[Federal Register Volume 63, Number 1 (Friday, January 2, 1998)]
[Notices]
[Pages 89-105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-34221]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[HCFA-1904-NC]
RIN 0938-AI24
Medicare Program; Schedule of Limits on Home Health Agency Costs
Per Visit for Cost Reporting Periods Beginning on or After October 1,
1997
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice with comment period.
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SUMMARY: This notice sets forth a revised schedule of limits on home
health agency costs that may be paid under the Medicare program for
cost reporting periods beginning on or after October 1, 1997. These
limits replace the per visit limits that were set forth in our July 1,
1996 notice with comment period (61 FR 34344) and supersede those set
forth in our July 1, 1997 notice with comment period (62 FR 35608).
This notice also provides, in accordance with the Balanced Budget Act
of 1997, that there be no changes in the home health per visit limits
for cost reporting periods beginning on or after July 1, 1997 and
before October 1, 1997 (that is, the cost limits set forth in our July
1, 1996 notice will apply to cost reporting
[[Page 90]]
periods beginning during this time period); that the establishment of
the cost per visit limitations for cost reporting periods beginning on
or after October 1, 1997 be based on 105 percent of the median of the
labor-related and nonlabor per visit costs for freestanding home health
agencies; that there be no updates in the home health costs limits
(including no adjustments for changes in the wage index or other
updates) for cost reporting periods beginning on or after July 1, 1994
and before July 1, 1996; and the wage index value that is applied to
the labor portion of the per visit limitations be based on the
geographic area in which the home health service is furnished.
DATES: Effective Date: This is a major rule under title 5, United
States Code, section 804(2). As indicated in section XI.A. of the
preamble of this notice with comment period, pursuant to 5 U.S.C.
553(b)(B), for good cause we find that prior notice and comment
procedures are impracticable and unnecessary. Pursuant to 5 U.S.C.
section 808(2), as well as section 1861(v)(1)(L)(i) of the Social
Security Act (as amended by section 4602(a)(5) of Pub. L. 105-33), this
schedule of limits is effective for cost reporting periods beginning on
or after October 1, 1997.
Comment Period: Written comments will be considered if we receive
them at the appropriate addresses, as provided below, no later than 5
p.m. on March 3, 1998.
ADDRESSES: Mail written comments (one original and three copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: HCFA-1904-NC, P.O. Box 7517,
Baltimore, Maryland 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,
Maryland 21244-1850.
Comments may also be submitted electronically to the following e-
mail address: [email protected]. E-mail comments must include the
full name, postal address, and affiliation (if applicable) of the
sender and must be submitted to the referenced address in order to be
considered. All comments must be incorporated in the e-mail message
because we may not be able to access attachments.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code HCFA-1904-NC. Comments received timely will be available
for public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue, SW, Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(Phone: (202) 690-7890).
Copies: To order copies of the Federal Register containing this
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FOR FURTHER INFORMATION CONTACT: Michael Bussacca, (410) 786-4602.
SUPPLEMENTARY INFORMATION:
I. Background
A. Summary
Section 1861(v)(1)(A) of the Social Security Act (the Act)
authorizes the Secretary to establish limits on allowable costs
incurred by a provider of services that may be paid under the Medicare
program, based on estimates of the costs necessary in the efficient
delivery of needed health services. Under this authority, we have
maintained limits on home health agency (HHA) per-visit costs since
1979. The limits may be applied to direct or indirect overall costs or
to the costs incurred for specific items or services furnished by the
provider. Implementing regulations are located at 42 CFR 413.30.
Additional statutory provisions specifically governing the limits
applicable to HHAs are contained at section 1861(v)(1)(L) of the Act.
Section 1861(v)(1)(L)(i) of the Act, as amended by section 4602(a) of
the Balanced Budget Act of 1997 (BBA '97), Pub. L. 105-33, specifies
that the cost limits must not exceed 105 percent of the median of the
labor-related and nonlabor per-visit costs for freestanding HHAs.
Section 1861(v)(1)(L)(vii) of the Act, as added by section 4602(c) of
BBA '97, requires that the Secretary establish HHA cost limits on an
annual basis for cost reporting periods beginning on or after October 1
of each year beginning in 1998, (except the cost limits established for
cost reporting periods beginning on or after October 1, 1997 must be
established by January 1, 1998). In establishing these limits, the
statute directs the Secretary to use the applicable hospital wage
index, as discussed below.
This notice with comment period sets forth revised cost limits for
cost reporting periods beginning on or after October 1, 1997. As
required by section 1861(v)(1)(L)(iii) of the Act, we are using the
area wage index applicable under section 1886(d)(3)(E) of the Act which
were determined using the survey of the most recent available wages and
wage-related costs of hospitals located in the geographic area in which
the home health service is furnished. For purposes of this notice, the
HHA wage index is based on the most recent hospital wage index, that
is, the prereclassified hospital wage index effective for hospital
discharges on or after October 1, 1997, which uses Federal fiscal year
(FY) 1994 wage data. As the statute also specifies, in applying the
hospital wage index to HHAs, no adjustments are to be made to account
for hospital reclassifications under section 1886(d)(8)(B) of the Act,
decisions of the Medicare Geographic Classification Review Board
(MGCRB) under section 1886(d)(10) of the Act, or decisions by the
Secretary.
B. Relevant Provisions of the Balanced Budget Act of 1997
The BBA '97 made major changes that affect the cost per visit
limitations applicable to services provided by HHAs. The provisions of
Pub. L. 105-
[[Page 91]]
33 that we are implementing in this notice with comment period are as
follows:
1. Delay in Updates
Section 4602(b) of BBA '97 amended section 1861(v)(1)(L)(iii) of
the Act to provide that there be no changes in the home health per
visit cost limits for cost reporting periods beginning on or after July
1, 1997 and before October 1, 1997. The effect of this provision is
that a HHA's latest per-visit cost limit for a cost reporting period
beginning on or after July 1, 1996 and before October 1, 1996, as
calculated under the notice published July 1, 1996 (61 FR 34344), will
remain in effect until its cost reporting period beginning on or after
October 1, 1997. For providers entering the Medicare program on or
after July 1, 1997 and before October 1, 1997, the applicable cost
limit will be the cost limit that would have applied for the identical
cost reporting period beginning on or after July 1, 1996 and before
October 1, 1996. (For example, if a provider enters the Medicare
program on July 1, 1997, with a 12-month cost reporting period, its
cost limit will be determined in the same manner as a cost limit for a
period beginning July 1, 1996 and ending June 30, 1997. If the provider
entering the Medicare program has a short cost reporting period, for
example, a period beginning July 1, 1997 and ending December 31, 1997,
the cost limit will be determined in the same manner as a cost limit
for a period beginning July 1, 1996, and ending December 31, 1996.)
Therefore, the notice of schedule of limits on HHA costs per visit for
cost reporting periods beginning on or after July 1, 1997, which was
published in the Federal Register (62 FR 35608) on July 1, 1997 has
been superseded by the change in the statute.
The notice of schedule of limits on HHA costs per visit, which was
published in the Federal Register on July 1, 1997 (62 FR 35608) also
contained comments and responses to the notice of schedule of limits
published in the Federal Register on July 1, 1996 (61 FR 34344). The
comments and responses in the July 1, 1997 Federal Register (62 FR
35609 through 35611) are not repeated in this notice. Even though the
cost limitations in the July 1, 1997 Federal Register have been
superseded by Pub. L. 105-33, the responses to the comments to the July
1, 1996 notice are still relevant and effective.
2. Reduction to limits
Section 1861(v)(1)(L)(i)(IV) was added to the Act by section
4602(a)(5) of the BBA '97 and requires the establishment of the cost
per visit limitations based on 105 percent of the median of labor-
related and nonlabor-related per visit costs for freestanding HHAs.
This is a change to the previous requirement that the cost limitations
be established based on 112 percent of the mean of the labor-related
and nonlabor per visit cost for freestanding HHAs.
The impact of this change will be discussed in general in the
impact statement in section XI of this notice with comment period.
3. Reduction in Market Basket Updates
Section 1861(v)(1)(L)(iv) was added to the Act by section 4601(a)
of BBA 97 and requires the Secretary not to take into account any
changes in the home health market basket with respect to cost reporting
periods which began on or after July 1, 1994 and before July 1, 1996 in
establishing the limitations for cost reporting periods beginning after
September 30, 1997. This, in effect, reduces the factors for increasing
the database dollars used in calculating the limits. How these factors
are determined is explained further in section VII of this notice with
comment period.
4. Application of per Visit Limitation
Section 1861(v)(1)(L)(iii) was amended by section 4604(b) of BBA
'97 to require that the utilization of the area wage index applicable
under section 1886(d)(3)(E) of the Act be determined using the survey
of the most recent available wages and wage-related costs of hospitals
located in the geographic area in which the home health services are
furnished. Previously, the survey was from hospitals located in the
geographic area in which the home health agency is located, and applied
to cost limitations for cost reporting periods beginning prior to
October 1, 1997. In effect, the cost per visit limitation that will
apply for the service furnished by the HHA will be the urban or rural
limit and the appropriate wage index for the geographic area where the
home health service is furnished. A Program Memorandum (Rev. AB-97-18),
which was published in September 1997, outlined the billing changes
that are needed to properly implement this provision.
5. Effective Date
Section 1861(v)(1)(L)(vii) of the Act was added by section 4602(c)
of BBA '97. Beginning in 1998, the Secretary is required to establish
the per-visit limits by August 1 of each year. However, for cost
reporting periods beginning on or after October 1, 1997, the Secretary
need only establish those limits by January 1, 1998. In accordance with
section 1861(v)(1)(L)(vii)(I), we are establishing by January 1, 1998,
the per-visit limits for cost reporting periods beginning on or after
October 1, 1997.
II. Updating the Wage Index on a Budget-Neutral Basis
Section 4207(d)(2) of the Omnibus Budget Reconciliation Act of
1990, Pub. L. 101-508, requires that in updating the wage index,
aggregate payments to HHAs should be equal to the amount that would
result from use of the 1982 wage index. On July 1, 1997, we published
the appropriate adjustment factor to comply with this requirement to
ensure that payments were not affected by the hospital wage index
published on August 30, 1996.
As stated before, BBA '97 was passed and included legislation that
affected the cost per-visit limitations. The effect of the changes in
the cost limit calculations (reducing per visit limits from 112% of the
mean to 105% of the median and freezing market basket updates) impacts
the level of payments and, therefore, affects the budget neutrality
factor. To determine the new adjustment factor, we used the same
methodology as explained in the July 1, 1997 Federal Register, page
35611, using the cost limits specified in this notice. As has been the
case with each of the new wage indices used in calculating home health
limits since the requirement of budget neutrality was established,
agencies would have received a higher adjusted cost limitation in the
aggregate. Aggregate payments to HHAs can only be affected to the
extent that agencies have costs exceeding the limits. When only a small
portion of total costs exceed the limits, the adjustment is effectively
spread over agencies, and the labor portion of the limits needs to be
increased by a large factor to reach the amount by which agencies, in
the aggregate, would have benefited using the 1982 wage index. It
follows that as the portion of costs exceeding the limits becomes
larger, the adjustment factor becomes smaller. Because the new cost
limits are lower, more providers are affected by the limits. Under the
old cost limit, 31% of home health agencies were over the limit, as
compared to 65% of home health agencies over the new cost limit. In
order to achieve the level of savings that would have occurred if the
1982 wage index was used, less of an increase is necessary to raise the
limits to achieve budget neutrality. We used the same methodology as
contained in the Federal Register published July 1, 1997 and determined
the new budget neutrality factor to be 1.009.
[[Page 92]]
III. Update of Limits
The cost report data used to develop the schedule of limits set
forth in this notice is for the same period as that used in setting the
limits that were effective July 1, 1996. We have updated the cost
limits to reflect the expected cost increases occurring between the
cost reporting periods for the data contained in the database and
September 30, 1998 (excluding, as required by statute, any changes in
the home health market basket for cost reporting periods beginning on
or after July 1, 1994 and before July 1, 1996).
A. Data Used
To develop the schedule of limits that is effective for cost
reporting periods beginning on or after October 1, 1997, we extracted
actual cost per-visit data from settled Medicare cost reports of
freestanding HHAs for periods ending on or after June 30, 1991, and
settled by October 1, 1995. The majority of the cost reports were from
FY 1993. We then adjusted the data using the latest available market
basket indexes to reflect expected cost increases occurring between the
cost reporting periods contained in our database and September 30,
1998. However, section 1861(v)(1)(L)(iv) prohibits the Secretary from
taking into account any changes in the home health market basket with
respect to cost reporting periods which began on or after July 1, 1994
and before July 1, 1996. Therefore, we excluded this time period when
we adjusted the database for the market basket increases.
B. Wage Index
The wage index is used to adjust the labor-related portion of the
limits to reflect differing wage levels among areas. In setting this
schedule of limits, we used the FY 1998 hospital wage index, which is
based on 1994 hospital wage data.
Each HHA's labor market area is determined based on the definitions
of Metropolitan Statistical Areas (MSAs) issued by the Office of
Management and Budget (OMB). Section 1861(v)(1)(L)(iii) of the Act
requires us to use the current hospital wage index (that is, the FY
1998 hospital wage index, which was published in the Federal Register
on August 29, 1997 (62 FR 46070)) to establish the HHA cost limits.
Therefore, this schedule of limits reflects the MSA definitions that
are currently in effect under the hospital prospective payment system.
We are continuing to incorporate exceptions to the MSA
classification system for certain New England counties that were
identified in the July 1, 1992 notice (57 FR 29410). These exceptions
have been recognized in setting hospital cost limits for cost reporting
periods beginning on and after July 1, 1979 (45 FR 41218), and were
authorized under section 601(g) of the Social Security Amendments of
1983 (Pub. L. 98-21). Section 601(g) of Public Law 98-21 requires that
any hospital in New England that was classified as being in an urban
area under the classification system in effect in 1979 will be
considered urban for the purposes of the hospital prospective payment
system. This provision is intended to ensure equitable treatment under
the hospital prospective payment system. Under this authority, the
following counties have been deemed to be urban areas for purposes of
payment under the inpatient hospital prospective payment system:
Litchfield County, CT in the Hartford, CT MSA.
York County, ME and Sagadahoc County, ME in the Portland,
ME MSA.
Merrimack County, NH in the Boston-Brockton-Nashua, MA-NH
MSA.
Newport County, RI in the Providence-Warwick-Pawtucket, RI
MSA.
We are continuing to grant these urban exceptions for the purpose
of applying the Medicare hospital wage index to the HHA cost limits.
These exceptions result in the same New England County Metropolitan
Area (NECMA) definitions for hospitals, skilled nursing facilities
(SNFs), and HHAs. In New England, MSAs are defined on town boundaries
rather than on county lines but exclude parts of the four counties
cited above that would be considered urban under the MSA definition.
Under this notice, those four counties are urban under either
definition, NECMA or MSA.
Section 1861(v)(1)(L)(iii), as amended by section 4604(b) of BBA
'97, requires us to establish these limits using the area wage index
applicable under section 1886(d)(3)(E) of the Act and determined using
the survey of the most recent available wages and wage-related costs of
hospitals located in the geographic area in which the home health
service is furnished. Prior to the amendment, the wage index as applied
to the labor portion of the per visit limitation was based on the
location of the HHA. Effective with cost reporting periods beginning on
or after October 1, 1997, the wage-index as applied to the labor
portion of the per visit limitation must be based on the geographic
location in which the home health service is actually furnished rather
than the physical location of the HHA itself. Therefore, in
establishing the limits for the HHAs, we will apply the wage index
based upon the location of where the service is furnished. See
discussion in section VII.
IV. Provisions of the HHA Schedule of Limits
The schedule of limits set forth below was calculated using 105
percent of the median per-visit costs of freestanding HHAs and is
adjusted by the latest estimates in the market basket index, excluding
any changes in the home health market basket for cost reporting periods
beginning on or after July 1, 1994 and before July 1, 1996.
The schedule of limits effective for cost reporting periods
beginning on or after October 1, 1997, is based on the actual cost per-
visit data from settled Medicare cost reports from freestanding HHAs
for periods ending on or after June 30, 1991, and settled by October 1,
1995, updated by the market basket rate of increase, excluding any
changes in the home health market basket with respect to cost reporting
periods that began on or after July 1, 1994 and before July 1, 1996,
and provides for the following:
A classification system based on whether an HHAs services
are furnished within an MSA, a NECMA, and/or a non-MSA area. (See
Tables 4a and 4b in section IX. of this notice for the listing of MSAs,
NECMAs, and rural areas.)
The use of a single schedule of limits for hospital-based
and freestanding agencies. This single limit is based on the cost
experience of freestanding agencies in accordance with section
1861(v)(1)(L)(i) of the Act.
The use of a market basket index, which was developed from
the price of goods and services purchased by HHAs to account for the
impact of changing wage and price levels on HHA costs.
The current hospital wage index that is used to adjust the
labor-related portion of the limits. The employee wage portion of the
market basket index, including a proportionate share of contract
services (64.226 percent), and the employee benefits portion (13.442
percent) are used to determine the labor component (77.668 percent) of
all HHA per-visit costs used to set the limits.
Separate treatment of the labor and nonlabor components of
per-visit costs. The separate components of costs are calculated by
obtaining actual HHA cost data for each agency for cost periods ending
on or after June 30, 1991 and settled before October 1, 1995, and
increasing those data by the actual and projected increases in the HHA
market basket index excluding any changes in the home health market
basket with respect to cost reporting periods that
[[Page 93]]
began on or after, July 1, 1994 and before July 1, 1996. We then
separated each HHA's per-visit costs into labor and nonlabor portions,
and divided the labor portion by the wage index value for the agency's
location to control for the effect of geographic variations in
prevailing wage levels. Separate means are computed for the labor and
nonlabor components of per-visit costs. For each comparison group, the
resulting amounts are shown in Table 3 of section VIII of this notice.
The application of a cost-of-living adjustment to the
nonlabor portion of the limit for HHAs located in Alaska, Hawaii,
Puerto Rico, and the U.S. Virgin Islands.
Limits are determined for the per-visit cost of each type
of home health service: skilled nursing care, physical therapy, speech
pathology, occupational therapy, medical social services, and home
health aide.
Application of the limits in the aggregate after an HHA's
actual costs are adjusted. An HHA's actual costs are adjusted for
individual items of cost that are found to be excessive under Medicare
principles of provider payment and for costs that are not included in
the limitation amount. The limits are applied in the aggregate to the
cost remaining after these adjustments are made. Payment is limited to
the lesser of the actual costs, the cost aggregated limits, or the per
beneficiary limitation. The per-beneficiary limitation must be
established by April 1, 1998, under section 1861(v)(1)(L)(vii), as
added by section 4602(c) of BBA '97 and will be effective for cost
reporting periods beginning October 1, 1997.
V. Market Basket
The 1993-based cost categories and weights are listed in Table 1
below.
Table 1.--1993-Based Cost Categories, Weights, and Price Proxies
------------------------------------------------------------------------
1993-based
market
Cost category basket Price proxy
weight
------------------------------------------------------------------------
Compensation, including allocated 77.668
Contract Services' Labor.
Wages and Salaries, including 64.226 HHA Occupational Wage
allocated Contract Services' Index.
Labor.
Employee benefits, including 13.442 HHA Occupational
allocated Contract Services' Benefits Index.
Labor.
Operations & Maintenance......... 0.832 CPI-U Fuel & Other
Utilities.
Administrative & General, 9.569
including allocated Contract
Services' Non-Labor.
Telephone.................... 0.725 CPI-U Telephone.
Paper & Printing............. 0.529 CPI-U Household Paper,
Paper Products &
Stationery Supplies.
Postage...................... 0.724 CPI-U Postage.
Other Administrative & 7.591 CPI-Services.
General, including allocated
Contract Services Non-Labor.
Transportation................... 3.405 CPI-U Private
Transportation.
Capital-Related.................. 3.204
Insurance.................... 0.560 CPI-U Household
Insurance.
Fixed Capital................ 1.764 CPI-U Owner's Equivalent
Rent.
Movable Capital.............. 0.880 PPI Machinery &
Equipment.
Other Expenses, including 5.322 CPI-U All Items Less
allocated Contract Services' Non- Food & Energy.
Labor.
-------------
Total...................... 100.000
------------------------------------------------------------------------
VI. Methodology for Determining Cost-Per-Visit Limits
A. Data
For this notice, the cost-per-visit limit values were determined by
extracting settled actual cost-per-visit data from Medicare cost
reports for cost reporting periods ending on or after June 30, 1991,
and settled before October 1, 1995. We then adjusted the data using the
latest available market basket factors to reflect expected cost
increases occurring between the cost reporting periods contained in our
database and September 30, 1998 excluding any changes in the home
health market basket with respect to cost reporting periods which began
on or after, July 1, 1994 and before July 1, 1996. The following
adjustment factors were used to compute the per-visit costs:
Table 2.--Factors for Inflating Database Dollars to September 30, 1998
[Inflation Adjustment Factors1]
------------------------------------------------------------------------
Fiscal year end 1992 1993 1994
------------------------------------------------------------------------
January 31............................. ......... 1.11250 1.07813
February 28............................ ......... 1.10947 1.07550
March 31............................... ......... 1.10642 1.07295
April 30............................... ......... 1.10336 1.07046
May 31................................. ......... 1.10033 1.06800
June 30................................ 1.13438 1.09737 1.06565
July 31................................ 1.13111 1.09450 1.06354
August 31.............................. 1.12791 1.09168 1.06165
September 30........................... 1.12476 1.08891 1.05993
October 31............................. 1.12166 1.08619 1.05838
November 30............................ 1.11859 1.08349 1.05706
[[Page 94]]
December 31............................ 1.11554 1.08080 1.05599
------------------------------------------------------------------------
\1\ Source: The Home Health Agency Input Price Index, produced by HCFA.
The forecasts are from Standard and Poor's DRI 3rd QTR 1997; @USSIM/
TREND25YR0897@CISSIM/Control973 forecast exercise which has historical
data through 1997:2.
Multiplying nominal dollars for a given fiscal year end by their
respective inflation adjustment factor will express those dollars in
the dollar levels for the fiscal year ending September 30, 1998.
The procedure followed to develop these revised tables, based on
requirements from the BBA '97, was to hold the June 1994 level for
input price index constant through June 1996. From July 1996 forward,
we trended the revised index forward using the percentage gain each
month from the HCFA Home Health Agency Input Price Index. Thus the
monthly trend of the revised index is the same as that of the HCFA
market basket for the period from July 1996 forward.
B. Cost Reporting Periods Consisting of Fewer Than 12 Months
HHAs may have cost reporting periods that are less than 12 months
in length. This may happen, for example, when a new provider enters the
Medicare program after its selected fiscal year has already begun, or
when a provider experiences a change of ownership before the end of the
cost reporting period. As explained in section IV. of this preamble,
the data used in calculating the cost limits were updated to September
30, 1998. Therefore, the cost limits published in this notice are for a
12-month cost reporting period beginning October 1, 1997 and ending
September 30, 1998. For 12-month cost reporting periods beginning after
October 1, 1997 and before October 1, 1998, cost reporting year
adjustment factors are provided in Table 5. However, when a cost
reporting period consists of fewer than 12 months, adjustments must be
made to the data that have been developed for use with 12-month cost
reporting periods. To promote the efficient dissemination of cost
limits to providers with cost reporting periods of fewer than 12
months, we are publishing the following examples and tables to enable
intermediaries to calculate the applicable adjustment factors.
Cost reporting periods of fewer than 12 months may not necessarily
begin on the first of the month or end on the last day of the month. In
order to simplify the process in calculating ``short period''
adjustment factors, if the short cost reporting period begins before
the sixteenth of the month, we will consider the period to have begun
on the first of that month. If the start period begins on or after the
sixteenth of the month, it will be considered to have begun at the
beginning of the next month. Also, if the short period ends before the
sixteenth of the month, we will consider the period to have ended at
the end of the preceding month; if the short period ends on or after
the sixteenth of the month, it will be considered to have ended at the
end of that month.
Examples:
1. After approval by its intermediary, an HHA changes its fiscal
year end from June 30 to December 31. Therefore, the HHA had a short
cost reporting period beginning on July 1, 1998 and ending on
December 31, 1998. The cost limits that apply to this short period
must be adjusted as follows:
Step 1--From Table 6, sum the index levels for the months of July
1998 through December 1998: 6.63687.
Step 2--Divide the results from Step 1 by the number of months in
the short period.
6.636876=1.106145
Step 3--From Table 6, sum the index levels for the months in the
common period of October 1997 through September 1998.
13.06926
Step 4--Divide the results in Step 3 by the number of months in the
common period.
13.0692612=1.089105
Step 5--Divide the results from Step 2 by the results from Step 4.
This is the adjustment factor to be applied to the published limits.
1.1061451.089105=1.015646
Step 6--Apply the results from Step 5 to the published cost limits.
a. Urban Skilled Nursing Labor Portion, $67.91 x 1.015646=$68.97
b. Urban Skilled Nursing Nonlabor Portion,
$19.18 x 1.015646=$19.48
2. An HHA with a fiscal year end of November 30, 1998 changes
ownership on September 21, 1998. The HHA is required to file a
terminated cost report for the period of December 1, 1997 to
September 21, 1998. The cost limits that apply to this short period
must be adjusted as follows:
Step 1--From Table 6, sum the index level for the month of December
1997 through September 1998.
10.91945
Step 2--Divide the results from Step 1 by the number of months in
the short period.
10.9194510=1.091945
Step 3--From Table 6, sum the index levels for the months in the
common period of October 1997, through September 1998.
13.06926
Step 4--Divide the results from Step 3 by the number of months in
the common period.
13.0692612=1.089105
Step 5--Divide the results from Step 2 by the results from Step 4.
1.0919451.089105=1.002608
Step 6--Apply the results from Step 5 to the published cost limits.
a. Urban Skilled Nursing Labor Portion, $67.91 x 1.002608=$68.09
b. Urban Skilled Nursing Non-Labor Portion,
$19.18 x 1.002608=$19.23
C. Standardization for Wage Levels
After adjustment by the market basket index, we divided each HHA's
per-visit costs into labor and nonlabor portions. The labor portion of
costs (77.668 percent as determined by the market basket) represents
the employee wage and benefit factor plus the contract services factor
from the market basket. We then divided the labor portion of per-visit
costs by the wage index applicable to the HHA's location to arrive at
an adjusted labor cost.
D. Adjustment for ``Outliers''
We transformed all per-visit cost data into their natural
logarithms and grouped them by type of service and MSA, NECMA, or non-
MSA location, in order to determine the median cost and standard
deviation for each group. We then eliminated all ``outlier'' costs
which were all per-visit costs under 10 dollars and per visit costs
over 800 dollars, retaining only those per-visit costs within two
standard deviations of the median in each service.
E. Basic Service Limit
We calculate a basic service limit equal to 105 percent of the
median labor and nonlabor portions of the per-visit costs of
freestanding HHAs for each type of service. (See Table 3 in section
IX.)
VII. Computing the Adjusted Limit
A. Adjustment of Cost Limits by Wage Index
To arrive at the adjusted limit, which is to be applied to each
service furnished by an HHA based on where the service is furnished,
the HHA's
[[Page 95]]
intermediary first determines the adjusted labor-related component by
multiplying the labor-related component of the limit by the appropriate
wage index and by multiplying the adjusted labor-related component by
the special labor adjustment for budget neutrality. (See example below
and Tables 4a and 4b in section VIII. of this notice.) The sum of the
nonlabor component plus the labor-related component is the adjusted
limit applicable to the service furnished by the HHA.
Example--Calculation of Adjusted Occupational Therapy Limit for an
Occupational Therapy Service Furnished in Dallas, TX by a Freestanding
HHA
Labor component (Table 3)................................... $73.20
Wage index value (Table 4a)................................. 0.9703
Labor portion............................................... $71.03
Special labor adjustment for budget neutrality.............. 1.009
Adjusted labor portion...................................... $71.67
Nonlabor component (Table 3)................................ $21.00
Adjusted occupational therapy limit......................... $92.67
B. Adjustment for Reporting Year
If an HHA has a 12-month cost reporting period beginning on or
after November 1, 1997, the adjusted per-visit limit for each service
is again revised by an adjustment factor from Table 5 that corresponds
to the month and year in which the cost reporting period begins. Each
factor represents the compounded rate of monthly increase derived from
the projected annual increase in the market basket index, and is used
to account for inflation in costs that will occur after the date on
which the limits become effective.
For example, if the HHA in the example above had a cost reporting
period beginning January 1, 1998, its per-visit therapy limit would be
further adjusted as follows:
Computation of Revised Limit for Occupational Therapy
------------------------------------------------------------------------
------------------------------------------------------------------------
Adjusted per-visit limit................................. $92.67
Adjustment factor from Table 5........................... 1.00781
Revised per-visit limit.................................. $93.39
------------------------------------------------------------------------
In this example, the revised adjusted per-visit limit for
occupational therapy services furnished in Dallas, TX by this HHA for
the cost reporting period beginning January 1, 1998, is $93.39 per
visit.
If an HHA uses a cost reporting period that is not 12 months in
duration, a special calculation of the adjustment factor must be made.
This results from the fact that projections are computed to September
30, 1998. This calculation is done using the methodology described in
section VII.B.
VIII. Schedule of Limits
The schedule of limits set forth below applies to cost reporting
periods beginning on or after October 1, 1997. The intermediaries will
compute the adjusted limits using the wage index published in Tables 4a
and 4b of section IX. and will notify each HHA they service of its
applicable cost per-visit limit for the areas where the HHA furnishes
each type of service. Each HHA's aggregate limit cannot be determined
prospectively, but depends on each HHA's Medicare visits for each type
of service furnished by location of the service for the cost reporting
periods subject to this notice.
The HHA costs that are subject to the limits include the cost of
medical supplies routinely furnished in conjunction with patient care.
Durable medical equipment, orthotics, prosthetics, and other medical
supplies directly identifiable as services to an individual patient are
excluded from the per-visit costs and are paid without regard to this
schedule of limits. (See Chapter IV of the Home Health Agency Manual
(HCFA Pub. 11).)
The intermediary will determine the limit for each HHA by
multiplying the number of Medicare visits for each type according to
the location of where the service is furnished by the HHA, by the
respective per-visit cost limit. The sum of these amounts is compared
to the HHA's total allowable cost.
Example: HHA X, a freestanding agency located in Richmond, VA, and
all its services in the Richmond, VA, MSA furnished 5,000 covered
skilled nursing visits, 2,000 physical therapy visits, and 4,000 home
health aide visits to Medicare beneficiaries during its 12-month cost
reporting period beginning October 1, 1997. The aggregate cost limit
for the HHA is calculated as follows:
Determining the Aggregate Cost Limit
----------------------------------------------------------------------------------------------------------------
Adjusted
Type of visit Visits Nonlabor labor Adjusted Aggregate
portion portion 1 limit limit
----------------------------------------------------------------------------------------------------------------
Skilled nursing................................ 5,000 $19.18 $62.71 $81.89 $409,450
Physical therapy............................... 2,000 20.78 67.78 88.56 177,120
Home health aide............................... 4,000 9.35 30.39 39.74 158,960
-------------
Total Visits............................... 11,000
Aggregate cost limit....................... ........... ........... ........... ........... $745,530
----------------------------------------------------------------------------------------------------------------
\1\ Includes special labor adjustment of 1.009 for budget neutrality.
Before the limits are applied during settlement of the cost report,
the HHA's actual costs are reduced by the amount of individual items of
cost (for example, administrative compensation and contract services)
that are found to be excessive under the Medicare principles of
provider payment. That is, the intermediary reviews the various
reported costs, taking into account all the Medicare payment
principles; for example, the cost guidelines for physical therapy
furnished under arrangements (42 CFR 413.106) and the limitation on
costs that are substantially out of line with those comparable HHAs (42
CFR 413.9).
Table 3.--Per Visit Limits For Home Health Agencies
------------------------------------------------------------------------
Labor Nonlabor
Type of visit Limit portion portion \1\
------------------------------------------------------------------------
MSA (NECMA) location:
Skilled nursing care......... $87.09 $67.91 $19.18
[[Page 96]]
Physical therapy............. 94.18 73.40 20.78
Speech pathology............. 94.57 73.50 21.07
Occupational therapy......... 94.20 73.20 21.00
Medical social services...... 119.76 93.23 26.53
Home health aide............. 42.26 32.91 9.35
Non-MSA location:
Skilled nursing care......... 97.09 79.25 17.84
Physical therapy............. 103.81 84.49 19.32
Speech pathology............. 109.94 89.45 20.49
Occupational therapy......... 111.00 90.25 20.75
Medical social services...... 149.21 121.56 27.65
Home health aide............. 42.09 34.34 7.75
------------------------------------------------------------------------
\1\ Nonlabor portion of limits for HHAs located in Alaska, Hawaii,
Puerto Rico, and the Virgin Islands are increased by multiplying them
by the following cost-of-living adjustment factors:
------------------------------------------------------------------------
Adjustment
Location factor
------------------------------------------------------------------------
Alaska..................................................... 1.150
Hawaii:
County of Honolulu..................................... 1.225
County of Hawaii....................................... 1.150
County of Kauai........................................ 1.200
County of Maui......................................... 1.225
County of Kalawao...................................... 1.225
Puerto Rico ............................................... 1.100
Virgin Islands............................................. 1.125
------------------------------------------------------------------------
IX. Wage Indexes
Table 4a--Wage index for Urban Areas
------------------------------------------------------------------------
Wage
Urban Area (Constituent Counties or County Equivalents) Index
------------------------------------------------------------------------
0040 Abilene, TX............................................. 0.8287
Taylor, TX
0060 Aguadilla, PR........................................... 0.4188
Aguada, PR
Aguadilla, PR
Moca, PR
0080 Akron, OH............................................... 0.9772
Portage, OH
Summit, OH
0120 Albany, GA.............................................. 0.7914
Dougherty, GA
Lee, GA
0160 Albany-Schenectady-Troy, NY............................. 0.8480
Albany, NY
Montgomery, NY
Rensselaer, NY
Saratoga, NY
Schenectady, NY
Schoharie, NY
0200 Albuquerque, NM......................................... 0.9309
Bernalillo, NM
Sandoval, NM
Valencia, NM
0220 Alexandria, LA.......................................... 0.8162
Rapides, LA
0240 Allentown-Bethlehem-Easton, PA.......................... 1.0086
Carbon, PA
Lehigh, PA
Northampton, PA
0280 Altoona, PA............................................. 0.9137
Blair, PA
0320 Amarillo, TX............................................ 0.9425
Potter, TX
Randall, TX
0380 AK Anchorage, AK........................................ 1.2842
Anchorage,
0440 Ann Arbor, MI........................................... 1.1785
Lenawee, MI
Livingston, MI
Washtenaw, MI
0450 Anniston, AL............................................ 0.8266
Calhoun, AL
0460 Appleton-Oshkosh-Neenah, WI............................. 0.8996
Calumet, WI
Outagamie, WI
Winnebago, WI
0470 Arecibo, PR............................................. 0.4218
Arecibo, PR
Camuy, PR
Hatillo, PR
0480 Asheville, NC........................................... 0.9072
Buncombe, NC
Madison, NC
0500 Athens, GA.............................................. 0.9087
Clarke, GA
Madison, GA
Oconee, GA
0520 Atlanta, GA............................................. 0.9823
Barrow, GA
Bartow, GA
Carroll, GA
Cherokee, GA
Clayton, GA
Cobb, GA
Coweta, GA
DeKalb, GA
Douglas, GA
Fayette, GA
Forsyth, GA
Fulton, GA
Gwinnett, GA
Henry, GA
Newton, GA
Paulding, GA
Pickens, GA
Rockdale, GA
Spalding, GA
Walton, GA
0560 Atlantic City-Cape May, NJ.............................. 1.1155
Atlantic City, NJ
Cape May, NJ
0600 Augusta-Aiken, GA-SC.................................... 0.9333
Columbia, GA
McDuffie, GA
Richmond, GA
Aiken, SC
Edgefield, SC
0640 Austin-San Marcos, TX................................... 0.9133
Bastrop, TX
Caldwell, TX
Hays, TX
Travis, TX
Williamson, TX
0680 Bakersfield, CA......................................... 1.0014
Kern, CA
0720 Baltimore, MD........................................... 0.9689
[[Page 97]]
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Carroll, MD
Harford, MD
Howard, MD
Queen Annes, MD
0733 Bangor, ME.............................................. 0.9478
Penobscot, ME
0743 Barnstable-Yarmouth, MA................................. 1.4291
Barnstable, MA
0760 Baton Rouge, LA......................................... 0.8382
Ascension, LA
East Baton Rouge, LA
Livingston, LA
West Baton Rouge, LA
0840 Beaumont-Port Arthur, TX................................ 0.8593
Hardin, TX
Jefferson, TX
Orange, TX
0860 Bellingham, WA.......................................... 1.1221
Whatcom, WA
0870 Benton Harbor, MI....................................... 0.8634
Berrien, MI
0875 Bergen-Passaic, NJ...................................... 1.2156
Bergen, NJ Passaic, NJ
0880 Billings, MT............................................ 0.9783
Yellowstone, MT
0920 Biloxi-Gulfport-Pascagoula, MS.......................... 0.8415
Hancock, MS
Harrison, MS
Jackson, MS
0960 Binghamton, NY.......................................... 0.8914
Broome, NY
Tioga, NY
1000 Birmingham, AL.......................................... 0.9005
Blount, AL
Jefferson, AL
St. Clair, AL
Shelby, AL
1010 Bismarck, ND............................................ 0.7695
Burleigh, ND
Morton, ND
1020 Bloomington, IN......................................... 0.9128
Monroe, IN
1040 Bloomington-Normal, IL.................................. 0.8733
McLean, IL
1080 Boise City, ID.......................................... 0.8856
Ada, ID
Canyon, ID
1123 Boston-Worcester Lawrence-Lowell-....................... 1.1506
Brockton, MA-NH
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
Boulder, CO
1145 Brazoria, TX............................................ 0.9341
Brazoria, TX
1150 Bremerton, WA........................................... 1.0999
Kitsap, WA
1240 Brownsville-Harlingen-San Benito, TX.................... 0.8740
Cameron, TX
1260 Bryan-College Station, TX............................... 0.8571
Brazos, TX
1280 Buffalo-Niagara Falls, NY............................... 0.9272
Erie, NY
Niagara, NY
1303 Burlington, VT.......................................... 1.0142
Chittenden, VT
Franklin, VT
Grand Isle, VT
1310 Caguas, PR.............................................. 0.4459
Caguas, PR
Cayey, PR
Cidra, PR
Gurabo, PR
San Lorenzo, PR
1320 Canton-Massillon, OH.................................... 0.8961
Carroll, OH
Stark, OH
1350 Casper, WY.............................................. 0.9013
Natrona, WY
1360 Cedar Rapids, IA........................................ 0.8529
Linn, IA
1400 Champaign-Urbana, IL.................................... 0.8824
Champaign, IL
1440 Charleston-North Charleston, SC......................... 0.8807
Berkeley, SC
Charleston, SC
Dorchester, SC
1450 Charleston, WV.......................................... 0.9142
Kanawha, WV
Putnam, WV
1520 Charlotte-Gastonia-Rock Hill, NC-SC..................... 0.9710
Cabarrus, NC
Gaston, NC
Lincoln, NC
Mecklenburg, NC
Rowan, NC
Union, NC
York, SC
1540 Charlottesville, VA..................................... 0.9051
Albemarle, VA
Charlottesville City, VA
Fluvanna, VA
Greene, VA
1560 Chattanooga, TN-GA...................................... 0.8658
Catoosa, GA
Dade, GA
Walker, GA
Hamilton, TN
Marion, TN
1580 Cheyenne, WY............................................ 0.7555
Laramie, WY
1600 Chicago, IL............................................. 1.0860
Cook, IL
DeKalb, IL
DuPage, IL
Grundy, IL
Kane, IL
Kendall, IL
Lake, IL
McHenry, IL
Will, IL
1620 Chico-Paradise, CA...................................... 1.0429
Butte, CA
1640 Cincinnati, OH-KY-IN.................................... 0.9474
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
Christian, KY
Montgomery, TN
1680 Cleveland-Lorain-Elyria, OH............................. 0.9804
Ashtabula, OH
Cuyahoga, OH
Geauga, OH
Lake, OH
Lorain, OH
Medina, OH
1720 Colorado Springs, CO.................................... 0.9316
El Paso, CO
1740 Columbia, MO............................................ 0.9001
Boone, MO
1760 Columbia, SC............................................ 0.9192
Lexington, SC
Richland, SC
1800 Columbus, GA-AL Russell, AL............................. 0.8288
Chattanoochee, GA
Harris, GA
Muscogee, GA
1840 Columbus, OH............................................ 0.9793
Delaware, OH
Fairfield, OH
Franklin, OH
Licking, OH
Madison, OH
Pickaway, OH
1880 Corpus Christi, TX...................................... 0.8945
Nueces, TX
San Patricio, TX
1900 Cumberland, MD-WV....................................... 0.8822
Allegany, MD
Mineral, WV
1920 Dallas, TX.............................................. 0.9703
Collin, TX
Dallas, TX
Denton, TX
Ellis, TX
Henderson, TX
Hunt, TX
Kaufman, TX
Rockwall, TX
1950 Danville, VA............................................ 0.8146
Danville City, VA
Pittsylvania, VA
1960 Davenport-Rock Island-Moline, IA-IL..................... 0.8405
Scott, IA
Henry, IL
Rock Island, IL
2000 Dayton-Springfield, OH.................................. 0.9584
[[Page 98]]
Clark, OH
Greene, OH
Miami, OH
Montgomery, OH
2020 Daytona Beach, FL....................................... 0.8375
Flagler, FL
Volusia, FL
2030 Decatur, AL............................................. 0.8286
Lawrence, AL
Morgan, AL
2040 Decatur, IL............................................. 0.7915
Macon, IL
2080 Denver, CO.............................................. 1.0386
Adams, CO
Arapahoe, CO
Denver, CO
Douglas, CO
Jefferson, CO
2120 Des Moines, IA.......................................... 0.8837
Dallas, IA
Polk, IA
Warren, IA
2160 Detroit, MI............................................. 1.0825
Lapeer, MI
Macomb, MI
Monroe, MI
Oakland, MI
St. Clair, MI
Wayne, MI
2180 Dothan, AL.............................................. 0.8070
Dale, AL
Houston, AL
2190 Dover, DE............................................... 0.9303
Kent, DE
2200 Dubuque, IA............................................. 0.8088
Dubuque, IA
2240 Duluth-Superior, MN-WI.................................. 0.9779
St. Louis, MN
Douglas, WI
2281 Dutchess County, NY..................................... 1.0632
Dutchess, NY
2290 Eau Claire, WI.......................................... 0.8764
Chippewa, WI
Eau Claire, WI
2320 El Paso, TX............................................. 1.0123
El Paso, TX
2330 Elkhart-Goshen, IN...................................... 0.9081
Elkhart, IN
2335 Elmira, NY.............................................. 0.8247
Chemung, NY
2340 Enid, OK................................................ 0.7962
Garfield, OK
2360 Erie, PA................................................ 0.8862
Erie, PA
2400 Eugene-Springfield, OR.................................. 1.1435
Lane, OR
2440 Evansville-Henderson, IN-KY............................. 0.8641
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
2520 Fargo-Moorhead, ND-MN................................... 0.9937
Clay, MN
Cass, ND
2560 Fayetteville, NC........................................ 0.8734
Cumberland, NC
2580 Fayetteville-Springdale-Rogers, AR...................... 0.7461
Benton, AR
Washington, AR
2620 Flagstaff, AZ-UT........................................ 0.9115
Coconino, AZ
Kane, UT
2640 Flint, MI............................................... 1.1171
Genesee, MI
2650 Florence, AL............................................ 0.7551
Colbert, AL
Lauderdale, AL
2655 Florence, SC............................................ 0.8711
Florence, SC
2670 Fort Collins-Loveland, CO............................... 1.0248
Larimer, CO
2680 Ft. Lauderdale, FL...................................... 1.0448
Broward, FL
2700 Fort Myers-Cape Coral, FL............................... 0.8788
Lee, FL
2710 Fort Pierce-Port St. Lucie, FL.......................... 1.0257
Martin, FL
St. Lucie, FL
2720 Fort Smith, AR-OK....................................... 0.7769
Crawford, AR
Sebastian, AR
Sequoyah, OK
2750 Fort Walton Beach, FL................................... 0.8765
Okaloosa, FL
2760 Fort Wayne, IN.......................................... 0.8901
Adams, IN
Allen, IN
DeKalb, IN
Huntington, IN
Wells, IN
Whitley, IN
2800 Forth Worth-Arlington, TX............................... 0.9979
Hood, TX
Johnson, TX
Parker, TX
Tarrant, TX
2840 Fresno, CA.............................................. 1.0607
Fresno, CA
Madera, CA
2880 Gadsden, AL............................................. 0.8815
Etowah, AL
2900 Gainesville, FL......................................... 0.9616
Alachua, FL
2920 Galveston-Texas City, TX................................ 1.0564
Galveston, TX
2960 ary, IN................................................. 0.9633
Lake, IN
Porter, IN
2975 Glens Falls, NY......................................... 0.8386
Warren, NY
Washington, NY
2980 Goldsboro, NC........................................... 0.8443
Wayne, NC
2985 Grand Forks, ND-MN......................................
Polk, MN
Grand Forks, ND
2995 Grand Junction, CO...................................... 0.9090
Mesa, CO
3000 Grand Rapids-Muskegon-Holland, MI....................... 1.0147
Allegan, MI
Kent, MI
Muskegon, MI
Ottawa, MI
3040 Great Falls, MT......................................... 0.8803
Cascade, MT
3060 Greeley, CO............................................. 1.0097
Weld, CO
3080 Green Bay, WI........................................... 0.9097
Brown, WI
3120 Greensboro-Winston-Salem-High Point, NC................. 0.9351
Alamance, NC
Davidson, NC
Davie, NC
Forsyth, NC
Guilford, NC
Randolph, NC
Stokes, NC
Yadkin, NC
3150 Greenville, NC.......................................... 0.9064
Pitt, NC
3160 Greenville-Spartanburg-Anderson, SC..................... 0.9059
Anderson, SC
Cherokee, SC
Greenville, SC
Pickens, SC
Spartanburg, SC
3180 Hagerstown, MD.......................................... 0.9681
Washington, MD
3200 Hamilton-Middletown, OH................................. 0.8767
Butler, OH
3240 Harrisburg-Lebanon-Carlisle, PA......................... 1.0187
Cumberland, PA
Dauphin, PA
Lebanon, PA
Perry, PA
3283 Hartford, CT............................................ 1.2562
Hartford, CT
Litchfield, CT
Middlesex, CT
Tolland, CT
3285 Hattiesburg, MS......................................... 0.7192
Forrest, MS
Lamar, MS
3290 Hickory-Morganton-Lenoir, NC............................ 0.8686
Alexander, NC
Burke, NC
Caldwell, NC
Catawba, NC
3320 Honolulu, HI............................................ 1.1816
Honolulu, HI
3350 Houma, LA............................................... 0.7854
Lafourche, LA
Terrebonne, LA
3360 Houston, TX............................................. 0.9855
Chambers, TX
Fort Bend, TX
Harris, TX
Liberty, TX
Montgomery, TX
Waller, TX
3400 Huntington-Ashland, WV-KY-OH............................ 0.9160
Boyd, KY
Carter, KY
Greenup, KY
Lawrence, OH
Cabell, WV
Wayne, WV
3440 Huntsville, AL.......................................... 0.8485
Limestone, AL
Madison, AL
[[Page 99]]
3480 Indianapolis, IN........................................ 0.9848
Boone, IN
Hamilton, IN
Hancock, IN
Hendricks, IN
Johnson, IN
Madison, IN
Marion, IN
Morgan, IN
Shelby, IN
3500 Iowa City, IA........................................... 0.9413
Johnson, IA
3520 Jackson, MI............................................. 0.9052
Jackson, MI
3560 Jackson, MS............................................. 0.7760
Hinds, MS
Madison, MS
Rankin, MS
3580 Jackson, TN............................................. 0.8522
Madison, TN
Chester, TN
3600 Jacksonville, FL........................................ 0.8969
Clay, FL
Duval, FL
Nassau, FL
St. Johns, FL
3605 Jacksonville, NC........................................ 0.6973
Onslow, NC
3610 Jamestown, NY........................................... 0.7552
Chautaqua, NY
3620 Janesville-Beloit, WI................................... 0.8824
Rock, WI
3640 Jersey City, NJ......................................... 1.1412
Hudson, NJ
3660 Johnson City-Kingsport-Bristol, TN-VA................... 0.9114
Carter, TN
Hawkins, TN
Sullivan, TN
Unicoi, TN
Washington, TN
Bristol City, VA
Scott, VA
Washington, VA
3680 Johnstown, PA........................................... 0.8378
Cambria, PA
Somerset, PA
3700 Jonesboro, AR........................................... 0.7443
Craighead, AR
3710 Joplin, MO.............................................. 0.7510
Jasper, MO
Newton, MO
3720 Kalamazoo-Battlecreek, MI............................... 1.0668
Calhoun, MI
Kalamazoo, MI
Van Buren, MI
3740 Kankakee, IL............................................ 0.8653
Kankakee, IL
3760 Kansas City, KS-MO...................................... 0.9564
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
Kenosha, WI
3810 Killeen-Temple, TX...................................... 1.0252
Bell, TX
Coryell, TX
3840 Knoxville, TN........................................... 0.8831
Anderson, TN
Blount, TN
Knox, TN
Loudon, TN
Sevier, TN
Union, TN
3850 Kokomo, IN.............................................. 0.8416
Howard, IN
Tipton, IN
3870 La Crosse, WI-MN........................................ 0.8749
Houston, MN
La Crosse, WI
3880 Lafayette, LA........................................... 0.8206
Acadia, LA
Lafayette, LA
St. Landry, LA
St. Martin, LA
3920 Lafayette, IN........................................... 0.9174
Clinton, IN
Tippecanoe, IN
3960 Lake Charles, LA........................................ 0.7776
Calcasieu, LA
3980 Lakeland-Winter Haven, FL............................... 0.8806
Polk, FL
4000 Lancaster, PA........................................... 0.9481
Lancaster, PA
4040 Lansing-East Lansing, MI................................ 1.0088
Clinton, MI
Eaton, MI
Ingham, MI
4080 Laredo, TX.............................................. 0.7325
Webb, TX
4100 Las Cruces, NM.......................................... 0.8646
Dona Ana, NM
4120 Las Vegas, NV-AZ........................................ 1.0592
Mohave, AZ
Clark, NV
Nye, NV
4150 Lawrence, KS............................................ 0.8608
Douglas, KS
4200 Lawton, OK.............................................. 0.9045
Comanche, OK
4243 Lewiston-Auburn, ME..................................... 0.9536
Androscoggin, ME
4280 Lexington, KY........................................... 0.8390
Bourbon, KY
Clark, KY
Fayette, KY
Jessamine, KY
Madison, KY
Scott, KY
Woodford, KY
4320 Lima, OH................................................ 0.9185
Allen, OH
Auglaize, OH
4360 Lincoln, NE............................................. 0.9231
Lancaster, NE
4400 Little Rock-North Little Rock, AR....................... 0.8490
Faulkner, AR
Lonoke, AR
Pulaski, AR
Saline, AR
4420 Longview-Marshall, TX................................... 0.8613
Gregg, TX
Harrison, TX
Upshur, TX
4480 Los Angeles-Long Beach, CA.............................. 1.2232
Los Angeles, CA
4520 Louisville, KY-IN....................................... 0.9507
Clark, IN
Floyd, IN
Harrison, IN
Scott, IN
Bullitt, KY
Jefferson, KY
Oldham, KY
4600 Lubbock, TX............................................. 0.8400
Lubbock, TX
4640 Lynchburg, VA........................................... 0.8228
Amherst, VA
Bedford, VA
Bedford City, VA
Campbell, VA
Lynchburg City, VA
4680 Macon, GA............................................... 0.9227
Bibb, GA
Houston, GA
Jones, GA
Peach, GA
Twiggs, GA
4720 Madison, WI............................................. 1.0055
Dane, WI
4800 Mansfield, OH........................................... 0.8639
Crawford, OH
Richland, OH
4840 Mayaguez, PR............................................ 0.4475
Anasco, PR
Cabo Rojo, PR
Hormigueros, PR
Mayaguez, PR
Sabana Grande, PR
San German, PR
4880 McAllen-Edinburg-Mission, TX............................ 0.8371
Hidalgo, TX
4890 Medford-Ashland, OR..................................... 1.0354
Jackson, OR
4900 Melbourne-Titusville-Palm Bay, FL....................... 0.8819
Brevard, Fl
4920 Memphis, TN-AR-MS....................................... 0.8589
Crittenden, AR
DeSoto, MS
Fayette, TN
Shelby, TN
Tipton, TN
4940 Merced, CA.............................................. 1.0947
Merced, CA
5000 Miami, FL............................................... 0.9859
Dade, FL
5015 Middlesex-Somerset-Hunterdon, NJ........................ 1.1059
Hunterdon, NJ
Middlesex, NJ
Somerset, NJ1
5080 Milwaukee-Waukesha, WI.................................. 0.9819
Milwaukee, WI
Ozaukee, WI
Washington, WI
Waukesha, WI
[[Page 100]]
5120 Minneapolis-St. Paul, MN-WI............................. 1.0733
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
Baldwin, AL
Mobile, AL
5170 Modesto, CA............................................. 1.0794
Stanislaus, CA
5190 Monmouth-Ocean, NJ...................................... 1.0934
Monmouth, NJ
Ocean, NJ
5200 Monroe, LA.............................................. 0.8414
Ouachita, LA
5240 Montgomery, AL.......................................... 0.7671
Autauga, AL
Elmore, AL
Montgomery, AL
5280 Muncie, IN.............................................. 0.9173
Delaware, IN
5330 Myrtle Beach, SC........................................ 0.8072
Horry, SC
5345 Naples, FL.............................................. 1.0109
Collier, FL
5360 Nashville, TN........................................... 0.9182
Cheatham, TN
Davidson, TN
Dickson, TN
Robertson, TN
Rutherford TN
Sumner, TN
Williamson, TN
Wilson, TN
5380 Nassau-Suffolk, NY...................................... 1.3807
Nassau, NY
Suffolk, NY
5483 New Haven-Bridgeport-Stamford-Danbury-Waterbury, CT..... 1.2618
Fairfield, CT
New Haven, CT
5523 New London-Norwich, CT.................................. 1.2013
New London, CT
5560 New Orleans, LA......................................... 0.9566
Jefferson, LA
Orleans, LA
Plaquemines, LA
St. Bernard, LA
St. Charles, LA
St. James, LA
St. John Baptist, LA
St. Tammany, LA
5600 New York, NY............................................ 1.4449
Bronx, NY
Kings, NY
New York, NY
Putnam, NY
Queens, NY
Richmond, NY
Rockland, NY
Westchester, NY
5640 Newark, NJ.............................................. 1.1980
Essex, NJ
Morris, NJ
Sussex, NJ
Union, NJ
Warren, NJ
5660 Newburgh, NY-PA......................................... 1.1283
Orange, NY
Pike, PA
5720 Norfolk-Virginia Beach-Newport News, VA-NC.............. 0.8316
Currituck, NC
Chesapeake City, VA
Gloucester, VA
Hampton City, VA
Isle of Wight, VA
James City, VA
Mathews, VA
Newport News City, VA
Norfolk City, VA
Poquoson City, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
York, VA
5775 Oakland, CA............................................. 1.5068
Alameda, CA
Contra Costa, CA
5790 Ocala, FL............................................... 0.9032
Marion, FL
5800 Odessa-Midland, TX...................................... 0.8660
Ector, TX
Midland, TX
5880 Oklahoma City, OK....................................... 0.8481
Canadian, OK
Cleveland, OK
Logan, OK
McClain, OK
Oklahoma, OK
Pottawatomie, OK
5910 Olympia, WA............................................. 1.0901
Thurston, WA
5920 Omaha, NE-IA............................................ 0.9421
Pottawattamie, IA
Cass, NE
Douglas, NE
Sarpy, NE
Washington, NE
5945 Orange County, CA....................................... 1.1605
Orange, CA
5960 Orlando, FL............................................. 0.9397
Lake, FL
Orange, FL
Osceola, FL
Seminole, FL
5990 Owensboro, KY........................................... 0.7480
Daviess, KY
6015 Panama City, FL......................................... 0.8337
Bay, FL
6020 Parkersburg-Marietta, WV-OH............................. 0.8046
Washington, OH
Wood, WV
6080 Pensacola, FL........................................... 0.8193
Escambia, FL
Santa Rosa, FL
6120 Peoria-Pekin, IL........................................ 0.8571
Peoria, IL
Tazewell, IL
Woodford, IL
6160 Philadelphia, PA-NJ..................................... 1.1398
Burlington, NJ
Camden, NJ
Gloucester, NJ
Salem, NJ
Bucks, PA
Chester, PA
Delaware, PA
Montgomery, PA
Philadelphia, PA
6200 Phoenix-Mesa, AZ........................................ 0.9606
Maricopa, AZ
Pinal, AZ
6240 Pine Bluff, AR.......................................... 0.7826
Jefferson, AR 0.7826
6280 Pittsburgh, PA.......................................... 0.9725
Allegheny, PA
Beaver, PA
Butler, PA
Fayette, PA
Washington, PA
Westmoreland, PA
6323 Pittsfield, MA.......................................... 1.0960
Berkshire, MA 1.0960
6340 Pocatelo, ID............................................ 0.9586
Bannock ID
6360 Ponce, PR............................................... 0.4589
Guayanilla, PR
Juana Diaz, PR
Penuelas, PR
Ponce, PR
Villalba, PR
Yauco, PR
6403 Portland, ME............................................ 0.9627
Cumberland, ME
Sagadahoc, ME
York, ME
6440 Portland-Vancouver, OR-WA............................... 1.1344
Clackamas, OR
Columbia, OR
Multnomah, OR
Washington, OR
Yamhill, OR
Clark, WA
6483 Providence-Warwick-Pawtucket, RI........................ 1.1049
Bristol, RI
Kent, RI
Newport, RI
Providence, RI
Washington, RI
Statewide, RI
6520 Provo-Orem, UT.......................................... 1.0073
Utah, UT
6560 Pueblo, CO.............................................. 0.8450
Pueblo, CO
6580 Punta Gorda, FL......................................... 0.8725
Charlotte, FL
6600 Racine, WI.............................................. 0.8934
Racine, WI
6640 Raleigh-Durham-Chapel Hill, NC.......................... 0.9818
Chatham, NC
Durham, NC
Franklin, NC
Johnston, NC
[[Page 101]]
Orange, NC
Wake, NC
6660 Rapid City, SD.......................................... 0.8345
Pennington, SD
6680 Reading, PA............................................. 0.9516
Berks, PA
6690 Redding, CA............................................. 1.1790
Shasta, CA
6720 Reno, NV................................................ 1.0768
Washoe, NV
6740 Richland-Kennewick-Pasco, WA............................ 0.9918
Benton, WA
Franklin, WA
6760 Richmond-Petersburg, VA................................. 0.9152
Charles City County, VA
Chesterfield, VA
Colonial Heights City, VA
Dinwiddie, VA
Goochland, VA
Hanover, VA
Henrico, VA
Hopewell City, VA
New Kent, VA
Petersburg City, VA
Powhatan, VA
Prince George, VA
Richmond City, VA
6780 Riverside-San Bernardino, CA............................ 1.1307
Riverside, CA
San Bernardino, CA
6800 Roanoke, VA............................................. 0.8402
Botetourt, VA
Roanoke, VA
Roanoke City, VA
Salem City, VA
6820 Rochester, MN........................................... 1.0502
Olmsted, MN
6840 Rochester, NY........................................... 0.9524
Genesee, NY
Livingston, NY
Monroe, NY
Ontario, NY
Orleans, NY
Wayne, NY
6880 Rockford, IL............................................ 0.9081
Boone, IL
Ogle, IL
Winnebago, IL
6895 Rocky Mount, NC......................................... 0.9029
Edgecombe, NC
Nash, NC
6920 Sacramento, CA.......................................... 1.2202
El Dorado, CA
Placer, CA
Sacramento, CA
6960 Saginaw-Bay City-Midland, MI............................ 0.9564
Bay, MI
Midland, MI
Saginaw, MI
6980 St. Cloud, MN........................................... 0.9544
Benton, MN
Stearns, MN
7000 St. Joseph, MO.......................................... 0.8366
Andrews, MO
Buchanan, MO
7040 St. Louis, MO-IL........................................ 0.9130
Clinton, IL
Jersey, IL
Madison, IL
Monroe, IL
St. Clair, IL
Franklin, MO
Jefferson, MO
Lincoln, MO
St. Charles, MO
St. Louis, MO
St. Louis City, MO
Warren, MO
7080 Salem, OR............................................... 0.9935
Marion, OR
Polk, OR
7120 Salinas, CA............................................. 1.4513
Monterey, CA
7160 Salt Lake City-Ogden, UT................................ 0.9857
Davis, UT
Salt Lake, UT
Weber, UT
7200 San Angelo, TX.......................................... 0.7780
Tom Green, TX
7240 San Antonio, TX......................................... 0.8499
Bexar, TX
Comal, TX
Guadalupe, TX
Wilson, TX
7320 San Diego, CA........................................... 1.2193
San Diego, CA
7360 San Francisco, CA....................................... 1.4180
Marin, CA
San Francisco, CA
San Mateo, CA
7400 San Jose, CA............................................ 1.4332
Santa Clara, CA
7440 San Juan-Bayamon, PR.................................... 0.4625
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
San Luis Obispo, CA
7480 Santa Barbara-Santa Maria-Lompoc, CA.................... 1.0688
Santa Barbara, CA
7485 Santa Cruz-Watsonville, CA.............................. 1.4187
Santa Cruz, CA
7490 Santa Fe, NM............................................ 1.0332
Los Alamos, NM
Santa Fe, NM
7500 Santa Rosa, CA.......................................... 1.2815
Sonoma, CA
7510 Sarasota-Bradenton, FL.................................. 0.9757
Manatee, FL
Sarasota, FL
7520 Savannah, GA............................................ 0.8638
Bryan, GA
Chatham, GA
Effingham, GA
7560 Scranton--Wilkes-Barre--Hazleton, PA.................... 0.8539
Columbia, PA
Lackawanna, PA
Luzerne, PA
Wyoming, PA
7600 Seattle-Bellevue-Everett, WA............................ 1.1339
Island, WA
King, WA
Snohomish, WA
7610 Sharon, PA.............................................. 0.8783
Mercer, PA
7620 Sheboygan, WI........................................... 0.7862
Sheboygan, WI
7640 Sherman-Denison, TX..................................... 0.8499
Grayson, TX
7680 Shreveport-Bossier City, LA............................. 0.9381
Bossier, LA
Caddo, LA
Webster, LA
7720 Sioux City, IA-NE....................................... 0.8031
Woodbury, IA
Dakota, NE
7760 Sioux Falls, SD......................................... 0.8712
Lincoln, SD
Minnehaha, SD
7800 South Bend, IN.......................................... 0.9868
St. Joseph, IN
7840 Spokane, WA............................................. 1.0486
Spokane, WA
7880 Springfield, IL......................................... 0.8713
Menard, IL
Sangamon, IL
7920 Springfield, MO......................................... 0.7989
Christian, MO
Greene, MO
Webster, MO
8003 Springfield, MA......................................... 1.0740
Hampden, MA
Hampshire, MA
8050 State College, PA....................................... 0.9635
Centre, PA
8080 Steubenville-Weirton, OH-WV............................. 0.8645
Jefferson, OH
Brooke, WV
Hancock, WV
8120 Stockton-Lodi, CA....................................... 1.1496
San Joaquin, CA
8140 Sumter, SC.............................................. 0.7842
Sumter, SC
[[Page 102]]
8160 Syracuse, NY............................................ 0.9464
Cayuga, NY
Madison, NY
Onondaga, NY
Oswego, NY
8200 Tacoma, WA.............................................. 1.1016
Pierce, WA
8240 Tallahassee, FL......................................... 0.8832
Gadsden, FL
Leon, FL
8280 Tampa-St. Petersburg-Clearwater, FL..................... 0.9103
Hernando, FL
Hillsborough, FL
Pasco, FL
Pinellas, FL
8320 Terre Haute, IN......................................... 0.8614
Clay, IN
Vermillion, IN
Vigo, IN
8360 Texarkana, AR-Texarkana, TX............................. 0.8664
Miller, AR
Bowie, TX
8400 Toledo, OH.............................................. 1.0390
Fulton, OH
Lucas, OH
Wood, OH
8440 Topeka, KS.............................................. 0.9438
Shawnee, KS
8480 Trenton, NJ............................................. 1.0380
Mercer, NJ
8520 Tucson, AZ.............................................. 0.9180
Pima, AZ
8560 Tulsa, OK............................................... 0.8074
Creek, OK
Osage, OK
Rogers, OK
Tulsa, OK
Wagoner, OK
8600 Tuscaloosa, AL.......................................... 0.8187
Tuscaloosa, AL
8640 Tyler, TX............................................... 0.9567
Smith, TX
8680 Utica-Rome, NY.......................................... 0.8398
Herkimer, NY
Oneida, NY
8720 Vallejo-Fairfield-Napa, CA.............................. 1.3754
Napa, CA
Solano, CA
8735 Ventura, CA............................................. 1.0946
Ventura, CA
8750 Victoria, TX............................................ 0.8474
Victoria, TX
8760 Vineland-Millville-Bridgeton, NJ........................ 1.0110
Cumberland, NJ
8780 Visalia-Tulare-Porterville, CA.......................... 0.9924
Tulare, CA
8800 Waco, TX................................................ 0.7696
McLennan, TX
8840 Washington, DC-MD-VA-WV................................. 1.0911
District of Columbia, DC
Calvert, MD
Charles, MD
Frederick, MD
Montgomery, MD
Prince Georges, MD
Alexandria City, VA
Arlington, VA
Clarke, VA
Culpepper, VA
Fairfax, VA
Fairfax City, VA
Falls Church City, VA
Fauquier, VA
Fredericksburg City, VA
King George, VA
Loudoun, VA
Manassas City, VA
Manassas Park City, VA
Prince William, VA
Spotsylvania, VA
Stafford, VA
Warren, VA
Berkeley, WV
Jefferson, WV
8920 Waterloo-Cedar Falls, IA................................ 0.8640
Black Hawk, IA
8940 Wausau, WI.............................................. 1.0545
Marathon, WI
896 West Palm Beach-Boca Raton, FL........................... 1.0372
Palm Beach, FL
9000 Wheeling, OH-WV......................................... 0.7707
Belmont, OH
Marshall, WV
Ohio, WV
9040 Wichita, KS............................................. 0.9403
Butler, KS
Harvey, KS
Sedgwick, KS
9080 Wichita Falls, TX....................................... 0.7646
Archer, TX
Wichita, TX
9140 Williamsport, PA........................................ 0.8548
Lycoming, PA
9160 Wilmington-Newark, DE-MD................................ 1.1538
New Castle, DE
Cecil, MD
9200 Wilmington, NC.......................................... 0.9322
New Hanover, NC
Brunswick, NC
9260 Yakima, WA.............................................. 1.0102
Yakima, WA
9270 Yolo, CA................................................ 1.1431
Yolo, CA
9280 York, PA................................................ 0.9415
York, PA
9320 Youngstown-Warren, OH................................... 0.9937
Columbiana, OH
Mahoning, OH
Trumbull, OH
9340 Yuba City, CA........................................... 1.0324
Sutter, CA
Yuba, CA
9360 Yuma, AZ................................................ 0.9732
Yuma, AZ
------------------------------------------------------------------------
*Large Urban Area.
Table 4b.--Wage Index for Rural Areas
------------------------------------------------------------------------
Wage
Nonurban area index
------------------------------------------------------------------------
Alabama....................................................... 0.7260
Alaska........................................................ 1.2302
Arizona....................................................... 0.7989
Arkansas...................................................... 0.6995
California.................................................... 0.9977
Colorado...................................................... 0.8129
Connecticut................................................... 1.2617
Delaware...................................................... 0.8925
Florida....................................................... 0.8838
Georgia....................................................... 0.7761
Hawaii........................................................ 1.0229
Idaho......................................................... 0.8221
Illinois...................................................... 0.7644
Indiana....................................................... 0.8161
Iowa.......................................................... 0.7391
Kansas........................................................ 0.7203
Kentucky...................................................... 0.7772
Louisiana..................................................... 0.7383
Maine......................................................... 0.8468
Maryland...................................................... 0.8617
Massachusetts................................................. 1.0718
Michigan...................................................... 0.8923
Minnesota..................................................... 0.8179
Mississippi................................................... 0.6911
Missouri...................................................... 0.7205
Montana....................................................... 0.8302
Nebraska...................................................... 0.7401
Nevada........................................................ 0.8914
New Hampshire................................................. 0.9717
New Jersey \1\................................................ ........
New Mexico.................................................... 0.8070
New York...................................................... 0.8401
North Carolina................................................ 0.7937
North Dakota.................................................. 0.7360
Ohio.......................................................... 0.8434
Oklahoma...................................................... 0.7072
Oregon........................................................ 0.9975
Pennsylvania.................................................. 0.8421
Puerto Rico................................................... 0.3939
Rhode Island \1\.............................................. ........
South Carolina................................................ 0.7921
South Dakota.................................................. 0.6983
Tennessee..................................................... 0.7353
Texas......................................................... 0.7404
Utah.......................................................... 0.8926
Vermont....................................................... 0.9314
Virginia...................................................... 0.7782
Washington.................................................... 1.0221
West Virginia................................................. 0.7938
Wisconsin..................................................... 0.8471
Wyoming....................................................... 0.8247
------------------------------------------------------------------------
\1\ All counties within the State are classified urban.
Table 5.--Cost Reporting Year Adjustment Factor \1\
------------------------------------------------------------------------
The
If the HHA cost reporting period begins adjustment
factor is
------------------------------------------------------------------------
November 1, 1997........................................... 1.00260
December 1, 1997........................................... 1.00521
January 1, 1998............................................ 1.00781
February 1, 1998........................................... 1.01042
March 1, 1998.............................................. 1.01302
April 1, 1998.............................................. 1.01563
May 1,1998................................................. 1.01823
June 1, 1998............................................... 1.02086
[[Page 103]]
July 1, 1998............................................... 1.02353
August 1, 1998............................................. 1.02626
September 1, 1998.......................................... 1.02901
------------------------------------------------------------------------
\1\ Based on compounded projected market basket inflation rates.
Source: The Home Health Agency Input Price Index, produced by HCFA for
the period between 1983:1 and 2008:4. The forecasts are from Standard
and Poor's DRI 3rd QTR 1997; @USSIM/TREND25YR0897@CISSIM/Control973
forecast exercise which has historical data through 1997:2.
These adjustment factors are subject to change based on later
estimates of cost increases.
If, for any reason, we do not publish a new schedule of limits to
be effective on October 1, 1998 or do not announce other changes in the
current schedule by that date, the current limits will continue in
effect. Intermediaries will be notified of the adjustment factors to be
applied until a new schedule of limits or other provision is issued.
Table 6.--Monthly Index Levels for Calculating Inflation Factors To Be
Applied to Home Health Agency Cost Limits
------------------------------------------------------------------------
Index
Month level
------------------------------------------------------------------------
October 1997.................................................. 1.07348
November 1997................................................. 1.07633
December 1997................................................. 1.07948
January 1998.................................................. 1.08263
February 1998................................................. 1.08580
March 1998.................................................... 1.08800
April 1998.................................................... 1.09021
May 1998...................................................... 1.09242
June 1998..................................................... 1.09557
July 1998..................................................... 1.09873
August 1998................................................... 1.10189
September 1998................................................ 1.10472
October 1998.................................................. 1.10756
November 1998................................................. 1.11041
December 1998................................................. 1.11356
January 1999.................................................. 1.11671
February 1999................................................. 1.11988
March 1999.................................................... 1.12208
April 1999.................................................... 1.12429
May 1999...................................................... 1.12650
June 1999..................................................... 1.13028
July 1999..................................................... 1.13406
August 1999................................................... 1.13786
September 1999................................................ 1.14070
------------------------------------------------------------------------
Source: The Home Health Agency Input Price Index, produced by HCFA for
the period between 1983:1 and 2008:4. The forecasts are from DRI's 3rd
QTR 1997; @USSIM/TREND25YR0897@CISSIM/Control973 forecast exercise
which has historical data through 1997:2.
X. Regulatory Impact Statement
A. Introduction
HCFA has examined the impacts of this notice 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, States and individuals are
not considered small entities. However, most providers, physicians, and
health care suppliers are small entities, either by nonprofit status or
by having revenues of $5 million or less annually.
We estimate that the impact of this notice with comment period will
be to decrease payments to home health agencies by approximately $570
million in FY 1998, compared to the payment that would have been made
in FY 1998 if BBA '97 had not been enacted. Therefore, this notice is a
major rule as defined in Title 5, United States Code, section 804(2).
It is clear that the changes being made in this document will
affect both a substantial number of small HHAs as well as other classes
of HHAs, and the effects on some may be significant. Therefore, the
discussion below, in combination with the rest of this notice with
comment period, constitutes a combined regulatory impact analysis and
regulatory flexibility analysis.
B. Changes in the Notice With Comment Period
Several provisions of Public Law 105-33 make significant changes in
payments for services provided by HHAs. The provisions that have
significant payment impacts for FY 1998 include the following:
The establishment of the cost per visit limitations be
based on 105 percent of the median of the labor-related and nonlabor
per visit costs for freestanding HHAs.
That there be no updates in the home health cost limits
for cost reporting periods beginning on or after July 1, 1994 and
before July 1, 1996.
The applicable wage index will be from the geographic area
in which the home health service is furnished.
C. Effect on Home Health Agencies
The following quantitative analysis presents the projected effects
of the statutory changes effective for FY 1998. The sum of the impacts
of the individual provisions of the statute do not equal the total
impact of the provisions when combined due to the interaction of the
various provisions. Therefore, the impact section will address total
impact in order to avoid confusion.
As discussed below, the impact of this final notice with comment
period will decrease payments to HHAs by approximately $570 million in
FY 1998 compared to payment that would have been made in FY 1998 if BBA
'97 had not been enacted. This notice is necessary to implement the
provisions of section 1861(v)(1)(L) of the Act, as amended by BBA '97,
these alternatives to the provisions set forth in this notice are not
available.
This notice with comment period sets forth a revised schedule of
HHA cost limits for cost reporting periods beginning on or after
October 1, 1997. In accordance with section 1861(v)(1)(L)(i)(IV) of the
Act, as amended by BBA '97, the limits have been set not to exceed 105
percent of the median of the labor-related and nonlabor per-visit costs
for freestanding HHAs. As required by section 1861(v)(1)(l)(iii) of the
Act, we are using the most recent hospital wage index to calculate the
HHA cost limits, that is, the hospital wage index effective for
discharges on or after October 1, 1997, which is based on 1994 wage
survey data. The wage index is used to adjust the labor-related
portions of the limits to reflect differing wage levels among areas. As
discussed in section II of this notice, we are applying a budget
neutrality adjustment factor of 1.009 to the labor-related portion of
the limits to ensure that aggregate payments to HHAs are not affected
by the updating of the wage index.
We are using settled cost report data from Medicare cost reports
for cost reporting periods ending on or after June 30, 1991, and
settled before October 1, 1995, to develop the HHA cost-per visit limit
values for each type of home health service: skilled nursing care,
physical therapy, speech pathology, occupational therapy, medical
social services, and home health aide. The majority of the cost reports
were from FY 1993. The data have been adjusted by the most recent
market basket factors, excluding market basket increases for cost
reporting periods beginning on or after July 1, 1994 and before July 1,
1996, to reflect
[[Page 104]]
the expected cost increases occurring between the cost reporting
periods for the data contained in the database and September 30, 1998.
The intermediary determines the aggregate cost limit for each HHA by
multiplying the number of Medicare visits for each type of services
furnished by the HHA by the respective per-visit cost limit. Each HHA's
aggregate limit cannot be determined prospectively, but depends on each
HHA's Medicare visits for each type of service and actual costs for the
cost reporting period subject to this notice.
The methodology used to calculate these new limits reflects the
changes resulting from the provisions in BBA '97. The projected
decrease in payments for home health services provided by HHAs when
compared to the projected expenditures under the old cost limits in
effect prior to October 1, 1997, updated by the market basket increases
since those limits took effect, is approximately $570 million.
Projected decreases in payments using this same methodology for fiscal
years prior to the implementation of a home health prospective payment
system is $990 million in FY 99.
The cost limits for HHAs are statutorily driven and the impact of
decreases in payments to HHAs have been reflected in the current law
baseline of the mid-session review of the President's FY 98 budget.
We are unable to identify the effects of the changes to the cost
limits on individual HHAs. However, Table 7 below illustrates the
proportion of HHAs that are likely to be affected by the limits. The
results are based on both the data used to determine the limits and all
available settled hospital-based cost reports for the same time period:
Table 7.--HHAs Exceeding the Cost Limits Based on 105% of the Median of
Per Visit Costs From Freestanding Home Health Agencies
------------------------------------------------------------------------
Number of Percentage
Number of HHAs of HHAs
HHAs in exceeding exceeding
database the limits the limits
------------------------------------------------------------------------
Total HHAs....................... 4986 3232 65
Urban:
Freestanding................. 2220 1252 56
Hospital-based............... 868 742 85
Rural:
Freestanding................. 982 539 55
Hospital-based............... 916 699 76
------------------------------------------------------------------------
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
XI. Other Required Information
A. Waiver of Proposed Notice
We ordinarily publish a proposed notice in the Federal Register
with a 60-day period for public comment as required under section
1871(b)(1) of the Act. However, section 1871(b)(2)(B) of the Act
provides that publication of a proposed notice is not required before
the notice takes effect if ``a statute establishes a specific deadline
for implementation of a 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 the 60-day period
for public comment if we find good cause that prior notice and comment
are impracticable, unnecessary or contrary to the public interest.
On July 1, 1997, we published a notice with comment period
addressing the per-visit limits for HHAs for cost reporting periods
beginning on or after July 1, 1997. Subsequently, on August 5, 1997,
Pub. L. 105-33 was enacted. Pub. L. 105-33 changed certain factors in
the calculation of the limit for cost reporting periods beginning on or
after October 1, 1997, and added other provisions relating to this
limit. These statutory provisions were generally effective for cost
reporting periods beginning on or after October 1, 1997.
In accordance with section 1871(b)(2)(B) of the Act, publication of
a proposed notice with prior comment period is not required before
implementing the statutory provisions of Pub. L. 105-33 that take
effect for cost reporting periods beginning on or after October 1,
1997. In addition, as discussed in section III above, in accordance
with the statute, we have used the same methodology to develop the
schedule of limits that was used in setting the limits effective for
cost reporting periods beginning on or after July 1, 1996. The cost
limits have been updated by the appropriate market basket adjustment
factor to reflect the cost increases occurring between the cost
reporting periods for the data contained in the database and September
30, 1998. Moreover, as required under section 1861(v)(1)(L)(iii) of the
Act, we have updated the wage index using the most recent hospital wage
index. Therefore, we believe that in this instance, it would be
impracticable and unnecessary to publish a proposed notice and find
good cause to waive publication of a proposed notice. However, we are
providing a 60-day period for public comment on these provisions.
B. Waiver of 30-day Delay in Effective Date
Generally, the Administrative Procedure Act requires us to provide
a 30-day delay before effectuation of a final rule unless we find good
cause to dispense with that delay. 5 U.S.C. section 553(d). To the
extent this requirement applies to this Notice with comment, we find
good cause to waive the 30-day delay in effective date.
As noted previously, these per-visit cost limits are effective for
cost reporting periods beginning on or after October 1, 1997. Section
1861(v)(1)(L)(vii) of the Act requires the Secretary to establish there
per-visit cost limits by January 1, 1998 and requires that they apply
to cost reporting periods beginning on or after October 1, 1997. That
statutory requirement is clear. A 30-day delay in implementing these
cost limits is unnecessary. Therefore, we find that it is unnecessary
to provide for a 30-day delay in effective date and find good cause to
waive the delay in effective date.
C. Effect of the Contract with America Advancement Act, Pub. L. 104-121
Normally, under 5 U.S.C. Sec. 801, as added by Sec. 251 of Pub. L.
No. 104-121, the effective date of a major rule is
[[Page 105]]
delayed 60 days for Congressional review. This has been determined to
be a major rule under title 5, United States Code, section 804(2).
However, as indicated in section XI.A of the preamble to this notice
with comment period, for good cause, we find that prior notice and
comment procedures are impracticable and unnecessary. Pursuant to 5
U.S.C. section 808(2), a major rule shall take effect at such time as
the Federal agency promulgating the rule determines if for good cause
it finds that notice and public procedure is impracticable or
unnecessary. Accordingly, under the exemption provided in 5 U.S.C
section 808(2), this schedule of limits is effective for cost reporting
periods beginning on or after October 1, 1997.
D. Public Comments
Because of the large number of items of correspondence we normally
receive on a notice with comment period, we are not able to acknowledge
or respond to them individually. However, we will consider all comments
concerning the provisions of this notice that we receive by the date
and time specified in the ``Dates'' section of this notice, and we will
respond to those comments in a subsequent notice.
Authority: Section 1861(v)(1)(L) of the Social Security Act (42
U.S.C. 1395x(v)(1)(L)); section 4207(d) of Pub. L. 101-508 (42
U.S.C. 1395x (note)).
(Catalog of Federal Domestic Assistance Program No. 93.773
Medicare--Hospital Insurance)
Dated: December 8, 1997.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
Dated: December 22, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-34221 Filed 12-31-97; 8:45 am]
BILLING CODE 4120-01-P