the nation, which means that Puerto Rico hospitals are receiving a greater share of their capital costs as part of their regular payments. We also project a decrease in hold-harmless payments which is greater than the national average. By type of ownership, proprietary hospitals are projected to have the largest rate of decrease (11.0 percent, 11.8 percent due to Federal rate changes and a positive increase of 0.8 percent from the effects of all other changes). Payments to voluntary hospitals will decrease 8.8 percent (an 11.0 percent decrease due to Federal rate changes and a 2.2 percent increase from the effects of all other changes) and payments to government hospitals will decrease 7.6 percent (a 10.3 percent decrease due to Federal rate changes and a 2.7 percent increase from the effects of all other changes). Section 1886(d)(10) of the Act established the MGCRB. Hospitals may apply for reclassification for purposes of the standardized amount, wage index, or both. Although the Federal capital rate is not affected, a hospital's geographic classification for purposes of the operating standardized amount does affect a hospital's capital payments as a result of the large urban adjustment factor and the disproportionate share adjustment for urban hospitals with 100 or more beds. Reclassification for wage index purposes affects the geographic adjustment factor since that factor is constructed from the hospital wage index. To present the effects of the hospitals being reclassified for FY 1998 compared to the effects of reclassification for FY 1997, we show the average payment percentage increase for hospitals reclassified in each fiscal year and in total. For FY 1998 reclassifications, we indicate those hospitals reclassified for standardized amount purposes only, for wage index purposes only, and for both purposes. The reclassified groups are compared to all other nonreclassified hospitals. These categories are further identified by urban and rural designation. Hospitals reclassified for FY 1998 as a whole are projected to experience a 9.2 percent decrease in payments (a 10.9 percent decrease attributable to Federal rate changes and a 1.7 percent increase attributable to the effects of all other changes). Payments to nonreclassified hospitals will decrease slightly less (8.7 percent) than reclassified hospitals (9.2 percent) overall. Payments to nonreclassified hospitals will decrease slightly less than reclassified hospitals from the Federal rate changes (10.8 percent compared to 10.9 percent), but they will gain slightly more from the effects of all other changes (2.1 percent compared to 1.7 percent). [[Page 46134]] Table V.--Comparison of Total Payments Per Case [FY 1997 Payments Compared To FY 1998 Payments] -------------------------------------------------------------------------------------------------------------------------------------------------------- Average FY Average FY 1998 1998 Average FY payments/ payments/ Change due Portion Number of 1997 case before case after All changes to Balanced attributable hospitals payments/ Balanced Balanced Budget Act to Federal case Budget Act Budget Act of 1997 rate change of 1997 of 1997 -------------------------------------------------------------------------------------------------------------------------------------------------------- By Geographic Location: All hospitals........................................... 5,015 673 743 613 -8.9 -17.5 -11.0 Large urban areas (populations over 1 million).......... 1,590 770 851 703 -8.7 -17.4 -10.9 Other urban areas (populations of 1 million or fewer)... 1,209 664 733 605 -8.9 -17.5 -11.1 Rural areas............................................. 2,216 461 507 416 -9.9 -18.0 -11.4 Urban hospitals......................................... 2,799 725 801 661 -8.8 -17.4 -11.0 0-99 beds........................................... 674 540 588 485 -10.1 -17.5 -11.6 100-199 beds........................................ 946 649 710 585 -9.8 -17.5 -11.5 200-299 beds........................................ 569 700 771 633 -9.6 -17.9 -11.4 300-499 beds........................................ 457 756 840 693 -8.2 -17.4 -10.9 500 or more beds.................................... 153 883 985 820 -7.2 -16.8 -9.7 Rural hospitals......................................... 2,216 461 507 416 -9.9 -18.0 -11.4 0-49 beds........................................... 1,158 367 403 333 -9.3 -17.5 -11.1 50-99 beds.......................................... 655 433 474 390 -9.9 -17.7 -11.3 100-149 beds........................................ 235 480 531 434 -9.7 -18.4 -11.9 150-199 beds........................................ 93 499 548 452 -9.5 -17.6 -10.7 200 or more beds.................................... 75 581 637 518 -10.7 -18.7 -12.0 By Region: Urban by Region......................................... 2,799 725 801 661 -8.8 -17.4 -11.0 New England......................................... 158 735 815 673 -8.5 -17.4 -11.3 Middle Atlantic..................................... 426 769 849 698 -9.3 -17.8 -11.1 South Atlantic...................................... 414 719 791 657 -8.6 -17.0 -11.3 East North Central.................................. 471 686 760 625 -8.9 -17.8 -10.6 East South Central.................................. 159 668 746 620 -7.1 -16.9 -10.0 West North Central.................................. 188 709 785 650 -8.3 -17.3 -10.6 West South Central.................................. 344 734 806 668 -9.0 -17.1 -10.8 Mountain............................................ 124 742 811 668 -9.9 -17.6 -11.3 Pacific............................................. 467 790 877 723 -8.5 -17.5 -11.2 Puerto Rico......................................... 48 300 319 266 -11.4 -16.7 -10.6 Rural by Region......................................... 2,216 461 507 416 -9.9 -18.0 -11.4 New England......................................... 53 531 596 504 -5.1 -15.5 -11.1 Middle Atlantic..................................... 84 477 518 425 -10.9 -17.9 -12.0 South Atlantic...................................... 293 496 541 448 -9.7 -17.2 -11.8 East North Central.................................. 301 458 505 414 -9.8 -18.0 -11.4 East South Central.................................. 273 425 471 381 -10.4 -19.2 -11.8 West North Central.................................. 511 439 480 395 -10.0 -17.7 -10.6 West South Central.................................. 345 425 467 379 -10.9 -18.9 -11.8 Mountain............................................ 211 486 533 437 -9.9 -17.9 -10.4 Pacific............................................. 140 523 584 479 -8.4 -17.9 -11.1 By Payment Classification: All hospitals........................................... 5,015 673 743 613 -8.9 -17.5 -11.0 Large urban areas (populations over 1 million).......... 1,735 760 840 693 -8.7 -17.5 -10.9 Other urban areas (populations of 1 million or fewer)... 1,153 663 732 605 -8.8 -17.4 -11.1 Rural areas............................................. 2,127 456 500 411 -10.0 -17.9 -11.5 Teaching Status: Non-teaching........................................ 3,922 582 638 523 -10.1 -18.0 -11.7 Fewer than 100 Residents............................ 855 711 787 648 -8.8 -17.6 -10.9 100 or more Residents............................... 238 961 1,075 902 -6.2 -16.2 -9.4 Urban DSH: 100 or more beds................................ 1,408 764 844 701 -8.2 -16.9 -10.6 Less than 100 beds.............................. 81 528 583 477 -9.7 -18.2 -11.3 Rural DSH: Sole Community (SCH/EACH)....................... 154 412 448 381 -7.5 -15.0 -10.6 Referral Center (RRC/EACH)...................... 50 534 587 485 -9.2 -17.4 -11.2 Other Rural: 100 or more beds............................ 66 438 478 389 -11.3 -18.6 -12.3 Less than 100 beds.......................... 127 367 405 327 -11.1 -19.3 -11.6 Urban teaching and DSH: Both teaching and DSH............................... 707 830 919 767 -7.5 -16.5 -10.1 [[Page 46135]] Teaching and no DSH................................. 329 720 805 659 -8.5 -18.2 -10.9 No teaching and DSH................................. 782 657 722 594 -9.6 -17.7 -11.5 No teaching and no DSH.............................. 1,070 628 688 562 -10.5 -18.4 -12.1 Rural Hospital Types: Non special status hospitals........................ 905 412 452 366 -11.1 -19.0 -12.0 RRC/EACH............................................ 158 541 596 481 -11.1 -19.3 -11.7 SCH/EACH............................................ 641 444 484 407 -8.4 -15.9 -11.0 Medicare-dependent hospitals (MDH).................. 366 367 408 337 -8.4 -17.6 -11.3 SCH, RRC and EACH................................... 57 537 581 493 -8.1 -15.0 -10.4 Hospitals Reclassified by the Medicare Geographic Classification Review Board: Reclassification Status During FY97 and FY98: Reclassified During Both FY97 and FY98.......... 333 631 705 569 -9.8 -19.2 -11.6 Reclassified During FY98 Only................... 89 544 629 515 -5.4 -18.2 -6.8 Reclassified During FY97 Only................... 178 615 654 529 -13.9 -19.1 -14.4 FY98 Reclassifications: All Reclassified Hospitals...................... 422 618 693 561 -9.2 -19.1 -10.9 All Nonreclassified Hospitals................... 4,511 679 750 620 -8.7 -17.3 -10.8 All Urban Reclassified Hospitals................ 109 718 804 648 -9.8 -19.4 -11.3 Urban Nonreclassified Hospitals................. 2,690 725 801 662 -8.7 -17.3 -10.9 All Reclassified Rural Hospitals................ 313 545 613 498 -8.8 -18.8 -10.6 Rural Nonreclassified Hospitals................. 1,876 430 467 385 -10.3 -17.5 -11.8 Other Reclassified Hospitals (Section 1886(D)(8)(B)).... 27 508 564 449 -11.7 -20.5 -11.6 Type of Ownership: Voluntary........................................... 2,912 688 760 628 -8.8 -17.5 -11.0 Proprietary......................................... 684 676 738 602 -11.0 -18.5 -11.8 Government.......................................... 1,344 590 656 545 -7.6 -17.0 -10.3 Medicare Utilization as a Percent of Inpatient Days: 0-25................................................ 254 756 845 709 -6.2 -16.1 -10.6 25-50............................................... 1,300 792 876 727 -8.3 -17.0 -10.4 50-65............................................... 1,982 628 694 570 -9.3 -17.8 -11.3 Over 65............................................. 1,404 560 616 503 -10.2 -18.2 -12.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- Appendix B: Technical Appendix on the New Capital Cost Model and Required Adjustments Under section 1886(g)(1)(A) of the Act, we set capital prospective payment rates for FY 1992 through FY 1995 so that aggregate prospective payments for capital costs were projected to be 10 percent lower than the amount that would have been payable on a reasonable cost basis for capital-related costs in that year. To implement this requirement, we developed the capital acquisition model to determine the budget neutrality adjustment factor. Even though the budget neutrality requirement expired effective with FY 1996, we must continue to determine the recalibration and geographic reclassification budget neutrality adjustment factor, and the reduction in the Federal and hospital-specific rates for exceptions payments. To determine these factors, we must continue to project capital costs and payments. We have used the capital acquisition model since the start of prospective payments for capital costs. We now have 4 years of cost reports under the capital prospective payment system. Consequently, we have developed a new capital cost model to replace the capital acquisition model. This new model makes use of the data from these cost reports. The following cost reports are used in the capital cost model for this final rule: the June 13, 1997 update of the cost reports for PPS- IX (cost reporting periods beginning in FY 1992), PPS-X (cost reporting periods beginning in FY 1993), PPS-XI (cost reporting periods beginning in FY 1994), and PPS-XII (cost reporting periods beginning in FY 1995). In addition, to model payments, we use the July 1, 1997 update of the provider-specific file, and the March [[Page 46136]] 1994 update of the intermediary audit file. Since hospitals under alternative payment system waivers (that is, hospitals in Maryland) are currently excluded from the capital prospective payment system, we excluded these hospitals from our model. We developed FY 1992 through FY 1997 hospital-specific rates using the provider-specific file and the intermediary audit file. (We used the cumulative provider-specific file, which includes all updates to each hospital's records, and chose the latest record for each fiscal year.) We checked the consistency between the provider-specific file and the intermediary audit file. We ensured that increases in the hospital-specific rates were at least as large as the published updates (increases) for the hospital-specific rates each year. We were able to match hospitals to the files as shown in the following table: ------------------------------------------------------------------------ Number of Source hospitals ------------------------------------------------------------------------ Provider-Specific File Only................................ 117 Provider-Specific and Audit File........................... 4971 ------------ Total................................................ 5088 ------------------------------------------------------------------------ Ninety-seven of the 5,088 hospitals had unusable or missing data or had no cost reports available. We determined from the cost reports that 24 of the 97 hospitals were paid under the hold-harmless methodology. Since the hospital-specific amount is not used to determine payments for these hospitals, we were able to include these 24 hospitals in the analysis. Seventy-three hospitals could not be used in the analysis because of insufficient information. They account for about 0.2 percent of admissions so any effect should be minimal. Therefore, we used data from cost reports from 5,015 hospitals for the analysis. We analyzed changes in capital-related costs (depreciation, interest, rent, leases, insurance, and taxes) reported in the cost reports. We found a wide variance among hospitals in the growth of these costs. For hospitals with more than 100 beds, the distribution and mean of these cost increases were different for large (greater than 20 percent) changes in bed-size. We also analyzed changes in the growth in old capital and new capital for cost reports that provided this information. For old capital, we limited the analysis only for decreases in old capital. We did this since the opportunity for most hospitals to treat ``obligated'' capital put into service as old capital has expired. Old capital costs should, therefore, decrease as assets become fully depreciated, and as interest costs decrease as the loan is amortized. The new capital cost model separates the hospitals into three mutually exclusive groups. Hold-harmless hospitals with data on old capital were placed in the first group. Of the remaining hospitals, those hospitals with fewer than 100 beds comprise the second group. The third group consists of all hospitals that did not fit into either of the first two groups. Each of these groups displayed unique patterns of growth in capital costs. We found that the gamma distribution is useful in explaining and describing the patterns of increase in capital costs. A gamma distribution is a statistical distribution that can be used to describe patterns of growth rates, with greatest proportion of rates being at the low end. We use the gamma distribution to estimate individual hospital rates of increase. (1) For hold-harmless hospitals, old capital cost changes were fitted to a truncated gamma distribution, that is, a gamma distribution covering only the distribution of cost decreases. New capital costs changes were fitted to the entire gamma distribution allowing for both decreases and increases. (2) For hospitals with fewer than 100 beds (small), total capital cost changes were fitted to the gamma distribution allowing for both decreases and increases. (3) Other (large) hospitals were further separated into three groups: Bed-size decreases over 20 percent (decrease) Bed-size increases over 20 percent (increase) Other (no-change). Capital cost changes for large hospitals were fitted to gamma distributions for each bed-size change group, allowing for both decreases and increases in capital costs. We analyzed the probability distribution of increases and decreases in bed-size for large hospitals. We found the probability somewhat dependent on the prior year change in bed-size and factored this dependence into the analysis. Probabilities of bed-size change were determined. Separate sets of probability factors were calculated to reflect the dependence on prior year change in bed-size (increase, decrease, and no change). The gamma distributions were fitted to changes in aggregate capital costs for the entire hospital. We checked the relationship between aggregate costs and Medicare per discharge costs. For large hospitals, there was a small variance, but the variance was larger for small hospitals. Since costs are used only for the hold-harmless methodology and to determine exceptions, we decided to use the gamma distributions fitted to aggregate cost increases for estimating distributions of cost per discharge increases. Capital costs per discharge calculated from the cost reports were increased by random numbers drawn from the gamma distribution to project costs in future years. Old and new capital were projected separately for hold-harmless hospitals. Aggregate capital per discharge costs were projected for all other hospitals. Because the distribution of increases in capital costs varies with changes in bed-size for large hospitals, we first projected changes in bed-size for large hospitals before drawing random numbers from the gamma distribution. Bed-size changes were drawn from the uniform distribution with the probabilities dependent on the previous year bed-size change. The gamma distribution has a shape parameter and a scaling parameter. (We used different parameters for each hospital group, and for old and new capital.) We used discharge counts from the cost reports to calculate capital cost per discharge. To estimate total capital costs for FY 1996 (the MEDPAR data year) and later, we use the number of discharges from the MEDPAR data. Some hospitals have considerably more discharges in FY 1996 than in the years for which we calculated cost per discharge from the cost report data. Consequently, a hospital with few cost report discharges would have a high capital cost per discharge since fixed costs would be allocated over only a few discharges. If discharges increase substantially, the cost per discharge would decrease because fixed costs would be allocated over many discharges. If the projection of capital cost per discharge is not adjusted for increases in discharges, the projection of exceptions would be overstated. We correct this situation by recalculating the cost per discharge with the MEDPAR discharges if the MEDPAR discharges exceed the cost report discharges by more than 20 percent. We do not adjust for increases of less than 20 percent because we have not received every FY 1996 discharge, and because some discharges are removed from the analysis because they are statistical outliers. This adjustment reduces our estimate of exceptions payments, and consequently, the reduction to the Federal Rate for exceptions is smaller. We will continue to monitor our modeling of exceptions payments and make adjustments as needed. [[Page 46137]] The average national capital cost per discharge generated by this model is the combined average of many randomly generated increases. This average must equal the projected average national capital cost per discharge, which we projected separately (outside this model). We adjusted the shape parameter of the gamma distributions so that the modeled average capital cost per discharge matches our projected capital cost per discharge. The shape parameter for old capital was not adjusted since we are modeling the aging of ``existing'' assets. This model provides a distribution of capital costs among hospitals that are consistent with our aggregate capital projections. Once each hospital's capital-related costs are generated, the model projects capital payments. We use the actual payment parameters (for example, the case-mix index and the geographic adjustment factor) that are applicable to the specific hospital. To project capital payments, the model first assigns the applicable payment methodology (fully prospective or hold-harmless) to the hospital as determined from the provider-specific file and the cost reports. The model simulates Federal rate payments using the assigned payment parameters and hospital-specific estimated outlier payments. The case-mix index for a hospital is derived from the FY 1996 MedPAR file using the FY 1998 DRG relative weights published in section V. of the Addendum of this final rule. The case-mix index is increased each year after FY 1996 based on analysis of past experiences in case-mix increases. Based on analysis of recent case-mix increases, we estimate that case-mix will increase 0.5 percent in FY 1997 and 1.0 percent in FY 1998. (Since we are using FY 1996 cases for our analysis, the FY 1996 increase in case mix has no effect on projected capital payments.) Changes in geographic classification and revisions to the hospital wage data used to establish the hospital wage index affect the geographic adjustment factor. Changes in the DRG classification system and the relative weights affect the case-mix index. Section 412.308(c)(4)(ii) requires that the estimated aggregate payments for the fiscal year, based on the Federal rate after any changes resulting from DRG reclassifications and recalibration and the geographic adjustment factor, equal the estimated aggregate payments based on the Federal rate that would have been made without such changes. For FY 1997, the budget neutrality adjustment factor was 1.00123. To determine the factor for FY 1998, we first determined the portion of the Federal rate that would be paid for each hospital in FY 1998 based on its applicable payment methodology. Using our model, we then compared estimated aggregate Federal rate payments based on the FY 1997 DRG relative weights and the FY 1997 geographic adjustment factor to estimated aggregate Federal rate payments based on the FY 1998 relative weights and the FY 1998 geographic adjustment factor. In making the comparison, we held the FY 1998 Federal rate portion constant and set the other budget neutrality adjustment factor and the exceptions reduction factor to 1.00. We determined that, to achieve budget neutrality for the changes in the geographic adjustment factor and DRG classifications and relative weights, an incremental budget neutrality adjustment of 0.99892 for FY 1998 should be applied to the previous cumulative FY 1997 adjustment of 1.00123, yielding a cumulative adjustment of 1.00015 through FY 1998. The following table summarizes the adjustment factors for each fiscal year: Budget Neutrality Adjustment for DRG Reclassifications and Recalibration and the Geographic Adjustment Factor ------------------------------------------------------------------------ Incremental Cumulative Fiscal year adjustment adjustment ------------------------------------------------------------------------ 1992........................................... ........... 1.00000 1993........................................... 0.99800 0.99800 1994........................................... 1.00531 1.00330 1995........................................... 0.99980 1.00310 1996........................................... 0.99940 1.00250 1997........................................... 0.99873 1.00123 1998........................................... 0.99892 1.00015 ------------------------------------------------------------------------ The methodology used to determine the recalibration and geographic (DRG/GAF) budget neutrality adjustment factor is similar to that used in establishing budget neutrality adjustments under the prospective payment system for operating costs. One difference is that, under the operating prospective payment system, the budget neutrality adjustments for the effect of geographic reclassifications are determined separately from the effects of other changes in the hospital wage index and the DRG relative weights. Under the capital prospective payment system, there is a single DRG/GAF budget neutrality adjustment factor for changes in the geographic adjustment factor (including geographic reclassification) and the DRG relative weights. In addition, there is no adjustment for the effects that geographic reclassification has on the other payment parameters, such as the payments for serving low- income patients or the large urban add-on payments. In addition to computing the DRG/GAF budget neutrality adjustment factor, we used the model to simulate total payments under the prospective payment system. Additional payments under the exceptions process are accounted for through a reduction in the Federal and hospital-specific rates. Therefore, we used the model to calculate the exceptions reduction factor. This exceptions reduction factor ensures that aggregate payments under the capital prospective payment system, including exceptions payments, are projected to equal the aggregate payments that would have been made under the capital prospective payment system without an exceptions process. Since changes in the level of the payment rates change the level of payments under the exceptions process, the exceptions reduction factor must be determined through iteration. In the August 30, 1991 final rule (56 FR 43517), we indicated that we would publish each year the estimated payment factors generated by the model to determine payments for the next 5 years. The table below provides the actual factors for fiscal years 1992 through 1998, and the estimated factors that would be applicable through FY 2002. We caution that these are estimates for fiscal years 1999 and later, and are subject to revisions resulting from continued methodological refinements, more recent data, and any payment policy changes that may occur. In this regard, we note that in making these projections we have assumed that the cumulative DRG/GAF budget neutrality adjustment factor will remain at 1.00015 for FY 1998 and later because we do not have sufficient information to estimate the change that will occur in the factor for years after FY 1998. The projections are as follows: [[Page 46138]] ---------------------------------------------------------------------------------------------------------------- Federal Exceptions Budget DRG/GAF Outlier Federal rate Fiscal year Update reduction neutrality adjustment adjustment rate (after factor factor factor factor \1\ factor adjustment outlier) reduction) ---------------------------------------------------------------------------------------------------------------- 1992......................... N/A 0.9813 0.9602 .......... .9497 .......... 415.59 1993......................... 6.07 .9756 .9162 .9980 .9496 .......... 417.29 1994......................... 3.04 .9485 .8947 1.0053 .9454 \2\.9260 378.34 1995......................... 3.44 .9734 .8432 .9998 .9414 .......... 376.83 1996......................... 1.20 .9849 N/A .9994 .9536 \3\.9972 461.96 1997......................... 0.70 .9358 N/A .9987 .9481 .......... 438.92 1998......................... 0.90 .9659 N/A .9989 .9382 \4\.8222 371.51 1999......................... 1.20 .9518 N/A \5\ 1.0000 \5\.9382 .......... 370.48 2000......................... 1.20 .9409 N/A 1.0000 .9382 .......... 370.63 2001......................... 1.30 .9324 N/A 1.0000 .9382 .......... 372.06 2002......................... 1.30 \6\ 1.0000 N/A 1.0000 .9382 .......... 404.22 ---------------------------------------------------------------------------------------------------------------- \1\ Note: The incremental change over the previous year. \2\ Note: OBRA 1993 adjustment. \3\ Note: Adjustment for change in the transfer policy. \4\ Note: Balanced Budget Act of 1997 adjustment. \5\ Note: Future adjustments are, for purposes of this projection, assumed to remain at the same level. \6\ Note: We are unable to estimate exceptions payments for the year under the special exceptions provision (Sec. 412.348(g) of the regulations) because the regular exceptions provision (Sec. 412.348(e)) expires. Appendix C: Revised Hospital Market Basket Data Sources I. Introduction: Market Basket Relative Weights and Choice of Price Proxy Variables for the Operating Hospital Input Price Indexes In the August 30, 1996 final rule (61 FR 46323), we discussed in detail the current 1992-based hospital market baskets, and noted that we would revise the hospital market baskets when new cost data for 1992 became available. This appendix describes the technical features of the revisions to the 1992-based indexes that we set forth in this final rule with comment period in section IV of the preamble. For both the prospective payment and excluded hospital market baskets, the differences between the revised market basket and the current market basket are noted. We present this description of the hospital operating market baskets in three steps: A synopsis of the differences between the current 1992- based market baskets and the revisions to those market baskets. A description of the methodology used to develop the cost category weights in the revised market baskets, making note of the differences from the methodology used to develop the 1992-based current market baskets. A description of the data sources used to measure price change for each component of the revised market baskets, making note of the differences from the price proxies used in the 1992-based current hospital market baskets. II. Synopsis of Differences Two major differences exist between the 1992-based current hospital market baskets and the hospital market baskets. The first major change is that the revised hospital market baskets are based on additional hospital expenditure data--data not available until after the publication of the August 30, 1996 final rule. The 1992-based current market baskets were derived from hospital cost reports for cost reporting periods beginning on or after October 1, 1991 and before October 1, 1992, augmented by information from the latest available (1987) Input-Output Table for the hospital industry, produced by the Bureau of Economic Analysis, U.S. Department of Commerce. In addition to the data sources cited above, the revised hospital market baskets use data from the 1992 Asset and Expenditure Survey, produced by the U.S. Department of Commerce, Economic and Statistics Administration, Bureau of the Census. These are more recent data made available after the publication of the August 30, 1996 final rule. The second major difference is that some cost categories have been combined with other cost categories to better reflect the new data sources. Specifically, the Transportation Services category has been combined with All Other Nonlabor-Intensive Services; Business Services and Computer and Data Processing Services with All Other Labor- Intensive Services; and part of Fuel Oil, Coal, etc. was combined with Natural Gas into Fuels, Nonhighway. The remainder of the Fuel Oil, Coal, etc. was combined with Miscellaneous Products. These category mergers reflect the Bureau of the Census categories in the Asset and Expenditure Survey and its information on services. III. Methodology for Developing the Revised Cost Category Weights Cost category weights for the revised market baskets were developed in three stages. First, base weights for the six main categories (Wages and Salaries, Employee Benefits, Pharmaceuticals, Nonmedical Professional Fees, Professional Liability Insurance, and All Other Expenses) were obtained from the 1992-based hospital market baskets. As the base year is not changing, these weights, developed last year from HCRIS data and the American Hospital Association (AHA) Annual Survey information, will not change. The weight for All Other Expenses was divided into subcategories using cost shares from the 1992 Asset and Expenditure Survey for Hospitals, U.S. Department of Commerce, Economics and Statistics Administration, Bureau of the Census. These subcategories were further divided using cost shares from the 1987 Input-Output Table for the hospital industry, produced by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA), aged to 1992 using price changes. A description of the source of the six main category weights is found in the August 30, 1996 final rule (61 FR 46323). The weight for the Utilities category, as well as those for the Electricity, Fuels Nonhighway, and Water and Sewerage Maintenance cost categories, was derived from the 1992 Asset and Expenditure Survey. The All Other Goods and Services category has more subcategories than any other market basket category. Goods found in this category include: direct service food, contract service food, pharmaceuticals, chemicals, medical instruments, photo supplies, rubber and plastics, paper products, apparel, [[Page 46139]] machinery and equipment and miscellaneous products. Services found in this category include telephone services, postage, other labor- intensive services, and other nonlabor-intensive services. The share for pharmaceuticals was derived from the 1992 Medicare cost reports. Relative shares for the other subcategories were derived from the 1992 Asset and Expenditure Survey, augmented by data from the 1987 Input- Output Table produced by BEA for the hospital industry, aged forward to 1992 using price changes, and then standardized to be consistent with data from the Asset and Expenditure Survey. IV. Price Proxies Used to Measure Cost Category Growth Descriptions of the price proxies used to measure cost category price growth in the current hospital market baskets are found in the August 30, 1996 final rule (61 FR 46324). The price proxies used for the revised hospital market baskets are the same as those for the current market baskets. Four cost categories in the current hospital market baskets have been combined with other cost categories to better reflect new data sources. For further discussion of the rationale for choosing specific price proxies, we refer the reader to the September 3, 1986 final rule (51 FR 31582). Appendix D: Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services I. Background Several provisions of the Act address the setting of update factors for inpatient services furnished in FY 1998 by hospitals subject to the prospective payment system and those excluded from the prospective payment system. Section 1886(b)(3)(B)(i)(XIII) of the Act, as amended by section 4401(a)(2) of Pub. L. 105-33, sets the percentage change in the operating cost standardized amounts equal to 0 percent for FY 1998. Section 1886(b)(3)(B)(iv) of the Act sets the FY 1998 percentage increase in the hospital-specific rates applicable to sole community and Medicare-dependent, small rural hospitals equal to the rate set forth in section 1886(b)(3)(B)(i) of the Act, that is, the same update factor as all other hospitals subject to the prospective payment system, or 0 percent. (As discussed in section V.D. of this preamble, section 4401(b) of Pub. L. 105-33 provides for an increase in the operating cost standardized amounts of 0.5 percentage points for certain hospitals that do not receive disproportionate share or indirect medical education payments and are not designated as Medicare- dependent, small rural hospitals.) Section 1886(b)(3)(B)(ii) of the Act, as amended by section 4411(a) of Pub. L 105-33, sets the FY 1998 percentage increase in the rate-of-increase limits for hospitals excluded from the prospective payment system equal to 0 percent. Therefore, in accordance with section 1886(d)(3)(A) of the Act, we are updating the standardized amounts, the hospital-specific rates, and the rate-of-increase limits for hospitals excluded from the prospective payment system by 0 percent. Sections 1886(e) (2)(A) and (3)(A) of the Act require that the Prospective Payment Assessment Commission (ProPAC) recommend to the Congress by March 1, 1997 an update factor that takes into account changes in the market basket rate of increase index, hospital productivity, technological and scientific advances, the quality of health care provided in hospitals, and long-term cost effectiveness in the provision of inpatient hospital services. In Recommendation 2 of its March 1, 1997 report, ProPAC recommended update factors to the standardized amounts equal to 0 percentage points for hospitals in both large urban and other areas. ProPAC did not make a separate recommendation for the hospital-specific rates applicable to sole community and Medicare-dependent, small rural hospitals. Section 1886(e)(4) of the Act requires that the Secretary, taking into consideration the recommendations of ProPAC, recommend update factors for each fiscal year that take into account the amounts necessary for the efficient and effective delivery of medically appropriate and necessary care of high quality. As required by section 1886(e)(5) of the Act, we published the FY 1998 update factors recommended under section 1886(e)(4) of the Act as Appendix E of the June 2, 1997 proposed rule (62 FR 30034). II. Secretary's Final Recommendations for Updating the Prospective Payment System Standardized Amounts We received several public comments concerning our proposed recommendation. After consideration of the arguments presented, we have decided that our final recommendation will be the same as our proposed recommendation. That is, we are recommending an update of 0 percentage points for hospitals located in large urban and other areas. We are also recommending an update of 0 percentage points to the hospital- specific rate for sole community and Medicare-dependent, small rural hospitals. We continue to believe these recommended update factors would ensure that Medicare acts as a prudent purchaser and would provide incentives to hospitals for increased efficiency, thereby contributing to the solvency of the Medicare Part A Trust Fund. We are also recommending an update of 0 percentage points for hospitals and hospital units excluded from the prospective payment system. This update is consistent with the updates provided to the prospective payment hospitals. Comment: Several commenters opposed the Secretary's recommendation that prospective payment hospitals receive a 0 percent update for FY 1998. The commenters observed that HCFA's update framework analysis supports a recommendation of not less than the market basket percentage increase minus 1.6 percentage points and asked why we had not relied on the results of the update framework in determining the recommended update. The commenters further stated that our recommendation ignores the variation in financial condition among hospitals and that the lack of an increase in the standardized amount will have an adverse impact on a significant number of hospitals. ProPAC supported our recommendation for an update of 0 percentage points, noting that the average Medicare inpatient operating costs per case and lengths of stay in prospective payment hospitals are both continuing to decrease, while total operating margins for hospitals have increased sharply. ProPAC believes that a 0 update will not harm either the hospital industry or Medicare beneficiaries. Response: In developing our update recommendation, we took into account the results of our update framework analysis in combination with several other factors. As stated in the proposed rule, these factors included the relative decrease in the use of hospital inpatient services and the corresponding increase in the use of hospital outpatient and postacute care services. We also considered the factors cited by ProPAC, particularly the decrease in costs per case. Thus, although we recognize that there is variation in financial condition among hospitals, we believe that a 0 percentage point update will result in payment rates that adequately compensate hospitals for the costs of efficient and effective treatment of Medicare beneficiaries. Comment: Several commenters stated that the Secretary's recommendation of [[Page 46140]] a 0 percentage point update, notwithstanding the results of HCFA's update framework analysis, could lower the confidence of hospitals in HCFA's objectivity. They indicated that the discrepancy between the results of the update framework and the recommended update casts doubts on HCFA's ability to administer the prospective payment system fairly. Response: We strongly object to the suggestion that the difference between the results of HCFA's update framework analysis and the Secretary's recommended update indicates any lack of objectivity in our analysis process or reflects on our ability to administer the Medicare program impartially. The update framework analysis is a largely empirical process carried out by HCFA that quantifies changes in hospital productivity, scientific and technological advances, practice pattern changes, and hospital case mix. In recommending an update, the Secretary takes these factors into account, as well as other factors such as the recommendations of ProPAC and the long-term solvency of the Medicare trust fund. Thus, the difference between the results of HCFA's update framework and the update recommended by the Secretary is reflective of the integrity of the update framework analysis process, which has not been compromised to produce an artificial congruence with the Secretary's recommendation. We continue to believe that the recommended update of 0 percentage points appropriately adjusts for overall changes occurring in the health care delivery system. III. Secretary's Final Recommendation for Updating the Rate-of- Increase Limits for Excluded Hospitals Our final recommendation is that hospitals and hospital units excluded from the prospective payment system also receive an update of 0 percentage points. This update is consistent with the updates provided to the prospective payment hospitals. We note that we carry out a separate update framework analysis for excluded hospitals and units, but the analysis indicates the same findings regarding changes in productivity, scientific and technological advances, practice patterns, and case mix for FY 1998 for excluded hospitals and for prospective payment system hospitals. We believe these updates will ensure that Medicare acts as a prudent purchaser and will provide incentives to hospitals for increased efficiency, thereby contributing to the solvency of the Medicare Part A Trust Fund. [FR Doc. 97-22890 Filed 8-28-97; 8:45 am] BILLING CODE 4160-01-P