[Federal Register Volume 63, Number 89 (Friday, May 8, 1998)]
[Proposed Rules]
[Pages 25576-25715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12207]



[[Page 25575]]

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Part III





Department of Health and Human Services





_______________________________________________________________________



Health Care Financing Administration



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42 CFR Parts 405, 412, and 413



Medicare Program; Changes to the Hospital Inpatient Prospective Payment 
Systems and Fiscal Year 1999 Rates; Proposed Rule

  Federal Register / Vol. 63, No. 89 / Friday, May 8, 1998 / Proposed 
Rules  

[[Page 25576]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 405, 412, and 413

[HCFA-1003-P]
RIN 0938-AI22


Medicare Program; Changes to the Hospital Inpatient Prospective 
Payment Systems and Fiscal Year 1999 Rates

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

ACTION: Proposed rule.

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SUMMARY: We are proposing to revise the Medicare hospital inpatient 
prospective payment systems for operating costs and capital-related 
costs to implement applicable statutory requirements, including section 
4407 of the Balanced Budget Act of 1997, as well as changes arising 
from our continuing experience with the systems. In addition, in the 
addendum to this proposed rule, we are describing proposed changes in 
the amounts and factors necessary to determine rates for Medicare 
hospital inpatient services for operating costs and capital-related 
costs. These changes would be applicable to discharges occurring on or 
after October 1, 1998. We are also setting forth proposed rate-of-
increase limits as well as proposing changes for hospitals and hospital 
units excluded from the prospective payment systems.

DATES: Comments will be considered if received at the appropriate 
address, as provided below, no later than 5 p.m. on July 7, 1998.

ADDRESSES: Mail written comments (an original and three copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-1003-P, P.O. Box 7517, 
Baltimore, MD 21207-0517.
    If you prefer, you may deliver your written comments (an original 
and three copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW, 
ashington, DC 20201, or
Room C5-09-26, Central Building, 7500 Security Boulevard, Baltimore, MD 
21244-1850.
    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-1003-P. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately three weeks after publication of a document, in Room 309-
G of the Department's offices at 200 Independence Avenue, SW, 
Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 
5 p.m. (phone: (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to:

Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Allison Herron Eydt, HCFA Desk Officer; and
Office of Financial and Human Resources, Management Planning and 
Analysis Staff, Room C2-26-17, 7500 Security Boulevard, Baltimore, MD 
21244-1850.

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FOR FURTHER INFORMATION CONTACT:

Nancy Edwards, (410) 786-4531, Operating Prospective Payment, DRG, and 
Wage Index Issues.
Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded 
Hospitals, and Graduate Medical Education Issues.

SUPPLEMENTARY INFORMATION:

I. Background

A. Summary

    Sections 1886(d) and (g) of the Social Security Act (the Act), set 
forth a system of payment for the operating costs of acute care 
hospital inpatient stays under Medicare Part A (Hospital Insurance) 
based on prospectively-set rates. Section 1886(g) of the Act requires 
the Secretary to pay for the capital-related costs of hospital 
inpatient stays under a prospective payment system. Under these 
prospective payment systems, Medicare payment for hospital inpatient 
operating and capital-related costs is made at predetermined, specific 
rates for each hospital discharge. Discharges are classified according 
to a list of diagnosis-related groups (DRGs).
    Certain specialty hospitals are excluded from the prospective 
payment systems. Under section 1886(d)(1)(B) of the Act, the following 
hospitals and units are excluded from PPS: psychiatric hospitals or 
units, rehabilitation hospitals or units, children's hospitals, long 
term care hospitals, and cancer hospitals. For these hospitals and 
units, Medicare payment for operating costs is based on reasonable 
costs subject to a hospital-specific annual limit.
    Under section 1886(a)(4) of the Act, costs incurred in connection 
with approved graduate medical education (GME) programs are excluded 
from the operating costs of inpatient hospital services. Hospitals with 
approved GME programs are paid for the direct costs of GME in 
accordance with section 1886(h) of the Act; the amount of payment for 
direct GME costs for a cost reporting period is based on the number of 
the hospital's residents in that period and the hospital's costs per 
resident in a base year.
    The regulations governing the hospital inpatient prospective 
payment system are located in 42 CFR Part 412. The regulations 
governing excluded hospitals are located in both Parts 412 and 413, and 
the graduate medical education regulations are found in Part 413.
    On August 29, 1997, we published a final rule with comment period 
in the Federal Register (62 FR 45966) setting forth both statutorily 
required changes and other changes to the Medicare hospital inpatient 
prospective payment systems for both operating costs and capital-
related costs, which were effective for discharges occurring on or 
after October 1, 1997. This rule also

[[Page 25577]]

implemented changes addressing payments for excluded hospitals and 
payments for graduate medical education costs. This final rule with 
comment period followed a proposed rule published in the Federal 
Register on June 2, 1997 (62 FR 29902) that set forth proposed updates 
and changes.

B. Major Contents of This Proposed Rule

    In this proposed rule, we are setting forth proposed changes to the 
Medicare hospital inpatient prospective payment systems for both 
operating costs and capital-related costs. This proposed rule would be 
effective for discharges occurring on or after October 1, 1998. 
Following is a summary of the major changes that we are proposing to 
make:
1. Changes to the DRG Classifications and Relative Weights
    As required by section 1886(d)(4)(C) of the Act, we must adjust the 
DRG classifications and relative weights at least annually. Our 
proposed changes for FY 1999 are set forth in section II. of this 
preamble.
2. Changes to the Hospital Wage Index
    In section III. of this preamble, we discuss proposed revisions to 
the wage index and the annual update of the wage data. Specific issues 
addressed in this section include the following:
     FY 1999 wage index update.
     Changes to the data categories included in the wage index.
     Revisions to the wage index based on hospital 
redesignations.
3. Other Decisions and Changes to the Prospective Payment System for 
Inpatient Operating and Graduate Medical Education Costs
    In section IV. of this preamble, we discuss several provisions of 
the regulations in 42 CFR parts 412 and 413 and set forth certain 
proposed changes concerning the following:
     Definition of transfer cases.
     Rural referral centers.
     Disproportionate share adjustment.
     Bad debts.
     Direct graduate medical education programs.
4. Changes to the Prospective Payment System for Capital-Related Costs
    In section V. of this preamble, we discuss several provisions of 
the regulations in 42 CFR part 412 and set forth certain proposed 
changes and clarifications concerning the following:
     Capital indirect medical education payments.
     Payments to new hospitals.
5. Changes for Hospitals and Hospital Units Excluded from the 
Prospective Payment Systems
    In section VI. of this preamble, we discuss the following criteria 
governing excluded hospital issues:
     Hospital-within-a-hospital.
     Adjustments to the target amounts for FY 1999.
6. Determining Prospective Payment Operating and Capital Rates and 
Rate-of-Increase Limits
    In the addendum to this proposed rule, we set forth proposed 
changes to the amounts and factors for determining the FY 1999 
prospective payment rates for operating costs and capital-related 
costs. We are also proposing update factors for determining the rate-
of-increase limits for cost reporting periods beginning in FY 1999 for 
hospitals and hospital units excluded from the prospective payment 
system.
7. Impact Analysis
    In Appendix A, we set forth an analysis of the impact that the 
proposed changes described in this proposed rule would have on affected 
entities.
8. Capital Acquisition Model
    Appendix B contains the technical appendix on the proposed FY 1999 
capital cost model.
9. Report to Congress on the Update Factor for Prospective Payment 
Hospitals and Hospitals Excluded from the Prospective Payment System
    Section 1886(e)(3)(B) of the Act requires that the Secretary report 
to Congress on our initial estimate of a recommended update factor for 
FY 1999 for both hospitals included in and hospitals excluded from the 
prospective payment systems. This report is included as Appendix C to 
this proposed rule.
10. Proposed Recommendation of Update Factor for Hospital Inpatient 
Operating Costs
    As required by sections 1886(e)(4) and (e)(5) of the Act, Appendix 
D provides our recommendation of the appropriate percentage change for 
FY 1999 for the following:
     Large urban area and other area average standardized 
amounts (and hospital-specific rates applicable to sole community and 
Medicare-dependent, small rural hospitals) for hospital inpatient 
services paid for under the prospective payment system for operating 
costs.
     Target rate-of-increase limits to the allowable operating 
costs of hospital inpatient services furnished by hospitals and 
hospital units excluded from the prospective payment system.
11. Discussion of Medicare Payment Advisory Commission Recommendations
    The Balanced Budget Act of 1997 abolished the Prospective Payment 
Assessment Commission (ProPAC) and created the Medicare Payment 
Advisory Commission (MedPAC). Under section 1805(b) of the Act, MedPAC 
is required to submit a report to Congress, not later than March 1 of 
each year, that reviews and makes recommendations on Medicare payment 
policies. The March 1, 1998 report made several recommendations 
concerning hospital inpatient payment policies. We reviewed those 
recommendations and this document sets forth our responses to those 
recommendations.
    Although it has been our practice to include a reprint of ProPAC's 
March 1 report as an appendix to the proposed rule, we are not 
following that practice with MedPAC reports. For further information 
relating specifically to that report or to obtain a copy of the report, 
contact MedPAC at (202) 653-7220.

II. Proposed Changes to DRG Classifications and Relative Weights

A. Background

    Under the prospective payment system, we pay for inpatient hospital 
services on the basis of a rate per discharge that varies by the DRG to 
which a beneficiary's stay is assigned. The formula used to calculate 
payment for a specific case takes an individual hospital's payment rate 
per case and multiplies it by the weight of the DRG to which the case 
is assigned. Each DRG weight represents the average resources required 
to care for cases in that particular DRG relative to the average 
resources used to treat cases in all DRGs.
    Congress recognized that it would be necessary to recalculate the 
DRG relative weights periodically to account for changes in resource 
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires 
that the Secretary adjust the DRG classifications and relative weights 
annually. These adjustments are made to reflect changes in treatment 
patterns, technology, and any other factors that may change the 
relative use of hospital resources. The proposed changes to the DRG 
classification system and the proposed recalibration of the DRG weights 
for discharges occurring on or after October 1, 1998 are discussed 
below.

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B. DRG Reclassification

1. General
    Cases are classified into DRGs for payment under the prospective 
payment system based on the principal diagnosis, up to eight additional 
diagnoses, and up to six procedures performed during the stay, as well 
as age, sex, and discharge status of the patient. The diagnosis and 
procedure information is reported by the hospital using codes from the 
International Classification of Diseases, Ninth Revision, Clinical 
Modification (ICD-9-CM). The Medicare fiscal intermediary enters the 
information into its claims system and subjects it to a series of 
automated screens called the Medicare Code Editor (MCE). These screens 
are designed to identify cases that require further review before 
classification into a DRG can be accomplished.
    After screening through the MCE and any further development of the 
claims, cases are classified by the GROUPER software program into the 
appropriate DRG. The GROUPER program was developed as a means of 
classifying each case into a DRG on the basis of the diagnosis and 
procedure codes and demographic information (that is, sex, age, and 
discharge status). It is used both to classify past cases in order to 
measure relative hospital resource consumption to establish the DRG 
weights and to classify current cases for purposes of determining 
payment. The records for all Medicare hospital inpatient discharges are 
maintained in the Medicare Provider Analysis and Review (MedPAR) file. 
The data in this file are used to evaluate possible DRG classification 
changes and to recalibrate the DRG weights.
    Currently, cases are assigned to one of 496 DRGs in 25 major 
diagnostic categories (MDCs). Most MDCs are based on a particular organ 
system of the body (for example, MDC 6, Diseases and Disorders of the 
Digestive System); however, some MDCs are not constructed on this basis 
since they involve multiple organ systems (for example, MDC 22, Burns).
    In general, cases are assigned to an MDC based on the principal 
diagnosis, before assignment to a DRG. However, there are five DRGs to 
which cases are directly assigned on the basis of procedure codes. 
These are the DRGs for liver, bone marrow, and lung transplant (DRGs 
480, 481, and 495, respectively) and the two DRGs for tracheostomies 
(DRGs 482 and 483). Cases are assigned to these DRGs before 
classification to an MDC.
    Within most MDCs, cases are then divided into surgical DRGs (based 
on a surgical hierarchy that orders individual procedures or groups of 
procedures by resource intensity) and medical DRGs. Medical DRGs 
generally are differentiated on the basis of diagnosis and age. Some 
surgical and medical DRGs are further differentiated based on the 
presence or absence of complications or comorbidities (hereafter CC).
    Generally, GROUPER does not consider other procedures; that is, 
nonsurgical procedures or minor surgical procedures generally not 
performed in an operating room are not listed as operating room (OR) 
procedures in the GROUPER decision tables. However, there are a few 
non-OR procedures that do affect DRG assignment for certain principal 
diagnoses, such as extracorporeal shock wave lithotripsy for patients 
with a principal diagnosis of urinary stones.
    The changes we are proposing to make to the DRG classification 
system for FY 1999 and other decisions concerning DRGs are set forth 
below. Unless otherwise noted, our DRG analysis is based on the full 
(100 percent) FY 1997 MedPAR file based on bills received through 
September 1997.
2. MDC 5 (Diseases and Disorders of the Circulatory System)
    In the August 29, 1997 hospital inpatient final rule with comment 
period (62 FR 45974), we noted that, because of the many recent changes 
in heart surgery, we were considering conducting a comprehensive review 
of the MDC 5 surgical DRGs. We have begun that review, and based upon 
our analysis thus far, we believe it is appropriate to propose some DRG 
changes immediately. These proposed changes are set forth below.
    a. Coronary Bypass. There are two DRGs that capture coronary bypass 
procedures: DRG 106 (Coronary Bypass with Cardiac Catheterization) and 
DRG 107 (Coronary Bypass without Cardiac Catheterization). The 
procedures that allow a coronary bypass case to be assigned to DRG 106 
include percutaneous valvuloplasty, percutaneous transluminal coronary 
angioplasty (PTCA), cardiac catheterization, coronary angiography, and 
arteriography.
    In analyzing the FY 1997 MedPAR file, we noted that, of cases 
assigned to DRG 106, the average standardized charges for coronary 
bypass cases with PTCA were significantly higher than those cases 
without PTCA. There were approximately 4,400 cases in DRG 106 where 
PTCA is performed as a secondary procedure. These cases have an average 
standardized charge of approximately $69,000. The average charge of the 
approximately 95,000 cases in DRG 106 without PTCA is approximately 
$52,000.
    Based on this analysis, we are proposing to create a new DRG for 
coronary bypass cases with PTCA. The cases currently in DRG 106 without 
PTCA would be assigned to another DRG and the cases currently assigned 
to DRG 107 would be unmodified. Because we would replace two DRGs with 
three new DRGs, we would revise the DRG numbers and titles accordingly. 
The new DRGs and their titles are set forth below:

DRG 106  Coronary Bypass with PTCA
DRG 107  Coronary Bypass with Cardiac Catheterization
DRG 109  Coronary Bypass without Cardiac Catheterization

    We note that DRG 109 has been an empty DRG for the last several 
years.
    b. Implantable Heart Assist System and Annuloplasty. In the August 
29, 1997 final rule with comment period, we moved implant of an 
implantable, pulsatile heart assist system (procedure code 37.66) from 
DRGs 110 and 111 (Major Cardiovascular Procedures) 1 to DRG 
108 (Other Cardiothoracic Procedures). Although this move improved 
payment for these procedures, they were still much more expensive than 
the other cases in DRG 108 ($96,000 for heart assist versus an average 
of $54,000 for all other cases in the FY 1996 MedPAR file). We stated 
that we would continue to review the MDC 5 surgical DRGs in an attempt 
to find a DRG placement for these cases that would be more similar in 
terms of resource use.
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    \1\ A single title combined with two DRG numbers is used to 
signify pairs. Generally, the first DRG is for cases with CC and the 
second DRG is for cases without CC. If a third number is included, 
it represents cases with patients who are age 0-17. Occasionally, a 
pair of DRGs is split between age >17 and age 0-17.
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    In reviewing the FY 1997 MedPAR file, we note that heart assist 
system implant continues to be the most expensive procedure in DRG 108. 
In fact, other than heart transplant, heart assist system implant is 
the most expensive procedure in MDC 5. The average FY 1997 charge for 
these cases, when assigned to DRG 108, is over $150,000 compared to 
about $53,000 for all cases in DRG 108. Obviously, the charges for 
heart assist implant are increasing at a much greater rate than the 
average charges for DRG 108. In addition, the length of stay for cases 
coded with 37.66 is approximately 32 days compared to about 11 days for 
all other DRG 108 cases.

[[Page 25579]]

    One possibility for improving payment for these cases is to move 
them to DRGs 104 and 105 (Cardiac Valve Procedures). Those DRGs, which 
split on the basis of the performance of cardiac catheterization, have 
average charges of approximately $66,000 and $51,000, respectively. 
While heart assist implant cases are still more expensive than the 
average case in these DRGs, payment would be improved. Clinically, 
placement of heart assist implant in DRGs 104 and 105 is not without 
precedent. Effective with FY 1988, we placed implant of a total 
automatic implantable cardioverter defibrillator (AICD) in these DRGs. 
In addition, the vast majority of procedures assigned to DRG 108 
involve surgically splitting open the sternum to perform the procedure. 
However, implant of the heart assist device does not require this 
approach.
    While reviewing the DRG 108 cases, we also noted that procedure 
code 35.33 (annuloplasty) is assigned to this DRG. Annuloplasty is a 
valve procedure and is clinically more similar to the cases assigned to 
DRGs 104 and 105 than it is to the cases assigned to DRG 108. In 
addition, the average standardized charge for annuloplasty cases 
assigned to DRG 108 is about $67,000, well above the overall average 
charge of approximately $53,000 for cases in DRG 108. Therefore, we are 
proposing to move annuloplasty from DRG 108 to DRGs 104 and 105.
    In order to more accurately reflect the cases assigned to DRGs 104 
and 105, we would retitle them as follows:

DRG 104  Cardiac Valve and Other Major Cardiothoracic Procedures 
with Cardiac Catheterization
DRG 105  Cardiac Valve and Other Major Cardiothoracic Procedures 
without Cardiac Catheterization.
3. MDC 22 (Burns)
    Under the current DRG system, burn cases are assigned to one of six 
DRGs in MDC 22 (Burns), which have not been revised since 1986. In our 
FY 1998 hospital inpatient proposed rule (June 2, 1997; 62 FR 29912), 
in response to inquiries we had received, we indicated that we would 
conduct a comprehensive review of MDC 22 to determine whether changes 
in these DRGs could more appropriately capture the variation in 
resource use associated with different classes of burn patients. We 
solicited public comments on this issue, particularly asking for 
recommendations on ways to categorize related diagnosis and procedure 
codes to produce DRG groupings that would be more homogeneous in terms 
of resource use.
    Among the comments we received was a proposal (endorsed by the 
American Burn Association (ABA)) for restructuring the DRGs based on 
several statistical and clinical criteria, including age, severity of 
the burn, and the presence of complications or comorbidities. Although 
this proposal was structured for a patient population encompassing all 
ages of patients, we believed that it showed great promise for Medicare 
patients as well. During the last several months, we have worked 
closely with representatives of the ABA and with the clinicians who 
developed the proposal in order to refine it for Medicare purposes.
    Based on this work, we are proposing a new set of DRGs for burn 
cases. Under this proposal, we would replace the six existing DRGs in 
MDC 22 with eight new DRGs. For ease of reference and classification, 
the current DRGs in MDC 22, DRGs 456 through 460 and 472, would no 
longer be valid, and we would establish new DRGs 504 through 511 to 
contain all cases that currently group to MDC 22. (The complete titles 
of the new DRGs are set forth below.)
    In reviewing the Medicare burn cases, we found that the most 
important distinguishing characteristic in terms of resource use was 
the amount of body surface affected by the burn and how much of that 
burn was a 3rd degree burn. The second most important factor was 
whether or not the patient received a skin graft. Thus, a patient with 
burns covering at least 20 percent of body area, with at least 10 
percent of that a 3rd degree burn, consumed the most resources. 
However, if a patient met these criteria and did not receive a skin 
graft, then the case was much less expensive and the average length of 
stay fell from over 30 days to 8 days. The first two proposed burn DRGs 
would reflect these distinctions (DRGs 504 and 505).
    After classifying the most extensive burn cases, we found that the 
patients with 3rd degree burns that did not meet the criteria to be 
assigned to DRGs 504 and 505 were the most expensive of the remaining 
cases (that is, those patients whose burns that did not meet the at 
least 20 percent body area or at least 10 percent 3rd degree criteria). 
These burns are referred to clinically as ``full-thickness burns.'' A 
subset of these full-thickness burn cases, those with skin graft or an 
inhalation injury, were much more expensive than the other cases. After 
dividing these patients into two groups, with or without skin graft or 
inhalation injury, we examined whether other factors had an influence 
on resource use. We found that patients who had a CC (complication or 
comorbidity) or a concomitant significant trauma consumed more 
resources whether or not they had a skin graft or inhalation injury. 
Thus, the next four DRGs were defined as full-thickness burns with skin 
graft or inhalation injury with or without CC or significant trauma, or 
full-thickness burns without skin graft or inhalation injury with or 
without CC or significant trauma (DRGs 506 through 509).
    Finally, the last two proposed DRGs (510 and 511) are for cases 
with nonextensive burns. These cases are also split on the basis of CCs 
or concomitant significant trauma.
    Consistent with the recommendations of several commenters on last 
year's proposed rule, the new burn DRGs would no longer include a 
separate DRG for cases in which burn patients were transferred to 
another acute care facility. Overall, we estimate that these proposed 
changes would increase by more than 25 percent the amount of variation 
in resource use explained by the DRGs in MDC 22. They would also 
improve the clinical coherence of the cases within each DRG. Thus, we 
believe that the proposed DRGs would provide for improved payment for 
cases assigned to MDC 22.
    The specific diagnosis and procedure codes that would be included 
in each of the eight DRGs and their titles are as follows:

DRGs 504 and 505--Extensive 3rd Degree Burns with and without Skin 
Graft

    DRGs 504 and 505 would include all cases with burns involving at 
least 20 percent of body surface area combined with a 3rd degree burn 
covering at least 10 percent of body surface area. Thus, these cases 
would have diagnosis codes of 948.xx, with a fourth digit of 2 or 
higher (indicating that burn extends over 20 percent or more of body 
surface) and a fifth digit of 1 or higher (indicating a 3rd degree burn 
extending over 10 percent or more of body surface). Cases with the 
appropriate diagnosis codes would be classified into DRG 504 if one of 
the following skin graft procedure codes is present:

85.82  Split-thickness graft to breast
85.83  Full-thickness graft to breast
85.84  Pedicle graft to breast
86.60  Free skin graft, NOS
86.61  Full-thickness skin graft to hand
86.62  Other skin graft to hand
86.63  Full-thickness skin graft to other sites
86.65  Heterograft to skin
86.66  Homograft to skin
86.67  Dermal regenerative graft (new code in FY 1999--see Table 6A 
in section V. of the Addendum)
86.69  Other skin graft to other sites
86.70  Pedicle of flap graft, NOS

[[Page 25580]]

86.71  Cutting and preparation of pedicle grafts or flaps
86.72  Advancement of pedicle graft
86.73  Attachment of pedicle or flap graft to hand
86.74  Attachment of pedicle or flap graft to other sites
86.75  Revision of pedicle or flap graft
86.93  Insertion of tissue expander

DRGs 506 and 507--Full Thickness Burn with Skin Graft or Inhalation 
Injury with or without CC or Significant Trauma

    These DRGs would include all other cases of 3rd degree burns that 
also have either a skin graft or an inhalation injury. Thus, these 
cases would have diagnosis codes of 941.xx through 946.xx, and 949.xx, 
with a fourth digit of 3 or higher, as well as cases with codes of 
948.xx that did not group into DRGs 504 or 505 (that is, 948.00, 
948.01, and 948.1x through 948.9x with a fifth digit of 0). In 
addition, cases classified into DRGs 506 and 507 must have either one 
of the skin graft procedure codes listed above or one of the following 
diagnosis codes for inhalation injuries:

518.5  Pulmonary insufficiency following trauma and surgery
518.81  Respiratory failure
518.84  Acute and chronic respiratory failure (new code in FY 1999--
see Table 6A in section V. of the Addendum)
947.1 Burn of larynx, trachea, or lung
987.9  Toxic effect of gas, fume, or vapor, NOS

    Cases that meet both of these coding criteria would be assigned to 
DRG 506 if there is a diagnosis code indicating either a CC (based on 
the standard DRG CC list) or concomitant significant trauma (based on 
the significant trauma diagnosis codes, listed by body site, used for 
classification in MDC 24).

DRGs 508 and 509--Full Thickness Burn without Skin Graft or Inhalation 
Injury with or without CC or Significant Trauma

    These DRGs would include all other cases of 3rd degree burns. Thus, 
these DRGs would include all cases without a skin graft or inhalation 
injury that have diagnosis codes of 941.xx through 946.xx, and 949.xx, 
with a fourth digit of 3 or higher, as well as cases with codes of 
948.xx that did not group into DRGs 504 or 505. DRG 508 would also 
require a secondary diagnosis from the standard CC list or the trauma 
list based on the significant trauma diagnosis codes, listed by body 
site, used for classification in MDC 24.

DRGs 510 and 511--Nonextensive Burns with and without CC or Significant 
Trauma

    The remaining burn cases would be classified into one of these two 
DRGs, depending on whether or not the claim included a diagnosis code 
reflecting the presence of a CC or a significant trauma, as explained 
above.
4. Legionnaires' Disease
    Effective with discharges occurring on or after October 1, 1997, a 
new diagnosis code was created for pneumonia due to Legionnaires' 
disease (code 482.84). In the August 29, 1997 final rule with comment 
period, we assigned this code to DRGs 79, 80, and 81 (Respiratory 
Infections and Inflammations) (62 FR 46090). However, we did not 
include this code as a human immunodeficiency virus (HIV) major related 
condition in MDC 25 (HIV Infections). Because pneumonia due to 
Legionnaires' disease is a serious respiratory condition that has a 
deleterious effect on patients with HIV, we are proposing to assign 
diagnosis code 482.84 to DRG 489 (HIV with Major Related Condition) as 
a major related condition. In addition, we did not assign the code as a 
major problem in DRGs 387 (Prematurity with Major Problems) and 389 
(Full Term Neonate with Major Problems). These DRGs are assigned to MDC 
15 (Newborns and Other Neonates with Conditions Originating in the 
Perinatal Period). Again, as a part of this proposed rule, we would 
assign diagnosis code 482.84 as a major problem in DRGs 387 and 389 
because of its effect on resource use in treating newborns.
5. Surgical Hierarchies
    Some inpatient stays entail multiple surgical procedures, each one 
of which, occurring by itself, could result in assignment of the case 
to a different DRG within the MDC to which the principal diagnosis is 
assigned. It is, therefore, necessary to have a decision rule by which 
these cases are assigned to a single DRG. The surgical hierarchy, an 
ordering of surgical classes from most to least resource intensive, 
performs that function. Its application ensures that cases involving 
multiple surgical procedures are assigned to the DRG associated with 
the most resource-intensive surgical class.
    Because the relative resource intensity of surgical classes can 
shift as a function of DRG reclassification and recalibration, we 
reviewed the surgical hierarchy of each MDC, as we have for previous 
reclassifications, to determine if the ordering of classes coincided 
with the intensity of resource utilization, as measured by the same 
billing data used to compute the DRG relative weights.
    A surgical class can be composed of one or more DRGs. For example, 
in MDC 5, the surgical class ``heart transplant'' consists of a single 
DRG (DRG 103) and the class ``major cardiovascular procedures'' 
consists of two DRGs (DRGs 110 and 111). Consequently, in many cases, 
the surgical hierarchy has an impact on more than one DRG. The 
methodology for determining the most resource-intensive surgical class 
involves weighting each DRG for frequency to determine the average 
resources for each surgical class. For example, assume surgical class A 
includes DRGs 1 and 2 and surgical class B includes DRGs 3, 4, and 5. 
Assume also that the average charge of DRG 1 is higher than that of DRG 
3, but the average charges of DRGs 4 and 5 are higher than the average 
charge of DRG 2. To determine whether surgical class A should be higher 
or lower than surgical class B in the surgical hierarchy, we would 
weight the average charge of each DRG by frequency (that is, by the 
number of cases in the DRG) to determine average resource consumption 
for the surgical class. The surgical classes would then be ordered from 
the class with the highest average resource utilization to that with 
the lowest, with the exception of ``other OR procedures'' as discussed 
below.
    This methodology may occasionally result in a case involving 
multiple procedures being assigned to the lower-weighted DRG (in the 
highest, most resource-intensive surgical class) of the available 
alternatives. However, given that the logic underlying the surgical 
hierarchy provides that the GROUPER searches for the procedure in the 
most resource-intensive surgical class this result is unavoidable.
    We note that, notwithstanding the foregoing discussion, there are a 
few instances when a surgical class with a lower average relative 
weight is ordered above a surgical class with a higher average relative 
weight. For example, the ``other OR procedures'' surgical class is 
uniformly ordered last in the surgical hierarchy of each MDC in which 
it occurs, regardless of the fact that the relative weight for the DRG 
or DRGs in that surgical class may be higher than that for other 
surgical classes in the MDC. The ``other OR procedures'' class is a 
group of procedures that are least likely to be related to the 
diagnoses in the MDC but are occasionally performed on patients with 
these diagnoses. Therefore, these procedures should only be considered 
if

[[Page 25581]]

no other procedure more closely related to the diagnoses in the MDC has 
been performed.
    A second example occurs when the difference between the average 
weights for two surgical classes is very small. We have found that 
small differences generally do not warrant reordering of the hierarchy 
since, by virtue of the hierarchy change, the relative weights are 
likely to shift such that the higher-ordered surgical class has a lower 
average weight than the class ordered below it.
    Based on the preliminary recalibration of the DRGs, we are 
proposing to modify the surgical hierarchy as set forth below. As we 
stated in the September 1, 1989 final rule (54 FR 36457), we are unable 
to test the effects of the proposed revisions to the surgical hierarchy 
and to reflect these changes in the proposed relative weights due to 
the unavailability of revised GROUPER software at the time this 
proposed rule is prepared. Rather, we simulate most major 
classification changes to approximate the placement of cases under the 
proposed reclassification and then determine the average charge for 
each DRG. These average charges then serve as our best estimate of 
relative resource use for each surgical class. We test the proposed 
surgical hierarchy changes after the revised GROUPER is received and 
reflect the final changes in the DRG relative weights in the final 
rule. Further, as discussed below in section II.C of this preamble, we 
anticipate that the final recalibrated weights will be somewhat 
different from those proposed, since they will be based on more 
complete data. Consequently, further revision of the hierarchy, using 
the above principles, may be necessary in the final rule.
    At this time, we would revise the surgical hierarchy for MDC 3 
(Diseases and Disorders of the Ear, Nose, Mouth and Throat) as follows:
     We would reorder Sinus and Mastoid Procedures (DRGs 53-54) 
above Myringotomy with Tube Insertion (DRGs 61-62).
     We would reorder Mouth Procedures (DRGs 168-169) above 
Tonsil and Adenoid Procedure Except Tonsillectomy and/or Adeniodectomy 
Only (DRGs 57-58).
6. Refinement of Complications and Comorbidities List
    There is a standard list of diagnoses that are considered CCs. We 
developed this list using physician panels to include those diagnoses 
that, when present as a secondary condition, would be considered a 
substantial complication or comorbidity. In previous years, we have 
made changes to the standard list of CCs, either by adding new CCs or 
deleting CCs already on the list. At this time, we do not propose to 
delete any of the diagnosis codes on the CC list.
    In the September 1, 1987 final notice concerning changes to the DRG 
classification system (52 FR 33143), we modified the GROUPER logic so 
that certain diagnoses included on the standard list of CCs would not 
be considered a valid CC in combination with a particular principal 
diagnosis. Thus, we created the CC Exclusions List. We made these 
changes to preclude coding of CCs for closely related conditions, to 
preclude duplicative coding or inconsistent coding from being treated 
as CCs, and to ensure that cases are appropriately classified between 
the complicated and uncomplicated DRGs in a pair.
    In the May 19, 1987 proposed notice concerning changes to the DRG 
classification system (52 FR 18877), we explained that the excluded 
secondary diagnoses were established using the following five 
principles:
     Chronic and acute manifestations of the same condition 
should not be considered CCs for one another (as subsequently corrected 
in the September 1, 1987 final notice (52 FR 33154)).
     Specific and nonspecific (that is, not otherwise specified 
(NOS)) diagnosis codes for a condition should not be considered CCs for 
one another.
     Conditions that may not co-exist, such as partial/total, 
unilateral/bilateral, obstructed/unobstructed, and benign/malignant, 
should not be considered CCs for one another.
     The same condition in anatomically proximal sites should 
not be considered CCs for one another.
     Closely related conditions should not be considered CCs 
for one another.
    The creation of the CC Exclusions List was a major project 
involving hundreds of codes. The FY 1988 revisions were intended to be 
only a first step toward refinement of the CC list in that the criteria 
used for eliminating certain diagnoses from consideration as CCs were 
intended to identify only the most obvious diagnoses that should not be 
considered complications or comorbidities of another diagnosis. For 
that reason, and in light of comments and questions on the CC list, we 
have continued to review the remaining CCs to identify additional 
exclusions and to remove diagnoses from the master list that have been 
shown not to meet the definition of a CC. (See the September 30, 1988 
final rule for the revision made for the discharges occurring in FY 
1989 (53 FR 38485); the September 1, 1989 final rule for the FY 1990 
revision (54 FR 36552); the September 4, 1990 final rule for the FY 
1991 revision (55 FR 36126); the August 30, 1991 final rule for the FY 
1992 revision (56 FR 43209); the September 1, 1992 final rule for the 
FY 1993 revision (57 FR 39753); the September 1, 1993 final rule for 
the FY 1994 revisions (58 FR 46278); the September 1, 1994 final rule 
for the FY 1995 revisions (59 FR 45334); the September 1, 1995 final 
rule for the FY 1996 revisions (60 FR 45782); the August 30, 1996 final 
rule for the FY 1997 revisions (61 FR 46171); and the August 29, 1997 
final rule for the FY 1998 revisions (62 FR 45966)).
    We are proposing a limited revision of the CC Exclusions List to 
take into account the changes that will be made in the ICD-9-CM 
diagnosis coding system effective October 1, 1998. (See section II.B.8, 
below, for a discussion of ICD-9-CM changes.) These proposed changes 
are being made in accordance with the principles established when we 
created the CC Exclusions List in 1987.
    Tables 6F and 6G in section V. of the Addendum to this proposed 
rule contain the proposed revisions to the CC Exclusions List that 
would be effective for discharges occurring on or after October 1, 
1998. Each table shows the principal diagnoses with proposed changes to 
the excluded CCs. Each of these principal diagnoses is shown with an 
asterisk and the additions or deletions to the CC Exclusions List are 
provided in an indented column immediately following the affected 
principal diagnosis.
    CCs that are added to the list are in Table 6F--Additions to the CC 
Exclusions List. Beginning with discharges on or after October 1, 1998, 
the indented diagnoses will not be recognized by the GROUPER as valid 
CCs for the asterisked principal diagnosis.
    CCs that are deleted from the list are in Table 6G--Deletions from 
the CC Exclusions List. Beginning with discharges on or after October 
1, 1998 the indented diagnoses will be recognized by the GROUPER as 
valid CCs for the asterisked principal diagnosis.
    Copies of the original CC Exclusions List applicable to FY 1988 can 
be obtained from the National Technical Information Service (NTIS) of 
the Department of Commerce. It is available in hard copy for $92.00 
plus $6.00 shipping and handling and on microfiche for $20.50, plus 
$4.00 for shipping and handling. A request for the FY 1988 CC 
Exclusions List (which

[[Page 25582]]

should include the identification accession number (PB) 88-133970) 
should be made to the following address: National Technical Information 
Service; United States Department of Commerce; 5285 Port Royal Road; 
Springfield, Virginia 22161; or by calling (703) 487-4650.
    Users should be aware of the fact that all revisions to the CC 
Exclusions List (FYs 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 
1997, and 1998) and those in Tables 6F and 6G of this document must be 
incorporated into the list purchased from NTIS in order to obtain the 
CC Exclusions List applicable for discharges occurring on or after 
October 1, 1998.
    Alternatively, the complete documentation of the GROUPER logic, 
including the current CC Exclusions List, is available from 3M/Health 
Information Systems (HIS), which, under contract with HCFA, is 
responsible for updating and maintaining the GROUPER program. The 
current DRG Definitions Manual, Version 15.0, is available for $195.00, 
which includes $15.00 for shipping and handling. Version 16.0 of this 
manual, which will include the final FY 1999 DRG changes, will be 
available in October 1998 for $225.00. These manuals may be obtained by 
writing 3M/HIS at the following address: 100 Barnes Road; Wallingford, 
Connecticut 06492; or by calling (203) 949-0303. Please specify the 
revision or revisions requested.
7. Review of Procedure Codes in DRGs 468, 476, and 477
    Each year, we review cases assigned to DRG 468 (Extensive OR 
Procedure Unrelated to Principal Diagnosis), DRG 476 (Prostatic OR 
Procedure Unrelated to Principal Diagnosis), and DRG 477 (Nonextensive 
OR Procedure Unrelated to Principal Diagnosis) in order to determine 
whether it would be appropriate to change the procedures assigned among 
these DRGs.
    DRGs 468, 476, and 477 are reserved for those cases in which none 
of the OR procedures performed is related to the principal diagnosis. 
These DRGs are intended to capture atypical cases, that is, those cases 
not occurring with sufficient frequency to represent a distinct, 
recognizable clinical group. DRG 476 is assigned to those discharges in 
which one or more of the following prostatic procedures are performed 
and are unrelated to the principal diagnosis:

60.0  Incision of prostate
60.12  Open biopsy of prostate
60.15  Biopsy of periprostatic tissue
60.18  Other diagnostic procedures on prostate and periprostatic 
tissue
60.21  Transurethral prostatectomy
60.29  Other transurethral prostatectomy
60.61  Local excision of lesion of prostate
60.69  Prostatectomy NEC
60.81  Incision of periprostatic tissue
60.82  Excision of periprostatic tissue
60.93  Repair of prostate
60.94  Control of (postoperative) hemorrhage of prostate
60.95  Transurethral balloon dilation of the prostatic urethra
60.99  Other operations on prostate

    All remaining OR procedures are assigned to DRGs 468 and 477, with 
DRG 477 assigned to those discharges in which the only procedures 
performed are nonextensive procedures that are unrelated to the 
principal diagnosis. The original list of the ICD-9-CM procedure codes 
for the procedures we consider nonextensive procedures, if performed 
with an unrelated principal diagnosis, was published in Table 6C in 
section IV. of the Addendum to the September 30, 1988 final rule (53 FR 
38591). As part of the final rules published on September 4, 1990, 
August 30, 1991, September 1, 1992, September 1, 1993, September 1, 
1994, September 1, 1995, August 30, 1996, and August 29, 1997, we moved 
several other procedures from DRG 468 to 477, as well as moving some 
procedures from DRG 477 to 468. (See 55 FR 36135, 56 FR 43212, 57 FR 
23625, 58 FR 46279, 59 FR 45336, 60 FR 45783, 61 FR 46173, and 62 FR 
45981, respectively.)
    a. Adding Procedure Codes to MDCs. We annually conduct a review of 
procedures producing DRG 468 or 477 assignments on the basis of volume 
of cases in these DRGs with each procedure. Our medical consultants 
then identify those procedures occurring in conjunction with certain 
principal diagnoses with sufficient frequency to justify adding them to 
one of the surgical DRGs for the MDC in which the diagnosis falls. 
Based on this year's review, we did not identify any necessary changes; 
therefore, we are not proposing to move any procedures from DRGs 468 
and 477 to one of the surgical DRGs.
     b. Reassignment of Procedures Among DRGs 468, 476, and 477. We 
also reviewed the list of procedures that produce assignments to DRGs 
468, 476, and 477 to ascertain if any of those procedures should be 
moved from one of these DRGs to another based on average charges and 
length of stay. Generally, we move only those procedures for which we 
have an adequate number of discharges to analyze the data. Based on our 
review this year, we are not proposing to move any procedures from DRG 
468 to DRGs 476 or 477, from DRG 476 to DRGs 468 or 477, or from DRG 
477 to DRGS 468 or 476.
8. Changes to the ICD-9-CM Coding System
    As discussed above in section II.B.1 of this preamble, the ICD-9-CM 
is a coding system that is used for the reporting of diagnoses and 
procedures performed on a patient. In September 1985, the ICD-9-CM 
Coordination and Maintenance Committee was formed. This is a Federal 
interdepartmental committee charged with the mission of maintaining and 
updating the ICD-9-CM. That mission includes approving coding changes, 
and developing errata, addenda, and other modifications to the ICD-9-CM 
to reflect newly developed procedures and technologies and newly 
identified diseases. The Committee is also responsible for promoting 
the use of Federal and non-Federal educational programs and other 
communication techniques with a view toward standardizing coding 
applications and upgrading the quality of the classification system.
    The Committee is co-chaired by the National Center for Health 
Statistics (NCHS) and HCFA. The NCHS has lead responsibility for the 
ICD-9-CM diagnosis codes included in the Tabular List and Alphabetic 
Index for Diseases while HCFA has lead responsibility for the ICD-9-CM 
procedure codes included in the Tabular List and Alphabetic Index for 
Procedures.
    The Committee encourages participation in the above process by 
health-related organizations. In this regard, the Committee holds 
public meetings for discussion of educational issues and proposed 
coding changes. These meetings provide an opportunity for 
representatives of recognized organizations in the coding fields, such 
as the American Health Information Management Association (AHIMA) 
(formerly American Medical Record Association (AMRA)), the American 
Hospital Association (AHA), and various physician specialty groups as 
well as physicians, medical record administrators, health information 
management professionals, and other members of the public to contribute 
ideas on coding matters. After considering the opinions expressed at 
the public meetings and in writing, the Committee formulates 
recommendations, which then must be approved by the agencies.
    The Committee presented proposals for coding changes at public 
meetings held on June 5 and December 4 and 5, 1997, and finalized the 
coding changes after consideration of comments received at the meetings 
and in writing

[[Page 25583]]

within 30 days following the December 1997 meeting. The initial meeting 
for consideration of coding issues for implementation in FY 2000 will 
be held on June 4, 1998. Copies of the minutes of the 1997 meetings can 
be obtained from the HCFA Home Page @ http://www.hcfa.gov/pubaffr.htm, 
under the ``What's New'' listing. Paper copies of these minutes are no 
longer available and the mailing list has been discontinued. We 
encourage commenters to address suggestions on coding issues involving 
diagnosis codes to: Donna Pickett, Co-Chairperson; ICD-9-CM 
Coordination and Maintenance Committee; NCHS; Room 1100; 6525 Belcrest 
Road; Hyattsville, Maryland 20782. Comments may be sent by E-mail to: 
[email protected].
    Questions and comments concerning the procedure codes should be 
addressed to: Patricia E. Brooks, Co-Chairperson; ICD-9-CM Coordination 
and Maintenance Committee; HCFA, Center for Health Plans and Providers, 
Plan and Provider Purchasing Policy Group, Division of Acute Care; C5-
06-27; 7500 Security Boulevard; Baltimore, Maryland 21244-1850. 
Comments may be sent by E-mail to: [email protected].
    The ICD-9-CM code changes that have been approved will become 
effective October 1, 1998. The new ICD-9-CM codes are listed, along 
with their proposed DRG classifications, in Tables 6A and 6B (New 
Diagnosis Codes and New Procedure Codes, respectively) in section V. of 
the Addendum to this proposed rule. As we stated above, the code 
numbers and their titles were presented for public comment in the ICD-
9-CM Coordination and Maintenance Committee meetings. Both oral and 
written comments were considered before the codes were approved. 
Therefore, we are soliciting comments only on the proposed DRG 
classifications.
    Further, the Committee has approved the expansion of certain ICD-9-
CM codes to require an additional digit for valid code assignment. 
Diagnosis codes that have been replaced by expanded codes, other codes, 
or have been deleted are in Table 6C (Invalid Diagnosis Codes). These 
invalid diagnosis codes will not be recognized by the GROUPER beginning 
with discharges occurring on or after October 1, 1998. The 
corresponding new or expanded diagnosis codes are included in Table 6A. 
Procedure codes that have been replaced by expanded codes, other codes, 
or have been deleted are in Table 6D (Invalid Procedure Codes). 
Revisions to diagnosis code titles are in Table 6E (Revised Diagnosis 
Code Titles), which also include the proposed DRG assignments for these 
revised codes. For FY 1999, there are no revisions to procedure code 
titles.
9. Other Issues--
    a. Palliative Care. Effective October 1, 1996 (FY 1997), we 
introduced a diagnosis code to allow the identification of those cases 
in which palliative care was delivered to a hospital inpatient. This 
code, V66.7 (Encounter for palliative care), was unusual in that there 
had been no previous code assignment that included the concept of 
palliative care. Since this was a new concept, instructional materials 
were developed and distributed by the AHA as well as specialty groups 
on the use of this new code. With new codes, it sometimes takes several 
years for physician documentation to improve and for coders to become 
accustomed to looking for this type of information in order to assign a 
code. There is an inclusion note listed under V66.7 which indicates 
that this code should be used as a secondary diagnosis only; the 
patient's medical problem would always be listed first. Currently, use 
of diagnosis code V66.7 does not have an impact on DRG assignment. 
Consistent with prior practice, we have waited until the FY 1997 data 
became available for analysis before considering any possible 
modifications to the DRGs.
    In analyzing the FY 1997 bills received through September 1997, we 
found that 4,769 discharges included V66.7 as a secondary diagnosis. 
These cases were widely distributed throughout 199 DRGs. The vast 
majority of these DRGs included five or fewer discharges with use of 
palliative care. Only 12 DRGs included more than 100 cases. These were 
the following:


------------------------------------------------------------------------
                                                              Number of 
               DRG                           Title              cases   
------------------------------------------------------------------------
10...............................  Nervous System Neoplasms          144
                                    with CC.                            
14...............................  Specific Cerebrovascular          272
                                    Disorders Except TIA.               
79...............................  Respiratory Infections            139
                                    and Inflammations Age               
                                    >17 with CC.                        
82...............................  Respiratory Neoplasms...          526
89...............................  Simple Pneumonia and              200
                                    Pleurisy Age >17 with               
                                    CC.                                 
127..............................  Heart Failure and Shock.          184
172..............................  Digestive Malignancy              226
                                    with CC.                            
203..............................  Malignancy of                     285
                                    Hepatobiliary System or             
                                    Pancreas.                           
239..............................  Pathological Fractures            218
                                    and Musculoskeletal and             
                                    Connective Tissue                   
                                    Malignancy.                         
296..............................  Nutritional and                   173
                                    Miscellaneous Metabolic             
                                    Disorders Age >17 with              
                                    CC.                                 
403..............................  Lymphoma and Non-Acute            178
                                    Leukemia with CC.                   
416..............................  Septicemia Age >17......          147
------------------------------------------------------------------------

    Six of these DRGs are cancer-related; however, the other DRGs are 
quite diverse. Upon further analysis, we found that, for the most part, 
discharges with code V66.7 do not significantly differ in length of 
stay from the discharges in the same DRG without code V66.7. Discharges 
with code V66.7 are sometimes longer and sometimes shorter and the 
comparative length of stay for a given DRG tends to vary by only one 
day. In general, the average charges for a palliative care case 
discharge with a secondary code of V66.7 were lower than the charges 
for other discharges within the DRG. However, these differences were 
relatively small and were well within the standard variation of charges 
for cases in the DRG.
    One approach we could take to revise the DRGs would be to divide 
those DRGs with a large number of cases coded with V66.7 into two 
different DRGs, with and without palliative care. However, the 
relatively small proportion of cases in each DRG argues against this 
approach; no DRG has more than 1 percent of its cases coded with 
palliative care and, in most cases, the percentage is well under 1 
percent. An alternative approach would be to group all palliative care 
cases, regardless of the underlying disease or condition, into one new 
DRG. However, the charges of these cases are so varied that this is not 
a logical choice. In addition, there is a lack of clinical coherence in 
such an approach. The underlying diagnoses of

[[Page 25584]]

these cases range from respiratory conditions to heart failure to 
septicemia. Because there are so few cases in the FY 1997 data and they 
are so widely dispersed among different DRGs, we are not proposing a 
DRG modification at this time. We will make a more detailed analysis of 
these cases over the next year based on a more complete FY 1997 data 
file as well as review of the FY 1998 cases that will be available 
later this year. As time goes by, hospital coders and physicians should 
become more aware of this code and we hope that more complete data will 
assist our decision making process.
    b. PTCA. Effective with discharges occurring on or after October 1, 
1997, we reassigned cases of PTCA with coronary artery stent implant 
from DRG 112 to DRG 116. In the August 29, 1997 final rule with comment 
period, we responded to several commenters who contended that PTCA 
cases treated with platelet inhibitors were as resource intensive as 
the PTCA with stent implant cases and that these cases should also be 
moved to DRG 116. However, there is currently no code that describes 
the infusion of platelet inhibitors. Therefore, we were unable to make 
any changes in the DRGs for FY 1998.
    As set forth in Table 6B, New Procedure Codes in section V. of the 
addendum to this proposed rule, a new procedure code for injection or 
infusion of platelet inhibitors (code 99.20) will be effective with 
discharges occurring on or after October 1, 1998. Our usual policy on 
new codes is to assign them to the same DRG or DRGs as their 
predecessor code. Because infusion of platelet inhibitors is currently 
assigned to a non-OR procedure code, we followed our usual practice and 
designated code 99.20 as a non-OR code that does not affect DRG 
assignment.
    We will not have any data on this new code until we receive bills 
for FY 1999. Thus, we would be unable to make any changes in DRG 
assignment until FY 2001. We note, however, that the Conference Report 
that accompanied the Balanced Budget Act of 1997 contained language 
stating that ``* * * in order to ensure that Medicare beneficiaries 
have access to innovative new drug therapies, the Conferees believe 
that HCFA should consider, to the extent feasible, reliable, validated 
data other than MedPAR data in annually recalibrating and reclassifying 
the DRGs.'' (H.R. Rep. No. 105-217.734). At this time, we have received 
no data that would allow us to make an appropriate modification of DRG 
112 for PTCA cases with platelet infusion therapy. When we develop the 
final rule, we will review and analyze any data we receive about the 
use of platelet inhibitors for Medicare beneficiaries. If we believe 
that the data are adequate to allow identification of the percentage of 
cases in DRG 112 that receive this therapy and the charge and length of 
stay data convince us that these cases should be moved, we will 
consider such a move effective for discharges occurring on or after 
October 1, 1998.

C. Recalibration of DRG Weights

    We are proposing to use the same basic methodology for the FY 1999 
recalibration as we did for FY 1998. (See the August 29, 1997 final 
rule with comment (62 FR 45982).) That is, we would recalibrate the 
weights based on charge data for Medicare discharges. However, we would 
use the most current charge information available, the FY 1997 MedPAR 
file, rather than the FY 1996 MedPAR file. The MedPAR file is based on 
fully-coded diagnostic and surgical procedure data for all Medicare 
inpatient hospital bills.
    The proposed recalibrated DRG relative weights are constructed from 
FY 1997 MedPAR data, based on bills received by HCFA through December 
1997, from all hospitals subject to the prospective payment system and 
short-term acute care hospitals in waiver States. The FY 1997 MedPAR 
file includes data for approximately 11.2 million Medicare discharges.
    The methodology used to calculate the proposed DRG relative weights 
from the FY 1997 MedPAR file is as follows:
     To the extent possible, all the claims were regrouped 
using the proposed DRG classification revisions discussed above in 
section II.B of this preamble. As noted in section II.B.5, due to the 
unavailability of revised GROUPER software, we simulate most major 
classification changes to approximate the placement of cases under the 
proposed reclassification. However, there are some changes that cannot 
be modeled.
     Charges were standardized to remove the effects of 
differences in area wage levels, indirect medical education costs, 
disproportionate share payments, and, for hospitals in Alaska and 
Hawaii, the applicable cost-of-living adjustment.
     The average standardized charge per DRG was calculated by 
summing the standardized charges for all cases in the DRG and dividing 
that amount by the number of cases classified in the DRG.
     We then eliminated statistical outliers, using the same 
criteria as was used in computing the current weights. That is, all 
cases that are outside of 3.0 standard deviations from the mean of the 
log distribution of both the charges per case and the charges per day 
for each DRG.
     The average charge for each DRG was then recomputed 
(excluding the statistical outliers) and divided by the national 
average standardized charge per case to determine the relative weight. 
A transfer case is counted as a fraction of a case based on the ratio 
of its length of stay to the geometric mean length of stay of the cases 
assigned to the DRG. That is, a 5-day length of stay transfer case 
assigned to a DRG with a geometric mean length of stay of 10 days is 
counted as 0.5 of a total case.
     We established the relative weight for heart and heart-
lung, liver, and lung transplants (DRGs 103, 480, and 495) in a manner 
consistent with the methodology for all other DRGs except that the 
transplant cases that were used to establish the weights were limited 
to those Medicare-approved heart, heart-lung, liver, and lung 
transplant centers that have cases in the FY 1995 MedPAR file. 
(Medicare coverage for heart, heart-lung, liver, and lung transplants 
is limited to those facilities that have received approval from HCFA as 
transplant centers.)
     Acquisition costs for kidney, heart, heart-lung, liver, 
and lung transplants continue to be paid on a reasonable cost basis. 
Unlike other excluded costs, the acquisition costs are concentrated in 
specific DRGs (DRG 302 (Kidney Transplant); DRG 103 (Heart Transplant 
for heart and heart-lung transplants); DRG 480 (Liver Transplant); and 
DRG 495 (Lung Transplant)). Because these costs are paid separately 
from the prospective payment rate, it is necessary to make an 
adjustment to prevent the relative weights for these DRGs from 
including the effect of the acquisition costs. Therefore, we subtracted 
the acquisition charges from the total charges on each transplant bill 
that showed acquisition charges before computing the average charge for 
the DRG and before eliminating statistical outliers.
    When we recalibrated the DRG weights for previous years, we set a 
threshold of 10 cases as the minimum number of cases required to 
compute a reasonable weight. We propose to use that same case threshold 
in recalibrating the DRG weights for FY 1999. Using the FY 1997 MedPAR 
data set, there are 38 DRGs that contain fewer than 10 cases. We 
computed the weights for the 38 low-volume DRGs by adjusting the FY 
1998 weights of these DRGs by the percentage change in the average 
weight of the cases in the other DRGs.
    The weights developed according to the methodology described above, 
using the proposed DRG classification

[[Page 25585]]

changes, result in an average case weight that is different from the 
average case weight before recalibration. Therefore, the new weights 
are normalized by an adjustment factor, so that the average case weight 
after recalibration is equal to the average case weight before 
recalibration. This adjustment is intended to ensure that recalibration 
by itself neither increases nor decreases total payments under the 
prospective payment system.
    Section 1886(d)(4)(C)(iii) of the Act requires that beginning with 
FY 1991, reclassification and recalibration changes be made in a manner 
that assures that the aggregate payments are neither greater than nor 
less than the aggregate payments that would have been made without the 
changes. Although normalization is intended to achieve this effect, 
equating the average case weight after recalibration to the average 
case weight before recalibration does not necessarily achieve budget 
neutrality with respect to aggregate payments to hospitals because 
payment to hospitals is affected by factors other than average case 
weight. Therefore, as we have done in past years and as discussed in 
section II.A.4.b of the Addendum to this proposed rule, we are 
proposing to make a budget neutrality adjustment to assure that the 
requirement of section 1886(d)(4)(C)(iii) of the Act is met.

III. Proposed Changes to the Hospital Wage Index

A. Background

    Section 1886(d)(3)(E) of the Act requires that, as part of the 
methodology for determining prospective payments to hospitals, the 
Secretary must adjust the standardized amounts ``for area differences 
in hospital wage levels by a factor (established by the Secretary) 
reflecting the relative hospital wage level in the geographic area of 
the hospital compared to the national average hospital wage level.'' In 
accordance with the broad discretion conferred under the Act, we 
currently define hospital labor market areas based on the definitions 
of Metropolitan Statistical Areas (MSAs), Primary MSAs (PMSAs), and New 
England County Metropolitan Areas (NECMAs) issued by the Office of 
Management and Budget (OMB). OMB also designates Consolidated MSAs 
(CMSAs). A CMSA is a metropolitan area with a population of one million 
or more, comprised of two or more PMSAs (identified by their separate 
economic and social character). For purposes of the hospital wage 
index, we use the PMSAs rather than CMSAs since they allow a more 
precise breakdown of labor costs. If a metropolitan area is not 
designated as part of a PMSA, we use the applicable MSA. Rural areas 
are areas outside a designated MSA, PMSA, or NECMA.
    We note that effective April 1, 1990, the term Metropolitan Area 
(MA) replaced the term Metropolitan Statistical Area (MSA) (which had 
been used since June 30, 1983) to describe the set of metropolitan 
areas comprised of MSAs, PMSAs, and CMSAs. The terminology was changed 
by OMB in the March 30, 1990 Federal Register to distinguish between 
the individual metropolitan areas known as MSAs and the set of all 
metropolitan areas (MSAs, PMSAs, and CMSAs) (55 FR 12154). For purposes 
of the prospective payment system, we will continue to refer to these 
areas as MSAs.
    Section 1886(d)(3)(E) of the Act also requires that the wage index 
be updated annually beginning October 1, 1993. Furthermore, this 
section provides that the Secretary base the update on a survey of 
wages and wage-related costs of short-term, acute care hospitals. The 
survey should measure, to the extent feasible, the earnings and paid 
hours of employment by occupational category, and must exclude the 
wages and wage-related costs incurred in furnishing skilled nursing 
services. We also adjust the wage index, as discussed below in section 
III.F, to take into account the geographic reclassification of 
hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of 
the Act.

B. FY 1999 Wage Index Update

    The proposed FY 1999 wage index in section V of the Addendum 
(effective for hospital discharges occurring on or after October 1, 
1998 and before October 1, 1999) is based on the data collected from 
the Medicare cost reports submitted by hospitals for cost reporting 
periods beginning in FY 1995 (the FY 1998 wage index was based on FY 
1994 wage data). The proposed FY 1999 wage index includes the following 
categories of data, which were also included in the FY 1998 wage index:
     Total salaries and hours from short-term, acute care 
hospitals.
     Home office costs and hours.
     Direct patient care contract labor costs and hours.
    The proposed wage index also continues to exclude the direct 
salaries and hours for nonhospital services such as skilled nursing 
facility services, home health services, or other subprovider 
components that are not subject to the prospective payment system. 
Finally, as discussed in detail in the August 29, 1997 final rule with 
comment period, we would calculate a separate Puerto Rico-specific wage 
index and apply it to the Puerto Rico standardized amount. (See 62 FR 
45984 and 46041) This wage index is based solely on Puerto Rico's data.
    For FY 1999 we are proposing to include two changes to the 
categories: we will add contract labor costs and hours for top 
management positions and replace the fringe benefit category with the 
wage-related costs associated with hospital and home office salaries 
category. These two changes reflect changes to the Medicare cost report 
that were implemented in the FY 1995 hospital prospective payment 
system September 1, 1994 final rule with comment period (59 FR 45355). 
The changes were made to the cost report for cost reporting periods 
beginning during FY 1995. Because we are using wage data from the FY 
1995 cost report for the proposed FY 1999 wage index, these two changes 
will be reflected in the wage index for the first time in FY 1999.
    As discussed in detail in the September 1, 1994 final rule with 
comment period (59 FR 45355), we expanded the definition of contract 
services reported on the Worksheet S-3 to include the labor-related 
costs associated with contract personnel in a hospital's top four 
management positions: Chief Executive Officer (CEO)/Hospital 
Administrator, Chief Operating Officer (COO), Chief Financial Officer 
(CFO), and Nursing Administrator. We also revised the cost report to 
reflect a change in terminology from ``fringe benefits'' to ``wage-
related costs,'' to promote the consistent reporting of these costs. 
(See September 1, 1994 final rule with comment period 59 FR 45356-
45359.) We made this change in terminology because we believe that it 
will eliminate confusion regarding those wage-related costs that are 
incorporated in the wage index versus the broader definition of fringe 
benefits recognized under the Medicare cost reimbursement principles. 
Wage-related costs, which include core and other wage-related costs, 
are reported on the Form HCFA-339, the Provider Cost Report 
Reimbursement Questionnaire.
    Finally, we have analyzed the wage data for the following costs, 
which were separately reported for the first time on the FY 1995 cost 
reports:
     Physician Part A costs.
     Resident and Certified Registered Nurse Anesthetist (CRNA) 
Part A costs.
     Overhead cost and hours by cost center.
    Our analysis and proposals concerning these data are set forth 
below in section III.C.

[[Page 25586]]

C. Proposals Concerning the FY 1999 Wage Index

1. Physician Part A Costs.
    Currently, if a hospital directly employs a physician, the Part A 
portion of the physician's salary and wage-related costs (that is, 
administrative and teaching service) is included in the calculation of 
the wage index. However, the costs for contract physician Part A 
services are not included. Our policy has been that, to be included in 
the wage index calculation, a contracted service must be related to 
direct patient care, or, beginning with the FY 1999 wage index, top 
level management (see discussion above). Because some States have laws 
that prohibit hospitals from directly hiring physicians, the hospitals 
in those States have claimed that they are disadvantaged by the wage 
index's exclusion of contract physician Part A costs. We began 
collecting separate wage data for both direct and contract physician 
Part A services on the FY 1995 cost report in order to analyze this 
issue. As we discussed in the September 1, 1994 final rule with comment 
period (59 FR 45354), our original purpose in collecting these data was 
to exclude all Part A physician costs from the wage index.
    When we made the change to the cost report, there were five States 
in which hospitals were prohibited from directly employing physicians. 
We understand that only two States currently maintain this prohibition: 
Texas and California. Thus, the number of hospitals affected by our 
current policy has decreased. Nevertheless, the fact that hospitals in 
these two States are still prohibited from directly employing 
physicians for Part A services and, therefore, must enter into 
contractual agreements with physicians for these services, perpetuates 
the perceived inequity.
    The main reasons we planned to exclude all Part A physician costs 
rather than include the contract costs was our concern that it would be 
difficult to accurately attribute the Part A costs and hours of these 
contract physicians and including these costs could inappropriately 
inflate the hospitals' average hourly wages. That is, we anticipated 
that average costs for contract physicians would be significantly 
higher than the costs for those physicians directly employed by the 
hospital. However, our analysis of the data shows that the average 
hourly wages for contract physician Part A costs are very similar to, 
and, in fact slightly lower than, the costs for salaried Part A 
physician services.
    Based on this result, we believe that continuing to include the 
direct physician Part A costs and adding the costs for contract 
physicians would be the better policy. Thus, we are proposing to 
calculate the FY 1999 wage index including both direct and contract 
physician Part A costs.
    Of the 5,115 hospitals included in the FY 1995 wage data file, 
approximately 23 percent reported contract physician Part A costs. 
Including these costs would raise the wage index values for one MSA (2 
hospitals) by more than 5 percent and 5 MSAs (60 hospitals) by between 
2 and 5 percent. One Statewide rural area (68 hospitals) would 
experience a decrease between 2 and 5 percent. The wage index values 
for the remaining 365 areas (5,055 hospitals) would be relatively 
unaffected, experiencing changes of between -2 and 2 percent. We 
understand that an unusually large number of hospitals have requested 
changes to these wage data; therefore, there may be relatively 
significant differences between the wage data file used to calculate 
the proposed wage index and the final corrected wage data in the file 
used to calculate the final wage index. Because of this, we will 
reevaluate our decision based on that final wage data, which will be 
submitted by April 6, 1998. If we find significant differences in the 
contract labor costs, we may reconsider our proposal.
2. Resident and CRNA Part A Costs
    The wage index presently includes salaries and wage-related costs 
for residents in approved medical education programs and for CRNAs 
employed by hospitals under the rural pass-through provision. However, 
Medicare pays for these costs outside the prospective payment system. 
Removing these costs from the wage index calculation would be 
consistent with our general policy to exclude costs that are not paid 
through the prospective payment system, but, because they were not 
separately identifiable, we could not remove them.
    In the September 1, 1994 final rule with comment period (59 FR 
45355), we stated that we would begin collecting the resident and CRNA 
wage data separately and would evaluate the data before proposing a 
change in computing the wage index. However, there were data reporting 
problems associated with these costs on the FY 1995 cost report. The 
original instructions for reporting resident costs on Line 6 of 
Worksheet S-3, Part III, erroneously included teaching physician 
salaries and other teaching program costs from Worksheet A of the cost 
report. Although we issued revised instructions to correct this error, 
we now understand these revisions may not have been uniformly 
instituted. Another issue relating to residents' salaries stems from 
apparent underreporting of these costs by hospitals and inconsistent 
treatment of the associated wage-related costs.
    In addition, the original Worksheet S-3 and reporting instructions 
did not provide for the separate reporting of CRNA wage-related costs. 
Another issue with the FY 1995 wage data is the inclusion of contract 
CRNA Part A costs in the contract labor costs reported on Worksheet S-
3. We believe that much of the CRNA Part A costs are reported under 
contract labor, rather than under salaried employee costs, due to the 
heavy use of contract labor by rural hospitals. We do not believe that 
it would be feasible at this time to try to remove these CRNA Part A 
costs from the contract labor costs. We improved the reporting 
instructions for CRNA costs on the FY 1996 cost report.
    Our analysis of the CRNA and resident wage data submitted on the FY 
1995 cost report convinces us that these data are inaccurately and 
incompletely reported by hospitals. For example, although there are 
over 900 teaching hospitals receiving graduate medical education 
payments, only about 800 hospitals reported resident cost data. Because 
we do not want to make a relatively significant change in the wage 
index data calculation without complete and accurate data upon which to 
base our decision, we are proposing to delay any decision regarding 
excluding resident and CRNA costs from the wage index until at least 
next year. We will review the FY 1996 data when it becomes available 
later this year and present our analysis and any proposals in next 
year's proposed rule.
3. Overhead Allocation
    Prior years' wage index calculations have excluded the direct wages 
and hours associated with certain subprovider components that are 
excluded from the prospective payment system; however, the overhead 
costs associated with excluded components have not been removed. We 
have previously attempted to remove the overhead costs associated with 
these excluded areas of the hospital on two separate occasions. Based 
on the quality of the data, as well as comments we received from the 
public, these proposals were never implemented.
    In the September 1, 1995 final rule with comment period (60 FR 
45797), we discussed the results of the second of these efforts. Our 
analysis was prompted by several suggestions from hospital 
representatives that the current methodology, which removes the higher

[[Page 25587]]

nursing costs in excluded areas from the hospital's direct salaries but 
leaves in the lower general services salaries, negatively distorts 
wages. However, the results of our analysis at that time dissuaded us 
from proposing to exclude these areas' overhead costs because the data 
were unreliable. We revised the FY 1995 cost report to allow for the 
reporting of the overhead salaries and hours. We stated that we would 
reexamine this issue when the FY 1995 cost report data became 
available.
    To allocate overhead costs based on the data reported on Worksheet 
S-3, we first determined the ratio of the hours reported directly to 
excluded areas compared to the total hours. Total overhead hours and 
salaries were then multiplied by this ratio to allocate the proportion 
of overhead costs attributable to excluded areas. Next, the overhead 
hours and salaries attributable to excluded areas were subtracted from 
the hospital's total hours and salaries, and an average hourly wage 
reflecting this overhead allocation was computed.
    Of the 5,115 hospitals in the FY 1995 wage data file, 3,661 
reported overhead hours (hospitals were only required to separately 
report overhead hours if their number of directly assigned excluded 
hours exceeded 5 percent of their total hours). The overhead allocation 
would result in an increase in the wage index value of more than 5 
percent for only one MSA (2 hospitals). A total of 12 labor areas (5 
Statewide rural (206 hospitals) and 7 MSAs (25 hospitals)) would 
experience an increase of between 2 percent and 5 percent. Only one MSA 
(29 hospitals) would experience a decline of between 2 and 5 percent. 
The wage index value for the remaining 358 areas (4,921 hospitals) 
would be affected by less than 2 percent.
    We are proposing to include this exclusion of overhead allocation 
in the calculation of the FY 1999 wage index. Although the overall 
impact on hospitals of this change is relatively small, we believe it 
is an appropriate step toward improving the overall consistency of the 
wage index. Additionally, we believe this change will significantly 
increase the accuracy of the wage data for individual hospitals, 
especially hospitals that have a relatively small portion of their 
facility devoted to acute inpatient care.

D. Verification of Wage Data From the Medicare Cost Report

    The data for the proposed FY 1999 wage index were obtained from 
Worksheet S-3, Parts III and IV of the FY 1995 Medicare cost reports. 
The data file used to construct the proposed wage index includes FY 
1995 data submitted to the Health Care Provider Cost Report Information 
System (HCRIS) as of early January 1998. As in past years, we performed 
an intensive review of the wage data, mostly through the use of edits 
designed to identify aberrant data.
    Of the 5,123 hospitals originally in the data file, 851 hospitals 
had data elements that failed an edit. From mid-January to mid-February 
1998, intermediaries contacted hospitals to revise or verify data 
elements that resulted in the edit failures.
    As of February 17, 1998, 31 hospitals still had unresolved data 
elements. These unresolved data elements are included in the 
calculation of the proposed FY 1999 wage index pending their resolution 
before calculation of the final FY 1999 wage index. We have instructed 
the intermediaries to complete their verification of questionable data 
elements and to transmit any changes to the wage data (through HCRIS) 
no later than April 6, 1998. We expect that all unresolved data 
elements will be resolved by that date. The revised data will be 
reflected in the final rule.
    Also, as part of our editing process, we deleted data for eight 
hospitals that failed edits. For two of these hospitals, we were unable 
to obtain sufficient documentation to verify or revise the data because 
the hospitals are no longer participating in the Medicare program or 
are in bankruptcy status. The data from the remaining six participating 
hospitals were removed because inclusion of their data would have 
significantly distorted the wage index values. The data for these six 
hospitals will be included in the final wage index if we receive 
corrected data that passes our edits. As a result, the proposed FY 1999 
wage index is calculated based on FY 1995 wage data for 5,115 
hospitals.

E. Computation of the Wage Index

    The method used to compute the proposed wage index is as follows:
    Step 1--As noted above, we are proposing to base the FY 1999 wage 
index on wage data reported on the FY 1995 Medicare cost reports. We 
gathered data from each of the non-Federal, short-term, acute care 
hospitals for which data were reported on the Worksheet S-3, Parts III 
and IV of the Medicare cost report for the hospital's cost reporting 
period beginning on or after October 1, 1994 and before October 1, 
1995. In addition, we included data from a few hospitals that had cost 
reporting periods beginning in September 1994 and reported a cost 
reporting period exceeding 52 weeks. These data were included because 
no other data from these hospitals would be available for the cost 
reporting period described above, and particular labor market areas 
might be affected due to the omission of these hospitals. However, we 
generally describe these wage data as FY 1995 data.
    Step 2--For each hospital, we subtracted the excluded salaries 
(that is, direct salaries attributable to skilled nursing facility 
services, home health services, and other subprovider components not 
subject to the prospective payment system) from gross hospital salaries 
to determine net hospital salaries. To determine total salaries plus 
wage-related costs, we added the costs of contract labor for direct 
patient care, certain top management, and physician Part A services; 
hospital wage-related costs, and any home office salaries and wage-
related costs reported by the hospital, to the net hospital salaries. 
The actual calculation is the sum of lines 2, 4, 6, and 33 of Worksheet 
S-3, Part III. This calculation differs from the one computed on line 
32 of Worksheet S-3, Part III. Therefore, a hospital's average hourly 
wage calculated under Step 2 will be different from the average hourly 
wage shown on line 32, column 5.
    Step 3--For each hospital, we subtracted the reported excluded 
hours from the gross hospital hours to determine net hospital hours. To 
determine total hours, we increased the net hours by the addition of 
home office hours and hours for contract labor attributable to direct 
patient care, certain top management, and physician Part A salaries.
    Step 4--For each hospital reporting both total overhead salaries 
and total overhead hours greater than zero, we then allocated overhead 
costs. First, we determined the ratio of excluded area hours (Line 24 
of Worksheet S-3, Part III) to revised total hours (Line 9 of Worksheet 
S-3, Part III, adding back CRNA Part A, physician Part A, and resident 
hours). Second, we computed the amounts of overhead salaries and hours 
to be allocated to excluded areas by multiplying the above ratio by the 
total overhead salaries and hours reported on Line 16 of Worksheet S-3, 
Part IV. Finally, we subtracted the computed overhead salaries and 
hours associated with excluded areas from the total salaries and hours 
derived in Steps 2 and 3.
    Step 5--For each hospital, we adjusted the total salaries plus 
wage-related costs to a common period to determine total adjusted 
salaries plus wage-related costs. To make the wage inflation 
adjustment, we estimated the percentage change in the employment

[[Page 25588]]

cost index (ECI) for compensation for each 30-day increment from 
October 14, 1994 through April 15, 1996, for private industry hospital 
workers from the Bureau of Labor Statistics Compensation and Working 
Conditions. For previous wage indexes, we used the percentage change in 
average hourly earnings for hospital industry workers to make the wage 
inflation adjustment. For FY 1999 we are proposing to use the ECI for 
compensation for private industry hospital workers because it reflects 
the price increase associated with total compensation (salaries plus 
fringes) rather than just the increase in salaries, which is what the 
average hourly earnings category reflected. In addition, the ECI 
includes managers as well as other hospital workers. We are also 
proposing to change the methodology used to compute the monthly update 
factors. This new methodology uses actual quarterly ECI data to 
determine the monthly update factors. The methodology assures that the 
update factors match the actual quarterly and annual percent changes. 
The inflation factors used to inflate the hospital's data were based on 
the midpoint of the cost reporting period as indicated below.

                    Midpoint of Cost Reporting Period                   
------------------------------------------------------------------------
                                                              Adjustment
                     After                         Before       factor  
------------------------------------------------------------------------
10/14/94......................................     11/15/94     1.032882
11/14/94......................................     12/15/94     1.030771
12/14/94......................................     01/15/95     1.028721
01/14/95......................................     02/15/95     1.026731
02/14/95......................................     03/15/95     1.024776
03/14/95......................................     04/15/95     1.022827
04/14/95......................................     05/15/95     1.020886
05/14/95......................................     06/15/95     1.018901
06/14/95......................................     07/15/95     1.016822
07/14/95......................................     08/15/95     1.014649
08/14/95......................................     09/15/95     1.012446
09/14/95......................................     10/15/95     1.010279
10/14/95......................................     11/15/95     1.008146
11/14/95......................................     12/15/95     1.006047
12/14/95......................................     01/15/96     1.003981
01/14/96......................................     02/15/96     1.001950
02/14/96......................................     03/15/96     1.000000
03/14/96......................................     04/15/96     0.998181
------------------------------------------------------------------------

    For example, the midpoint of a cost reporting period beginning 
January 1, 1995 and ending December 31, 1995 is June 30, 1995. An 
inflation adjustment factor of 1.016822 would be applied to the wages 
of a hospital with such a cost reporting period. In addition, for the 
data for any cost reporting period that began in FY 1995 and covers a 
period of less than 360 days or greater than 370 days, we annualized 
the data to reflect a 1-year cost report. Annualization is accomplished 
by dividing the data by the number of days in the cost report and then 
multiplying the results by 365.
    Step 6--Each hospital was assigned to its appropriate urban or 
rural labor market area prior to any reclassifications under sections 
1886(d)(8)(B) or 1886(d)(10) of the Act. Within each urban or rural 
labor market area, we added the total adjusted salaries plus wage-
related costs obtained in Step 5 for all hospitals in that area to 
determine the total adjusted salaries plus wage-related costs for the 
labor market area.
    Step 7--We divided the total adjusted salaries plus wage-related 
costs obtained in Step 6 by the sum of the total hours (from Step 4) 
for all hospitals in each labor market area to determine an average 
hourly wage for the area.
    Step 8--We added the total adjusted salaries plus wage-related 
costs obtained in Step 5 for all hospitals in the Nation and then 
divided the sum by the national sum of total hours from Step 4 to 
arrive at a national average hourly wage. Using the data as described 
above, the national average hourly wage is $20.6036.
    Step 9--For each urban or rural labor market area, we calculated 
the hospital wage index value by dividing the area average hourly wage 
obtained in Step 7 by the national average hourly wage computed in Step 
8.
    Step 10--Following the process set forth above, we developed a 
separate Puerto Rico-specific wage index for purposes of adjusting the 
Puerto Rico standardized amounts. We added the total adjusted salaries 
plus wage-related costs (as calculated in Step 5) for all hospitals in 
Puerto Rico and divided the sum by the total hours for Puerto Rico (as 
calculated in Step 4) to arrive at an overall average hourly wage of 
$9.3339 for Puerto Rico. For each labor market area in Puerto Rico, we 
calculated the hospital wage index value by dividing the area average 
hourly wage (as calculated in Step 7) by the overall Puerto Rico 
average hourly wage.
    Step 11--Section 4410 of Public Law 105-33 provides that, for 
discharges on or after October 1, 1997, the area wage index applicable 
to any hospital that is not located in a rural area may not be less 
than the area wage index applicable to hospitals located in rural areas 
in that State. Furthermore, this wage index floor is to be implemented 
in such a manner as to assure that aggregate prospective payment system 
payments are not greater or less than those which would have been made 
in the year if this section did not apply. For FY 1999, this change 
affects 229 hospitals in 34 MSAs. The MSAs affected by this provision 
are identified in Table 4A by a footnote.

F. Revisions to the Wage Index Based on Hospital Redesignation

    Under section 1886(d)(8)(B) of the Act, hospitals in certain rural 
counties adjacent to one or more MSAs are considered to be located in 
one of the adjacent MSAs if certain standards are met. Under section 
1886(d)(10) of the Act, the Medicare Geographic Classification Review 
Board (MGCRB) considers applications by hospitals for geographic 
reclassification for purposes of payment under the prospective payment 
system.
    The methodology for determining the wage index values for 
redesignated hospitals is applied jointly to the hospitals located in 
those rural counties that were deemed urban under section 1886(d)(8)(B) 
of the Act and those hospitals that were reclassified as a result of 
the MGCRB decisions under section 1886(d)(10) of the Act. Section 
1886(d)(8)(C) of the Act provides that the application of the wage 
index to redesignated hospitals is dependent on the hypothetical impact 
that the wage data from these hospitals would have on the wage index 
value for the area to which they have been redesignated. Therefore, as 
provided in section 1886(d)(8)(C) of the Act, the wage index values 
were determined by considering the following:
     If including the wage data for the redesignated hospitals 
would reduce the wage index value for the area to which the hospitals 
are redesignated by 1 percentage point or less, the area wage index 
value determined exclusive of the wage data for the redesignated 
hospitals applies to the redesignated hospitals.
     If including the wage data for the redesignated hospitals 
reduces the wage index value for the area to which the hospitals are 
redesignated by more than 1 percentage point, the hospitals that are 
redesignated are subject to that combined wage index value.
     If including the wage data for the redesignated hospitals 
increases the wage index value for the area to which the hospitals are 
redesignated, both the area and the redesignated hospitals receive the 
combined wage index value.
     The wage index value for a redesignated urban or rural 
hospital cannot be reduced below the wage index value for the rural 
areas of the State in which the hospital is located.
     Rural areas whose wage index values would be reduced by 
excluding the wage data for hospitals that have been redesignated to 
another area continue to have their wage index values calculated as if 
no redesignation had occurred.
     Rural areas whose wage index values increase as a result 
of excluding

[[Page 25589]]

the wage data for the hospitals that have been redesignated to another 
area have their wage index values calculated exclusive of the wage data 
of the redesignated hospitals.
     The wage index value for an urban area is calculated 
exclusive of the wage data for hospitals that have been reclassified to 
another area. However, geographic reclassification may not reduce the 
wage index value for an urban area below the statewide rural wage index 
value.
    We note that, except for those rural areas where redesignation 
would reduce the rural wage index value, the wage index value for each 
area is computed exclusive of the wage data for hospitals that have 
been redesignated from the area for purposes of their wage index. As a 
result, several urban areas listed in Table 4a have no hospitals 
remaining in the area. This is because all the hospitals originally in 
these urban areas have been reclassified to another area by the MGCRB. 
These areas with no remaining hospitals receive the prereclassified 
wage index value. The prereclassified wage index value will apply as 
long as the area remains empty.
    The proposed revised wage index values for FY 1999 are shown in 
Tables 4A, 4B, 4C, and 4F in the Addendum to this proposed rule. 
Hospitals that are redesignated should use the wage index values shown 
in Table 4C. Areas in Table 4C may have more than one wage index value 
because the wage index value for a redesignated urban or rural hospital 
cannot be reduced below the wage index value for the rural areas of the 
State in which the hospital is located. When the wage index value of 
the area to which a hospital is redesignated is lower than the wage 
index value for the rural areas of the State in which the hospital is 
located, the redesignated hospital receives the higher wage index 
value, that is, the wage index value for the rural areas of the State 
in which it is located, rather than the wage index value otherwise 
applicable to the redesignated hospitals.
    Tables 4D and 4E list the average hourly wage for each labor market 
area, prior to the redesignation of hospitals, based on the FY 1995 
wage data. In addition, Table 3C in the Addendum to this proposed rule 
includes the adjusted average hourly wage for each hospital based on 
the FY 1995 data (as calculated from Steps 4 and 5, above). The MGCRB 
will use the average hourly wage published in the final rule to 
evaluate a hospital's application for reclassification, unless that 
average hourly wage is later revised in accordance with the wage data 
correction policy described in Sec. 412.63(w)(2). In such cases, the 
MGCRB will use the most recent revised data used for purposes of the 
hospital wage index. Hospitals that choose to apply before publication 
of the final rule may use the proposed wage data in applying to the 
MGCRB for wage index reclassifications that would be effective for FY 
2000. We note that in adjudicating these wage index reclassification 
requests during FY 1999, the MGCRB will use the average hourly wages 
for each hospital and labor market area that are reflected in the final 
FY 1999 wage index.
    At the time this proposed wage index was constructed, the MGCRB had 
completed its review. The proposed FY 1999 wage index values 
incorporate all 435 hospitals redesignated for purposes of the wage 
index (hospitals redesignated under section 1886(d)(8)(B) or 
1886(d)(10) of the Act) for FY 1999. The final number of 
reclassifications may be different because some MGCRB decisions are 
still under review by the Administrator and because some hospitals may 
withdraw their requests for reclassification.
    Any changes to the wage index that result from withdrawals of 
requests for reclassification, wage index corrections, appeals, and the 
Administrator's review process will be incorporated into the wage index 
values published in the final rule. The changes may affect not only the 
wage index value for specific geographic areas, but also whether 
redesignated hospitals receive the wage index value for the area to 
which they are redesignated, or a wage index value that includes the 
data for both the hospitals already in the area and the redesignated 
hospitals. Further, the wage index value for the area from which the 
hospitals are redesignated may be affected.
    Under Sec. 412.273, hospitals that have been reclassified by the 
MGCRB are permitted to withdraw their applications within 45 days of 
the publication of this Federal Register document. The request for 
withdrawal of an application for reclassification that would be 
effective in FY 1999 must be received by the MGCRB by June 22, 1998. A 
hospital that requests to withdraw its application may not later 
request that the MGCRB decision be reinstated.

G. Requests for Wage Data Corrections

    As a part of the August 29, 1997 final rule with comment period, we 
implemented a new timetable for requesting wage data corrections (62 FR 
45990). In February 1998, we notified hospitals again of these changes 
through a memorandum to the fiscal intermediaries. To allow hospitals 
time to evaluate the wage data used to construct the proposed FY 1999 
hospital wage index, we made available to the public a data file 
containing the FY 1995 hospital wage data. In a memorandum dated 
February 2, 1998, we instructed all Medicare intermediaries to inform 
the prospective payment hospitals that they serve of the availability 
of the wage data file and the process and timeframe for requesting 
revisions. The wage data file was made available February 6, 1998, 
through the Internet at HCFA's home page (http://www.hcfa.gov). The 
intermediaries were also instructed to advise hospitals of the 
alternative availability of these data through their representative 
hospital organizations or directly from HCFA. Additional details on 
ordering this data file are discussed in section IX.A of this preamble, 
``Requests for Data from the Public.''
    In addition, Table 3C in the Addendum to this proposed rule 
contains each hospital's adjusted average hourly wage used to construct 
the proposed wage index values. A hospital can verify its adjusted 
average hourly wage, as calculated from Steps 4 and 5 of the 
computation of the wage index (see section III.E of this preamble, 
above) based on the wage data on the hospital's cost report (after 
taking into account any adjustments made by the intermediary), by 
dividing the adjusted average hourly wage in Table 3C by the applicable 
wage adjustment factors as set forth above in Step 5 of the computation 
of the wage index. As noted above, however, a hospital's average hourly 
wages using this calculation will vary from the average hourly wages 
shown on Line 32 of Worksheet S-3, Part III. An updated Table 3C (along 
with applicable wage adjustment factors) will be included in the final 
rule.
    We believe hospitals have had ample time to ensure the accuracy of 
their FY 1995 wage data. Moreover, the ultimate responsibility for 
accurately completing the cost report rests with the hospital, which 
must attest to the accuracy of the data at the time the cost report is 
filed. However, if after review of the wage data file released February 
6, a hospital believed that its FY 1995 wage data were incorrectly 
reported, the hospital was to submit corrections along with complete, 
detailed supporting documentation to its intermediary by March 9, 1998. 
To be reflected in the final wage index, any wage data corrections must 
be reviewed and verified by the intermediary and transmitted to HCFA on 
or before April 6, 1998. These deadlines are necessary

[[Page 25590]]

to allow sufficient time to review and process the data so that the 
final wage index calculation can be completed for development of the 
final prospective payment rates to be published by August 1, 1998. We 
cannot guarantee that corrections transmitted to HCFA after April 6 
will be reflected in the final wage index.
    After reviewing requested changes submitted by hospitals, 
intermediaries transmitted any revised cost reports to HCRIS and 
forwarded a copy of the revised Worksheet S-3, Parts III and IV to the 
hospitals. If requested changes were not accepted, fiscal 
intermediaries notified hospitals of the reasons why the changes were 
not accepted. This procedure ensures that hospitals have every 
opportunity to verify the data that will be used to construct their 
wage index values. We believe that fiscal intermediaries are generally 
in the best position to make evaluations regarding the appropriateness 
of a particular cost and whether it should be included in the wage 
index data. However, if a hospital disagrees with the intermediary's 
resolution of a requested change, the hospital may contact HCFA in an 
effort to resolve policy disputes. We note that the April 6 deadline 
also applies to these requested changes. We will not consider factual 
determinations at this time as these should have been resolved earlier 
in the process.
    We have created the process described above to resolve all 
substantive wage data correction disputes before we finalize the wage 
data for the FY 1999 payment rates. Accordingly, hospitals that do not 
meet the procedural deadlines set forth above will not be afforded a 
later opportunity to submit wage corrections or to dispute the 
intermediary's decision with respect to requested changes.
    We note that, beginning this year with the FY 1999 wage index, the 
final wage index that is published August 1 will incorporate all 
corrections, including those to correct data entry or tabulation errors 
of the final wage data by the intermediary or HCFA. The final wage data 
public use file will be released by May 7, 1998. Hospitals will have 
until June 5, 1998, to submit requests to correct errors in the final 
wage data due to data entry or tabulation errors by the intermediary or 
HCFA. The correction requests that will be considered after the March 9 
deadline will be limited to errors in the entry or tabulation of the 
final wage data which the hospital could not have known about prior to 
March 9, 1998.
    The final wage data file released in early May will contain the 
wage data that will be used to construct the wage index values in the 
final rule. As with the file made available in February, HCFA will make 
the final wage data file released in May available to hospital 
associations and the public (on the Internet). This file, however, is 
being made available only for the limited purpose of identifying any 
potential errors made by HCFA or the intermediary in the entry of the 
final wage data that result from the correction process described above 
(with the March 9 deadline), not for the initiation of new wage data 
correction requests. Hospitals are encouraged to review their hospital 
wage data promptly after the release of the final file.
    If, after reviewing the final file, a hospital believes that its 
wage data are incorrect due to a fiscal intermediary or HCFA error in 
the entry or tabulation of the final wage data, it should send a letter 
to both its fiscal intermediary and HCFA. The letters should outline 
why the hospital believes an error exists and provide all supporting 
information, including dates. These requests must be received by HCFA 
and the intermediaries no later than June 5, 1998. Requests mailed to 
HCFA should be sent to: Health Care Financing Administration; Center 
for Health Plans and Providers; Attention: Stephen Phillips, Technical 
Advisor; Division of Acute Care; C5-06-27; 7500 Security Boulevard; 
Baltimore, MD 21244-1850. Each request also must be sent to the 
hospital's fiscal intermediary. The intermediary will review requests 
upon receipt and contact HCFA immediately to discuss its findings.
    At this time, changes to the hospital wage data will be made only 
in those very limited situations involving an error by the intermediary 
or HCFA that the hospital could not have known about before its review 
of the final wage data file. Specifically, neither the intermediary nor 
HCFA will accept the following types of requests at this stage of the 
process:
     Requests for wage data corrections that were submitted too 
late to be included in the data transmitted to HCRIS on or before April 
6, 1998.
     Requests for correction of errors that were not, but could 
have been, identified during the hospital's review of the February 1998 
wage data file.
     Requests to revisit factual determinations or policy 
interpretations made by the intermediary or HCFA during the wage data 
correction process.
    Verified corrections to the wage index received timely (that is, by 
June 5, 1998) will be incorporated into the final wage index to be 
published by August 1, 1998, and effective October 1, 1998.
    Again, we believe the wage data correction process described above 
provides hospitals with sufficient opportunity to bring errors in their 
wage data to the intermediary's attention. Moreover, because hospitals 
will have access to the final wage data by early May, they will have 
the opportunity to detect any data entry or tabulation errors made by 
the intermediary or HCFA before the development and publication of the 
FY 1999 wage index by August 1, 1998, and the implementation of the FY 
1999 wage index on October 1, 1998. If hospitals avail themselves of 
this opportunity, the wage index implemented on October 1 should be 
free of such errors. Nevertheless, in the unlikely event that errors 
should occur after that date, we retain the right to make midyear 
changes to the wage index under very limited circumstances.
    Specifically, in accordance with Sec. 412.63(w)(2), we may make 
midyear corrections to the wage index only in those limited 
circumstances where a hospital can show: (1) That the intermediary or 
HCFA made an error in tabulating its data; and (2) that the hospital 
could not have known about the error, or did not have an opportunity to 
correct the error, before the beginning of FY 1999 (that is, by the 
June 5, 1998 deadline). As indicated earlier, since a hospital will 
have the opportunity to verify its data, and the intermediary will 
notify the hospital of any changes, we do not foresee any specific 
circumstances under which midyear corrections would be made. However, 
should a midyear correction be necessary, the wage index change for the 
affected area will be effective prospectively from the date the 
correction is made.

IV.-V. Other Decisions and Changes to the Prospective Payment 
System for Inpatient Operating Costs

A. Definition of Transfers (Sec. 412.4)

    Pursuant to section 1886(d)(5)(I) of the Act, the prospective 
payment system distinguishes between ``discharges,'' situations in 
which a patient leaves an acute care (prospective payment) hospital 
after receiving complete acute care treatment, and ``transfers,'' 
situations in which the patient is transferred to another acute care 
hospital for related care. If a full DRG payment were made to each 
hospital involved in a transfer situation, irrespective of the length 
of time the patient spent in the ``sending'' hospital prior to 
transfer, a strong incentive to increase transfers would be created, 
thereby unnecessarily endangering

[[Page 25591]]

patients' health. Therefore, our policy, which is set forth in the 
regulations at Sec. 412.4, provides that, in a transfer situation, full 
payment is made to the final discharging hospital and each transferring 
hospital is paid a per diem rate for each day of the stay, not to 
exceed the full DRG payment that would have been made if the patient 
had been discharged without being transferred.
    Currently, the per diem rate paid to a transferring hospital is 
determined by dividing the full DRG payment that would have been paid 
in a nontransfer situation by the geometric mean length of stay for the 
DRG into which the case falls. Hospitals receive twice the per diem for 
the first day of the stay and the per diem for every following day up 
to the full DRG amount. Transferring hospitals are also eligible for 
outlier payments for cases that meet the cost outlier criteria 
established for all other cases (nontransfer and transfer cases alike) 
classified to the DRG. Two exceptions to the transfer payment policy 
are transfer cases classified into DRG 385 (Neonates, Died or 
Transferred to Another Acute Care Facility) and DRG 456 (Burns, 
Transferred to Another Acute Care Facility), which receive the full DRG 
payment instead of being paid on a per diem basis.
    Under section 1886(d)(5)(J) of the Act, which was added by section 
4407 of the Balanced Budget Act of 1997, a ``qualified discharge'' from 
one of 10 DRGs selected by the Secretary to a postacute care provider 
will be treated as a transfer case beginning with discharges on or 
after October 1, 1998. Section 1886(d)(5)(J)(iii) confers broad 
authority on the Secretary to select 10 DRGs ``based upon a high volume 
of discharges classified within such group and a disproportionate use 
of'' certain post discharge services. Section 1886(d)(5)(J)(ii) defines 
a ``qualified discharge'' as a discharge from a prospective payment 
hospital of an individual whose hospital stay is classified in one of 
the 10 selected DRGs if, upon such discharge, the individual--
     Is admitted to a hospital or hospital unit that is not a 
prospective payment system hospital;
     Is admitted to a skilled nursing facility; or
     Is provided home health services by a home health agency 
if the services relate to the condition or diagnosis for which the 
individual received inpatient hospital services and if these services 
are provided within an appropriate period as determined by the 
Secretary.
    The Conference Agreement that accompanied the law noted that 
``(t)he Conferees are concerned that Medicare may in some cases be 
overpaying hospitals for patients who are transferred to a post acute 
care setting after a very short acute care hospital stay. The Conferees 
believe that Medicare's payment system should continue to provide 
hospitals with strong incentives to treat patients in the most 
effective and efficient manner, while at the same time, adjust PPS 
[prospective payment system] payments in a manner that accounts for 
reduced hospital lengths of stay because of a discharge to another 
setting.'' (H.R. Rep. No. 105-217, 740.) In its March 1, 1997 report, 
ProPAC expressed similar concerns: ``* * * length of stay declines have 
been greater in DRGs associated with substantial postacute care use, 
suggesting a shift in care from hospital inpatient to postacute 
settings'' (pp. 21-22).
    In fact, based on the latest available data, overall Medicare 
hospital costs per case have decreased during FYs 1994 and 1995. This 
unprecedented real decline in costs per case has led to historically 
high Medicare operating margins (over 10 percent on average). Along 
with these declining lengths of stay and costs per case, there has been 
an increase in the utilization of postacute care. In 1990, the rate of 
skilled nursing facility services per 1,000 Medicare enrollees was 19. 
By 1995, it had grown to 33. Corresponding numbers for home health 
agency services are 58 per 1,000 Medicare enrollees during 1990 and 93 
per 1,000 enrollees during 1995. Although home health services are not 
always directly related to a hospitalization episode, there does appear 
to be a trend toward increased use of home health for the provision of 
postacute care rehabilitation services. Previous analysis of the 
percentage of hospital discharges that receive postacute home health 
care showed a 10.3 percent increase in 1994 compared to 1992.
    Our proposals to implement section 1886(d)(5)(J) of the Act are set 
forth below.
1. Selection of 10 DRGs
    Section 1886(d)(5)(J)(iii)(I) of the Act provides that the 
Secretary select 10 DRGs based on a high volume of discharges to 
postacute care and a disproportionate use of postacute care services. 
Therefore, in order to select the DRGs to be paid as transfers, we 
first identified those DRGs with the highest percentage of postacute 
care.
    We used the FY 1996 MedPAR file because the complete FY 1997 MedPAR 
file was not available at the time we conducted our analysis. To 
identify postacute care utilization, we merged hospital inpatient bill 
files with postacute care bill files matching beneficiary 
identification numbers and discharge and admission dates. We created 
this file rather than depend on information concerning discharge 
destination on the inpatient bill because we have found that the 
discharge destination codes included on the hospital bills are often 
inaccurate in identifying discharges to a facility other than another 
prospective payment hospital.
    Section 1886(d)(5)(J)(ii)(III) of the Act requires the Secretary to 
choose an appropriate window of days in which the home health services 
start in order for the discharge to meet the definition of a transfer. 
In order to include postdischarge home health utilization in our 
analysis, we identified all hospital discharges for patients who 
received any home health care within 7 days after the date of 
discharge. (As described below in section IV.A.2., we ultimately 
decided to propose 3 days as the window for home health services.)
    Starting with the DRG with the highest percentage of postacute care 
discharges and continuing in descending order, we selected the first 20 
DRGs that had a relatively large number of discharges to postacute care 
(our lower limit was 14,000 cases). In order to select 10 DRGs from the 
20 DRGs on our list, for each of the DRGs we considered the volume and 
percent age of discharges to postacute care that occurred before the 
mean length of stay and whether the discharges occurring early in the 
stay were more likely to receive postacute care. The following table 
lists the 10 DRGs we are proposing to include under our expanded 
transfer definition, their percentage of postacute utilization compared 
to total cases, and the total number of cases identified as going to 
postacute care.

[[Page 25592]]



------------------------------------------------------------------------
                                                 Percent of   Number of 
        DRG            Title and type of DRG     postacute    postacute 
                       (surgical or medical)    utilization     cases   
------------------------------------------------------------------------
14.................  Specific Cerebrovascular          49.5      186,845
                      Disorders Except                                  
                      Transient Ischemic                                
                      Attack (Medical).                                 
113................  Amputation for                    59.0       28,402
                      Circulatory System                                
                      Disorders Excluding                               
                      Upper Limb and Toe                                
                      (Surgical).                                       
209................  Major Joint Limb                  71.9      257,875
                      Reattachment Procedures                           
                      of Lower Extremity                                
                      (Surgical).                                       
210................  Hip and Femur Procedures          77.8      111,799
                      Except Major Joint Age                            
                      >17 With CC (Surgical).                           
211................  Hip and Femur Procedures          74.2       19,548
                      Except Major Joint Age                            
                      >17 Without CC                                    
                      (Surgical).                                       
236................  Fractures of Hip and              61.2       24,498
                      Pelvis (Medical).                                 
263................  Skin Graft and/or                 49.4       14,499
                      Debridement for Skin                              
                      Ulcer or Cellulitis With                          
                      CC (Surgical).                                    
264................  Skin Graft and/or                 39.3        1,328
                      Debridement for Skin                              
                      Ulcer or Cellulitis W/O                           
                      CC (Surgical).                                    
429................  Organic Disturbances and          45.4       19,314
                      Mental Retardation                                
                      (Medical).                                        
483................  Tracheostomy Except for           45.3       18,254
                      Face, Mouth and Neck                              
                      Diagnoses (Surgical).                             
------------------------------------------------------------------------

    We included DRG 263 on the list because of its ranking in the top 
20 DRGs in terms of postacute utilization and volume of discharges to 
postacute care. DRGs 263 and 264 are paired DRGS; that is, the only 
difference in the cases assigned to DRG 263 as opposed to DRG 264 is 
that the patient has a complicating or comorbid condition. If we 
included only DRG 263 in the list, it would be possible for a transfer 
case with a relatively short length of stay that should be assigned to 
DRG 263 and receive a relatively small transfer payment to be assigned 
instead to DRG 264, and receive the full DRG payment, simply by failing 
to include the CC diagnosis code on the bill. Therefore, our choice was 
to either delete DRG 263 from the list or add DRG 264. We decided to 
include DRG 264 in the proposed list because DRG 263 fully meets all 
the conditions for inclusion on the list of 10 DRGS.
2. Postacute Care Settings
    Section 1886(d)(5)(J)(ii) of the Act requires the Secretary to 
define and pay as transfers cases from one of 10 DRGs selected by the 
Secretary if the individual is discharged to one of the following 
settings:
     A hospital or hospital unit that is not a subsection 
[1886](d) hospital, that is a hospital or unit excluded from the 
inpatient prospective payment system.
     A skilled nursing facility that is, a facility that meets 
the definition of a skilled nursing facility set forth at section 1819 
of the Act.
     Home health services provided by a home health agency, if 
the services are related to the condition or diagnosis for which the 
individual received inpatient hospital services, and if the home health 
services are provided within an appropriate period (as determined by 
the Secretary).
    Section 1886(d)(1)(B) of the Act defines the hospitals and hospital 
units that are excluded from the prospective payment system as the 
following: psychiatric, rehabilitation, childrens', long-term care, and 
cancer hospitals and psychiatric and rehabilitation distinct part units 
of a hospital. Therefore, any discharge from a prospective payment 
hospital from one of the 10 proposed DRGS that is admitted to one of 
these types of facilities on the date of discharge from the acute 
hospital, on or after October 1, 1998, would be considered a transfer 
and paid accordingly under the prospective payment systems (operating 
and capital) for inpatient hospital services.
    A discharge from a prospective payment hospital to a skilled 
nursing facility would include cases discharged from one of the 10 DRGS 
from an inpatient bed in the hospital to a bed in the same hospital 
that has been designated for the provision of skilled nursing care (a 
``swing'' bed). The swing bed provision allows certain small rural 
hospitals to furnish services in inpatient beds which, if furnished by 
a skilled nursing facility, would constitute extended care services. In 
addition, any patient who receives swing-bed services is deemed to have 
received extended care services as if furnished by a skilled nursing 
facility. Thus, if swing beds are not included in the transfer policy, 
those hospitals with swing bed agreements could move patients assigned 
to one of the 10 selected DRGs as if it were a discharge from an 
inpatient bed to a swing bed and receive payment. We do not believe 
that this would be a fair policy in that it would create a payment 
advantage for swing bed hospitals. Therefore, we are providing in the 
regulations that a discharge to a swing bed will be paid as a transfer 
when the patient is classified to one of the 10 selected DRGs.
    Section 1886(d)(5)(J)(ii)(III) of the Act states that the discharge 
of an individual who receives home health services upon discharge will 
be treated as a transfer if ``such services are provided within an 
appropriate period (as determined by the Secretary) * * *.'' As 
discussed above in section IV.A.1, we began our analysis using 7 days 
(one week) as the time period we would consider. We now believe that 3 
days after the date of discharge is a more appropriate timeframe. Based 
on our analysis of the FY 1996 bills, approximately 90 percent of 
patients began receiving home health care within 3 days. We are 
particularly interested in receiving comments on the appropriate period 
of time in which home health services should begin in the context of 
the transfer policy.
    With regard to an appropriate definition of ``home health services 
* * * relate[d] to the condition or diagnosis for which the individual 
received inpatient hospital services * * *'', we considered several 
possible approaches. Under one approach we could compare the principal 
diagnosis of the inpatient stay to the diagnosis code indicated on the 
home health bill, similar to our policy on the 3-day payment window for 
preadmission services. However, we believe that is far too restrictive 
in terms of qualifying discharges for transfer payment. In addition, a 
hospital will not know when it discharges a patient to home health what 
diagnosis code the home health agency will put on the bill. Therefore, 
the hospital would not be able to correctly code the inpatient bill as 
a transfer or discharge.
    We also considered proposing that any home health care that begins 
within the designated timeframe be included ``as related'' in our 
definition. However, this definition might be too broad and the 
hospital would not be able to predict which cases should be coded as 
transfers because the hospital often may not know about home health 
services that are provided upon discharge but were not ordered or 
planned for as part of the hospital discharge plan.
    We are proposing that home health services would be considered 
related to the hospital discharge if the patient is discharged from the 
hospital with a written plan of care for the provision of home health 
care services from a home health agency. In this way, the hospital 
would be fully aware of the status of the patient when discharged and 
could be held responsible for correctly coding the

[[Page 25593]]

discharge as a transfer on the inpatient bill. In general, this would 
mean that the home health service would qualify as a Part A home health 
benefit under section 1861(tt) of the Act as added by section 4611(b) 
of the BBA.
    We note, however, that we plan to compare inpatient bills with home 
health service bills for care provided within 3 days after discharge, 
similar to our current claims edit for hospital to hospital transfers. 
If we find that home health services were provided within the 
postdischarge window, the hospital will be notified and the hospital 
payment adjusted unless the hospital can submit documentation verifying 
the discharge status of the patient. This will alert hospitals if there 
are problems with their discharge/transfer billing and allow them to 
adjust their discharge planning process and billing practices. If we 
find a continued pattern of a hospital billing for cases from the 10 
DRGs as discharges and our records indicate that the patients are 
receiving postacute care services from an excluded hospital, a skilled 
nursing facility, or within the 3-day home health service window, the 
hospitals may be investigated for fraudulent or abusive billing 
practices.
3. Payment Methodology
    The statute does not dictate the payment methodology we must use 
for these transfer cases. However, section 1886(d)(5)(J)(i) of the Act 
provides that the payment amount for a case may not exceed the sum of 
half the full DRG payment amount and half of the payment amount under 
the current per diem payment methodology.
    Based on our analysis comparing the costs per case for the 
transfers in the 10 DRGs with payments under our current transfer 
payment methodology, we found that most of the 10 DRGs are 
appropriately paid using our current methodology (that is, twice the 
per diem for the first day and the per diem for each subsequent day). 
In fact, this payment would, on average, slightly exceed costs. 
However, this is not true of DRGs 209, 210, and 211. For those three 
DRGs, a disproportionate percentage (about 50 percent) of the costs of 
the case are incurred on the first day of the stay. Therefore, we are 
proposing to pay DRGs 209, 210, and 211 based on 50 percent of the DRG 
payment for the first day of the stay and 50 percent of the per diem 
for the remaining days of the stay. The other seven DRGs would be paid 
under the current transfer payment methodology.
    In Appendix E to this proposed rule, we have included tables that 
illustrate, for 9 of the 10 DRGs, the number of total and postacute 
discharges by length of stay, the geometric mean lengths of stay from 
FY 1983 through FY 1997, and the estimated average costs and transfer 
payments by length of stay. (The summary information for DRG 264 was 
not available at the time of publication because it was not included in 
the original data file of 20 DRGs used for our analysis.) For DRGs 209, 
210, and 211, the payment line is determined on the basis of the 
alternative payment formula described above.
    These tables demonstrate that a very large number of discharges 
from these 10 DRGs receive postacute care. In addition, the length of 
stay for these DRGs has decreased sharply over the last several years. 
We believe that this proposed policy will both decrease the hospitals' 
financial incentive to discharge patients very early in the stay, often 
before the full course of acute care treatment has ended, as well as 
pay the hospital at an appropriate level when it does move patients 
into postacute care.
    We would revise Sec. 412.4 to reflect these proposed policies. In 
addition, we would delete the reference in current Sec. 412.4(d)(2) to 
DRG 456 (Burns, Transferred to Another Acute Care Facility) because we 
are proposing to replace that DRG, as discussed in section II.B.3 of 
this preamble. There would no longer be any burn DRG with a transfer 
designation.

B. Rural Referral Centers (Sec. 412.96)

    Under the authority of section 1886(d)(5)(C)(i) of the Act, 
Sec. 412.96 sets forth the criteria a hospital must meet in order to 
receive special treatment under the prospective payment system as a 
rural referral center. For discharges occurring before October 1, 1994, 
rural referral centers received the benefit of payment based on the 
other urban rather than the rural standardized amount. As of that date, 
the other urban and rural standardized amounts were the same. However, 
rural referral centers continue to receive special treatment under both 
the disproportionate share hospital payment adjustment and the criteria 
for geographic reclassification.
    One of the criteria under which a rural hospital may qualify as a 
rural referral center is to have 275 or more beds available for use. A 
rural hospital that does not meet the bed size criterion can qualify as 
a rural referral center if the hospital meets two mandatory criteria 
(specifying a minimum case-mix index and a minimum number of 
discharges) and at least one of the three optional criteria (relating 
to specialty composition of medical staff, source of inpatients, or 
volume of referrals). With respect to the two mandatory criteria, a 
hospital may be classified as a rural referral center if its--
     Case-mix index is at least equal to the lower of the 
median case-mix index for urban hospitals in its census region, 
excluding hospitals with approved teaching programs, or the median 
case-mix index for all urban hospitals nationally; and
     Number of discharges is at least 5,000 discharges per year 
or, if fewer, the median number of discharges for urban hospitals in 
the census region in which the hospital is located. (The number of 
discharges criterion for an osteopathic hospital is at least 3,000 
discharges per year.)
1. Case-Mix Index
    Section 412.96(c)(1) provides that HCFA will establish updated 
national and regional case-mix index values in each year's annual 
notice of prospective payment rates for purposes of determining rural 
referral center status. The methodology we use to determine the 
proposed national and regional case-mix index values, is set forth in 
regulations at Sec. 412.96(c)(1)(ii). The proposed national case-mix 
index value includes all urban hospitals nationwide, and the proposed 
regional values are the median values of urban hospitals within each 
census region, excluding those with approved teaching programs (that 
is, those hospitals receiving indirect medical education payments as 
provided in Sec. 412.105).
    These values are based on discharges occurring during FY 1997 
(October 1, 1996 through September 30, 1997) and include bills posted 
to HCFA's records through December 1997. Therefore, in addition to 
meeting other criteria, for hospitals with fewer than 275 beds, we are 
proposing that to qualify for initial rural referral center status for 
cost reporting periods beginning on or after October 1, 1998, a 
hospital's case-mix index value for FY 1997 would have to be at least--
     1.3578; or
     Equal to the median case-mix index value for urban 
hospitals (excluding hospitals with approved teaching programs as 
identified in Sec. 412.105) calculated by HCFA for the census region in 
which the hospital is located.
    The median case-mix values by region are set forth in the table 
below:

------------------------------------------------------------------------
                                                               Case-mix 
                           Region                                index  
                                                                 value  
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).....................      1.2533
2. Middle Atlantic (PA, NJ, NY).............................      1.2499
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)......      1.3468

[[Page 25594]]

                                                                        
4. East North Central (IL, IN, MI, OH, WI)..................      1.2717
5. East South Central (AL, KY, MS, TN)......................      1.2965
6. West North Central (IA, KS, MN, MO, NE, ND, SD)..........      1.2264
7. West South Central (AR, LA, OK, TX)......................      1.3351
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................      1.3752
9. Pacific (AK, CA, HI, OR, WA).............................      1.3405
------------------------------------------------------------------------

    The above numbers will be revised in the final rule to the extent 
required to reflect the updated MedPAR file, which will contain data 
from additional bills received for discharges through March 31, 1997.
    For the benefit of hospitals seeking to qualify as referral centers 
or those wishing to know how their case-mix index value compares to the 
criteria, we are publishing each hospital's FY 1997 case-mix index 
value in Table 3C in section IV. of the Addendum to this proposed rule. 
In keeping with our policy on discharges, these case-mix index values 
are computed based on all Medicare patient discharges subject to DRG-
based payment.
2. Discharges
    Section 412.96(c)(2)(i) provides that HCFA will set forth the 
national and regional numbers of discharges in each year's annual 
notice of prospective payment rates for purposes of determining 
referral center status. As specified in section 1886(d)(5)(C)(ii) of 
the Act, the national standard is set at 5,000 discharges. However, we 
are proposing to update the regional standards. The proposed regional 
standards are based on discharges for urban hospitals' cost reporting 
periods that began during FY 1996 (that is, October 1, 1995 through 
September 30, 1996). That is the latest year for which we have complete 
discharge data available.
    Therefore, in addition to meeting other criteria, we are proposing 
that to qualify for initial rural referral center status for cost 
reporting periods beginning on or after October 1, 1998, the number of 
discharges a hospital must have for its cost reporting period that 
began during FY 1997 would have to be at least--
     5,000; or
     Equal to the median number of discharges for urban 
hospitals in the census region in which the hospital is located, as 
indicated in the table below.

------------------------------------------------------------------------
                                                               Number of
                           Region                             discharges
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).....................        6658
2. Middle Atlantic (PA, NJ, NY).............................        8477
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)......        7505
4. East North Central (IL, IN, MI, OH, WI)..................        7273
5. East South Central (AL, KY, MS, TN)......................        6852
6. West North Central (IA, KS, MN, MO, NE, ND, SD)..........        5346
7. West South Central (AR, LA, OK, TX)......................        5179
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)................        7926
9. Pacific (AK, CA, HI, OR, WA).............................        5945
------------------------------------------------------------------------

    We note that the number of discharges for hospitals in each census 
region is greater than the national standard of 5,000 discharges. 
Therefore, 5,000 discharges is the minimum criteria for all hospitals. 
These numbers will be revised in the final rule based on the latest FY 
1996 cost report data.
    We reiterate that, to qualify for rural referral center status for 
cost reporting periods beginning on or after October 1, 1998, an 
osteopathic hospital's number of discharges for its cost reporting 
period that began during FY 1996 would have to be at least 3,000.

C. Payments to Disproportionate Share Hospitals: Conforming Change 
Regarding Interpretation of Medicaid Patient Days Included in 
Disproportionate Patient Percentage (Sec. 412.106)

    Effective for discharges beginning on or after May 1, 1986, 
hospitals that treat a disproportionately large number of low-income 
patients receive additional payments through the disproportionate share 
(DSH) adjustment. One means of determining a hospital's DSH payment 
adjustment for a cost reporting period requires calculation of its 
disproportionate patient percentage for the period. The 
disproportionate patient percentage is the sum of a prescribed Medicare 
fraction and a Medicaid fraction for the hospital's fiscal period. 
Under clause (I) of section 1886(d)(5)(F)(vi) of the Act and 
Sec. 412.106(b)(2), the Medicare fraction is determined by dividing the 
number of the hospital's patient days for patients who were entitled 
(for such days) to benefits under both Medicare Part A and Supplemental 
Security Income (SSI) under Title XVI of the Act, by the total number 
of the hospital's patient days for the patients who were entitled to 
Medicare Part A. The Medicaid fraction is determined, in accordance 
with clause (II) of section 1886(d)(5)(F)(vi) of the Act and 
Sec. 412.106(b)(4), by dividing the number of the hospital's patient 
days for patients who (for such days) were eligible for medical 
assistance under a State Medicaid plan approved under Title XIX of the 
Act but who were not entitled to Medicare Part A, by the total number 
of the hospital's patient days for that period.
    Initially, HCFA calculated the Medicaid fraction by interpreting 
section 1886(d)(5)(F)(vi)(II) of the Act to recognize as Medicaid 
patient days only those days for which the hospital received Medicaid 
payment for inpatient hospital services. See 51 FR 31454, 31460 (1986). 
The agency's interpretation was declared invalid by four Federal 
circuit courts of appeals. See Cabell Huntington Hosp., Inc. v. 
Shalala, 101 F.3d 984, 990-91 (4th Cir. 1996) (following three other 
circuits). These courts held that the statute requires, for purposes of 
calculating the Medicaid fraction, inclusion of each patient day of 
service for which a patient was eligible on that day for medical 
assistance under an approved State Medicaid plan. Specifically, the 
statute requires inclusion of each hospital patient day for a patient 
eligible for Medicaid on such day, regardless of whether particular 
items or services were covered or paid under the State Medicaid plan.
    On February 27, 1997, the HCFA Administrator issued HCFA Ruling 97-
2, which acquiesced in the four adverse appellate court decisions. The 
Ruling changed the agency's statutory construction to comport with 
those decisions, in order to facilitate nationwide uniformity in the 
calculation of the Medicaid fraction. Like the court decisions, the 
Ruling provides that a hospital's Medicaid patient days include each 
patient day of service for which a patient was eligible on such day for 
medical assistance under an approved State Medicaid plan, regardless of 
whether particular items or services were covered or paid under the 
State plan. The Ruling also reflects the hospital's burden of 
furnishing data adequate to prove each claimed Medicaid patient day, 
and of verifying with the State that a patient was eligible for 
Medicaid during each day of the inpatient hospital stay.
    The Ruling further provides that the agency's new interpretation is 
effective February 27, 1997 for each cost reporting period that: (1) 
Begins on or after that effective date; (2) was not settled, as of that 
date, on the Medicaid patient days issue, by means of an applicable 
notice of program reimbursement (NPR) (see Sec. 405.1803); or (3) was 
settled through such an NPR

[[Page 25595]]

as of the Ruling's effective date and is the subject of a pending 
administrative appeal or civil action that satisfies all applicable 
jurisdictional requirements of the Medicare statute and regulations. 
The Ruling also provides, however, that the change in statutory 
interpretation effected by the Ruling is not a basis for reopening a 
hospital cost reporting period (see Secs. 405.1885-405.1889) that was 
finalized previously on the same matter at issue.
    We propose to revise Sec. 412.106(b)(4) in order to conform the 
Medicare regulations to the new statutory construction issued in HCFA 
Ruling 97-2. The revisions are necessary to ensure that the regulations 
comport with the four appellate court decisions that declared invalid 
the agency's prior interpretation and led to the issuance of the HCFA 
Ruling. The proposed revisions will further facilitate nationwide 
uniformity in the calculation of the Medicaid fraction.
    Since the proposed revisions are intended simply to conform the 
regulations to HCFA Ruling 97-2 (and hence to the four adverse court 
decisions), revised Sec. 412.106(b)(4) would reiterate the Ruling's 
change of interpretation that the Medicaid fraction under section 
1886(d)(5)(F)(vi)(II) of the Act includes each hospital patient day for 
a patient eligible for Medicaid on such day, regardless of whether 
particular items or services were covered or paid under the State 
Medicaid Plan. Our proposed revisions to Sec. 412.106(b)(4), like the 
Ruling, would continue to place on the hospital the burdens of 
production, proof, and verification as to each claimed Medicaid patient 
day.
    Under our proposal, revised Sec. 412.106(b)(4) would apply to cost 
reporting periods beginning on or after October 1, 1998. HCFA Ruling 
97-2, which includes the same provisions as proposed 
Sec. 412.106(b)(4), would continue to apply to any cost reporting 
period beginning before October 1, 1998 provided that, as of February 
27, 1997, there is for such period: no submitted cost report; no cost 
report settled on the Medicaid patient days issue through an applicable 
NPR; or a cost report settled on that issue, which is also the subject 
of a jurisdictionally proper administrative appeal or civil action on 
the issue.

D. Payment for Bad Debts (Sec. 413.80)

    Section 4451 of the Balanced Budget Act of 1997 reduces the payment 
for enrollee bad debt for hospitals. Specifically, this provision 
reduces the amount of bad debts otherwise treated as allowable costs, 
attributable to the deductibles and coinsurance amounts under this 
title, by 25 percent for cost reporting periods beginning during fiscal 
year 1998, by 40 percent for cost reporting periods beginning during 
fiscal year 1999, and by 45 percent for cost reporting periods 
beginning during a subsequent fiscal year. This proposed rule would 
conform the regulations to the statute.
    Section 4451 of the Balanced Budget Act of 1997 also provides that 
in determining such reasonable costs for hospitals, any copayments 
reduced under the election available for hospital outpatient services 
under section 1833(t)(5)(B) of the Act will not be treated as a bad 
debt. This provision will be implemented in the outpatient prospective 
payment system regulation that implements section 4521, 4522, and 4523 
of the Balanced Budget Act of 1997, to be published later this year.

E. Payment for Direct Costs of Graduate Medical Education to Hospitals 
and Nonhospital Providers (Secs. 405.2468, 413.85, and 413.86)

1. Introduction
    Currently, under section 1886(h) of the Act, Medicare pays only 
hospitals for the costs of graduate medical education (GME) training. 
We do not pay nonhospital sites for the costs they incur in training 
medical residents. There has been a general trend to shift patient care 
from the inpatient setting to the less expensive nonhospital setting 
where appropriate. Consistent with this trend in patient care, the BBA 
allows for direct GME payment to qualified nonhospital providers to 
encourage more training of future physicians in nonhospital settings.
    Under section 1886(k) of the Act, as added by section 4625 of the 
BBA, the Secretary is now authorized, but not required, to pay 
qualified nonhospital providers for the direct costs of GME training. 
The Conference Report also notes that the Conferees believe paying 
nonhospital providers for GME costs may help alleviate physician 
shortages in underserved rural areas. We believe that providing 
Medicare payment directly to nonhospital providers may facilitate more 
training and better quality training in nonhospital sites.
2. Statutory Background
    Section 1886(k) of the Act states: ``For cost reporting periods 
beginning on or after October 1, 1997, the Secretary may establish 
rules for payment to qualified nonhospital providers for their direct 
costs of medical education, if those costs are incurred in the 
operation of an approved medical residency training programs described 
in subsection (h).'' The statute further provides that, to the extent 
the Secretary exercises this broad discretionary authority, the rules 
``shall specify the amounts, form, and manner in which such payments 
will be made and the portion of such payments that will be made from 
each of the trust funds under this title.''
    a. Payments Only to ``Qualified Nonhospital Providers''. The 
statute confers broad discretion on the Secretary regarding whether and 
how to pay nonhospital providers for direct GME costs. However, the 
statute does specify the entities whom the Secretary can pay--
``qualified nonhospital providers.'' Section 1886(k)(2) of the Act 
defines ``qualified nonhospital providers'' to include: Federally 
Qualified Health Centers (FQHCs), as defined in section 1861(aa)(4); 
Rural Health Centers (RHCs), as defined in section 1861(aa)(2); 
Medicare+Choice organizations; and such other providers (other than 
hospitals) as the Secretary determines to be appropriate.
    b. Payments Only for the ``Direct Costs'' of Training. The statute 
also specifies the costs the Secretary can pay for under section 
1886(k) of the Act. Medicare pays hospitals for both the direct and 
indirect costs of medical education under sections 1886(h) and 
1886(d)(5)(B) of the Act respectively, but section 1886(k) of the Act 
provides for payment to nonhospital providers only for the direct costs 
of medical education.
    In addition, section 1886(k) of the Act provides for payment for 
the direct costs of training medical residents only if those costs are 
incurred in the operation of an ``approved medical residency training 
program.'' Section 1886(h)(5)(A) of the Act defines an ``approved 
medical residency training program'' as a ``residency or other 
postgraduate medical training program participation in which may be 
counted toward certification in a specialty or subspecialty and 
includes formal postgraduate training programs in geriatric medicine 
approved by the Secretary.'' Implementing regulations at Sec. 413.86(b) 
state that an approved medical residency training program includes 
allopathic and osteopathic training programs as well as training 
programs for dentistry and podiatry. Therefore, the statute authorizes 
Medicare payments to nonhospital providers only for the costs of 
training medical residents, not for the costs of training other health 
professionals.
    In addition to adding section 1886(k) of the Act, section 4625 of 
the BBA amends section 1886(h)(3)(B) of the Act to prohibit double 
payments for direct

[[Page 25596]]

GME to a hospital and a qualified nonhospital provider. This 
prohibition on double payments requires that the Secretary reduce a 
hospital's GME payments (the ``aggregate approved amount'' as defined 
in section 1886(h)(3)(b) of the Act) to the extent we pay a nonhospital 
provider for GME under section 1886(k) of the Act.
3. Proposed Policies
    Pursuant to section 4625 of the BBA, we are proposing policies to 
provide Medicare payment to nonhospital providers for the direct costs 
of GME training, effective for portions of cost reporting periods 
occurring on or after January 1, 1999. We believe that these payments 
will serve the Congressional intent to encourage and support training 
in nonhospital settings.
    a. Definition of ``Qualified Non-Hospital Providers''. Under our 
proposed policy, Medicare would make GME payments to the following 
``qualified nonhospital providers''--FQHCs, RHCs, and Medicare+Choice 
organizations. Under the authority of section 1886(k)(2)(D) of the Act, 
the Secretary may expand the definition of a ``qualified nonhospital 
provider'' to include such other providers (other than hospitals) as 
the Secretary determines to be appropriate. Once we have gained 
experience providing direct GME payments to FQHCs, RHCs, and 
Medicare+Choice organizations, we may consider including other types of 
nonhospital providers in the definition of a ``qualified nonhospital 
provider.''
    Additionally, we propose that, under certain circumstances, a 
hospital may continue to receive GME payments for residents who train 
in the nonhospital setting. In those instances where a hospital is 
eligible to continue receiving GME payments for residents who train in 
the nonhospital setting, the nonhospital provider could receive payment 
from the hospital for costs they incur in training medical residents. 
Thus, our policy promotes the intent of section 4625 of the BBA to 
provide financial support, either directly from Medicare or through the 
hospital, to nonhospital providers for the direct costs of training 
residents in the nonhospital site.
    b. Definition of ``Direct Costs'' of Medical Education for Non-
Hospital Providers. Section 4625 of the BBA provides for payment to 
nonhospital providers only for the direct costs of training residents. 
Our proposed definition of ``direct costs'' for nonhospital providers 
is comparable to the direct costs for hospitals under section 1886(h) 
of the Act. Under our proposed policy, direct GME costs are those costs 
that are incurred by the nonhospital site for the education activities 
of the approved program and that are the proximate result of training 
medical residents in the nonhospital site. Direct costs for nonhospital 
providers would include:
     Residents' salaries and fringe benefits (including related 
travel and lodging expenses where applicable);
     That portion of costs of the teaching physicians' salaries 
and fringe benefits that are related to the time spent in teaching and 
supervision of residents; and
     Other related GME overhead costs.
    Consistent with our policies on direct GME costs for hospitals, 
direct GME costs for nonhospital providers would not include normal 
operating costs or the marginal increase in costs that the nonhospital 
site experiences as a result of having an approved medical residency 
training program. For example, a decrease in productivity and increased 
intensity in treatment patterns as the result of a training program do 
not constitute ``direct costs'' of training residents in the 
nonhospital setting; rather, these are the ``indirect costs'' of such 
training.
    Also consistent with our policies for direct GME payments to 
hospitals, we propose to pay qualified nonhospital providers only for 
training that is related to the delivery of patient care services. 
Sections 1886(h) (``Payments for Direct GME Costs'') and 1886(h)(4)(E) 
of the Act (``Counting Time Spent in Outpatient Settings'') provide 
support continuing our longstanding policy of paying only for training 
that is associated with patient care services. In particular, section 
1886(h)(4)(E) of the Act states:

    Such rules shall provide that only time spent in activities 
relating to patient care shall be counted and that all the time so 
spent by a resident under an approved medical residency training 
program shall be counted towards the determination of full-time 
equivalency, without regard to the setting in which the activities 
are performed, if the hospital incurs all, or substantially all, of 
the costs for the training program in that setting.

In addition, section 1861(b) of the Act describes the types of patient 
care services that are reimbursable. Specifically, section 1861(b)(6) 
of the Act indicates that the training of interns or residents under an 
approved teaching program are included as reimbursable patient care 
costs.
    Moreover, direct GME costs for nonhospital providers, like direct 
GME costs for hospitals, would include only that portion of costs of 
the teaching physicians' salaries and fringe benefits associated with 
time spent in teaching and supervising residents. Specifically, a 
teaching physician's time spent on teaching of a general nature would 
constitute a direct GME cost, while teaching of a patient-specific 
nature would not constitute a direct cost. In addition, direct costs in 
the nonhospital setting would include that portion of teaching 
physicians' salaries and fringe benefits associated with time spent 
developing resident schedules and evaluating or rating the residents. 
Direct costs would also include a teaching physician's office costs 
allocated to GME.
    By contrast, direct GME costs for nonhospital providers would not 
include the following: A teaching physician's time spent in the care of 
individual patients which results in billable services; teaching 
physicians' activities that are related to the education of other 
health professionals (i.e., classroom instruction in connection with 
approved activities other than GME such as provider-operated nursing 
programs); teaching physicians' time spent on administrative and 
supervisory services to the provider that are unrelated to approved 
educational activities (i.e. operating costs); and teaching physician 
activities that involve nonallowable costs such as research and medical 
school activities that are not related to patient care in the 
nonhospital setting.
    GME overhead costs include only those costs that are allocable to 
direct GME and that are not used in patient care. For example, a 
portion of administrative and general costs could be appropriately 
allocated to an RHC or FQHC's GME cost center. Similarly, a conference 
room that is dedicated specifically for the training of residents could 
be appropriately allocated to an RHC or FQHC's GME cost center. By 
contrast, patient care rooms added to an RHC or an FQHC cannot be 
appropriately allocated to an RHC or FQHC's GME cost center.
    One of the advantages of our proposed definition of ``direct 
costs'' is that it is administratively feasible. Our definition of 
``direct costs'' for nonhospital providers is comparable to the direct 
costs that are included in the per resident amount paid to hospitals 
under section 1886(h) of the Act. At present, there is limited 
information regarding the actual costs of training residents in 
nonhospital sites. After we gain experience providing direct GME 
payments to qualified nonhospital providers and have reviewed the GME 
costs separately reported by these nonhospital providers, we may revise 
the definition of ``direct costs.'' We are

[[Page 25597]]

soliciting comments on other elements that may constitute direct costs 
of GME in the nonhospital site that can be identified, reported, and 
verified as directly attributable to GME activities through the cost 
reporting process. We are interested in comments on whether we should 
include other costs in the definition of ``direct costs'' for 
nonhospital providers and on the administrative feasibility of 
identifying the GME portion of those costs.
    c. Determining Direct Costs. One of our major concerns in 
developing policies for paying nonhospital providers for the direct 
costs of GME is the administrative feasibility of determining the 
amount of direct costs incurred by the nonhospital provider. It is our 
understanding that, currently, hospitals and nonhospital sites often 
share, to varying degrees, the costs of training residents in the 
nonhospital site. Because of the difficulty in apportioning costs 
between the hospital and the nonhospital for the training in the 
nonhospital site, we believe that it is not administratively feasible 
to pay both the hospital and the nonhospital site for the cost of 
training in the nonhospital site. We have been unable to devise a 
method for accurately apportioning costs between the two entities.
    Furthermore, the potential for both the hospital and the 
nonhospital site to be paid for the same direct GME expenses poses a 
significant problem for complying with section 1886(h)(3)(B) of the 
Act, as amended by the BBA, which specifically prohibits double 
payments. Under this provision, the Secretary shall reduce the 
hospital's GME payment (the ``aggregate approved amount'') to the 
extent we pay nonhospital providers for GME costs under section 1886(k) 
of the Act. Consequently, our policy must ensure that Medicare does not 
pay two entities for the same training time in the nonhospital site.
    Given that the hospital's per resident amount can include, but is 
not necessarily based on the costs of training in the nonhospital site, 
we were not able to devise an equitable way of reducing the hospital's 
per resident payment to reflect payments made under section 1886(k) of 
the Act. It would not be equitable to subtract the exact amount of 
payment made to the qualified nonhospital provider from the hospital's 
per resident payment because the payment made to the nonhospital site 
is unrelated to the hospital's per resident amount. The hospital per 
resident amount is based on specific GME costs incurred by the hospital 
in the 1984 base year. Those costs included in the per resident amount 
have no relevance to the costs incurred in the nonhospital setting 
almost 15 years after the 1984 base year. We believe that the 
residents' salaries, teaching physicians' salaries, and overhead costs 
for the nonhospital setting will constitute a different proportion of 
the total GME costs in the nonhospital setting as compared with the 
hospital setting. Rather, it would be more equitable to determine the 
proportion of costs incurred by each entity and reduce the hospital's 
per resident payment by the proportion of GME costs incurred by the 
nonhospital site; however, since specific components of the per 
resident amount were not identified in the hospital's GME base year 
(1984), we cannot accurately determine the appropriate amount to reduce 
the current year hospital per resident payment amount. Moreover, to 
reduce the hospital's GME payments based solely on the amount paid to 
the nonhospital site could result in inequitable payments to the 
hospital, which has ongoing costs even when the resident is training in 
the nonhospital site. In fact, it could leave the hospital at risk of 
receiving no payment for the GME costs it has incurred.
    In order to encourage training in nonhospital sites, it is 
important to develop a policy that, while providing payment to 
nonhospital providers, would also be equitable to hospitals. We believe 
that paying only the nonhospital site for the training costs could 
result in hospitals choosing not to rotate their residents to the 
nonhospital site. We have been unable to devise an equitable and 
accurate method for dividing up the GME payment for training in the 
nonhospital site if neither the hospital, nor the nonhospital site 
incurs ``all or substantially all'' of the costs. As such, we are 
soliciting comment on possible methods for allocating the GME payments 
for training in the nonhospital site where neither the hospital nor the 
nonhospital provider is incurring ``all or substantially all'' of the 
costs for the training program. We believe that the proposed policies 
discussed below are equitable to both hospital and nonhospital 
providers and will achieve Congress' objective of encouraging and 
supporting training in the nonhospital setting.
    Given our concerns about administrative feasibility, the statutory 
prohibition on double payments, and developing policies that are 
equitable to hospitals as well as nonhospital providers, we believe the 
only feasible way to pay for training in nonhospital settings is to pay 
either the hospital or the nonhospital provider. Currently, hospitals 
may receive payment for the time residents spend in the nonhospital 
setting if the hospital incurs ``all or substantially all'' of the 
training costs. We propose to adopt a similar policy for nonhospital 
providers; that is, a qualified nonhospital provider may receive 
payment for the direct costs of GME if the nonhospital provider incurs 
``all or substantially all'' of the training costs.
    d. Modifications of Policy To Pay Hospitals For GME. In the course 
of developing our policies for nonhospital providers, we have reviewed 
our method for paying hospitals for the costs of training residents in 
the nonhospital site. Accordingly, as part of our policy to pay 
nonhospital providers for the costs of training residents, we are 
proposing necessary and appropriate modifications to our current policy 
for paying hospitals for such nonhospital training. Specifically, as 
part of our proposal to implement section 1886(k) of the Act, we 
propose to modify the regulations at Sec. 413.86(f).
    Presently, under sections 1886(d)(5)(B)(iv) and 1886(h)(4)(E) of 
the Act, if a hospital incurs ``all or substantially all'' of the costs 
of training residents in the nonhospital site, then the hospital may 
include the resident in its indirect medical education (IME) and direct 
GME full-time equivalent count. Under Sec. 413.86(f)(1)(iii), currently 
a hospital incurs ``all or substantially all'' of the costs of training 
the resident in the nonhospital site if the hospital pays the 
residents' salaries and fringe benefits. Based on our review of data in 
Medicare cost reports on the Hospital Cost Reporting Information System 
(HCRIS), we decided to reexamine the issue of what constitutes ``all or 
substantially all'' of the costs of training the resident. In our 
analysis, we determined that, on average, residents' salaries and 
fringe benefits are less than half of the total amount of the direct 
costs of a hospital's GME program. Therefore, we are proposing to 
revise the standard for incurring ``all or substantially all'' of the 
costs for the training program in the nonhospital setting.
    We propose to redefine ``all or substantially all'' of the costs 
for the training program in the nonhospital setting to include at a 
minimum:
     the portion of costs of the teaching physicians' salaries 
and fringe benefits that are related to the time spent in teaching and 
supervision of residents; and
     residents' salaries and fringe benefits (including travel 
and lodging expenses where applicable).
    e. Payment Proposal. In light of the numerous considerations 
discussed

[[Page 25598]]

above, we are proposing a system whereby we will pay either the 
hospital or the nonhospital site for the cost of training in the 
nonhospital site, depending on which entity incurs ``all or 
substantially all'' of the costs of training in the nonhospital site. 
An entity incurs ``all or substantially all'' of the costs for the 
training program in the nonhospital setting if it pays for, at a 
minimum: that portion of the costs of the teaching physicians' salaries 
and fringe benefits that are related to the time spent in teaching and 
supervision of residents; and residents' salaries and fringe benefits 
(including travel and lodging expenses where applicable). Our proposal 
accommodates three alternative payment scenarios that are discussed 
below.
    i. Payment to FQHCs and RHCs. In the first payment scenario, if the 
FQHC or RHC incurs ``all or substantially all'' of the costs for the 
training program in the nonhospital setting, we are proposing to pay 
the nonhospital site cost-based reimbursement for the direct costs of 
training. By reporting these direct GME costs in a reimbursable cost 
center on the cost report, an FQHC or RHC would be attesting that it is 
incurring ``all or substantially all'' of the costs for the training 
program in the nonhospital site. Conversely, where an FQHC or RHC is 
not incurring ``all or substantially all'' of the costs of training 
residents in the nonhospital site, the FQHC or RHC would report these 
training costs in a nonreimbursable cost center on the cost report.
    As previously stated, we propose to define the direct costs of 
training to include:
     Residents' salaries and fringe benefits (including related 
travel and lodging expenses where applicable);
     That portion of the costs of teaching physicians' salaries 
and fringe benefits that are related to the time spent in teaching and 
supervision of residents; and
     Other related overhead costs that are allocated to GME.
    We are proposing that the FQHC's and RHC's allowable direct GME 
costs be subject to reasonable cost principles in 42 CFR part 413 and 
other relevant provisions referenced in part 413. As such we are 
proposing to add language to Sec. 415.60 to make the reasonable cost 
principles applicable to FQHC's and RHC's. In addition, the FQHC's and 
RHC's direct GME costs would be subject to the Reasonable Compensation 
Equivalency limits under Secs. 415.60 and 415.70. Accordingly, we are 
proposing to add language to Sec. 415.70 to make the reasonable 
compensation equivalency limits applicable to FQHC's and RHC's.
    Also, Medicare would pay only for Medicare's share of the direct 
costs of training in the nonhospital site. We are proposing that the 
FQHC's and RHC's Medicare share equal the nonhospital provider's ratio 
of Medicare visits to total visits. Thus, the amount of Medicare 
payment would equal the product of the clinic's Medicare allowed direct 
GME costs and the clinic's ratio of Medicare visits to total visits.
    For FQHCs and RHCs that incur ``all or substantially all'' of the 
costs for the training program in the nonhospital setting, the direct 
GME costs are not subject to the existing per visit payment caps for 
reimbursement under sections 505.1 and 505.2 of the Medicare Rural 
Health Clinic and Federally Qualified Health Centers Manual. Moreover, 
we believe participation in GME training should not affect any FQHCs or 
RHCs ability to meet the productivity standards outlined in section 503 
of the Medicare Rural Health Clinic and Federally Qualified Health 
Centers Manual. Therefore, we are proposing that, where payment is 
available under section 1886(k) of the Act for residents working in 
either an FQHC or an RHC, the FQHCs and RHCs do not need to include 
residents as health care staff in the calculation of productivity 
standards under section 503 of the Manual.
    ii. Payment to Medicare+Choice organizations. In the second payment 
scenario, if a Medicare+Choice organization incurs ``all or 
substantially all'' of the costs for the training program in the 
nonhospital setting, we propose making the direct GME payment to the 
Medicare+Choice organization. The Medicare+Choice organization would be 
eligible to receive cost-based reimbursement for the residents' 
salaries and fringe benefits only for the time that the resident spends 
in the nonhospital setting. In addition, we are proposing that the 
Medicare+Choice organization's allowed costs include only that portion 
of the teaching physician salaries and fringe benefits that is related 
to training in the nonhospital setting.
    Unlike our proposed policy in paying FQHCs and RHCs for GME, at 
this time we are not proposing to pay Medicare+Choice organizations for 
the costs of overhead that are directly associated with a GME program. 
We have no historical data on the GME costs of managed care 
organizations and the extent to which these costs are incurred directly 
or indirectly under contracts between the managed care organization and 
physician groups or other providers engaged in ambulatory care. 
Moreover, we have an established methodology for allocating and 
reporting overhead costs for FQHCs and RHCs on Medicare cost reports 
that does not currently exist for Medicare+Choice organizations. Since 
Medicare+Choice organizations do not use the Medicare cost report, 
there is currently no mechanism to review and audit these costs in the 
managed care context. Because Medicare+Choice organizations are paid on 
a capitated basis, we have no method for paying Medicare+Choice 
organizations for variable costs such as GME overhead that require a 
sophisticated cost allocation methodology. By contrast, it is currently 
feasible to pay Medicare+Choice organizations for the costs of the 
residents' salaries and teaching physicians' salaries because those 
costs are more readily documented and auditable.
    However, we are open to suggestions about how we can create a 
methodology for allocating and reporting overhead costs for 
Medicare+Choice organizations. Any comments should include not only a 
proposed methodology for paying Medicare+Choice organizations for GME 
overhead costs, but also proposed mechanisms for the audit and review 
of the costs of these organizations.
    Similar to our proposed policy for paying FQHCs and RHCs for direct 
costs of GME, the Medicare+Choice organization's reimbursement for 
residents' salaries and fringe benefits (including related travel and 
lodging expenses where applicable) would be subject to the reasonable 
cost principles in 42 CFR part 413 and any other relevant provisions 
referenced in part 413. As such we are proposing to add language to 
Sec. 415.60 to make the reasonable cost principles applicable to 
Medicare+Choice organizations. In addition, the Medicare+Choice 
organization's GME reimbursement would also be subject to the 
Reasonable Compensation Equivalency limits under Secs. 415.60 and 
415.70. Accordingly, we are proposing to add language to Sec. 415.70 to 
make reasonable compensation equivalency limits applicable to 
Medicare+Choice organizations. While we would pay the Medicare+Choice 
organization for certain GME costs in nonhospital settings under this 
proposal, the cost of residents' and teaching physicians' salaries and 
fringe benefits in the hospital setting would be paid to the hospital, 
not the Medicare+Choice organization.
    The Medicare+Choice organization would receive direct GME payment 
only for the direct costs of training in the nonhospital site that are 
associated with the delivery of patient care services. In

[[Page 25599]]

determining the amount of direct GME payments to Medicare+Choice 
organizations, we must adjust for Medicare's share of those education 
costs. Medicare's share would equal the ratio of the total number of 
Medicare enrollees in the Medicare+Choice organization to total 
enrollees in the Medicare+Choice organization.
    We are proposing that, in order to receive the direct GME payment, 
the Medicare+Choice organization must produce a contractual agreement 
between itself and the nonhospital providers. Medicare+Choice 
organizations may contract with any nonhospital patient care site, 
including freestanding clinics, nursing homes, and physicians' offices 
in connection with approved programs. The contract between the 
Medicare+Choice organization and the nonhospital site must indicate 
that, for the time that residents spend in the nonhospital site, the 
Medicare+Choice organization agrees to pay for the cost of residents' 
salaries and fringe benefits. In addition, the contract must indicate 
that the Medicare+Choice organization agrees to pay the portion of the 
costs of teaching physicians' salaries and fringe benefits that is 
related to the time spent in teaching and supervision of residents and 
that is unrelated to the volume of services. The contract must 
stipulate the portion of each teaching physician's time that will be 
spent training residents in the nonhospital setting. Moreover, the 
contract must indicate that the Medicare+Choice organization agrees to 
identify an amount for the cost of the teaching physician's salary 
based on the time that the resident spends in the nonhospital setting, 
not based upon a capitated rate for the delivery of physician services.
    Under our proposed rule, we could pay a Medicare+Choice 
organization for the direct costs of training medical residents in a 
physician's office if such office had a contractual agreement with the 
organization whereby the organization agrees to pay for ``all or 
substantially all'' of the costs for the training program in the 
nonhospital setting. However, an independent physician office would not 
be eligible to receive payment directly from Medicare for the cost of 
training residents because it would not be a ``qualified nonhospital 
provider'' under our proposed policy. Similarly, if a hospital rotates 
a resident through a physician's office, the hospital must pay for 
``all or substantially all'' of the costs of training the resident in 
the physician's office in order to include that resident in its FTE 
count for IME and direct GME purposes. (In this instance, the 
hospital's responsibility in assuming ``all or substantially all'' of 
the costs of training the resident in the nonhospital site would not be 
based on section 4625 of BBA which permits payment to nonhospital 
providers.) The hospital would have to assume ``all or substantially 
all'' of the training costs for that nonhospital training time in order 
to avail itself of the benefit of including the resident in the 
hospital's FTE count for IME and direct GME purposes based on the 
proposed modifications to Sec. 413.86.
    iii. Payment to Hospitals. In the third payment scenario, if the 
hospital itself incurs ``all or substantially all'' of the costs for 
the training program in the nonhospital setting, then the hospital may 
include the residents' training time in the nonhospital setting in the 
hospital's FTE counts for direct GME and for IME. In order to include 
the residents' training in the nonhospital site, the hospital must 
produce a contractual agreement between the hospital and the 
nonhospital provider. Under Sec. 413.86(f)(1)(iii), hospitals may 
contract with any nonhospital patient care provider such as 
freestanding clinics, nursing homes, and physicians' offices in 
connection with approved programs.
    Currently, a hospital must produce a written agreement between the 
hospital and the nonhospital provider that states that the resident's 
compensation for training time spent outside of the hospital setting is 
to be paid by the hospital. Since this proposal changes the definition 
of what constitutes ``all or substantially all'' of the costs of 
training in the nonhospital site, hospitals must produce a written 
agreement that demonstrates that they are assuming responsibility for 
more of the costs of training in the nonhospital site than had 
previously been required.
    In accordance with our proposed definition of what constitutes 
``all or substantially all'' of the costs of training while the 
resident is in the nonhospital site, we are proposing that the contract 
must indicate that the hospital is assuming financial responsibility 
for, at a minimum, the cost of residents' salaries and fringe benefits 
(including travel and lodging expenses where applicable) and the costs 
for that portion of teaching physicians' salaries and fringe benefits 
related to the time spent in teaching and supervision of residents.
    The contract must indicate that the hospital is assuming financial 
responsibility for these costs directly or that the hospital agrees to 
reimburse the nonhospital provider for such costs. The contract must 
also contain an acknowledgment on the part of the nonhospital provider 
that, since the residents' time is being counted by the hospital, the 
nonhospital site cannot claim GME costs on their Medicare cost report. 
The nonhospital provider must agree to report its direct GME costs as 
well as any money received from the hospital for GME purposes in a 
nonallowable cost center on its cost report. In addition, in order to 
determine teaching physician compensation that may be allocated to 
direct GME, the nonhospital provider must specify the portion of the 
teaching physicians' time that will be spent training residents in the 
nonhospital setting. Finally, any payment to the hospital for the 
direct costs of GME training in the nonhospital setting will continue 
to reflect Medicare's share, which equals the hospital's ratio of 
Medicare inpatient days to total inpatient days.
    Hospitals that have residents who rotate to nonhospital sites are, 
like all teaching hospitals, subject to an institutional cap on the 
number of FTE residents that may be counted for both indirect and 
direct GME under sections 1886(d)(5)(B)(v) and 1886(h)(6)(F) of the 
Act. For hospitals that have residents who rotate to a nonhospital 
site, those residents will be subject to the hospital's FTE caps.
    f. Trust Funds. Under section 1886(k)(1) of the Act, the rules 
established by the Secretary for paying nonhospital providers for GME 
must specify the portion of Medicare payments that will be made from 
each of the Medicare trust funds. We propose that GME payments made 
directly to an FQHC, RHC, or Medicare+Choice organization would be made 
from the Federal Supplementary Medical Insurance Trust Fund.
    g. Conclusion. Under this proposed rule, clinics that are presently 
ineligible to receive payments for direct GME may now receive such 
payments. Moreover, this proposal provides Medicare+Choice 
organizations the opportunity to receive direct GME payments for 
training residents in the nonhospital setting. As Medicare+Choice 
organizations, managed care entities will, for the first time, be 
eligible to receive direct GME payments for training residents in 
various types of nonhospital sites. This proposed rule would help 
bridge the disparity between hospital and nonhospital providers in 
obtaining payment for direct GME costs.
    We believe this proposed rule may encourage the development of new 
programs in nonhospital settings. Similarly, it may also encourage 
approved residency training programs to

[[Page 25600]]

rotate additional residents to nonhospital sites.
    In developing this proposed rule, we considered establishing a 
fixed payment rate for the direct costs of training residents in the 
nonhospital setting. We are not proposing a policy of a fixed payment 
at this time because we presently have no reliable data on the direct 
costs of training residents in nonhospital settings. Moreover, we are 
concerned that a fixed payment for these costs may not be appropriate 
if there is significant variation in cost among participating 
nonhospital sites.
    Given these considerations, our policy to pay FQHCs, RHCs, and 
Medicare+Choice organizations on a cost reimbursement basis may be 
revised in the future. Once we have acquired data such that we can 
estimate the direct costs of training residents in the nonhospital 
site, we will revisit our payment methodology for paying FQHCs, RHCs, 
and Medicare+Choice organizations for direct GME. We believe that 
ultimately it might be appropriate to pay FQHCs, RHCs, and 
Medicare+Choice organizations using a national average per resident 
amount. This national per resident amount would be based on the 
national average for the direct costs of training medical residents in 
the nonhospital site. As such, we are interested in receiving comments 
on a fixed payment methodology and on how to derive such a payment. 
These comments should include empirical data on training costs in 
nonhospital sites.
    The effective date of these provisions for FQHCs, RHCs, 
Medicare+Choice organizations, and hospitals will be January 1, 1999. 
In particular, the effective date for IME payments to hospitals under 
this provision applies to discharges occurring on or after January 1, 
1999. In addition, the effective date for direct medical education 
payments to FQHCs, RHCs, Medicare+Choice organizations, and hospitals 
applies to that portion of cost reporting periods occurring on or after 
January 1, 1999.

VI. Changes to the Prospective Payment System for Capital-Related 
Costs

A. Proposed Cap on the Capital Indirect Medical Education Adjustment 
Ratio (Sec. 417.322)

    Under section 1886(g) of the Act, the Secretary has broad 
discretion in implementing the capital prospective payment system. 
Section 412.322 of the regulations specifies the formula for the 
capital indirect medical education (IME) adjustment factor. The capital 
IME adjustment is intended to pay the capital prospective payment 
system share of the indirect costs of medical education to teaching 
hospitals. The formula was adopted in the August 30, 1991 final rule 
for the capital prospective payment system (56 FR 43380) and uses the 
ratio of interns and residents to average daily census (defined as 
total inpatient days divided by the number of days in the cost 
reporting period). Section 1886(d)(5)(B) of the Act requires the use of 
the ratio of residents-to-beds to calculate the IME adjustment for the 
operating Prospective payment system. However, pursuant to our 
authority under section 1886(g) of the Act, we adopted the resident to 
average daily census ratio for the capital prospective payment system 
because we believed it was a more appropriate method for measuring 
teaching intensity and because we believed it was less subject to 
manipulation.
    The IME adjustment factor increases by approximately 2.8 percentage 
points for each .10 increase in the hospital's ratio of residents to 
average daily census. The IME adjustment for inpatient capital-related 
costs for hospitals paid under the prospective payment system takes the 
form of e raised to the power (.2822  x  ratio of interns and residents 
to average daily census)-1] where e is the natural antilogy of 1, based 
on the total cost regression results. In order to determine the Federal 
rate portion of the hospital's payment, the IME adjustment factor is 
multiplied by the standard federal rate, the DRG weight, the geographic 
adjustment factor, and any other relevant payment adjustments such as 
the DSH adjustment or the large urban add-on. The formula is as 
follows: (Standard Federal Rate)  x  (DRG weight)  x  (GAF)  x  (Large 
Urban Add-on, if applicable)  x  (COLA adjustment for hospitals located 
in Alaska and Hawaii)  x  (1 + Disproportionate Share Adjustment Factor 
+ IME Adjustment Factor, if applicable).
    It has come to our attention that because of the application of the 
capital IME adjustment, one hospital would receive a capital IME 
payment greater than its total hospital costs. We have also recently 
learned that of the approximately 1,200 teaching hospitals in the 
United States, based on December 1997 data, 8 hospitals have a resident 
to average daily census ratio of more than 1.5. A resident to average 
daily census ratio of 1.5 results in a capital IME adjustment factor of 
.53, which increases the Federal rate portion of the hospital's capital 
payment by 53 percent.
    To address this unintended effect of the capital IME methodology, 
we are proposing to cap the capital IME ratio at 1.5. A ratio greater 
than 1.5 means a hospital has, on average, considerably more residents 
than inpatients. Capping the ratio at 1.5 would allow for one resident 
per patient on the inpatient side plus some outpatient training, and 
would keep capital IME payments more consistent with the costs 
incurred. Because of the large number of unoccupied beds in most 
hospitals, the operating IME ratio has only slightly exceeded 1.0 in 
two cases. This change would ensure that the capital IME adjustment is 
more in line with hospital costs.

B. Payment Methodology for Mergers Involving New Hospitals 
(Sec. 412.331)

    The August 30, 1991 final rule (56 FR 43418), which implemented the 
capital prospective payment system, established special payment 
provisions for new hospitals. Under Sec. 412.324(b), a new hospital is 
paid 85 percent of its allowable Medicare capital-related costs through 
its first cost reporting period ending at least 2 years after the 
hospital accepts its first patient. The first cost reporting period 
beginning at least 1 year after the hospital accepts its first patient 
is the hospital's base year for purposes of determining its hospital-
specific rate. Section 412.302(b) defines a new hospital's old capital 
costs as allowable capital-related costs for land and depreciable 
assets that were put in use for patient care on or before the last day 
of the hospital's base year cost reporting period. Beginning with the 
third year, the hospital is paid under the fully prospective or hold-
harmless payment methodology, as appropriate. If the hospital is paid 
under the hold-harmless payment methodology, the hospital's hold-
harmless payments for its old capital costs can continue for up to 8 
years.
    In the August 30, 1991 final rule, we defined a new hospital as one 
that had operated (under previous or present ownership) for less than 2 
years and did not have a 12-month cost reporting period that ended on 
or before December 31, 1990. In the September 1, 1992 final rule (57 FR 
39789), as a result of situations brought to our attention after 
publication of the prospective payment system final rule, we clarified 
the new hospital exemption under the capital prospective payment 
system. We explained that the new hospital exemption would not apply to 
a facility that opened as an acute care hospital if that hospital had 
previously operated under current or prior ownership and had a historic 
asset base. We also clarified that a hospital that replaced its entire 
facility (with or without a change of ownership) would not qualify for 
a

[[Page 25601]]

new hospital exemption and that a previously existing excluded hospital 
(paid under section 1886(b) of the Act) that became an acute care 
hospital (paid under section 1886(d)) of the Act would not qualify.
    We explained our belief that the reasonable cost payment protection 
under the new hospital exemption should only be available to those 
hospitals that had not received reasonable cost payments in the past 
and needed special protection during their initial period of operation. 
We also stated in the June 4, 1992 proposed rule (57 FR 23649) that we 
were clarifying the new hospital exemption to ensure that hospitals 
that had an existing asset base before December 31, 1990 were not 
provided with an extended transition period and inappropriately higher 
payments relative to other hospitals. We also explained our belief that 
it was essential to maintain the integrity of the capital prospective 
payment system by allowing only truly new providers of hospital care to 
qualify for the new hospital exemption.
    Since publication of our last clarification of the payment rules 
for new hospitals, questions have arisen regarding application of our 
rules for payment of new hospitals in merger situations. Consistent 
with our previously stated policy that only truly new hospitals without 
an existing asset base should be eligible for the new hospital 
exemption, we are further clarifying the new hospital payment 
provisions.
    If during the period it is eligible for payment as a new hospital 
(as defined at Sec. 412.300(b) and Sec. 412.328(b)), a new hospital 
merges with one or more existing hospitals and the merger meets the 
existing capital-related reasonable cost rules regarding the criteria 
for recognizing a merger at Sec. 413.134 and the new hospital is the 
surviving corporation (as defined in Sec. 413.134(l)(2)) we would treat 
as old capital only those assets of the existing hospital that met the 
definition of old capital (as defined in Sec. 412.302(b)) prior to the 
merger, for purposes of determining payments after the merger.
    Any assets of the existing hospital that were considered new 
capital prior to the merger will still be considered new capital after 
the merger. The merger cannot be used to convert the existing 
hospital's new capital into old capital. After the merger, the 
discharges of each campus of the merged entity would maintain their 
pre-merger payment methodology until the end of the 2 year period that 
the ``new hospital'' campus was eligible for reasonable cost 
reimbursement as defined at Sec. 412.324(b). At the end of this period, 
the intermediary would devise a hospital specific rate for the ``new'' 
campus of the merged hospital. Finally, the calculation methodology for 
hospital mergers at new Sec. 412.331(a)(1) and (2) would be performed 
and a combined hospital-specific rate would be determined and a payment 
methodology selected for the merged hospital as a whole.
    The calculation at Sec. 412.331(a)(1) and (2) uses each hospital's 
base year old capital costs. Any new capital of the previously existing 
hospital would not be used in the determination. If the new merged 
entity qualifies for the hold-harmless payment methodology, only the 
capital which meets the definition of old capital at Sec. 412.302(b) 
would be eligible for hold-harmless payments.
    We note that this proposed change is consistent with the principles 
underlying existing Sec. 412.331(a)(3), which provides that in the case 
of a merger only the existing capital-related costs related to the 
assets of each merged or consolidated hospital as of December 31, 1990 
are recognized as old capital costs during the transition period. If 
the hospital is paid under the hold-harmless methodology after merger 
or consolidation, only that original base year old capital is eligible 
for hold-harmless payments.

    Example: Hospital A is a new hospital in its first 2 years of 
operation and is being paid 85 percent of its allowable Medicare 
inpatient hospital capital-related costs. Hospital A's base year for 
establishing its hospital-specific rate will end September 30, 1998. 
Hospital B is an existing hospital whose base year for capital 
prospective payment system purposes was June 30, 1990. Hospital B is 
a hold-harmless hospital paid 100 percent of the Federal rate. 
Hospital A merged with Hospital B (in accordance with to 
Sec. 413.134(l)) on March 1, 1998, and Hospital A is a new merged 
entity, with two campuses: one which used to be the original 
Hospital A--the ``new'' hospital, and one which used to be hospital 
B--the ``existing'' hospital). The merged Hospital A retains the 
corporate structure, provider number, and cost reporting period of 
the original Hospital A, which is the surviving hospital. The merged 
Hospital A's discharges will be paid under two different payment 
methodologies until the ``new'' campus completes its base period 
under the payment rules for new hospitals and a hospital-specific 
rate and a payment methodology can be determined for the merged 
Hospital A. Until that time, the discharges of the ``new'' hospital 
campus (previously the original Hospital A) will be paid in 
accordance with Sec. 412.324(b) as a new hospital. Any capital that 
meets the definition of old capital acquired by the ``new'' campus 
before the end of its base year will be accorded old capital status 
in accordance with Sec. 412.302(b). The ``existing'' hospital campus 
(previously hospital B) will continue to be paid on a hold-harmless 
basis. Any capital acquired by the ``existing'' campus will be 
accorded new capital status in accordance with section 2807.3A of 
the Provider Reimbursement Manual (PRM). At the end of the ``new'' 
campus' base year, a hospital-specific rate will be determined for 
that campus. After a hospital specific rate is determined, the 
calculation methodology for hospital mergers at Sec. 412.331(a)(1) 
and (2) will be performed. As part of the calculation and before 
combining the data, the base years of the two hospitals used to 
establish the hospital-specific rate are brought to the same point 
by discharge-weighting and updating. The calculation uses only the 
old capital costs of each hospital in order to determine a combined 
hospital-specific rate and payment methodology. After a payment 
methodology determination is made, the two campuses will be paid 
using the same payment methodology for all of their discharges.

VII. Changes for Hospitals and Units Excluded From the Prospective 
Payment System

Limits on and Adjustments to the Target Amounts for Excluded Hospitals 
and Units (Sec. 413.40(g))

1. Updated Caps
    Section 1886(b)(3) of the Act as amended by section 4414 of the BBA 
established caps on the target amounts for excluded hospitals and units 
for cost reporting periods beginning on or after October 1, 1997, 
through September 30, 2002. The caps on the target amounts apply to the 
following three categories of excluded hospitals: psychiatric hospitals 
and units, rehabilitation hospitals and units, and long-term care 
hospitals.
    A discussion of how the caps on the target amounts were calculated 
can be found in the August 29, 1997 final rule with comment period (62 
FR 46018). For purposes of calculating the caps for cost reporting 
periods beginning during FY 1999 through FY 2002, the statute requires 
us to calculate the 75th percentile of the target amounts for each 
class of hospital (psychiatric, rehabilitation, or long-term care) for 
cost reporting periods ending during FY 1996. The resulting amounts are 
updated by the market basket percentage to the applicable fiscal year.
    The projected market basket for excluded hospitals and units for FY 
1999 is 2.5 percent. Accordingly, the caps on the target amount for FY 
1999 as follows:

(1) Psychiatric hospitals and units: $10,443
(2) Rehabilitation hospitals and units: $18,938
(3) Long-term care hospitals: $37,360

[[Page 25602]]

2. Classification of Hospitals and Units
    Since publication of the August 29, 1997 final rule with comment 
period, some excluded facilities have suggested that if they are 
currently excluded as one class of hospital or unit but also qualify 
for exclusion as another class of hospital, they should be permitted to 
choose which classification applies for purposes of applying the cap on 
target amounts. For example, some hospitals that participate in 
Medicare as psychiatric hospitals (defined under section 1861(f) of the 
Act, and the special conditions of participation in 42 CFR part 482 
subpart E) have noted that they have average lengths of stay greater 
than 25 days. Those hospitals have asked to be ``reclassified'' as 
long-term care hospitals and given the benefit of the higher cap on 
target amounts applicable to that hospital class.
    We have considered these hospitals' suggestions, but we believe it 
would not be appropriate to adopt them. Section 1886(b)(3)(H)(iv) of 
Act makes it clear that each category of hospital and corresponding 
units--psychiatric (section 1886(d)(1)(B)(I)), rehabilitation (section 
1886(d)(1)(B)(ii)), and long-term care hospitals (section 
1886(d)(1)(B)(iv)) is treated separately. We believe it is consistent 
with effective implementation of this provision to prevent hospitals or 
units that could potentially be assigned to more than one category of 
excluded facility from choosing the category to which they wish to be 
assigned. Even though some hospitals or units in one group might 
potentially have been assigned to a different group, each group has its 
own limit based on the target amounts for similarly classified 
facilities. It would not be appropriate to apply a limit to a hospital 
or unit based on the target amount derived from the cost experience of 
differently classified hospitals and units.
    In addition, there are a number of hospitals that could potentially 
move from the psychiatric hospital cap to the long-term care hospital 
cap. This movement would have a significant impact on the 
appropriateness of both caps. In the case of the psychiatric hospitals, 
had those hospitals with the longest lengths of stay and therefore 
higher per discharge target amount been excluded in the original 
calculation of the caps, the cap for all remaining psychiatric 
hospitals would invariably have been lower. Furthermore, had those 
psychiatric hospitals been included in the calculation of the long-term 
care hospital cap, that cap could also have been lower. To allow such a 
significant change in the application of the caps is to raise a serious 
question as to the appropriateness of the current caps for all 
psychiatric and long-term care hospitals.
    Thus, to clarify the application of the caps, we propose to revise 
Sec. 413.40(c)(4)(iii) to specify that, for purposes of that paragraph, 
the classification of a hospital that was excluded from the prospective 
payment system for its cost reporting period ending in FY 1996 will be 
determined by its classification (that is, the basis on which it was 
excluded) in FY 1996. If a hospital or unit was not excluded for a cost 
reporting period ending in FY 1996 but could be excluded on more than 
one basis (for example, as either a rehabilitation or long-term care 
hospital) it will be assigned to the classification group with the 
lowest limit.
3. Exceptions
    The August 29, 1997 final rule with comment period (62 FR 46018) 
specified that a hospital that has a target amount that is capped at 
the 75th percentile would not be granted an adjustment payment to the 
target amount (also referred to as an exception payment) as governed by 
Sec. 413.40(g) based solely on a comparison of its costs or patient mix 
in its base year to its costs or patient mix in the payment year. Since 
the hospital's target amount would not be determined based on its own 
experience in a base year, any comparison of costs or patient mix in 
its base year to costs or patient mix in the payment year would be 
irrelevant.
    We propose to clarify that, to the extent we grant an exception to 
a hospital not affected by the cap, the amount of the exception would 
be limited to the cap on the hospital's target amount. This policy is 
consistent with the caps. By establishing caps on TEFRA target amounts, 
Congress has limited payments to individual hospitals based on amounts 
that reflect the cost experience of other hospitals. Therefore, in 
determining the extent of any adjustment paid to a hospital as an 
exception under our regulations at Sec. 413.40(g)(3), we believe it is 
consistent with Congressional intent to limit the extent of the 
adjustment to the hospital's cap on its target amount.
    We propose to revise Sec. 413.40(g)(1) to set forth the limitation 
on the adjustment payments.

VIII. MedPAC Recommendations

    We have reviewed the March 1998 report submitted by MedPAC to 
Congress and have given its recommendations careful consideration in 
conjunction with the proposals set forth in this document. 
Recommendations concerning the update factors for inpatient operating 
costs and for hospitals and hospital distinct-part units excluded from 
the prospective payment system are discussed in Appendix D, to this 
proposed rule. The remaining recommendations are discussed below.

A. Disproportionate Share Hospitals (DSH)

    Recommendation: The Medicare Payment Advisory Commission (MedPAC) 
made several recommendations concerning the Medicare disproportionate 
share adjustment calculation. In general, the Commission's proposal 
would base the amount of DSH payment each hospital receives on its 
volume and mix of cases paid under the prospective payment system and 
its share of low-income patients. The low-income share measure would 
reflect the costs of care provided to low-income individuals (Medicare 
patients eligible for Supplemental Security Income (SSI), Medicaid 
patients, patients sponsored by local indigent care programs, and 
patients receiving uncompensated care) as a proportion of total patient 
care expenses. Both inpatient and outpatient costs were included in the 
data used to calculate the low-income shares, although payment would be 
made only on inpatient discharges.
    The same formula would be applied to all prospective payment 
hospitals. Under the recommendation, there would be a threshold or 
minimum low-income share, that must be reached for a hospital to 
receive any Medicare disproportionate share adjustment. The payment the 
hospital would receive is proportionate to the segment of its low-
income share that lies above the threshold. MedPAC simulated the 
potential effects of applying their approach on the distribution of 
Medicare disproportionate share payments made in 1995. For purposes of 
MedPAC's simulations, the threshold was set at a level that would limit 
payments to about 40 percent of prospective payment hospitals--roughly 
the same as under the current DSH adjustment. MedPAC stated that this 
proportion could be adjusted, or the threshold could be set using a 
different method, as deemed appropriate by policy makers. (For more 
information see Volume 1, chapter 6, page 63 of the March 1998 report.)
    Response: Section 1886(d)(5)(F) of the Act, as amended by section 
4403(b) of the BBA, requires us to prepare a report to Congress, due by 
August 5, 1998, which will include our recommendations for an 
appropriate

[[Page 25603]]

formula for determining DSH payments. We appreciate MedPAC's efforts to 
assist HCFA in restructuring the Medicare disproportionate share 
adjustment and we will further examine and consider their 
recommendations as we develop our report to Congress.

B. Potential Effects of Target Amount Caps

    Recommendation: The wage-related portion of the excluded hospital 
target amount caps should be adjusted by the appropriate hospital wage 
index to account for geographic differences in wages. (For more 
information see Volume 1, chapter 7, page 71 of the March 1998 report.)
    Response: As MedPAC indicated in its recommendation, legislation 
would be required to adjust the target amount caps in such a 
substantial manner as to adjust for differences in area labor costs.

IX. Other Required Information

A. Requests for Data From the Public

    In order to respond promptly to public requests for data related to 
the prospective payment system, we have set up a process under which 
commenters can gain access to the raw data on an expedited basis. 
Generally, the data are available in computer tape or cartridge format; 
however, some files are available on diskette as well as on the 
Internet at HTTP://WWW.HCFA.GOV/STATS/PUBFILES.HTML. Data files are 
listed below with the cost of each. Anyone wishing to purchase data 
tapes, cartridges, or diskettes should submit a written request along 
with a company check or money order (payable to HCFA-PUF) to cover the 
cost to the following address: Health Care Financing Administration, 
Public Use Files, Accounting Division, P.O. Box 7520, Baltimore, 
Maryland 21207-0520, (410) 786-3691. Files on the Internet may be 
downloaded without charge.
1. Expanded Modified MEDPAR-Hospital (National)
    The Medicare Provider Analysis and Review (MedPAR) file contains 
records for 100 percent of Medicare beneficiaries using hospital 
inpatient services in the United States. (The file is a Federal fiscal 
year file, that is, discharges occurring October 1 through September 30 
of the requested year.)
    The records are stripped of most data elements that will permit 
identification of beneficiaries. The hospital is identified by the 6-
position Medicare billing number. The file is available to persons 
qualifying under the terms of the Notice of Proposed New Routine Uses 
for an Existing System of Records published in the Federal Register on 
December 24, 1984 (49 FR 49941), and amended by the July 2, 1985 notice 
(50 FR 27361). The national file consists of approximately 11 million 
records. Under the requirements of these notices, an agreement for use 
of HCFA Beneficiary Encrypted Files must be signed by the purchaser 
before release of these data. For all files requiring a signed 
agreement, please write or call to obtain a blank agreement form before 
placing an order. Two versions of this file are created each year. They 
support the following:
     Notice of Proposed Rulemaking (NPRM) published in the 
Federal Register, usually available by the end of May (April beginning 
in 1998). This file is derived from the MedPAR file with a cutoff of 3 
months after the end of the fiscal year (December file).
     Final Rule published in the Federal Register, usually 
available by the first week of September (August beginning with the FY 
1999 final rule). For final rules published before 1998, this file is 
derived from the MedPAR file with a cutoff of 9 months after the end of 
the fiscal year (June file). The FY 1997 MedPar file used for the FY 
1999 final rule will have a cutoff of 6 months after the end of the 
fiscal year (March file).

Media: Tape/Cartridge
File Cost: $3,415.00 per fiscal year
Periods Available: FY 1988 through FY 1997
2. Expanded Modified MedPAR-Hospital (State)
    The State MedPAR file contains records for 100 percent of Medicare 
beneficiaries using hospital inpatient services in a particular State. 
The records are stripped of most data elements that will permit 
identification of beneficiaries. The hospital is identified by the 6-
position Medicare billing number. The file is available to persons 
qualifying under the terms of the Notice of Proposed New Routine Uses 
for an Existing System of Records published in the December 24, 1984 
Federal Register notice, and amended by the July 2, 1985 notice. This 
file is a subset of the Expanded Modified MedPAR-Hospital (National) as 
described above. Under the requirements of these notices, an agreement 
for use of HCFA Beneficiary Encrypted Files must be signed by the 
purchaser before release of these data. Two versions of this file are 
created each year. They support the following:
     NPRM published in the Federal Register, usually available 
by the end of May (April beginning in 1998). This file is derived from 
the MedPAR file with a cutoff of 3 months after the end of the fiscal 
year (December file).
     Final Rule published in the Federal Register, usually 
available by the first week of September (August beginning with the FY 
1999 final rule). For final rules published before 1998, this file is 
derived from the MedPAR file with a cutoff of 9 months after the end of 
the fiscal year (June file). The FY 1997 MedPar file used for the FY 
1999 final rule will be cut off 6 months after the end of the fiscal 
year (March file).

Media: Tape/Cartridge
File Cost: $1,050.00 per State per year
Periods Available: FY 1988 through FY 1997
3. HCFA Wage Data
    This file contains the hospital hours and salaries for 1995 used to 
create the proposed FY 1999 prospective payment system wage index. The 
file will be available by the beginning of February for the NPRM and 
the beginning of May for the final rule.

------------------------------------------------------------------------
    Processing year           Wage data year          PPS fiscal year   
------------------------------------------------------------------------
1998...................               1995                    1999      
1997...................               1994                    1998      
1996...................               1993                    1997      
1995...................               1992                    1996      
1994...................               1991                    1995      
1993...................               1990                    1994      
1992...................               1989                    1993      
1991...................               1988                    1992      
------------------------------------------------------------------------

    These files support the following:
     NPRM published in the Federal Register, usually by the end 
of April.
     Final Rule published in the Federal Register, usually by 
the first week of August.

Media: Diskette/Internet
File Cost: $145.00 per year
Periods Available: FY 1999 PPS Update
4. HCFA Hospital Wages Indices (Formally: Urban and Rural Wage Index 
Values Only)
    This file contains a history of all wage indices since October 1, 
1983.

Media: Diskette/Internet
File Cost: $145.00 per year
Periods Available: FY 1999 PPS Update
5. PPS SSA/FIPS MSA State and County Crosswalk
    This file contains a crosswalk of State and county codes used by 
the Social Security Administration (SSA) and the Federal Information 
Processing Standards (FIPS), county name, and a historical list of 
Metropolitan Statistical Area (MSA).

Media: Diskette/Internet

[[Page 25604]]

File Cost: $145.00 per year
Periods Available: FY 1999 PPS Update
6. Reclassified Hospitals by Provider Only
    This file contains a list of hospitals that were reclassified for 
the purpose of the proposed FY 1999 wage index. Two versions of these 
files are created each year.
    They support the following:
     NPRM published in the Federal Register, usually by the end 
of April.
     Final Rule published in the Federal Register, usually by 
the first week of August.

Media: Diskette/Internet
File Cost: $145.00 per year
Periods Available: FY 1999 PPS Update
7. PPS-IV to PPS-XII Minimum Data Sets
    The Minimum Data Set contains cost, statistical, financial, and 
other information from Medicare hospital cost reports. The data set 
includes only the most current cost report (as submitted, final 
settled, or reopened) submitted for a Medicare participating hospital 
by the Medicare Fiscal Intermediary to HCFA. This data set is updated 
at the end of each calendar quarter and is available on the last day of 
the following month.

                          Media: Tape/Cartridge                         
------------------------------------------------------------------------
                                                  Periods               
                                                 beginning    and before
                                                on or after             
------------------------------------------------------------------------
PPS IV........................................     10/01/86     10/01/87
PPS V.........................................     10/01/87     10/01/88
PPS VI........................................     10/01/88     10/01/89
PPS VII.......................................     10/01/89     10/01/90
PPS VIII......................................     10/01/90     10/01/91
PPS IX........................................     10/01/91     10/01/92
PPS X.........................................     10/01/92     10/01/93
PPS XI........................................     10/01/93     10/01/94
PPS XII.......................................     10/01/94     10/01/95
------------------------------------------------------------------------

(Note: The PPS XIII Minimum Data Set covering FY 1997 will not be 
available until July 31, 1998.)

File Cost: $715.00 per year
8. PPS-IX to PPS-XII Capital Data Set
    The Capital Data Set contains selected data for capital-related 
costs, interest expense and related information and complete balance 
sheet data from the Medicare hospital cost report. The data set 
includes only the most current cost report (as submitted, final settled 
or reopened) submitted for a Medicare certified hospital by the 
Medicare fiscal intermediary to HCFA. This data set is updated at the 
end of each calendar quarter and is available on the last day of the 
following month.

                          Media: Tape/Cartridge                         
------------------------------------------------------------------------
                                                  Periods               
                                                 beginning    and before
                                                on or after             
------------------------------------------------------------------------
PPS IX........................................     10/01/91     10/01/92
PPS X.........................................     10/01/92     10/01/93
PPS XI........................................     10/01/93     10/01/94
PPS XII.......................................     10/01/94     10/01/95
------------------------------------------------------------------------

(Note: The PPS XIII Capital Data Set covering FY 1997 will not be 
available until July 31, 1998.)

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

Media: Diskette/Internet
File Cost: $265.00
Periods Available: FY 1998 PPS Update
10. HCFA Medicare Case-Mix Index File
    This file contains the Medicare case-mix index by provider number 
as published in each year's update of the Medicare hospital inpatient 
prospective payment system. The case-mix index is a measure of the 
costliness of cases treated by a hospital relative to the cost of the 
national average of all Medicare hospital cases, using DRG weights as a 
measure of relative costliness of cases. Two versions of this file are 
created each year. They support the following:
     NPRM published in the Federal Register, usually by the end 
of May (April beginning in 1998).
     Final rule published in the Federal Register, usually by 
the first week of September (August beginning in 1998).

Media: Diskette/Internet
Price: $145.00 per year
Periods Available: FY 1985 through FY 1997 (Internet--FY 1997)
11. DRG Relative Weights (Formerly Table 5 DRG)
    This file contains a listing of DRGs, DRG narrative description, 
relative weights, and geometric and arithmetic mean lengths of stay as 
published in the Federal Register. The hardcopy image has been copied 
to diskette. There are two versions of this file as published in the 
Federal Register:
    a. NPRM, usually published by the end of May (April beginning in 
1998).
    b. Final rule, usually published by the first week of September 
(August beginning in 1999).

Media: Diskette/Internet
File Cost: $145.00
Periods Available: FY 1999 PPS Update
12. PPS Payment Impact File
    This file contains data used to estimate payments under Medicare's 
hospital inpatient prospective payment systems for operating and 
capital-related costs. The data are taken from various sources, 
including the Provider-Specific File, Minimum Data Sets, and prior 
impact files. The data set is abstracted from an internal file used for 
the impact analysis of the changes to the prospective payment systems 
published in the Federal Register. This file is available for release 1 
month after the proposed and final rules are published in the Federal 
Register.

Media: Diskette/Internet
File Cost: $145.00
Periods Available: FY 1999 PPS Update
13. AOR/BOR Tables
    This file contains data used to develop the DRG relative weights. 
It contains mean, maximum, minimum, standard deviation, and coefficient 
of variation statistics by DRG for length of stay and standardized 
charges. The BOR tables are ``Before Outliers Removed'' and the AOR is 
``After Outliers Removed.'' (Outliers refers to statistical outliers, 
not payment outliers.) Two versions of this file are created each year. 
They support the following:
     NPRM published in the Federal Register, usually by the end 
of April.
     Final rule published in the Federal Register, usually by 
the first week of August.

Media: Diskette/Internet
File Cost: $145.00
Periods Available: FY 1999 PPS Update

    For further information concerning these data tapes, contact Mary 
R. White at (410) 786-3691.
    Commenters interested in obtaining or discussing any other data 
used in constructing this rule should contact Stephen Phillips at (410) 
786-4548.

B. Public Comments

    Because of the large number of items of correspondence we normally 
receive on a proposed rule, we are not able to acknowledge or respond 
to them individually. However, in preparing the final rule, we will 
consider all comments concerning the provisions of this proposed rule 
that we receive by the date and time specified in the Dates

[[Page 25605]]

section of this preamble and respond to those comments in the preamble 
to that rule. We emphasize that, given the statutory requirement under 
section 1886(e)(5) of the Act that our final rule for FY 1999 be 
published by August 1, 1998, we will consider only those comments that 
deal specifically with the matters discussed in this proposed rule.

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

42 CFR Part 412

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

42 CFR Part 413

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

    42 CFR Chapter IV would be amended as set forth below:
    A. Part 405 is amended as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

    1. The authority citation for part 405 is revised to read as 
follows:

    Authority: Secs. 1102, 1861, 1862(a), 1871, 1874, 1881, and 
1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 
1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 353 of the Public 
Health Service Act (42 U.S.C. 263a), unless otherwise noted.

Subpart X--Rural Health Clinic and Federally Qualified Health 
Center Services


Sec. 405.2468  [Amended]

    2. In Sec. 405.2468, a new paragraph (f) is added to read as 
follows:
* * * * *
    (f) Graduate medical education. (1) Effective for that portion of 
cost reporting periods occurring on or after January 1, 1999, if an RHC 
or an FQHC incurs ``all or substantially all'' of the costs for the 
training program in the nonhospital setting as defined in 
Sec. 413.86(b) of this chapter, the RHC or FQHC may receive direct 
graduate medical education payment for those residents.
    (2) Direct graduate medical education costs are not included as 
allowable cost under Sec. 405.2466(b)(1)(i); and therefore, are not 
subject to the limit on the all-inclusive rate for allowable costs.
    (3) Allowable graduate medical education costs must be reported on 
the RHC's or the FQHC's cost report under a separate cost center.
    (4) Allowable direct graduate medical education costs under 
paragraphs (f)(5) and (6)(i) of this section, are subject to reasonable 
cost principles under part 413 and the reasonable compensation 
equivalency limits in Secs. 415.60 and 415.70 of this chapter.
    (5) The allowable direct graduate medical education costs are those 
costs incurred by the nonhospital site for the educational activities 
associated with patient care services of an approved program, subject 
to the redistribution and community support principles in 
Sec. 413.85(c).
    (i) The following costs are included in allowable direct graduate 
medical education costs to the extent that they are reasonable--
    (A) The costs of the residents' salaries and fringe benefits 
(including travel and lodging expenses where applicable).
    (B) The portion of teaching physicians' salaries and fringe 
benefits that are related to the time spent teaching and supervising 
residents.
    (C) Facility overhead costs that are allocated to direct graduate 
medical education.
    (ii) The following costs are not included as allowable graduate 
medical education costs--
    (A) Costs associated with training, but not related to patient care 
services.
    (B) Normal operating and capital-related costs.
    (C) The marginal increase in patient care costs that the RHC or 
FQHC experiences as a result of having an approved program.
    (D) The costs associated with activities described in 
Sec. 413.85(d) of this chapter.
    (6) Payment is equal to the product of--
    (i) The RHC's or the FQHC's allowable direct graduate medical 
education costs; and
    (ii) Medicare's share of the direct graduate medical education 
payment which is equal to the ratio of Medicare visits to the total 
number of visits (as defined in Sec. 405.2463).
    (7) Direct graduate medical education payments to RHCs and FQHCs 
made under this section are made from the Federal Supplementary Medical 
Insurance Trust Fund.
* * * * *
    B. Part 412 is amended as set forth below:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

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

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1895hh).

Subpart A--General Provisions

    2. Section 412.4 is revised to read as follows:


Sec. 412.4  Discharges and transfers.

    (a) Discharges. Subject to the provisions of paragraphs (b) and (c) 
of this section, a hospital inpatient is considered discharged from a 
hospital paid under the prospective payment system when --
    (1) The patient is formally released from the hospital; or
    (2) The patient dies in the hospital.
    (b) Transfer--Basic rule. A discharge of a hospital inpatient is 
considered to be a transfer for purposes of payment under this part if 
the discharge is made under any of the following circumstances:
    (1) From a hospital to the care of another hospital that is--
    (i) Paid under the prospective payment system; or
    (ii) Excluded from being paid under the prospective payment system 
because of participation in an approved Statewide cost control program 
as described in subpart C of part 403 of this chapter.
    (2) From one inpatient area or unit of a hospital to another 
inpatient area or unit of the hospital that is paid under the 
prospective payment system.
    (c) Transfers--Special 10 DRG rule. For discharges occurring on or 
after October 1, 1998, a discharge of a hospital inpatient is 
considered to be a transfer for purposes of this part when the 
patient's discharge is assigned, as described in Sec. 412.60(c), to one 
of the qualifying diagnosis-related groups (DRGs) listed in paragraph 
(d) of this section and the discharge is made under any of the 
following circumstances--
    (1) To a hospital or distinct part hospital unit excluded from the 
prospective payment system under subpart B of this part.
    (2) To a skilled nursing facility or to a swing bed in the hospital 
that meets the provisions of Sec. 482.66 of this chapter.
    (3) To home under a written plan of care for the provision of home 
health services from a home health agency and those services begin 
within 3 days after the date of discharge.

[[Page 25606]]

    (d) Qualifying DRGs. The qualifying DRGs for purposes of paragraph 
(c) of this section are DRGs 14, 113, 209, 210, 211, 236, 263, 264, 
429, and 483.
    (e) Payment for discharges. The hospital discharging an inpatient 
(under paragraph (a) of this section) is paid in full, in accordance 
with Sec. 412.2(b).
    (f) Payment for transfers--(1) General rule. Except as provided in 
paragraph (f)(2) or (f)(3) of this section, a hospital that transfers 
an inpatient under the circumstances described in paragraph (b) or (c) 
of this section, is paid a graduated per diem rate for each day of the 
patient's stay in that hospital, not to exceed the amount that would 
have been paid under subparts D and M of this part if the patient had 
been discharged to another setting. The per diem rate is determined by 
dividing the appropriate prospective payment rates (as determined under 
subparts D, and M of this part) by the geometric mean length of stay 
for the specific which the case is assigned. Payment is graduated by 
paying twice the per diem amount for the first day of the stay, and the 
per diem amount for each subsequent day, up to the full DRG payment.
    (2) Special rule for DRGs 209, 210, and 211. A hospital that 
transfers an inpatient under the circumstances described in paragraph 
(c) of this section and the transfer is assigned to DRGs 209, 210 or 
211 is paid as follows:
    (i) 50 percent of the appropriate prospective payment rate (as 
determined under subparts D and M of this part) for the first day of 
the stay; and
    (ii) 50 percent of the per diem amount as calculated under 
paragraph (f)(1) of this section for the remaining days of the stay, up 
to the full DRG payment.
    (3) Transfer assigned to DRG 385. If a transfer is classified into 
DRG No. 385 (Neonates, died or transferred) the transferring hospital 
is paid in accordance with Sec. 412.2(e).
    (4) Outliers. Effective with discharges occurring on or after 
October 1, 1994, a transferring hospital may qualify for an additional 
payment for extraordinarily high-cost cases that meet the criteria for 
cost outliers as described in subpart F of this part.

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

    3. In Sec. 412.106, paragraph (b)(4) is revised to read as follows:


Sec. 412.106  Special treatment: Hospitals that serve a 
disproportionate share of low-income patients.

* * * * *
    (b) * * *
    (4) Second computation. The fiscal intermediary determines, for the 
same cost reporting period used for the first computation, the number 
of the hospital's patient days of service for which patients were 
eligible for Medicaid but not entitled to Medicare Part A, and divides 
that number by the total number of patient days in the same period.
    (i) For purpose of paragraph (b)(4), a patient is deemed eligible 
for Medicaid on a given day if the patient is eligible for medical 
assistance under an approved State Medicaid plan on such day, 
regardless of whether particular items or services were covered or paid 
under the State plan.
    (ii) The hospital has the burden of furnishing data adequate to 
prove eligibility for each Medicaid patient day claimed under this 
paragraph, and of verifying with the State that a patient was eligible 
for Medicaid during each claimed patient hospital day.
* * * * *

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

    4. In Sec. 412.322, a new sentence is added at the end of paragraph 
(a)(3) to read as follows:


Sec. 412.322  Indirect medical education adjustment factor.

    (a) * * *
    (3) * * * This ratio cannot exceed 1.5.
* * * * *
    5. In Sec. 412.331, paragraphs (a) and (b) are redesignated as 
paragraphs (b) and (c) respectively, a new paragraph (a) is added, and 
the first sentences of new paragraphs (b) introductory text and (b)(2) 
are revised to read as follows:


Sec. 412.331  Determining hospital-specific rates in cases of hospital 
merger, consolidation, or dissolution.

    (a) New hospital merger or consolidation. If, after a new hospital 
accepts its first patient but before the end of its base year, it 
merges with one or more existing hospitals, and two or more separately 
located hospital campuses are maintained, hospital specific rate and 
payment determination for the merged entity are determined as follows--
    (1) The ``new'' campus continues to be paid based on reasonable 
costs until the end of its base year. The existing campus remains on 
its previous payment methodology until the end of the new campus' base 
year. Effective with the first cost reporting period beginning after 
the ``new'' campus, the intermediary determines a hospital-specific 
rate applicable to the new campus, and then determines a revised 
hospital-specific rate for the merged entity in accordance with 
paragraph(a) of this section.
    (2) Payment determination. To determine the applicable payment 
methodology under Sec. 412.336 and for payment purposes under 
Sec. 412.340 or Sec. 412.344, the discharge-weighted hospital-specific 
rate is compared to the Federal rate. The revised payment methodology 
is effective on the first day of the cost reporting period beginning 
after the end of the ``new'' campus'' base year.
    (b) Hospital merger or consolidation. If, after the base year, two 
or more hospitals merge or consolidate into one hospital as provided 
for under Sec. 413.134(k) of this chapter and are not subject to the 
provisions of paragraph (a) of this section, the intermediary 
determines a revised hospital-specific rate applicable to the combined 
facility under Sec. 412.328, which is effective beginning with the date 
of merger or consolidation. * * *
    (2) Payment determination. To determine the applicable payment 
methodology under Sec. 412.336 and for payment purposes under 
Sec. 412.340 or Sec. 412.344, the discharge-weighted hospital-specific 
rate is compared to the Federal rate. * * *
* * * * *
    C. Part 413 is amended as set forth below:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED 
PAYMENT FOR SKILLED NURSING FACILITIES

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

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (I) and 
(n), 1861(v), 1871, 1881, 1883, and 1866 of the Social Security Act 
(42 U.S.C. 1302, 1395f(b), 1395g, 1395l, 1395l(a), (I) and (n), 
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww).

Subpart C--Limits on Cost Reimbursement

    2. In Sec. 413.40, paragraph (c)(4)(iv) is redesignated as 
paragraph (v), a new paragraph (iv) is added, and paragraph (g)(1) is 
revised to read as follows:


Sec. 413.40  Ceiling on the rate of increase in hospital inpatient 
costs.

* * * * *
    (c) * * *

[[Page 25607]]

    (4) * * *
    (iv) For purposes of the limits on target amounts established under 
paragraph (c)(4)(iii) of this section, each hospital or unit that was 
excluded from the prospective payment system for its cost reporting 
period ending during FY 1996 will be classified in the same way (that 
is, as a psychiatric hospital or unit, or a long-term care hospital) as 
it was classified under subpart B of part 412 of this chapter for 
purposes of exclusion from prospective payment systems for its cost 
reporting period ending during FY 1996. If a hospital or unit was not 
excluded from the prospective payment system for a cost reporting 
period ending during FY 1996 but could qualify to be classified in more 
than one way under the exclusion criteria in subpart B of part 412 of 
this chapter, the hospital is assigned to the classification group that 
has the lowest limit on its target amounts.
* * * * *
    (g) Adjustments--(1) General rule. HCFA may adjust the amount of 
the operating costs considered in establishing the rate-of-increase 
ceiling for one or more cost reporting periods, including both periods 
subject to the ceiling and the hospital's base period, under the 
circumstances specified below. When an adjustment is requested by the 
hospital, HCFA makes an adjustment only to the extent that the 
hospital's operating costs are reasonable, attributable to the 
circumstances specified separately identified by the hospital, and 
verified by the intermediary. HCFA may grant an adjustment requested by 
the hospital only if the hospital's operating costs exceed the rate-of-
increase ceiling imposed under this section. In the case of a 
psychiatric hospital or unit, rehabilitation hospital or unit, or long 
term care hospital, the amount of payment made to a hospital after an 
adjustment under paragraph (g)(3) of this section may not exceed the 
75th percentile of the target amounts for hospitals of the same class 
as described in Sec. 413.40(c)(4)(iii).

Subpart F--Specific Categories of Costs

    3. In Sec. 413.80, paragraph (h) is redesignated as paragraph (i), 
and a new paragraph (h) is added to read as follows:


Sec. 413.80  Bad debts, charity, and courtesy allowances.

* * * * *
    (h) Limitations on bad debts. In determining reasonable costs for 
hospitals, the amount of bad debts otherwise treated as allowable costs 
(as defined in paragraph (e) of this section) is reduced--
    (1) For cost reporting periods beginning during fiscal year 1998, 
by 25 percent;
    (2) For cost reporting periods beginning during fiscal year 1999, 
by 40 percent; and
    (3) For cost reporting periods beginning during a subsequent fiscal 
year, by 45 percent.
* * * * *
    4. In Sec. 413.85, a new paragraph (h) is added to read as follows:


Sec. 413.85  Cost of educational activities.

* * * * *
    (h) Medicare+Choice organizations. (1) Effective for that portion 
of cost reporting periods occurring on or after January 1, 1999, 
Medicare+Choice organizations may receive direct graduate medical 
education payments for the time that residents spend in nonhospital 
provider settings such as freestanding clinics, nursing homes, and 
physicians' offices in connection with approved programs.
    (2) Medicare+Choice organizations may receive direct graduate 
medical education payments if all of the following conditions are met--
    (i) The resident spends his or her time in patient care activities.
    (ii) The Medicare+Choice organization incurs ``all or substantially 
all'' of the costs for the training program in the nonhospital setting 
as defined in Sec. 413.86(b).
    (iii) There is a written agreement between the Medicare+Choice 
organization and the nonhospital provider that contains--
    (A) A statement by the nonhospital provider that, all or 
substantially all of the direct graduate medical education costs as 
defined in paragraph (f)(1)(ii) of this section are being assumed by 
the Medicare+Choice organization;
    (B) A statement that the nonhospital site agrees to offset the 
revenue received from the Medicare+Choice organization.
    (C) A statement that the nonhospital site agrees to report its 
direct graduate medical education costs in a nonreimbursable cost 
center on its cost report; and
    (D) A statement indicating how much time the teaching physicians 
will spend training residents in the nonhospital setting, subject to 
the provisions of Secs. 415.60 and 415.70 of this chapter.
    (3) A Medicare+Choice organization's allowable direct graduate 
medical education costs, subject to the redistribution and community 
support principles in Sec. 413.85(c), consist of--
    (i) Residents' salaries and fringe benefits (including travel and 
lodging where applicable); and
    (ii) The portion of teaching physicians' salaries and fringe 
benefits that are related to the time spent in teaching and supervising 
residents.
    (4) Allowable direct graduate medical education costs under 
paragraph (h)(3) of this section are subject to the reasonable cost 
principles of part 413 and the reasonable compensation equivalency 
limits in Secs. 415.60 and 415.70 of this chapter.
    (5) The direct graduate medical education payment is equal to the 
product of--
    (i) The Medicare+Choice organization's allowable direct graduate 
medical education costs as defined in paragraph (h)(3) of this section; 
and
    (ii) Medicare's share of the Medicare+Choice organization's direct 
graduate medical education payment in the nonhospital site which is 
equal to the ratio of the number of Medicare beneficiaries enrolled to 
the total number of individuals enrolled in the Medicare+Choice 
organization.
    (6) Direct graduate medical education payments made to 
Medicare+Choice organizations under this section are made from the 
Federal Supplementary Medical Insurance Trust Fund.
* * * * *
    5. In Sec. 413.86, the introductory text of paragraph (b) is 
republished, a new definition in alphabetical order is added to 
paragraph (b), paragraphs (i) and (j) are redesignated as paragraphs 
(j) and (k) respectively, paragraph (f)(2) is redesignated as new 
paragraph (i), paragraphs (f)(2)(i) through (vii) are redesignated as 
paragraphs (i)(1) through (7) respectively, the introductory text of 
paragraph (f)(1) is redesignated as the introductory text of paragraph 
(f), paragraphs (f)(1)(i) through (iii) are redesignated as paragraphs 
(f)(1) through (3) respectively, paragraphs (f)(1)(iii)(A) and (B) are 
redesignated as (f)(3)(i) and (ii) respectively, new paragraph (f)(2) 
and the introductory text of new paragraph (f)(3) are revised, and a 
new paragraph (f)(4) is added to read as follows:


Sec. 413.86  Direct graduate medical education payments.

* * * * *
    (b) Definitions. For purposes of this section, the following 
definitions apply:
* * * * *
    All or substantially all of the costs for the training program in 
the nonhospital setting means the residents' salaries and fringe 
benefits (including travel and lodging where applicable) and the

[[Page 25608]]

portion of the cost of teaching physicians' salaries and fringe 
benefits.
* * * * *
    (f) * * *
    (2) No individual may be counted as more than one FTE. If a 
resident spends time in more than one hospital or, except as provided 
in paragraphs (f)(3) and (4) of this section, in a nonprovider setting, 
the resident counts as partial FTE based on the proportion of time 
worked at the hospital to the total time worked. A part-time resident 
counts as a partial FTE based on the proportion of allowable time 
worked compared to the total time necessary to fill a full-time 
internship or residency slot.
    (3) On or after July 1, 1987 and for the portion of the cost 
reporting period ocurring before January 1, 1999, the time residents 
spend in nonprovider settings such as freestanding clinics, nursing 
homes, and physicians' offices in connection with approved programs is 
not excluded in determining the number of FTE residents in the 
calculation of a hospital's resident count if the following conditions 
are met--
* * * * *
    (4) On or after July 1, 1987 and for the portion cost reporting 
period occurring on or after January 1, 1999, the time residents spend 
in nonprovider settings such as freestanding clinics, nursing homes, 
and physicians' offices in connection with approved programs is not 
excluded in determining the number of FTE residents in the calculation 
of a hospital's resident count if the following conditions are met--
    (i) The resident spends his or her time in patient care activities.
    (ii) The written agreement between the hospital and the nonhospital 
provider must contain--
    (A) A statement by the nonhospital provider that, all or 
substantially all of the direct graduate medical education costs as 
defined in paragraph (b) of this section are being assumed by the 
hospital;
    (B) A statement that the nonhospital site agrees to offset the 
revenue received from the hospital;
    (C) A statement that the nonhospital site agrees to report its 
direct graduate medical education costs on its cost report in a 
graduate medical education cost center; and
    (D) A statement indicating how much time the teaching physicians 
will spend training residents in the nonhospital setting, subject to 
the provisions of Secs. 415.60 and 415.70 of this chapter.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance)

    Dated: April 28, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Dated: May 1, 1998.
Donna E. Shalala,
Secretary.

[Editorial Note: The following addendum and appendixes will not 
appear in the Code of Federal Regulations.]

Addendum--Proposed Schedule of Standardized Amounts Effective With 
Discharges Occurring On or After October 1, 1998 and Update Factors and 
Rate-of-Increase Percentages Effective With Cost Reporting Periods 
Beginning On or After October 1, 1998

I. Summary and Background

    In this addendum, we are setting forth the proposed amounts and 
factors for determining prospective payment rates for Medicare 
inpatient operating costs and Medicare inpatient capital-related costs. 
We are also setting forth proposed rate-of-increase percentages for 
updating the target amounts for hospitals and hospital units excluded 
from the prospective payment system.
    For discharges occurring on or after October 1, 1998, except for 
sole community hospitals, Medicare-dependent, small rural hospitals, 
and hospitals located in Puerto Rico, each hospital's payment per 
discharge under the prospective payment system will be based on 100 
percent of the Federal national rate.
    Sole community hospitals are paid based on whichever of the 
following rates yield the greatest aggregate payment: The Federal 
national rate, the updated hospital-specific rate based on FY 1982 cost 
per discharge, or the updated hospital-specific rate based on FY 1987 
cost per discharge. Medicare-dependent, small rural hospitals are paid 
based on the Federal national rate or, if higher, the Federal national 
rate plus 50 percent of the difference between the Federal national 
rate and the updated hospital-specific rate based on FY 1982 or FY 1987 
cost per discharge, whichever is higher. For hospitals in Puerto Rico, 
the payment per discharge is based on the sum of 50 percent of a Puerto 
Rico rate and 50 percent of a national rate.
    As discussed below in section II, we are proposing to make changes 
in the determination of the prospective payment rates for Medicare 
inpatient operating costs. The changes, to be applied prospectively, 
would affect the calculation of the Federal rates. In section III of 
this addendum, we discuss our proposed changes for determining the 
prospective payment rates for Medicare inpatient capital-related costs. 
Section IV of this addendum sets forth our proposed changes for 
determining the rate-of-increase limits for hospitals excluded from the 
prospective payment system. The tables to which we refer in the 
preamble to the proposed rule are presented at the end of this addendum 
in section V.

II. Proposed Changes to Prospective Payment Rates for Inpatient 
Operating Costs for FY 1999

    The basic methodology for determining prospective payment rates for 
inpatient operating costs is set forth at Sec. 412.63 for hospitals 
located outside of Puerto Rico. The basic methodology for determining 
the prospective payment rates for inpatient operating costs for 
hospitals located in Puerto Rico is set forth at Secs. 412.210 and 
412.212. Below, we discuss the proposed factors used for determining 
the prospective payment rates. The Federal and Puerto Rico rate 
changes, once issued as final, would be effective with discharges 
occurring on or after October 1, 1998. As required by section 
1886(d)(4)(C) of the Act, we must also adjust the DRG classifications 
and weighting factors for discharges in FY 1999.
    In summary, the proposed standardized amounts set forth in Tables 
1A and 1C of section V of this addendum reflect--
     Updates of 0.7 percent for all areas (that is, the market 
basket percentage increase of 2.6 percent minus 1.9 percentage points);
     An adjustment to ensure budget neutrality as provided for 
in sections 1886(d)(4)(C)(iii) and (d)(3)(E) of the Act by applying new 
budget neutrality adjustment factors to the large urban and other 
standardized amounts;
     An adjustment to ensure budget neutrality as provided for 
in section 1886(d)(8)(D) of the Act by removing the FY 1998 budget 
neutrality factor and applying a revised factor;
     An adjustment to apply the revised outlier offset by 
removing the FY 1998 outlier offsets and applying a new offset; and
     An adjustment in the Puerto Rico standardized amounts to 
reflect the application of a Puerto Rico-specific wage index.
    The standardized amounts set forth in Tables 1E and 1F of section V 
of this addendum, which apply to ``temporary relief'' hospitals (see 62 
FR 46001 for a discussion of these hospitals), reflect updates of 1.0 
percent for all areas but otherwise reflect the same adjustments

[[Page 25609]]

as the national standardized amounts. As described in Sec. 412.107, 
these hospitals receive an update that is 0.3 percentage points more 
than the update factor applicable to all other prospective payment 
hospitals for FY 1999.

A. Calculation of Adjusted Standardized Amounts

1. Standardization of Base-Year Costs or Target Amounts
    Section 1886(d)(2)(A) of the Act required the establishment of 
base-year cost data containing allowable operating costs per discharge 
of inpatient hospital services for each hospital. The preamble to the 
September 1, 1983 interim final rule (48 FR 39763) contains a detailed 
explanation of how base-year cost data were established in the initial 
development of standardized amounts for the prospective payment system 
and how they are used in computing the Federal rates.
    Section 1886(d)(9)(B)(i) of the Act required that Medicare target 
amounts be determined for each hospital located in Puerto Rico for its 
cost reporting period beginning in FY 1987. The September 1, 1987 final 
rule contains a detailed explanation of how the target amounts were 
determined and how they are used in computing the Puerto Rico rates (52 
FR 33043, 33066).
    The standardized amounts are based on per discharge averages of 
adjusted hospital costs from a base period or, for Puerto Rico, 
adjusted target amounts from a base period, updated and otherwise 
adjusted in accordance with the provisions of section 1886(d) of the 
Act. Sections 1886(d)(2)(B) and (C) of the Act required that the base-
year per discharge costs be updated for FY 1984 and then standardized 
in order to remove from the cost data the effects of certain sources of 
variation in cost among hospitals. These include case mix, differences 
in area wage levels, cost of living adjustments for Alaska and Hawaii, 
indirect medical education costs, and payments to hospitals serving a 
disproportionate share of low-income patients.
    Under sections 1886(d)(2)(H) and (d)(3)(E) of the Act, in making 
payments under the prospective payment system, the Secretary estimates 
from time to time the proportion of costs that are wages and wage-
related costs. Since October 1, 1997, when the market basket was last 
revised, we have considered 71.1 percent of costs to be labor-related 
for purposes of the prospective payment system. We are revising the 
Puerto Rico standardized amounts by the average labor share in Puerto 
Rico of 71.3 percent. We are revising the discharge-weighted national 
standardized amount for Puerto Rico to reflect the proportion of 
discharges in large urban and other areas from the FY 1997 MedPAR file.
2. Computing Large Urban and Other Area Averages
    Sections 1886(d) (2)(D) and (3) of the Act require the Secretary to 
compute two average standardized amounts for discharges occurring in a 
fiscal year: One for hospitals located in large urban areas and one for 
hospitals located in other areas. In addition, under sections 
1886(d)(9)(B)(iii) and (C)(i) of the Act, the average standardized 
amount per discharge must be determined for hospitals located in urban 
and other areas in Puerto Rico. Hospitals in Puerto Rico are paid a 
blend of 50 percent of the applicable Puerto Rico standardized amount 
and 50 percent of a national standardized payment amount.
    Section 1886(d)(2)(D) of the Act defines ``urban area'' as those 
areas within a Metropolitan Statistical Area (MSA). A ``large urban 
area'' is defined as an urban area with a population of more than 
1,000,000. In addition, section 4009(i) of Public Law 100-203 provides 
that a New England County Metropolitan Area (NECMA) with a population 
of more than 970,000 is classified as a large urban area. As required 
by section 1886(d)(2)(D) of the Act, population size is determined by 
the Secretary based on the latest population data published by the 
Bureau of the Census. Urban areas that do not meet the definition of a 
``large urban area'' are referred to as ``other urban areas.'' Areas 
that are not included in MSAs are considered ``rural areas'' under 
section 1886(d)(2)(D) of the Act. Payment for discharges from hospitals 
located in large urban areas will be based on the large urban 
standardized amount. Payment for discharges from hospitals located in 
other urban and rural areas will be based on the other standardized 
amount.
    Based on 1996 population estimates published by the Bureau of the 
Census, 60 areas meet the criteria to be defined as large urban areas 
for FY 1999. These areas are identified by a footnote in Table 4A.
3. Updating the Average Standardized Amounts
    Under section 1886(d)(3)(A) of the Act, we update the area average 
standardized amounts each year. In accordance with section 
1886(d)(3)(A)(iv) of the Act, we are proposing to update the large 
urban and the other areas average standardized amounts for FY 1999 
using the applicable percentage increases specified in section 
1886(b)(3)(B)(i) of the Act. Section 1886(b)(3)(B)(i)(XIV) of the Act 
specifies that, for hospitals in all areas, the update factor for the 
standardized amounts for FY 1999 is equal to the market basket 
percentage increase minus 1.9 percentage points. The ``temporary 
relief'' provision under section 4401 of Public Law 105-33 provides for 
an update equal to the market basket percentage increase minus 1.6 
percentage points for hospitals that are not Medicare-dependent, small 
rural hospitals, that receive no IME or DSH payments, that are located 
in a state in which aggregate Medicare operating payments for such 
hospitals were less than their aggregate allowable Medicare operating 
costs for their cost reporting periods beginning during FY 1995, and 
whose Medicare operating payments are less than their allowable 
Medicare operating costs for their cost reporting period beginning 
during FY 1999.
    The percentage change in the market basket reflects the average 
change in the price of goods and services purchased by hospitals to 
furnish inpatient care. The most recent forecast of the proposed 
hospital market basket increase for FY 1999 is 2.6 percent. Thus, for 
FY 1999, the proposed update to the average standardized amounts equals 
0.7 percent (1.0 percent for those hospitals qualifying under the 
``temporary relief'' provision of Public Law 105-33).
    As in the past, we are adjusting the FY 1998 standardized amounts 
to remove the effects of the FY 1998 geographic reclassifications and 
outlier payments before applying the FY 1999 updates. That is, we are 
increasing the standardized amounts to restore the reductions that were 
made for the effects of geographic reclassification and outliers. We 
then apply the new offsets to the standardized amounts for outliers and 
geographic reclassifications for FY 1999.
    Although the update factor for FY 1999 is set by law, we are 
required by section 1886(e)(3) of the Act to report to Congress on our 
initial recommendation of update factors for FY 1999 for both 
prospective payment hospitals and hospitals excluded from the 
prospective payment system. For general information purposes, we have 
included the report to Congress as Appendix C to this proposed rule. 
Our proposed recommendation on the update factors (which is required by 
sections 1886(e)(4)(A) and (e)(5)(A) of the Act), as well as our 
responses to MedPAC's recommendation concerning the update factor, are 
set forth as Appendix D to this proposed rule.

[[Page 25610]]

4. Other Adjustments to the Average Standardized Amounts
    a. Recalibration of DRG Weights and Updated Wage Index--Budget 
Neutrality Adjustment. Section 1886(d)(4)(C)(iii) of the Act specifies 
that beginning in FY 1991, the annual DRG reclassification and 
recalibration of the relative weights must be made in a manner that 
ensures that aggregate payments to hospitals are not affected. As 
discussed in section II of the preamble, we normalized the recalibrated 
DRG weights by an adjustment factor, so that the average case weight 
after recalibration is equal to the average case weight prior to 
recalibration.
    Section 1886(d)(3)(E) of the Act specifies that the hospital wage 
index must be updated on an annual basis beginning October 1, 1993. 
This provision also requires that any updates or adjustments to the 
wage index must be made in a manner that ensures that aggregate 
payments to hospitals are not affected by the change in the wage index.
    To comply with the requirement of section 1886(d)(4)(C)(iii) of the 
Act that DRG reclassification and recalibration of the relative weights 
be budget neutral, and the requirement in section 1886(d)(3)(E) of the 
Act that the updated wage index be budget neutral, we used historical 
discharge data to simulate payments and compared aggregate payments 
using the FY 1998 relative weights and wage index to aggregate payments 
using the proposed FY 1999 relative weights and wage index. The same 
methodology was used for the FY 1998 budget neutrality adjustment. (See 
the discussion in the September 1, 1992 final rule (57 FR 39832).) 
Based on this comparison, we computed a budget neutrality adjustment 
factor equal to 0.999227. We adjust the Puerto Rico-specific 
standardized amounts for the effect of DRG reclassification and 
recalibration. We computed a budget neutrality adjustment factor for 
Puerto Rico-specific standardized amounts equal to 0.998946. These 
budget neutrality adjustment factors are applied to the standardized 
amounts without removing the effects of the FY 1998 budget neutrality 
adjustments. We do not remove the prior budget neutrality adjustment 
because estimated aggregate payments after the changes in the DRG 
relative weights and wage index should equal estimated aggregate 
payments prior to the changes. If we removed the prior year adjustment, 
we would not satisfy this condition.
    In addition, we are proposing to continue to apply the same FY 1999 
adjustment factor to the hospital-specific rates that are effective for 
cost reporting periods beginning on or after October 1, 1998, in order 
to ensure that we meet the statutory requirement that aggregate 
payments neither increase nor decrease as a result of the 
implementation of the FY 1999 DRG weights and updated wage index. (See 
the discussion in the September 4, 1990 final rule (55 FR 36073).)
    b. Reclassified Hospitals--Budget Neutrality Adjustment. Section 
1886(d)(8)(B) of the Act provides that certain rural hospitals are 
deemed urban effective with discharges occurring on or after October 1, 
1988. In addition, section 1886(d)(10) of the Act provides for the 
reclassification of hospitals based on determinations by the Medicare 
Geographic Classification Review Board (MGCRB). Under section 
1886(d)(10) of the Act, a hospital may be reclassified for purposes of 
the standardized amount or the wage index, or both.
    Under section 1886(d)(8)(D) of the Act, the Secretary is required 
to adjust the standardized amounts so as to ensure that total aggregate 
payments under the prospective payment system after implementation of 
the provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the 
Act are equal to the aggregate prospective payments that would have 
been made absent these provisions. To calculate this budget neutrality 
factor, we used historical discharge data to simulate payments, and 
compared total prospective payments (including IME and DSH payments) 
prior to any reclassifications to total prospective payments after 
reclassifications. We are applying an adjustment factor of 0.994019 to 
ensure that the effects of reclassification are budget neutral.
    The adjustment factor is applied to the standardized amounts after 
removing the effects of the FY 1998 budget neutrality adjustment 
factor. We note that the proposed FY 1999 adjustment reflects wage 
index and standardized amount reclassifications approved by the MGCRB 
or the Administrator as of February 27, 1998. The effects of any 
additional reclassification changes resulting from appeals and reviews 
of the MGCRB decisions for FY 1999 or from a hospital's request for the 
withdrawal of a reclassification request will be reflected in the final 
budget neutrality adjustment required under section 1886(d)(8)(D) of 
the Act and published in the final rule for FY 1999.
    c. Outliers. Section 1886(d)(5)(A) of the Act provides for payments 
in addition to the basic prospective payments for ``outlier'' cases, 
cases involving extraordinarily high costs (cost outliers). Section 
1886(d)(3)(B) of the Act requires the Secretary to adjust both the 
large urban and other area national standardized amounts by the same 
factor to account for the estimated proportion of total DRG payments 
made to outlier cases. Similarly, section 1886(d)(9)(B)(iv) of the Act 
requires the Secretary to adjust the large urban and other standardized 
amounts applicable to hospitals in Puerto Rico to account for the 
estimated proportion of total DRG payments made to outlier cases. 
Furthermore, under section 1886(d)(5)(A)(iv) of the Act, outlier 
payments for any year must be projected to be not less than 5 percent 
nor more than 6 percent of total payments based on DRG prospective 
payment rates.
    For FY 1998, the fixed loss cost outlier threshold is equal to the 
prospective payment for the DRG plus $11,050 ($10,080 for hospitals 
that have not yet entered the prospective payment system for capital-
related costs). The marginal cost factor for cost outliers (the percent 
of costs paid after costs for the case exceed the threshold) is 80 
percent. We applied an outlier adjustment to the FY 1998 standardized 
amounts of 0.948840 for the large urban and other areas rates and 
0.9382 for the capital Federal rate.
    We are proposing a fixed loss cost outlier threshold in FY 1999 
equal to the prospective payment rate for the DRG plus $11,350 ($10,355 
for hospitals that have not yet entered the prospective payment system 
for capital-related costs). In addition, we are proposing to maintain 
the marginal cost factor for cost outliers at 80 percent.
    In accordance with section 1886(d)(5)(A)(iv) of the Act, we 
calculated proposed outlier thresholds so that outlier payments are 
projected to equal 5.1 percent of total payments based on DRG 
prospective payment rates. In accordance with section 1886(d)(3)(E), we 
reduced the proposed FY 1999 standardized amounts by the same 
percentage to account for the projected proportion of payments paid to 
outliers.
    As stated in the September 1, 1993 final rule (58 FR 46348), we 
establish outlier thresholds that are applicable to both inpatient 
operating costs and inpatient capital-related costs. When we modeled 
the combined operating and capital outlier payments, we found that 
using a common set of thresholds resulted in a higher percentage of 
outlier payments for capital-related costs than for operating costs. We 
project that the proposed thresholds for FY 1999 will result in outlier 
payments equal to 5.1

[[Page 25611]]

percent of operating DRG payments and 6.2 percent of capital payments 
based on the Federal rate.
    The proposed outlier adjustment factors applied to the standardized 
amounts for FY 1999 are as follows:

------------------------------------------------------------------------
                                             Operating                  
                                           standardized       Capital   
                                              amounts      federal rate 
------------------------------------------------------------------------
National................................        0.948819          0.9378
Puerto Rico.............................        0.972962          0.9626
------------------------------------------------------------------------

    We apply the proposed outlier adjustment factors after removing the 
effects of the FY 1998 outlier adjustment factors on the standardized 
amounts.
    Table 8A in section V of this addendum contains the updated 
Statewide average operating cost-to-charge ratios for urban hospitals 
and for rural hospitals to be used in calculating cost outlier payments 
for those hospitals for which the intermediary is unable to compute a 
reasonable hospital-specific cost-to-charge ratio. These Statewide 
average ratios would replace the ratios published in the August 29, 
1997 final rule with comment period (62 FR 46113), effective October 1, 
1998. Table 8B contains comparable Statewide average capital cost-to-
charge ratios. These average ratios would be used to calculate cost 
outlier payments for those hospitals for which the intermediary 
computes operating cost-to-charge ratios lower than 0.217279 or greater 
than 1.28985 and capital cost-to-charge ratios lower than 0.01281 or 
greater than 0.18084. This range represents 3.0 standard deviations 
(plus or minus) from the mean of the log distribution of cost-to-charge 
ratios for all hospitals. We note that the cost-to-charge ratios in 
Tables 8A and 8B would be used during FY 1999 when hospital-specific 
cost-to-charge ratios based on the latest settled cost report are 
either not available or outside the three standard deviations range.
    In the August 29, 1997 final rule with comment period (62 FR 
46041), we stated that, based on available data, we estimated that 
actual FY 1997 outlier payments would be approximately 4.8 percent of 
actual total DRG payments. This was computed by simulating payments 
using actual FY 1996 bill data available at the time. That is, the 
estimate of actual outlier payments did not reflect actual FY 1997 
bills but instead reflected the application of FY 1997 rates and 
policies to available FY 1996 bills. Our current estimate, using 
available FY 1997 bills, is that actual outlier payments for FY 1997 
were approximately 5.5 percent of actual total DRG payments. We note 
that the MedPAR file for FY 1997 discharges continues to be updated.
    We currently estimate that actual outlier payments for FY 1998 will 
be approximately 5.4 percent of actual total DRG payments, slightly 
higher than the 5.1 percent we projected in setting outlier policies 
for FY 1998. This estimate is based on simulations using the December 
1997 update of the provider-specific file and the December 1997 update 
of the FY 1997 MedPAR file (discharge data for FY 1997 bills). We used 
these data to calculate an estimate of the actual outlier percentage 
for FY 1998 by applying FY 1998 rates and policies to available FY 1997 
bills.
    In FY 1994, we began using a cost inflation factor rather than a 
charge inflation factor to update billed charges for purposes of 
estimating outlier payments. This refinement was made to improve our 
estimation methodology. For FY 1998, we used a cost inflation factor of 
minus 2.005 percent (a cost per case decrease of 2.005 percent). For FY 
1999, based on more recent data, we are proposing a cost inflation 
factor of minus 1.831 percent to set outlier thresholds. We will 
reevaluate this factor when we develop the final rule for FY 1999. At 
that time, more recent data should be available for analysis, 
specifically, cost report data for cost reporting periods beginning in 
FY 1997.
5. FY 1999 Standardized Amounts
    The adjusted standardized amounts are divided into labor and 
nonlabor portions. Table 1A (Table 1E for ``temporary relief'' 
hospitals) contains the two national standardized amounts that we are 
proposing to be applicable to all hospitals, except for hospitals in 
Puerto Rico. Under section 1886(d)(9)(A)(ii) of the Act, the Federal 
portion of the Puerto Rico payment rate is based on the discharge-
weighted average of the national large urban standardized amount and 
the national other standardized amount (as set forth in Table 1A and 
1E). The labor and nonlabor portions of the national average 
standardized amounts for Puerto Rico hospitals are set forth in Table 
1C (Table 1F for ``temporary relief'' hospitals). These tables also 
include the Puerto Rico standardized amounts.

B. Adjustments for Area Wage Levels and Cost of Living

    Tables 1A, 1C, 1E and 1F, as set forth in this addendum, contain 
the proposed labor-related and nonlabor-related shares that would be 
used to calculate the prospective payment rates for hospitals located 
in the 50 States, the District of Columbia, and Puerto Rico. This 
section addresses two types of adjustments to the standardized amounts 
that are made in determining the prospective payment rates as described 
in this addendum.
1. Adjustment for Area Wage Levels
    Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require 
that an adjustment be made to the labor-related portion of the 
prospective payment rates to account for area differences in hospital 
wage levels. This adjustment is made by multiplying the labor-related 
portion of the adjusted standardized amounts by the appropriate wage 
index for the area in which the hospital is located. In section III of 
the preamble, we discuss certain revisions we are making to the wage 
index. The wage index is set forth in Tables 4A through 4F of this 
addendum.
2. Adjustment for Cost of Living in Alaska and Hawaii
    Section 1886(d)(5)(H) of the Act authorizes an adjustment to take 
into account the unique circumstances of hospitals in Alaska and 
Hawaii. Higher labor-related costs for these two States are taken into 
account in the adjustment for area wages described above. For FY 1999, 
we propose to adjust the payments for hospitals in Alaska and Hawaii by 
multiplying the nonlabor portion of the standardized amounts by the 
appropriate adjustment factor contained in the table below. If the 
Office of Personnel Management releases revised cost-of-living 
adjustment factors before July 1, 1998, we will publish them in the 
final rule and use them in determining FY 1999 payments.

 Table of Cost-of-Living Adjustment Factors, Alaska and Hawaii Hospitals
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Alaska--All areas................................................  1.25 
Hawaii:                                                                 
  County of Honolulu.............................................  1.225
  County of Hawaii...............................................  1.15 
  County of Kauai................................................  1.225
  County of Maui.................................................  1.225
  County of Kalawao..............................................  1.225
------------------------------------------------------------------------

    (The above factors are based on data obtained from the U.S. Office 
of Personnel Management.)

C. DRG Relative Weights

    As discussed in section II of the preamble, we have developed a 
classification system for all hospital discharges, assigning them into 
DRGs, and have developed relative weights for each DRG that reflect the 
resource utilization of cases in each DRG relative

[[Page 25612]]

to Medicare cases in other DRGs. Table 5 of section V of this addendum 
contains the relative weights that we propose to use for discharges 
occurring in FY 1999. These factors have been recalibrated as explained 
in section II of the preamble.

D. Calculation of Prospective Payment Rates for FY 1999

    General Formula for Calculation of Prospective Payment Rates for FY 
1999
    Prospective payment rate for all hospitals located outside of 
Puerto Rico except sole community hospitals and Medicare-dependent, 
small rural hospitals = Federal rate.
    Prospective payment rate for sole community hospitals = Whichever 
of the following rates yields the greatest aggregate payment: 100 
percent of the Federal rate, 100 percent of the updated FY 1982 
hospital-specific rate, or 100 percent of the updated FY 1987 hospital-
specific rate.
    Prospective payment rate for Medicare-dependent, small rural 
hospitals = 100 percent of the Federal rate plus, if the greater of the 
updated FY 1982 hospital-specific rate or the updated FY 1987 hospital-
specific rate is higher than the Federal rate, 50 percent of the 
difference between the applicable hospital-specific rate and the 
Federal rate.
    Prospective payment rate for Puerto Rico = 50 percent of the Puerto 
Rico rate + 50 percent of a discharge-weighted average of the national 
large urban standardized amount and the national other standardized 
amount.
1. Federal Rate
    For discharges occurring on or after October 1, 1998 and before 
October 1, 1999, except for sole community hospitals, Medicare-
dependent, small rural hospitals, and hospitals in Puerto Rico, the 
hospital's payment is based exclusively on the Federal national rate.
    The payment amount is determined as follows:
    Step 1--Select the appropriate national standardized amount 
considering the type of hospital and designation of the hospital as 
large urban or other (see Tables 1A or 1E, in section V of this 
addendum).
    Step 2--Multiply the labor-related portion of the standardized 
amount by the applicable wage index for the geographic area in which 
the hospital is located (see Tables 4A, 4B, and 4C of section V of this 
addendum).
    Step 3--For hospitals in Alaska and Hawaii, multiply the nonlabor-
related portion of the standardized amount by the appropriate cost-of-
living adjustment factor.
    Step 4--Add the amount from Step 2 and the nonlabor-related portion 
of the standardized amount (adjusted if appropriate under Step 3).
    Step 5--Multiply the final amount from Step 4 by the relative 
weight corresponding to the appropriate DRG (see Table 5 of section V 
of this addendum).
2. Hospital-Specific Rate (Applicable Only to Sole Community Hospitals 
and Medicare-Dependent, Small Rural Hospitals)
    Sections 1886(d)(5)(D)(i) and (b)(3)(C) of the Act provide that 
sole community hospitals are paid based on whichever of the following 
rates yields the greatest aggregate payment: the Federal rate, the 
updated hospital-specific rate based on FY 1982 cost per discharge, or 
the updated hospital-specific rate based on FY 1987 cost per discharge.
    Sections 1886(d)(5)(G) and (b)(3)(D) of the Act provide that 
Medicare-dependent, small rural hospitals are paid based on whichever 
of the following rates yields the greatest aggregate payment: the 
Federal rate or the Federal rate plus 50 percent of the difference 
between the Federal rate and the greater of the updated hospital-
specific rate based on FY 1982 and FY 1987 cost per discharge.
    Hospital-specific rates have been determined for each of these 
hospitals based on both the FY 1982 cost per discharge and the FY 1987 
cost per discharge. For a more detailed discussion of the calculation 
of the FY 1982 hospital-specific rate and the FY 1987 hospital-specific 
rate, we refer the reader to the September 1, 1983 interim final rule 
(48 FR 39772); the April 20, 1990 final rule with comment (55 FR 
15150); and the September 4, 1990 final rule (55 FR 35994).
    a. Updating the FY 1982 and FY 1987 Hospital-Specific Rates for FY 
1999. We are proposing to increase the hospital-specific rates by 0.7 
percent (the hospital market basket percentage increase of 2.6 percent 
minus 1.9 percentage points) for sole community hospitals and Medicare-
dependent, small rural hospitals located in all areas for FY 1999. 
Section 1886(b)(3)(C)(iv) of the Act provides that the update factor 
applicable to the hospital-specific rates for sole community hospitals 
equals the update factor provided under section 1886(b)(3)(B)(iv) of 
the Act, which, for FY 1999, is the market basket rate of increase 
minus 1.9 percentage points. Section 1886(b)(3)(D) of the Act provides 
that the update factor applicable to the hospital-specific rates for 
Medicare-dependent, small rural hospitals equals the update factor 
provided under section 1886(b)(3)(B)(iv) of the Act, which, for FY 
1999, is the market basket rate of increase minus 1.9 percentage 
points.
    b. Calculation of Hospital-Specific Rate. For sole community 
hospitals and Medicare-dependent, small rural hospitals, the applicable 
FY 1999 hospital-specific rate would be calculated by increasing the 
hospital's hospital-specific rate for the preceding fiscal year by the 
applicable update factor (0.7 percent), which is the same as the update 
for all prospective payment hospitals except ``temporary relief'' 
hospitals. In addition, the hospital-specific rate would be adjusted by 
the budget neutrality adjustment factor (that is, 0.999227) as 
discussed in section II.A.4.a of this Addendum. This resulting rate 
would be used in determining under which rate a sole community hospital 
or Medicare-dependent, small rural hospital is paid for its discharges 
beginning on or after October 1, 1998, based on the formula set forth 
above.
3. General Formula for Calculation of Prospective Payment Rates for 
Hospitals Located in Puerto Rico Beginning On or After October 1, 1998 
and Before October 1, 1999.
    a. Puerto Rico Rate. The Puerto Rico prospective payment rate is 
determined as follows:
    Step 1--Select the appropriate adjusted average standardized amount 
considering the large urban or other designation of the hospital (see 
Table 1C or 1F of section V of the addendum).
    Step 2--Multiply the labor-related portion of the standardized 
amount by the appropriate Puerto Rico-specific wage index (see Table 4F 
of section V of the addendum).
    Step 3--Add the amount from Step 2 and the nonlabor-related portion 
of the standardized amount.
    Step 4--Multiply the result in Step 3 by 50 percent.
    Step 5--Multiply the amount from Step 4 by the appropriate DRG 
relative weight (see Table 5 of section V of the addendum).
    b. National Rate. The national prospective payment rate is 
determined as follows:
    Step 1--Multiply the labor-related portion of the national average 
standardized amount (see Table 1C or 1F of section V of the addendum) 
by the appropriate national wage index (see Tables 4A and 4B of section 
V of the addendum).
    Step 2--Add the amount from Step 1 and the nonlabor-related portion 
of the national average standardized amount.

[[Page 25613]]

Step 3--Multiply the result in Step 2 by 50 percent.

    Step 4--Multiply the amount from Step 3 by the appropriate DRG 
relative weight (see Table 5 of section V of the addendum).
    The sum of the Puerto Rico rate and the national rate computed 
above equals the prospective payment for a given discharge for a 
hospital located in Puerto Rico.

III. Proposed Changes to Payment Rates for Inpatient Capital-
Related Costs for FY 1999

    The prospective payment system for hospital inpatient capital-
related costs was implemented for cost reporting periods beginning on 
or after October 1, 1991. Effective with that cost reporting period and 
during a 10-year transition period extending through FY 2001, hospital 
inpatient capital-related costs are paid on the basis of an increasing 
proportion of the capital prospective payment system Federal rate and a 
decreasing proportion of a hospital's historical costs for capital.
    The basic methodology for determining Federal capital prospective 
rates is set forth at Secs. 412.308 through 412.352. Below we discuss 
the factors that we used to determine the proposed Federal rate and the 
hospital-specific rates for FY 1999. The rates will be effective for 
discharges occurring on or after October 1, 1998.
    For FY 1992, we computed the standard Federal payment rate for 
capital-related costs under the prospective payment system by updating 
the FY 1989 Medicare inpatient capital cost per case by an actuarial 
estimate of the increase in Medicare inpatient capital costs per case. 
Each year after FY 1992 we update the standard Federal rate, as 
provided in Sec. 412.308(c)(1), to account for capital input price 
increases and other factors. Also, Sec. 412.308(c)(2) provides that the 
Federal rate is adjusted annually by a factor equal to the estimated 
proportion of outlier payments under the Federal rate to total capital 
payments under the Federal rate. In addition, Sec. 412.308(c)(3) 
requires that the Federal rate be reduced by an adjustment factor equal 
to the estimated proportion of payments for exceptions under 
Sec. 412.348. Furthermore, Sec. 412.308(c)(4)(ii) requires that the 
Federal rate be adjusted so that the annual DRG reclassification and 
the recalibration of DRG weights and changes in the geographic 
adjustment factor are budget neutral. For FYs 1992 through 1995, 
Sec. 412.352 required that the Federal rate also be adjusted by a 
budget neutrality factor so that aggregate payments for inpatient 
hospital capital costs were projected to equal 90 percent of the 
payments that would have been made for capital-related costs on a 
reasonable cost basis during the fiscal year. That provision expired in 
FY 1996. Section 412.308(b)(2) describes the 7.4 percent reduction to 
the rate which was made in FY 1994, and Sec. 412.308(b)(3) describes 
the 0.28 percent reduction to the rate made in FY 1996 as a result of 
the revised policy of paying for transfers. In the FY 1998 final rule 
with comment period (62 FR 45966) we implemented section 4402 of the 
BBA, which required that for discharges occurring on or after October 
1, 1997, and before October 1, 2002, the unadjusted standard Federal 
rate was reduced by 17.78 percent. A small part of that reduction will 
be restored effective October 1, 2002.
    For each hospital, the hospital-specific rate was calculated by 
dividing the hospital's Medicare inpatient capital-related costs for a 
specified base year by its Medicare discharges (adjusted for 
transfers), and dividing the result by the hospital's case mix index 
(also adjusted for transfers). The resulting case-mix adjusted average 
cost per discharge was then updated to FY 1992 based on the national 
average increase in Medicare's inpatient capital cost per discharge and 
adjusted by the exceptions payment adjustment factor and the budget 
neutrality adjustment factor to yield the FY 1992 hospital-specific 
rate. Since FY 1992, the hospital-specific rate has been updated 
annually for inflation and for changes in the exceptions payment 
adjustment factor. For FYs 1992 through 1995, the hospital-specific 
rate was also adjusted by a budget neutrality adjustment factor. In the 
FY 1998 final rule with comment period (62 FR 46012) we implemented 
section 4402 of the BBA, which required that for discharges occurring 
on or after October 1, 1997, and before October 1, 2002, the unadjusted 
hospital-specific rate should be reduced by 17.78 percent. A small part 
of that reduction will also be restored effective October 1, 2002.
    To determine the appropriate budget neutrality adjustment factor 
and the exceptions payment adjustment factor, we developed a dynamic 
model of Medicare inpatient capital-related costs, that is, a model 
that projects changes in Medicare inpatient capital-related costs over 
time. With the expiration of the budget neutrality provision, the model 
is still used to estimate the exceptions payment adjustment and other 
factors. The model and its application are described in greater detail 
in Appendix B of this proposed rule.
    In accordance with section 1886(d)(9)(A) of the Act, under the 
prospective payment system for inpatient operating costs, hospitals 
located in Puerto Rico are paid for operating costs under a special 
payment formula. Prior to FY 1998, hospitals in Puerto Rico were paid a 
blended rate that consisted of 75 percent of the applicable 
standardized amount specific to Puerto Rico hospitals and 25 percent of 
the applicable national average standardized amount. However, effective 
October 1, 1998, as a result of section 4406 of the BBA, operating 
payments to hospitals in Puerto Rico are based on a blend of 50 percent 
of the applicable standardized amount specific to Puerto Rico hospitals 
and 50 percent of the applicable national average standardized amount. 
In conjunction with this change to the operating blend percentage, 
effective with discharges on or after October 1, 1997, we compute 
capital payments to hospitals in Puerto Rico based on a blend of 50 
percent of the Puerto Rico rate and 50 percent of the Federal rate. 
Section 412.374 provides for the use of this blended payment system for 
payments to Puerto Rico hospitals under the prospective payment system 
for inpatient capital-related costs. Accordingly, for capital-related 
costs we compute a separate payment rate specific to Puerto Rico 
hospitals using the same methodology used to compute the national 
Federal rate for capital.

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

    For FY 1998, the Federal rate is $371.51. With the changes we are 
proposing to the factors used to establish the Federal rate, the 
proposed FY 1999 Federal rate is $377.25.
    In the discussion that follows, we explain the factors that were 
used to determine the proposed FY 1999 Federal rate. In particular, we 
explain why the proposed FY 1999 Federal rate has increased 1.55 
percent compared to the FY 1998 Federal rate. Even though we estimate 
that Medicare hospital inpatient discharges will decline by 
approximately 2.25 between FY 1998 and FY 1999, we also estimate that 
aggregate capital payments will increase by 2.60 percent during this 
same period. This aggregate increase is primarily due to the change in 
the federal rate blend percentage from 70 percent to 80 percent, the 
1.55 percent increase in the rate, and a projected increase in case 
mix.
    The major factor contributing to the increase in the proposed 
capital Federal rate for FY 1999 relative to FY 1998 is

[[Page 25614]]

that the proposed FY 1999 exceptions reduction factor is 1.06 percent 
higher than the factor for FY 1998. The exceptions reduction factor 
equals 1 minus the projected percentage of exceptions payments. We 
estimate that the projected percentage of exceptions payments for FY 
1999 will be lower than the projected percentage for FY 1998; 
accordingly, the proposed FY 1999 rate reflects less of a reduction to 
account for exceptions than the FY 1998 rate.
    Total payments to hospitals under the prospective payment system 
are relatively unaffected by changes in the capital prospective 
payments. Since capital payments constitute about 10 percent of 
hospital payments, a 1 percent change in the capital Federal rate 
yields only about 0.1 percent change in actual payments to hospitals. 
Aggregate payments under the capital prospective payment transition 
system are estimated to increase in FY 1999 compared to FY 1998.
1. Standard Federal Rate Update
    a. Description of the Update Framework. Under section 
412.308(c)(1), the standard Federal rate is updated on the basis of an 
analytical framework that takes into account changes in a capital input 
price index and other factors. The update framework consists of a 
capital input price index (CIPI) and several policy adjustment factors. 
Specifically, we have adjusted the projected CIPI rate of increase as 
appropriate each year for case-mix index related changes, for 
intensity, and for errors in previous CIPI forecasts. The proposed 
update factor for FY 1999 under that framework is 0.2 percent. This 
proposal is based on a projected 0.8 percent increase in the CIPI, 
policy adjustment factors of -0.2, and a forecast error correction of 
-0.4 percent. We explain the basis for the FY 1999 CIPI projection in 
section II.D of this addendum. Here we describe the policy adjustments.
    The case-mix index is the measure of the average DRG weight for 
cases paid under the prospective payment system. Because the DRG weight 
determines the prospective payment for each case, any percentage 
increase in the case-mix index corresponds to an equal percentage 
increase in hospital payments.
    The case-mix index can change for any of several reasons:
     The average resource use of Medicare patients changes 
(``real'' case-mix change);
     Changes in hospital coding of patient records result in 
higher weight DRG assignments (``coding effects''); and
     The annual DRG reclassification and recalibration changes 
may not be budget neutral (``reclassification effect'').
    We define real case-mix change as actual changes in the mix (and 
resource requirements) of Medicare patients as opposed to changes in 
coding behavior that result in assignment of cases to higher-weighted 
DRGs but do not reflect higher resource requirements. In the update 
framework for the prospective payment system for operating costs, we 
adjust the update upwards to allow for real case-mix change, but remove 
the effects of coding changes on the case-mix index. We also remove the 
effect on total payments of prior changes to the DRG classifications 
and relative weights, in order to retain budget neutrality for all 
case-mix index-related changes other than patient severity. (For 
example, we adjusted for the effects of the FY 1992 DRG 
reclassification and recalibration as part of our FY 1994 update 
recommendation.) The operating adjustment consists of a reduction for 
total observed case-mix change, an increase for the portion of case-mix 
change that we determine is due to real case-mix change rather than 
coding modifications, and an adjustment for the effect of prior DRG 
reclassification and recalibration changes. We have adopted this case-
mix index adjustment in the capital update framework as well.
    For FY 1999, we are projecting a 1.0 percent increase in the case-
mix index. We estimate that real case-mix increase will equal 0.8 
percent in FY 1999. Therefore, the proposed net adjustment for case-mix 
change in FY 1999 is -0.2 percentage points.
    We estimate that DRG reclassification and recalibration result in a 
0.0 percent change in the case mix when compared with the case-mix 
index that would have resulted if we had not made the reclassification 
and recalibration changes to the DRGs.
    The capital update framework contains an adjustment for forecast 
error. The input price index forecast is based on historical trends and 
relationships ascertainable at the time the update factor is 
established for the upcoming year. In any given year there may be 
unanticipated price fluctuations that may result in differences between 
the actual increase in prices faced by hospitals and the forecast used 
in calculating the update factors. In setting a prospective payment 
rate under the proposed framework, we make an adjustment for forecast 
error only if our estimate of the capital input price index rate of 
increase for any year is off by 0.25 percentage points or more. There 
is a 2-year lag between the forecast and the measurement of the 
forecast error. Thus, for example, we would adjust for a forecast error 
made in FY 1997 through an adjustment to the FY 1999 update. Because we 
only introduced this analytical framework in FY 1996, FY 1998 was the 
first year in which a forecast error adjustment could be required. We 
estimate that the FY 1997 CIPI was 0.4 percentage points higher than 
our current data show, which means that we estimate a forecast error of 
-0.4 percentage points for FY 1997. Therefore we are making an -0.4 
percent adjustment for forecast error in FY 1999.
    Under the capital prospective payment system framework, we also 
make an adjustment for changes in intensity. We calculate this 
adjustment using the same methodology and data as in the framework for 
the operating prospective payment system. The intensity factor for the 
operating update framework reflects how hospital services are utilized 
to produce the final product, that is, the discharge. This component 
accounts for changes in the use of quality-enhancing services, changes 
in within-DRG severity, and expected modification of practice patterns 
to remove cost-ineffective services.
    We calculate case-mix constant intensity as the change in total 
charges per admission, adjusted for price level changes (the CPI 
hospital component), and changes in real case mix. The use of total 
charges in the calculation of the proposed intensity factor makes it a 
total intensity factor, that is, charges for capital services are 
already built into the calculation of the factor. We have, therefore, 
incorporated the intensity adjustment from the operating update 
framework into the capital update framework. Without reliable estimates 
of the proportions of the overall annual intensity increases that are 
due, respectively, to ineffective practice patterns and to the 
combination of quality-enhancing new technologies and within-DRG 
complexity, we assume, as in the revised operating update framework, 
that one-half of the annual increase is due to each of these factors. 
The capital update framework thus provides an add-on to the input price 
index rate of increase of one-half of the estimated annual increase in 
intensity to allow for within-DRG severity increases and the adoption 
of quality-enhancing technology.
    For FY 1999, we have developed a Medicare-specific intensity 
measure based on a 5-year average using FY 1993-1997 data. In 
determining case-mix constant intensity, we found that observed case-
mix increase was 0.9 percent in FY 1993, 0.8 percent in FY

[[Page 25615]]

1994, 1.7 percent in FY 1995, 1.6 percent in FY 1996, and 0.3 percent 
in FY 1997. For FY 1995 and FY 1996, we estimate that real case-mix 
increase was 1.0 to 1.4 percent each year. The estimate for those years 
is supported by past studies of case-mix change by the RAND 
Corporation. The most recent study was ``Has DRG Creep Crept Up? 
Decomposing the Case Mix Index Change Between 1987 and 1988'' by G. M. 
Carter, J. P. Newhouse, and D. A. Relles, R-4098-HCFA/ProPAC(1991). The 
study suggested that real case-mix change was not dependent on total 
change, but was usually a fairly steady 1.0 to 1.5 percent per year. We 
use 1.4 percent as the upper bound because the RAND study did not take 
into account that hospitals may have induced doctors to document 
medical records more completely in order to improve payment. Following 
that study, we consider up to 1.4 percent of observed case-mix change 
as real for FY 1992 through FY 1997. Based on this analysis, we believe 
that all of the observed case-mix increase for FY 1993, FY 1994 and FY 
1997 is real.
    We calculate case-mix constant intensity as the change in total 
charges per admission, adjusted for price level changes (the CPI 
hospital component), and changes in real case-mix. Given estimates of 
real case mix of 0.9 percent for FY 1993, 0.8 percent for FY 1994, 1.0 
percent for FY 1995, and 1.0 percent for FY 1996, and 0.3 percent for 
FY 1997, we estimate that case-mix constant intensity declined by an 
average 1.5 percent during FYs 1993 through 1997, for a cumulative 
decrease of 7.3 percent. If we assume that real case-mix increase was 
0.9 percent for FY 1993, 0.8 percent for FY 1994, 1.4 percent for FY 
1995, 1.4 percent for FY 1996 and 0.3 percent for FY 1997, we estimate 
that case-mix constant intensity declined by an average 1.6 percent 
during FYs 1993 through 1997, for a cumulative decrease of 7.7 percent. 
Since we estimate that intensity has declined during that period, we 
are recommending a 0.0 percent intensity adjustment for FY 1999.
    b. Comparison of HCFA and MedPAC Update Recommendations. MedPAC 
recommends a 0.0 to 0.7 percent update to the standard Federal rate and 
we are recommending a 0.2 percent update. There are some significant 
differences between the HCFA and MedPAC update frameworks, which 
account for the difference in the respective update recommendations. A 
major difference is the input price index which each framework uses as 
a beginning point to estimate the change in input prices since the 
previous year. The HCFA capital input price index (the CIPI) includes 
price measures for interest expense, which are an indicator of the 
interest rates facing hospitals during their capital purchasing 
decisions. The MedPAC capital market basket does not include interest 
expense; instead the MedPAC update framework includes an adjustment 
when necessary to account for the prolonged changes in interest rates. 
HCFA's CIPI is vintage-weighted, meaning that it takes into account 
price changes from past purchases of capital when determining the 
current period update. MedPAC's capital market basket is not vintage-
weighted, accounting only for the current year price changes. This 
year, due to the difference between HCFA's and MedPAC's input price 
index, the percentage change in HCFA's CIPI is 0.8 percent, and the 
percentage change in MedPAC's market basket is 2.4 percent.
    MedPAC and HCFA also differ in the adjustments they make to their 
price indices. (See Table 1 for a comparison of HCFA and MedPAC's 
update recommendations.) MedPAC makes an adjustment for productivity, 
while HCFA has not adopted an adjustment for capital productivity or 
efficiency. MedPAC employs the same productivity adjustment in its 
operating and capital framework. We have identified a total intensity 
factor but have not identified an adequate total productivity measure. 
The Commission also includes a product change adjustment to account for 
changes in the service content of hospital stays, which adjusts the 
base payment rates to eliminate overpayments in the future. MedPAC 
recommends a -3.0 to a -1.0 adjustment for product change for FY 1999. 
For FY 1999 MedPAC recommends a -0.7 to a -0.3 adjustment for 
productivity. We recommend a 0.0 intensity adjustment.
    We recommend a -0.2 total case mix adjustment since we are 
projecting a 1.0 percent increase in the case mix index and we estimate 
that real case-mix increase will equal 0.8 percent in FY 1999. MedPAC 
makes a two part adjustment for case mix changes, which takes into 
account changes in case mix in the past year. They recommend a -0.2 to 
-0.0 adjustment for coding change and an 0.0 to 0.2 adjustment for 
within-DRG complexity change. We recommend a -0.4 adjustment for 
forecast error correction, and MedPAC recommends a -0.4 adjustment for 
forecast error correction.
    The net result of these adjustments is that MedPAC's capital update 
framework suggests a -1.9 to 1.4 percent update. MedPAC has recommended 
a 0.0 to 0.7 percent update to the rate for FY 1999. This range is 
consistent with the PPS operating update recommended by the Commission. 
We describe the basis for our proposed 0.2 percent total update in the 
preceding section. HCFA and MedPAC's update recommendations are quite 
close, with HCFA's recommendation within the range recommended by 
MedPAC.

   Table 1.--HCFA's FY 1999 Update Factor and MedPAC's Recommendation   
------------------------------------------------------------------------
                                  HCFA's update     MedPAC's recommenda 
                                      factor                tion        
------------------------------------------------------------------------
Capital Input Price Index.....                0.8  2.4                  
Policy Adjustment Factors:                                              
    Productivity..............  .................  -0.7 to -0.3         
    Intensity.................                0.0  .....................
        Science and Technology  .................  0.0 to 0.5           
        Intensity.............  .................  (\1\)                
        Real within DRG Change  .................  (\2\)                
    Product Change............  .................  -3.0 to -1.0         
                               -----------------------------------------
          Subtotal............                0.0  -3.7 to -0.8         
                               =========================================
Case-Mix Adjustment Factors:                                            
    Projected Case-Mix Change.               -1.0  .....................
    Real Across DRG Change....                0.8  .....................

[[Page 25616]]

                                                                        
    Coding Change.............  .................  -0.2 to -0.0         
    Real within DRG Change....              (\3\)  0.0 to 0.2           
                               -----------------------------------------
          Subtotal............               -0.2  -0.2 to 0.2          
                               =========================================
Effect of FY 1996                             0.0  .....................
 Reclassification and                                                   
 Recalibration.                                                         
Forecast Error Correction.....               -0.4  -0.4                 
                               -----------------------------------------
      Total Update............                0.2  -1.9 to 1.4          
------------------------------------------------------------------------
\1\ Included in MedPAC's productivity measure.                          
\2\ Included in MedPAC's case-mix adjustment.                           
\3\ Included in HCFA's intensity factor.                                

2. Outlier Payment Adjustment Factor
    Section 412.312(c) establishes a unified outlier methodology for 
inpatient operating and inpatient capital-related costs. A single set 
of thresholds is used to identify outlier cases for both inpatient 
operating and inpatient capital-related payments. Outlier payments are 
made only on the portion of the Federal rate that is used to calculate 
the hospital's inpatient capital-related payments (for example, 80 
percent for cost reporting periods beginning in FY 1999 for hospitals 
paid under the fully prospective methodology). Section 412.308(c)(2) 
provides that the standard Federal rate for inpatient capital-related 
costs be reduced by an adjustment factor equal to the estimated 
proportion of outlier payments under the Federal rate to total 
inpatient capital-related payments under the Federal rate. The outlier 
thresholds are set so that operating outlier payments are projected to 
be 5.1 percent of total operating DRG payments. The inpatient capital-
related outlier reduction factor reflects the inpatient capital-related 
outlier payments that would be made if all hospitals were paid 100 
percent of the Federal rate. For purposes of calculating the outlier 
thresholds and the outlier reduction factor, we model payments as if 
all hospitals were paid 100 percent of the Federal rate because, as 
explained above, outlier payments are made only on the portion of the 
Federal rate that is included in the hospital's inpatient capital-
related payments.
    In the August 29, 1997 final rule with comment period, we estimated 
that outlier payments for capital in FY 1998 would equal 6.18 percent 
of inpatient capital-related payments based on the Federal rate. 
Accordingly, we applied an outlier adjustment factor of 0.9382 to the 
Federal rate. Based on the thresholds as set forth in section II.A.4.d 
of this Addendum, we estimate that outlier payments for capital will 
equal 6.22 percent of inpatient capital-related payments based on the 
Federal rate in FY 1999. We are, therefore, proposing an outlier 
adjustment factor of 0.9378 to the Federal rate. Thus, estimated 
capital outlier payments for FY 1999 represent a higher percentage of 
total capital standard payments than in FY 1998.
    The outlier reduction factors are not built permanently into the 
rates; that is, they are not applied cumulatively in determining the 
Federal rate. Therefore, the proposed net change in the outlier 
adjustment to the Federal rate for FY 1999 is 0.9996 (0.9378/0.9382). 
Thus, the outlier adjustment decreases the FY 1999 Federal rate by 0.04 
percent (0.9996--1) compared with the FY 1998 outlier adjustment.
3. Budget Neutrality Adjustment Factor for Changes in DRG 
Classifications and Weights and the Geographic Adjustment Factor
    Section 412.308(c)(4)(ii) requires that the Federal rate be 
adjusted so that aggregate payments for the fiscal year based on the 
Federal rate after any changes resulting from the annual DRG 
reclassification and recalibration and changes in the GAF are projected 
to equal aggregate payments that would have been made on the basis of 
the Federal rate without such changes. We use the actuarial model, 
described in Appendix B of this proposed rule, to estimate the 
aggregate payments that would have been made on the basis of the 
Federal rate without changes in the DRG classifications and weights and 
in the GAF. We also use the model to estimate aggregate payments that 
would be made on the basis of the Federal rate as a result of those 
changes. We then use these figures to compute the adjustment required 
to maintain budget neutrality for changes in DRG weights and in the 
GAF.
    For FY 1998, we calculated a GAF/DRG budget neutrality factor of 
0.9989. For FY 1999, we are proposing a GAF/DRG budget neutrality 
factor of 1.0032. The GAF/DRG budget neutrality factors are built 
permanently into the rates; that is, they are applied cumulatively in 
determining the Federal rate. This follows from the requirement that 
estimated aggregate payments each year be no more than they would have 
been in the absence of the annual DRG reclassification and 
recalibration and changes in the GAF. The proposed incremental change 
in the adjustment from FY 1998 to FY 1999 is 1.0032. The proposed 
cumulative change in the rate due to this adjustment is 1.0034 (the 
product of the incremental factors for FY 1993, FY 1994, FY 1995, FY 
1996, FY 1997, FY 1998, and the proposed incremental factor for FY 
1999: 0.9980  x  1.0053  x  0.9998  x  0.9994  x  0.9987  x  0.9989  x  
1.0032 = 1.0034).
    This proposed factor accounts for DRG reclassifications and 
recalibration and for changes in the GAF. It also incorporates the 
effects on the GAF of FY 1999 geographic reclassification decisions 
made by the MGCRB compared to FY 1998 decisions. However, it does not 
account for changes in payments due to changes in the disproportionate 
share and indirect medical education adjustment factors or in the large 
urban add-on.
4. Exceptions Payment Adjustment Factor
    Section 412.308(c)(3) requires that the standard Federal rate for 
inpatient capital-related costs be reduced by an adjustment factor 
equal to the estimated proportion of additional payments for exceptions 
under Sec. 412.348 relative to total payments under the hospital-
specific rate and Federal rate. We use the model originally developed 
for determining the budget neutrality adjustment factor to determine 
the

[[Page 25617]]

exceptions payment adjustment factor. We describe that model in 
Appendix B to this proposed rule.
    For FY 1998, we estimated that exceptions payments would equal 3.41 
percent of aggregate payments based on the Federal rate and the 
hospital-specific rate. Therefore, we applied an exceptions reduction 
factor of 0.9659 (1-0.0341) in determining the Federal rate. For this 
proposed rule, we estimate that exceptions payments for FY 1999 will 
equal 2.39 percent of aggregate payments based on the Federal rate and 
the hospital-specific rate. Therefore, we are proposing an exceptions 
payment reduction factor of 0.9761 to the Federal rate for FY 1999. The 
proposed exceptions reduction factor for FY 1999 is 1.06 percent higher 
than the factor for FY 1998.
    The exceptions reduction factors are not built permanently into the 
rates; that is, the factors are not applied cumulatively in determining 
the Federal rate. Therefore, the proposed net adjustment to the FY 1999 
Federal rate is 0.9761/0.9659, or 1.0106.
5. Standard Capital Federal Rate for FY 1999
    For FY 1998, the capital Federal rate was $371.51. With the changes 
we are proposing to the factors used to establish the Federal rate, the 
FY 1999 Federal rate would be $377.25. The proposed Federal rate for FY 
1999 was calculated as follows:
     The proposed FY 1999 update factor is 1.0020, that is, the 
proposed update is 0.20 percent.
     The proposed FY 1999 budget neutrality adjustment factor 
that is applied to the standard Federal payment rate for changes in the 
DRG relative weights and in the GAF is 1.0032.
     The proposed FY 1999 outlier adjustment factor is 0.9378.
     The proposed FY 1999 exceptions payments adjustment factor 
is 0.9761.
    Since the Federal rate has already been adjusted for differences in 
case mix, wages, cost of living, indirect medical education costs, and 
payments to hospitals serving a disproportionate share of low-income 
patients, we propose to make no additional adjustments in the standard 
Federal rate for these factors other than the budget neutrality factor 
for changes in the DRG relative weights and the GAF.
    We are providing a chart that shows how each of the factors and 
adjustments for FY 1999 affected the computation of the proposed FY 
1999 Federal rate in comparison to the FY 1998 Federal rate. The 
proposed FY 1999 update factor has the effect of increasing the Federal 
rate by 0.20 percent compared to the rate in FY 1998, while the 
proposed geographic and DRG budget neutrality factor has the effect of 
increasing the Federal rate by 0.32 percent. The proposed FY 1999 
outlier adjustment factor has the effect of decreasing the Federal rate 
by 0.04 percent compared to FY 1998. The proposed FY 1999 exceptions 
reduction factor has the effect of increasing the Federal rate by 1.06 
percent compared to the exceptions reduction for FY 1998. The combined 
effect of all the proposed changes is to increase the proposed Federal 
rate by 1.55 percent compared to the Federal rate for FY 1998.

          Comparison of Factors and Adjustments--FY 1998 Federal Rate and Proposed FY 1999 Federal Rate         
----------------------------------------------------------------------------------------------------------------
                                                                           Proposed FY                 Percent  
                                                                 FY 98          99         Change       change  
----------------------------------------------------------------------------------------------------------------
Update factor\1\............................................       1.0090       1.0020       1.0020         0.20
GAF/DRG Adjustment Factor\1\................................       0.9989       1.0032       1.0032         0.32
Outlier Adjustment Factor\2\................................       0.9382       0.9378       0.9996        -0.04
Exceptions Adjustment Factor\2\.............................       0.9659       0.9761       1.0106         1.06
Federal Rate................................................      $371.51      $377.25       1.0155        1.55 
----------------------------------------------------------------------------------------------------------------
\1\ The update factor and the GAF/DRG budget neutrality factors are built permanently into the rates. Thus, for 
  example, the incremental change from FY 1998 to FY 1999 resulting from the application of the 1.0032 GAF/DRG  
  budget neutrality factor for FY 1999 is 1.0032.                                                               
\2\ The outlier reduction factor and the exceptions reduction factor are not built permanently into the rates;  
  that is, these factors are not applied cumulatively in determining the rates. Thus, for example, the net      
  change resulting from the application of the FY 1999 outlier reduction factor is 0.9378/0.9382, or 0.9996.    

6. Special Rate for Puerto Rico Hospitals
    As explained at the beginning of this section, hospitals in Puerto 
Rico are paid based on 50 percent of the Puerto Rico rate and 50 
percent of the Federal rate. The Puerto Rico rate is derived from the 
costs of Puerto Rico hospitals only, while the Federal rate is derived 
from the costs of all acute care hospitals participating in the 
prospective payment system (including Puerto Rico). To adjust 
hospitals' capital payments for geographic variations in capital costs, 
we apply a geographic adjustment factor (GAF) to both portions of the 
blended rate. The GAF is calculated using the operating PPS wage index 
and varies depending on the MSA or rural area in which the hospital is 
located. We use the Puerto Rico wage index to determine the GAF for the 
Puerto Rico part of the capital blended rate and the national wage 
index to determine the GAF for the national part of the blended rate.
    Since we implemented a separate GAF for Puerto Rico, we also 
propose to apply separate budget neutrality adjustments for the 
national GAF and for the Puerto Rico GAF. We propose to apply the same 
budget neutrality factor for DRG reclassifications and recalibration 
nationally and for Puerto Rico. Separate adjustments were unnecessary 
for FY 1998 since the Puerto Rico specific GAF was implemented that 
year. The Puerto Rico GAF budget neutrality factor is 0.9989, while the 
DRG adjustment is 1.0033, for a combined cumulative adjustment of 
1.0022. (For a more detailed explanation of this proposed change see 
Appendix B.)
    In computing the payment for a particular Puerto Rico hospital, the 
Puerto Rico portion of the rate (50%) is multiplied by the Puerto Rico-
specific GAF for the MSA in which the hospital is located, and the 
national portion of the rate (50%) is multiplied by the national GAF 
for the MSA in which the hospital is located (which is computed from 
national data for all hospitals in the United States and Puerto Rico). 
In FY 1998, we implemented a 17.78 percent reduction to the Puerto Rico 
rate as a result of the BBA.
    For FY 1998, before application of the GAF, the special rate for 
Puerto Rico hospitals was $177.57. With the changes we are proposing to 
the factors used to determine the rate, the proposed FY 1999 special 
rate for Puerto Rico is $180.73.

B. Determination of Hospital-Specific Rate Update

    Section 412.328(e) of the regulations provides that the hospital-
specific rate for FY 1999 be determined by adjusting

[[Page 25618]]

the FY 1998 hospital-specific rate by the following factors:
1. Hospital-Specific Rate Update Factor
    The hospital-specific rate is updated in accordance with the update 
factor for the standard Federal rate determined under 
Sec. 412.308(c)(1). For FY 1999, we are proposing that the hospital-
specific rate be updated by a factor of 1.0020.
2. Exceptions Payment Adjustment Factor
    For FYs 1992 through FY 2001, the updated hospital-specific rate is 
multiplied by an adjustment factor to account for estimated exceptions 
payments for capital-related costs under Sec. 412.348, determined as a 
proportion of the total amount of payments under the hospital-specific 
rate and the Federal rate. For FY 1999, we estimate that exceptions 
payments will be 2.39 percent of aggregate payments based on the 
Federal rate and the hospital-specific rate. Therefore, we propose that 
the updated hospital-specific rate be reduced by a factor of 0.9761. 
The exceptions reduction factors are not built permanently into the 
rates; that is, the factors are not applied cumulatively in determining 
the hospital-specific rate. The proposed net adjustment to the FY 1999 
hospital-specific rate is 0.9761/0.9659, or 1.0106.
3. Net Change to Hospital-Specific Rate
    We are providing a chart to show the net change to the hospital-
specific rate. The chart shows the factors for FY 1998 and FY 1999 and 
the net adjustment for each factor. It also shows that the proposed 
cumulative net adjustment from FY 1998 to FY 1999 is 1.0126, which 
represents a proposed increase of 1.26 percent to the hospital-specific 
rate. For each hospital, the proposed FY 1999 hospital-specific rate is 
determined by multiplying the FY 1998 hospital-specific rate by the 
cumulative net adjustment of 1.0126.

                       Proposed FY 1999 Update and Adjustments to Hospital-Specific Rates                       
----------------------------------------------------------------------------------------------------------------
                                                                           Proposed FY      Net        Percent  
                                                                 FY 98          99       Adjustment     Change  
----------------------------------------------------------------------------------------------------------------
Update Factor...............................................       1.0090       1.0020       1.0020         0.20
Exceptions Payment Adjustment Factor........................       0.9659       0.9761       1.0106         1.06
Cumulative Adjustments......................................       0.9746       0.9869       1.0026        1.26 
----------------------------------------------------------------------------------------------------------------
Note: The update factor for the hospital-specific rate is applied cumulatively in determining the rates. Thus,  
  the incremental increase in the update factor from FY 1998 to FY 1999 is 1.0020. In contrast, the exceptions  
  payment adjustment factor is not applied cumulatively. Thus, for example, the incremental increase in the     
  exceptions reduction factor from FY 1998 to FY 1999 is 0.9761/0.9659, or 1.0106.                              

C. Calculation of Inpatient Capital-Related Prospective Payments for FY 
1999

    During the capital prospective payment system transition period, a 
hospital is paid for the inpatient capital-related costs under one of 
two payment methodologies--the fully prospective payment methodology or 
the hold-harmless methodology. The payment methodology applicable to a 
particular hospital is determined when a hospital comes under the 
prospective payment system for capital-related costs by comparing its 
hospital-specific rate to the Federal rate applicable to the hospital's 
first cost reporting period under the prospective payment system.
    The applicable Federal rate was determined by making adjustments as 
follows:
     For outliers by dividing the standard Federal rate by the 
outlier redution factor for that fiscal year; and,
     For the payment adjustment factors applicable to the 
hospital (that is, the hospital's GAF, the disproportionate share 
adjustment factor, and the indirect medical education adjustment 
factor, when appropriate).
     If the hospital-specific rate is above the applicable 
Federal rate, the hospital is paid under the hold-harmless methodology. 
If the hospital-specific rate is below the applicable Federal rate, the 
hospital is paid under the fully prospective methodology.
    For purposes of calculating payments for each discharge under both 
the hold-harmless payment methodology and the fully prospective payment 
methodology, the standard Federal rate is adjusted as follows:
    (Standard Federal Rate) x (DRG weight) x (GAF) x (Large Urban Add-
on, if applicable) x (COLA adjustment for hospitals located in Alaska 
and Hawaii) x (1 + Disproportionate Share Adjustment Factor + IME 
Adjustment Factor, if applicable).
    The result is the adjusted Federal rate.
    Payments under the hold-harmless methodology are determined under 
one of two formulas. A hold-harmless hospital is paid the higher of the 
following:
     100 percent of the adjusted Federal rate for each 
discharge; or
     An old capital payment equal to 85 percent (100 percent 
for sole community hospitals) of the hospital's allowable Medicare 
inpatient old capital costs per discharge for the cost reporting period 
plus a new capital payment based on a percentage of the adjusted 
Federal rate for each discharge. The percentage of the adjusted Federal 
rate equals the ratio of the hospital's allowable Medicare new capital 
costs to its total Medicare inpatient capital-related costs in the cost 
reporting period.
    Once a hospital receives payment based on 100 percent of the 
adjusted Federal rate in a cost reporting period beginning on or after 
October 1, 1994 (or the first cost reporting period after obligated 
capital that is recognized as old capital under Sec. 412.302(c) is put 
in use for patient care, if later), the hospital continues to receive 
capital prospective payment system payments on that basis for the 
remainder of the transition period.
    Payment for each discharge under the fully prospective methodology 
is the sum of the following:
     The hospital-specific rate multiplied by the DRG relative 
weight for the discharge and by the applicable hospital-specific 
transition blend percentage for the cost reporting period; and
     The adjusted Federal rate multiplied by the Federal 
transition blend percentage.
     The blend percentages for cost reporting periods beginning 
in FY 1999 are 80 percent of the adjusted Federal rate and 20 percent 
of the hospital-specific rate.
    Hospitals may also receive outlier payments for those cases that 
qualify under the thresholds established for each fiscal year. Section 
412.312(c) provides for a single set of thresholds to identify outlier 
cases for both inpatient operating and inpatient capital-related 
payments. Outlier payments are made only on that portion of the Federal 
rate that is used to calculate the hospital's inpatient capital-related 
payments. For fully prospective hospitals, that portion is 80 percent 
of the Federal rate for

[[Page 25619]]

discharges occurring in cost reporting periods beginning during FY 
1999. Thus, a fully prospective hospital will receive 80 percent of the 
capital-related outlier payment calculated for the case for discharges 
occurring in cost reporting periods beginning in FY 1999. For hold-
harmless hospitals paid 85 percent of their reasonable costs for old 
inpatient capital, the portion of the Federal rate that is included in 
the hospital's outlier payments is based on the hospital's ratio of 
Medicare inpatient costs for new capital to total Medicare inpatient 
capital costs. For hold-harmless hospitals that are paid 100 percent of 
the Federal rate, 100 percent of the Federal rate is included in the 
hospital's outlier payments.
    The proposed outlier thresholds for FY 1999 are in section II.A.4.c 
of this Addendum. For FY 1999, a case qualifies as a cost outlier if 
the cost for the case (after standardization for the indirect teaching 
adjustment and disproportionate share adjustment) is greater than the 
prospective payment rate for the DRG plus $11,350.
    During the capital prospective payment system transition period, a 
hospital may also receive an additional payment under an exceptions 
process if its total inpatient capital-related payments are less than a 
minimum percentage of its allowable Medicare inpatient capital-related 
costs. The minimum payment level is established by class of hospital 
under Sec. 412.348. The proposed minimum payment levels for portions of 
cost reporting periods occurring in FY 1999 are:
     Sole community hospitals (located in either an urban or 
rural area), 90 percent;
     Urban hospitals with at least 100 beds and a 
disproportionate share patient percentage of at least 20.2 percent ; 
and
     Urban hospitals with at least 100 beds that qualify for 
disproportionate share payments under Sec. 412.106(c)(2), 80 percent; 
and
     All other hospitals, 70 percent.
    Under Sec. 412.348(d), the amount of the exceptions payment is 
determined by comparing the cumulative payments made to the hospital 
under the capital prospective payment system to the cumulative minimum 
payment levels applicable to the hospital for each cost reporting 
period subject to that system. Any amount by which the hospital's 
cumulative payments exceed its cumulative minimum payment is deducted 
from the additional payment that would otherwise be payable for a cost 
reporting period.
    New hospitals are exempted from the capital prospective payment 
system for their first 2 years of operation and are paid 85 percent of 
their reasonable costs during that period. A new hospital's old capital 
costs are its allowable costs for capital assets that were put in use 
for patient care on or before the later of December 31, 1990 or the 
last day of the hospital's base year cost reporting period, and are 
subject to the rules pertaining to old capital and obligated capital as 
of the applicable date. Effective with the third year of operation, we 
will pay the hospital under either the fully prospective methodology, 
using the appropriate transition blend in that Federal fiscal year, or 
the hold-harmless methodology. If the hold-harmless methodology is 
applicable, the hold-harmless payment for assets in use during the base 
period would extend for 8 years, even if the hold-harmless payments 
extend beyond the normal transition period.

D. Capital Input Price Index

1. Background
    Like the prospective payment hospital operating input price index, 
the Capital Input Price Index (CIPI) is a fixed-weight price index that 
measures the price changes associated with costs during a given year. 
The CIPI differs from the operating input price index in one important 
aspect--the CIPI reflects the vintage nature of capital, which is the 
acquisition and use of capital over time. Capital expenses in any given 
year are determined by the stock of capital in that year (that is, 
capital that remains on hand from all current and prior capital 
acquisitions). An index measuring capital price changes needs to 
reflect this vintage nature of capital. Therefore, the CIPI was 
developed to capture the vintage nature of capital by using a weighted-
average of past capital purchase prices up to and including the current 
year.
    Using Medicare cost reports, AHA data, and Securities Data 
Corporation data, a vintage-weighted price index was developed to 
measure price increases associated with capital expenses. We 
periodically update the base year for the operating and capital input 
prices to reflect the changing composition of inputs for operating and 
capital expenses. Currently, the CIPI is based to FY 1992 and was last 
rebased in 1997. The most recent explanation of the CIPI was discussed 
in the final rule with comment period for FY 1998 published in the 
August 29, 1997 Federal Register (62 FR 46050). The following Federal 
Register documents also describe development and revisions of the 
methodology involved with the construction of the CIPI: September 1, 
1992 (57 FR 40016), May 26, 1993 (58 FR 30448), September 1, 1993 (58 
FR 46490), May 27, 1994 (59 FR 27876), September 1, 1994 (59 FR 45517), 
June 2, 1995 (60 FR 29229), and September 1, 1995 (60 FR 45815), May 
31, 1996 (61 FR 27466), August 30, 1996 (61 FR 46196), and June 2, 1997 
(62 FR 29953).
2. Forecast of the CIPI for Federal Fiscal Year 1999
    DRI forecasts a 0.8 percent increase in the CIPI for FY 1999. This 
is the outcome of a projected 2.0 percent increase in vintage-weighted 
depreciation prices (building and fixed equipment, and movable 
equipment) and a 2.6 percent increase in other capital expense prices 
in FY 1999, partially offset by a 2.7 percent decline in vintage-
weighted interest rates in FY 1999. The weighted average of these three 
factors produces the 0.8 percent increase for the CIPI as a whole.

IV. Proposed Changes to Payment Rates for Excluded Hospitals and 
Hospital Units: Rate-of-Increase Percentages

A. Rate-of-Increase Percentages for Excluded Hospitals and Hospital 
Units

    The inpatient operating costs of hospitals and hospital units 
excluded from the prospective payment system are subject to rate-of-
increase limits established under the authority of section 1886(b) of 
the Act, which is implemented in Sec. 413.40 of the regulations. Under 
these limits, an annual target amount (expressed in terms of the 
inpatient operating cost per discharge) is set for each hospital, based 
on the hospital's own historical cost experience trended forward by the 
applicable rate-of-increase percentages (update factors). In the case 
of a psychiatric hospital or unit, rehabilitation hospital or unit, or 
long-term care hospital, the target amount may not exceed the 75th 
percentile of target amounts for hospitals and units in the same class 
(psychiatric, rehabilitation, and long-term care). The target amount is 
multiplied by the number of Medicare discharges in a hospital's cost 
reporting period, yielding the ceiling on aggregate Medicare inpatient 
operating costs for the cost reporting period.
    Each hospital's target amount is adjusted annually, at the 
beginning of its cost reporting period, by an applicable update factor. 
Section 1886(b)(3)(B) of the Act provides that for cost reporting 
periods beginning on or after October 1, 1998 and before October 1, 
1999, the update factor is the market basket less a percentage point 
between 0 and 2.5 depending on the hospital's or

[[Page 25620]]

unit's costs in relation to the ceiling. For hospitals with costs 
exceeding the ceiling by 10 percent or more, the update factor is the 
market basket increase. For hospitals with costs exceeding the ceiling 
by less than 10 percent, the update factor is the market basket minus 
.25 percent for each percentage point by which costs are less than 10 
percent over the ceiling. For hospitals with costs equal to or less 
than the ceiling but greater than 66.7 percent of the ceiling, the 
update factor is the greater of 0 percent or the market basket minus 
2.5 percent. For hospitals with costs that do not exceed 66.7 percent 
of the ceiling, the update factor is 0.
    The most recent forecast of the market basket increase for FY 1999 
for hospitals and hospital units excluded from the prospective payment 
system is 2.5 percent; therefore, the update to a hospital's target 
amount for its cost reporting period beginning in FY 1999 would be 
between 0 and 2.5 percent.
    In addition, section 1886(b)(3)(H) of the Act provides that for 
cost reporting periods beginning on or after October 1, 1998 and before 
October 1, 1999, the target amount for psychiatric hospitals and units, 
rehabilitation hospitals and units, and long-term care hospitals will 
be the lower of the hospital's specific target amount or the 75th 
percentile target amount for hospitals in the same class. The FY 1998 
75th percentile target amounts were $10,534 for psychiatric hospitals 
and units, $19,104 for rehabilitation hospital and units, and $37,688 
for long-term care hospitals. For 1999, these 75th percentile figures 
must be updated by the market basket increase. Section 1886(b) of the 
Act was revised to change the formulas for determining bonus and relief 
payments for excluded hospitals and also establishes an additional 
bonus payment for continuous improvement, for cost reporting periods on 
or after October 1, 1997. Finally, a new statutory payment methodology 
for new hospitals and units (psychiatric, rehabilitation, and long-term 
care) was effective October 1, 1997 as governed by section 1886(b)(7) 
of the Act.

V. Tables

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

Table 1A--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor
Table 1C--Adjusted Operating Standardized Amounts for Puerto Rico, 
Labor/Nonlabor
Table 1D--Capital Standard Federal Payment Rate
Table 1E--National Adjusted Operating Standardized Amounts for 
``Temporary Relief'' Hospitals, Labor/Nonlabor
Table 1F--Adjusted Operating Standardized Amounts for ``Temporary 
Relief'' Hospitals in Puerto Rico, Labor/Nonlabor
Table 3C--Hospital Case Mix Indexes for Discharges Occurring in Federal 
Fiscal Year 1997 and Hospital Average Hourly Wage for Federal Fiscal 
Year 1999 Wage Index
Table 4A--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Urban Areas
Table 4B--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Rural Areas
Table 4C--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Hospitals That Are Reclassified
Table 4D--Average Hourly Wage for Urban Areas
Table 4E--Average Hourly Wage for Rural Areas
Table 4F--Puerto Rico Wage Index and Capital Geographic Adjustment 
Factor (GAF)
Table 5--List of Diagnosis Related Groups (DRGs), Relative Weighting 
Factors, Geometric Mean Length of Stay, and Arithmetic Mean Length of 
Stay Points Used in the Prospective Payment System
Table 6A--New Diagnosis Codes
Table 6B--New Procedure Codes
Table 6C--Invalid Diagnosis Codes
Table 6D--Invalid Procedure Codes
Table 6E--Revised Diagnosis Code Titles
Table 6F--Additions to the CC Exclusions List
Table 6G--Deletions to the CC Exclusions List
Table 7A--Medicare Prospective Payment System Selected Percentile 
Lengths of Stay FY 97 MEDPAR Update 12/97 GROUPER V15.0
Table 7B--Medicare Prospective Payment System Selected Percentile 
Lengths of Stay FY 97 MEDPAR Update 12/97 GROUPER V16.0
Table 8A--Statewide Average Operating Cost-to-Charge Ratios for Urban 
and Rural Hospitals (Case Weighted) March 1998
Table 8B--Statewide Average Capital Cost-to-Charge Ratios (Case 
Weighted) March 1998

                   Table 1A.--National Adjusted Operating Standardized Amounts, Labor/Nonlabor                  
----------------------------------------------------------------------------------------------------------------
                    Large urban areas                                           Other areas                     
----------------------------------------------------------------------------------------------------------------
       Labor-related               Nonlabor-related              Labor-related             Nonlabor-related     
----------------------------------------------------------------------------------------------------------------
2,776.21...................                   1,128.44                    2,732.26                    1,110.58  
----------------------------------------------------------------------------------------------------------------


               Table 1C.--Adjusted Operating Standardized Amounts For Puerto Rico, Labor/Nonlabor               
----------------------------------------------------------------------------------------------------------------
                                                                  Large urban areas            Other areas      
                                                             ---------------------------------------------------
                                                                 Labor       Nonlabor      Labor       Nonlabor 
----------------------------------------------------------------------------------------------------------------
National....................................................     2,752.36     1,118.74     2,752.36     1,118.74
Puerto Rico.................................................     1,323.01       532.55     1,302.07       524.11
----------------------------------------------------------------------------------------------------------------


[[Page 25621]]


            Table 1D.--Capital Standard Federal Payment Rate            
------------------------------------------------------------------------
                                                                 Rate   
------------------------------------------------------------------------
National...................................................       371.51
Puerto Rico................................................       177.57
------------------------------------------------------------------------


 Table 1E.--National Adjusted Operating Standardized Amounts For ``Temporary Relief'' Hospitals, Labor/Nonlabor 
----------------------------------------------------------------------------------------------------------------
                    Large urban areas                                           Other areas                     
----------------------------------------------------------------------------------------------------------------
       Labor-related               Nonlabor-related              Labor-related             Nonlabor-related     
----------------------------------------------------------------------------------------------------------------
2,790.09...................                   1,134.08                    2,745.92                    1,116.13  
----------------------------------------------------------------------------------------------------------------


  Table 1F.--Adjusted Operating Standardized Amounts For ``Temporary Relief'' Hospitals in Puerto Rico, Labor/  
                                                    Nonlabor                                                    
----------------------------------------------------------------------------------------------------------------
                                                                  Large urban areas            Other areas      
                                                             ---------------------------------------------------
                                                                 Labor       Nonlabor      Labor       Nonlabor 
----------------------------------------------------------------------------------------------------------------
National....................................................     2,766.12     1,124.33     2,766.12     1,124.33
Puerto Rico.................................................     1,329.63       535.21     1,308.58       526.73
----------------------------------------------------------------------------------------------------------------


[[Page 25622]]


                 Table 3C.--Hospital Case Mix Indexes for Discharges Occurring in Federal Fiscal Year 1997; Hospital Average Hourly Wage For Federal Fiscal Year 1999 Wage Index                
                                                                                          Page 1 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
010001.......................   01.4634   15.97   010097..........   00.9183   14.87   030006.........   01.5689   18.22   040005.........   01.0400   13.38   040118.........   01.3520   15.27
010004.......................   01.0055   13.79   010098..........   01.1894   13.02   030007.........   01.3034   17.95   040007.........   01.8696   18.99   040119.........   01.1640   15.33
010005.......................   01.1699   15.89   010099..........   01.1010   09.13   030008.........   02.2412   14.19   040008.........   01.0301   13.20   040124.........   01.0549   16.23
010006.......................   01.4636   16.19   010100..........   01.3314   15.67   030009.........   01.2640   17.83   040010.........   01.3262   16.83   040126.........   00.9551   13.26
010007.......................   01.1300   14.09   010101..........   01.0382   14.69   030010.........   01.4386   20.05   040011.........   00.9590   11.65   040134.........   02.6975  ......
010008.......................   01.0838   13.76   010102..........   00.9504   12.71   030011.........   01.4734   19.48   040014.........   01.2138   18.12   050002.........   01.5241   27.86
010009.......................   01.1456   17.50   010103..........   01.8119   17.65   030012.........   01.2358   18.04   040015.........   01.1668   14.80   050006.........   01.5662   20.69
010010.......................   01.0888   15.40   010104..........   01.6869   18.66   030013.........   01.2951   20.90   040016.........   01.6762   16.66   050007.........   01.5312   27.11
010011.......................   01.6411   20.28   010108..........   01.2192   16.69   030014.........   01.5263   19.07   040017.........   01.2700   14.62   050008.........   01.4438   25.60
010012.......................   01.2728   17.45   010109..........   01.1224   13.41   030016.........   01.1871   19.00   040018.........   01.2583   18.08   050009.........   01.6484   24.26
010015.......................   01.1428   14.04   010110..........   01.0248   14.97   030017.........   01.4718   19.72   040019.........   01.1438   12.08   050013.........   01.8476   23.25
010016.......................   01.2538   17.40   010112..........   01.1997   14.59   030018.........   01.8083   27.57   040020.........   01.5404   15.42   050014.........   01.1816   23.57
010018.......................   00.9607   17.72   010113..........   01.6522   15.97   030019.........   01.2636   23.65   040021.........   01.2056   16.15   050015.........   01.3820   24.35
010019.......................   01.2435   15.00   010114..........   01.3201   16.49   030022.........   01.4160   18.79   040022.........   01.5321   23.41   050016.........   01.1889   18.74
010021.......................   01.2461   15.83   010115..........   00.8706   08.92   030023.........   01.4822   20.04   040024.........   01.0031   13.38   050017.........   02.0973   24.47
010022.......................   01.0069   18.25   010117..........   00.8624  .......  030024.........   01.6963   20.87   040025.........   00.9000   12.48   050018.........   01.2579   17.02
010023.......................   01.6877   16.06   010118..........   01.3033   28.66   030025.........   01.0483   14.97   040026.........   01.5700   17.88   050021.........   01.4154   24.41
010024.......................   01.4236   15.62   010119..........   00.8398   16.57   030027.........   01.0392   17.17   040027.........   01.2930   13.77   050022.........   01.5819   23.22
010025.......................   01.3834   14.53   010120..........   01.0107   16.62   030030.........   01.7154   18.21   040028.........   01.0462   14.24   050024.........   01.3639   20.68
010027.......................   00.8180   36.37   010121..........   01.3471   13.03   030033.........   01.2640   15.67   040029.........   01.2975   17.64   050025.........   01.8279   21.99
010029.......................   01.6109   17.24   010123..........   01.2883   16.28   030034.........   01.0795   17.44   040030.........   00.8325   12.20   050026.........   01.5433   28.62
010031.......................   01.2801   17.36   010124..........   01.2886   16.44   030035.........   01.2315   17.93   040032.........   00.9669   11.81   050028.........   01.3707   15.51
010032.......................   00.9803   13.81   010125..........   01.0743   15.15   030036.........   01.2603   20.35   040035.........   00.9837   10.12   050029.........   01.4900   21.71
010033.......................   01.9671   18.82   010126..........   01.2171   18.91   030037.........   02.0594   20.18   040036.........   01.5104   17.85   050030.........   01.3267   20.82
010034.......................   01.1086   14.54   010127..........   01.3575   18.07   030038.........   01.6264   20.57   040037.........   01.1061   12.40   050032.........   01.2557   19.03
010035.......................   01.1827   17.08   010128..........   00.9738  .......  030040.........   01.1572   14.74   040039.........   01.2394   13.39   050033.........   01.4502   24.74
010036.......................   01.1899   17.99   010129..........   01.0590   12.94   030041.........   00.9538   14.31   040040.........   00.9817   15.09   050036.........   01.6546   15.95
010038.......................   01.3028   19.03   010130..........   00.9980   15.85   030043.........   01.2213   17.92   040041.........   01.2978   17.08   050038.........   01.4456   29.35
010039.......................   01.7055   17.67   010131..........   01.3864   17.25   030044.........   00.9736   16.04   040042.........   01.2567   15.12   050039.........   01.6097   21.59
010040.......................   01.6110   18.52   010134..........   00.8391   10.86   030047.........   00.9401   18.63   040044.........   01.0524   13.02   050040.........   01.2411   32.71
010043.......................   01.0489   11.63   010137..........   01.2373   18.84   030049.........   00.9939   20.75   040045.........   01.0079   17.86   050042.........   01.2889   22.76
010044.......................   01.1028   15.92   010138..........   00.9399   12.43   030054.........   00.8332   14.41   040047.........   01.1013   15.48   050043.........   01.5649   31.83
010045.......................   01.2056   14.77   010139..........   01.6766   20.38   030055.........   01.2012   17.65   040050.........   01.1795   12.44   050045.........   01.2364   18.69
010046.......................   01.5054   17.67   010143..........   01.2743   15.07   030059.........   01.3005   22.74   040051.........   01.1670   13.51   050046.........   01.1880   22.24
010047.......................   00.9884   12.14   010144..........   01.3459   16.59   030060.........   01.1528   17.75   040053.........   01.1178   15.65   050047.........   01.5646   34.07
010049.......................   01.1575   13.82   010145..........   01.3390   16.15   030061.........   01.6564   20.08   040054.........   01.0532   13.50   050051.........   01.1348   20.91
010050.......................   01.1489   14.17   010146..........   01.2470   16.83   030062.........   01.2455   16.61   040055.........   01.4655   15.78   050054.........   01.1263   18.44
010051.......................   00.9234   11.17   010148..........   00.9483  .......  030064.........   01.7664   18.45   040058.........   01.0463   15.12   050055.........   01.3276   22.45
010052.......................   01.0479   13.68   010149..........   01.3349   17.75   030065.........   01.7843   19.91   040060.........   00.9290   11.03   050056.........   01.3074   24.36
010053.......................   01.0750   08.17   010150..........   01.1552   15.82   030067.........   01.0939   16.99   040062.........   01.6786   15.55   050057.........   01.5828   20.60
010054.......................   01.1995   17.28   010152..........   01.2892   16.12   030068.........   01.1092   15.82   040064.........   01.0657   13.92   050058.........   01.4871   25.22
010055.......................   01.4737   16.47   010155..........   01.0788   10.90   030069.........   01.4037   21.66   040066.........   01.1801   16.36   050060.........   01.5008   18.49
010056.......................   01.3306   19.46   020001..........   01.5208   27.19   030071.........   01.0057  .......  040067.........   01.2165   12.63   050061.........   01.3507   22.13
010058.......................   00.9765   13.47   020002..........   01.0595   24.09   030072.........   00.8620  .......  040069.........   01.1095   15.47   050063.........   01.4701   23.89
010059.......................   01.0774   15.44   020004..........   01.1712   25.49   030073.........   01.0041  .......  040070.........   00.9098   14.25   050065.........   01.7005   21.95
010061.......................   01.1893   15.80   020005..........   00.9285   28.73   030074.........   00.9408  .......  040071.........   01.6234   16.49   050066.........   01.2265   19.77
010062.......................   01.0206   13.27   020006..........   01.1834   25.07   030075.........   00.8242  .......  040072.........   01.0982   15.41   050067.........   01.3204   21.48
010064.......................   01.7552   20.86   020007..........   00.9834   25.64   030076.........   00.9614  .......  040074.........   01.2503   16.30   050068.........   01.1315   19.98
010065.......................   01.3692   15.35   020008..........   01.1238   30.06   030077.........   00.8060  .......  040075.........   01.0369   12.15   050069.........   01.6246   24.57
010066.......................   00.9184   10.89   020009..........   00.8881   25.77   030078.........   01.0727  .......  040076.........   01.0407   16.99   050070.........   01.3716   31.44
010068.......................   01.2837   17.18   020010..........   01.0169   25.93   030079.........   00.8528  .......  040077.........   01.0621   12.57   050071.........   01.3791   33.07
010069.......................   01.1851   12.84   020011..........   00.9299   25.75   030080.........   01.5008   19.77   040078.........   01.5099   22.64   050072.........   01.4414   32.14
010072.......................   01.1579   15.22   020012..........   01.2746   26.15   030083.........   01.3763   22.10   040080.........   01.0790   16.38   050073.........   01.3063   33.68
010073.......................   01.0650   11.04   020013..........   01.0266   26.76   030084.........   01.1228  .......  040081.........   00.9679   10.85   050075.........   01.3412   32.86
010078.......................   01.2573   17.97   020014..........   01.1152   22.90   030085.........   01.4617   18.59   040082.........   01.2191   14.71   050076.........   01.9181   32.26
010079.......................   01.2411   14.42   020017..........   01.4752   25.14   030086.........   01.4318   20.19   040084.........   01.1006   16.62   050077.........   01.6304   24.52
010081.......................   01.8296   17.69   020018..........   00.9680  .......  030087.........   01.6536   19.77   040085.........   01.1954   15.29   050078.........   01.3632   25.59
010083.......................   01.0337   15.64   020019..........   00.9067  .......  030088.........   01.4231   19.42   040088.........   01.4395   13.39   050079.........   01.5434   31.90
010084.......................   01.5048   18.27   020020..........   00.7369  .......  030089.........   01.6391   19.70   040090.........   00.9349   14.77   050080.........   01.4214   19.44
010085.......................   01.2796   17.32   020021..........   00.8551  .......  030092.........   01.6833   21.25   040091.........   01.1266   18.55   050082.........   01.6661   21.99
010086.......................   01.0395   15.44   020024..........   01.1349   22.66   030093.........   01.3770   18.77   040093.........   00.9413   13.01   050084.........   01.6759   22.53
010087.......................   01.6587   16.36   020025..........   01.0164   26.32   030094.........   01.2784   19.19   040100.........   01.2392   12.91   050088.........   00.9877   19.55
010089.......................   01.2392   18.50   020026..........   01.2873  .......  030095.........   01.0461   18.85   040105.........   01.0353   13.05   050089.........   01.3688   18.85
010090.......................   01.6235   17.44   020027..........   01.0891  .......  030099.........   00.9439  .......  040106.........   01.0675   13.53   050090.........   01.2668   23.85
010091.......................   01.0247   13.51   030001..........   01.3399   19.87   040001.........   01.1079   13.42   040107.........   01.1428   16.75   050091.........   01.1370   21.99
010092.......................   01.4011   15.82   030002..........   01.7944   20.96   040002.........   01.1468   13.33   040109.........   01.1342   13.95   050092.........   00.9386   16.26
010094.......................   01.2128   16.01   030003..........   02.0396   22.65   040003.........   01.0880   13.97   040114.........   01.8758   17.98   050093.........   01.5500   23.90
010095.......................   00.9779   12.73   030004..........   01.1011   12.52   040004.........   01.6709   17.69   040116.........   01.2656   16.72   050096.........   01.2374   21.29
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                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
050097.......................   01.3873   18.48   050204..........   01.5825   24.52   050313.........   01.2044   22.00   050443.........   00.9057   18.82   050571.........   01.5096   20.05
050099.......................   01.4747   23.55   050205..........   01.2709   21.52   050315.........   01.3579   20.47   050444.........   01.2967   22.54   050573.........   01.6294   28.41
050100.......................   01.6983   33.49   050207..........   01.2640   20.02   050317.........   01.2655   21.86   050446.........   00.9770   10.06   050575.........   01.1367  ......
050101.......................   01.4168   31.68   050211..........   01.3186   30.67   050320.........   01.2324   27.70   050447.........   01.0672   18.58   050577.........   01.4644   20.19
050102.......................   01.3532   17.01   050213..........   01.5794   22.96   050324.........   01.9664   26.19   050448.........   01.0974   20.95   050578.........   01.4689   30.62
050103.......................   01.5661   23.46   050214..........   01.4659   21.31   050325.........   01.2308   21.08   050449.........   01.3366   21.14   050579.........   01.4970   28.52
050104.......................   01.4815   23.94   050215..........   01.5572   29.63   050327.........   01.5599   18.67   050454.........   01.8425   25.82   050580.........   01.4380   27.74
050107.......................   01.4511   23.02   050217..........   01.3457   19.08   050329.........   01.2928   19.88   050455.........   01.7746   16.56   050581.........   01.3930   24.39
050108.......................   01.8295   23.87   050219..........   01.1139   18.83   050331.........   01.4843   24.20   050456.........   01.1694   16.92   050583.........   01.6266   21.88
050110.......................   01.1656   20.59   050222..........   01.6256   31.91   050333.........   01.1427   24.96   050457.........   02.0310   31.03   050584.........   01.1966   20.18
050111.......................   01.3578   20.16   050224..........   01.5705   23.23   050334.........   01.7269   34.59   050459.........   01.2985   29.51   050585.........   01.2772   27.19
050112.......................   01.4824   19.36   050225..........   01.6075   22.02   050335.........   01.4534   21.39   050464.........   01.8738   22.01   050586.........   01.3490   20.52
050113.......................   01.3756   31.25   050226..........   01.4119   24.79   050336.........   01.3695   20.14   050468.........   01.3879   19.71   050588.........   01.3220   24.70
050114.......................   01.3693   23.13   050228..........   01.2880   30.89   050342.........   01.3706   17.71   050469.........   01.0972   16.63   050589.........   01.2474   24.07
050115.......................   01.5640   20.46   050230..........   01.3342   25.40   050343.........   01.0225   14.95   050470.........   01.1474   18.51   050590.........   01.3578   24.92
050116.......................   01.4487   23.36   050231..........   01.6681   25.54   050348.........   01.6579   25.44   050471.........   01.8883   23.41   050591.........   01.3784   22.87
050117.......................   01.4515   20.79   050232..........   01.7123   21.50   050349.........   00.8825   14.57   050476.........   01.3512   21.10   050592.........   01.3661   18.46
050118.......................   01.1901   23.81   050234..........   01.2536   30.23   050350.........   01.3957   24.28   050477.........   01.4936   26.90   050593.........   01.1846  ......
050121.......................   01.3531   24.60   050235..........   01.6014   24.55   050351.........   01.4653   32.84   050478.........   00.9635   21.11   050594.........   01.6739   19.05
050122.......................   01.5966   26.85   050236..........   01.4693   25.40   050352.........   01.3034   19.07   050481.........   01.4648   27.13   050597.........   01.2665   21.36
050124.......................   01.3182   17.12   050238..........   01.5517   24.76   050353.........   01.6669   24.77   050482.........   01.0978   16.07   050598.........   01.3875   32.07
050125.......................   01.3970   27.55   050239..........   01.5877   21.67   050355.........   00.9808   16.04   050483.........   01.1821   22.22   050599.........   01.6318   23.23
050126.......................   01.5414   24.94   050240..........   01.4863   21.17   050357.........   01.4011   23.77   050485.........   01.6561   23.81   050601.........   01.6150   32.05
050127.......................   01.3406   24.15   050241..........   01.2337   26.32   050359.........   01.2854   19.11   050486.........   01.3493   23.00   050603.........   01.4035   22.60
050128.......................   01.6211   21.63   050242..........   01.4284   29.91   050360.........   01.4136   31.05   050488.........   01.3349   32.94   050604.........   01.5622   37.27
050129.......................   01.6194   14.25   050243..........   01.5930   22.58   050366.........   01.3455   22.32   050491.........   01.1935   21.97   050607.........   01.1545   20.69
050131.......................   01.3023   29.90   050245..........   01.4385   23.33   050367.........   01.2485   27.64   050492.........   01.4113   22.37   050608.........   01.3080   15.26
050132.......................   01.4257   23.74   050248..........   01.2618   27.54   050369.........   01.2376   21.58   050494.........   01.2167   26.20   050609.........   01.4505   32.31
050133.......................   01.2911   25.55   050251..........   01.0989   14.91   050373.........   01.4446   24.31   050496.........   01.7259   31.88   050613.........   01.0696   31.83
050135.......................   01.3964   25.36   050253..........   01.2992   25.63   050376.........   01.3991   26.32   050497.........   00.8270   10.59   050615.........   01.6042   23.31
050136.......................   01.4011   24.04   050254..........   01.2141   14.11   050377.........   00.9333   19.49   050498.........   01.2434   24.96   050616.........   01.3591   22.85
050137.......................   01.4012   30.81   050256..........   01.7518   23.91   050378.........   01.1364   20.86   050502.........   01.7222   22.74   050618.........   01.1163   22.63
050138.......................   01.9630   33.22   050257..........   01.1275   19.38   050379.........   00.9589   15.15   050503.........   01.3400   23.15   050623.........   02.0034   27.05
050139.......................   01.2532   31.55   050260..........   01.0044   24.07   050380.........   01.6867   29.30   050506.........   01.4395   27.49   050624.........   01.3554   22.18
050140.......................   01.2757   31.54   050261..........   01.2723   18.81   050382.........   01.3984   23.86   050510.........   01.3791   31.86   050625.........   01.6074   25.23
050144.......................   01.6355   29.12   050262..........   01.8576   27.43   050385.........   01.4021   26.64   050512.........   01.5743   33.03   050630.........   01.3401   23.93
050145.......................   01.3861   31.48   050264..........   01.3335   27.45   050388.........   00.9019   20.64   050515.........   01.3473   32.36   050633.........   01.3131   21.95
050146.......................   01.4762  .......  050267..........   01.6544   27.78   050390.........   01.1857   16.75   050516.........   01.5400   26.16   050636.........   01.5051   26.10
050148.......................   01.1151   21.00   050270..........   01.3573   24.13   050391.........   01.3292   21.68   050517.........   01.1822   19.69   050638.........   01.1025   24.90
050149.......................   01.4748   22.78   050272..........   01.3703   21.55   050392.........   00.9917   18.42   050522.........   01.2252   30.95   050641.........   01.2588   14.88
050150.......................   01.2678   23.95   050274..........   00.9903   21.63   050393.........   01.4860   17.95   050523.........   01.2384   28.96   050643.........   00.8426  ......
050152.......................   01.3850   23.39   050276..........   01.2072   33.01   050394.........   01.5488   20.22   050526.........   01.3236   13.42   050644.........   01.0506   22.44
050153.......................   01.6231   28.40   050277..........   01.4723   19.05   050396.........   01.6148   24.12   050528.........   01.2785   19.70   050660.........   01.4613  ......
050155.......................   01.0917   22.33   050278..........   01.5669   22.63   050397.........   00.9890   20.00   050531.........   01.1762   20.18   050661.........   00.8186   20.05
050158.......................   01.3649   27.94   050279..........   01.3441   19.04   050401.........   01.1257   19.64   050534.........   01.4679   23.66   050662.........   00.8651   33.41
050159.......................   01.2998   19.09   050280..........   01.7639   25.90   050404.........   01.0765   15.96   050535.........   01.3453   23.23   050663.........   01.1547   24.12
050167.......................   01.2885   21.83   050281..........   01.5490   33.56   050406.........   01.0708   19.56   050537.........   01.3680   18.57   050666.........   00.9460   34.46
050168.......................   01.5276   22.07   050282..........   01.3068   23.58   050407.........   01.3597   29.45   050539.........   01.2567   19.52   050667.........   01.0189   28.01
050169.......................   01.4399   24.49   050283..........   01.5231   27.35   050410.........   01.0632   13.08   050541.........   01.5665   33.44   050668.........   01.1332   39.35
050170.......................   01.4906   21.04   050286..........   00.8525   18.46   050411.........   01.3589   33.17   050542.........   01.1186   14.45   050670.........   00.7487   20.84
050172.......................   01.2523   19.87   050289..........   01.6964   30.78   050414.........   01.3074   23.74   050543.........   00.9409   23.72   050674.........   01.3219   32.55
050173.......................   01.3729   21.72   050290..........   01.6895   33.81   050417.........   01.3155   20.45   050545.........   00.8583   27.87   050675.........   01.9709   14.65
050174.......................   01.6799   29.40   050291..........   01.1544   30.54   050419.........   01.4360   16.25   050546.........   00.6946   31.14   050676.........   00.9474   16.75
050175.......................   01.3660   23.84   050292..........   01.0469   22.19   050420.........   01.3375   23.41   050547.........   00.8417   36.25   050677.........   01.3998   32.89
050177.......................   01.2731   16.69   050293..........   01.1254   20.70   050423.........   01.0173   19.31   050549.........   01.7120   26.33   050678.........   01.2229  ......
050179.......................   01.3003   21.22   050295..........   01.4947   21.01   050424.........   01.8153   23.48   050550.........   01.4607   22.49   050680.........   01.1971   28.94
050180.......................   01.6017   32.17   050296..........   01.1902   23.74   050425.........   01.3094   34.22   050551.........   01.3289   24.83   050682.........   00.8928   22.32
050183.......................   01.1126   19.44   050298..........   01.3275   22.54   050426.........   01.3708   25.47   050552.........   01.2293   20.52   050684.........   01.2450   17.19
050186.......................   01.2933   27.51   050299..........   01.3607   20.49   050427.........   00.9189   19.93   050557.........   01.5109   21.78   050685.........   01.2468   28.37
050188.......................   01.4286   26.90   050300..........   01.4936   19.23   050430.........   01.0555   19.53   050559.........   01.3996   23.82   050686.........   01.3134   32.42
050189.......................   01.0831   22.39   050301..........   01.2481   24.81   050432.........   01.6129   22.37   050561.........   01.1996   32.15   050688.........   01.2792   25.15
050191.......................   01.4729   20.67   050302..........   01.3482   27.55   050433.........   01.1058   20.42   050564.........   01.3309   06.57   050689.........   01.4155   30.16
050192.......................   01.1901   20.19   050305..........   01.5457   29.10   050434.........   01.1365   19.87   050565.........   01.3544   13.81   050690.........   01.5124   32.17
050193.......................   01.3308   22.67   050307..........   01.3027   19.99   050435.........   01.2208   29.08   050566.........   00.9061   13.99   050693.........   01.3049   29.48
050194.......................   01.2435   27.41   050308..........   01.4832   27.92   050436.........   00.9412   15.20   050567.........   01.6269   24.54   050694.........   01.3586   18.36
050195.......................   01.5834   33.92   050309..........   01.3376   24.61   050438.........   01.8098   19.83   050568.........   01.3990   19.06   050695.........   01.0960   28.46
050196.......................   01.3052   15.36   050310..........   01.0912   20.24   050440.........   01.3403   18.63   050569.........   01.3783   23.26   050696.........   02.3021   26.75
050197.......................   01.8716   30.49   050312..........   01.9222   24.66   050441.........   02.0343   26.41   050570.........   01.7110   23.79   050697.........   01.4515   20.60
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[[Page 25624]]


                                                                                          Page 3 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
050698.......................   00.9075  .......  060073..........   01.0655   16.43   100009.........   01.4921   21.67   100102.........   01.0245   18.11   100210.........   01.6031   18.18
050699.......................   00.6236   20.97   060075..........   01.3102   24.34   100010.........   01.5263   24.50   100103.........   00.9830   16.14   100211.........   01.3282   20.20
050700.......................   01.5678   31.31   060076..........   01.3829   19.28   100012.........   01.6950   16.74   100105.........   01.4360   21.03   100212.........   01.6623   20.46
050701.......................   01.3360   30.27   060085..........   00.9348   12.76   100014.........   01.4918   21.94   100106.........   01.0823   16.69   100213.........   01.5199   18.60
050704.......................   01.1294   15.23   060087..........   01.6777   21.08   100015.........   01.4344   17.47   100107.........   01.3253   18.60   100217.........   01.3379   18.88
050707.......................   01.0702   27.09   060088..........   00.9931   23.16   100017.........   01.4976   17.71   100108.........   01.0633   14.31   100220.........   01.7265   26.34
050708.......................   01.2629   22.59   060090..........   00.9777   13.54   100018.........   01.5086   21.03   100109.........   01.3838   18.97   100221.........   01.7374   25.21
050709.......................   01.3280   18.88   060096..........   01.0685   21.94   100019.........   01.5290   19.50   100110.........   01.4040   20.80   100222.........   01.4127   20.13
050710.......................   01.3480   26.13   060100..........   01.5060  .......  100020.........   01.3336   23.86   100112.........   00.9244   12.57   100223.........   01.4858   18.81
050713.......................   00.8060  .......  060103..........   01.2902   23.16   100022.........   01.9055   24.49   100113.........   02.1161   19.93   100224.........   01.4049   20.57
050714.......................   01.3480  .......  060104..........   01.2502   21.91   100023.........   01.4358   17.35   100114.........   01.4078   18.20   100225.........   01.4014   20.59
050715.......................   01.7138  .......  060107..........   01.1286  .......  100024.........   01.3638   19.67   100117.........   01.3161   19.37   100226.........   01.4003   18.53
050716.......................   03.8652  .......  070001..........   01.7599   25.86   100025.........   01.8449   18.06   100118.........   01.2409   19.51   100228.........   01.3287   20.31
050717.......................   00.8003  .......  070002..........   01.8086   24.34   100026.........   01.5872   18.06   100121.........   01.2121   16.03   100229.........   01.3032   18.10
050718.......................   00.9336  .......  070003..........   01.1454   25.30   100027.........   00.9920   15.86   100122.........   01.3058   16.67   100230.........   01.3648   22.35
050899.......................   00.5288  .......  070004..........   01.2352   24.34   100028.........   01.2339   18.03   100124.........   01.3284   14.64   100231.........   01.7051   16.97
060001.......................   01.6504   20.31   070005..........   01.4131   24.84   100029.........   01.4199   19.56   100125.........   01.3273   18.00   100232.........   01.3660   19.83
060003.......................   01.3293   18.91   070006..........   01.4122   27.20   100030.........   01.3066   19.01   100126.........   01.4408   18.89   100234.........   01.5349   18.94
060004.......................   01.2793   20.57   070007..........   01.3912   24.35   100032.........   01.8893   17.78   100127.........   01.6387   19.58   100235.........   01.5525   17.92
060006.......................   01.1829   18.36   070008..........   01.2534   22.94   100034.........   01.7634   19.44   100128.........   02.1517   21.53   100236.........   01.4246   19.87
060007.......................   01.1389   15.33   070009..........   01.2944   24.56   100035.........   01.6050   17.98   100129.........   01.2696   17.72   100237.........   02.2024   23.28
060008.......................   01.1684   15.83   070010..........   01.6774   20.35   100038.........   01.5798   18.23   100130.........   01.2454   18.62   100238.........   01.5894   13.88
060009.......................   01.4660   21.35   070011..........   01.4579   23.69   100039.........   01.5397   21.36   100131.........   01.3794   20.96   100239.........   01.4442   19.35
060010.......................   01.5585   22.31   070012..........   01.2488   23.36   100040.........   01.7626   17.97   100132.........   01.3098   19.53   100240.........   00.7775   15.37
060011.......................   01.3645   22.12   070015..........   01.4162   24.05   100043.........   01.3643   15.33   100134.........   00.9935   13.03   100241.........   00.9329   13.90
060012.......................   01.4391   18.62   070016..........   01.3810   23.00   100044.........   01.4082   21.18   100135.........   01.6123   17.62   100242.........   01.4132   16.91
060013.......................   01.3221   16.29   070017..........   01.3702   24.60   100045.........   01.4052   19.25   100137.........   01.3170   18.60   100243.........   01.4048   24.16
060014.......................   01.7402  .......  070018..........   01.4229   28.54   100046.........   01.4822   20.36   100138.........   01.0153   10.76   100244.........   01.4078   19.39
060015.......................   01.5816   21.13   070019..........   01.2953   24.83   100047.........   01.7725   18.92   100139.........   01.1145   15.04   100246.........   01.4106   17.86
060016.......................   01.2616   17.07   070020..........   01.3139   24.55   100048.........   00.9695   13.58   100140.........   01.2249   17.48   100248.........   01.6271   18.75
060018.......................   01.2400   17.15   070021..........   01.2930   24.85   100049.........   01.3276   17.97   100142.........   01.2594   18.68   100249.........   01.3503   18.84
060020.......................   01.6773   17.56   070022..........   01.8192   23.48   100050.........   01.1456   15.90   100144.........   01.2818   19.61   100252.........   01.2846   21.94
060022.......................   01.6160   19.49   070024..........   01.3153   23.84   100051.........   01.2118   19.11   100146.........   01.0877   16.15   100253.........   01.5082   20.97
060023.......................   01.6591   17.02   070025..........   01.8600   19.43   100052.........   01.4303   16.90   100147.........   01.0605   14.54   100254.........   01.5827   18.66
060024.......................   01.7966   22.84   070026..........   01.1616   18.55   100053.........   01.2198   18.09   100150.........   01.3984   19.96   100255.........   01.2900   24.34
060027.......................   01.6866   21.24   070027..........   01.2854   23.11   100054.........   01.3283   17.76   100151.........   01.7240   18.08   100256.........   02.0081   18.90
060028.......................   01.4966   21.55   070028..........   01.5443   24.77   100055.........   01.3757   17.93   100154.........   01.5955   19.74   100258.........   01.6280   21.07
060029.......................   00.9005   15.35   070029..........   01.3587   21.95   100056.........   01.4068   19.38   100156.........   01.2007   19.92   100259.........   01.4194   18.73
060030.......................   01.3241   19.00   070030..........   01.2292   25.18   100057.........   01.4184   18.63   100157.........   01.5860   21.06   100260.........   01.4513   21.73
060031.......................   01.6355   19.53   070031..........   01.2535   23.12   100060.........   01.7365   21.02   100159.........   00.9550   11.69   100262.........   01.3943   21.16
060032.......................   01.4770   20.78   070033..........   01.4122   26.38   100061.........   01.4813   21.68   100160.........   01.2495   18.43   100263.........   01.2482   18.64
060033.......................   01.0722   13.41   070034..........   01.3825   29.05   100062.........   01.7465   18.11   100161.........   01.7073   21.30   100264.........   01.4012   17.62
060034.......................   01.5666  .......  070035..........   01.4072   22.69   100063.........   01.2890   18.31   100162.........   01.4540   19.83   100265.........   01.3352   15.01
060036.......................   01.1694   15.76   070036..........   01.5709   27.95   100067.........   01.4095   16.81   100165.........   01.1337   13.18   100266.........   01.3566   18.10
060037.......................   01.0286   13.56   070038..........   01.0707  .......  100068.........   01.3733   17.72   100166.........   01.4808   19.75   100267.........   01.3379   19.83
060038.......................   01.0310   13.78   070039..........   00.9302   23.64   100069.........   01.3153   15.88   100167.........   01.4454   20.58   100268.........   01.2241   22.61
060041.......................   00.9383   14.14   080001..........   01.7025   27.32   100070.........   01.4966   18.19   100168.........   01.3650   19.91   100269.........   01.4247   20.37
060042.......................   01.0363   14.73   080002..........   01.2023   15.33   100071.........   01.2953   16.97   100169.........   01.8710   20.54   100270.........   00.8682   20.06
060043.......................   00.9025   12.99   080003..........   01.3849   20.16   100072.........   01.2360   23.32   100170.........   01.4100   15.49   100271.........   01.7428   20.02
060044.......................   01.1085   16.07   080004..........   01.3094   19.45   100073.........   01.7511   20.04   100172.........   01.3995   14.68   100275.........   01.4146   20.36
060046.......................   01.0901   18.50   080006..........   01.4184   21.83   100075.........   01.6523   18.22   100173.........   01.6957   17.25   100276.........   01.2702   22.13
060047.......................   00.9872   13.98   080007..........   01.4486   16.75   100076.........   01.3180   17.07   100174.........   01.3787   17.95   100277.........   01.0519   15.24
060049.......................   01.3479   20.25   090001..........   01.5888   27.79   100077.........   01.3753   16.82   100175.........   01.2198   15.49   100279.........   01.3775   12.47
060050.......................   01.2593   16.03   090002..........   01.3122   19.74   100078.........   01.1969   16.33   100176.........   02.0937   23.45   100280.........   01.3550   16.99
060052.......................   01.0840   13.49   090003..........   01.3697   25.82   100079.........   01.6561   19.15   100177.........   01.3473   18.58   100281.........   01.3003   22.78
060053.......................   01.1047   14.93   090004..........   01.7397   24.43   100080.........   01.6318   22.70   100179.........   01.7319   19.47   100282.........   01.1124   17.70
060054.......................   01.3319   18.61   090005..........   01.3450   23.71   100081.........   01.0539   14.21   100180.........   01.4631   19.43   110001.........   01.3047   15.63
060056.......................   00.9946   15.37   090006..........   01.3214   20.39   100082.........   01.4614   18.91   100181.........   01.2111   21.61   110002.........   01.3058   16.54
060057.......................   01.0133   23.55   090007..........   01.3635   19.38   100084.........   01.4186   20.77   100183.........   01.2830   18.48   110003.........   01.3845   15.24
060058.......................   00.9506   15.60   090008..........   01.4969   20.72   100085.........   01.3915   21.33   100187.........   01.4150   19.92   110004.........   01.3881   18.05
060060.......................   00.9769   14.53   090010..........   01.0223   17.93   100086.........   01.2392   21.23   100189.........   01.3952   24.14   110005.........   01.1802   17.38
060062.......................   00.9096   16.53   090011..........   02.0090   25.70   100087.........   01.8553   21.28   100191.........   01.2949   20.19   110006.........   01.4001   19.78
060064.......................   01.4880   21.56   100001..........   01.4825   16.62   100088.........   01.6726   21.08   100199.........   01.3616   19.76   110007.........   01.6056   16.12
060065.......................   01.3260   22.85   100002..........   01.4763   19.92   100090.........   01.3888   17.89   100200.........   01.3456   21.55   110008.........   01.2651   18.30
060066.......................   01.0226   15.09   100004..........   01.0119   13.82   100092.........   01.5281   19.47   100204.........   01.6026   19.37   110009.........   01.1532   15.80
060068.......................   01.0475   18.74   100006..........   01.6406   20.10   100093.........   01.5080   15.93   100206.........   01.3988   19.96   110010.........   02.1459   24.74
060070.......................   01.1221   17.17   100007..........   01.8866   20.87   100098.........   01.1552   19.33   100208.........   01.5848   22.72   110011.........   01.2262   16.24
060071.......................   01.2194   16.52   100008..........   01.7096   20.20   100099.........   01.2922   13.50   100209.........   01.5855   17.58   110013.........   01.1130   16.61
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[[Page 25625]]


                                                                                          Page 4 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
110014.......................   01.0448   16.21   110101..........   01.1323   12.27   110198.........   01.3303   25.48   130048.........   01.0690   14.17   140081.........   01.0654   14.36
110015.......................   01.1788   19.15   110103..........   00.9185   11.59   110200.........   01.8824   19.23   130049.........   01.2597   19.05   140082.........   01.4505   22.85
110016.......................   01.2943   16.27   110104..........   01.0983   15.18   110201.........   01.5092   18.30   130054.........   00.8904   17.88   140083.........   01.3069   18.82
110017.......................   00.8766   13.46   110105..........   01.2904   15.96   110203.........   00.9956   20.45   130056.........   00.8204   17.37   140084.........   01.2298   19.27
110018.......................   01.1447   18.80   110107..........   01.8386   18.54   110204.........   00.8148   18.89   130060.........   01.3078   20.72   140086.........   01.1655   15.72
110020.......................   01.3285   18.61   110108..........   00.9689   17.58   110205.........   01.0763   22.85   130061.........   00.9403   09.29   140087.........   01.3956   17.07
110023.......................   01.2840   18.65   110109..........   01.0955   15.30   110207.........   01.1607   12.46   130063.........   01.1768  .......  140088.........   01.7029   21.97
110024.......................   01.4669   19.21   110111..........   01.1955   15.74   110208.........   00.9903   15.74   140001.........   01.3044   15.14   140089.........   01.2384   17.29
110025.......................   01.4282   17.90   110112..........   01.1297   18.83   110209.........   00.7381   16.57   140002.........   01.3201   18.33   140090.........   01.4953   23.24
110026.......................   01.2060   14.58   110113..........   01.1014   14.21   110211.........   00.9586  .......  140003.........   01.0457   15.69   140091.........   01.8169   18.10
110027.......................   01.1287   15.90   110114..........   01.0561   15.10   110212.........   01.1651  .......  140004.........   01.0989   16.55   140093.........   01.1840   18.79
110028.......................   01.6783   20.65   110115..........   01.6734   22.60   110213.........   00.7480  .......  140005.........   00.9503   10.22   140094.........   01.3097   20.06
110029.......................   01.3697   20.27   110118..........   01.0544   11.38   120001.........   01.8279   27.25   140007.........   01.4925   21.24   140095.........   01.3835   20.89
110030.......................   01.2736   17.81   110120..........   01.0683   12.89   120002.........   01.2601   23.99   140008.........   01.5269   20.27   140097.........   00.9245   15.85
110031.......................   01.2780   19.47   110121..........   01.2134   14.59   120003.........   01.1064   24.14   140010.........   01.3777   23.35   140100.........   01.3042   20.50
110032.......................   01.3079   15.70   110122..........   01.3699   18.25   120004.........   01.2164   24.55   140011.........   01.1962   16.35   140101.........   01.2281   18.42
110033.......................   01.4405   21.48   110124..........   01.3180   14.58   120005.........   01.2966   21.62   140012.........   01.2712   18.24   140102.........   01.1167   15.46
110034.......................   01.6284   18.31   110125..........   01.2718   16.36   120006.........   01.3249   24.64   140013.........   01.5981   16.59   140103.........   01.4637   15.98
110035.......................   01.4374   23.29   110127..........   00.9214   14.72   120007.........   01.6729   21.82   140014.........   01.2346   18.98   140105.........   01.3523   20.16
110036.......................   01.7729  .......  110128..........   01.1853   18.34   120009.........   00.9647   19.58   140015.........   01.2859   14.77   140107.........   01.0723   14.19
110038.......................   01.4872   17.19   110129..........   01.6924   17.61   120010.........   01.8131   23.76   140016.........   00.9826   12.09   140108.........   01.3529   22.83
110039.......................   01.3748   19.83   110130..........   01.0679   11.85   120011.........   01.3231   32.97   140018.........   01.3572   19.73   140109.........   01.2235   14.65
110040.......................   01.1392   17.40   110132..........   01.1281   13.98   120012.........   00.8889   21.42   140019.........   01.0877   14.26   140110.........   01.2260   18.89
110041.......................   01.1919   16.68   110134..........   00.9052   12.22   120014.........   01.3437   23.53   140024.........   00.9826   13.82   140112.........   01.1475   14.27
110042.......................   01.2326   16.85   110135..........   01.3155   17.76   120015.........   00.8945   23.63   140025.........   01.0844   16.04   140113.........   01.5963   18.16
110043.......................   01.8013   16.83   110136..........   01.1358   15.43   120016.........   01.0773   26.99   140026.........   01.2533   16.60   140114.........   01.3451   19.18
110044.......................   01.1835   15.11   110140..........   01.0384   15.81   120018.........   01.0119   22.29   140027.........   01.3199   17.12   140115.........   01.3318   19.21
110045.......................   01.2010   19.00   110141..........   01.0430   13.17   120019.........   01.2134   20.93   140029.........   01.4133   20.69   140116.........   01.2572   20.69
110046.......................   01.2702   19.27   110142..........   00.9278   10.94   120021.........   00.8363   19.89   140030.........   01.7236   21.88   140117.........   01.5466   20.39
110048.......................   01.2958   14.77   110143..........   01.4312   20.93   120022.........   01.6938   17.36   140031.........   01.1981   14.47   140118.........   01.6712   23.20
110049.......................   01.0595   12.66   110144..........   01.1053   18.09   120026.........   01.2420   24.30   140032.........   01.3088   17.51   140119.........   01.7295   21.17
110050.......................   01.2663   17.24   110146..........   01.1084   16.74   120027.........   01.4788   22.77   140033.........   01.2949   22.13   140120.........   01.4493   16.54
110051.......................   01.0328   13.87   110149..........   01.1383   18.93   120028.........   01.2495  .......  140034.........   01.1849   18.25   140121.........   01.4033   14.91
110052.......................   01.1633   08.57   110150..........   01.3908   18.34   130001.........   00.9237   20.88   140035.........   01.0753   13.77   140122.........   01.5946   22.76
110054.......................   01.3234   18.80   110152..........   01.0769   15.05   130002.........   01.3874   15.94   140036.........   01.2318   17.01   140124.........   01.2207   25.20
110056.......................   01.1047   16.02   110153..........   01.0943   18.60   130003.........   01.3296   19.77   140037.........   01.0362   13.33   140125.........   01.3391   16.31
110059.......................   01.3075   12.05   110154..........   01.0296   13.75   130005.........   01.4326   19.70   140038.........   01.2131   14.65   140127.........   01.4371   18.66
110061.......................   01.0818   13.87   110155..........   01.1450   14.18   130006.........   01.8387   19.10   140040.........   01.3081   15.90   140128.........   01.0565   16.08
110062.......................   00.8961   14.52   110156..........   01.0223   15.53   130007.........   01.6496   19.28   140041.........   01.1977   16.33   140129.........   01.1941   16.61
110063.......................   01.1382   15.19   110161..........   01.3086   20.74   130008.........   00.9899   12.07   140042.........   01.0291   13.94   140130.........   01.2719   24.16
110064.......................   01.3862   18.18   110162..........   00.8099  .......  130009.........   00.9347   15.62   140043.........   01.1678   17.93   140132.........   01.5121   23.60
110065.......................   01.0241   12.93   110163..........   01.5208   18.71   130010.........   00.9101   19.08   140045.........   01.0478   15.21   140133.........   01.3440   20.51
110066.......................   01.4714   20.37   110164..........   01.4277   21.27   130011.........   01.3476   19.35   140046.........   01.3159   15.70   140135.........   01.2990   16.16
110069.......................   01.2824   18.52   110165..........   01.4010   18.70   130012.........   01.0020   22.02   140047.........   01.1731   16.57   140137.........   01.0428   17.24
110070.......................   01.1006   17.18   110166..........   01.5150   18.65   130013.........   01.3101   19.25   140048.........   01.3315   21.58   140138.........   01.0982   14.18
110071.......................   01.1356   11.04   110168..........   01.7223   20.47   130014.........   01.3693   17.03   140049.........   01.5511   20.89   140139.........   01.1145   15.86
110072.......................   01.0173   12.51   110169..........   01.1931   18.66   130015.........   00.9264   17.50   140051.........   01.5114   19.42   140140.........   01.1906   18.58
110073.......................   01.2272   14.32   110171..........   01.4942   20.46   130016.........   00.9173   17.25   140052.........   01.3990   17.19   140141.........   01.3059   14.79
110074.......................   01.4541   17.24   110172..........   01.4235   21.34   130017.........   01.1709   16.55   140053.........   02.0119   18.24   140143.........   01.1514   17.94
110075.......................   01.3591   16.51   110174..........   00.9675   15.24   130018.........   01.7382   17.35   140054.........   01.3761   22.90   140144.........   01.0424   17.37
110076.......................   01.5073   20.04   110176..........   02.5217   20.96   130019.........   01.1641   17.99   140055.........   00.9267   13.99   140145.........   01.1604   16.19
110078.......................   01.7630   21.73   110177..........   01.5788   19.87   130021.........   00.9692   15.30   140058.........   01.2943   16.54   140146.........   01.0612   16.77
110079.......................   01.3856   19.30   110178..........   02.9393   16.83   130022.........   01.2437   18.53   140059.........   01.2264   15.77   140147.........   01.3933   15.62
110080.......................   01.2083   18.22   110179..........   01.1105   20.42   130024.........   01.0773   18.00   140061.........   01.1070   14.15   140148.........   01.8210   17.46
110082.......................   02.1044   21.81   110181..........   00.9493   14.70   130025.........   01.1043   14.20   140062.........   01.2892   26.44   140150.........   01.5671   25.02
110083.......................   01.7148   20.98   110183..........   01.3855   21.18   130026.........   01.1592   19.63   140063.........   01.4336   22.90   140151.........   01.0723   19.64
110086.......................   01.2336   13.04   110184..........   01.2704   19.37   130027.........   00.8923   19.57   140064.........   01.3056   17.80   140152.........   01.1727   21.63
110087.......................   01.3469   20.67   110185..........   01.1237   15.51   130028.........   01.2366   16.83   140065.........   01.5316   24.12   140155.........   01.3024   17.47
110089.......................   01.2215   17.12   110186..........   01.3551   15.59   130029.........   01.1095   17.62   140066.........   01.2213   15.60   140158.........   01.3851   22.91
110091.......................   01.3195   19.73   110187..........   01.3406   19.18   130030.........   00.8668   18.40   140067.........   01.7964   17.99   140160.........   01.2137   16.52
110092.......................   01.1612   15.18   110188..........   01.3408   18.49   130031.........   00.9616   16.44   140068.........   01.2411   18.98   140161.........   01.2198   18.07
110093.......................   00.9463   11.69   110189..........   01.1257   17.51   130034.........   01.0096   19.35   140069.........   01.0622   16.04   140162.........   01.7869   17.93
110094.......................   01.0827   14.08   110190..........   01.0981   15.41   130035.........   01.0090   19.47   140070.........   01.2423   17.31   140164.........   01.4470   20.29
110095.......................   01.3819   14.69   110191..........   01.3627   17.96   130036.........   01.3025   13.66   140074.........   01.0465   17.25   140165.........   01.1078   13.70
110096.......................   01.1427   14.85   110192..........   01.4687   21.41   130037.........   01.2910   16.97   140075.........   01.4117   14.13   140166.........   01.3247   17.54
110097.......................   01.0561   14.44   110193..........   01.2426   17.89   130043.........   00.9508   15.79   140077.........   01.2351   16.89   140167.........   01.1271   15.06
110098.......................   00.9804   15.28   110194..........   00.9257   14.21   130044.........   01.1952   10.50   140079.........   01.2417   17.22   140168.........   01.1771   16.36
110100.......................   01.0482   16.39   110195..........   01.1159   13.34   130045.........   00.9956   15.28   140080.........   01.6294   20.58   140170.........   01.0929   13.81
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                                                                                          Page 5 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
140171.......................   00.9828   12.95   140300..........   01.5868   23.72   150074.........   01.6442   19.08   160030.........   01.3920   18.00   160109.........   01.0993   14.76
140172.......................   01.6579   18.91   150001..........   01.1146   19.10   150075.........   01.1491   15.63   160031.........   01.1010   14.50   160110.........   01.5914   15.04
140173.......................   00.9180   16.52   150002..........   01.5657   18.51   150076.........   01.1723   21.36   160032.........   01.1307   16.27   160111.........   01.0133   12.29
140174.......................   01.5914   20.01   150003..........   01.6957   19.07   150077.........   01.1446   17.40   160033.........   01.8232   17.57   160112.........   01.4106   16.06
140176.......................   01.2364   19.89   150004..........   01.5034   19.60   150078.........   01.0704   17.34   160034.........   01.1382   15.15   160113.........   01.0099   13.35
140177.......................   01.3461   17.27   150005..........   01.1843   18.97   150079.........   01.2096   15.90   160035.........   01.0002   16.77   160114.........   01.0199   15.40
140179.......................   01.3420   20.09   150006..........   01.2849   18.75   150082.........   01.5715   18.22   160036.........   00.9948   19.22   160115.........   01.0123   15.21
140180.......................   01.4432   20.79   150007..........   01.2112   23.06   150084.........   01.9333   21.85   160037.........   01.0667   17.12   160116.........   01.1438   16.05
140181.......................   01.4074   19.27   150008..........   01.4533   20.34   150086.........   01.3607   16.73   160039.........   01.0325   17.49   160117.........   01.4481   16.57
140182.......................   01.4406   15.18   150009..........   01.3592   17.29   150088.........   01.3868   18.67   160040.........   01.3654   17.43   160118.........   01.0367   15.14
140184.......................   01.2681   15.18   150010..........   01.3797   16.85   150089.........   01.4239   19.56   160041.........   01.1128   14.40   160120.........   01.0155   11.33
140185.......................   01.5341   17.64   150011..........   01.2435   18.61   150090.........   01.2347   18.94   160043.........   01.0103   14.43   160122.........   01.0901   18.27
140186.......................   01.3891   20.30   150012..........   01.6411   21.50   150091.........   01.0113   16.53   160044.........   01.2318   15.75   160124.........   01.2824   16.47
140187.......................   01.4964   16.84   150013..........   01.1763   15.74   150092.........   01.0684   14.87   160045.........   01.7278   18.63   160126.........   01.0538   15.68
140188.......................   00.9537   13.20   150014..........   01.5052   18.35   150094.........   00.9903   17.59   160046.........   00.9983   11.21   160129.........   01.0655   15.03
140189.......................   01.1992   17.72   150015..........   01.2408   20.85   150095.........   01.0953   18.41   160047.........   01.3985   16.53   160130.........   01.2040   14.80
140190.......................   01.1009   16.47   150017..........   01.8553   19.45   150096.........   01.0629   17.95   160048.........   01.0493   13.27   160131.........   01.0625   14.49
140191.......................   01.4397   22.26   150018..........   01.3501   18.66   150097.........   01.1098   17.18   160049.........   00.9436   12.67   160134.........   00.9376   12.70
140193.......................   01.1059   14.46   150019..........   01.1845   14.94   150098.........   01.1241   16.63   160050.........   01.0811   15.90   160135.........   01.0142   15.11
140197.......................   01.2541   16.79   150020..........   01.1512   13.22   150099.........   01.2843   17.66   160051.........   00.9312   13.79   160138.........   01.0655   14.59
140199.......................   01.1100   17.14   150021..........   01.6165   18.36   150100.........   01.6568   17.51   160052.........   01.0078   14.41   160140.........   01.1400   16.69
140200.......................   01.4621   21.75   150022..........   01.1136   17.58   150101.........   01.1211   19.95   160054.........   01.0121   13.35   160142.........   01.1009   15.31
140202.......................   01.3111   21.58   150023..........   01.6061   19.97   150102.........   01.1598   12.14   160055.........   00.9931   13.61   160143.........   00.9819   15.10
140203.......................   01.1647   22.19   150024..........   01.3888   18.92   150103.........   00.9512   19.44   160056.........   01.1741   14.54   160145.........   01.1407   14.85
140205.......................   00.9675   15.10   150025..........   01.4888   17.26   150104.........   01.0823   16.22   160057.........   01.3770   17.28   160146.........   01.4416   16.29
140206.......................   01.2352   20.80   150026..........   01.2078   18.81   150105.........   01.3386   17.27   160058.........   01.7722   19.62   160147.........   01.3353   17.49
140207.......................   01.3748   20.67   150027..........   01.0411   17.50   150106.........   01.0981   15.15   160060.........   01.1076   15.15   160151.........   01.1079   16.09
140208.......................   01.6884   24.61   150029..........   01.3890   20.73   150109.........   01.4355   18.03   160061.........   01.1171   16.03   160152.........   01.0039   14.39
140209.......................   01.6540   14.76   150030..........   01.2567   17.00   150110.........   01.0392   15.28   160062.........   00.9454   15.66   160153.........   01.8054   18.68
140210.......................   01.0799   14.99   150031..........   01.0946   15.03   150111.........   01.1656   15.08   160063.........   01.1546   16.85   170001.........   01.1951   16.74
140211.......................   01.2061   19.50   150032..........   01.8612   19.41   150112.........   01.3267   18.92   160064.........   01.6269   18.72   170004.........   01.0677   13.57
140213.......................   01.3176   21.25   150033..........   01.5986   21.73   150113.........   01.2282   18.52   160065.........   01.0220   16.04   170006.........   01.1576   15.84
140215.......................   01.0859   14.05   150034..........   01.4872   21.18   150114.........   01.0692   17.02   160066.........   01.1481   15.76   170008.........   00.9797   13.42
140217.......................   01.3129   22.52   150035..........   01.5616   19.66   150115.........   01.3601   17.18   160067.........   01.4072   17.52   170009.........   01.2006   17.07
140218.......................   01.0528   15.20   150036..........   01.0369   18.92   150122.........   01.1376   18.53   160068.........   01.0212   15.43   170010.........   01.3037   16.52
140220.......................   01.1009   17.26   150037..........   01.2481   18.31   150123.........   01.0540   14.07   160069.........   01.4919   17.39   170012.........   01.4254   15.95
140223.......................   01.6061   23.21   150038..........   01.4463   18.74   150124.........   01.1303   15.08   160070.........   00.9590   14.55   170013.........   01.3060   16.49
140224.......................   01.3499   22.21   150039..........   00.9739   16.62   150125.........   01.4487   19.02   160072.........   01.0768   14.19   170014.........   01.0310   17.45
140228.......................   01.6505   17.83   150042..........   01.2851   16.54   150126.........   01.4679   20.96   160073.........   00.9704   13.66   170015.........   00.9909   15.23
140230.......................   00.9336   15.97   150043..........   01.0389   16.96   150127.........   01.0314   15.89   160074.........   01.0474   15.71   170016.........   01.6836   22.29
140231.......................   01.5659   21.90   150044..........   01.2351   18.03   150128.........   01.2813   18.07   160075.........   01.1806   15.77   170017.........   01.2077   18.08
140233.......................   01.8328   18.16   150045..........   01.1303   16.21   150129.........   01.1222   24.48   160076.........   01.0409   17.07   170018.........   01.1380   14.10
140234.......................   01.2359   17.76   150046..........   01.4926   16.66   150130.........   01.3484   16.53   160077.........   01.0730   11.38   170019.........   01.2203   16.42
140236.......................   01.0046   14.29   150047..........   01.6176   19.11   150132.........   01.4914   18.89   160079.........   01.4250   17.85   170020.........   01.2910   15.58
140239.......................   01.7410   18.31   150048..........   01.2267   18.58   150133.........   01.1644   17.44   160080.........   01.2026   17.07   170022.........   01.1333   16.84
140240.......................   01.4331   22.78   150049..........   01.1415   15.37   150134.........   01.1629   17.56   160081.........   01.0971   15.21   170023.........   01.3998   17.38
140242.......................   01.6616   22.15   150050..........   01.2343   16.20   150136.........   00.8607   20.95   160082.........   01.9400   17.26   170024.........   01.1587   13.03
140245.......................   01.2200   15.19   150051..........   01.4673   18.63   150145.........   03.7024  .......  160083.........   01.6760   17.94   170025.........   01.1942   16.10
140246.......................   01.1107   12.78   150052..........   01.1526   14.50   160001.........   01.2869   18.91   160085.........   00.9877   15.41   170026.........   01.1060   13.45
140250.......................   01.3085   23.24   150053..........   01.0122   18.92   160002.........   01.1579   14.48   160086.........   00.9510   15.78   170027.........   01.3149   15.96
140251.......................   01.3487   20.32   150054..........   01.0954   15.80   160003.........   01.0272   14.39   160088.........   01.1853   16.87   170030.........   01.0487   12.94
140252.......................   01.4849   23.55   150056..........   01.8319   23.14   160005.........   01.0962   15.72   160089.........   01.2264   16.16   170031.........   00.8797   12.80
140253.......................   01.3970   14.08   150057..........   02.3139   18.25   160007.........   01.0149   13.81   160090.........   01.0121   15.53   170032.........   01.0645   15.46
140258.......................   01.5859   22.07   150058..........   01.7734   20.30   160008.........   01.1611   14.74   160091.........   01.0690   12.74   170033.........   01.3680   15.54
140271.......................   01.0367   14.78   150059..........   01.3588   21.47   160009.........   01.2225   15.87   160092.........   01.0710   15.37   170034.........   01.0172   13.85
140275.......................   01.2393   16.99   150060..........   01.1408   14.72   160012.........   01.0015   15.93   160093.........   01.0603   15.71   170035.........   00.8913   14.00
140276.......................   02.0402   21.39   150061..........   01.2235   15.33   160013.........   01.2088   16.74   160094.........   01.1200   15.60   170036.........   00.9101   14.08
140280.......................   01.3633   17.80   150062..........   01.1228   17.69   160014.........   00.9551   14.41   160095.........   01.0625   14.27   170037.........   01.0368   16.58
140281.......................   01.6894   22.14   150063..........   01.0545   16.90   160016.........   01.2452   17.25   160097.........   01.0952   14.59   170038.........   00.9220   12.68
140285.......................   01.2529   26.86   150064..........   01.2804   16.17   160018.........   00.9374   13.77   160098.........   01.0002   15.05   170039.........   01.0941   14.19
140286.......................   01.1496   18.53   150065..........   01.2062   18.66   160020.........   01.0918   13.84   160099.........   00.9166   12.91   170040.........   01.6491   19.98
140288.......................   01.7475   22.93   150066..........   01.0055   17.04   160021.........   01.0569   15.16   160101.........   01.0582   17.55   170041.........   01.0778   11.22
140289.......................   01.3491   16.32   150067..........   01.1690   16.20   160023.........   01.0267   14.75   160102.........   01.4133   16.83   170044.........   00.9909   13.97
140290.......................   01.3868   20.06   150069..........   01.2637   17.75   160024.........   01.5208   18.26   160103.........   01.0464   16.71   170045.........   01.0394   15.99
140291.......................   01.3999   23.45   150070..........   01.0571   17.16   160026.........   01.0784   17.30   160104.........   01.2767   17.17   170049.........   01.2914   18.45
140292.......................   01.1440   20.62   150071..........   01.1147   14.38   160027.........   01.1359   15.04   160106.........   01.0226   15.39   170051.........   00.9111   13.41
140294.......................   01.1807   18.17   150072..........   01.2157   16.13   160028.........   01.2457   29.74   160107.........   01.1907   16.26   170052.........   01.1183   14.31
140297.......................   03.6153   42.09   150073..........   01.0490   20.53   160029.........   01.5683   20.19   160108.........   01.1241   15.98   170053.........   00.9906   13.83
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[[Page 25627]]


                                                                                          Page 6 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
170054.......................   01.0978   13.64   170150..........   01.1546   14.00   180067.........   01.9594   17.80   190034.........   01.1818   15.36   190155.........   00.7261   16.10
170055.......................   01.0862   14.51   170151..........   00.9807   12.49   180069.........   01.1523   17.35   190035.........   01.4071  .......  190156.........   01.0217   12.27
170056.......................   00.8958   14.93   170152..........   01.0368   14.21   180070.........   01.1536   13.55   190036.........   01.6970   20.46   190158.........   01.1942   20.62
170057.......................   00.9835   12.90   170160..........   01.0025   11.81   180072.........   01.1750   15.81   190037.........   00.9050   11.28   190160.........   01.2638   17.06
170058.......................   01.1567   17.07   170164..........   01.0153   15.00   180075.........   01.6587   12.66   190039.........   01.4112   16.98   190161.........   01.0650   14.05
170060.......................   01.1064   14.95   170166..........   01.1487   17.40   180078.........   01.0858   18.97   190040.........   01.3258   20.34   190162.........   01.0985   19.57
170061.......................   01.1697   14.15   170171..........   01.0693   12.88   180079.........   01.2462   12.71   190041.........   01.5988   19.98   190164.........   01.2766   14.89
170063.......................   00.8588   11.84   170175..........   01.3959   17.67   180080.........   01.0624   15.09   190043.........   01.0674   12.52   190167.........   01.1707   18.78
170066.......................   01.0038   13.66   170176..........   01.6751   23.94   180087.........   01.3024   14.29   190044.........   01.1587   21.11   190170.........   00.9093   13.69
170067.......................   01.0353   14.44   170182..........   01.4638   21.54   180088.........   01.5749   21.13   190045.........   01.4309   21.34   190173.........   01.4304   19.33
170068.......................   01.2562   17.01   170183..........   02.0468   15.05   180092.........   01.2237   15.98   190046.........   01.4383   18.69   190175.........   01.6161   20.46
170070.......................   01.0330   12.73   170184..........   01.7569  .......  180093.........   01.3704   16.69   190048.........   01.2557   15.02   190176.........   01.6907   20.76
170073.......................   01.1796   15.56   180001..........   01.3958   17.78   180094.........   01.0627   12.86   190049.........   00.9841   15.98   190177.........   01.7756   18.85
170074.......................   01.1210   13.48   180002..........   01.1271   17.71   180095.........   01.1988   13.96   190050.........   01.0974   14.68   190178.........   00.9828   10.60
170075.......................   00.9167   10.71   180004..........   01.1260   15.79   180099.........   01.2011   12.83   190053.........   01.1305   12.51   190182.........   01.2638   19.89
170076.......................   01.0539   12.59   180005..........   01.2488   18.80   180101.........   01.2773   16.26   190054.........   01.3434   16.77   190183.........   01.1934   15.22
170077.......................   00.9613   12.55   180006..........   00.9249   12.49   180102.........   01.4712   18.17   190059.........   00.8927   14.11   190184.........   01.0340   15.61
170079.......................   00.9525   12.75   180007..........   01.4823   16.55   180103.........   02.2948   18.25   190060.........   01.4334   14.94   190185.........   01.3460   19.22
170080.......................   00.9784   12.95   180009..........   01.4022   20.11   180104.........   01.5599   16.85   190064.........   01.5728   22.67   190186.........   00.9219   14.11
170081.......................   00.9351   11.91   180010..........   01.9106   18.13   180105.........   00.9458   15.32   190065.........   01.4938   18.08   190190.........   00.8904   12.48
170082.......................   00.9822   12.06   180011..........   01.3471   18.96   180106.........   00.8758   13.13   190071.........   00.9048   12.68   190191.........   01.2236   19.55
170084.......................   00.9112   29.87   180012..........   01.4127   18.41   180108.........   00.8320   13.64   190077.........   00.9403   13.95   190196.........   00.9611   16.22
170085.......................   00.9055   12.47   180013..........   01.4174   17.18   180115.........   01.0027   16.43   190078.........   01.1522   12.81   190197.........   01.1855   17.51
170086.......................   01.7294   18.97   180014..........   01.7276   18.00   180116.........   01.3502   16.15   190079.........   01.3216   17.02   190199.........   01.2599   10.95
170088.......................   00.9532   10.70   180016..........   01.3059   14.83   180117.........   01.1374   17.24   190081.........   00.9314   13.70   190200.........   01.5884   20.17
170089.......................   00.9736   12.13   180017..........   01.3626   14.79   180118.........   01.0477   11.54   190083.........   01.1019   16.51   190201.........   01.0893   18.83
170090.......................   00.9993   11.36   180018..........   01.3348   15.32   180120.........   01.0374   16.25   190086.........   01.3466   15.04   190202.........   01.2511   18.81
170092.......................   00.8320   12.01   180019..........   01.2531   16.76   180121.........   01.3111   14.05   190088.........   01.3395   19.01   190203.........   01.5559   22.35
170093.......................   00.9126   12.94   180020..........   01.1266   16.86   180122.........   01.1060   15.93   190089.........   01.0953   12.63   190204.........   01.4971   20.42
170094.......................   00.9330   16.97   180021..........   01.0695   14.26   180123.........   01.4019   18.92   190090.........   01.1136   16.03   190205.........   01.9390   18.91
170095.......................   01.1284   13.41   180023..........   00.9119   14.80   180124.........   01.4305   16.87   190092.........   01.4163   21.19   190206.........   01.6020   21.26
170097.......................   00.9893   14.02   180024..........   01.4455   15.89   180125.........   01.1083   17.87   190095.........   01.0410   15.00   190207.........   01.2223   17.10
170098.......................   01.1633   14.54   180025..........   01.1748   16.40   180126.........   01.2108   11.42   190098.........   01.4884   19.10   190208.........   00.8302   10.93
170099.......................   01.2147   12.86   180026..........   01.2509   13.57   180127.........   01.3576   16.72   190099.........   01.2333   17.67   190218.........   01.1701   17.36
170100.......................   01.0623   13.73   180027..........   01.3139   15.23   180128.........   01.1777   16.18   190102.........   01.5818   18.10   190227.........   00.8692   30.27
170101.......................   00.9176   13.46   180028..........   01.0814   17.78   180129.........   01.0392   15.30   190103.........   00.8978   11.00   190231.........   01.4412   13.27
170102.......................   01.0142   12.99   180029..........   01.3033   16.86   180130.........   01.4202   17.56   190106.........   01.1713   17.85   190235.........   01.6524  ......
170103.......................   01.2839   15.92   180030..........   01.1614   16.38   180132.........   01.2846   16.14   190109.........   01.2506   14.31   190236.........   01.4037  ......
170104.......................   01.4518   20.25   180031..........   01.1179   14.02   180133.........   01.3195   22.68   190110.........   00.9671   13.76   200001.........   01.4021   16.84
170105.......................   01.0732   15.22   180032..........   01.0939   16.97   180134.........   01.0985   14.44   190111.........   01.5353   19.83   200002.........   01.1101   23.41
170106.......................   00.9680   10.48   180033..........   01.1805   16.08   180136.........   01.6663   19.72   190112.........   01.6582   20.08   200003.........   01.1421   16.08
170109.......................   00.9935   16.20   180034..........   01.1401   15.45   180138.........   01.2692   17.70   190113.........   01.3372   19.82   200006.........   01.0161   18.67
170110.......................   01.0011   15.05   180035..........   01.6042   19.58   180139.........   01.1175   17.89   190114.........   01.0360   13.12   200007.........   01.0238   16.64
170112.......................   01.0327   13.55   180036..........   01.2081   18.69   180140.........   01.0543   22.60   190115.........   01.2011   19.30   200008.........   01.2487   20.05
170113.......................   01.0910   15.23   180037..........   01.3315   19.96   180141.........   01.7850  .......  190116.........   01.1612   15.43   200009.........   01.8248   20.28
170114.......................   01.0309   14.05   180038..........   01.4356   15.84   190001.........   00.9574   22.06   190118.........   01.0653   13.08   200012.........   01.1253   16.83
170115.......................   00.9963   12.43   180040..........   01.9798   18.75   190002.........   01.7233   18.29   190120.........   01.0389   13.99   200013.........   01.1175   15.39
170116.......................   01.0782   15.42   180041..........   01.1067   14.94   190003.........   01.4208   18.68   190122.........   01.3127   13.83   200015.........   01.2672   17.80
170117.......................   00.9897   13.41   180042..........   01.1356   15.00   190004.........   01.4619   16.87   190124.........   01.6393   19.92   200016.........   01.0377   16.48
170119.......................   00.9907   13.57   180043..........   01.1907   19.10   190005.........   01.5814   16.64   190125.........   01.5379   18.47   200018.........   01.2179   16.45
170120.......................   01.3100   12.93   180044..........   01.2212   17.26   190006.........   01.3309   15.31   190128.........   01.1054   18.95   200019.........   01.2635   18.12
170122.......................   01.7443   18.82   180045..........   01.3799   17.34   190007.........   01.0296   14.17   190130.........   00.9720   12.14   200020.........   01.1295   19.42
170123.......................   01.7876   18.98   180046..........   01.1868   16.65   190008.........   01.6750   19.37   190131.........   01.2328   17.54   200021.........   01.1599   18.52
170124.......................   00.9925   13.55   180047..........   01.0316   14.66   190009.........   01.3215   14.70   190133.........   00.9626   12.86   200023.........   00.9037   14.08
170126.......................   00.9618   12.53   180048..........   01.2731   16.28   190010.........   01.1133   16.24   190134.........   01.0045   16.50   200024.........   01.4120   19.55
170128.......................   00.9122   14.70   180049..........   01.3932   16.09   190011.........   01.1696   15.32   190135.........   01.4522   20.69   200025.........   01.1595   19.60
170131.......................   01.1686   12.10   180050..........   01.2650   17.25   190013.........   01.3473   16.26   190136.........   01.2074   11.11   200026.........   01.0448   15.97
170133.......................   01.1015   16.69   180051..........   01.3715   15.43   190014.........   01.1457   16.03   190138.........   00.8637   20.29   200027.........   01.2326   16.90
170134.......................   00.9044   13.04   180053..........   01.1052   14.96   190015.........   01.2583   18.74   190140.........   00.9874   11.98   200028.........   00.9883   16.14
170137.......................   01.1656   17.98   180054..........   01.1345   15.82   190017.........   01.3983   14.84   190142.........   00.9321   14.53   200031.........   01.2524   15.04
170139.......................   01.0729   12.91   180055..........   01.2319   14.70   190018.........   01.1580   17.48   190144.........   01.2665   16.26   200032.........   01.2974   17.40
170142.......................   01.2852   17.02   180056..........   01.1288   16.33   190019.........   01.7296   19.64   190145.........   01.0068   14.74   200033.........   01.7963  ......
170143.......................   01.1875   15.24   180058..........   01.0463   13.04   190020.........   01.1693   17.77   190146.........   01.6123   21.10   200034.........   01.2207   18.06
170144.......................   01.6583   13.79   180059..........   00.8671   15.28   190025.........   01.3335   13.33   190147.........   00.9695   14.36   200037.........   01.2183   16.94
170145.......................   01.1081   14.18   180063..........   01.1789   11.94   190026.........   01.5020   18.00   190148.........   00.9710   13.91   200038.........   01.1302   19.07
170146.......................   01.5294   18.68   180064..........   01.3252   14.68   190027.........   01.5422   17.46   190149.........   01.0118   14.40   200039.........   01.2896   19.74
170147.......................   01.2024   18.98   180065..........   01.0035   12.89   190029.........   01.1748   17.67   190151.........   01.2151   12.80   200040.........   01.1290   19.05
170148.......................   01.4951   17.89   180066..........   01.1563   18.08   190033.........   00.9756   10.02   190152.........   01.4896   20.71   200041.........   01.1543   18.64
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                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
200043.......................   00.7365   18.37   220017..........   01.3977   14.12   220153.........   01.0232   22.56   230100.........   01.1670   15.57   230213.........   00.9993   15.25
200050.......................   01.1575   17.35   220019..........   01.1645   19.12   220154.........   00.9445   22.42   230101.........   01.1095   18.36   230216.........   01.5651   17.80
200051.......................   01.0114   19.57   220020..........   01.2268   19.47   220162.........   01.2697  .......  230103.........   01.0400   20.72   230217.........   01.2521   22.94
200052.......................   01.0406   15.56   220023..........   00.6107   19.30   220163.........   02.1199   24.87   230104.........   01.5911   22.43   230219.........   00.8768   19.28
200055.......................   01.1614   17.37   220024..........   01.2158   21.22   220171.........   01.6207   22.92   230105.........   01.7568   20.27   230221.........   00.8720   24.54
200062.......................   00.9472   15.91   220025..........   01.1292   18.70   230001.........   01.1902   18.07   230106.........   01.3003   20.51   230222.........   01.4495   19.43
200063.......................   01.3059   18.34   220028..........   01.4722   21.01   230002.........   01.2759   20.69   230107.........   00.9076   14.72   230223.........   01.3326   21.85
200066.......................   01.1622   16.74   220029..........   01.1851   24.16   230003.........   01.1581   18.62   230108.........   01.2121   18.37   230227.........   01.4724   21.56
210001.......................   01.4925   21.16   220030..........   01.1533   15.00   230004.........   01.7098   22.86   230110.........   01.3576   17.83   230230.........   01.6794   22.01
210002.......................   01.9930   18.07   220031..........   01.9215  .......  230005.........   01.2844   18.86   230113.........   00.9199   20.15   230232.........   00.9510   17.15
210003.......................   01.6014   21.93   220033..........   01.2840   20.97   230006.........   01.1008   18.53   230115.........   01.0388   17.19   230235.........   01.0957   16.27
210004.......................   01.3657   23.18   220035..........   01.2837   24.51   230007.........   00.9571   18.95   230116.........   00.9248   16.31   230236.........   01.3249   21.58
210005.......................   01.2762   19.38   220036..........   01.5965   21.66   230012.........   00.8563   12.18   230117.........   01.8993   26.08   230239.........   01.1389   13.72
210006.......................   01.1400   17.16   220038..........   01.2959   26.32   230013.........   01.4022   21.05   230118.........   01.2189   17.43   230241.........   01.1643   17.52
210007.......................   01.7371   25.17   220041..........   01.2273   23.41   230015.........   01.2010   20.91   230119.........   01.2966   21.44   230244.........   01.3959   21.17
210008.......................   01.3938   19.26   220042..........   01.2464   24.13   230017.........   01.5028   28.89   230120.........   01.1514   18.40   230253.........   00.9911   18.85
210009.......................   01.8131   21.72   220046..........   01.3702   23.14   230019.........   01.4696   22.20   230121.........   01.2299   20.61   230254.........   01.2624   21.20
210010.......................   01.1495   15.64   220049..........   01.3541   18.47   230020.........   01.7404   21.30   230122.........   01.3428   19.37   230257.........   00.7824   18.51
210011.......................   01.3419   19.67   220050..........   01.1242   19.98   230021.........   01.5653   18.27   230124.........   01.1625   18.52   230259.........   01.1882   21.59
210012.......................   01.6374   22.07   220051..........   01.2183   21.10   230022.........   01.2543   18.76   230128.........   01.3957   22.70   230264.........   01.6939   14.86
210013.......................   01.3219   19.82   220052..........   01.3247   24.59   230024.........   01.4460   22.98   230130.........   01.6687   22.34   230269.........   01.3782   22.69
210015.......................   01.2992   19.60   220053..........   01.2325   20.02   230027.........   01.1127   17.48   230132.........   01.3690   24.82   230270.........   01.1731   20.20
210016.......................   01.8243   22.33   220055..........   01.2994   13.69   230029.........   01.5562   19.51   230133.........   01.2687   17.99   230273.........   01.4465   22.29
210017.......................   01.2218   15.90   220057..........   01.4056   22.67   230030.........   01.3295   16.78   230135.........   01.3180   23.03   230275.........   00.5262   19.58
210018.......................   01.3056   21.29   220058..........   01.1529   18.51   230031.........   01.4311   19.42   230137.........   01.1560   18.31   230276.........   00.6644   21.40
210019.......................   01.5805   18.39   220060..........   01.2952   25.42   230032.........   01.7502   19.80   230141.........   01.6323   22.96   230277.........   01.2430   23.05
210022.......................   01.5039   21.14   220062..........   00.5762   19.65   230034.........   01.2739   18.80   230142.........   01.3057   19.01   230278.........   01.4214   17.82
210023.......................   01.3373   21.51   220063..........   01.2663   19.84   230035.........   01.0906   20.47   230143.........   01.3112   18.35   230279.........   00.6584   15.95
210024.......................   01.5453   20.11   220064..........   01.2830   21.51   230036.........   01.2229   20.75   230144.........   01.1462   20.61   230280.........   00.9997   12.33
210025.......................   01.3740   18.95   220065..........   01.2956   19.95   230037.........   01.1368   17.66   230145.........   01.1934   18.05   240001.........   01.5448   22.78
210026.......................   01.3830   17.97   220066..........   01.3789   21.73   230038.........   01.6671   21.58   230146.........   01.2748   19.36   240002.........   01.7516   20.94
210027.......................   01.2945   17.66   220067..........   01.3230   22.81   230040.........   01.1819   20.58   230147.........   01.3954   17.47   240004.........   01.5826   21.10
210028.......................   01.2229   18.31   220070..........   01.2219   19.89   230041.........   01.2518   19.27   230149.........   01.1505   16.14   240005.........   00.9321   17.38
210029.......................   01.2710   14.51   220071..........   01.9036   24.06   230042.........   01.2328   20.08   230151.........   01.4024   21.20   240006.........   01.1358   20.97
210030.......................   01.1576   19.24   220073..........   01.3068   25.94   230046.........   01.9346   23.28   230153.........   01.1458   16.66   240007.........   01.0656   15.50
210031.......................   01.2844   16.76   220074..........   01.4397   28.44   230047.........   01.3796   19.17   230154.........   00.9500   14.32   240008.........   01.1157   19.71
210032.......................   01.1792   18.71   220075..........   01.4818   20.18   230053.........   01.6002   24.58   230155.........   01.0478   17.35   240009.........   00.9226   14.31
210033.......................   01.2737   18.96   220076..........   01.1822  .......  230054.........   01.8075   19.80   230156.........   01.7144   23.80   240010.........   01.9880   24.41
210034.......................   01.3510   20.17   220077..........   01.7973   24.84   230055.........   01.1704   19.01   230157.........   01.2003   22.20   240011.........   01.1532   17.81
210035.......................   01.2976   19.08   220079..........   01.1889   21.38   230056.........   00.9664   15.57   230159.........   01.3458   17.84   240013.........   01.3350   18.17
210037.......................   01.2736   18.27   220080..........   01.3076   19.50   230058.........   01.0994   18.45   230162.........   01.0605   19.93   240014.........   01.0774   20.29
210038.......................   01.4108   21.78   220081..........   01.0949   26.78   230059.........   01.5035   19.06   230165.........   01.8769   22.77   240016.........   01.3927   18.22
210039.......................   01.1817   19.69   220082..........   01.2893   19.76   230060.........   01.2247   18.53   230167.........   01.7979   19.39   240017.........   01.0659   17.25
210040.......................   01.2977   23.05   220083..........   01.1675   21.76   230062.........   00.9643   15.71   230169.........   01.3453   23.25   240018.........   01.2884   17.23
210043.......................   01.3140   21.29   220084..........   01.3389   26.31   230063.........   01.3202   19.89   230171.........   01.0161   14.41   240019.........   01.2645   21.39
210044.......................   01.3429   21.63   220086..........   01.7743  .......  230065.........   01.3020   20.37   230172.........   01.1855   19.10   240020.........   01.1651   20.04
210045.......................   01.0234   11.01   220088..........   01.6385   23.68   230066.........   01.3702   21.26   230174.........   01.3641   20.84   240021.........   01.0408   16.96
210048.......................   01.2485   22.46   220089..........   01.2541   21.52   230069.........   01.1366   22.24   230175.........   03.7062  .......  240022.........   01.1137   19.13
210049.......................   01.1655   17.20   220090..........   01.2774   21.06   230070.........   01.6318   20.99   230176.........   01.2172   22.12   240023.........   00.9935   19.88
210051.......................   01.4205   22.78   220092..........   01.2563   29.72   230071.........   01.1883   22.62   230178.........   01.0025   17.48   240025.........   01.1418   16.29
210054.......................   01.3626   21.94   220094..........   01.4476   18.10   230072.........   01.2717   19.89   230180.........   01.1699   14.55   240027.........   01.0297   16.33
210055.......................   01.2721   22.10   220095..........   01.2243   18.87   230075.........   01.4810   20.07   230184.........   01.1598   18.23   240028.........   01.1529   18.52
210056.......................   01.3993   17.67   220098..........   01.3462   17.39   230076.........   01.3291   22.97   230186.........   01.2450   15.20   240029.........   01.1603   18.10
210057.......................   01.4721   24.67   220100..........   01.2697   25.09   230077.........   01.9370   19.36   230188.........   01.1176   15.81   240030.........   01.2834   17.99
210058.......................   01.4828   18.67   220101..........   01.4781   24.24   230078.........   01.2553   16.56   230189.........   00.9585   15.39   240031.........   00.9756   16.71
210059.......................   01.2611   21.98   220104..........   01.4373   23.69   230080.........   01.2411   19.94   230190.........   01.0724   24.98   240036.........   01.5650   20.26
210060.......................   01.2540  .......  220105..........   01.3499   20.60   230081.........   01.2578   16.66   230191.........   00.9623   17.58   240037.........   01.0233   18.19
210061.......................   01.1774   18.56   220106..........   01.2300   23.09   230082.........   01.1162   17.08   230193.........   01.2584   17.77   240038.........   01.4973   24.56
220001.......................   01.2775   27.10   220108..........   01.1989   22.28   230085.........   01.0922   18.91   230195.........   01.3347   21.46   240040.........   01.2454   20.15
220002.......................   01.5400   18.62   220110..........   02.0189   29.18   230086.........   00.9486   17.36   230197.........   01.4218   21.17   240041.........   01.1644   17.48
220003.......................   01.1363   17.49   220111..........   01.2643   21.79   230087.........   01.0889   16.19   230199.........   01.1115   19.29   240043.........   01.1966   17.00
220006.......................   01.4328   20.39   220116..........   01.9394  .......  230089.........   01.2754   23.86   230201.........   01.1456   15.09   240044.........   01.1842   18.04
220008.......................   01.2873   21.58   220119..........   01.3311   23.69   230092.........   01.3562   19.28   230204.........   01.4307   21.66   240045.........   01.0477   21.34
220010.......................   01.3417   21.70   220123..........   01.0577   23.94   230093.........   01.2768   19.05   230205.........   01.0377   16.37   240047.........   01.5436   21.26
220011.......................   01.1581   28.81   220126..........   01.3572   19.87   230095.........   01.1791   17.06   230207.........   01.2683   19.90   240048.........   01.2443   22.64
220012.......................   01.3404   35.18   220128..........   00.8929   21.18   230096.........   01.0974   24.02   230208.........   01.3205   17.76   240049.........   01.7730   22.43
220015.......................   01.1918   22.77   220133..........   00.9081   27.36   230097.........   01.6121   19.12   230211.........   00.9047   21.59   240050.........   01.1639   24.71
220016.......................   01.3686   21.58   220135..........   01.3076   26.10   230099.........   01.1463   19.68   230212.........   01.0827   23.46   240051.........   01.0123   18.49
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[[Page 25629]]


                                                                                          Page 8 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
240052.......................   01.3097   18.64   240139..........   00.9667   16.59   250042.........   01.2795   15.45   260003.........   01.1304   13.48   260105.........   01.8950   20.26
240053.......................   01.5210   20.25   240141..........   01.1702   21.09   250043.........   00.9854   12.25   260004.........   01.0516   13.31   260107.........   01.4575   19.81
240056.......................   01.2479   21.74   240142..........   01.1458   19.27   250044.........   01.0267   15.41   260005.........   01.6188   20.26   260108.........   01.8607   21.29
240057.......................   01.8120   22.68   240143..........   00.9530   13.94   250045.........   01.2004   18.75   260006.........   01.5009   20.55   260109.........   00.9884   12.92
240058.......................   00.9732   14.79   240144..........   01.0302   16.74   250047.........   00.9728   15.45   260008.........   01.3629   16.53   260110.........   01.6869   15.15
240059.......................   01.0983   21.81   240145..........   01.0332   15.57   250048.........   01.5487   15.26   260009.........   01.2581   16.29   260113.........   01.1477   14.76
240061.......................   01.8085   24.36   240146..........   00.9306   19.10   250049.........   00.8905   11.34   260011.........   01.6980   18.75   260115.........   01.2593   17.02
240063.......................   01.4355   22.81   240148..........   01.0485   14.55   250050.........   01.2741   13.43   260012.........   01.1050   12.84   260116.........   01.0817   15.06
240064.......................   01.2914   21.93   240150..........   00.9199   12.84   250051.........   00.8862   10.57   260013.........   01.1935   15.32   260119.........   01.2307   15.30
240065.......................   01.0337   12.44   240152..........   01.0164   19.91   250057.........   01.2316   15.59   260015.........   01.2710   16.27   260120.........   01.1985   16.64
240066.......................   01.3815   21.19   240153..........   01.0056   15.23   250058.........   01.1873   14.40   260017.........   01.2333   15.54   260122.........   01.1738   12.73
240069.......................   01.1890   19.07   240154..........   01.0449   17.00   250059.........   01.0410   14.21   260018.........   00.9010   10.09   260123.........   01.0789   14.05
240071.......................   01.1104   19.55   240155..........   00.8945   19.40   250060.........   00.7799   08.90   260019.........   01.0877   14.52   260127.........   01.0109   15.92
240072.......................   01.0197   16.80   240157..........   01.0929   14.13   250061.........   00.8857   17.69   260020.........   01.7249   20.07   260128.........   01.0125   10.96
240073.......................   00.9372   16.40   240160..........   01.0026   16.30   250063.........   00.8515   12.44   260021.........   01.4657   17.59   260129.........   01.2317   15.69
240075.......................   01.1813   19.91   240161..........   00.9970   14.99   250065.........   00.9231   12.61   260022.........   01.2879   19.05   260131.........   01.2494   18.04
240076.......................   01.0703   21.04   240162..........   01.0628   16.59   250066.........   00.9111   13.53   260023.........   01.4980   34.66   260134.........   01.1693   15.67
240077.......................   00.9446   14.31   240163..........   00.9935   17.79   250067.........   01.1344   14.67   260024.........   00.9639   12.96   260137.........   01.7177   15.26
240078.......................   01.4829   23.66   240166..........   01.1120   15.60   250068.........   00.8476   11.36   260025.........   01.3101   14.68   260138.........   01.8700   21.26
240079.......................   01.0280   15.37   240169..........   00.9128   15.98   250069.........   01.3525   17.35   260027.........   01.6202   21.58   260141.........   01.9087   19.54
240080.......................   01.5649   22.34   240170..........   01.1056   17.38   250071.........   00.9308   11.63   260029.........   01.2388   19.02   260142.........   01.1144   15.65
240082.......................   01.1936   17.03   240171..........   01.0726   15.79   250072.........   01.4199   18.43   260030.........   01.1850   10.36   260143.........   00.9985   12.75
240083.......................   01.3140   17.90   240172..........   00.9529   15.82   250077.........   00.9293   11.97   260031.........   01.6090   18.38   260147.........   00.9753   13.55
240084.......................   01.2434   20.04   240173..........   00.8928   16.66   250078.........   01.4771   14.93   260032.........   01.6629   18.43   260148.........   00.9263   10.32
240085.......................   00.9719   17.41   240179..........   01.0132   16.66   250079.........   00.8824   17.44   260034.........   01.0573   15.99   260158.........   01.0224   12.65
240086.......................   01.0849   17.64   240184..........   00.9886   13.04   250081.........   01.3211   16.03   260035.........   01.0046   11.74   260159.........   00.9863   19.26
240087.......................   01.2026   14.87   240187..........   01.1930   18.48   250082.........   01.4033   13.51   260036.........   01.0154   15.34   260160.........   01.0544   15.82
240088.......................   01.3869   19.81   240193..........   01.0223   17.61   250083.........   00.9515   12.27   260039.........   01.1258   13.86   260162.........   01.5557   20.64
240089.......................   00.9840   17.72   240196..........   00.6319   22.78   250084.........   01.1844   17.73   260040.........   01.6625   15.28   260163.........   01.2241   14.59
240090.......................   01.0465   14.69   240200..........   00.8680   14.48   250085.........   00.9749   12.58   260042.........   01.2599   17.82   260164.........   00.9519   13.24
240093.......................   01.3293   17.64   240205..........   00.9138  .......  250088.........   01.0022   16.53   260044.........   01.0487   15.91   260166.........   01.2346   19.78
240094.......................   00.9622   20.49   240206..........   00.8411  .......  250089.........   01.2121   13.89   260047.........   01.4767   17.20   260172.........   00.9986   12.55
240096.......................   00.9800   17.63   240207..........   01.2109   21.80   250093.........   01.1337   14.36   260048.........   01.2953   20.70   260173.........   01.0314   12.21
240097.......................   01.0196   21.79   240210..........   01.2788   22.90   250094.........   01.3184   15.45   260050.........   01.0431   16.40   260175.........   01.1175   16.34
240098.......................   00.9533   20.33   240211..........   00.9038   14.75   250095.........   01.0053   15.92   260052.........   01.3352   19.75   260176.........   01.6500   17.62
240099.......................   01.0631   13.30   250001..........   01.5514   17.39   250096.........   01.1988   17.01   260053.........   01.1737   11.73   260177.........   01.2846   20.19
240100.......................   01.2892   18.97   250002..........   00.9820   17.13   250097.........   01.3216   15.83   260054.........   01.3147   16.07   260178.........   01.4976   20.94
240101.......................   01.1825   20.41   250003..........   01.0084   18.40   250098.........   00.8380   16.66   260055.........   00.9908   10.97   260179.........   01.6431   20.52
240102.......................   00.9603   12.87   250004..........   01.4873   17.91   250099.........   01.2609   14.01   260057.........   01.1503   16.96   260180.........   01.7064   18.96
240103.......................   01.0505   16.28   250005..........   00.9412   09.95   250100.........   01.2905   15.26   260059.........   01.2691   14.66   260183.........   01.5177   16.58
240104.......................   01.2301   21.81   250006..........   00.9862   14.60   250101.........   00.8850   16.65   260061.........   01.1020   14.06   260186.........   01.4347   17.27
240105.......................   00.9597   13.46   250007..........   01.2808   19.42   250102.........   01.6048   17.06   260062.........   01.2033   18.91   260188.........   01.2198   18.37
240106.......................   01.4052   26.55   250008..........   00.9814   13.33   250104.........   01.4486   17.62   260063.........   01.0697   15.44   260189.........   00.8526   10.87
240107.......................   00.9916   17.31   250009..........   01.2300   17.50   250105.........   00.9434   13.40   260064.........   01.3240   16.92   260190.........   01.2045   18.00
240108.......................   01.0081   17.24   250010..........   01.0398   12.77   250107.........   00.8815   14.53   260065.........   01.8217   18.25   260191.........   01.2516   18.58
240109.......................   00.9484   12.99   250012..........   00.9311   19.88   250109.........   00.8949   15.37   260066.........   01.0266   15.01   260193.........   01.2915   26.66
240110.......................   00.9668   16.33   250015..........   01.0847   10.44   250112.........   00.9717   13.07   260067.........   00.8671   13.74   260195.........   01.2198   16.53
240111.......................   01.0666   19.00   250017..........   00.9989   16.64   250117.........   01.0769   14.70   260068.........   01.6718   20.21   260197.........   01.1405   25.99
240112.......................   00.9994   14.73   250018..........   00.9513   13.02   250119.........   01.1164   12.45   260070.........   01.0429   14.48   260198.........   01.3077   16.46
240114.......................   00.9257   14.74   250019..........   01.4335   17.00   250120.........   01.1106   13.09   260073.........   01.1387   12.89   260200.........   01.2666   19.43
240115.......................   01.6191   21.63   250020..........   00.9455   13.52   250122.........   01.2481   16.91   260074.........   01.3021   13.93   260205.........   01.3757  ......
240116.......................   00.9343   13.96   250021..........   00.8815   08.57   250123.........   01.2786   18.73   260077.........   01.7307   17.13   270002.........   01.3026   14.15
240117.......................   01.1588   18.18   250023..........   00.9552   12.77   250124.........   00.9126   11.59   260078.........   01.1782   14.62   270003.........   01.2653   21.02
240119.......................   00.8258   20.58   250024..........   00.9084   13.60   250125.........   01.3155   16.38   260079.........   01.0765   14.32   270004.........   01.6961   18.01
240121.......................   00.9397   21.27   250025..........   01.2071   18.06   250126.........   00.9754   14.17   260080.........   01.0516   11.77   270006.........   00.9221   16.35
240122.......................   01.0517   18.93   250027..........   00.9570   11.90   250127.........   00.8201  .......  260081.........   01.6079   18.83   270007.........   00.8770   12.23
240123.......................   01.0109   15.03   250029..........   00.8773   12.96   250128.........   01.0941   12.06   260082.........   01.1768   13.93   270009.........   01.1201   19.32
240124.......................   00.9676   18.39   250030..........   00.9739   14.45   250131.........   01.0232   11.03   260085.........   01.5720   19.71   270011.........   01.0312   18.28
240125.......................   00.9278   11.73   250031..........   01.3079   18.54   250134.........   00.9919   16.70   260086.........   01.0978   15.09   270012.........   01.5921   18.33
240127.......................   01.1171   14.25   250032..........   01.2608   16.21   250136.........   00.8821   17.66   260091.........   01.7219   19.76   270014.........   01.8294   17.81
240128.......................   01.1221   15.77   250033..........   01.0514   15.66   250138.........   01.2904   17.90   260094.........   01.1985   16.48   270016.........   00.8992   15.97
240129.......................   01.0143   17.56   250034..........   01.6577   14.46   250141.........   01.2616   15.71   260095.........   01.4477   16.89   270017.........   01.2378   19.09
240130.......................   00.9625   15.66   250035..........   00.8681   13.84   250145.........   00.8232   10.04   260096.........   01.5927   22.03   270019.........   01.0001   15.86
240132.......................   01.2209   22.40   250036..........   00.9700   14.48   250146.........   00.9630   13.97   260097.........   01.2007   14.79   270021.........   01.1771   16.67
240133.......................   01.1986   17.72   250037..........   00.9132   10.05   250148.........   01.0955   19.08   260100.........   01.0435   15.72   270023.........   01.3055   21.22
240135.......................   00.8725   14.11   250038..........   00.9700   14.37   250149.........   00.8930   12.04   260102.........   01.0442   18.57   270026.........   00.8850   14.97
240137.......................   01.2258   18.97   250039..........   00.9941   13.36   260001.........   01.7040   18.05   260103.........   01.2885   17.51   270027.........   01.1158   12.40
240138.......................   00.9522   12.97   250040..........   01.3026   16.20   260002.........   01.4644   21.10   260104.........   01.7564   18.42   270028.........   01.1217   15.50
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 25630]]


                                                                                          Page 9 of 15                                                                                          
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
270029.......................   00.9579   18.18   280051..........   01.0812   15.15   290021.........   01.6244   21.94   310041.........   01.4067   23.71   320023.........   01.0840   16.73
270032.......................   01.1262   16.20   280052..........   01.0846   13.32   290022.........   01.7010   17.94   310042.........   01.2416   23.53   320030.........   01.1495   16.84
270033.......................   00.8614   15.58   280054..........   01.2607   17.98   290027.........   00.9528   17.23   310043.........   01.1431   20.86   320031.........   00.8258   17.05
270035.......................   01.0099   18.28   280055..........   00.9182   14.40   290029.........   00.9833  .......  310044.........   01.2847   20.70   320032.........   00.9003   17.10
270036.......................   00.8802   12.78   280056..........   00.9752   14.45   290032.........   01.4115   22.30   310045.........   01.4639   27.19   320033.........   01.1552   22.76
270039.......................   01.0024   15.36   280057..........   00.9835   15.40   290036.........   00.9391   51.78   310047.........   01.3682   24.34   320035.........   01.0299   22.89
270040.......................   01.1080   18.24   280058..........   01.3029   18.34   290038.........   00.9923   19.95   310048.........   01.2820   22.81   320037.........   01.2216   23.31
270041.......................   01.1062   15.74   280060..........   01.5871   18.65   290039.........   01.3219  .......  310049.........   01.2927   25.66   320038.........   01.2326   16.83
270044.......................   01.1453   13.98   280061..........   01.4293   17.06   300001.........   01.3935   21.15   310050.........   01.2323   23.05   320046.........   01.2948   20.88
270046.......................   00.9619   14.85   280062..........   01.0987   13.35   300003.........   01.9474   23.98   310051.........   01.3560   24.27   320048.........   01.2823   14.43
270048.......................   01.1003   16.41   280064..........   01.0290   15.52   300005.........   01.2963   20.28   310052.........   01.2951   22.60   320057.........   00.9566  ......
270049.......................   01.7959   20.21   280065..........   01.2779   18.54   300006.........   01.1897   19.05   310054.........   01.3459   24.60   320058.........   00.7512  ......
270050.......................   01.0985   17.98   280066..........   01.0654   12.50   300007.........   01.1006   18.33   310057.........   01.3357   21.17   320059.........   01.0062  ......
270051.......................   01.3389   21.08   280068..........   00.9650   09.45   300008.........   01.2856   19.44   310058.........   01.1060   24.61   320060.........   00.8691  ......
270052.......................   01.0417   17.86   280070..........   01.0106   11.19   300009.........   01.1291   19.41   310060.........   01.2001   18.63   320061.........   01.1829  ......
270057.......................   01.2418   18.93   280073..........   01.0056   13.68   300010.........   01.1911   19.48   310061.........   01.2520   21.39   320062.........   00.8839  ......
270058.......................   00.9052   13.38   280074..........   01.1152   14.02   300011.........   01.3744   22.78   310062.........   01.3076   20.98   320063.........   01.3049   16.68
270059.......................   00.7748   15.90   280075..........   01.1776   13.70   300012.........   01.3351   21.77   310063.........   01.3696   21.02   320065.........   01.2881   16.05
270060.......................   00.9593   15.08   280076..........   01.0520   13.95   300013.........   01.1894   17.57   310064.........   01.3195   24.32   320067.........   00.8533   15.74
270063.......................   00.9957   14.82   280077..........   01.3183   17.95   300014.........   01.2855   19.49   310067.........   01.3185   22.76   320068.........   00.9287   16.40
270072.......................   00.8066   13.85   280079..........   01.0646   10.61   300015.........   01.2367   18.54   310069.........   01.2924   22.42   320069.........   00.9720   10.83
270073.......................   01.1764   11.83   280080..........   01.1041   13.61   300016.........   01.2347   18.83   310070.........   01.4173   23.33   320070.........   00.9663  ......
270074.......................   00.8989  .......  280081..........   01.7829   18.66   300017.........   01.3038   21.18   310072.........   01.3090   21.25   320074.........   01.0956   18.00
270075.......................   00.9172  .......  280082..........   01.0111   13.50   300018.........   01.3126   20.22   310073.........   01.6320   25.21   320079.........   01.1739   17.24
270076.......................   00.7682  .......  280083..........   01.0442   14.26   300019.........   01.2127   19.97   310074.........   01.4198   22.66   330001.........   01.1965   25.94
270079.......................   00.8978   13.71   280084..........   01.0067   11.42   300020.........   01.3060   20.45   310075.........   01.4342   24.11   330002.........   01.4751   25.86
270080.......................   01.1930   16.88   280088..........   01.7594  .......  300021.........   01.0885   17.07   310076.........   01.4454   29.78   330003.........   01.3224   15.68
270081.......................   01.0272   12.52   280089..........   01.0559   17.29   300022.........   01.0547   17.35   310077.........   01.6821   25.08   330004.........   01.2944   19.87
270082.......................   01.0743   16.17   280090..........   00.9608   14.34   300023.........   01.3847   20.45   310078.........   01.3970   23.81   330005.........   01.8198   23.51
270083.......................   01.0915   15.30   280091..........   01.1064   14.54   300024.........   01.2611   19.20   310081.........   01.3268   21.63   330006.........   01.2708   26.60
270084.......................   00.8820   14.83   280092..........   00.9797   13.94   300028.........   01.2139   17.28   310083.........   01.3087   22.57   330007.........   01.3120   18.50
280001.......................   01.1071   14.99   280094..........   01.1321   15.40   300029.........   01.3666   22.33   310084.........   01.3916   21.85   330008.........   01.1599   16.96
280003.......................   02.1164   18.85   280097..........   00.9649   11.94   300033.........   01.1353   16.28   310086.........   01.2187   21.24   330009.........   01.2889   30.94
280005.......................   01.4013   17.73   280098..........   00.9699   10.71   300034.........   02.0334   22.41   310087.........   01.3224   20.28   330010.........   01.3763   12.50
280009.......................   01.7524   18.19   280101..........   01.1002   13.51   310001.........   01.8034   25.91   310088.........   01.2207   20.56   330011.........   01.3000   19.95
280011.......................   00.8691   12.42   280102..........   00.9272   12.45   310002.........   01.8222   25.58   310090.........   01.3629   24.24   330012.........   01.6985   29.74
280013.......................   01.9321   21.09   280104..........   00.9947   13.11   310003.........   01.2776   23.65   310091.........   01.2907   20.77   330013.........   02.0896   17.73
280014.......................   00.9234   13.35   280105..........   01.2732   18.10   310005.........   01.2322   21.08   310092.........   01.3142   21.20   330014.........   01.3552   29.38
280015.......................   01.0353   15.29   280106..........   00.9818   14.48   310006.........   01.2754   22.66   310093.........   01.1662   20.42   330016.........   01.0658   16.94
280017.......................   01.1197   14.01   280107..........   01.0910   11.45   310008.........   01.3528   23.42   310096.........   01.8816   23.74   330019.........   01.3051   27.77
280018.......................   01.0384   13.73   280108..........   01.1303   15.09   310009.........   01.3133   23.49   310105.........   01.3010   24.12   330020.........   01.0469   14.30
280020.......................   01.6464   19.60   280109..........   00.9214   10.58   310010.........   01.2849   20.79   310108.........   01.4365   24.39   330023.........   01.2634   23.47
280021.......................   01.2618   16.90   280110..........   01.0019   11.44   310011.........   01.2108   21.51   310110.........   01.2714   20.54   330024.........   01.8333   31.66
280022.......................   01.0382   14.17   280111..........   01.2495   18.27   310012.........   01.6569   26.14   310111.........   01.3831   23.33   330025.........   01.1052   13.57
280023.......................   01.3988   16.83   280114..........   00.9200   13.00   310013.........   01.4193   21.54   310112.........   01.3408   21.93   330027.........   01.3596   31.94
280024.......................   00.9571   11.90   280115..........   00.9323   16.12   310014.........   01.6973   25.20   310113.........   01.2698   21.81   330028.........   01.4711   25.53
280025.......................   00.9430   12.87   280117..........   01.0899   15.93   310015.........   01.9538   25.55   310115.........   01.3332   21.37   330029.........   01.0082   19.40
280026.......................   01.2113   14.79   280118..........   00.9335   16.45   310016.........   01.2558   24.30   310116.........   01.2758   22.74   330030.........   01.2557   16.43
280028.......................   01.1079   15.15   280119..........   00.8703  .......  310017.........   01.3828   23.95   310118.........   01.2657   22.78   330033.........   01.2798   16.66
280029.......................   01.1344   15.52   280123..........   00.8938  .......  310018.........   01.1258   21.68   310119.........   01.7103   30.34   330034.........   00.6391   30.46
280030.......................   01.7044   27.82   280125..........   01.2392  .......  310019.........   01.6672   24.86   310120.........   01.0971   20.79   330036.........   01.3056   19.62
280031.......................   01.0150   13.61   290001..........   01.6935   23.03   310020.........   01.3887   22.65   320001.........   01.3857   17.43   330037.........   01.1546   15.46
280032.......................   01.3002   16.45   290002..........   00.9128   16.13   310021.........   01.3817   23.63   320002.........   01.3670   19.13   330038.........   01.2340   15.52
280033.......................   01.0406   15.69   290003..........   01.6810   25.76   310022.........   01.3156   21.10   320003.........   01.1238   13.29   330041.........   01.3043   36.69
280035.......................   01.0337   13.65   290005..........   01.4874   20.79   310024.........   01.3022   23.65   320004.........   01.2792   14.96   330043.........   01.3194   33.46
280037.......................   01.0415   15.48   290006..........   01.2561   19.14   310025.........   01.2009   21.93   320005.........   01.3531   20.75   330044.........   01.3085   18.10
280038.......................   01.0023   15.49   290007..........   01.8502   27.93   310026.........   01.2043   23.19   320006.........   01.4170   14.55   330045.........   01.4176   27.45
280039.......................   01.0469   15.70   290008..........   01.2147   19.60   310027.........   01.3265   21.41   320009.........   01.6244   17.17   330046.........   01.4603   30.06
280040.......................   01.6269   19.18   290009..........   01.6221   17.91   310028.........   01.2526   21.94   320011.........   01.0077   17.05   330047.........   01.1772   16.85
280041.......................   00.9134   12.05   290010..........   01.2399   14.00   310029.........   01.9458   23.14   320012.........   00.9924   16.53   330048.........   01.2917   17.45
280042.......................   01.0344   15.14   290011..........   00.9015   15.52   310031.........   02.8675   22.58   320013.........   01.1521   17.67   330049.........   01.2386   17.85
280043.......................   01.0147   15.47   290012..........   01.3753   21.50   310032.........   01.3467   22.51   320014.........   01.1514   14.63   330053.........   01.1874   14.83
280045.......................   01.0969   16.10   290013..........   01.0527   18.62   310034.........   01.2580   21.58   320016.........   01.1211   15.17   330055.........   01.6244   29.81
280046.......................   01.1072   12.37   290014..........   00.9699   17.46   310036.........   01.1893   19.11   320017.........   01.2111   16.75   330056.........   01.4395   30.22
280047.......................   01.0907   18.01   290015..........   00.9197   15.18   310037.........   01.3653   27.57   320018.........   01.5827   18.43   330057.........   01.6763   18.74
280048.......................   01.2131   13.82   290016..........   01.1837   22.67   310038.........   01.9545   26.13   320019.........   01.4848   19.57   330058.........   01.3057   16.66
280049.......................   01.0412   15.08   290019..........   01.3426   19.74   310039.........   01.2827   21.22   320021.........   01.7502   17.99   330059.........   01.5787   33.67
280050.......................   00.9263   13.71   290020..........   01.0445   17.29   310040.........   01.2393   23.99   320022.........   01.2213   16.24   330061.........   01.3166   24.36
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                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
330062.......................   01.0733   17.10   330179..........   00.9045   14.60   330275.........   01.2903   22.06   340031.........   01.0066   12.83   340129.........   01.2985   18.11
330064.......................   01.4892   32.11   330180..........   01.1983   16.27   330276.........   01.1685   17.92   340032.........   01.3624   18.77   340130.........   01.3225   19.83
330065.......................   01.2030   18.54   330181..........   01.3528   31.07   330277.........   01.1085   16.57   340035.........   01.1531   17.23   340131.........   01.5209   18.16
330066.......................   01.2766   17.98   330182..........   02.5453   30.48   330279.........   01.3577   19.05   340036.........   01.2139   18.25   340132.........   01.3256   16.27
330067.......................   01.3948   20.64   330183..........   01.4677   19.94   330285.........   01.8458   22.66   340037.........   01.0873   14.46   340133.........   01.1268   14.74
330072.......................   01.4097   29.92   330184..........   01.3264   27.58   330286.........   01.3379   24.38   340038.........   01.1012   16.68   340137.........   01.1310   15.62
330073.......................   01.2255   15.82   330185..........   01.2827   24.72   330290.........   01.6841   32.27   340039.........   01.2681   19.88   340138.........   01.0625   16.94
330074.......................   01.3127   17.25   330186..........   00.5618   20.30   330293.........   01.1953   15.09   340040.........   01.8191   18.61   340141.........   01.7229   20.28
330075.......................   01.0589   17.73   330188..........   01.1830   18.71   330304.........   01.2338   27.04   340041.........   01.2094   17.69   340142.........   01.2350   15.79
330078.......................   01.4268   17.96   330189..........   01.3232   16.54   330306.........   01.4286   28.10   340042.........   01.2260   15.70   340143.........   01.4228   19.62
330079.......................   01.2427   17.22   330191..........   01.3283   18.17   330307.........   01.2663   19.23   340044.........   01.1020   18.87   340144.........   01.3656   18.96
330080.......................   01.3325   27.06   330193..........   01.3516   28.64   330314.........   01.3785   21.50   340045.........   00.9956   14.02   340145.........   01.4314   18.88
330084.......................   01.0696   17.68   330194..........   01.7808   31.20   330315.........   16.0413   30.36   340047.........   01.8288   19.42   340146.........   01.1145   14.28
330085.......................   01.2974   18.59   330195..........   01.6416   31.94   330316.........   01.3084   22.23   340048.........   01.0275   05.23   340147.........   01.2535   19.21
330086.......................   01.2666   26.87   330196..........   01.2608   27.80   330327.........   00.9713   16.98   340049.........   01.0355   17.75   340148.........   01.4937   18.55
330088.......................   01.0531   22.43   330197..........   01.1287   16.79   330331.........   01.3121   29.10   340050.........   01.2003   17.95   340151.........   01.2078   15.67
330090.......................   01.5991   17.92   330198..........   01.3837   23.21   330332.........   01.2892   26.99   340051.........   01.3356   16.79   340153.........   01.8814   19.87
330091.......................   01.3584   18.01   330199..........   01.3382   25.90   330333.........   01.2444   51.91   340052.........   01.0223   21.14   340155.........   01.3840   21.24
330092.......................   01.0542   14.25   330201..........   01.6866   40.72   330336.........   01.3094   30.29   340053.........   01.6440   19.44   340156.........   00.7966  ......
330094.......................   01.2399   17.06   330202..........   01.3886   27.41   330338.........   01.2333   20.97   340054.........   01.2239   14.35   340158.........   01.1278   16.49
330095.......................   01.2452   18.40   330203..........   01.3959   19.61   330339.........   00.9320   18.87   340055.........   01.2769   17.40   340159.........   01.1375   16.21
330096.......................   01.1887   15.81   330204..........   01.3552   28.88   330340.........   01.2344   22.43   340060.........   01.1293   17.75   340160.........   01.1672   14.11
330097.......................   01.2171   15.32   330205..........   01.1763   19.85   330350.........   01.6747   28.46   340061.........   01.7280   20.31   340162.........   01.1787   16.56
330100.......................   00.7936   28.03   330208..........   01.2263   26.41   330353.........   01.2772   31.43   340063.........   01.0171   22.75   340164.........   01.4579   20.69
330101.......................   01.8106   30.39   330209..........   01.1811   24.53   330354.........   01.5676  .......  340064.........   01.2364   17.05   340166.........   01.2776   19.58
330102.......................   01.3312   17.00   330211..........   01.2029   18.46   330357.........   01.3809   34.81   340065.........   01.2854   15.89   340168.........   00.4875   15.15
330103.......................   01.2449   16.63   330212..........   01.1468   24.26   330359.........   00.9373   29.31   340067.........   01.1587   18.20   340171.........   01.2031  ......
330104.......................   01.4313   27.69   330213..........   01.1701   18.39   330372.........   01.1964   22.25   340068.........   01.2139   16.56   340173.........   01.2130  ......
330106.......................   01.6949   34.04   330214..........   01.8173   31.94   330381.........   01.2852   29.21   340069.........   01.8495   20.34   350001.........   00.9857   14.51
330107.......................   01.3314   26.04   330215..........   01.2026   17.11   330385.........   01.1940   29.15   340070.........   01.3026   18.49   350002.........   01.8548   16.86
330108.......................   01.2467   16.97   330218..........   01.0527   20.44   330386.........   01.2158   23.26   340071.........   01.0889   15.86   350003.........   01.1701   16.63
330111.......................   01.0751   15.08   330219..........   01.6629   20.87   330387.........   00.7923   30.68   340072.........   01.1279   15.86   350004.........   01.9174   18.34
330114.......................   00.9490   15.82   330221..........   01.2904   29.07   330389.........   01.7245   31.92   340073.........   01.5386   19.84   350005.........   01.0598   14.07
330115.......................   01.2405   16.12   330222..........   01.2606   18.36   330390.........   01.3751   31.67   340075.........   01.1939   16.88   350006.........   01.5142   16.25
330116.......................   00.9611   15.34   330223..........   01.0770   16.39   330393.........   01.7444   25.45   340080.........   01.0339   15.49   350007.........   00.8879   13.24
330118.......................   01.6591   20.00   330224..........   01.2569   21.50   330394.........   01.5407   18.21   340084.........   01.0889   16.12   350008.........   00.9420   16.74
330119.......................   01.7636   32.85   330225..........   01.1739   24.76   330395.........   01.3488   33.16   340085.........   01.1663   16.33   350009.........   01.1468   17.04
330121.......................   01.0383   15.12   330226..........   01.2590   17.82   330396.........   01.1754   31.55   340087.........   01.1169   16.53   350010.........   01.1050   13.74
330122.......................   01.0650   22.97   330229..........   01.3257   16.25   330397.........   01.3150   30.46   340088.........   01.1258   18.13   350011.........   01.8836   20.64
330125.......................   01.9179   20.66   330230..........   01.3791   29.27   330398.........   01.3550   29.49   340089.........   01.0120   13.83   350012.........   01.1086   13.55
330126.......................   01.1519   22.70   330231..........   01.0674   29.53   330399.........   01.2625   29.60   340090.........   01.1444   17.83   350013.........   01.1051   16.53
330127.......................   01.3403   29.65   330232..........   01.2445   17.76   340001.........   01.4796   17.91   340091.........   01.7002   19.89   350014.........   00.9841   13.14
330128.......................   01.2625   29.68   330233..........   01.4948   30.49   340002.........   01.8416   18.45   340093.........   01.0697   13.96   350015.........   01.7381   16.56
330132.......................   01.2001   13.55   330234..........   02.3119   31.88   340003.........   01.1252   17.14   340094.........   01.4789   18.27   350016.........   01.0963   11.47
330133.......................   01.3701   34.67   330235..........   01.1204   19.21   340004.........   01.4483   18.79   340096.........   01.1483   17.40   350017.........   01.3990   16.68
330135.......................   01.1994   19.14   330236..........   01.4074   28.47   340005.........   01.1650   14.89   340097.........   01.1445   17.69   350018.........   01.0846   17.93
330136.......................   01.2894   19.26   330238..........   01.1749   15.02   340006.........   01.0428   14.76   340098.........   01.6889   19.32   350019.........   01.6863   18.72
330140.......................   01.7769   18.58   330239..........   01.1666   16.21   340007.........   01.1704   16.96   340099.........   01.2134   13.03   350021.........   01.0260   12.00
330141.......................   01.3850   24.49   330240..........   01.3279   27.67   340008.........   01.1373   17.84   340101.........   01.0627   11.87   350023.........   00.9286   15.16
330144.......................   00.9394   15.19   330241..........   01.9705   21.51   340010.........   01.2998   17.56   340104.........   00.9970   11.37   350024.........   01.0368   16.47
330148.......................   01.0767   15.47   330242..........   01.3423   25.14   340011.........   01.1622   15.71   340105.........   01.3725   18.85   350025.........   01.0095   14.00
330151.......................   01.1172   14.68   330245..........   01.3076   17.00   340012.........   01.3162   17.04   340106.........   01.2505   20.04   350027.........   00.9540   14.46
330152.......................   01.4137   30.10   330246..........   01.3839   25.91   340013.........   01.2800   17.33   340107.........   01.3591   17.08   350029.........   00.8728   12.98
330153.......................   01.7338   16.97   330247..........   00.9015   27.38   340014.........   01.5587   22.23   340109.........   01.3186   17.38   350030.........   01.0496   16.65
330154.......................   01.7268  .......  330249..........   01.1933   16.18   340015.........   01.3007   20.37   340111.........   01.1989   14.63   350033.........   00.9198   14.40
330157.......................   01.3501   19.72   330250..........   01.2870   17.98   340016.........   01.1912   16.24   340112.........   00.9917   15.24   350034.........   00.9924   17.45
330158.......................   01.4999   20.48   330252..........   00.9461   16.84   340017.........   01.2474   14.31   340113.........   01.8577   20.59   350035.........   00.9005   10.21
330159.......................   01.2907   17.88   330254..........   01.1696   17.12   340018.........   01.2456   16.25   340114.........   01.5500   20.34   350038.........   01.0922   15.28
330160.......................   01.4736   29.42   330258..........   01.3355   30.01   340019.........   01.0224   20.26   340115.........   01.5723   19.35   350039.........   01.0288   14.75
330162.......................   01.2185   27.06   330259..........   01.5025   23.47   340020.........   01.1977   19.04   340116.........   01.8178   19.81   350041.........   01.0442   17.60
330163.......................   01.1905   19.14   330261..........   01.2944   26.17   340021.........   01.2336   17.51   340119.........   01.2970   16.41   350042.........   01.1142   15.19
330164.......................   01.4954   19.87   330263..........   01.0305   17.91   340022.........   01.0586   16.91   340120.........   01.0817   13.56   350043.........   01.5670   14.65
330166.......................   01.0125   13.56   330264..........   01.2135   21.71   340023.........   01.3771   17.77   340121.........   01.0648   15.43   350044.........   00.8768   11.49
330167.......................   01.6539   29.65   330265..........   01.3931   16.33   340024.........   01.1393   16.33   340123.........   01.0906   15.57   350047.........   01.1941   16.54
330169.......................   01.4639   32.41   330267..........   01.3643   23.95   340025.........   01.2234   15.47   340124.........   01.0127   13.98   350049.........   01.3354   13.86
330171.......................   01.4007   23.94   330268..........   00.9663   15.02   340027.........   01.2058   16.89   340125.........   01.4796   16.50   350050.........   00.9591   11.89
330175.......................   01.1894   15.10   330270..........   01.9872   31.03   340028.........   01.5976   16.85   340126.........   01.3940   16.50   350051.........   00.9832   15.74
330177.......................   00.9633   14.78   330273..........   01.3059   25.72   340030.........   02.0173   21.06   340127.........   01.3339   17.51   350053.........   01.0118   11.88
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[[Page 25632]]


                                                                                          Page 11 of 15                                                                                         
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                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
350055.......................   00.9999   13.76   360074..........   01.3337   18.00   360159.........   01.2116   19.84   370029.........   01.2602   13.51   370149.........   01.2900   15.69
350056.......................   00.9564   13.88   360075..........   01.4441   21.40   360161.........   01.2549   13.69   370030.........   01.1832   16.49   370153.........   01.0658   14.06
350058.......................   00.9230   12.18   360076..........   01.3645   18.64   360163.........   01.8032   20.26   370032.........   01.5887   16.17   370154.........   01.0434   14.12
350060.......................   00.8587   08.80   360077..........   01.5831   19.38   360164.........   00.9634   15.60   370033.........   01.0599   12.34   370156.........   01.0577   17.29
350061.......................   01.0645   15.31   360078..........   01.2491   19.90   360165.........   01.1732   17.81   370034.........   01.2337   14.36   370158.........   01.0253   12.09
350063.......................   00.8843  .......  360079..........   01.8666   21.04   360166.........   01.1873   16.01   370035.........   01.6429   16.77   370159.........   01.3951   15.05
350064.......................   00.8364  .......  360080..........   01.1462   15.68   360170.........   01.3808   16.53   370036.........   01.0721   10.54   370163.........   01.0022   14.57
360001.......................   01.3790   17.65   360081..........   01.3761   19.70   360172.........   01.3455   17.89   370037.........   01.7160   18.63   370165.........   01.1291   11.97
360002.......................   01.1925   17.82   360082..........   01.3254   23.27   360174.........   01.3284   18.44   370038.........   01.0052   11.68   370166.........   01.1323   15.55
360003.......................   01.7561   22.14   360084..........   01.6045   20.53   360175.........   01.1937   20.19   370039.........   01.2616   13.93   370169.........   01.0593   11.91
360006.......................   01.8372   20.93   360085..........   01.8333   21.47   360176.........   01.1290   15.34   370040.........   01.0977   15.04   370170.........   01.0046  ......
360007.......................   01.0627   15.95   360086..........   01.4331   17.81   360177.........   01.2931   18.27   370041.........   00.9733   16.47   370171.........   01.0182  ......
360008.......................   01.2396   17.78   360087..........   01.4291   18.51   360178.........   01.2433   17.16   370042.........   00.8835   13.98   370172.........   00.9229  ......
360009.......................   01.4867   17.38   360088..........   01.3676   19.09   360179.........   01.3391   19.50   370043.........   00.9443   15.18   370173.........   01.1000  ......
360010.......................   01.2461   17.09   360089..........   01.1769   17.84   360180.........   02.1577   23.00   370045.........   00.9900   09.83   370174.........   00.7547  ......
360011.......................   01.3403   18.91   360090..........   01.2425   19.75   360184.........   00.4293   18.76   370046.........   00.9817   10.89   370176.........   01.2219   16.29
360012.......................   01.3150   19.72   360091..........   01.2836   20.40   360185.........   01.2259   18.13   370047.........   01.3904   15.04   370177.........   00.9737   10.48
360013.......................   01.1386   18.36   360092..........   01.1263   19.47   360186.........   01.1539   10.45   370048.........   01.2228   15.40   370178.........   01.0021   11.20
360014.......................   01.2083   18.87   360093..........   01.1654   17.64   360187.........   01.4085   17.67   370049.........   01.3327   15.44   370179.........   00.7441   15.19
360016.......................   01.6147   18.36   360094..........   01.3940   18.15   360188.........   00.9725   17.11   370051.........   00.9867   11.30   370180.........   00.9135  ......
360017.......................   01.8633   21.51   360095..........   01.2581   19.83   360189.........   01.1592   16.98   370054.........   01.4696   16.32   370183.........   01.0309   10.35
360018.......................   01.6285   19.87   360096..........   01.1266   17.46   360192.........   01.3663   21.31   370056.........   01.5245   18.44   370186.........   00.9921   13.32
360019.......................   01.2657   21.76   360098..........   01.4265   18.26   360193.........   01.2971   16.98   370057.........   01.1165   15.27   370190.........   01.5486   26.42
360020.......................   01.4424   20.72   360099..........   01.0479   19.53   360194.........   01.2855   17.89   370059.........   01.0974   17.49   370192.........   01.2229   16.30
360024.......................   01.3762   17.75   360100..........   01.2888   18.00   360195.........   01.1587   19.33   370060.........   01.1260   13.90   370196.........   00.8240  ......
360025.......................   01.3562   19.40   360101..........   01.3901   21.04   360197.........   01.1688   19.16   370063.........   01.1782   16.95   370197.........   00.9846  ......
360026.......................   01.3485   16.21   360102..........   01.2869   19.19   360200.........   01.0276   15.62   370064.........   00.9593   10.71   370198.........   01.7997  ......
360027.......................   01.4597   20.14   360103..........   01.3578   19.87   360203.........   01.2094   14.41   370065.........   00.9924   15.36   380001.........   01.2902   18.13
360028.......................   01.4846   17.21   360106..........   01.1021   16.08   360204.........   01.2422   19.09   370071.........   01.0530   10.05   380002.........   01.2715   18.07
360029.......................   01.1846   17.74   360107..........   01.2417   17.37   360210.........   01.2012   20.61   370072.........   00.8635   14.04   380003.........   01.2260   28.86
360030.......................   01.2891   16.67   360108..........   01.0913   16.45   360211.........   01.2671   19.64   370076.........   01.2612   12.45   380004.........   01.7003   23.04
360031.......................   01.2807   19.33   360109..........   01.1094   18.64   360212.........   01.3941   20.16   370078.........   01.7411   16.06   380005.........   01.2187   22.81
360032.......................   01.0729   17.87   360112..........   01.8012   23.33   360213.........   01.2686   18.05   370079.........   00.9534   15.91   380006.........   01.2870   19.61
360034.......................   01.3225   14.77   360113..........   01.3630   15.36   360218.........   01.3047   18.29   370080.........   00.9738   14.18   380007.........   01.6852   24.92
360035.......................   01.6186   20.73   360114..........   01.1017   17.48   360230.........   01.5624   21.16   370082.........   00.9220   13.85   380008.........   01.0543   19.56
360036.......................   01.3579   19.04   360115..........   01.2554   17.92   360231.........   01.1494   12.39   370083.........   00.9508   12.81   380009.........   01.8821   22.90
360037.......................   02.0580   21.38   360116..........   01.0983   17.49   360234.........   01.3469   16.44   370084.........   01.0827   13.65   380010.........   01.0520   22.58
360038.......................   01.5828   20.60   360118..........   01.3521   18.34   360236.........   01.2893   25.36   370085.........   00.8717   13.21   380011.........   01.0490   19.05
360039.......................   01.3135   17.40   360121..........   01.2409   19.22   360239.........   01.3034   19.65   370086.........   01.1713   11.51   380013.........   01.3177   20.62
360040.......................   01.3495   17.81   360123..........   01.2744   19.33   360241.........   00.4699   21.14   370089.........   01.2580   15.23   380014.........   01.6295   22.02
360041.......................   01.3392   18.83   360125..........   01.0992   17.41   360242.........   01.8068  .......  370091.........   01.7259   19.16   380017.........   01.9390   25.87
360042.......................   01.1862   18.02   360126..........   01.2179   20.75   360243.........   00.7287   14.26   370092.........   01.0247   14.09   380018.........   01.8034   20.94
360044.......................   01.1205   15.83   360127..........   01.1844   17.85   360245.........   00.7295   15.21   370093.........   01.8539   17.71   380019.........   01.2880   21.45
360045.......................   01.4762   20.73   360128..........   01.1314   15.05   360247.........   00.4164  .......  370094.........   01.5130   19.25   380020.........   01.5022   21.41
360046.......................   01.1449   17.71   360129..........   00.9665   15.12   360248.........   01.7504  .......  370095.........   00.9994   11.75   380021.........   01.2890   21.57
360047.......................   01.1368   14.51   360130..........   01.1237   15.93   370001.........   01.7845   20.06   370097.........   01.3708   17.38   380022.........   01.1715   22.57
360048.......................   01.8279   21.60   360131..........   01.3442   18.99   370002.........   01.1524   13.71   370099.........   01.1771   14.07   380023.........   01.2243   18.43
360049.......................   01.1856   19.60   360132..........   01.4255   18.28   370004.........   01.2310   16.67   370100.........   01.0076   14.49   380025.........   01.3449   25.35
360050.......................   01.0987   12.40   360133..........   01.5948   18.70   370005.........   01.0032   14.07   370103.........   00.9320   16.27   380026.........   01.1604   19.09
360051.......................   01.6396   23.55   360134..........   01.7247   20.07   370006.........   01.2654   15.48   370105.........   01.9777   18.43   380027.........   01.2943   22.82
360052.......................   01.7665   18.65   360136..........   01.0811   16.90   370007.........   01.2216   14.36   370106.........   01.5469   18.37   380029.........   01.1592   18.33
360054.......................   01.2934   16.53   360137..........   01.6532   19.95   370008.........   01.3784   17.77   370108.........   01.1298   11.81   380031.........   00.9808   22.48
360055.......................   01.2577   19.64   360140..........   00.9788   16.21   370011.........   01.0524   12.91   370112.........   01.0696   14.65   380033.........   01.7744   24.22
360056.......................   01.4280   20.89   360141..........   01.5661   23.32   370012.........   00.8733   09.87   370113.........   01.1887   15.11   380035.........   01.2910   21.53
360057.......................   01.1603   15.46   360142..........   01.0197   16.62   370013.........   01.8435   19.24   370114.........   01.6464   15.79   380036.........   01.0585   20.79
360058.......................   01.2702   17.56   360143..........   01.4294   19.90   370014.........   01.2842   19.35   370121.........   01.1723   16.84   380037.........   01.2761   20.52
360059.......................   01.6935   21.65   360144..........   01.3319   19.89   370015.........   01.2181   17.16   370122.........   01.1283   12.45   380038.........   01.3383   25.28
360062.......................   01.5157   20.52   360145..........   01.6848   18.18   370016.........   01.3747   16.52   370123.........   01.3288   17.25   380039.........   01.3184   21.50
360063.......................   01.1355   18.29   360147..........   01.2300   16.40   370017.........   01.1872   11.23   370125.........   00.9809   12.01   380040.........   01.2643   21.08
360064.......................   01.6110   21.73   360148..........   01.1746   17.80   370018.........   01.3459   18.25   370126.........   00.9821   12.07   380042.........   01.0847   17.33
360065.......................   01.2978   18.23   360149..........   01.2144   18.68   370019.........   01.3577   14.79   370131.........   00.9568   15.71   380047.........   01.7005   21.15
360066.......................   01.5064   18.92   360150..........   01.2765   20.02   370020.........   01.3041   11.86   370133.........   01.1458   11.04   380048.........   01.0727   15.35
360067.......................   01.1473   13.46   360151..........   01.3441   17.15   370021.........   00.9234   10.38   370138.........   01.0828   15.12   380050.........   01.4632   18.30
360068.......................   01.7403   21.49   360152..........   01.5138   19.73   370022.........   01.3220   17.34   370139.........   01.1101   11.70   380051.........   01.6000   20.79
360069.......................   01.1413   17.25   360153..........   01.1322   13.86   370023.........   01.3350   16.03   370140.........   01.0074   11.92   380052.........   01.2194   17.97
360070.......................   01.6991   16.22   360154..........   01.0127   13.29   370025.........   01.3416   16.09   370141.........   01.3413   15.22   380055.........   01.0479   25.16
360071.......................   01.3655   14.35   360155..........   01.3655   20.38   370026.........   01.4980   16.66   370146.........   01.1663   11.23   380056.........   01.1095   16.82
360072.......................   01.2294   17.52   360156..........   01.2889   18.45   370028.........   01.9096   20.31   370148.........   01.4901   27.04   380060.........   01.4546   22.68
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 25633]]


                                                                                          Page 12 of 15                                                                                         
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
380061.......................   01.5010   21.24   390054..........   01.1925   16.20   390138.........   01.3274   17.99   390242.........   01.3211   18.77   400120.........   01.3210   09.45
380062.......................   01.2271   18.32   390055..........   01.8803   26.53   390139.........   01.5292   23.00   390244.........   00.9008   12.10   400121.........   00.9061   06.57
380063.......................   01.2398   18.55   390056..........   01.1583   16.53   390142.........   01.6012   28.56   390245.........   01.4283   21.37   400122.........   01.0071   07.20
380064.......................   01.3645   18.24   390057..........   01.3181   19.58   390145.........   01.3627   20.30   390246.........   01.2381   17.91   400123.........   01.1923   08.39
380065.......................   01.2612   22.48   390058..........   01.2736   18.64   390146.........   01.2696   16.85   390247.........   01.0888   20.42   400124.........   02.6899   11.00
380066.......................   01.3314   20.01   390060..........   01.2044   16.88   390147.........   01.2520   20.55   390249.........   01.0117   12.79   410001.........   01.3885   21.15
380068.......................   00.9929   21.71   390061..........   01.5126   20.08   390150.........   01.1850   20.98   390256.........   01.8065   24.05   410004.........   01.3542   21.95
380069.......................   01.1237   19.35   390062..........   01.1873   16.43   390151.........   01.2236   19.88   390258.........   01.3894   20.71   410005.........   01.3893   22.97
380070.......................   01.3856   25.32   390063..........   01.7711   20.19   390152.........   01.0833   17.35   390260.........   01.2324   23.05   410006.........   01.3047   21.58
380071.......................   01.2895   20.13   390065..........   01.2445   19.95   390153.........   01.2347   22.04   390262.........   01.8663   18.17   410007.........   01.6895   21.22
380072.......................   00.9525   16.03   390066..........   01.2979   19.58   390154.........   01.2149   17.37   390263.........   01.4746   19.75   410008.........   01.2641   20.03
380075.......................   01.3760   19.99   390067..........   01.7841   19.97   390156.........   01.4353   20.56   390265.........   01.3029   19.06   410009.........   01.3206   23.53
380078.......................   00.9840   18.28   390068..........   01.3034   19.04   390157.........   01.3790   18.98   390266.........   01.2200   16.95   410010.........   01.0628   26.80
380081.......................   01.1300   18.28   390069..........   01.3386   20.08   390158.........   01.5582   19.47   390267.........   01.3089   19.01   410011.........   01.2360   23.92
380082.......................   01.3109   21.55   390070..........   01.3343   19.37   390160.........   01.2930   19.68   390268.........   01.3484   21.17   410012.........   01.8346   21.15
380083.......................   01.2950   21.90   390071..........   01.0930   15.04   390161.........   01.1318   13.75   390270.........   01.3595   17.08   410013.........   01.2926   24.44
380084.......................   01.2579   21.98   390072..........   01.0866   15.49   390162.........   01.5617   21.02   390272.........   00.4562  .......  420002.........   01.3852   21.83
380087.......................   01.0848   12.91   390073..........   01.6243   19.82   390163.........   01.2249   16.11   390277.........   00.5292   23.14   420004.........   01.8530   18.30
380088.......................   01.0227   18.65   390074..........   01.2608   16.62   390164.........   02.1585   22.59   390278.........   00.6728   16.94   420005.........   01.1718   15.14
380089.......................   01.3275   23.92   390075..........   01.3632   17.48   390166.........   01.1125   18.97   390279.........   01.0386   14.40   420006.........   01.1714   17.68
380090.......................   01.2856   25.49   390076..........   01.4253   21.97   390167.........   01.3655   21.84   400001.........   01.2646   09.39   420007.........   01.5056   17.78
380091.......................   01.3021   24.95   390078..........   01.0805   18.92   390168.........   01.2845   18.12   400002.........   01.6156   10.99   420009.........   01.2431   17.01
390001.......................   01.4101   21.89   390079..........   01.7802   17.91   390169.........   01.2814   18.85   400003.........   01.3181   08.34   420010.........   01.2029   15.22
390002.......................   01.2997   19.71   390080..........   01.3128   18.40   390170.........   01.8882   21.93   400004.........   01.1998   08.16   420011.........   01.1862   15.88
390003.......................   01.2251   17.48   390081..........   01.3443   21.33   390173.........   01.2026   17.81   400005.........   01.0804   06.50   420014.........   01.0521   15.49
390004.......................   01.3957   17.68   390083..........   01.2260   17.49   390174.........   01.6821   28.75   400006.........   01.2047   07.62   420015.........   01.3602   17.27
390005.......................   01.0449   16.56   390084..........   01.1848   15.92   390176.........   01.1634   18.54   400007.........   01.1616   07.13   420016.........   00.9967   14.27
390006.......................   01.7963   18.43   390086..........   01.1623   17.91   390178.........   01.3125   19.14   400009.........   01.0382   07.64   420018.........   01.8076   19.64
390007.......................   01.2165   20.24   390088..........   01.3418   21.04   390179.........   01.3565   21.31   400010.........   00.9135   10.07   420019.........   01.1909   14.81
390008.......................   01.1475   16.70   390090..........   01.7964   20.56   390180.........   01.4771   23.13   400011.........   01.0608   07.81   420020.........   01.2623   17.58
390009.......................   01.6945   19.72   390091..........   01.1404   18.52   390181.........   01.0478   19.10   400012.........   01.1906   07.69   420023.........   01.4452   19.27
390010.......................   01.2666   16.99   390093..........   01.1546   15.95   390183.........   01.1759   18.03   400013.........   01.2834   08.06   420026.........   01.8876   18.73
390011.......................   01.2805   18.32   390095..........   01.2041   15.21   390184.........   01.1047   18.24   400014.........   01.3803   08.68   420027.........   01.3581   17.34
390012.......................   01.2209   19.43   390096..........   01.5027   17.87   390185.........   01.2232   17.20   400015.........   01.3729  .......  420030.........   01.2949   17.49
390013.......................   01.2405   18.14   390097..........   01.2959   22.07   390189.........   01.1429   19.19   400016.........   01.3717   11.37   420031.........   00.9613   12.23
390015.......................   01.1529   13.06   390100..........   01.6655   20.58   390191.........   01.2270   16.80   400017.........   01.2069   06.56   420033.........   01.2721   19.24
390016.......................   01.2456   17.76   390101..........   01.2042   17.62   390192.........   01.1586   15.64   400018.........   01.2977   09.29   420036.........   01.4355   18.46
390017.......................   01.2175   15.86   390102..........   01.3763   19.60   390193.........   01.2088   17.26   400019.........   01.7668   09.58   420037.........   01.1963   21.60
390018.......................   01.3160   19.26   390103..........   01.1383   18.62   390194.........   01.1410   18.95   400021.........   01.4606   09.43   420038.........   01.3331   15.74
390019.......................   01.1409   16.01   390104..........   01.0956   14.75   390195.........   01.8448   22.62   400022.........   01.3456   11.18   420039.........   01.1544   16.21
390022.......................   01.3648   20.49   390106..........   01.0527   15.96   390196.........   01.3776  .......  400024.........   01.0267   07.45   420042.........   01.1022   14.56
390023.......................   01.2385   18.03   390107..........   01.3456   19.43   390197.........   01.3002   17.67   400026.........   00.9852   06.04   420043.........   01.2299   18.79
390024.......................   01.0879   23.53   390108..........   01.3676   19.21   390198.........   01.2119   15.83   400027.........   01.1410   08.07   420048.........   01.2492   13.44
390025.......................   00.6397   15.37   390109..........   01.2783   14.91   390199.........   01.3245   15.86   400028.........   01.0099   07.98   420049.........   01.1743   16.46
390026.......................   01.3006   21.98   390110..........   01.6319   19.36   390200.........   01.0981   17.18   400029.........   01.0884   10.05   420051.........   01.6278   17.99
390027.......................   01.8620   28.88   390111..........   01.8454   29.97   390201.........   01.2808   20.12   400031.........   01.2349   09.50   420053.........   01.1996   16.08
390028.......................   01.8946   19.73   390112..........   01.2860   13.72   390203.........   01.3856   22.12   400032.........   01.2495   08.99   420054.........   01.2953   17.01
390029.......................   01.9719   18.87   390113..........   01.2274   17.00   390204.........   01.3041   20.57   400044.........   01.1780   09.84   420055.........   01.0131   15.72
390030.......................   01.2422   18.37   390114..........   01.2178   21.25   390206.........   01.3925   19.09   400048.........   01.1548   08.23   420056.........   01.0853   13.21
390031.......................   01.1866   18.45   390115..........   01.3792   23.95   390209.........   01.0699   16.37   400061.........   01.6558   14.42   420057.........   01.1687   14.71
390032.......................   01.2567   19.11   390116..........   01.2709   23.74   390211.........   01.2499   18.17   400079.........   01.2819   10.43   420059.........   00.9796   15.11
390035.......................   01.2478   17.14   390117..........   01.1848   16.64   390213.........   01.1615   19.15   400087.........   01.4420   10.90   420061.........   01.1681   17.58
390036.......................   01.4518   19.18   390118..........   01.1802   16.48   390215.........   01.2938   24.51   400094.........   01.0401   06.88   420062.........   01.4640   15.61
390037.......................   01.3834   19.24   390119..........   01.3516   18.05   390217.........   01.2323   20.29   400098.........   01.3576   08.48   420064.........   01.1124   14.50
390039.......................   01.1357   16.31   390121..........   01.3576   19.61   390219.........   01.3267   19.86   400102.........   01.1698   04.27   420065.........   01.3464   18.10
390040.......................   00.9663   16.73   390122..........   01.1007   18.49   390220.........   01.2025   18.22   400103.........   01.4518   09.30   420066.........   00.9577   16.65
390041.......................   01.2908   18.92   390123..........   01.3805   20.31   390222.........   01.2859   20.89   400104.........   01.3442   09.05   420067.........   01.2622   18.10
390042.......................   01.5647   21.41   390125..........   01.2001   15.48   390223.........   01.5318   22.49   400105.........   01.2514   08.85   420068.........   01.4309   17.58
390043.......................   01.1558   18.18   390126..........   01.2793   19.94   390224.........   00.9047   15.35   400106.........   01.2522   08.61   420069.........   01.0556   18.03
390044.......................   01.6721   19.24   390127..........   01.2446   21.39   390225.........   01.1782   17.76   400109.........   01.4903   09.61   420070.........   01.2279   16.89
390045.......................   01.8045   17.60   390128..........   01.2398   19.93   390226.........   01.7896   23.48   400110.........   01.0649   08.99   420071.........   01.3120   18.25
390046.......................   01.5550   20.26   390130..........   01.1635   16.56   390228.........   01.2819   19.19   400111.........   01.1917   08.80   420072.........   00.9800   11.63
390047.......................   01.9134   30.25   390131..........   01.3311   16.73   390231.........   01.4331   24.08   400112.........   01.1131   08.91   420073.........   01.3017   20.68
390048.......................   01.1814   18.12   390132..........   01.2825   22.21   390233.........   01.3151   18.31   400113.........   01.2139   08.29   420074.........   01.0054   13.73
390049.......................   01.6700   21.29   390133..........   01.8226   22.97   390235.........   01.5371   23.51   400114.........   01.0730   08.19   420075.........   00.9408   13.75
390050.......................   02.1813   22.47   390135..........   01.2353   21.67   390236.........   01.1865   16.40   400115.........   01.0700   08.58   420078.........   01.8491   21.18
390051.......................   02.1743   25.65   390136..........   01.1261   15.10   390237.........   01.6160   19.08   400117.........   01.1921   09.36   420079.........   01.5774   19.07
390052.......................   01.1794   15.47   390137..........   01.5138   16.40   390238.........   01.4870   18.78   400118.........   01.2634   10.06   420080.........   01.3760   24.17
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                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
420082.......................   01.5220   18.32   440011..........   01.3887   17.79   440135.........   01.2276   19.84   450039.........   01.4508   17.93   450150.........   00.9615   10.86
420083.......................   01.2939   19.79   440012..........   01.6038   18.49   440137.........   01.0953   13.42   450040.........   01.5337   17.64   450151.........   01.1421   15.82
420085.......................   01.4964   17.31   440014..........   00.9585   14.66   440141.........   01.0489   16.14   450042.........   01.7796   17.20   450152.........   01.2733   16.88
420086.......................   01.4475   18.16   440015..........   01.7375   15.39   440142.........   01.0746   12.75   450044.........   01.5602   20.09   450153.........   01.5917   18.67
420087.......................   01.6840   18.21   440016..........   01.0127   12.66   440143.........   01.0957   17.21   450046.........   01.4559   12.99   450154.........   01.1522   14.43
420088.......................   01.1409   16.23   440017..........   01.7209   19.76   440144.........   01.2961   17.79   450047.........   01.1070   11.09   450155.........   01.0382   24.42
420089.......................   01.2826   21.79   440018..........   01.3665   16.68   440145.........   00.9607   13.88   450050.........   00.9968   11.53   450157.........   01.1365   15.32
420091.......................   01.2793   16.06   440019..........   01.6964   20.11   440147.........   01.5847   16.28   450051.........   01.6355   19.77   450160.........   00.9535   15.51
420093.......................   01.0268  .......  440020..........   01.2407   15.60   440148.........   01.1655   16.26   450052.........   01.0576   13.42   450162.........   01.2604   21.24
430004.......................   01.1554   16.77   440023..........   01.1507   14.25   440149.........   01.1555   14.35   450053.........   01.0823   14.15   450163.........   01.0682   16.72
430005.......................   01.3595   15.32   440024..........   01.3297   17.96   440150.........   01.3246   18.41   450054.........   01.6306   21.89   450164.........   01.2194   14.62
430007.......................   01.0638   13.91   440025..........   01.2064   13.85   440151.........   01.3017   17.69   450055.........   01.0921   12.18   450165.........   01.0931   13.25
430008.......................   01.1481   16.06   440029..........   01.3155   17.57   440152.........   01.8871   18.01   450056.........   01.6523   16.13   450166.........   00.9365   10.68
430010.......................   01.1348   14.54   440030..........   01.2445   13.96   440153.........   01.2219   16.01   450058.........   01.6081   16.97   450169.........   00.7896   12.56
430011.......................   01.2481   15.59   440031..........   01.0365   13.97   440156.........   01.5838   22.45   450059.........   01.3520   13.67   450170.........   00.9586   11.25
430012.......................   01.3134   16.94   440032..........   01.0487   14.25   440157.........   01.0574   15.33   450063.........   00.9136   12.64   450176.........   01.3488   14.31
430013.......................   01.2626   16.44   440033..........   01.1447   11.81   440159.........   01.3462   13.80   450064.........   01.4496   15.32   450177.........   01.2792   13.51
430014.......................   01.3447   18.19   440034..........   01.5652   19.30   440161.........   01.9004   19.94   450065.........   01.1111   19.22   450178.........   00.9692   13.80
430015.......................   01.1468   16.06   440035..........   01.2851   17.56   440166.........   01.6175   18.67   450068.........   01.8913   24.40   450181.........   01.0425   19.19
430016.......................   01.8285   18.86   440039..........   01.7990   18.40   440168.........   01.0818   16.29   450072.........   01.2252   19.03   450184.........   01.5030   23.29
430018.......................   00.9273   14.23   440040..........   01.0268   14.47   440173.........   01.6639   17.92   450073.........   01.2014   18.74   450185.........   01.0475   10.84
430022.......................   00.9234   11.69   440041..........   01.0192   12.50   440174.........   01.0421   15.12   450076.........   01.6720  .......  450187.........   01.2512   19.67
430023.......................   00.9009   11.59   440046..........   01.2308   14.28   440175.........   01.1542   17.31   450078.........   00.9841   09.74   450188.........   01.0367   14.02
430024.......................   01.0343   14.51   440047..........   00.9274   16.03   440176.........   01.4262   19.42   450079.........   01.4681   20.51   450191.........   01.0301   19.15
430027.......................   01.7770   18.58   440048..........   01.8485   16.82   440178.........   01.2426   22.63   450080.........   01.2200   17.44   450192.........   01.2312   17.99
430028.......................   01.0635   15.50   440049..........   01.6623   17.56   440180.........   01.2421   16.19   450081.........   01.0655   15.61   450193.........   02.0166   22.67
430029.......................   01.0237   15.69   440050..........   01.3806   16.99   440181.........   01.0545   10.98   450082.........   01.0038   13.31   450194.........   01.2934   20.99
430031.......................   00.9251   12.23   440051..........   00.9613   14.08   440182.........   00.9998   16.20   450083.........   01.7323   19.48   450196.........   01.4438   17.07
430033.......................   00.9805   13.99   440052..........   01.1465   15.14   440183.........   01.5912   20.71   450085.........   01.0847   12.24   450200.........   01.4043   14.95
430034.......................   01.0590   12.76   440053..........   01.3823   17.37   440184.........   01.3803   19.32   450087.........   01.4908   17.64   450201.........   01.0004   17.33
430036.......................   01.0975   12.56   440054..........   01.1902   13.52   440185.........   01.2481   18.83   450090.........   01.2450   13.44   450203.........   01.2382   18.28
430037.......................   00.8770   14.57   440056..........   01.1204   14.40   440186.........   01.0953   17.87   450092.........   01.2228   12.47   450209.........   01.5951   18.25
430038.......................   00.9865   11.26   440057..........   01.0459   12.35   440187.........   01.2081   15.76   450094.........   01.3052  .......  450210.........   01.1066   13.17
430040.......................   01.0299   13.59   440058..........   01.2301   15.98   440189.........   01.5755   18.56   450096.........   01.4605   16.91   450211.........   01.3831   16.37
430041.......................   00.9403   14.87   440059..........   01.3550   13.94   440192.........   01.2296   16.54   450097.........   01.4472   18.03   450213.........   01.6843   16.75
430043.......................   01.1676   12.87   440060..........   01.2762   16.56   440193.........   01.2803   17.93   450098.........   01.1799   16.58   450214.........   01.3531   19.24
430044.......................   00.8239   16.48   440061..........   01.2361   17.43   440194.........   01.2787   22.50   450099.........   01.2415   17.53   450217.........   01.0704   11.12
430047.......................   01.0575   14.80   440063..........   01.6979   18.02   440197.........   01.3863   19.25   450101.........   01.4681   16.40   450219.........   01.1743   12.93
430048.......................   01.2187   17.49   440064..........   01.1639   17.44   440200.........   01.1095   16.93   450102.........   01.7052   17.78   450221.........   01.2410   19.52
430049.......................   00.8976   13.24   440065..........   01.2574   19.20   440203.........   00.9488   14.18   450104.........   01.1807   14.62   450222.........   01.5738   17.18
430051.......................   00.9900   16.00   440067..........   01.2538   17.02   440205.........   01.1295   14.78   450107.........   01.6561   19.78   450224.........   01.3931   21.57
430054.......................   01.0254   13.60   440068..........   01.2810   17.51   440206.........   01.0269   17.93   450108.........   00.9943   13.51   450229.........   01.6431   15.88
430056.......................   00.8484   13.33   440070..........   01.0737   15.47   440210.........   00.8638  .......  450109.........   00.9201   14.10   450231.........   01.6402   17.02
430057.......................   00.8887   13.52   440071..........   01.3827   15.29   440211.........   00.8634  .......  450110.........   01.3519   18.61   450234.........   01.0158   11.70
430060.......................   00.9648   09.05   440072..........   01.4283   17.03   450002.........   01.5007   16.67   450111.........   01.2674   19.21   450235.........   01.0278   13.81
430064.......................   01.1062   13.30   440073..........   01.3083   18.15   450004.........   01.1706   13.46   450112.........   01.3283   14.83   450236.........   01.1414   12.89
430066.......................   00.9328   12.75   440078..........   01.0126   12.13   450005.........   01.2847   14.90   450113.........   01.2951   16.69   450237.........   01.5569   16.22
430073.......................   01.0259   15.30   440081..........   01.1637   14.99   450007.........   01.2371   18.19   450118.........   01.5992   18.24   450239.........   01.0932   16.23
430076.......................   00.9397   11.72   440082..........   02.0438   21.84   450008.........   01.3035   15.35   450119.........   01.4448   19.05   450241.........   00.9370   17.05
430077.......................   01.6490   17.05   440083..........   01.1524   12.07   450010.........   01.3484   15.69   450121.........   01.5409   18.89   450243.........   00.9835   11.45
430079.......................   00.9894   13.32   440084..........   01.1534   13.82   450011.........   01.5105   16.02   450123.........   01.1160   18.35   450249.........   00.9517   10.86
430081.......................   00.8564  .......  440091..........   01.6220   18.42   450014.........   01.0623   15.48   450124.........   01.7023   18.45   450250.........   00.9991   15.66
430082.......................   00.9185  .......  440100..........   01.0732   14.88   450015.........   01.6551   16.86   450126.........   01.4337   17.01   450253.........   01.1681   12.65
430083.......................   00.7926  .......  440102..........   01.1389   13.79   450016.........   01.5914   18.01   450128.........   01.2114   13.18   450258.........   01.0492   12.74
430084.......................   00.8631  .......  440103..........   01.2114   17.04   450018.........   01.4744   20.02   450130.........   01.4736   18.04   450264.........   00.8597   15.18
430085.......................   00.8586  .......  440104..........   01.6329   18.95   450020.........   00.9726   16.92   450131.........   01.2712   20.21   450269.........   01.0555   15.78
430087.......................   00.7737   10.24   440105..........   01.5362   15.40   450021.........   01.8369   20.79   450132.........   01.6805   17.53   450270.........   01.2103   11.06
430089.......................   00.8702  .......  440109..........   01.1650   13.89   450023.........   01.4090   17.41   450133.........   01.6198   14.09   450271.........   01.2446   15.37
430090.......................   01.6368  .......  440110..........   01.0533   16.25   450024.........   01.3806   17.30   450135.........   01.6577   19.58   450272.........   01.3032   15.86
430091.......................   01.2774  .......  440111..........   01.3627   20.00   450025.........   01.4884   16.75   450137.........   01.5282   21.67   450276.........   01.0699   12.98
440001.......................   01.1359   14.55   440114..........   01.0912   14.77   450028.........   01.5646   18.21   450140.........   00.9498   11.63   450278.........   00.9644   12.52
440002.......................   01.6162   17.64   440115..........   01.0532   15.54   450029.........   01.5963   15.23   450143.........   00.9918   12.21   450280.........   01.5125   18.38
440003.......................   01.2559   17.39   440120..........   01.5957   18.89   450031.........   01.4996   18.63   450144.........   01.0331   12.01   450283.........   01.0389   12.79
440006.......................   01.4841   18.92   440125..........   01.5453   18.50   450032.........   01.3522   13.79   450145.........   00.8532   14.34   450288.........   01.1750   15.16
440007.......................   01.0194   10.84   440130..........   01.1768   14.86   450033.........   01.6513   17.18   450146.........   01.0084   23.62   450289.........   01.4006   17.39
440008.......................   00.9915   14.52   440131..........   01.1562   14.49   450034.........   01.6287   18.76   450147.........   01.3928   16.89   450292.........   01.1576   19.69
440009.......................   01.2565   14.35   440132..........   01.1233   13.67   450035.........   01.4187   19.20   450148.........   01.2800   19.65   450293.........   00.9323   12.72
440010.......................   00.9659   12.64   440133..........   01.5603   19.98   450037.........   01.6096   18.97   450149.........   01.5185   19.99   450296.........   01.4152   19.20
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[[Page 25635]]


                                                                                          Page 14 of 15                                                                                         
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
450299.......................   01.4072   17.64   450508..........   01.3603   17.56   450666.........   01.3312   17.90   450795.........   01.1350   11.54   470023.........   01.2895   20.23
450303.......................   01.0154   09.91   450514..........   01.1700   21.10   450668.........   01.5943   20.06   450796.........   01.1114   18.43   470024.........   01.1727   19.52
450306.......................   01.3057   13.64   450517..........   00.9399   10.56   450669.........   01.4186   18.58   450797.........   00.6077   20.39   490001.........   01.1946   22.18
450307.......................   00.8801   14.50   450518..........   01.5820   18.69   450670.........   01.3482   19.53   450798.........   00.8050   13.86   490002.........   01.1337   13.48
450309.......................   01.0743   11.89   450523..........   01.5399   20.21   450672.........   01.6957   15.51   450801.........   01.4763   15.51   490003.........   00.6057   17.48
450315.......................   01.0586   19.19   450530..........   01.2367   14.42   450673.........   01.0679   13.71   450802.........   01.3938   21.70   490004.........   01.2252   17.71
450320.......................   01.2414   18.72   450534..........   00.9886   15.40   450674.........   01.2022   19.92   450803.........   00.9037   14.23   490005.........   01.5926   15.95
450321.......................   00.9614   13.82   450535..........   01.2414   21.39   450675.........   01.4594   18.09   450804.........   01.7378   18.83   490006.........   01.1499   14.40
450322.......................   00.6639   17.10   450537..........   01.3383   20.33   450677.........   01.3331   18.92   450807.........   00.8978   09.72   490007.........   02.0606   17.85
450324.......................   01.6384   16.95   450539..........   01.4022   16.04   450678.........   01.4407   20.79   450808.........   01.2265   20.55   490009.........   01.9210   21.78
450327.......................   01.0202   15.94   450544..........   01.2272   18.82   450683.........   01.3459   16.70   450809.........   01.6064   11.29   490010.........   01.1786   18.22
450330.......................   01.1889   17.95   450545..........   01.2791   10.16   450684.........   01.2082   18.70   450810.........   00.9015  .......  490011.........   01.4566   17.62
450334.......................   01.0427   12.16   450547..........   01.1421   14.03   450686.........   01.5023   14.59   450811.........   02.1718  .......  490012.........   01.2121   13.77
450337.......................   01.1368   15.71   450551..........   01.0935   11.37   450688.........   01.3506   18.63   450812.........   01.4107  .......  490013.........   01.2228   16.47
450340.......................   01.4648   13.10   450558..........   01.8402   18.19   450690.........   01.4263   17.85   450813.........   00.9625  .......  490014.........   01.5159   22.68
450341.......................   01.0639   17.56   450561..........   01.6276   17.05   450694.........   01.1099   20.41   460001.........   01.7571   20.72   490015.........   01.4427   21.35
450346.......................   01.5308   16.52   450563..........   01.2546   26.74   450696.........   01.8786   18.73   460003.........   01.6596   13.31   490017.........   01.3665   14.05
450347.......................   01.1688   17.43   450565..........   01.2517   16.37   450697.........   01.5484   15.64   460004.........   01.7671   21.27   490018.........   01.3418   17.01
450348.......................   01.0269   11.60   450570..........   01.0924   15.62   450698.........   00.9596   13.36   460005.........   01.6688   17.23   490019.........   01.2321   16.49
450351.......................   01.2346   20.05   450571..........   01.4622   16.04   450700.........   01.0540   13.52   460006.........   01.3436   19.96   490020.........   01.2247   16.07
450352.......................   01.2368   17.88   450573..........   01.0277   13.94   450702.........   01.5379   17.73   460007.........   01.4903   20.38   490021.........   01.3831   18.08
450353.......................   01.2532   18.38   450574..........   00.9377   11.77   450703.........   01.5073   10.03   460008.........   01.4270   16.77   490022.........   01.4805   20.25
450355.......................   01.1328   14.56   450575..........   01.0523   17.94   450704.........   01.3187   18.39   460009.........   01.8533   20.44   490023.........   01.2675   18.77
450358.......................   02.0759   22.13   450578..........   00.9641   14.60   450705.........   00.8680   17.81   460010.........   02.0765   21.33   490024.........   01.8219   17.17
450362.......................   01.0834   14.11   450580..........   01.1420   14.05   450706.........   01.3743   20.77   460011.........   01.4411   15.69   490027.........   01.1416   14.52
450369.......................   01.0290   11.76   450583..........   01.0040   11.81   450709.........   01.2530   18.28   460013.........   01.4727   18.36   490030.........   01.1740   11.44
450370.......................   01.1810   09.42   450584..........   01.1354   12.88   450711.........   01.6382   26.65   460014.........   01.3196   16.46   490031.........   01.1290   13.85
450371.......................   01.3147   12.05   450586..........   01.0874   12.54   450712.........   00.7382   11.77   460015.........   01.2639   19.92   490032.........   01.7735   19.88
450372.......................   01.2321   21.35   450587..........   01.2170   17.55   450713.........   01.5244   20.73   460016.........   00.9270   16.64   490033.........   01.1962   17.39
450373.......................   01.1823   18.71   450591..........   01.2310   17.41   450715.........   01.4406   18.46   460017.........   01.4957   17.56   490035.........   01.0236   07.57
450374.......................   00.9860   12.21   450596..........   01.3163   18.97   450716.........   01.3997   19.33   460018.........   00.9784   16.10   490037.........   01.1888   14.88
450378.......................   01.0667   21.41   450597..........   01.0268   13.68   450717.........   01.3232   22.11   460019.........   01.1733   16.25   490038.........   01.2703   14.98
450379.......................   01.5480   20.94   450603..........   00.7219   14.21   450718.........   01.2781   17.49   460020.........   00.9866   17.05   490040.........   01.4415   21.70
450381.......................   01.0325   13.87   450604..........   01.3496   14.64   450723.........   01.4075   18.75   460021.........   01.3876   20.12   490041.........   01.2682   16.01
450388.......................   01.8150   15.21   450605..........   01.2166   16.69   450724.........   01.3091   18.28   460022.........   00.9246   18.19   490042.........   01.3042   16.38
450389.......................   01.2994   14.80   450609..........   00.8719   12.26   450725.........   01.0043   19.85   460023.........   01.2160   20.38   490043.........   01.3803   19.82
450393.......................   01.3200   11.86   450610..........   01.4645   18.06   450727.........   01.0811   16.87   460025.........   00.8007   20.08   490044.........   01.3514   17.17
450395.......................   01.0597   16.54   450614..........   01.0531   12.79   450728.........   00.8837   07.46   460026.........   01.0552   17.32   490045.........   01.2228   19.98
450399.......................   00.9655   11.15   450615..........   01.1326   12.36   450730.........   01.2614   21.03   460027.........   00.8883   20.44   490046.........   01.5215   17.89
450400.......................   01.1933   13.63   450617..........   01.3492   19.91   450733.........   01.6021   15.09   460029.........   01.0308   17.00   490047.........   01.1505   16.65
450403.......................   01.3197   19.63   450620..........   01.1109   12.27   450735.........   00.9833   13.78   460030.........   01.1423   16.55   490048.........   01.5931   17.94
450411.......................   00.9264   13.09   450623..........   01.2008   18.97   450742.........   01.2757   20.17   460032.........   01.0597   19.39   490050.........   01.4805   20.95
450417.......................   01.2299   15.17   450626..........   01.0125   16.38   450743.........   01.4277   17.77   460033.........   00.9172   17.19   490052.........   01.6347   16.26
450418.......................   01.4876   21.54   450628..........   00.9890   17.19   450746.........   01.0074   14.71   460035.........   00.9441   12.43   490053.........   01.3129   15.12
450419.......................   01.2224   20.33   450630..........   01.6105   19.66   450747.........   01.3436   17.58   460036.........   01.0266   20.56   490054.........   01.0153   15.45
450422.......................   00.8593   25.07   450631..........   01.6903   13.59   450749.........   00.9909   14.54   460037.........   00.9572   18.38   490057.........   01.5481   18.87
450423.......................   01.4768   22.62   450632..........   01.0398   11.43   450750.........   01.0134   12.54   460039.........   01.0909   23.84   490059.........   01.6281   19.99
450424.......................   01.2921   16.39   450633..........   01.5622   12.13   450751.........   01.3102   19.24   460041.........   01.3319   20.51   490060.........   01.1169   18.19
450429.......................   01.0852   12.33   450634..........   01.7215   23.78   450754.........   00.9192   13.20   460042.........   01.4554   14.11   490063.........   01.7955   23.28
450431.......................   01.6026   18.46   450638..........   01.5546   25.20   450755.........   01.1391   17.26   460043.........   00.9829   21.91   490066.........   01.2905   20.77
450438.......................   01.2764   13.12   450639..........   01.4457   23.25   450757.........   00.9009   13.23   460044.........   01.1823   20.42   490067.........   01.2750   16.60
450446.......................   00.7248   15.16   450641..........   01.0829   17.56   450758.........   01.9407   19.90   460046.........   01.9599   17.71   490069.........   01.4205   14.56
450447.......................   01.3800   17.19   450643..........   01.2095   15.10   450760.........   01.2017   18.55   460047.........   01.7392   19.91   490071.........   01.4266   17.71
450451.......................   01.1660   15.20   450644..........   01.5151   18.19   450761.........   01.0213   11.87   460049.........   02.0096   19.97   490073.........   01.4914   22.82
450457.......................   01.7808   18.77   450646..........   01.5429   20.32   450763.........   00.9975   17.58   460050.........   01.3199   19.33   490074.........   01.4074   17.39
450460.......................   01.0157   12.81   450647..........   01.9096   20.84   450766.........   02.0886   21.59   460051.........   01.2227   13.29   490075.........   01.4408   18.79
450462.......................   01.7455   16.26   450648..........   00.9381   12.65   450769.........   00.8730   11.77   470001.........   01.2556   20.25   490077.........   01.2421   19.03
450464.......................   01.0024   12.89   450649..........   00.9870   14.53   450770.........   01.0213   15.47   470003.........   01.8563   19.92   490079.........   01.3591   15.64
450465.......................   01.3399   15.41   450651..........   01.7586   19.35   450771.........   01.7967   16.42   470004.........   01.1211   15.87   490084.........   01.2514   16.34
450467.......................   00.9850   17.15   450652..........   00.8798   14.52   450774.........   01.6108   20.17   470005.........   01.2357   21.12   490085.........   01.2505   15.31
450469.......................   01.4058   19.15   450653..........   01.1829   16.63   450775.........   01.3187   41.14   470006.........   01.2066   17.97   490088.........   01.1793   16.50
450473.......................   01.0205   14.61   450654..........   00.9596   10.61   450776.........   00.9848   10.16   470008.........   01.2542   17.91   490089.........   01.1277   16.41
450475.......................   01.1210   13.56   450656..........   01.4624   18.35   450777.........   00.9836   16.72   470010.........   01.1439   19.71   490090.........   01.1658   16.31
450484.......................   01.4951   19.64   450658..........   00.9767   12.49   450779.........   01.2890   22.50   470011.........   01.1753   20.37   490091.........   01.2201   19.80
450488.......................   01.3238   17.72   450659..........   01.5010   21.19   450780.........   01.6074   16.21   470012.........   01.2872   18.28   490092.........   01.2429   15.01
450489.......................   01.0359   13.90   450661..........   01.1973   21.13   450785.........   00.9638   18.31   470015.........   01.1589   19.34   490093.........   01.3892   15.78
450497.......................   01.1631   14.82   450662..........   01.6029   16.56   450788.........   01.5172   16.06   470018.........   01.2011   20.89   490094.........   01.1193   16.40
450498.......................   00.9818   12.66   450665..........   00.9015   13.23   450794.........   01.4587   16.66   470020.........   00.9543   16.28   490095.........   01.4744   17.31
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 25636]]


                                                                                          Page 15 of 15                                                                                         
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Avg.                                 Avg.                                Avg.                                Avg.                               Avg. 
           Provider            Case mix    hour       Provider      Case mix    hour       Provider     Case mix    hour       Provider     Case mix    hour       Provider     Case mix   hour 
                                 index     wage                       index     wage                      index     wage                      index     wage                      index    wage 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
490097.......................   01.2401   15.08   500055..........   01.1102   22.34   510030.........   01.0609   15.76   520045.........   01.6699   18.60   520144.........   01.0176   16.36
490098.......................   01.2771   13.23   500057..........   01.2911   17.73   510031.........   01.4605   16.76   520047.........   00.9944   17.42   520145.........   00.9470   16.85
490099.......................   00.9704   16.66   500058..........   01.5107   21.64   510033.........   01.3690   16.31   520048.........   01.4624   18.04   520146.........   01.0694   15.76
490100.......................   01.5522   18.36   500059..........   01.0873   22.72   510035.........   01.3504   18.82   520049.........   01.9631   19.12   520148.........   01.1567   16.73
490101.......................   01.2218   23.44   500060..........   01.4688   23.67   510036.........   01.0367   12.45   520051.........   01.8043   15.77   520149.........   00.9333   12.72
490104.......................   00.8484   21.14   500061..........   01.0054   20.43   510038.........   01.1249   14.36   520053.........   01.1564   15.87   520151.........   01.0435   16.58
490105.......................   00.5902   30.04   500062..........   01.1028   19.07   510039.........   01.3356   15.69   520054.........   01.0412   19.44   520152.........   01.1259   17.97
490106.......................   00.8464   21.07   500064..........   01.6849   24.85   510043.........   00.9429   14.14   520057.........   01.1771   18.10   520153.........   00.9590   14.95
490107.......................   01.3556   22.35   500065..........   01.2258   20.87   510046.........   01.3048   17.25   520058.........   01.1268   20.40   520154.........   01.1615   18.07
490108.......................   00.9494   19.84   500068..........   01.0622   18.61   510047.........   01.2964   18.83   520059.........   01.3542   19.76   520156.........   01.1721   19.10
490109.......................   00.9167   20.38   500069..........   01.1722   19.05   510048.........   01.1292   18.03   520060.........   01.4225   17.08   520157.........   01.0942   15.30
490110.......................   01.3455   15.76   500071..........   01.3952   20.91   510050.........   01.6030   16.38   520062.........   01.3120   17.21   520159.........   00.9415   19.52
490111.......................   01.2018   15.96   500072..........   01.2463   24.49   510053.........   01.0108   14.63   520063.........   01.2008   19.95   520160.........   01.7765   19.26
490112.......................   01.6587   19.70   500073..........   01.0093   18.07   510055.........   01.2826   22.31   520064.........   01.5671   20.70   520161.........   01.0404   17.96
490113.......................   01.2995   22.73   500074..........   01.0970   18.46   510058.........   01.2636   17.21   520066.........   01.5292   19.84   520170.........   01.2542   21.23
490114.......................   01.1138   15.90   500077..........   01.3337   22.82   510059.........   02.4160   15.98   520068.........   00.9889   18.59   520171.........   00.9070   14.86
490115.......................   01.1964   16.62   500079..........   01.3407   21.42   510060.........   01.0691   15.10   520069.........   01.1861   18.14   520173.........   01.1585   19.58
490116.......................   01.1887   16.24   500080..........   00.8399   13.35   510061.........   01.0314   13.59   520070.........   01.5734   17.44   520177.........   01.6324   19.38
490117.......................   01.1938   10.57   500084..........   01.2536   21.57   510062.........   01.2784   17.15   520071.........   01.2420   18.44   520178.........   01.1172   16.98
490118.......................   01.7261   20.56   500085..........   01.0506   18.46   510066.........   01.1573   13.24   520074.........   01.0372   16.81   520187.........   00.2986  ......
490119.......................   01.4062   17.02   500086..........   01.3459   21.47   510067.........   01.1882   16.39   520075.........   01.4602   18.96   530002.........   01.2253   21.84
490120.......................   01.3763   17.93   500088..........   01.3211   23.74   510068.........   01.1347   15.46   520076.........   01.1673   16.36   530003.........   00.8835   14.70
490122.......................   01.4040   22.46   500089..........   01.0985   16.55   510070.........   01.3876   15.31   520077.........   00.9774   14.51   530004.........   00.9574   14.14
490123.......................   01.1230   15.45   500090..........   00.9182   14.04   510071.........   01.3472   15.76   520078.........   01.6274   18.24   530005.........   01.0465   14.61
490124.......................   01.1222   15.81   500092..........   00.9896   19.29   510072.........   01.0515   13.30   520082.........   01.2908   17.60   530006.........   01.1196   20.18
490126.......................   01.4055   16.47   500094..........   00.9176   17.96   510077.........   01.1535   15.63   520083.........   01.7091   21.38   530007.........   01.1095   14.87
490127.......................   01.0287   16.05   500096..........   01.0080   18.80   510080.........   01.2046   16.32   520084.........   01.0866   17.62   530008.........   01.2996   13.79
490129.......................   01.0607   23.65   500097..........   01.1573   19.47   510081.........   01.1996   13.50   520087.........   01.7203   18.61   530009.........   00.9922   18.12
490130.......................   01.2347   15.72   500098..........   01.0903   14.96   510082.........   01.2149   13.50   520088.........   01.2637   18.97   530010.........   01.2158   18.65
490132.......................   01.0026  .......  500101..........   00.9755   19.08   510084.........   00.9664   12.91   520089.........   01.4904   20.44   530011.........   01.1586   17.22
500001.......................   01.4111   21.97   500102..........   00.9657   20.71   510085.........   01.3282   17.98   520090.........   01.2889   17.51   530012.........   01.5605   18.08
500002.......................   01.4114   21.64   500104..........   01.1802   22.63   510086.........   01.1820   13.59   520091.........   01.3199   19.68   530014.........   01.4027   19.27
500003.......................   01.4119   24.03   500106..........   00.9602   19.85   520002.........   01.2720   18.86   520092.........   01.1556   16.83   530015.........   01.2690   19.02
500005.......................   01.8033   21.24   500107..........   01.2297   16.68   520003.........   01.0633   15.78   520094.........   00.7870   19.19   530016.........   01.2999   17.19
500007.......................   01.3070   23.24   500108..........   01.7227   20.48   520004.........   01.1862   18.46   520095.........   01.3843   19.38   530017.........   00.8709   15.80
500008.......................   01.9296   25.09   500110..........   01.1878   20.80   520006.........   01.0492   20.59   520096.........   01.3993   18.60   530018.........   01.0972   16.71
500011.......................   01.3263   22.98   500118..........   01.1808   22.66   520007.........   01.0781   14.87   520097.........   01.2965   19.05   530019.........   01.0350   11.26
500012.......................   01.5418   22.34   500119..........   01.3050   21.86   520008.........   01.6437   22.59   520098.........   01.8306   20.96   530022.........   01.1106   17.60
500014.......................   01.5358   22.94   500122..........   01.2794   22.76   520009.........   01.6467   18.07   520100.........   01.2826   18.08   530023.........   00.8946   19.55
500015.......................   01.4382   22.41   500123..........   00.8946   16.33   520010.........   01.2081   20.01   520101.........   01.0947   17.84   530025.........   01.2196   21.13
500016.......................   01.5256   24.13   500124..........   01.3290   23.72   520011.........   01.2493   19.33   520102.........   01.1586   09.85   530026.........   01.1680   21.55
500019.......................   01.3845   22.33   500125..........   01.1430   15.98   520013.........   01.3654   19.29   520103.........   01.3295   18.39   530027.........   00.9464   32.50
500021.......................   01.4791   18.72   500129..........   01.7655   23.34   520014.........   01.1483   16.47   520107.........   01.3313   18.69   530029.........   01.0347   14.86
500023.......................   01.2237   21.48   500132..........   00.9488   17.26   520015.........   01.1656   17.59   520109.........   00.9890   18.27   530031.........   00.8621   18.36
500024.......................   01.6929   25.17   500134..........   00.5730   17.47   520016.........   01.1202   12.53   520110.........   01.2401   18.59   530032.........   01.0887   20.69
500025.......................   01.8624   25.48   500138..........   06.3328  .......  520017.........   01.1603   18.49   520111.........   00.9933   17.44                                    
500026.......................   01.4298   24.13   500139..........   01.4946   20.62   520018.........   01.1396   17.51   520112.........   01.1309   17.67                                    
500027.......................   01.6083   25.89   500141..........   01.3409   22.31   520019.........   01.3102   19.27   520113.........   01.2560   19.14                                    
500028.......................   01.1018   17.84   500143..........   00.5980   15.77   520021.........   01.3145   19.71   520114.........   01.1466   15.59                                    
500029.......................   00.9778   17.28   500146..........   01.1943   17.52   520024.........   01.1085   13.94   520115.........   01.2493   17.57                                    
500030.......................   01.4685   23.64   510001..........   01.8062   18.22   520025.........   01.1185   16.59   520116.........   01.2386   19.24                                    
500031.......................   01.3076   22.42   510002..........   01.3476   17.07   520026.........   01.0738   18.95   520117.........   01.0212   17.30                                    
500033.......................   01.3568   20.98   510005..........   00.9799   14.53   520027.........   01.2317   20.05   520118.........   00.8786   12.73                                    
500036.......................   01.3789   20.93   510006..........   01.2876   17.40   520028.........   01.4023   20.17   520120.........   00.8917   16.22                                    
500037.......................   01.1777   20.35   510007..........   01.5321   19.91   520029.........   00.9252   17.80   520121.........   00.9810   16.30                                    
500039.......................   01.3856   22.97   510008..........   01.2363   16.30   520030.........   01.6637   20.22   520122.........   01.0140   16.52                                    
500041.......................   01.2891   24.11   510012..........   01.0194   15.51   520031.........   01.1181   15.70   520123.........   01.0617   17.45                                    
500042.......................   01.4113   21.93   510013..........   01.1629   16.85   520032.........   01.1645   16.87   520124.........   01.0920   16.50                                    
500043.......................   01.0687   19.43   510015..........   01.0179   13.81   520033.........   01.2055   17.42   520130.........   01.0256   14.89                                    
500044.......................   01.9209   23.59   510018..........   01.1368   14.07   520034.........   01.0827   17.18   520131.........   01.0431   17.56                                    
500045.......................   01.0517   22.10   510020..........   01.0662   12.22   520035.........   01.3492   17.15   520132.........   01.1994   17.01                                    
500048.......................   00.9665   19.03   510022..........   01.8733   19.32   520037.........   01.6601   19.33   520134.........   01.0791   16.37                                    
500049.......................   01.5515   22.21   510023..........   01.2461   15.36   520038.........   01.3396   17.69   520135.........   00.9793   24.20                                    
500050.......................   01.3757   20.94   510024..........   01.4907   18.04   520039.........   01.0178   18.09   520136.........   01.5411   19.31                                    
500051.......................   01.6476   24.14   510026..........   01.0369   13.05   520040.........   01.4388   19.39   520138.........   01.8963   19.63                                    
500052.......................   01.2052  .......  510027..........   00.9899   16.49   520041.........   01.1377   15.58   520139.........   01.2903   20.36                                    
500053.......................   01.3356   21.20   510028..........   01.1102   14.91   520042.........   01.1067   17.13   520140.........   01.6170   19.69                                    
500054.......................   01.8578   22.51   510029..........   01.2666   16.61   520044.........   01.4365   17.04   520142.........   00.8928   16.53                                    
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Case mix indexes do not include discharges from PPS-exempt units.                                                                                                                         
Case mix indexes include cases received in HCFA Central Office through December 1996.                                                                                                           


[[Page 25637]]


Table 4A.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
                               Urban Areas                              
------------------------------------------------------------------------
                                                        Wage            
          Urban area (Constituent counties)             index      GAF  
------------------------------------------------------------------------
0040  Abilene, TX...................................    0.8081    0.8642
  Taylor, TX                                                            
0060  Aguadilla, PR.................................    0.4772    0.6025
  Aguada, PR                                                            
  Aguadilla, PR                                                         
  Moca, PR                                                              
0080  Akron, OH.....................................    1.0011    1.0008
  Portage, OH                                                           
  Summit, OH                                                            
0120  Albany, GA....................................    0.8098    0.8655
  Dougherty, GA                                                         
  Lee, GA                                                               
0160  \2\ Albany-Schenectady-Troy, NY...............    0.8640    0.9047
  Albany, NY                                                            
  Montgomery, NY                                                        
  Rensselaer, NY                                                        
  Saratoga, NY                                                          
  Schenectady, NY                                                       
  Schoharie, NY                                                         
0200  Albuquerque, NM...............................    0.8813    0.9171
  Bernalillo, NM                                                        
  Sandoval, NM                                                          
  Valencia, NM                                                          
0220  Alexandria, LA................................    0.8598    0.9017
  Rapides, LA                                                           
0240  Allentown-Bethlehem-Easton, PA................    1.0219    1.0149
  Carbon, PA                                                            
  Lehigh, PA                                                            
  Northampton, PA                                                       
0280  Altoona, PA...................................    0.9398    0.9584
  Blair, PA                                                             
0320  Amarillo, TX..................................    0.8483    0.8935
  Potter, TX                                                            
  Randall, TX                                                           
0380  Anchorage, AK.................................    1.3088    1.2024
  Anchorage, AK                                                         
0440  Ann Arbor, MI.................................    1.1127    1.0759
  Lenawee, MI                                                           
  Livingston, MI                                                        
  Washtenaw, MI                                                         
0450  Anniston, AL..................................    0.8731    0.9113
  Calhoun, AL                                                           
0460  Appleton-Oshkosh-Neenah, WI...................    0.8899    0.9232
  Calumet, WI                                                           
  Outagamie, WI                                                         
  Winnebago, WI                                                         
0470  Arecibo, PR...................................    0.4915    0.6148
  Arecibo, PR                                                           
  Camuy, PR                                                             
  Hatillo, PR                                                           
0480  Asheville, NC.................................    0.9016    0.9315
  Buncombe, NC                                                          
  Madison, NC                                                           
0500  Athens, GA....................................    0.8746    0.9123
  Clarke, GA                                                            
  Madison, GA                                                           
  Oconee, GA                                                            
0520  \1\ Atlanta, GA...............................    1.0024    1.0016
  Barrow, GA                                                            
  Bartow, GA                                                            
  Carroll, GA                                                           
  Cherokee, GA                                                          
  Clayton, GA                                                           
  Cobb, GA                                                              
  Coweta, GA                                                            
  DeKalb, GA                                                            
  Douglas, GA                                                           
  Fayette, GA                                                           
  Forsyth, GA                                                           
  Fulton, GA                                                            
  Gwinnett, GA                                                          
  Henry, GA                                                             
  Newton, GA                                                            
  Paulding, GA                                                          
  Pickens, GA                                                           
  Rockdale, GA                                                          
  Spalding, GA                                                          
  Walton, GA                                                            
0560  Atlantic-Cape May, NJ.........................    1.0442    1.0301
  Atlantic, NJ                                                          
  Cape May, NJ                                                          
0600  Augusta-Aiken, GA-SC..........................    0.9309    0.9521
  Columbia, GA                                                          
  McDuffie, GA                                                          
  Richmond, GA                                                          
  Aiken, SC                                                             
  Edgefield, SC                                                         
0640  \1\ Austin-San Marcos, TX.....................    0.8158    0.8699
  Bastrop, TX                                                           
  Caldwell, TX                                                          
  Hays, TX                                                              
  Travis, TX                                                            
  Williamson, TX                                                        
0680  \2\ Bakersfield, CA...........................    0.9976    0.9984
  Kern, CA                                                              
0720  \1\ Baltimore, MD.............................    0.9760    0.9835
  Anne Arundel, MD                                                      
  Baltimore, MD                                                         
  Baltimore City, MD                                                    
  Carroll, MD                                                           
  Harford, MD                                                           
  Howard, MD                                                            
  Queen Anne's, MD                                                      
0733  \2\ Bangor, ME................................    0.8538    0.8974
  Penobscot, ME                                                         
0743  Barnstable-Yarmouth, MA.......................    1.5644    1.3586
  Barnstable, MA                                                        
0760  Baton Rouge, LA...............................    0.8940    0.9261
  Ascension, LA                                                         
  East Baton Rouge, LA                                                  
  Livingston, LA                                                        
  West Baton Rouge, LA                                                  
0840  Beaumont-Port Arthur, TX......................    0.8660    0.9062
  Hardin, TX                                                            
  Jefferson, TX                                                         
  Orange, TX                                                            
0860  Bellingham, WA................................    1.1475    1.0988
  Whatcom, WA                                                           
0870  \2\ Benton Harbor, MI.........................    0.8988    0.9295
  Berrien, MI                                                           
0875  \1\ Bergen-Passaic, NJ........................    1.1845    1.1229
  Bergen, NJ                                                            
  Passaic, NJ                                                           
0880  Billings, MT..................................    0.9220    0.9459
  Yellowstone, MT                                                       
0920  Biloxi-Gulfport-Pascagoula, MS................    0.8291    0.8796
  Hancock, MS                                                           
  Harrison, MS                                                          
  Jackson, MS                                                           
0960  Binghamton, NY................................    0.9103    0.9377
  Broome, NY                                                            
  Tioga, NY                                                             
1000  Birmingham, AL................................    0.9150    0.9410
  Blount, AL                                                            
  Jefferson, AL                                                         
  St. Clair, AL                                                         
  Shelby, AL                                                            
1010  Bismarck, ND..................................    0.8015    0.8594
  Burleigh, ND                                                          
  Morton, ND                                                            
1020  Bloomington, IN...............................    0.9041    0.9333
  Monroe, IN                                                            
1040  Bloomington-Normal, IL........................    0.8926    0.9251
  McLean, IL                                                            
1080  Boise City, ID................................    0.9267    0.9492
  Ada, ID                                                               
  Canyon, ID                                                            
1123  \1\ \2\ Boston-Worcester-Lawrence-Lowell-                         
 Brockton, MA-NH (Massachusetts Hospitals)..........    1.0917    1.0619
  Bristol, MA                                                           
  Essex, MA                                                             
  Middlesex, MA                                                         
  Norfolk, MA                                                           
  Plymouth, MA                                                          
  Suffolk, MA                                                           
  Worcester, MA                                                         
  Hillsborough, NH                                                      
  Merrimack, NH                                                         
  Rockingham, NH                                                        
  Strafford, NH                                                         
1123  \1\ Boston-Worcester-Lawrence-Lowell-Brockton,                    
 MA-NH (New Hampshire Hospitals)....................    1.0885    1.0598
  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..........................    1.0122    1.0083
  Boulder, CO                                                           
1145  Brazoria, TX..................................    0.8895    0.9229
  Brazoria, TX                                                          
1150  Bremerton, WA.................................    1.1148    1.0773
  Kitsap, WA                                                            
1240  Brownsville-Harlingen-San Benito, TX..........    0.8291    0.8796
  Cameron, TX                                                           
1260  Bryan-College Station, TX.....................    0.7962    0.8555

[[Page 25638]]

                                                                        
  Brazos, TX                                                            
1280  \1\ Buffalo-Niagara Falls, NY.................    0.9592    0.9719
  Erie, NY                                                              
  Niagara, NY                                                           
1303  Burlington, VT................................    0.9612    0.9733
  Chittenden, VT                                                        
  Franklin, VT                                                          
  Grand Isle, VT                                                        
1310  Caguas, PR....................................    0.4445    0.5739
  Caguas, PR                                                            
  Cayey, PR                                                             
  Cidra, PR                                                             
  Gurabo, PR                                                            
  San Lorenzo, PR                                                       
1320  Canton-Massillon, OH..........................    0.8895    0.9229
  Carroll, OH                                                           
  Stark, OH                                                             
1350  Casper, WY....................................    0.9227    0.9464
  Natrona, WY                                                           
1360  Cedar Rapids, IA..............................    0.8888    0.9224
  Linn, IA                                                              
1400  Champaign-Urbana, IL..........................    0.8844    0.9193
  Champaign, IL                                                         
1440  Charleston-North Charleston, SC...............    0.8931    0.9255
  Berkeley, SC                                                          
  Charleston, SC                                                        
  Dorchester, SC                                                        
1480  Charleston, WV................................    0.9042    0.9334
  Kanawha, WV                                                           
  Putnam, WV                                                            
1520  \1\ Charlotte-Gastonia-Rock Hill, NC-SC.......    0.9568    0.9702
  Cabarrus, NC                                                          
  Gaston, NC                                                            
  Lincoln, NC                                                           
  Mecklenburg, NC                                                       
  Rowan, NC                                                             
  Stanly, NC                                                            
  Union, NC                                                             
  York, SC                                                              
1540  Charlottesville, VA...........................    1.0359    1.0244
  Albemarle, VA                                                         
  Charlottesville City, VA                                              
  Fluvanna, VA                                                          
  Greene, VA                                                            
1560  Chattanooga, TN-GA............................    0.9123    0.9391
  Catoosa, GA                                                           
  Dade, GA                                                              
  Walker, GA                                                            
  Hamilton, TN                                                          
  Marion, TN                                                            
1580  Cheyenne, WY..................................    0.9354    0.9553
  Laramie, WY                                                           
1600  \1\ Chicago, IL...............................    1.0507    1.0344
  Cook, IL                                                              
  DeKalb, IL                                                            
  DuPage, IL                                                            
  Grundy, IL                                                            
  Kane, IL                                                              
  Kendall, IL                                                           
  Lake, IL                                                              
  McHenry, IL                                                           
  Will, IL                                                              
1620  Chico-Paradise, CA............................    1.0231    1.0158
  Butte, CA                                                             
1640  \1\ Cincinnati, OH-KY-IN......................    0.9465    0.9630
  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...............    0.8204    0.8732
  Christian, KY                                                         
  Montgomery, TN                                                        
1680  \1\ Cleveland-Lorain-Elyria, OH...............    0.9970    0.9979
  Ashtabula, OH                                                         
  Cuyahoga, OH                                                          
  Geauga, OH                                                            
  Lake, OH                                                              
  Lorain, OH                                                            
  Medina, OH                                                            
1720  Colorado Springs, CO..........................    0.9469    0.9633
  El Paso, CO                                                           
1740  Columbia, MO..................................    0.9678    0.9778
  Boone, MO                                                             
1760  Columbia, SC..................................    0.9368    0.9563
  Lexington, SC                                                         
  Richland, SC                                                          
1800  Columbus, GA-AL...............................    0.8573    0.8999
  Russell, AL                                                           
  Chattahoochee, GA                                                     
  Harris, GA                                                            
  Muscogee, GA                                                          
1840  \1\ Columbus, OH..............................    0.9929    0.9951
  Delaware, OH                                                          
  Fairfield, OH                                                         
  Franklin, OH                                                          
  Licking, OH                                                           
  Madison, OH                                                           
  Pickaway, OH                                                          
1880  Corpus Christi, TX............................    0.8112    0.8665
  Nueces, TX                                                            
  San Patricio, TX                                                      
1900  \2\ Cumberland, MD-WV (Maryland Hospitals)....    0.8627    0.9038
  Allegany, MD                                                          
  Mineral, WV                                                           
1900  Cumberland, MD-WV (West Virginia Hospital)....    0.8407    0.8880
  Allegany, MD                                                          
  Mineral, WV                                                           
1920  \1\ Dallas, TX................................    0.9149    0.9409
  Collin, TX                                                            
  Dallas, TX                                                            
  Denton, TX                                                            
  Ellis, TX                                                             
  Henderson, TX                                                         
  Hunt, TX                                                              
  Kaufman, TX                                                           
  Rockwall, TX                                                          
1950  Danville, VA..................................    0.9121    0.9389
  Danville City, VA                                                     
  Pittsylvania, VA                                                      
1960  Davenport-Moline-Rock Island, IA-IL...........    0.8496    0.8944
  Scott, IA                                                             
  Henry, IL                                                             
  Rock Island, IL                                                       
2000  Dayton-Springfield, OH........................    0.9670    0.9773
  Clark, OH                                                             
  Greene, OH                                                            
  Miami, OH                                                             
  Montgomery, OH                                                        
2020  Daytona Beach, FL.............................    0.9211    0.9453
  Flagler, FL                                                           
  Volusia, FL                                                           
2030  Decatur, AL...................................    0.8302    0.8804
  Lawrence, AL                                                          
  Morgan, AL                                                            
2040  Decatur, IL...................................    0.8140    0.8686
  Macon, IL                                                             
2080  \1\ Denver, CO................................    1.0532    1.0361
  Adams, CO                                                             
  Arapahoe, CO                                                          
  Denver, CO                                                            
  Douglas, CO                                                           
  Jefferson, CO                                                         
2120  Des Moines, IA................................    0.8576    0.9001
  Dallas, IA                                                            
  Polk, IA                                                              
  Warren, IA                                                            
2160  \1\ Detroit, MI...............................    1.0601    1.0408
  Lapeer, MI                                                            
  Macomb, MI                                                            
  Monroe, MI                                                            
  Oakland, MI                                                           
  St. Clair, MI                                                         
  Wayne, MI                                                             
2180  Dothan, AL....................................    0.7827    0.8455
  Dale, AL                                                              
  Houston, AL                                                           
2190  Dover, DE.....................................    0.9441    0.9614
  Kent, DE                                                              
2200  Dubuque, IA...................................    0.8292    0.8796
  Dubuque, IA                                                           
2240  Duluth-Superior, MN-WI........................    1.0133    1.0091
  St. Louis, MN                                                         
  Douglas, WI                                                           
2281  Dutchess County, NY...........................    0.9860    0.9904
  Dutchess, NY                                                          
2290  Eau Claire, WI................................    0.8755    0.9130
  Chippewa, WI                                                          

[[Page 25639]]

                                                                        
  Eau Claire, WI                                                        
2320  El Paso, TX...................................    0.8978    0.9288
  El Paso, TX                                                           
2330  Elkhart-Goshen, IN............................    0.9168    0.9422
  Elkhart, IN                                                           
2335  \2\ Elmira, NY................................    0.8640    0.9047
  Chemung, NY                                                           
2340  Enid, OK......................................    0.8050    0.8620
  Garfield, OK                                                          
2360  Erie, PA......................................    0.9343    0.9545
  Erie, PA                                                              
2400  Eugene-Springfield, OR........................    1.1288    1.0865
  Lane, OR                                                              
2440  Evansville-Henderson, IN-KY...................    0.8505    0.8950
  Posey, IN                                                             
  Vanderburgh, IN                                                       
  Warrick, IN                                                           
  Henderson, KY                                                         
2520  Fargo-Moorhead, ND-MN (North Dakota Hospitals)    0.7905    0.8513
  Clay, MN                                                              
  Cass, ND                                                              
2520  \2\ Fargo-Moorhead, ND-MN (Minnesota                              
 Hospitals).........................................    0.8665    0.9065
  Clay, MN                                                              
  Cass, ND                                                              
2560  Fayetteville, NC..............................    0.8460    0.8918
  Cumberland, NC                                                        
2580  Fayetteville-Springdale-Rogers, AR............    0.8686    0.9080
  Benton, AR                                                            
  Washington, AR                                                        
2620  Flagstaff, AZ-UT..............................    0.9602    0.9726
  Coconino, AZ                                                          
  Kane, UT                                                              
2640  Flint, MI.....................................    1.1106    1.0745
  Genesee, MI                                                           
2650  Florence, AL..................................    0.7740    0.8391
  Colbert, AL                                                           
  Lauderdale, AL                                                        
2655  Florence, SC..................................    0.8368    0.8851
  Florence, SC                                                          
2670  Fort Collins-Loveland, CO.....................    1.0383    1.0261
  Larimer, CO                                                           
2680  \1\ Ft. Lauderdale, FL........................    1.0534    1.0363
  Broward, FL                                                           
2700  Fort Myers-Cape Coral, FL.....................    0.9017    0.9316
  Lee, FL                                                               
2710  Fort Pierce-Port St. Lucie, FL................    0.9847    0.9895
  Martin, FL                                                            
  St. Lucie, FL                                                         
2720  Fort Smith, AR-OK.............................    0.7687    0.8352
  Crawford, AR                                                          
  Sebastian, AR                                                         
  Sequoyah, OK                                                          
2750  \2\ Fort Walton Beach, FL.....................    0.8947    0.9266
  Okaloosa, FL                                                          
2760  Fort Wayne, IN................................    0.8896    0.9230
  Adams, IN                                                             
  Allen, IN                                                             
  De Kalb, IN                                                           
  Huntington, IN                                                        
  Wells, IN                                                             
  Whitley, IN                                                           
2800  \1\ Forth Worth-Arlington, TX.................    0.9192    0.9439
  Hood, TX                                                              
  Johnson, TX                                                           
  Parker, TX                                                            
  Tarrant, TX                                                           
2840  Fresno, CA....................................    1.0491    1.0334
  Fresno, CA                                                            
  Madera, CA                                                            
2880  Gadsden, AL...................................    0.8854    0.9200
  Etowah, AL                                                            
2900  Gainesville, FL...............................    0.9542    0.9684
  Alachua, FL                                                           
2920  Galveston-Texas City, TX......................    0.9549    0.9689
  Galveston, TX                                                         
2960  Gary, IN......................................    0.9542    0.9684
  Lake, IN                                                              
  Porter, IN                                                            
2975  \2\ Glens Falls, NY...........................    0.8640    0.9047
  Warren, NY                                                            
  Washington, NY                                                        
2980  Goldsboro, NC.................................    0.8523    0.8963
  Wayne, NC                                                             
2985  Grand Forks, ND-MN............................    0.8996    0.9301
  Polk, MN                                                              
  Grand Forks, ND                                                       
2995  Grand Junction, CO............................    0.9110    0.9382
  Mesa, CO                                                              
3000  \1\ Grand Rapids-Muskegon-Holland, MI.........    1.0018    1.0012
  Allegan, MI                                                           
  Kent, MI                                                              
  Muskegon, MI                                                          
  Ottawa, MI                                                            
3040  Great Falls, MT...............................    0.9362    0.9559
  Cascade, MT                                                           
3060  Greeley, CO...................................    0.9856    0.9901
  Weld, CO                                                              
3080  Green Bay, WI.................................    0.9323    0.9531
  Brown, WI                                                             
3120  \1\ Greensboro-Winston-Salem-High Point, NC...    0.9418    0.9598
  Alamance, NC                                                          
  Davidson, NC                                                          
  Davie, NC                                                             
  Forsyth, NC                                                           
  Guilford, NC                                                          
  Randolph, NC                                                          
  Stokes, NC                                                            
  Yadkin, NC                                                            
3150  Greenville, NC................................    0.9034    0.9328
  Pitt, NC                                                              
3160  Greenville-Spartanburg-Anderson, SC...........    0.9318    0.9528
  Anderson, SC                                                          
  Cherokee, SC                                                          
  Greenville, SC                                                        
  Pickens, SC                                                           
  Spartanburg, SC                                                       
3180  Hagerstown, MD................................    1.0268    1.0183
  Washington, MD                                                        
3200  Hamilton-Middletown, OH.......................    0.9292    0.9510
  Butler, OH                                                            
3240  Harrisburg-Lebanon-Carlisle, PA...............    0.9572    0.9705
  Cumberland, PA                                                        
  Dauphin, PA                                                           
  Lebanon, PA                                                           
  Perry, PA                                                             
3283  \1\ \2\ Hartford, CT..........................    1.2175    1.1443
  Hartford, CT                                                          
  Litchfield, CT                                                        
  Middlesex, CT                                                         
  Tolland, CT                                                           
3285  \2\ Hattiesburg, MS...........................    0.7359    0.8106
  Forrest, MS                                                           
  Lamar, MS                                                             
3290  Hickory-Morganton-Lenoir, NC..................    0.8687    0.9081
  Alexander, NC                                                         
  Burke, NC                                                             
  Caldwell, NC                                                          
  Catawba, NC                                                           
3320  Honolulu, HI..................................    1.1628    1.1088
  Honolulu, HI                                                          
3350  Houma, LA.....................................    0.8266    0.8777
  Lafourche, LA                                                         
  Terrebonne, LA                                                        
3360  \1\ Houston, TX...............................    1.0017    1.0012
  Chambers, TX                                                          
  Fort Bend, TX                                                         
  Harris, TX                                                            
  Liberty, TX                                                           
  Montgomery, TX                                                        
  Waller, TX                                                            
3400  Huntington-Ashland, WV-KY-OH..................    0.9728    0.9813
  Boyd, KY                                                              
  Carter, KY                                                            
  Greenup, KY                                                           
  Lawrence, OH                                                          
  Cabell, WV                                                            
  Wayne, WV                                                             
3440  Huntsville, AL................................    0.8428    0.8895
  Limestone, AL                                                         
  Madison, AL                                                           
3480  \1\ Indianapolis, IN..........................    0.9901    0.9932
  Boone, IN                                                             
  Hamilton, IN                                                          
  Hancock, IN                                                           
  Hendricks, IN                                                         
  Johnson, IN                                                           
  Madison, IN                                                           
  Marion, IN                                                            
  Morgan, IN                                                            
  Shelby, IN                                                            
3500  Iowa City, IA.................................    0.9561    0.9697
  Johnson, IA                                                           
3520  Jackson, MI...................................    0.9302    0.9517
  Jackson, MI                                                           

[[Page 25640]]

                                                                        
3560  Jackson, MS...................................    0.8279    0.8787
  Hinds, MS                                                             
  Madison, MS                                                           
  Rankin, MS                                                            
3580  Jackson, TN...................................    0.8632    0.9042
  Madison, TN                                                           
  Chester, TN                                                           
3600  \1\ \2\ Jacksonville, FL......................    0.8947    0.9266
  Clay, FL                                                              
  Duval, FL                                                             
  Nassau, FL                                                            
  St. Johns, FL                                                         
3605  \2\ Jacksonville, NC..........................    0.8162    0.8702
  Onslow, NC                                                            
3610  \2\ Jamestown, NY.............................    0.8640    0.9047
  Chautauqua, NY                                                        
3620  Janesville-Beloit, WI.........................    0.9128    0.9394
  Rock, WI                                                              
3640  Jersey City, NJ...............................    1.1372    1.0920
  Hudson, NJ                                                            
3660  Johnson City-Kingsport-Bristol, TN-VA.........    0.8847    0.9195
  Carter, TN                                                            
  Hawkins, TN                                                           
  Sullivan, TN                                                          
  Unicoi, TN                                                            
  Washington, TN                                                        
  Bristol City, VA                                                      
  Scott, VA                                                             
  Washington, VA                                                        
3680  Johnstown, PA.................................    0.8671    0.9070
  Cambria, PA                                                           
  Somerset, PA                                                          
3700  Jonesboro, AR.................................    0.7643    0.8319
  Craighead, AR                                                         
3710  Joplin, MO....................................    0.7933    0.8534
  Jasper, MO                                                            
  Newton, MO                                                            
3720  Kalamazoo-Battlecreek, MI.....................    1.2009    1.1336
  Calhoun, MI                                                           
  Kalamazoo, MI                                                         
  Van Buren, MI                                                         
3740  Kankakee, IL..................................    0.9175    0.9427
  Kankakee, IL                                                          
3760  \1\ Kansas City, KS-MO........................    0.9672    0.9774
  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...................................    0.9206    0.9449
  Kenosha, WI                                                           
3810  Killeen-Temple, TX............................    1.0180    1.0123
  Bell, TX                                                              
  Coryell, TX                                                           
3840  Knoxville, TN.................................    0.8569    0.8996
  Anderson, TN                                                          
  Blount, TN                                                            
  Knox, TN                                                              
  Loudon, TN                                                            
  Sevier, TN                                                            
  Union, TN                                                             
3850  Kokomo, IN....................................    0.9350    0.9550
  Howard, IN                                                            
  Tipton, IN                                                            
3870  La Crosse, WI-MN..............................    0.8989    0.9296
  Houston, MN                                                           
  La Crosse, WI                                                         
3880  Lafayette, LA.................................    0.8363    0.8848
  Acadia, LA                                                            
  Lafayette, LA                                                         
  St. Landry, LA                                                        
  St. Martin, LA                                                        
3920  Lafayette, IN.................................    0.8984    0.9293
  Clinton, IN                                                           
  Tippecanoe, IN                                                        
3960  Lake Charles, LA..............................    0.7738    0.8389
  Calcasieu, LA                                                         
3980  Lakeland-Winter Haven, FL.....................    0.8947    0.9266
  Polk, FL                                                              
4000  Lancaster, PA.................................    0.9646    0.9756
  Lancaster, PA                                                         
4040  Lansing-East Lansing, MI......................    1.0130    1.0089
  Clinton, MI                                                           
  Eaton, MI                                                             
  Ingham, MI                                                            
4080  \2\ Laredo, TX................................    0.7404    0.8140
  Webb, TX                                                              
4100  Las Cruces, NM................................    0.9045    0.9336
  Dona Ana, NM                                                          
4120  \1\ Las Vegas, NV-AZ..........................    1.1349    1.0905
   Mohave, AZ                                                           
  Clark, NV                                                             
  Nye, NV                                                               
4150  Lawrence, KS..................................    0.8728    0.9110
  Douglas, KS                                                           
4200  Lawton, OK....................................    0.8770    0.9140
  Comanche, OK                                                          
4243  Lewiston-Auburn, ME...........................    0.9226    0.9463
  Androscoggin, ME                                                      
4280  Lexington, KY.................................    0.8579    0.9004
  Bourbon, KY                                                           
  Clark, KY                                                             
  Fayette, KY                                                           
  Jessamine, KY                                                         
  Madison, KY                                                           
  Scott, KY                                                             
  Woodford, KY                                                          
4320  Lima, OH......................................    0.8885    0.9222
  Allen, OH                                                             
  Auglaize, OH                                                          
4360  Lincoln, NE...................................    0.9082    0.9362
  Lancaster, NE                                                         
4400  Little Rock-North Little Rock, AR.............    0.8598    0.9017
  Faulkner, AR                                                          
  Lonoke, AR                                                            
  Pulaski, AR                                                           
  Saline, AR                                                            
4420  Longview-Marshall, TX.........................    0.8583    0.9007
  Gregg, TX                                                             
  Harrison, TX                                                          
  Upshur, TX                                                            
4480  \1\ Los Angeles-Long Beach, CA................    1.2124    1.1410
  Los Angeles, CA                                                       
4520  Louisville, KY-IN.............................    0.9212    0.9453
  Clark, IN                                                             
  Floyd, IN                                                             
  Harrison, IN                                                          
  Scott, IN                                                             
  Bullitt, KY                                                           
  Jefferson, KY                                                         
  Oldham, KY                                                            
4600  Lubbock, TX...................................    0.8460    0.8918
  Lubbock, TX                                                           
4640  Lynchburg, VA.................................    0.8680    0.9076
  Amherst, VA                                                           
  Bedford, VA                                                           
  Bedford City, VA                                                      
  Campbell, VA                                                          
  Lynchburg City, VA                                                    
4680  Macon, GA.....................................    0.9109    0.9381
  Bibb, GA                                                              
  Houston, GA                                                           
  Jones, GA                                                             
  Peach, GA                                                             
  Twiggs, GA                                                            
4720  Madison, WI...................................    1.0103    1.0070
  Dane, WI                                                              
4800  Mansfield, OH.................................    0.8606    0.9023
  Crawford, OH                                                          
  Richland, OH                                                          
4840  Mayaguez, PR..................................    0.4360    0.5664
  Anasco, PR                                                            
  Cabo Rojo, PR                                                         
  Hormigueros, PR                                                       
  Mayaguez, PR                                                          
  Sabana Grande, PR                                                     
  San German, PR                                                        
4880  McAllen-Edinburg-Mission, TX..................    0.8541    0.8976
  Hidalgo, TX                                                           
4890  Medford-Ashland, OR...........................    1.0109    1.0075
  Jackson, OR                                                           
4900  Melbourne-Titusville-Palm Bay, FL.............    0.9289    0.9507
  Brevard, Fl                                                           
4920  \1\ Memphis, TN-AR-MS.........................    0.8423    0.8891
  Crittenden, AR                                                        
  DeSoto, MS                                                            
  Fayette, TN                                                           
  Shelby, TN                                                            
  Tipton, TN                                                            
4940  Merced, CA....................................    1.0304    1.0207
  Merced, CA                                                            
5000  \1\ Miami, FL.................................    0.9427    0.9604
  Dade, FL                                                              
5015  \1\ Middlesex-Somerset-Hunterdon, NJ..........    1.0871    1.0589

[[Page 25641]]

                                                                        
  Hunterdon, NJ                                                         
  Middlesex, NJ                                                         
  Somerset, NJ                                                          
5080  \1\ Milwaukee-Waukesha, WI....................    0.9470    0.9634
  Milwaukee, WI                                                         
  Ozaukee, WI                                                           
  Washington, WI                                                        
  Waukesha, WI                                                          
5120  \1\ Minneapolis-St. Paul, MN-WI...............    1.0956    1.0645
  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....................................    0.7942    0.8540
  Baldwin, AL                                                           
  Mobile, AL                                                            
5170  Modesto, CA...................................    1.0406    1.0276
  Stanislaus, CA                                                        
5190  \1\ Monmouth-Ocean, NJ........................    1.1285    1.0863
  Monmouth, NJ                                                          
  Ocean, NJ                                                             
5200  Monroe, LA....................................    0.8288    0.8793
  Ouachita, LA                                                          
5240  Montgomery, AL................................    0.7919    0.8523
  Autauga, AL                                                           
  Elmore, AL                                                            
  Montgomery, AL                                                        
5280  Muncie, IN....................................    0.9493    0.9650
  Delaware, IN                                                          
5330  \2\ Myrtle Beach, SC..........................    0.8110    0.8664
  Horry, SC                                                             
5345  Naples, FL....................................    1.0205    1.0140
  Collier, FL                                                           
5360  \1\ Nashville, TN.............................    0.9336    0.9540
  Cheatham, TN                                                          
  Davidson, TN                                                          
  Dickson, TN                                                           
  Robertson, TN                                                         
  Rutherford TN                                                         
  Sumner, TN                                                            
  Williamson, TN                                                        
  Wilson, TN                                                            
5380  \1\ Nassau-Suffolk, NY........................    1.3123    1.2046
  Nassau, NY                                                            
  Suffolk, NY                                                           
5483  \1\ \2\ New Haven-Bridgeport-Stamford-                            
 Waterbury-Danbury, CT..............................    1.2175    1.1443
  Fairfield, CT                                                         
  New Haven, CT                                                         
5523  \2\ New London-Norwich, CT....................    1.2175    1.1443
  New London, CT                                                        
5560  \1\ New Orleans, LA...........................    0.9397    0.9583
  Jefferson, LA                                                         
  Orleans, LA                                                           
  Plaquemines, LA                                                       
  St. Bernard, LA                                                       
  St. Charles, LA                                                       
  St. James, LA                                                         
  St. John The Baptist, LA                                              
  St. Tammany, LA                                                       
5600  \1\ New York, NY..............................    1.4537    1.2920
  Bronx, NY                                                             
  Kings, NY                                                             
  New York, NY                                                          
  Putnam, NY                                                            
  Queens, NY                                                            
  Richmond, NY                                                          
  Rockland, NY                                                          
  Westchester, NY                                                       
5640  \1\ Newark, NJ................................    1.0899    1.0607
  Essex, NJ                                                             
  Morris, NJ                                                            
  Sussex, NJ                                                            
  Union, NJ                                                             
  Warren, NJ                                                            
5660  Newburgh, NY-PA...............................    1.1226    1.0824
  Orange, NY                                                            
  Pike, PA                                                              
5720  \1\ Norfolk-Virginia Beach-Newport News, VA-NC    0.8235    0.8755
  Currituck, NC                                                         
  Chesapeake City, VA                                                   
  Gloucester, VA                                                        
  Hampton City, VA                                                      
  Isle of Wight, VA                                                     
  James City, VA                                                        
  Mathews, VA                                                           
  Newport News City, VA                                                 
  Norfolk City, VA                                                      
  Poquoson City, VA                                                     
  Portsmouth City, VA                                                   
  Suffolk City, VA                                                      
  Virginia Beach City VA                                                
  Williamsburg City, VA                                                 
  York, VA                                                              
5775  \1\ Oakland, CA...............................    1.5309    1.3386
  Alameda, CA                                                           
  Contra Costa, CA                                                      
5790  Ocala, FL.....................................    0.9229    0.9465
  Marion, FL                                                            
5800  Odessa-Midland, TX............................    0.7773    0.8415
  Ector, TX                                                             
  Midland, TX                                                           
5880  \1\ Oklahoma City, OK.........................    0.8764    0.9136
  Canadian, OK                                                          
  Cleveland, OK                                                         
  Logan, OK                                                             
  McClain, OK                                                           
  Oklahoma, OK                                                          
  Pottawatomie, OK                                                      
5910  Olympia, WA...................................    1.1605    1.1073
  Thurston, WA                                                          
5920  Omaha, NE-IA..................................    0.9938    0.9958
  Pottawattamie, IA                                                     
  Cass, NE                                                              
  Douglas, NE                                                           
  Sarpy, NE                                                             
  Washington, NE                                                        
5945  \1\ Orange County, CA.........................    1.1153    1.0776
  Orange, CA                                                            
5960  \1\ Orlando, FL...............................    0.9933    0.9954
  Lake, FL                                                              
  Orange, FL                                                            
  Osceola, FL                                                           
  Seminole, FL                                                          
5990  \2\ Owensboro, KY.............................    0.7902    0.8511
  Daviess, KY                                                           
6015  \2\ Panama City, FL...........................    0.8947    0.9266
  Bay, FL                                                               
6020  Parkersburg-Marietta, WV-OH (West Virginia                        
 Hospitals).........................................    0.8118    0.8669
  Washington, OH                                                        
  Wood, WV                                                              
6020  \2\ Parkersburg-Marietta, WV-OH (Ohio                             
 Hospitals).........................................    0.8576    0.9001
  Washington, OH                                                        
  Wood, WV                                                              
6080  \2\ Pensacola, FL.............................    0.8947    0.9266
  Escambia, FL                                                          
  Santa Rosa, FL                                                        
6120  Peoria-Pekin, IL..............................    0.8157    0.8698
  Peoria, IL                                                            
  Tazewell, IL                                                          
  Woodford, IL                                                          
6160  \1\ Philadelphia, PA-NJ.......................    1.1427    1.0957
  Burlington, NJ                                                        
  Camden, NJ                                                            
  Gloucester, NJ                                                        
  Salem, NJ                                                             
  Bucks, PA                                                             
  Chester, PA                                                           
  Delaware, PA                                                          
  Montgomery, PA                                                        
  Philadelphia, PA                                                      
6200  \1\ Phoenix-Mesa, AZ..........................    0.9759    0.9834
  Maricopa, AZ                                                          
  Pinal, AZ                                                             
6240  Pine Bluff, AR................................    0.8003    0.8585
  Jefferson, AR                                                         
6280  \1\ Pittsburgh, PA............................    0.9896    0.9929
  Allegheny, PA                                                         
  Beaver, PA                                                            
  Butler, PA                                                            
  Fayette, PA                                                           
  Washington, PA                                                        
  Westmoreland, PA                                                      
6323  \2\ Pittsfield, MA............................    1.0917    1.0619
  Berkshire, MA                                                         
6340  Pocatello, ID.................................    0.8760    0.9133

[[Page 25642]]

                                                                        
  Bannock, ID                                                           
6360  Ponce, PR.....................................    0.4740    0.5998
  Guayanilla, PR                                                        
  Juana Diaz, PR                                                        
  Penuelas, PR                                                          
  Ponce, PR                                                             
  Villalba, PR                                                          
  Yauco, PR                                                             
6403  Portland, ME..................................    0.9537    0.9681
  Cumberland, ME                                                        
  Sagadahoc, ME                                                         
  York, ME                                                              
6440  \1\ Portland-Vancouver, OR-WA.................    1.1274    1.0856
  Clackamas, OR                                                         
  Columbia, OR                                                          
  Multnomah, OR                                                         
  Washington, OR                                                        
  Yamhill, OR                                                           
  Clark, WA                                                             
6483  \1\ Providence-Warwick-Pawtucket, RI..........    1.0888    1.0600
  Bristol, RI                                                           
  Kent, RI                                                              
  Newport, RI                                                           
  Providence, RI                                                        
  Washington, RI                                                        
6520  Provo-Orem, UT................................    0.9910    0.9938
  Utah, UT                                                              
6560  Pueblo, CO....................................    0.8785    0.9151
  Pueblo, CO                                                            
6580  Punta Gorda, FL...............................    0.8994    0.9300
  Charlotte, FL                                                         
6600  Racine, WI....................................    0.9207    0.9450
  Racine, WI                                                            
6640  \1\ Raleigh-Durham-Chapel Hill, NC............    0.9909    0.9938
  Chatham, NC                                                           
  Durham, NC                                                            
  Franklin, NC                                                          
  Johnston, NC                                                          
  Orange, NC                                                            
  Wake, NC                                                              
6660  Rapid City, SD................................    0.8277    0.8785
  Pennington, SD                                                        
6680  Reading, PA...................................    0.9282    0.9503
  Berks, PA                                                             
6690  Redding, CA...................................    1.2017    1.1341
  Shasta, CA                                                            
6720  Reno, NV......................................    1.0169    1.0115
  Washoe, NV                                                            
6740  \2\ Richland-Kennewick-Pasco, WA..............    1.0577    1.0392
  Benton, WA                                                            
  Franklin, WA                                                          
6760  Richmond-Petersburg, VA.......................    0.9257    0.9485
  Charles City County, VA                                               
  Chesterfield, VA                                                      
  Colonial Heights City, VA                                             
  Dinwiddie, VA                                                         
  Goochland, VA                                                         
  Hanover, VA                                                           
  Henrico, VA                                                           
  Hopewell City, VA                                                     
  New Kent, VA                                                          
  Petersburg City, VA                                                   
  Powhatan, VA                                                          
  Prince George, VA                                                     
  Richmond City, VA                                                     
6780  \1\ Riverside-San Bernardino, CA..............    1.0151    1.0103
  Riverside, CA                                                         
  San Bernardino, CA                                                    
6800  Roanoke, VA...................................    0.8581    0.9005
  Botetourt, VA                                                         
  Roanoke, VA                                                           
  Roanoke City, VA                                                      
  Salem City, VA                                                        
6820  Rochester, MN.................................    1.1797    1.1198
  Olmsted, MN                                                           
6840  \1\ Rochester, NY.............................    0.9678    0.9778
  Genesee, NY                                                           
  Livingston, NY                                                        
  Monroe, NY                                                            
  Ontario, NY                                                           
  Orleans, NY                                                           
  Wayne, NY                                                             
6880  Rockford, IL..................................    0.8703    0.9093
  Boone, IL                                                             
  Ogle, IL                                                              
  Winnebago, IL                                                         
6895  Rocky Mount, NC...............................    0.8214    0.8740
  Edgecombe, NC                                                         
  Nash, NC                                                              
6920  \1\ Sacramento, CA............................    1.1952    1.1299
  El Dorado, CA                                                         
  Placer, CA                                                            
  Sacramento, CA                                                        
6960  Saginaw-Bay City-Midland, MI..................    0.9567    0.9701
  Bay, MI                                                               
  Midland, MI                                                           
  Saginaw, MI                                                           
6980  St. Cloud, MN.................................    0.9667    0.9771
  Benton, MN                                                            
  Stearns, MN                                                           
7000  St. Joseph, MO................................    0.9972    0.9981
  Andrew, MO                                                            
  Buchanan, MO                                                          
7040  \1\ St. Louis, MO-IL..........................    0.9063    0.9348
  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.....................................    0.9987    0.9991
  Marion, OR                                                            
  Polk, OR                                                              
7120  Salinas, CA...................................    1.5270    1.3363
  Monterey, CA                                                          
7160  \1\ Salt Lake City-Ogden, UT..................    0.9458    0.9626
  Davis, UT                                                             
  Salt Lake, UT                                                         
  Weber, UT                                                             
7200  San Angelo, TX................................    0.7512    0.8221
  Tom Green, TX                                                         
7240  \1\ San Antonio, TX...........................    0.7744    0.8394
  Bexar, TX                                                             
  Comal, TX                                                             
  Guadalupe, TX                                                         
  Wilson, TX                                                            
7320  \1\ San Diego, CA.............................    1.2388    1.1579
  San Diego, CA                                                         
7360  \1\ San Francisco, CA.........................    1.3621    1.2357
  Marin, CA                                                             
  San Francisco, CA                                                     
  San Mateo, CA                                                         
7400  \1\ San Jose, CA..............................    1.3783    1.2457
  Santa Clara, CA                                                       
7440  \1\ San Juan-Bayamon, PR......................    0.4521    0.5806
  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....    1.0825    1.0558
  San Luis Obispo, CA                                                   
7480  Santa Barbara-Santa Maria-Lompoc, CA..........    1.1233    1.0829
  Santa Barbara, CA                                                     
7485  Santa Cruz-Watsonville, CA....................    1.4099    1.2652
  Santa Cruz, CA                                                        
7490  Santa Fe, NM..................................    0.9525    0.9672

[[Page 25643]]

                                                                        
  Los Alamos, NM                                                        
  Santa Fe, NM                                                          
7500  Santa Rosa, CA................................    1.3167    1.2073
  Sonoma, CA                                                            
7510  Sarasota-Bradenton, FL........................    0.9567    0.9701
  Manatee, FL                                                           
  Sarasota, FL                                                          
7520  Savannah, GA..................................    0.8776    0.9145
  Bryan, GA                                                             
  Chatham, GA                                                           
  Effingham, GA                                                         
7560  \2\ Scranton-Wilkes-Barre-Hazleton, PA........    0.8615    0.9029
  Columbia, PA                                                          
  Lackawanna, PA                                                        
  Luzerne, PA                                                           
  Wyoming, PA                                                           
7600  \1\ Seattle-Bellevue-Everett, WA..............    1.1634    1.1092
  Island, WA                                                            
  King, WA                                                              
  Snohomish, WA                                                         
7610  Sharon, PA....................................    0.8948    0.9267
  Mercer, PA                                                            
7620  \2\ Sheboygan, WI.............................    0.8557    0.8988
  Sheboygan, WI                                                         
7640  Sherman-Denison, TX...........................    0.8229    0.8750
  Grayson, TX                                                           
7680  Shreveport-Bossier City, LA...................    0.9436    0.9610
  Bossier, LA                                                           
  Caddo, LA                                                             
  Webster, LA                                                           
7720  Sioux City, IA-NE.............................    0.8530    0.8968
  Woodbury, IA                                                          
  Dakota, NE                                                            
7760  Sioux Falls, SD...............................    0.8988    0.9295
  Lincoln, SD                                                           
  Minnehaha, SD                                                         
7800  South Bend, IN................................    0.9939    0.9958
  St. Joseph, IN                                                        
7840  Spokane, WA...................................    1.1020    1.0688
  Spokane, WA                                                           
7880  Springfield, IL...............................    0.8793    0.9157
  Menard, IL                                                            
  Sangamon, IL                                                          
7920  Springfield, MO...............................    0.8151    0.8694
  Christian, MO                                                         
  Greene, MO                                                            
  Webster, MO                                                           
8003  Springfield, MA...............................    1.0917    1.0619
  Hampden, MA                                                           
  Hampshire, MA                                                         
8050  State College, PA.............................    0.9528    0.9674
  Centre, PA                                                            
8080  \2\ Steubenville-Weirton, OH-WV (Ohio                             
 Hospitals).........................................    0.8576    0.9001
  Jefferson, OH                                                         
  Brooke, WV                                                            
  Hancock, WV                                                           
8080  Steubenville-Weirton, OH-WV (West Virginia                        
 Hospitals).........................................    0.8476    0.8929
  Jefferson, OH                                                         
  Brooke, WV                                                            
  Hancock, WV                                                           
8120  Stockton-Lodi, CA.............................    1.1157    1.0779
  San Joaquin, CA                                                       
8140  Sumter, SC....................................    0.8195    0.8726
  Sumter, SC                                                            
8160  Syracuse, NY..................................    0.9410    0.9592
  Cayuga, NY                                                            
  Madison, NY                                                           
  Onondaga, NY                                                          
  Oswego, NY                                                            
8200  \2\ Tacoma, WA................................    1.0577    1.0392
  Pierce, WA                                                            
8240  \2\ Tallahassee, FL...........................    0.8947    0.9266
  Gadsden, FL                                                           
  Leon, FL                                                              
8280  \1\ Tampa-St. Petersburg-Clearwater, FL.......    0.9179    0.9430
  Hernando, FL                                                          
  Hillsborough, FL                                                      
  Pasco, FL                                                             
  Pinellas, FL                                                          
8320  Terre Haute, IN...............................    0.9063    0.9348
  Clay, IN                                                              
  Vermillion, IN                                                        
  Vigo, IN                                                              
8360  Texarkana, AR-Texarkana, TX...................    0.7538    0.8240
  Miller, AR                                                            
  Bowie, TX                                                             
8400  Toledo, OH....................................    1.0132    1.0090
  Fulton, OH                                                            
  Lucas, OH                                                             
  Wood, OH                                                              
8440  Topeka, KS....................................    0.9894    0.9927
  Shawnee, KS                                                           
8480  Trenton, NJ...................................    1.0399    1.0272
  Mercer, NJ                                                            
8520  Tucson, AZ....................................    0.9104    0.9377
  Pima, AZ                                                              
8560  Tulsa, OK.....................................    0.8520    0.8961
  Creek, OK                                                             
  Osage, OK                                                             
  Rogers, OK                                                            
  Tulsa, OK                                                             
  Wagoner, OK                                                           
8600  Tuscaloosa, AL................................    0.7706    0.8366
  Tuscaloosa, AL                                                        
8640  Tyler, TX.....................................    0.8792    0.9156
  Smith, TX                                                             
8680  \2\ Utica-Rome, NY............................    0.8640    0.9047
  Herkimer, NY                                                          
  Oneida, NY                                                            
8720  Vallejo-Fairfield-Napa, CA....................    1.3458    1.2255
  Napa, CA                                                              
  Solano, CA                                                            
8735  Ventura, CA...................................    1.0764    1.0517
  Ventura, CA                                                           
8750  Victoria, TX..................................    0.8451    0.8911
  Victoria, TX                                                          
8760  Vineland-Millville-Bridgeton, NJ..............    1.0460    1.0313
  Cumberland, NJ                                                        
8780  Visalia-Tulare-Porterville, CA................    1.0168    1.0115
  Tulare, CA                                                            
8800  Waco, TX......................................    0.8027    0.8603
  McLennan, TX                                                          
8840  \1\ Washington, DC-MD-VA-WV...................    1.0863    1.0583
  District of Columbia, DC                                              
  Calvert, MD                                                           
  Charles, MD                                                           
  Frederick, MD                                                         
  Montgomery, MD                                                        
  Prince Georges, MD                                                    
  Alexandria City, VA                                                   
  Arlington, VA                                                         
  Clarke, VA                                                            
  Culpeper, VA                                                          
  Fairfax, VA                                                           
  Fairfax City, VA                                                      
  Falls Church City, VA                                                 
  Fauquier, VA                                                          
  Fredericksburg City, VA                                               
  King George, VA                                                       
  Loudoun, VA                                                           
  Manassas City, VA                                                     
  Manassas Park City, VA                                                
  Prince William, VA                                                    
  Spotsylvania, VA                                                      
  Stafford, VA                                                          
  Warren, VA                                                            
  Berkeley, WV                                                          
  Jefferson, WV                                                         
8920  Waterloo-Cedar Falls, IA......................    0.8402    0.8876
  Black Hawk, IA                                                        
8940  Wausau, WI....................................    0.9814    0.9872
  Marathon, WI                                                          
8960  West Palm Beach-Boca Raton, FL................    1.0288    1.0196
  Palm Beach, FL                                                        
9000  \2\ Wheeling, WV-OH (West Virginia Hospitals).    0.7938    0.8537
  Belmont, OH                                                           
  Marshall, WV                                                          
  Ohio, WV                                                              
9000  \2\ Wheeling, WV-OH (Ohio Hospitals)..........    0.8576    0.9001
  Belmont, OH                                                           
  Marshall, WV                                                          
  Ohio, WV                                                              
9040  Wichita, KS...................................    0.8990    0.9297
  Butler, KS                                                            
  Harvey, KS                                                            
  Sedgwick, KS                                                          
9080  Wichita Falls, TX.............................    0.7864    0.8483
  Archer, TX                                                            
  Wichita, TX                                                           

[[Page 25644]]

                                                                        
9140  \2\ Williamsport, PA..........................    0.8615    0.9029
  Lycoming, PA                                                          
9160  Wilmington-Newark, DE-MD......................    1.1968    1.1309
  New Castle, DE                                                        
  Cecil, MD                                                             
9200  Wilmington, NC................................    0.9427    0.9604
  New Hanover, NC                                                       
  Brunswick, NC                                                         
9260  \2\ Yakima, WA................................    1.0577    1.0392
  Yakima, WA                                                            
9270  Yolo, CA......................................    1.0702    1.0476
  Yolo, CA                                                              
9280  York, PA......................................    0.9509    0.9661
  York, PA                                                              
9320  Youngstown-Warren, OH.........................    0.9897    0.9929
  Columbiana, OH                                                        
  Mahoning, OH                                                          
  Trumbull, OH                                                          
9340  Yuba City, CA.................................    1.0957    1.0646
  Sutter, CA                                                            
  Yuba, CA                                                              
9360  Yuma, AZ......................................    1.0143    1.0098
  Yuma, AZ                                                              
------------------------------------------------------------------------
\1\ Large Urban Area                                                    
\2\ Hospitals geographically located in the area are assigned the       
  statewide rural wage index for FY 1999.                               


Table 4B.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
                               Rural Areas                              
------------------------------------------------------------------------
                                                        Wage            
                    Nonurban area                       index      GAF  
------------------------------------------------------------------------
Alabama.............................................    0.7385    0.8125
Alaska..............................................    1.2534    1.1673
Arizona.............................................    0.8082    0.8643
Arkansas............................................    0.7274    0.8042
California..........................................    0.9976    0.9984
Colorado............................................    0.8454    0.8914
Connecticut.........................................    1.2175    1.1443
Delaware............................................    0.8590    0.9012
Florida.............................................    0.8947    0.9266
Georgia.............................................    0.7933    0.8534
Hawaii..............................................    1.1011    1.0682
Idaho...............................................    0.8548    0.8981
Illinois............................................    0.7985    0.8572
Indiana.............................................    0.8429    0.8896
Iowa................................................    0.7846    0.8469
Kansas..............................................    0.7334    0.8087
Kentucky............................................    0.7902    0.8511
Louisiana...........................................    0.7517    0.8225
Maine...............................................    0.8538    0.8974
Maryland............................................    0.8627    0.9038
Massachusetts.......................................    1.0917    1.0619
Michigan............................................    0.8988    0.9295
Minnesota...........................................    0.8665    0.9065
Mississippi.........................................    0.7359    0.8106
Missouri............................................    0.7510    0.8219
Montana.............................................    0.8645    0.9051
Nebraska............................................    0.7683    0.8349
Nevada..............................................    0.9267    0.9492
New Hampshire.......................................    1.0324    1.0221
New Jersey \1\......................................  ........  ........
New Mexico..........................................    0.7927    0.8529
New York............................................    0.8640    0.9047
North Carolina......................................    0.8162    0.8702
North Dakota........................................    0.7471    0.8190
Ohio................................................    0.8576    0.9001
Oklahoma............................................    0.7207    0.7991
Oregon..............................................    0.9957    0.9971
Pennsylvania........................................    0.8615    0.9029
Puerto Rico.........................................    0.4083    0.5415
Rhode Island \1\....................................  ........  ........
South Carolina......................................    0.8110    0.8664
South Dakota........................................    0.7564    0.8260
Tennessee...........................................    0.7483    0.8199
Texas...............................................    0.7404    0.8140
Utah................................................    0.8851    0.9198
Vermont.............................................    0.9489    0.9647
Virginia............................................    0.7890    0.8502
Washington..........................................    1.0577    1.0392
West Virginia.......................................    0.7938    0.8537
Wisconsin...........................................    0.8557    0.8988
Wyoming.............................................    0.8763    0.9135
------------------------------------------------------------------------
All counties within the State are classified as urban.                  


Table 4C.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
                     Hospitals That Are Reclassified                    
------------------------------------------------------------------------
                                                        Wage            
                        Area                            index      GAF  
------------------------------------------------------------------------
Abilene, TX.........................................    0.8081    0.8642
Albany, GA..........................................    0.7933    0.8534
Albuquerque, NM.....................................    0.8813    0.9171
Alexandria, LA......................................    0.8598    0.9017
Allentown-Bethlehem-Easton, PA......................    1.0219    1.0149
Amarillo, TX........................................    0.8483    0.8935
Anchorage, AK.......................................    1.3088    1.2024
Asheville, NC.......................................    0.9016    0.9315
Atlanta, GA.........................................    1.0024    1.0016
Augusta-Aiken, GA-SC................................    0.9309    0.9521
Baltimore, MD.......................................    0.9760    0.9835
Barnstable-Yarmouth, MA.............................    1.4646    1.2986
Baton Rouge, LA.....................................    0.8940    0.9261
Benton Harbor, MI...................................    0.8988    0.9295
Bergen-Passaic, NJ..................................    1.1845    1.1229
Billings, MT........................................    0.9220    0.9459
Binghamton, NY......................................    0.8989    0.9296
Birmingham, AL......................................    0.9150    0.9410
Bismarck, ND........................................    0.7838    0.8464
Boise City, ID......................................    0.9267    0.9492
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH....    1.0885    1.0598
Brazoria, TX........................................    0.8895    0.9229
Bryan-College Station, TX...........................    0.7962    0.8555
Buffalo-Niagara Falls, NY...........................    0.9592    0.9719
Burlington, VT......................................    0.9612    0.9733
Caguas, PR..........................................    0.4445    0.5739
Canton-Massillon, OH................................    0.8895    0.9229
Casper, WY..........................................    0.9227    0.9464
Champaign-Urbana, IL................................    0.8844    0.9193
Charleston-North Charleston, SC.....................    0.8931    0.9255
Charleston, WV......................................    0.8819    0.9175
Charlotte-Gastonia-Rock Hill, NC-SC.................    0.9568    0.9702
Charlottesville, VA.................................    0.9803    0.9865
Chattanooga, TN-GA..................................    0.8885    0.9222
Chicago, IL.........................................    1.0507    1.0344
Cincinnati, OH-KY-IN................................    0.9465    0.9630
Clarksville-Hopkinsville, TN-KY.....................    0.8204    0.8732
Cleveland-Lorain-Elyria, OH.........................    0.9970    0.9979
Columbia, MO........................................    0.9331    0.9537
Columbus, GA-AL.....................................    0.8573    0.8999
Columbus, OH........................................    0.9929    0.9951
Corpus Christi, TX..................................    0.8112    0.8665
Dallas, TX..........................................    0.9149    0.9409
Danville, VA........................................    0.8779    0.9147
Davenport-Moline-Rock Island, IA-IL.................    0.8496    0.8944
Dayton-Springfield, OH..............................    0.9670    0.9773
Denver, CO..........................................    1.0532    1.0361
Des Moines, IA......................................    0.8576    0.9001
Duluth-Superior, MN-WI..............................    1.0133    1.0091
Dutchess County, NY.................................    0.9860    0.9904
Elkhart-Goshen, IN..................................    0.9168    0.9422
Eugene-Springfield, OR..............................    1.1141    1.0768
Evansville-Henderson, IN-KY.........................    0.8505    0.8950
Fargo-Moorhead, ND-MN (Minnesota Hospital)..........    0.8665    0.9065
Fargo-Moorhead, ND-MN (South Dakota Hospital).......    0.7905    0.8513
Fayetteville, NC....................................    0.8460    0.8918
Flagstaff, AZ-UT....................................    0.9602    0.9726
Flint, MI...........................................    1.1106    1.0745
Fort Collins-Loveland, CO...........................    1.0383    1.0261
Ft. Lauderdale, FL..................................    1.0534    1.0363
Fort Pierce-Port St. Lucie, FL......................    0.9847    0.9895
Fort Smith, AR-OK...................................    0.7582    0.8273
Fort Walton Beach, FL...............................    0.8694    0.9086
Forth Worth-Arlington, TX...........................    0.9192    0.9439
Gadsden, AL.........................................    0.8854    0.9200
Gainesville, FL.....................................    0.9542    0.9684
Goldsboro, NC.......................................    0.8366    0.8850
Grand Forks, ND-MN..................................    0.8996    0.9301
Grand Junction, CO..................................    0.9110    0.9382
Grand Rapids-Muskegon-Holland, MI...................    0.9908    0.9937
Great Falls, MT.....................................    0.9362    0.9559
Greeley, CO.........................................    0.9663    0.9768
Green Bay, WI.......................................    0.9323    0.9531
Greenville, NC......................................    0.8844    0.9193
Greenville-Spartanburg-Anderson, SC.................    0.9318    0.9528
Harrisburg-Lebanon-Carlisle, PA.....................    0.9572    0.9705

[[Page 25645]]

                                                                        
Hartford, CT........................................    1.1152    1.0775
Hattiesburg, MS.....................................    0.7359    0.8106
Hickory-Morganton-Lenoir, NC........................    0.8687    0.9081
Honolulu, HI........................................    1.1628    1.1088
Houston, TX.........................................    1.0017    1.0012
Huntington-Ashland, WV-KY-OH........................    0.9353    0.9552
Huntsville, AL......................................    0.8269    0.8780
Indianapolis, IN....................................    0.9901    0.9932
Iowa City, IA.......................................    0.9441    0.9614
Jackson, MS.........................................    0.8279    0.8787
Jackson, TN.........................................    0.8632    0.9042
Jacksonville, FL....................................    0.8915    0.9244
Johnson City-Kingsport-Bristol, TN-VA...............    0.8847    0.9195
Jonesboro, AR.......................................    0.7643    0.8319
Joplin, MO..........................................    0.7710    0.8369
Kalamazoo-Battlecreek, MI...........................    1.1713    1.1144
Kansas City, KS-MO..................................    0.9672    0.9774
Knoxville, TN.......................................    0.8569    0.8996
Lafayette, LA.......................................    0.8363    0.8848
Lansing-East Lansing, MI............................    1.0025    1.0017
Las Cruces, NM......................................    0.9045    0.9336
Las Vegas, NV-AZ....................................    1.1349    1.0905
Lexington, KY.......................................    0.8579    0.9004
Lima, OH............................................    0.8715    0.9101
Lincoln, NE.........................................    0.8900    0.9233
Little Rock-North Little Rock, AR...................    0.8598    0.9017
Los Angeles-Long Beach, CA..........................    1.2124    1.1410
Louisville, KY-IN...................................    0.9212    0.9453
Macon, GA...........................................    0.8886    0.9223
Madison, WI.........................................    1.0103    1.0070
Mansfield, OH.......................................    0.8606    0.9023
Memphis, TN-AR-MS...................................    0.8423    0.8891
Merced, CA..........................................    1.0304    1.0207
Milwaukee-Waukesha, WI..............................    0.9289    0.9507
Minneapolis-St. Paul, MN-WI.........................    1.0956    1.0645
Modesto, CA.........................................    1.0406    1.0276
Monroe, LA..........................................    0.8148    0.8691
Montgomery, AL......................................    0.7919    0.8523
Myrtle Beach, SC....................................    0.8162    0.8702
Nashville, TN.......................................    0.9336    0.9540
New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT.    1.2175    1.1443
New London-Norwich, CT..............................    1.1738    1.1160
New Orleans, LA.....................................    0.9397    0.9583
New York, NY........................................    1.4537    1.2920
Newark, NJ..........................................    1.0899    1.0607
Newburgh, NY-PA.....................................    1.1356    1.0910
Oakland, CA.........................................    1.5309    1.3386
Odessa-Midland, TX..................................    0.7773    0.8415
Oklahoma City, OK...................................    0.8764    0.9136
Omaha, NE-IA........................................    0.9938    0.9958
Orange County, CA...................................    1.1153    1.0776
Orlando, FL.........................................    0.9933    0.9954
Peoria-Pekin, IL....................................    0.8157    0.8698
Philadelphia, PA-NJ.................................    1.1427    1.0957
Pittsburgh, PA......................................    0.9740    0.9821
Pocatello, ID (Idaho Hospital)......................    0.8760    0.9133
Pocatello, ID (Wyoming Hospitals)...................    0.8763    0.9135
Portland, ME........................................    0.9537    0.9681
Portland-Vancouver, OR-WA...........................    1.1274    1.0856
Provo-Orem, UT......................................    0.9910    0.9938
Raleigh-Durham-Chapel Hill, NC......................    0.9909    0.9938
Rapid City, SD......................................    0.8277    0.8785
Reno, NV............................................    1.0169    1.0115
Rochester, MN.......................................    1.1797    1.1198
Rockford, IL........................................    0.8703    0.9093
Sacramento, CA......................................    1.1952    1.1299
Saginaw-Bay City-Midland, MI........................    0.9567    0.9701
St. Cloud, MN.......................................    0.9667    0.9771
St. Louis, MO-IL....................................    0.9063    0.9348
Salt Lake City-Ogden, UT............................    0.9458    0.9626
San Diego, CA.......................................    1.2388    1.1579
Santa Fe, NM........................................    0.9414    0.9595
Santa Rosa, CA......................................    1.3003    1.1970
Seattle-Bellevue-Everett, WA........................    1.1634    1.1092
Sharon, PA..........................................    0.8835    0.9187
Sherman-Denison, TX.................................    0.8061    0.8628
Sioux City, IA-NE...................................    0.8530    0.8968
Sioux Falls, SD.....................................    0.8885    0.9222
South Bend, IN......................................    0.9939    0.9958
Spokane, WA.........................................    1.0819    1.0554
Springfield, IL.....................................    0.8793    0.9157
Springfield, MO.....................................    0.8151    0.8694
State College, PA...................................    0.8845    0.9194
Syracuse, NY........................................    0.9410    0.9592
Tallahassee, FL.....................................    0.8566    0.8994
Tampa-St. Petersburg-Clearwater, FL.................    0.9179    0.9430
Texarkana, AR-Texarkana, TX.........................    0.7538    0.8240
Topeka, KS..........................................    0.9667    0.9771
Tucson, AZ..........................................    0.9104    0.9377
Tulsa, OK...........................................    0.8418    0.8888
Tuscaloosa, AL......................................    0.7706    0.8366
Tyler, TX...........................................    0.8792    0.9156
Vallejo-Fairfield-Napa, CA..........................    1.3458    1.2255
Victoria, TX........................................    0.8451    0.8911
Washington, DC-MD-VA-WV.............................    1.0863    1.0583
Waterloo-Cedar Falls, IA............................    0.8402    0.8876
Wausau, WI..........................................    0.9501    0.9656
Wichita, KS.........................................    0.8853    0.9200
Wichita Falls, TX...................................    0.7695    0.8357
Rural Alabama.......................................    0.7385    0.8125
Rural Illinois......................................    0.7985    0.8572
Rural Louisiana.....................................    0.7517    0.8225
Rural Massachusetts.................................    1.0481    1.0327
Rural Michigan......................................    0.8988    0.9295
Rural Minnesota.....................................    0.8665    0.9065
Rural Missouri......................................    0.7510    0.8219
Rural Nevada........................................    0.8855    0.9201
Rural New Mexico....................................    0.7927    0.8529
Rural Oregon........................................    0.9957    0.9971
Rural Washington....................................    1.0577    1.0392
Rural Wyoming.......................................    0.8763    0.9135
------------------------------------------------------------------------


             Table 4D.--Average Hourly Wage For Urban Areas             
------------------------------------------------------------------------
                                                                Average 
                          Urban area                             hourly 
                                                                  wage  
------------------------------------------------------------------------
Abilene, TX..................................................    16.4503
Aguadilla, PR................................................     9.8326
Akron, OH....................................................    20.5582
Albany, GA...................................................    16.6839
Albany-Schenectady-Troy, NY..................................    17.3615
Albuquerque, NM..............................................    18.1579
Alexandria, LA...............................................    17.7146
Allentown-Bethlehem-Easton, PA...............................    21.0540
Altoona, PA..................................................    19.3623
Amarillo, TX.................................................    17.4756
Anchorage, AK................................................    26.6324
Ann Arbor, MI................................................    22.9259
Anniston, AL.................................................    17.9884
Appleton-Oshkosh-Neenah, WI..................................    18.3354
Arecibo, PR..................................................    10.1277
Asheville, NC................................................    18.5755
Athens, GA...................................................    18.0203
Atlanta, GA..................................................    20.6523
Atlantic-Cape May, NJ........................................    23.3952
Augusta-Aiken, GA-SC.........................................    19.1799
Austin-San Marcos, TX........................................    16.8088
Bakersfield, CA..............................................    18.4123
Baltimore, MD................................................    20.1089
Bangor, ME...................................................    16.5207
Barnstable-Yarmouth, MA......................................    32.2329
Baton Rouge, LA..............................................    18.4192
Beaumont-Port Arthur, TX.....................................    17.8430
Bellingham, WA...............................................    23.6418
Benton Harbor, MI............................................    17.7241
Bergen-Passaic, NJ...........................................    25.1292
Billings, MT.................................................    18.9960
Biloxi-Gulfport-Pascagoula, MS...............................    17.0828
Binghamton, NY...............................................    18.7554
Birmingham, AL...............................................    18.8514
Bismarck, ND.................................................    16.5132
Bloomington,IN...............................................    18.6271
Bloomington-Normal, IL.......................................    18.3900
Boise City, ID...............................................    19.0323
Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH.............    22.3344
Boulder-Longmont, CO.........................................    20.8550
Brazoria, TX.................................................    18.3273
Bremerton, WA................................................    22.9686
Brownsville-Harlingen-San Benito, TX.........................    17.0823
Bryan-College Station, TX....................................    16.3918
Buffalo-Niagara Falls, NY....................................    19.7621
Burlington, VT...............................................    19.7504
Caguas, PR...................................................     9.1371
Canton-Massillon, OH.........................................    18.3270
Casper, WY...................................................    18.0774
Cedar Rapids, IA.............................................    18.3134
Champaign-Urbana, IL.........................................    18.1242
Charleston-North Charleston, SC..............................    18.4009
Charleston, WV...............................................    18.6306

[[Page 25646]]

                                                                        
Charlotte-Gastonia-Rock Hill, NC-SC..........................    19.7132
Charlottesville, VA..........................................    21.3425
Chattanooga, TN-GA...........................................    18.7967
Cheyenne, WY.................................................    19.2719
Chicago, IL..................................................    21.6476
Chico-Paradise, CA...........................................    21.0787
Cincinnati, OH-KY-IN.........................................    19.5020
Clarksville-Hopkinsville, TN-KY..............................    16.6908
Cleveland-Lorain-Elyria, OH..................................    20.5422
Colorado Springs, CO.........................................    19.5098
Columbia, MO.................................................    19.9392
Columbia, SC.................................................    19.3016
Columbus, GA-AL..............................................    17.6626
Columbus, OH.................................................    20.4569
Corpus Christi, TX...........................................    16.6221
Cumberland, MD-WV............................................    17.3219
Dallas, TX...................................................    18.9048
Danville, VA.................................................    18.7936
Davenport-Moline-Rock Island, IA-IL..........................    17.5045
Dayton-Springfield, OH.......................................    19.9239
Daytona Beach, FL............................................    18.9775
Decatur, AL..................................................    17.1051
Decatur, IL..................................................    16.7703
Denver, CO...................................................    21.6957
Des Moines, IA...............................................    17.5941
Detroit, MI..................................................    21.8417
Dothan, AL...................................................    16.1254
Dover, DE....................................................    19.4527
Dubuque, IA..................................................    17.0843
Duluth-Superior, MN-WI.......................................    20.7877
Dutchess County, NY..........................................    21.5269
Eau Claire, WI...............................................    18.0385
El Paso, TX..................................................    18.4982
Elkhart-Goshen, IN...........................................    18.7060
Elmira, NY...................................................    17.5584
Enid, OK.....................................................    16.5863
Erie, PA.....................................................    19.2498
Eugene-Springfield, OR.......................................    23.2566
Evansville, Henderson, IN-KY.................................    17.5235
Fargo-Moorhead, ND-MN........................................    15.4103
Fayetteville, NC.............................................    17.4302
Fayetteville-Springdale-Rogers, AR...........................    17.8965
Flagstaff, AZ-UT.............................................    19.7008
Flint, MI....................................................    22.8823
Florence, AL.................................................    15.9479
Florence, SC.................................................    17.2402
Fort Collins-Loveland, CO....................................    21.3936
Fort Lauderdale, FL..........................................    20.3768
Fort Myers-Cape Coral, FL....................................    18.5790
Fort Pierce-Port St. Lucie, FL...............................    19.9753
Fort Smith, AR-OK............................................    15.8375
Fort Walton Beach, FL........................................    17.8995
Fort Wayne, IN...............................................    18.3283
Fort Worth-Arlington, TX.....................................    18.8266
Fresno, CA...................................................    21.6143
Gadsden, AL..................................................    18.2411
Gainesville, FL..............................................    19.6396
Galveston-Texas City, TX.....................................    19.6738
Gary, IN.....................................................    19.5496
Glens Falls, NY..............................................    17.6404
Goldsboro, NC................................................    17.5612
Grand Forks, ND-MN...........................................    18.4172
Grand Junction, CO...........................................    17.0997
Grand Rapids-Muskegon-Holland, MI............................    20.6411
Great Falls, MT..............................................    18.4336
Greeley, CO..................................................    20.3075
Green Bay, WI................................................    19.0230
Greensboro-Winston-Salem-High Point, NC......................    19.4045
Greenville, NC...............................................    18.6140
Greenville-Spartanburg-Anderson, SC..........................    19.1991
Hagerstown, MD...............................................    21.1564
Hamilton-Middletown, OH......................................    19.1458
Harrisburg-Lebanon-Carlisle, PA..............................    19.7220
Hartford, CT.................................................    22.8114
Hattiesburg, MS..............................................    15.0868
Hickory-Morganton-Lenoir, NC.................................    18.4430
Honolulu, HI.................................................    23.9579
Houma, LA....................................................    17.0314
Houston, TX..................................................    20.6380
Huntington-Ashland, WV-KY-OH.................................    20.0441
Huntsville, AL...............................................    17.3657
Indianapolis, IN.............................................    20.3998
Iowa City, IA................................................    19.6992
Jackson, MI..................................................    19.1645
Jackson, MS..................................................    17.0541
Jackson, TN..................................................    17.7852
Jacksonville, FL.............................................    18.3674
Jacksonville, NC.............................................    15.6996
Jamestown, NY................................................    15.9060
Janesville-Beloit, WI........................................    18.8060
Jersey City, NJ..............................................    23.4307
Johnson City-Kingsport-Bristol, TN-VA........................    18.2276
Johnstown, PA................................................    17.8659
Jonesboro, AR................................................    15.3904
Joplin, MO...................................................    16.3448
Kalamazoo-Battlecreek, MI....................................    24.7428
Kankakee, IL.................................................    18.9037
Kansas City, KS-MO...........................................    19.9286
Kenosha, WI..................................................    18.9676
Killeen-Temple, TX...........................................    20.9746
Knoxville, TN................................................    17.6557
Kokomo, IN...................................................    19.2639
La Crosse, WI-MN.............................................    18.5196
Lafayette, LA................................................    17.1506
Lafayette, IN................................................    18.3693
Lake Charles, LA.............................................    15.9437
Lakeland-Winter Haven, FL....................................    18.5691
Lancaster, PA................................................    19.8739
Lansing-East Lansing, MI.....................................    20.8707
Laredo, TX...................................................    15.2064
Las Cruces, NM...............................................    18.4298
Las Vegas, NV-AZ.............................................    23.3827
Lawrence, KS.................................................    17.9827
Lawton, OK...................................................    18.0698
Lewiston-Auburn, ME..........................................    19.0090
Lexington, KY................................................    17.6767
Lima, OH.....................................................    18.3062
Lincoln, NE..................................................    18.7127
Little Rock-North Little Rock, AR............................    17.6667
Longview-Marshall, TX........................................    17.6848
Los Angeles-Long Beach, CA...................................    24.9118
Louisville, KY-IN............................................    18.9791
Lubbock, TX..................................................    17.4301
Lynchburg, VA................................................    17.8831
Macon, GA....................................................    18.7672
Madison, WI..................................................    20.8155
Mansfield, OH................................................    17.7321
Mayaguez, PR.................................................     8.9825
McAllen-Edinburg-Mission, TX.................................    17.5983
Medford-Ashland, OR..........................................    20.8288
Melbourne-Titusville-Palm Bay, FL............................    19.1394
Memphis, TN-AR-MS............................................    17.3550
Merced, CA...................................................    20.8449
Miami, FL....................................................    20.7248
Middlesex-Somerset-Hunterdon, NJ.............................    23.1938
Milwaukee-Waukesha, WI.......................................    19.5106
Minneapolis-St. Paul, MN-WI..................................    22.5733
Mobile, AL...................................................    16.3627
Modesto, CA..................................................    21.4409
Monmouth-Ocean, NJ...........................................    23.2510
Monroe, LA...................................................    17.0762
Montgomery, AL...............................................    16.2493
Muncie, IN...................................................    19.5589
Myrtle Beach, SC.............................................    16.4379
Naples, FL...................................................    21.0253
Nashville, TN................................................    19.2358
Nassau-Suffolk, NY...........................................    28.5558
New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT..........    24.7905
New London-Norwich, CT.......................................    24.1351
New Orleans, LA..............................................    19.3612
New York, NY.................................................    29.9516
Newark, NJ...................................................    24.1961
Newburgh, NY-PA..............................................    23.1287
Norfolk-Virginia Beach-Newport News, VA-NC...................    16.9674
Oakland, CA..................................................    31.0918
Ocala, FL....................................................    19.0159
Odessa-Midland, TX...........................................    16.0153
Oklahoma City, OK............................................    18.0573
Olympia, WA..................................................    23.9108
Omaha, NE-IA.................................................    20.4749
Orange County, CA............................................    23.1127
Orlando, FL..................................................    20.4664
Owensboro, KY................................................    16.1460
Panama City, FL..............................................    17.6753
Parkersburg-Marietta, WV-OH..................................    16.7267
Pensacola, FL................................................    16.9466
Peoria-Pekin, IL.............................................    16.7415
Philadelphia, PA-NJ..........................................    23.5434
Phoenix-Mesa, AZ.............................................    20.1062
Pine Bluff, AR...............................................    16.4882
Pittsburgh, PA...............................................    20.3893
Pittsfield, MA...............................................    22.4781
Pocatello, ID................................................    18.0491
Ponce, PR....................................................     9.7656
Portland, ME.................................................    19.6358
Portland-Vancouver, OR-WA....................................    23.2280
Providence-Warwick, RI.......................................    22.4328
Provo-Orem, UT...............................................    20.4158
Pueblo, CO...................................................    18.1010
Punta Gorda, FL..............................................    18.5303
Racine, WI...................................................    18.9689
Raleigh-Durham-Chapel Hill, NC...............................    20.4162
Rapid City, SD...............................................    17.0546
Reading, PA..................................................    19.1241
Redding, CA..................................................    24.7586
Reno, NV.....................................................    20.9521
Richland-Kennewick-Pasco, WA.................................    21.3732
Richmond-Petersburg, VA......................................    19.0728
Riverside-San Bernardino, CA.................................    21.3055
Roanoke, VA..................................................    17.6802
Rochester, MN................................................    24.3054
Rochester, NY................................................    19.9396
Rockford, IL.................................................    17.9308
Rocky Mount, NC..............................................    18.5969
Sacramento, CA...............................................    24.6188
Saginaw-Bay City-Midland, MI.................................    19.7109
St. Cloud, MN................................................    19.9167

[[Page 25647]]

                                                                        
St. Joseph, MO...............................................    20.5465
St. Louis, MO-IL.............................................    18.6721
Salem, OR....................................................    20.5776
Salinas, CA..................................................    31.4614
Salt Lake City-Ogden, UT.....................................    19.4515
San Angelo, TX...............................................    15.4776
San Antonio, TX..............................................    15.9548
San Diego, CA................................................    25.4297
San Francisco, CA............................................    28.9991
San Jose, CA.................................................    28.6758
San Juan-Bayamon, PR.........................................     9.3148
San Luis Obispo-Atascadero-Paso Robles, CA...................    22.3026
Santa Barbara-Santa Maria-Lompoc, CA.........................    23.1439
Santa Cruz-Watsonville, CA...................................    29.0487
Santa Fe, NM.................................................    19.6247
Santa Rosa, CA...............................................    28.2324
Sarasota-Bradenton, FL.......................................    19.7119
Savannah, GA.................................................    18.0808
Scranton-Wilkes Barre-Hazleton, PA...........................    17.5663
Seattle-Bellevue-Everett, WA.................................    23.9527
Sharon, PA...................................................    18.4366
Sheboygan, WI................................................    17.0899
Sherman-Denison, TX..........................................    16.9538
Shreveport-Bossier City, LA..................................    19.4408
Sioux City, IA-NE............................................    17.5754
Sioux Falls, SD..............................................    18.5187
South Bend, IN...............................................    20.4772
Spokane, WA..................................................    22.7055
Springfield, IL..............................................    18.1176
Springfield, MO..............................................    16.7941
Springfield, MA..............................................    22.7477
State College, PA............................................    19.6319
Steubenville-Weirton, OH-WV..................................    17.4636
Stockton-Lodi, CA............................................    22.9869
Sumter, SC...................................................    16.8850
Syracuse, NY.................................................    19.3881
Tacoma, WA...................................................    21.5661
Tallahassee, FL..............................................    17.5545
Tampa-St. Petersburg-Clearwater, FL..........................    18.7444
Terre Haute, IN..............................................    18.6722
Texarkana, AR-Texarkana, TX..................................    14.8193
Toledo, OH...................................................    20.8755
Topeka, KS...................................................    20.3862
Trenton, NJ..................................................    21.4255
Tucson, AZ...................................................    18.7576
Tulsa, OK....................................................    17.5538
Tuscaloosa, AL...............................................    15.8762
Tyler, TX....................................................    18.1141
Utica-Rome, NY...............................................    17.2785
Vallejo-Fairfield-Napa, CA...................................    27.9551
Ventura, CA..................................................    22.7487
Victoria, TX.................................................    17.4131
Vineland-Millville-Bridgeton, NJ.............................    21.5511
Visalia-Tulare-Porterville, CA...............................    20.9493
Waco, TX.....................................................    16.5375
Washington, DC-MD-VA-WV......................................    22.3812
Waterloo-Cedar Falls, IA.....................................    16.5347
Wausau, WI...................................................    20.2214
West Palm Beach-Boca Raton, FL...............................    21.2686
Wheeling, OH-WV..............................................    15.8460
Wichita, KS..................................................    18.5231
Wichita Falls, TX............................................    16.2020
Williamsport, PA.............................................    17.5305
Wilmington-Newark, DE-MD.....................................    24.6591
Wilmington, NC...............................................    19.4232
Yakima, WA...................................................    21.4371
Yolo, CA.....................................................    22.0507
York, PA.....................................................    19.5923
Youngstown-Warren, OH........................................    20.3921
Yuba City, CA................................................    22.5751
Yuma, AZ.....................................................    20.8977
------------------------------------------------------------------------


             Table 4E.--Average Hourly Wage for Rural Areas             
------------------------------------------------------------------------
                                                                Average 
                        Nonurban area                            hourly 
                                                                  wage  
------------------------------------------------------------------------
Alabama......................................................    15.1489
Alaska.......................................................    25.8250
Arizona......................................................    16.6528
Arkansas.....................................................    14.9880
California...................................................    20.5534
Colorado.....................................................    17.4187
Connecticut..................................................    25.0854
Delaware.....................................................    17.6976
Florida......................................................    18.4340
Georgia......................................................    16.3451
Hawaii.......................................................    22.6872
Idaho........................................................    17.6124
Illinois.....................................................    16.4317
Indiana......................................................    17.3659
Iowa.........................................................    16.1658
Kansas.......................................................    15.1110
Kentucky.....................................................    16.2801
Louisiana....................................................    15.4622
Maine........................................................    17.5914
Maryland.....................................................    17.7750
Massachusetts................................................    22.4920
Michigan.....................................................    18.5026
Minnesota....................................................    17.8522
Mississippi..................................................    15.1615
Missouri.....................................................    15.4743
Montana......................................................    17.8114
Nebraska.....................................................    15.8291
Nevada.......................................................    19.0933
New Hampshire................................................    21.2716
New Jersey \1\...............................................  .........
New Mexico...................................................    16.3322
New York.....................................................    17.8012
North Carolina...............................................    16.8177
North Dakota.................................................    15.3932
Ohio.........................................................    17.6689
Oklahoma.....................................................    14.8488
Oregon.......................................................    20.5099
Pennsylvania.................................................    17.7499
Puerto Rico..................................................     8.4134
Rhode Island \1\.............................................  .........
South Carolina...............................................    16.7085
South Dakota.................................................    15.5851
Tennessee....................................................    15.4168
Texas........................................................    15.2542
Utah.........................................................    18.2372
Vermont......................................................    19.5500
Virginia.....................................................    16.2563
Washington...................................................    21.7931
West Virginia................................................    16.3543
Wisconsin....................................................    17.6308
Wyoming......................................................   18.0559 
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.              


                 Table 4F.--Puerto Rico Wage Index and Capital Geogaphic Adjustment Factor (GAF)                
----------------------------------------------------------------------------------------------------------------
                                                                                    Wage index--                
                         Area                            Wage index      GAF          Reclass.     GAF--Reclass.
                                                                                     hospitals       hospitals  
----------------------------------------------------------------------------------------------------------------
Aguadilla, PR.........................................       1.0534       1.0363  ...............  .............
Arecibo, PR...........................................       1.0850       1.0575  ...............  .............
Caguas, PR............................................       0.9812       0.9871         0.9812          0.9871 
Mayaguez, PR..........................................       0.9624       0.9741  ...............  .............
Ponce, PR.............................................       1.0462       1.0314  ...............  .............
San Juan-Bayamon, PR..................................       0.9980       0.9986  ...............  .............
Rural Puerto Rico.....................................       0.9014       0.9314  ...............  .............
----------------------------------------------------------------------------------------------------------------


[[Page 25648]]


  Table 5.--List of Diagnosis Related Groups (DRGS), Relative Weighting Factors, Geometric and Arithmetic Mean  
                                                 Length of Stay                                                 
----------------------------------------------------------------------------------------------------------------
                                                                               Relative    Geometric  Arithmetic
                                                                                weights    mean LOS    mean LOS 
----------------------------------------------------------------------------------------------------------------
1...............       01  SURG                  CRANIOTOMY AGE >17 EXCEPT        3.0645         6.8         9.6
                                                  FOR TRAUMA.                                                   
2...............       01  SURG                  CRANIOTOMY FOR TRAUMA AGE        3.1009         7.5        10.1
                                                  >17.                                                          
3...............       01  SURG                  *CRANIOTOMY AGE 0-17.......      1.9573        12.7        12.7
4...............       01  SURG                  SPINAL PROCEDURES..........      2.3259         5.1         7.7
5...............       01  SURG                  EXTRACRANIAL VASCULAR            1.4845         2.7         3.6
                                                  PROCEDURES.                                                   
6...............       01  SURG                  CARPAL TUNNEL RELEASE......       .7763         2.1         3.0
7...............       01  SURG                  PERIPH & CRANIAL NERVE &         2.3911         6.8        10.1
                                                  OTHER NERV SYST PROC W CC.                                    
8...............       01  SURG                  PERIPH & CRANIAL NERVE &         1.2891         2.2         3.2
                                                  OTHER NERV SYST PROC W/O                                      
                                                  CC.                                                           
9...............       01  MED                   SPINAL DISORDERS & INJURIES      1.2867         4.8         6.6
10..............       01  MED                   NERVOUS SYSTEM NEOPLASMS W       1.2113         5.1         7.0
                                                  CC.                                                           
11..............       01  MED                   NERVOUS SYSTEM NEOPLASMS W/       .8233         3.1         4.2
                                                  O CC.                                                         
12..............       01  MED                   DEGENERATIVE NERVOUS SYSTEM       .9034         4.8         6.7
                                                  DISORDERS.                                                    
13..............       01  MED                   MULTIPLE SCLEROSIS &              .7792         4.4         5.5
                                                  CEREBELLAR ATAXIA.                                            
14..............       01  MED                   SPECIFIC CEREBROVASCULAR         1.1973         4.9         6.4
                                                  DISORDERS EXCEPT TIA.                                         
15..............       01  MED                   TRANSIENT ISCHEMIC ATTACK &       .7327         3.1         3.9
                                                  PRECEREBRAL OCCLUSIONS.                                       
16..............       01  MED                   NONSPECIFIC CEREBROVASCULAR      1.0715         4.5         5.9
                                                  DISORDERS W CC.                                               
17..............       01  MED                   NONSPECIFIC CEREBROVASCULAR       .6186         2.7         3.4
                                                  DISORDERS W/O CC.                                             
18..............       01  MED                   CRANIAL & PERIPHERAL NERVE        .9285         4.3         5.6
                                                  DISORDERS W CC.                                               
19..............       01  MED                   CRANIAL & PERIPHERAL NERVE        .6463         3.0         3.8
                                                  DISORDERS W/O CC.                                             
20..............       01  MED                   NERVOUS SYSTEM INFECTION         2.6134         7.9        10.5
                                                  EXCEPT VIRAL MENINGITIS.                                      
21..............       01  MED                   VIRAL MENINGITIS...........      1.4785         5.1         6.8
22..............       01  MED                   HYPERTENSIVE ENCEPHALOPATHY       .8984         3.6         4.7
23..............       01  MED                   NONTRAUMATIC STUPOR & COMA.       .7776         3.2         4.3
24..............       01  MED                   SEIZURE & HEADACHE AGE >17        .9579         3.8         5.1
                                                  W CC.                                                         
25..............       01  MED                   SEIZURE & HEADACHE AGE >17        .5905         2.7         3.4
                                                  W/O CC.                                                       
26..............       01  MED                   SEIZURE & HEADACHE AGE 0-17       .6950         2.4         3.1
27..............       01  MED                   TRAUMATIC STUPOR & COMA,         1.3017         3.4         5.3
                                                  COMA >1 HR.                                                   
28..............       01  MED                   TRAUMATIC STUPOR & COMA,         1.1699         4.3         6.0
                                                  COMA <1 HR AGE >17 W CC.                                      
29..............       01  MED                   TRAUMATIC STUPOR & COMA,          .6370         2.7         3.6
                                                  COMA <1 HR AGE >17 W/O CC.                                    
30..............       01  MED                   *TRAUMATIC STUPOR & COMA,         .3310         2.0         2.0
                                                  COMA <1 HR AGE 0-17.                                          
31..............       01  MED                   CONCUSSION AGE >17 W CC....       .8039         3.2         4.4
32..............       01  MED                   CONCUSSION AGE >17 W/O CC..       .5138         2.2         3.0
33..............       01  MED                   *CONCUSSION AGE 0-17.......       .2080         1.6         1.6
34..............       01  MED                   OTHER DISORDERS OF NERVOUS       1.0067         4.1         5.5
                                                  SYSTEM W CC.                                                  
35..............       01  MED                   OTHER DISORDERS OF NERVOUS        .5915         2.7         3.6
                                                  SYSTEM W/O CC.                                                
36..............       02  SURG                  RETINAL PROCEDURES.........       .6873         1.3         1.5
37..............       02  SURG                  ORBITAL PROCEDURES.........       .9614         2.5         3.7
38..............       02  SURG                  PRIMARY IRIS PROCEDURES....       .4876         1.9         2.6
39..............       02  SURG                  LENS PROCEDURES WITH OR           .5686         1.5         2.0
                                                  WITHOUT VITRECTOMY.                                           
40..............       02  SURG                  EXTRAOCULAR PROCEDURES            .7937         2.1         3.2
                                                  EXCEPT ORBIT AGE >17.                                         
41..............       02  SURG                  *EXTRAOCULAR PROCEDURES           .3369         1.6         1.6
                                                  EXCEPT ORBIT AGE 0-17.                                        
42..............       02  SURG                  INTRAOCULAR PROCEDURES            .6034         1.6         2.1
                                                  EXCEPT RETINA, IRIS & LENS.                                   
43..............       02  MED                   HYPHEMA....................       .4370         2.7         3.4
44..............       02  MED                   ACUTE MAJOR EYE INFECTIONS.       .6100         4.2         5.1
45..............       02  MED                   NEUROLOGICAL EYE DISORDERS.       .6822         2.8         3.5
46..............       02  MED                   OTHER DISORDERS OF THE EYE        .7546         3.6         4.7
                                                  AGE >17 W CC.                                                 
47..............       02  MED                   OTHER DISORDERS OF THE EYE        .4618         2.5         3.3
                                                  AGE >17 W/O CC.                                               
48..............       02  MED                   *OTHER DISORDERS OF THE EYE       .2969         2.9         2.9
                                                  AGE 0-17.                                                     
49..............       03  SURG                  MAJOR HEAD & NECK                1.7597         3.7         5.0
                                                  PROCEDURES.                                                   
50..............       03  SURG                  SIALOADENECTOMY............       .8288         1.6         2.0
51..............       03  SURG                  SALIVARY GLAND PROCEDURES         .8590         1.8         2.8
                                                  EXCEPT SIALOADENECTOMY.                                       
52..............       03  SURG                  CLEFT LIP & PALATE REPAIR..       .9567         2.0         2.8
53..............       03  SURG                  SINUS & MASTOID PROCEDURES       1.1402         2.3         3.7
                                                  AGE >17.                                                      
54..............       03  SURG                  *SINUS & MASTOID PROCEDURES       .4812         3.2         3.2
                                                  AGE 0-17.                                                     
55..............       03  SURG                  MISCELLANEOUS EAR, NOSE,          .8886         2.0         3.0
                                                  MOUTH & THROAT PROCEDURES.                                    
56..............       03  SURG                  RHINOPLASTY................       .9008         2.1         2.8
57..............       03  SURG                  T&A PROC, EXCEPT                  .9381         2.6         3.7
                                                  TONSILLECTOMY &/OR                                            
                                                  ADENOIDECTOMY ONLY, AGE                                       
                                                  >17.                                                          
58..............       03  SURG                  *T&A PROC, EXCEPT                 .2732         1.5         1.5
                                                  TONSILLECTOMY &/OR                                            
                                                  ADENOIDECTOMY ONLY, AGE 0-                                    
                                                  17.                                                           
59..............       03  SURG                  TONSILLECTOMY &/OR                .6750         1.8         2.4
                                                  ADENOIDECTOMY ONLY, AGE                                       
                                                  >17.                                                          
60..............       03  SURG                  *TONSILLECTOMY &/OR               .2081         1.5         1.5
                                                  ADENOIDECTOMY ONLY, AGE 0-                                    
                                                  17.                                                           
61..............       03  SURG                  MYRINGOTOMY W TUBE               1.1456         2.6         4.5
                                                  INSERTION AGE >17.                                            
62..............       03  SURG                  *MYRINGOTOMY W TUBE               .2946         1.3         1.3
                                                  INSERTION AGE 0-17.                                           
63..............       03  SURG                  OTHER EAR, NOSE, MOUTH &         1.3248         3.0         4.4
                                                  THROAT O.R. PROCEDURES.                                       
64..............       03  MED                   EAR, NOSE, MOUTH & THROAT        1.2201         4.4         6.8
                                                  MALIGNANCY.                                                   
65..............       03  MED                   DYSEQUILIBRIUM.............       .5173         2.4         3.0
66..............       03  MED                   EPISTAXIS..................       .5418         2.6         3.3
67..............       03  MED                   EPIGLOTTITIS...............       .8230         3.0         3.8
68..............       03  MED                   OTITIS MEDIA & URI AGE >17        .6733         3.4         4.2
                                                  W CC.                                                         

[[Page 25649]]

                                                                                                                
69..............       03  MED                   OTITIS MEDIA & URI AGE >17        .5076         2.7         3.3
                                                  W/O CC.                                                       
70..............       03  MED                   OTITIS MEDIA & URI AGE 0-17       .3860         2.1         2.5
71..............       03  MED                   LARYNGOTRACHEITIS..........       .7663         3.2         4.0
72..............       03  MED                   NASAL TRAUMA & DEFORMITY...       .6534         2.8         3.8
73..............       03  MED                   OTHER EAR, NOSE, MOUTH &          .7507         3.3         4.4
                                                  THROAT DIAGNOSES AGE >17.                                     
74..............       03  MED                   *OTHER EAR, NOSE, MOUTH &         .3347         2.1         2.1
                                                  THROAT DIAGNOSES AGE 0-17.                                    
75..............       04  SURG                  MAJOR CHEST PROCEDURES.....      3.1785         8.1        10.2
76..............       04  SURG                  OTHER RESP SYSTEM O.R.           2.6860         8.4        11.3
                                                  PROCEDURES W CC.                                              
77..............       04  SURG                  OTHER RESP SYSTEM O.R.           1.1569         3.4         4.9
                                                  PROCEDURES W/O CC.                                            
78..............       04  MED                   PULMONARY EMBOLISM.........      1.4068         6.3         7.4
79..............       04  MED                   RESPIRATORY INFECTIONS &         1.6331         6.7         8.4
                                                  INFLAMMATIONS AGE >17 W CC.                                   
80..............       04  MED                   RESPIRATORY INFECTIONS &          .9177         4.7         5.9
                                                  INFLAMMATIONS AGE >17 W/O                                     
                                                  CC.                                                           
81..............       04  MED                   *RESPIRATORY INFECTIONS &        1.5160         6.1         6.1
                                                  INFLAMMATIONS AGE 0-17.                                       
82..............       04  MED                   RESPIRATORY NEOPLASMS......      1.3628         5.3         7.2
83..............       04  MED                   MAJOR CHEST TRAUMA W CC....       .9508         4.4         5.6
84..............       04  MED                   MAJOR CHEST TRAUMA W/O CC..       .5041         2.7         3.3
85..............       04  MED                   PLEURAL EFFUSION W CC......      1.2361         5.1         6.7
86..............       04  MED                   PLEURAL EFFUSION W/O CC....       .6843         3.0         3.9
87..............       04  MED                   PULMONARY EDEMA &                1.3672         4.8         6.4
                                                  RESPIRATORY FAILURE.                                          
88..............       04  MED                   CHRONIC OBSTRUCTIVE               .9558         4.4         5.4
                                                  PULMONARY DISEASE.                                            
89..............       04  MED                   SIMPLE PNEUMONIA & PLEURISY      1.0865         5.2         6.3
                                                  AGE >17 W CC.                                                 
90..............       04  MED                   SIMPLE PNEUMONIA & PLEURISY       .6669         3.8         4.5
                                                  AGE >17 W/O CC.                                               
91..............       04  MED                   SIMPLE PNEUMONIA & PLEURISY       .7210         3.3         4.0
                                                  AGE 0-17.                                                     
92..............       04  MED                   INTERSTITIAL LUNG DISEASE W      1.2047         5.1         6.4
                                                  CC.                                                           
93..............       04  MED                   INTERSTITIAL LUNG DISEASE W/      .7722         3.5         4.4
                                                  O CC.                                                         
94..............       04  MED                   PNEUMOTHORAX W CC..........      1.1904         4.9         6.5
95..............       04  MED                   PNEUMOTHORAX W/O CC........       .6060         3.1         3.9
96..............       04  MED                   BRONCHITIS & ASTHMA AGE >17       .7917         4.0         4.9
                                                  W CC.                                                         
97..............       04  MED                   BRONCHITIS & ASTHMA AGE >17       .5942         3.2         3.8
                                                  W/O CC.                                                       
98..............       04  MED                   BRONCHITIS & ASTHMA AGE 0-        .6921         3.6         4.9
                                                  17.                                                           
99..............       04  MED                   RESPIRATORY SIGNS &               .6739         2.3         3.0
                                                  SYMPTOMS W CC.                                                
100.............       04  MED                   RESPIRATORY SIGNS &               .5155         1.7         2.1
                                                  SYMPTOMS W/O CC.                                              
101.............       04  MED                   OTHER RESPIRATORY SYSTEM          .8304         3.3         4.4
                                                  DIAGNOSES W CC.                                               
102.............       04  MED                   OTHER RESPIRATORY SYSTEM          .5402         2.2         2.8
                                                  DIAGNOSES W/O CC.                                             
103.............       05  SURG                  HEART TRANSPLANT...........     16.8723        30.4        48.1
104.............       05  SURG                  CARDIAC VALVE & OTH MAJ          7.2756         9.9        12.5
                                                  CARDIOTHORACIC PROC W CARD                                    
                                                  CATH.                                                         
105.............       05  SURG                  CARDIAC VALVE & OTH MAJ          5.7011         7.9         9.7
                                                  CARDIOTHORACIC PROC W/O                                       
                                                  CARD CATH.                                                    
106.............       05  SURG                  CORONARY BYPASS WITH PTCA..      7.3400         9.2        10.9
107.............       05  SURG                  CORONARY BYPASS W CARDIAC        5.4891         9.5        10.7
                                                  CATH.                                                         
108.............       05  SURG                  OTHER CARDIOTHORACIC             5.9512         8.6        11.3
                                                  PROCEDURES.                                                   
109.............       05  SURG                  CORONARY BYPASS W/O CARDIAC      4.0670         7.0         8.0
                                                  CATH.                                                         
110.............       05  SURG                  MAJOR CARDIOVASCULAR             4.1419         7.4         9.7
                                                  PROCEDURES W CC.                                              
111.............       05  SURG                  MAJOR CARDIOVASCULAR             2.2188         5.1         5.9
                                                  PROCEDURES W/O CC.                                            
112.............       05  SURG                  PERCUTANEOUS CARDIOVASCULAR      1.9862         2.8         3.9
                                                  PROCEDURES.                                                   
113.............       05  SURG                  AMPUTATION FOR CIRC SYSTEM       2.7407         9.8        13.0
                                                  DISORDERS EXCEPT UPPER                                        
                                                  LIMB & TOE.                                                   
114.............       05  SURG                  UPPER LIMB & TOE AMPUTATION      1.5023         6.0         8.4
                                                  FOR CIRC SYSTEM DISORDERS.                                    
115.............       05  SURG                  PERM PACE IMPLNT W AMI, HRT      3.5531         6.4         8.8
                                                  FAIL OR SHOCK OR AICD LEAD                                    
                                                  OR GEN PROC.                                                  
116.............       05  SURG                  OTH PERM CARDIAC PACEMAKER       2.4811         3.0         4.2
                                                  IMPLANT OR PTCA W CORONARY                                    
                                                  ART STENT.                                                    
117.............       05  SURG                  CARDIAC PACEMAKER REVISION       1.2368         2.7         4.0
                                                  EXCEPT DEVICE REPLACEMENT.                                    
118.............       05  SURG                  CARDIAC PACEMAKER DEVICE         1.5711         2.0         2.9
                                                  REPLACEMENT.                                                  
119.............       05  SURG                  VEIN LIGATION & STRIPPING..      1.2960         3.2         5.4
120.............       05  SURG                  OTHER CIRCULATORY SYSTEM         1.9568         4.9         8.2
                                                  O.R. PROCEDURES.                                              
121.............       05  MED                   CIRCULATORY DISORDERS W AMI      1.6354         5.7         7.0
                                                  & MAJOR COMP DISCH ALIVE.                                     
122.............       05  MED                   CIRCULATORY DISORDERS W AMI      1.1299         3.6         4.4
                                                  W/O MAJOR COMP DISCH ALIVE.                                   
123.............       05  MED                   CIRCULATORY DISORDERS W          1.4874         2.7         4.4
                                                  AMI, EXPIRED.                                                 
124.............       05  MED                   CIRCULATORY DISORDERS            1.3790         3.5         4.5
                                                  EXCEPT AMI, W CARD CATH &                                     
                                                  COMPLEX DIAG.                                                 
125.............       05  MED                   CIRCULATORY DISORDERS            1.0130         2.2         2.9
                                                  EXCEPT AMI, W CARD CATH W/                                    
                                                  O COMPLEX DIAG.                                               
126.............       05  MED                   ACUTE & SUBACUTE                 2.5820         9.7        12.7
                                                  ENDOCARDITIS.                                                 
127.............       05  MED                   HEART FAILURE & SHOCK......      1.0143         4.3         5.5
128.............       05  MED                   DEEP VEIN THROMBOPHLEBITIS.       .7671         5.3         6.0
129.............       05  MED                   CARDIAC ARREST, UNEXPLAINED      1.0878         1.8         3.0
130.............       05  MED                   PERIPHERAL VASCULAR               .9435         4.9         6.0
                                                  DISORDERS W CC.                                               
131.............       05  MED                   PERIPHERAL VASCULAR               .6077         3.9         4.7
                                                  DISORDERS W/O CC.                                             

[[Page 25650]]

                                                                                                                
132.............       05  MED                   ATHEROSCLEROSIS W CC.......       .6711         2.5         3.2
133.............       05  MED                   ATHEROSCLEROSIS W/O CC.....       .5562         2.0         2.5
134.............       05  MED                   HYPERTENSION...............       .5838         2.7         3.5
135.............       05  MED                   CARDIAC CONGENITAL &              .8519         3.3         4.4
                                                  VALVULAR DISORDERS AGE >17                                    
                                                  W CC.                                                         
136.............       05  MED                   CARDIAC CONGENITAL &              .5766         2.4         3.0
                                                  VALVULAR DISORDERS AGE >17                                    
                                                  W/O CC.                                                       
137.............       05  MED                   *CARDIAC CONGENITAL &             .8168         3.3         3.3
                                                  VALVULAR DISORDERS AGE 0-                                     
                                                  17.                                                           
138.............       05  MED                   CARDIAC ARRHYTHMIA &              .8012         3.1         4.1
                                                  CONDUCTION DISORDERS W CC.                                    
139.............       05  MED                   CARDIAC ARRHYTHMIA &              .4981         2.1         2.6
                                                  CONDUCTION DISORDERS W/O                                      
                                                  CC.                                                           
140.............       05  MED                   ANGINA PECTORIS............       .5973         2.4         3.0
141.............       05  MED                   SYNCOPE & COLLAPSE W CC....       .7029         3.0         3.9
142.............       05  MED                   SYNCOPE & COLLAPSE W/O CC..       .5316         2.2         2.8
143.............       05  MED                   CHEST PAIN.................       .5265         1.8         2.3
144.............       05  MED                   OTHER CIRCULATORY SYSTEM         1.1123         3.8         5.3
                                                  DIAGNOSES W CC.                                               
145.............       05  MED                   OTHER CIRCULATORY SYSTEM          .6305         2.2         2.9
                                                  DIAGNOSES W/O CC.                                             
146.............       06  SURG                  RECTAL RESECTION W CC......      2.7210         9.0        10.3
147.............       06  SURG                  RECTAL RESECTION W/O CC....      1.5887         6.1         6.7
148.............       06  SURG                  MAJOR SMALL & LARGE BOWEL        3.4239        10.3        12.3
                                                  PROCEDURES W CC.                                              
149.............       06  SURG                  MAJOR SMALL & LARGE BOWEL        1.5698         6.3         6.9
                                                  PROCEDURES W/O CC.                                            
150.............       06  SURG                  PERITONEAL ADHESIOLYSIS W        2.7465         8.9        10.9
                                                  CC.                                                           
151.............       06  SURG                  PERITONEAL ADHESIOLYSIS W/O      1.2832         4.8         5.9
                                                  CC.                                                           
152.............       06  SURG                  MINOR SMALL & LARGE BOWEL        1.9427         7.0         8.3
                                                  PROCEDURES W CC.                                              
153.............       06  SURG                  MINOR SMALL & LARGE BOWEL        1.1905         5.1         5.6
                                                  PROCEDURES W/O CC.                                            
154.............       06  SURG                  STOMACH, ESOPHAGEAL &            4.1849        10.3        13.4
                                                  DUODENAL PROCEDURES AGE                                       
                                                  >17 W CC.                                                     
155.............       06  SURG                  STOMACH, ESOPHAGEAL &            1.3570         3.6         4.7
                                                  DUODENAL PROCEDURES AGE                                       
                                                  >17 W/O CC.                                                   
156.............       06  SURG                  *STOMACH, ESOPHAGEAL &            .8412         6.0         6.0
                                                  DUODENAL PROCEDURES AGE 0-                                    
                                                  17.                                                           
157.............       06  SURG                  ANAL & STOMAL PROCEDURES W       1.2071         3.9         5.4
                                                  CC.                                                           
158.............       06  SURG                  ANAL & STOMAL PROCEDURES W/       .6434         2.1         2.6
                                                  O CC.                                                         
159.............       06  SURG                  HERNIA PROCEDURES EXCEPT         1.2873         3.7         5.0
                                                  INGUINAL & FEMORAL AGE >17                                    
                                                  W CC.                                                         
160.............       06  SURG                  HERNIA PROCEDURES EXCEPT          .7413         2.2         2.7
                                                  INGUINAL & FEMORAL AGE >17                                    
                                                  W/O CC.                                                       
161.............       06  SURG                  INGUINAL & FEMORAL HERNIA        1.0742         2.9         4.1
                                                  PROCEDURES AGE >17 W CC.                                      
162.............       06  SURG                  INGUINAL & FEMORAL HERNIA         .6129         1.7         2.0
                                                  PROCEDURES AGE >17 W/O CC.                                    
163.............       06  SURG                  *HERNIA PROCEDURES AGE 0-17       .8700         2.1         2.1
164.............       06  SURG                  APPENDECTOMY W COMPLICATED       2.3206         7.3         8.5
                                                  PRINCIPAL DIAG W CC.                                          
165.............       06  SURG                  APPENDECTOMY W COMPLICATED       1.2301         4.3         5.0
                                                  PRINCIPAL DIAG W/O CC.                                        
166.............       06  SURG                  APPENDECTOMY W/O                 1.4518         4.0         5.1
                                                  COMPLICATED PRINCIPAL DIAG                                    
                                                  W CC.                                                         
167.............       06  SURG                  APPENDECTOMY W/O                  .8548         2.4         2.8
                                                  COMPLICATED PRINCIPAL DIAG                                    
                                                  W/O CC.                                                       
168.............       03  SURG                  MOUTH PROCEDURES W CC......      1.1593         3.1         4.6
169.............       03  SURG                  MOUTH PROCEDURES W/O CC....       .7155         1.9         2.5
170.............       06  SURG                  OTHER DIGESTIVE SYSTEM O.R.      2.8008         7.9        11.3
                                                  PROCEDURES W CC.                                              
171.............       06  SURG                  OTHER DIGESTIVE SYSTEM O.R.      1.1668         3.6         4.8
                                                  PROCEDURES W/O CC.                                            
172.............       06  MED                   DIGESTIVE MALIGNANCY W CC..      1.3152         5.2         7.1
173.............       06  MED                   DIGESTIVE MALIGNANCY W/O CC       .7316         2.8         4.0
174.............       06  MED                   G.I. HEMORRHAGE W CC.......       .9945         4.0         4.9
175.............       06  MED                   G.I. HEMORRHAGE W/O CC.....       .5305         2.5         3.0
176.............       06  MED                   COMPLICATED PEPTIC ULCER...      1.1068         4.3         5.5
177.............       06  MED                   UNCOMPLICATED PEPTIC ULCER        .8646         3.7         4.6
                                                  W CC.                                                         
178.............       06  MED                   UNCOMPLICATED PEPTIC ULCER        .6344         2.7         3.2
                                                  W/O CC.                                                       
179.............       06  MED                   INFLAMMATORY BOWEL DISEASE.      1.1084         5.0         6.4
180.............       06  MED                   G.I. OBSTRUCTION W CC......       .9184         4.2         5.4
181.............       06  MED                   G.I. OBSTRUCTION W/O CC....       .5254         2.9         3.5
182.............       06  MED                   ESOPHAGITIS, GASTROENT &          .7709         3.4         4.4
                                                  MISC DIGEST DISORDERS AGE                                     
                                                  >17 W CC.                                                     
183.............       06  MED                   ESOPHAGITIS, GASTROENT &          .5594         2.4         3.0
                                                  MISC DIGEST DISORDERS AGE                                     
                                                  >17 W/O CC.                                                   
184.............       06  MED                   ESOPHAGITIS, GASTROENT &          .5224         2.5         3.2
                                                  MISC DIGEST DISORDERS AGE                                     
                                                  0-17.                                                         
185.............       03  MED                   DENTAL & ORAL DIS EXCEPT          .8303         3.3         4.5
                                                  EXTRACTIONS &                                                 
                                                  RESTORATIONS, AGE >17.                                        
186.............       03  MED                   *DENTAL & ORAL DIS EXCEPT         .3207         2.9         2.9
                                                  EXTRACTIONS &                                                 
                                                  RESTORATIONS, AGE 0-17.                                       
187.............       03  MED                   DENTAL EXTRACTIONS &              .7415         3.0         4.0
                                                  RESTORATIONS.                                                 
188.............       06  MED                   OTHER DIGESTIVE SYSTEM           1.0758         4.1         5.6
                                                  DIAGNOSES AGE >17 W CC.                                       
189.............       06  MED                   OTHER DIGESTIVE SYSTEM            .5600         2.4         3.2
                                                  DIAGNOSES AGE >17 W/O CC.                                     
190.............       06  MED                   OTHER DIGESTIVE SYSTEM            .7636         3.8         5.3
                                                  DIAGNOSES AGE 0-17.                                           
191.............       07  SURG                  PANCREAS, LIVER & SHUNT          4.4088        10.8        14.6
                                                  PROCEDURES W CC.                                              
192.............       07  SURG                  PANCREAS, LIVER & SHUNT          1.7111         5.4         6.7
                                                  PROCEDURES W/O CC.                                            

[[Page 25651]]

                                                                                                                
193.............       07  SURG                  BILIARY TRACT PROC EXCEPT        3.3324        10.4        12.5
                                                  ONLY CHOLECYST W OR W/O                                       
                                                  C.D.E. W CC.                                                  
194.............       07  SURG                  BILIARY TRACT PROC EXCEPT        1.6689         5.8         6.9
                                                  ONLY CHOLECYST W OR W/O                                       
                                                  C.D.E. W/O CC.                                                
195.............       07  SURG                  CHOLECYSTECTOMY W C.D.E. W       2.7947         8.3         9.8
                                                  CC.                                                           
196.............       07  SURG                  CHOLECYSTECTOMY W C.D.E. W/      1.6378         4.9         5.7
                                                  O CC.                                                         
197.............       07  SURG                  CHOLECYSTECTOMY EXCEPT BY        2.3864         7.1         8.6
                                                  LAPAROSCOPE W/O C.D.E. W                                      
                                                  CC.                                                           
198.............       07  SURG                  CHOLECYSTECTOMY EXCEPT BY        1.2024         4.0         4.6
                                                  LAPAROSCOPE W/O C.D.E. W/O                                    
                                                  CC.                                                           
199.............       07  SURG                  HEPATOBILIARY DIAGNOSTIC         2.3873         7.7        10.2
                                                  PROCEDURE FOR MALIGNANCY.                                     
200.............       07  SURG                  HEPATOBILIARY DIAGNOSTIC         3.2791         7.4        11.5
                                                  PROCEDURE FOR NON-                                            
                                                  MALIGNANCY.                                                   
201.............       07  SURG                  OTHER HEPATOBILIARY OR           3.5903        10.4        14.4
                                                  PANCREAS O.R. PROCEDURES.                                     
202.............       07  MED                   CIRRHOSIS & ALCOHOLIC            1.3123         5.1         6.8
                                                  HEPATITIS.                                                    
203.............       07  MED                   MALIGNANCY OF HEPATOBILIARY      1.2979         5.1         6.9
                                                  SYSTEM OR PANCREAS.                                           
204.............       07  MED                   DISORDERS OF PANCREAS            1.2114         4.7         6.1
                                                  EXCEPT MALIGNANCY.                                            
205.............       07  MED                   DISORDERS OF LIVER EXCEPT        1.2109         4.9         6.6
                                                  MALIG, CIRR, ALC HEPA W CC.                                   
206.............       07  MED                   DISORDERS OF LIVER EXCEPT         .6932         3.1         4.1
                                                  MALIG, CIRR, ALC HEPA W/O                                     
                                                  CC.                                                           
207.............       07  MED                   DISORDERS OF THE BILIARY         1.0711         4.0         5.2
                                                  TRACT W CC.                                                   
208.............       07  MED                   DISORDERS OF THE BILIARY          .6178         2.3         2.9
                                                  TRACT W/O CC.                                                 
209.............       08  SURG                  MAJOR JOINT & LIMB               2.1818         4.9         5.5
                                                  REATTACHMENT PROCEDURES OF                                    
                                                  LOWER EXTREMITY.                                              
210.............       08  SURG                  HIP & FEMUR PROCEDURES           1.8153         6.1         7.1
                                                  EXCEPT MAJOR JOINT AGE >17                                    
                                                  W CC.                                                         
211.............       08  SURG                  HIP & FEMUR PROCEDURES           1.2530         4.7         5.2
                                                  EXCEPT MAJOR JOINT AGE >17                                    
                                                  W/O CC.                                                       
212.............       08  SURG                  HIP & FEMUR PROCEDURES            .8679         3.2         3.8
                                                  EXCEPT MAJOR JOINT AGE 0-                                     
                                                  17.                                                           
213.............       08  SURG                  AMPUTATION FOR                   1.6323         6.2         8.4
                                                  MUSCULOSKELETAL SYSTEM &                                      
                                                  CONN TISSUE DISORDERS.                                        
214.............       08  SURG                  NO LONGER VALID............       .0000          .0          .0
215.............       08  SURG                  NO LONGER VALID............       .0000          .0          .0
216.............       08  SURG                  BIOPSIES OF MUSCULOSKELETAL      2.1241         7.0         9.8
                                                  SYSTEM & CONNECTIVE TISSUE.                                   
217.............       08  SURG                  WND DEBRID & SKN GRFT            2.7825         8.7        13.0
                                                  EXCEPT HAND,FOR MUSCSKELET                                    
                                                  & CONN TISS DIS.                                              
218.............       08  SURG                  LOWER EXTREM & HUMER PROC        1.4630         4.2         5.3
                                                  EXCEPT HIP, FOOT, FEMUR                                       
                                                  AGE >17 W CC.                                                 
219.............       08  SURG                  LOWER EXTREM & HUMER PROC         .9926         2.8         3.3
                                                  EXCEPT HIP, FOOT, FEMUR                                       
                                                  AGE >17 W/O CC.                                               
220.............       08  SURG                  *LOWER EXTREM & HUMER PROC        .5827         5.3         5.3
                                                  EXCEPT HIP, FOOT, FEMUR                                       
                                                  AGE 0-17.                                                     
221.............       08  SURG                  NO LONGER VALID............       .0000          .0          .0
222.............       08  SURG                  NO LONGER VALID............       .0000          .0          .0
223.............       08  SURG                  MAJOR SHOULDER/ELBOW PROC,        .9257         2.0         2.6
                                                  OR OTHER UPPER EXTREMITY                                      
                                                  PROC W CC.                                                    
224.............       08  SURG                  SHOULDER, ELBOW OR FOREARM        .7876         1.7         2.1
                                                  PROC, EXC MAJOR JOINT                                         
                                                  PROC, W/O CC.                                                 
225.............       08  SURG                  FOOT PROCEDURES............      1.0120         3.0         4.4
226.............       08  SURG                  SOFT TISSUE PROCEDURES W CC      1.4076         4.0         5.9
227.............       08  SURG                  SOFT TISSUE PROCEDURES W/O        .7916         2.1         2.7
                                                  CC.                                                           
228.............       08  SURG                  MAJOR THUMB OR JOINT PROC,       1.0048         2.3         3.4
                                                  OR OTH HAND OR WRIST PROC                                     
                                                  W CC.                                                         
229.............       08  SURG                  HAND OR WRIST PROC, EXCEPT        .7055         1.8         2.4
                                                  MAJOR JOINT PROC, W/O CC.                                     
230.............       08  SURG                  LOCAL EXCISION & REMOVAL OF      1.1097         3.1         4.5
                                                  INT FIX DEVICES OF HIP &                                      
                                                  FEMUR.                                                        
231.............       08  SURG                  LOCAL EXCISION & REMOVAL OF      1.2922         3.0         4.6
                                                  INT FIX DEVICES EXCEPT HIP                                    
                                                  & FEMUR.                                                      
232.............       08  SURG                  ARTHROSCOPY................      1.0895         2.3         3.8
233.............       08  SURG                  OTHER MUSCULOSKELET SYS &        2.0599         5.4         7.7
                                                  CONN TISS O.R. PROC W CC.                                     
234.............       08  SURG                  OTHER MUSCULOSKELET SYS &        1.1712         2.8         3.6
                                                  CONN TISS O.R. PROC W/O CC.                                   
235.............       08  MED                   FRACTURES OF FEMUR.........       .7526         3.9         5.4
236.............       08  MED                   FRACTURES OF HIP & PELVIS..       .7260         4.1         5.3
237.............       08  MED                   SPRAINS, STRAINS, &               .5367         2.9         3.6
                                                  DISLOCATIONS OF HIP,                                          
                                                  PELVIS & THIGH.                                               
238.............       08  MED                   OSTEOMYELITIS..............      1.3382         6.7         8.9
239.............       08  MED                   PATHOLOGICAL FRACTURES &          .9661         5.0         6.4
                                                  MUSCULOSKELETAL & CONN                                        
                                                  TISS MALIGNANCY.                                              
240.............       08  MED                   CONNECTIVE TISSUE DISORDERS      1.2253         5.0         6.7
                                                  W CC.                                                         
241.............       08  MED                   CONNECTIVE TISSUE DISORDERS       .5875         3.1         4.0
                                                  W/O CC.                                                       
242.............       08  MED                   SEPTIC ARTHRITIS...........      1.0391         5.2         6.8
243.............       08  MED                   MEDICAL BACK PROBLEMS......       .7159         3.8         4.9
244.............       08  MED                   BONE DISEASES & SPECIFIC          .7056         3.9         5.0
                                                  ARTHROPATHIES W CC.                                           

[[Page 25652]]

                                                                                                                
245.............       08  MED                   BONE DISEASES & SPECIFIC          .4961         2.9         3.8
                                                  ARTHROPATHIES W/O CC.                                         
246.............       08  MED                   NON-SPECIFIC ARTHROPATHIES.       .5662         3.1         3.9
247.............       08  MED                   SIGNS & SYMPTOMS OF               .5542         2.6         3.5
                                                  MUSCULOSKELETAL SYSTEM &                                      
                                                  CONN TISSUE.                                                  
248.............       08  MED                   TENDONITIS, MYOSITIS &            .7487         3.6         4.7
                                                  BURSITIS.                                                     
249.............       08  MED                   AFTERCARE, MUSCULOSKELETAL        .6514         2.6         3.6
                                                  SYSTEM & CONNECTIVE TISSUE.                                   
250.............       08  MED                   FX, SPRN, STRN & DISL OF          .6776         3.2         4.2
                                                  FOREARM, HAND, FOOT AGE                                       
                                                  >17 W CC.                                                     
251.............       08  MED                   FX, SPRN, STRN & DISL OF          .4622         2.3         3.0
                                                  FOREARM, HAND, FOOT AGE                                       
                                                  >17 W/O CC.                                                   
252.............       08  MED                   *FX, SPRN, STRN & DISL OF         .2532         1.8         1.8
                                                  FOREARM, HAND, FOOT AGE 0-                                    
                                                  17.                                                           
253.............       08  MED                   FX, SPRN, STRN & DISL OF          .7188         3.7         4.9
                                                  UPARM, LOWLEG EX FOOT AGE                                     
                                                  >17 W CC.                                                     
254.............       08  MED                   FX, SPRN, STRN & DISL OF          .4315         2.7         3.4
                                                  UPARM, LOWLEG EX FOOT AGE                                     
                                                  >17 W/O CC.                                                   
255.............       08  MED                   *FX, SPRN, STRN & DISL OF         .2947         2.9         2.9
                                                  UPARM, LOWLEG EX FOOT AGE                                     
                                                  0-17.                                                         
256.............       08  MED                   OTHER MUSCULOSKELETAL             .7564         3.8         5.1
                                                  SYSTEM & CONNECTIVE TISSUE                                    
                                                  DIAGNOSES.                                                    
257.............       09  SURG                  TOTAL MASTECTOMY FOR              .9219         2.4         3.0
                                                  MALIGNANCY W CC.                                              
258.............       09  SURG                  TOTAL MASTECTOMY FOR              .7237         1.9         2.1
                                                  MALIGNANCY W/O CC.                                            
259.............       09  SURG                  SUBTOTAL MASTECTOMY FOR           .8840         2.0         3.1
                                                  MALIGNANCY W CC.                                              
260.............       09  SURG                  SUBTOTAL MASTECTOMY FOR           .6238         1.4         1.5
                                                  MALIGNANCY W/O CC.                                            
261.............       09  SURG                  BREAST PROC FOR NON-              .9138         1.7         2.2
                                                  MALIGNANCY EXCEPT BIOPSY &                                    
                                                  LOCAL EXCISION.                                               
262.............       09  SURG                  BREAST BIOPSY & LOCAL             .8738         2.9         4.2
                                                  EXCISION FOR NON-                                             
                                                  MALIGNANCY.                                                   
263.............       09  SURG                  SKIN GRAFT &/OR DEBRID FOR       2.0055         8.8        11.9
                                                  SKN ULCER OR CELLULITIS W                                     
                                                  CC.                                                           
264.............       09  SURG                  SKIN GRAFT &/OR DEBRID FOR       1.1061         5.4         7.2
                                                  SKN ULCER OR CELLULITIS W/                                    
                                                  O CC.                                                         
265.............       09  SURG                  SKIN GRAFT &/OR DEBRID           1.4806         4.2         6.5
                                                  EXCEPT FOR SKIN ULCER OR                                      
                                                  CELLULITIS W CC.                                              
266.............       09  SURG                  SKIN GRAFT &/OR DEBRID            .8252         2.5         3.4
                                                  EXCEPT FOR SKIN ULCER OR                                      
                                                  CELLULITIS W/O CC.                                            
267.............       09  SURG                  PERIANAL & PILONIDAL              .9378         3.0         4.6
                                                  PROCEDURES.                                                   
268.............       09  SURG                  SKIN, SUBCUTANEOUS TISSUE &      1.0673         2.3         3.6
                                                  BREAST PLASTIC PROCEDURES.                                    
269.............       09  SURG                  OTHER SKIN, SUBCUT TISS &        1.5778         5.6         7.9
                                                  BREAST PROC W CC.                                             
270.............       09  SURG                  OTHER SKIN, SUBCUT TISS &         .7218         2.2         3.2
                                                  BREAST PROC W/O CC.                                           
271.............       09  MED                   SKIN ULCERS................      1.0023         5.7         7.2
272.............       09  MED                   MAJOR SKIN DISORDERS W CC..      1.0465         4.9         6.4
273.............       09  MED                   MAJOR SKIN DISORDERS W/O CC       .6251         3.6         4.8
274.............       09  MED                   MALIGNANT BREAST DISORDERS       1.1170         4.8         6.8
                                                  W CC.                                                         
275.............       09  MED                   MALIGNANT BREAST DISORDERS        .5288         2.6         3.6
                                                  W/O CC.                                                       
276.............       09  MED                   NON-MALIGANT BREAST               .6416         3.6         4.5
                                                  DISORDERS.                                                    
277.............       09  MED                   CELLULITIS AGE >17 W CC....       .8345         4.8         5.9
278.............       09  MED                   CELLULITIS AGE >17 W/O CC..       .5561         3.8         4.5
279.............       09  MED                   CELLULITIS AGE 0-17........       .6697         4.3         5.0
280.............       09  MED                   TRAUMA TO THE SKIN, SUBCUT        .6624         3.3         4.3
                                                  TISS & BREAST AGE >17 W CC.                                   
281.............       09  MED                   TRAUMA TO THE SKIN, SUBCUT        .4540         2.5         3.2
                                                  TISS & BREAST AGE >17 W/O                                     
                                                  CC.                                                           
282.............       09  MED                   *TRAUMA TO THE SKIN, SUBCUT       .2563         2.2         2.2
                                                  TISS & BREAST AGE 0-17.                                       
283.............       09  MED                   MINOR SKIN DISORDERS W CC..       .6961         3.6         4.8
284.............       09  MED                   MINOR SKIN DISORDERS W/O CC       .4419         2.6         3.3
285.............       10  SURG                  AMPUTAT OF LOWER LIMB FOR        2.0445         8.1        11.0
                                                  ENDOCRINE, NUTRIT, &                                          
                                                  METABOL DISORDERS.                                            
286.............       10  SURG                  ADRENAL & PITUITARY              2.2173         5.5         7.0
                                                  PROCEDURES.                                                   
287.............       10  SURG                  SKIN GRAFTS & WOUND DEBRID       1.8652         8.0        11.3
                                                  FOR ENDOC, NUTRIT & METAB                                     
                                                  DISORDERS.                                                    
288.............       10  SURG                  O.R. PROCEDURES FOR OBESITY      2.0156         4.7         5.9
289.............       10  SURG                  PARATHYROID PROCEDURES.....      1.0132         2.2         3.2
290.............       10  SURG                  THYROID PROCEDURES.........       .9181         1.9         2.5
291.............       10  SURG                  THYROGLOSSAL PROCEDURES....       .5752         1.5         1.8
292.............       10  SURG                  OTHER ENDOCRINE, NUTRIT &        2.5779         7.5        10.7
                                                  METAB O.R. PROC W CC.                                         
293.............       10  SURG                  OTHER ENDOCRINE, NUTRIT &        1.2954         3.9         5.5
                                                  METAB O.R. PROC W/O CC.                                       
294.............       10  MED                   DIABETES AGE >35...........       .7500         3.8         4.9
295.............       10  MED                   DIABETES AGE 0-35..........       .7234         3.0         4.0
296.............       10  MED                   NUTRITIONAL & MISC                .8511         4.1         5.4
                                                  METABOLIC DISORDERS AGE                                       
                                                  >17 W CC.                                                     
297.............       10  MED                   NUTRITIONAL & MISC                .5206         2.9         3.7
                                                  METABOLIC DISORDERS AGE                                       
                                                  >17 W/O CC.                                                   
298.............       10  MED                   NUTRITIONAL & MISC                .5479         2.4         3.7
                                                  METABOLIC DISORDERS AGE 0-                                    
                                                  17.                                                           
299.............       10  MED                   INBORN ERRORS OF METABOLISM       .8774         3.9         5.4
300.............       10  MED                   ENDOCRINE DISORDERS W CC...      1.0807         4.8         6.3
301.............       10  MED                   ENDOCRINE DISORDERS W/O CC.       .6023         2.9         3.8
302.............       11  SURG                  KIDNEY TRANSPLANT..........      3.6251         8.6        10.1

[[Page 25653]]

                                                                                                                
303.............       11  SURG                  KIDNEY, URETER & MAJOR           2.6598         7.5         9.2
                                                  BLADDER PROCEDURES FOR                                        
                                                  NEOPLASM.                                                     
304.............       11  SURG                  KIDNEY, URETER & MAJOR           2.3331         6.5         9.0
                                                  BLADDER PROC FOR NON-NEOPL                                    
                                                  W CC.                                                         
305.............       11  SURG                  KIDNEY, URETER & MAJOR           1.1358         3.2         3.9
                                                  BLADDER PROC FOR NON-NEOPL                                    
                                                  W/O CC.                                                       
306.............       11  SURG                  PROSTATECTOMY W CC.........      1.2407         3.8         5.5
307.............       11  SURG                  PROSTATECTOMY W/O CC.......       .6423         2.0         2.4
308.............       11  SURG                  MINOR BLADDER PROCEDURES W       1.5218         4.1         6.0
                                                  CC.                                                           
309.............       11  SURG                  MINOR BLADDER PROCEDURES W/       .9101         2.1         2.6
                                                  O CC.                                                         
310.............       11  SURG                  TRANSURETHRAL PROCEDURES W       1.0630         3.0         4.3
                                                  CC.                                                           
311.............       11  SURG                  TRANSURETHRAL PROCEDURES W/       .6087         1.6         2.0
                                                  O CC.                                                         
312.............       11  SURG                  URETHRAL PROCEDURES, AGE          .9880         2.9         4.3
                                                  >17 W CC.                                                     
313.............       11  SURG                  URETHRAL PROCEDURES, AGE          .6269         1.8         2.4
                                                  >17 W/O CC.                                                   
314.............       11  SURG                  *URETHRAL PROCEDURES, AGE 0-      .4939         2.3         2.3
                                                  17.                                                           
315.............       11  SURG                  OTHER KIDNEY & URINARY           2.0691         4.6         8.0
                                                  TRACT O.R. PROCEDURES.                                        
316.............       11  MED                   RENAL FAILURE..............      1.3318         5.0         6.9
317.............       11  MED                   ADMIT FOR RENAL DIALYSIS...       .6194         2.0         2.9
318.............       11  MED                   KIDNEY & URINARY TRACT           1.0973         4.4         6.1
                                                  NEOPLASMS W CC.                                               
319.............       11  MED                   KIDNEY & URINARY TRACT            .6170         2.2         3.0
                                                  NEOPLASMS W/O CC.                                             
320.............       11  MED                   KIDNEY & URINARY TRACT            .8675         4.5         5.6
                                                  INFECTIONS AGE >17 W CC.                                      
321.............       11  MED                   KIDNEY & URINARY TRACT            .5826         3.4         4.0
                                                  INFECTIONS AGE >17 W/O CC.                                    
322.............       11  MED                   KIDNEY & URINARY TRACT            .5394         3.3         4.1
                                                  INFECTIONS AGE 0-17.                                          
323.............       11  MED                   URINARY STONES W CC, &/OR         .7679         2.4         3.2
                                                  ESW LITHOTRIPSY.                                              
324.............       11  MED                   URINARY STONES W/O CC......       .4360         1.6         1.9
325.............       11  MED                   KIDNEY & URINARY TRACT            .6246         3.0         4.0
                                                  SIGNS & SYMPTOMS AGE >17 W                                    
                                                  CC.                                                           
326.............       11  MED                   KIDNEY & URINARY TRACT            .4152         2.1         2.7
                                                  SIGNS & SYMPTOMS AGE >17 W/                                   
                                                  O CC.                                                         
327.............       11  MED                   *KIDNEY & URINARY TRACT           .3532         3.1         3.1
                                                  SIGNS & SYMPTOMS AGE 0-17.                                    
328.............       11  MED                   URETHRAL STRICTURE AGE >17        .7189         2.8         3.7
                                                  W CC.                                                         
329.............       11  MED                   URETHRAL STRICTURE AGE >17        .4911         1.7         2.3
                                                  W/O CC.                                                       
330.............       11  MED                   *URETHRAL STRICTURE AGE 0-        .3182         1.6         1.6
                                                  17.                                                           
331.............       11  MED                   OTHER KIDNEY & URINARY            .9946         4.2         5.6
                                                  TRACT DIAGNOSES AGE >17 W                                     
                                                  CC.                                                           
332.............       11  MED                   OTHER KIDNEY & URINARY            .6236         2.7         3.6
                                                  TRACT DIAGNOSES AGE >17 W/                                    
                                                  O CC.                                                         
333.............       11  MED                   OTHER KIDNEY & URINARY            .7891         3.5         5.0
                                                  TRACT DIAGNOSES AGE 0-17.                                     
334.............       12  SURG                  MAJOR MALE PELVIC                1.5998         4.4         5.0
                                                  PROCEDURES W CC.                                              
335.............       12  SURG                  MAJOR MALE PELVIC                1.2055         3.4         3.7
                                                  PROCEDURES W/O CC.                                            
336.............       12  SURG                  TRANSURETHRAL PROSTATECTOMY       .8873         2.8         3.6
                                                  W CC.                                                         
337.............       12  SURG                  TRANSURETHRAL PROSTATECTOMY       .6186         2.0         2.3
                                                  W/O CC.                                                       
338.............       12  SURG                  TESTES PROCEDURES, FOR           1.0888         3.2         4.8
                                                  MALIGNANCY.                                                   
339.............       12  SURG                  TESTES PROCEDURES, NON-           .9811         2.9         4.2
                                                  MALIGNANCY AGE >17.                                           
340.............       12  SURG                  *TESTES PROCEDURES, NON-          .2828         2.4         2.4
                                                  MALIGNANCY AGE 0-17.                                          
341.............       12  SURG                  PENIS PROCEDURES...........      1.1213         2.1         3.0
342.............       12  SURG                  CIRCUMCISION AGE >17.......       .8601         2.6         3.5
343.............       12  SURG                  *CIRCUMCISION AGE 0-17.....       .1536         1.7         1.7
344.............       12  SURG                  OTHER MALE REPRODUCTIVE          1.0395         1.8         2.6
                                                  SYSTEM O.R. PROCEDURES FOR                                    
                                                  MALIGNANCY.                                                   
345.............       12  SURG                  OTHER MALE REPRODUCTIVE           .8659         2.5         3.6
                                                  SYSTEM O.R. PROC EXCEPT                                       
                                                  FOR MALIGNANCY.                                               
346.............       12  MED                   MALIGNANCY, MALE                  .9541         4.3         5.8
                                                  REPRODUCTIVE SYSTEM, W CC.                                    
347.............       12  MED                   MALIGNANCY, MALE                  .5764         2.3         3.1
                                                  REPRODUCTIVE SYSTEM, W/O                                      
                                                  CC.                                                           
348.............       12  MED                   BENIGN PROSTATIC                  .6894         3.2         4.3
                                                  HYPERTROPHY W CC.                                             
349.............       12  MED                   BENIGN PROSTATIC                  .4142         2.1         2.8
                                                  HYPERTROPHY W/O CC.                                           
350.............       12  MED                   INFLAMMATION OF THE MALE          .6931         3.6         4.4
                                                  REPRODUCTIVE SYSTEM.                                          
351.............       12  MED                   *STERILIZATION, MALE.......       .2358         1.3         1.3
352.............       12  MED                   OTHER MALE REPRODUCTIVE           .6279         2.7         3.6
                                                  SYSTEM DIAGNOSES.                                             
353.............       13  SURG                  PELVIC EVISCERATION,             1.9243         5.6         6.9
                                                  RADICAL HYSTERECTOMY &                                        
                                                  RADICAL VULVECTOMY.                                           
354.............       13  SURG                  UTERINE, ADNEXA PROC FOR         1.4969         4.8         5.8
                                                  NON-OVARIAN/ADNEXAL MALIG                                     
                                                  W CC.                                                         
355.............       13  SURG                  UTERINE, ADNEXA PROC FOR          .9332         3.2         3.5
                                                  NON-OVARIAN/ADNEXAL MALIG                                     
                                                  W/O CC.                                                       
356.............       13  SURG                  FEMALE REPRODUCTIVE SYSTEM        .7878         2.3         2.6
                                                  RECONSTRUCTIVE PROCEDURES.                                    
357.............       13  SURG                  UTERINE & ADNEXA PROC FOR        2.4468         7.3         9.0
                                                  OVARIAN OR ADNEXAL                                            
                                                  MALIGNANCY.                                                   
358.............       13  SURG                  UTERINE & ADNEXA PROC FOR        1.2133         3.7         4.4
                                                  NON-MALIGNANCY W CC.                                          
359.............       13  SURG                  UTERINE & ADNEXA PROC FOR         .8676         2.8         3.0
                                                  NON-MALIGNANCY W/O CC.                                        
360.............       13  SURG                  VAGINA, CERVIX & VULVA            .8910         2.6         3.2
                                                  PROCEDURES.                                                   
361.............       13  SURG                  LAPAROSCOPY & INCISIONAL         1.2140         2.3         3.3
                                                  TUBAL INTERRUPTION.                                           
362.............       13  SURG                  *ENDOSCOPIC TUBAL                 .3014         1.4         1.4
                                                  INTERRUPTION.                                                 

[[Page 25654]]

                                                                                                                
363.............       13  SURG                  D&C, CONIZATION & RADIO-          .7481         2.5         3.3
                                                  IMPLANT, FOR MALIGNANCY.                                      
364.............       13  SURG                  D&C, CONIZATION EXCEPT FOR        .7290         2.6         3.6
                                                  MALIGNANCY.                                                   
365.............       13  SURG                  OTHER FEMALE REPRODUCTIVE        1.7398         4.6         6.9
                                                  SYSTEM O.R. PROCEDURES.                                       
366.............       13  MED                   MALIGNANCY, FEMALE               1.1946         4.8         6.9
                                                  REPRODUCTIVE SYSTEM W CC.                                     
367.............       13  MED                   MALIGNANCY, FEMALE                .5666         2.2         2.9
                                                  REPRODUCTIVE SYSTEM W/O CC.                                   
368.............       13  MED                   INFECTIONS, FEMALE               1.0553         5.0         6.4
                                                  REPRODUCTIVE SYSTEM.                                          
369.............       13  MED                   MENSTRUAL & OTHER FEMALE          .5264         2.3         3.1
                                                  REPRODUCTIVE SYSTEM                                           
                                                  DISORDERS.                                                    
370.............       14  SURG                  CESAREAN SECTION W CC......      1.0533         4.3         5.5
371.............       14  SURG                  CESAREAN SECTION W/O CC....       .7197         3.2         3.5
372.............       14  MED                   VAGINAL DELIVERY W                .5679         2.4         3.2
                                                  COMPLICATING DIAGNOSES.                                       
373.............       14  MED                   VAGINAL DELIVERY W/O              .3987         1.8         2.1
                                                  COMPLICATING DIAGNOSES.                                       
374.............       14  SURG                  VAGINAL DELIVERY W                .7188         2.1         3.0
                                                  STERILIZATION &/OR D&C.                                       
375.............       14  SURG                  *VAGINAL DELIVERY W O.R.          .6840         4.4         4.4
                                                  PROC EXCEPT STERIL &/OR                                       
                                                  D&C.                                                          
376.............       14  MED                   POSTPARTUM & POST ABORTION        .4925         2.4         2.9
                                                  DIAGNOSES W/O O.R.                                            
                                                  PROCEDURE.                                                    
377.............       14  SURG                  POSTPARTUM & POST ABORTION       1.4598         3.4         4.5
                                                  DIAGNOSES W O.R. PROCEDURE.                                   
378.............       14  MED                   ECTOPIC PREGNANCY..........       .8441         2.2         2.6
379.............       14  MED                   THREATENED ABORTION........       .4401         2.2         3.6
380.............       14  MED                   ABORTION W/O D&C...........       .4235         1.7         2.0
381.............       14  SURG                  ABORTION W D&C, ASPIRATION        .5583         1.6         2.1
                                                  CURETTAGE OR HYSTEROTOMY.                                     
382.............       14  MED                   FALSE LABOR................       .1917         1.1         1.3
383.............       14  MED                   OTHER ANTEPARTUM DIAGNOSES        .4732         2.7         3.7
                                                  W MEDICAL COMPLICATIONS.                                      
384.............       14  MED                   OTHER ANTEPARTUM DIAGNOSES        .3576         1.9         2.7
                                                  W/O MEDICAL COMPLICATIONS.                                    
385.............       15  ....................  *NEONATES, DIED OR               1.3728         1.8         1.8
                                                  TRANSFERRED TO ANOTHER                                        
                                                  ACUTE CARE FACILITY.                                          
386.............       15  ....................  *EXTREME IMMATURITY OR           4.5269        17.9        17.9
                                                  RESPIRATORY DISTRESS                                          
                                                  SYNDROME, NEONATE.                                            
387.............       15  ....................  *PREMATURITY W MAJOR             3.0918        13.3        13.3
                                                  PROBLEMS.                                                     
388.............       15  ....................  *PREMATURITY W/O MAJOR           1.8655         8.6         8.6
                                                  PROBLEMS.                                                     
389.............       15  ....................  *FULL TERM NEONATE W MAJOR       1.4930         4.7         4.7
                                                  PROBLEMS.                                                     
390.............       15  ....................  NEONATE W OTHER SIGNIFICANT      1.6281         4.2         6.0
                                                  PROBLEMS.                                                     
391.............       15  ....................  *NORMAL NEWBORN............       .1522         3.1         3.1
392.............       16  SURG                  SPLENECTOMY AGE >17........      3.2630         7.8        10.4
393.............       16  SURG                  *SPLENECTOMY AGE 0-17......      1.3447         9.1         9.1
394.............       16  SURG                  OTHER O.R. PROCEDURES OF         1.6349         4.1         7.1
                                                  THE BLOOD AND BLOOD                                           
                                                  FORMING ORGANS.                                               
395.............       16  MED                   RED BLOOD CELL DISORDERS          .8209         3.4         4.7
                                                  AGE >17.                                                      
396.............       16  MED                   RED BLOOD CELL DISORDERS         2.2655         5.5        18.5
                                                  AGE 0-17.                                                     
397.............       16  MED                   COAGULATION DISORDERS......      1.2544         4.0         5.5
398.............       16  MED                   RETICULOENDOTHELIAL &            1.2457         4.7         6.0
                                                  IMMUNITY DISORDERS W CC.                                      
399.............       16  MED                   RETICULOENDOTHELIAL &             .6933         3.0         3.7
                                                  IMMUNITY DISORDERS W/O CC.                                    
400.............       17  SURG                  LYMPHOMA & LEUKEMIA W MAJOR      2.6552         6.1         9.4
                                                  O.R. PROCEDURE.                                               
401.............       17  SURG                  LYMPHOMA & NON-ACUTE             2.5729         7.7        11.0
                                                  LEUKEMIA W OTHER O.R. PROC                                    
                                                  W CC.                                                         
402.............       17  SURG                  LYMPHOMA & NON-ACUTE             1.0126         2.7         3.9
                                                  LEUKEMIA W OTHER O.R. PROC                                    
                                                  W/O CC.                                                       
403.............       17  MED                   LYMPHOMA & NON-ACUTE             1.6817         5.8         8.2
                                                  LEUKEMIA W CC.                                                
404.............       17  MED                   LYMPHOMA & NON-ACUTE              .8288         3.2         4.5
                                                  LEUKEMIA W/O CC.                                              
405.............       17  ....................  *ACUTE LEUKEMIA W/O MAJOR        1.9065         4.9         4.9
                                                  O.R. PROCEDURE AGE 0-17.                                      
406.............       17  SURG                  MYELOPROLIF DISORD OR            2.5701         6.9         9.5
                                                  POORLY DIFF NEOPL W MAJ                                       
                                                  O.R.PROC W CC.                                                
407.............       17  SURG                  MYELOPROLIF DISORD OR            1.1786         3.4         4.3
                                                  POORLY DIFF NEOPL W MAJ                                       
                                                  O.R.PROC W/O CC.                                              
408.............       17  SURG                  MYELOPROLIF DISORD OR            1.8039         4.6         7.5
                                                  POORLY DIFF NEOPL W OTHER                                     
                                                  O.R.PROC.                                                     
409.............       17  MED                   RADIOTHERAPY...............      1.0112         4.3         5.8
410.............       17  MED                   CHEMOTHERAPY W/O ACUTE            .8403         2.7         3.4
                                                  LEUKEMIA AS SECONDARY                                         
                                                  DIAGNOSIS.                                                    
411.............       17  MED                   HISTORY OF MALIGNANCY W/O         .3229         2.0         2.9
                                                  ENDOSCOPY.                                                    
412.............       17  MED                   HISTORY OF MALIGNANCY W           .5222         1.9         2.3
                                                  ENDOSCOPY.                                                    
413.............       17  MED                   OTHER MYELOPROLIF DIS OR         1.3511         5.4         7.5
                                                  POORLY DIFF NEOPL DIAG W                                      
                                                  CC.                                                           
414.............       17  MED                   OTHER MYELOPROLIF DIS OR          .7210         3.1         4.2
                                                  POORLY DIFF NEOPL DIAG W/O                                    
                                                  CC.                                                           
415.............       18  SURG                  O.R. PROCEDURE FOR               3.5656        10.5        14.4
                                                  INFECTIOUS & PARASITIC                                        
                                                  DISEASES.                                                     
416.............       18  MED                   SEPTICEMIA AGE >17.........      1.4885         5.7         7.4
417.............       18  MED                   SEPTICEMIA AGE 0-17........      1.3566         4.5         6.0
418.............       18  MED                   POSTOPERATIVE & POST-             .9882         4.9         6.2
                                                  TRAUMATIC INFECTIONS.                                         
419.............       18  MED                   FEVER OF UNKNOWN ORIGIN AGE       .8779         4.0         5.0
                                                  >17 W CC.                                                     
420.............       18  MED                   FEVER OF UNKNOWN ORIGIN AGE       .6351         3.2         4.0
                                                  >17 W/O CC.                                                   
421.............       18  MED                   VIRAL ILLNESS AGE >17......       .6757         3.1         4.0

[[Page 25655]]

                                                                                                                
422.............       18  MED                   VIRAL ILLNESS & FEVER OF          .5729         2.6         3.3
                                                  UNKNOWN ORIGIN AGE 0-17.                                      
423.............       18  MED                   OTHER INFECTIOUS &               1.6011         5.8         7.8
                                                  PARASITIC DISEASES                                            
                                                  DIAGNOSES.                                                    
424.............       19  SURG                  O.R. PROCEDURE W PRINCIPAL       2.3280         9.0        14.3
                                                  DIAGNOSES OF MENTAL                                           
                                                  ILLNESS.                                                      
425.............       19  MED                   ACUTE ADJUST REACT &              .6791         3.0         4.1
                                                  DISTURBANCES OF                                               
                                                  PSYCHOSOCIAL DYSFUNCTION.                                     
426.............       19  MED                   DEPRESSIVE NEUROSES........       .5537         3.5         4.9
427.............       19  MED                   NEUROSES EXCEPT DEPRESSIVE.       .5609         3.4         4.8
428.............       19  MED                   DISORDERS OF PERSONALITY &        .7031         4.5         7.2
                                                  IMPULSE CONTROL.                                              
429.............       19  MED                   ORGANIC DISTURBANCES &            .8721         5.2         7.4
                                                  MENTAL RETARDATION.                                           
430.............       19  MED                   PSYCHOSES..................       .8073         6.2         8.8
431.............       19  MED                   CHILDHOOD MENTAL DISORDERS.       .7541         4.6         7.3
432.............       19  MED                   OTHER MENTAL DISORDER             .7008         3.4         5.2
                                                  DIAGNOSES.                                                    
433.............       20  ....................  ALCOHOL/DRUG ABUSE OR             .3024         2.3         3.2
                                                  DEPENDENCE, LEFT AMA.                                         
434.............       20  ....................  ALC/DRUG ABUSE OR DEPEND,         .6998         3.9         5.2
                                                  DETOX OR OTH SYMPT TREAT W                                    
                                                  CC.                                                           
435.............       20  ....................  ALC/DRUG ABUSE OR DEPEND,         .4143         3.5         4.4
                                                  DETOX OR OTH SYMPT TREAT W/                                   
                                                  O CC.                                                         
436.............       20  ....................  ALC/DRUG DEPENDENCE W             .8189        11.4        14.1
                                                  REHABILITATION THERAPY.                                       
437.............       20  ....................  ALC/DRUG DEPENDENCE,              .7027         7.7         9.2
                                                  COMBINED REHAB & DETOX                                        
                                                  THERAPY.                                                      
438.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
439.............       21  SURG                  SKIN GRAFTS FOR INJURIES...      1.5601         5.0         7.7
440.............       21  SURG                  WOUND DEBRIDEMENTS FOR           1.7978         5.7         8.9
                                                  INJURIES.                                                     
441.............       21  SURG                  HAND PROCEDURES FOR              1.0114         2.3         3.4
                                                  INJURIES.                                                     
442.............       21  SURG                  OTHER O.R. PROCEDURES FOR        2.2637         5.2         8.1
                                                  INJURIES W CC.                                                
443.............       21  SURG                  OTHER O.R. PROCEDURES FOR         .9271         2.5         3.3
                                                  INJURIES W/O CC.                                              
444.............       21  MED                   TRAUMATIC INJURY AGE >17 W        .7110         3.5         4.5
                                                  CC.                                                           
445.............       21  MED                   TRAUMATIC INJURY AGE >17 W/       .4790         2.6         3.4
                                                  O CC.                                                         
446.............       21  MED                   *TRAUMATIC INJURY AGE 0-17.       .2955         2.4         2.4
447.............       21  MED                   ALLERGIC REACTIONS AGE >17.       .4935         1.9         2.5
448.............       21  MED                   *ALLERGIC REACTIONS AGE 0-        .0972         2.9         2.9
                                                  17.                                                           
449.............       21  MED                   POISONING & TOXIC EFFECTS         .7848         2.7         3.8
                                                  OF DRUGS AGE >17 W CC.                                        
450.............       21  MED                   POISONING & TOXIC EFFECTS         .4333         1.6         2.1
                                                  OF DRUGS AGE >17 W/O CC.                                      
451.............       21  MED                   *POISONING & TOXIC EFFECTS        .2625         2.1         2.1
                                                  OF DRUGS AGE 0-17.                                            
452.............       21  MED                   COMPLICATIONS OF TREATMENT        .9785         3.6         5.0
                                                  W CC.                                                         
453.............       21  MED                   COMPLICATIONS OF TREATMENT        .4855         2.2         2.9
                                                  W/O CC.                                                       
454.............       21  MED                   OTHER INJURY, POISONING &         .8478         3.2         4.7
                                                  TOXIC EFFECT DIAG W CC.                                       
455.............       21  MED                   OTHER INJURY, POISONING &         .4694         2.0         2.7
                                                  TOXIC EFFECT DIAG W/O CC.                                     
456.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
457.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
458.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
459.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
460.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
461.............       23  SURG                  O.R. PROC W DIAGNOSES OF         1.0644         2.4         4.4
                                                  OTHER CONTACT W HEALTH                                        
                                                  SERVICES.                                                     
462.............       23  MED                   REHABILITATION.............      1.3849        10.1        12.6
463.............       23  MED                   SIGNS & SYMPTOMS W CC......       .6757         3.3         4.4
464.............       23  MED                   SIGNS & SYMPTOMS W/O CC....       .5006         2.6         3.4
465.............       23  MED                   AFTERCARE W HISTORY OF            .5238         1.9         2.9
                                                  MALIGNANCY AS SECONDARY                                       
                                                  DIAGNOSIS.                                                    
466.............       23  MED                   AFTERCARE W/O HISTORY OF          .6193         2.3         4.1
                                                  MALIGNANCY AS SECONDARY                                       
                                                  DIAGNOSIS.                                                    
467.............       23  MED                   OTHER FACTORS INFLUENCING         .4944         2.3         4.4
                                                  HEALTH STATUS.                                                
468.............  .......  ....................  EXTENSIVE O.R. PROCEDURE         3.6566         9.5        13.5
                                                  UNRELATED TO PRINCIPAL                                        
                                                  DIAGNOSIS.                                                    
469.............  .......  ....................  **PRINCIPAL DIAGNOSIS             .0000          .0          .0
                                                  INVALID AS DISCHARGE                                          
                                                  DIAGNOSIS.                                                    
470.............  .......  ....................  **UNGROUPABLE..............       .0000          .0          .0
471.............       08  SURG                  BILATERAL OR MULTIPLE MAJOR      3.3201         5.3         6.1
                                                  JOINT PROCS OF LOWER                                          
                                                  EXTREMITY.                                                    
472.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
473.............       17  ....................  ACUTE LEUKEMIA W/O MAJOR         3.4688         7.6        13.0
                                                  O.R. PROCEDURE AGE >17.                                       
474.............  .......  ....................  NO LONGER VALID............       .0000          .0          .0
475.............       04  MED                   RESPIRATORY SYSTEM               3.7373         8.1        11.3
                                                  DIAGNOSIS WITH VENTILATOR                                     
                                                  SUPPORT.                                                      
476.............  .......  SURG                  PROSTATIC O.R. PROCEDURE         2.2226         8.9        11.9
                                                  UNRELATED TO PRINCIPAL                                        
                                                  DIAGNOSIS.                                                    
477.............  .......  SURG                  NON-EXTENSIVE O.R.               1.7581         5.3         8.2
                                                  PROCEDURE UNRELATED TO                                        
                                                  PRINCIPAL DIAGNOSIS.                                          
478.............       05  SURG                  OTHER VASCULAR PROCEDURES W      2.3334         5.1         7.5
                                                  CC.                                                           
479.............       05  SURG                  OTHER VASCULAR PROCEDURES W/     1.4224         3.0         3.8
                                                  O CC.                                                         
480.............  .......  SURG                  LIVER TRANSPLANT...........     10.6455        19.4        26.8
481.............  .......  SURG                  BONE MARROW TRANSPLANT.....      9.7725        24.5        27.2

[[Page 25656]]

                                                                                                                
482.............  .......  SURG                  TRACHEOSTOMY FOR FACE,           3.5950        10.0        12.8
                                                  MOUTH & NECK DIAGNOSES.                                       
483.............  .......  SURG                  TRACHEOSTOMY EXCEPT FOR         16.2677        33.9        42.1
                                                  FACE, MOUTH & NECK                                            
                                                  DIAGNOSES.                                                    
484.............       24  SURG                  CRANIOTOMY FOR MULTIPLE          5.3170         9.5        14.8
                                                  SIGNIFICANT TRAUMA.                                           
485.............       24  SURG                  LIMB REATTACHMENT, HIP AND       3.0440         7.7         9.6
                                                  FEMUR PROC FOR MULTIPLE                                       
                                                  SIGNIFICANT TR.                                               
486.............       24  SURG                  OTHER O.R. PROCEDURES FOR        4.9559         8.4        12.4
                                                  MULTIPLE SIGNIFICANT                                          
                                                  TRAUMA.                                                       
487.............       24  MED                   OTHER MULTIPLE SIGNIFICANT       1.9036         5.4         7.5
                                                  TRAUMA.                                                       
488.............       25  SURG                  HIV W EXTENSIVE O.R.             4.5576        11.9        17.2
                                                  PROCEDURE.                                                    
489.............       25  MED                   HIV W MAJOR RELATED              1.7700         6.2         8.9
                                                  CONDITION.                                                    
490.............       25  MED                   HIV W OR W/O OTHER RELATED        .9720         3.9         5.4
                                                  CONDITION.                                                    
491.............       08  SURG                  MAJOR JOINT & LIMB               1.6670         3.1         3.7
                                                  REATTACHMENT PROCEDURES OF                                    
                                                  UPPER EXTREMITY.                                              
492.............       17  MED                   CHEMOTHERAPY W ACUTE             4.5197        11.4        17.2
                                                  LEUKEMIA AS SECONDARY                                         
                                                  DIAGNOSIS.                                                    
493.............       07  SURG                  LAPAROSCOPIC                     1.7952         4.2         5.6
                                                  CHOLECYSTECTOMY W/O C.D.E.                                    
                                                  W CC.                                                         
494.............       07  SURG                  LAPAROSCOPIC                      .9989         1.9         2.4
                                                  CHOLECYSTECTOMY W/O C.D.E.                                    
                                                  W/O CC.                                                       
495.............  .......  SURG                  LUNG TRANSPLANT............      9.0247        13.7        17.0
496.............       08  SURG                  COMBINED ANTERIOR/POSTERIOR      5.4507         8.6        10.6
                                                  SPINAL FUSION.                                                
497.............       08  SURG                  SPINAL FUSION W CC.........      2.7585         5.0         6.3
498.............       08  SURG                  SPINAL FUSION W/O CC.......      1.6870         2.9         3.5
499.............       08  SURG                  BACK & NECK PROCS EXCEPT         1.4669         3.8         5.0
                                                  SPINAL FUSION W CC.                                           
500.............       08  SURG                  BACK & NECK PROCS EXCEPT          .9709         2.4         2.9
                                                  SPINAL FUSION W/O CC.                                         
501.............       08  SURG                  KNEE PROC W PDX OF               2.5459         8.4        10.4
                                                  INFECTION W CC.                                               
502.............       08  SURG                  KNEE PROC W PDX OF               1.5548         5.5         6.6
                                                  INFECTION W/O CC.                                             
503.............       08  SURG                  KNEE PROCEDURES W/O PDX OF       1.2316         3.2         4.2
                                                  INFECTION.                                                    
504.............       22  SURG                  EXTENSIVE 3RD DEGREE BURN W     13.9440        23.1        31.6
                                                  SKIN GRAFT.                                                   
505.............       22  ....................  EXTENSIVE 3RD DEGREE BURN W/     1.7871         2.3         5.9
                                                  O SKIN GRAFT.                                                 
506.............       22  ....................  FULL THICK BURN W SK GRAFT       4.2300        12.2        16.8
                                                  OR INHAL INJ W CC OR SIG                                      
                                                  TR.                                                           
507.............       22  ....................  FULL THICK BURN W SK GRAFT       1.7017         6.5         9.0
                                                  OR INHAL INJ W/O CC OR SIG                                    
                                                  TR.                                                           
508.............       22  ....................  FULL THICK BURN W/O SK           1.3792         5.2         7.8
                                                  GRAFT OR INHAL INJ W CC OR                                    
                                                  SIG TR.                                                       
509.............       22  ....................  FULL THICK BURN W/O SK            .7376         3.3         4.9
                                                  GRAFT OR INHAL INJ W/O CC                                     
                                                  OR SIG TR.                                                    
510.............       22  ....................  NON-EXTENSIVE BURNS W CC OR      1.1408         4.8         6.9
                                                  SIGNIFICANT TRAUMA.                                           
511.............       22  ....................  NON-EXTENSIVE BURNS W/O CC        .6001         3.5        4.8 
                                                  OR SIGNIFICANT TRAUMA.                                        
----------------------------------------------------------------------------------------------------------------
* Medicare data have been supplemented by data from 19 states for low volume DRGs.                              
** DRGs 469 and 470 contain cases which could not be assigned to valid DRGs.                                    
Note: Geometric mean is used only to determine payment for transfer cases.                                      
Note: Arithmetic mean is used only to determine payment for outlier cases.                                      
Note: Relative weights are based on medicare patient data and may not be appropriate for other patients.        


                                         Table 6A.--New Diagnosis Codes                                         
----------------------------------------------------------------------------------------------------------------
  Diagnosis                                                                                                     
    codes             Description                 CC              MDC                       DRG                 
----------------------------------------------------------------------------------------------------------------
337.3.......  Autonomic dysreflexia.....  N                            1  18,19                                 
438.53......  Other paralytic syndrome,   N                            1  12                                    
               bilateral.                                                                                       
482.40......  Pneumonia due to            Y                            4  79, 80, 81 \1\                        
               Staphyloccus, unspecified.                              5  121                                   
                                                                      15  387, 389,\2\ 489 \3\                  
                                                                      25                                        
482.41......  Pneumonia due to            Y                            4  79, 80, 81                            
               Staphylococcus aureus.                                  5  121 \1\                               
                                                                      15  387, 389 \2\                          
                                                                      25  489 \3\                               
482.49......  Other Staphylococcus        Y                            4  79, 80, 81                            
               pneumonia.                                              5  121 \1\                               
                                                                      15  387, 389 \2\                          
                                                                      25  489 \3\                               
518.83......  Chronic respiratory         Y                            4  87                                    
               failure.                                                                                         
518.84......  Acute and chronic           Y                            4  87                                    
               respiratory.                                           22  506, 507                              
519.00......  Unspecified tracheostomy    Y                          Pre  482                                   
               complication.                                           4  101, 102                              
519.01......  Infection of tracheostomy.  Y                          Pre  482                                   
                                                                       4  101, 102                              
519.02......  Mechanical complication of  Y                          Pre  482                                   
               tracheostomy.                                           4  101, 102                              
519.09......  Other tracheostomy          Y                          Pre  482                                   
               complication.                                           4  101, 102                              

[[Page 25657]]

                                                                                                                
536.40......  Unspecified gastrostomy     Y                            6  188, 189, 190                         
               complication.                                                                                    
536.41......  Infection of gastrostomy..  Y                            6  188, 189, 190                         
536.42......  Mechanical complication of  Y                            6  188, 189, 190                         
               gastrostomy.                                                                                     
536.49......  Other gastrostomy           Y                            6  188, 189, 190                         
               complication.                                                                                    
564.81......  Neurogenic bowel..........  N                            6  182, 183, 184                         
564.89......  Other functional disorders  N                            6  182, 183, 184                         
               of intestine.                                                                                    
569.62......  Mechanical complication of  Y                            6  188, 189, 190                         
               colostomy and enterostomy.                                                                       
659.70......  Abnormality in fetal heart  N                           14  370, 371, 372, 373, 374, 375          
               rate/rhythm, unspecified                                                                         
               as to episode of care or                                                                         
               not applicable.                                                                                  
659.71......  Abnormality in fetal heart  N                           14  370, 371, 372, 373, 374, 375          
               rate/rhythm, delivered,                                                                          
               with or without mention                                                                          
               of antepartum condition.                                                                         
659.73......  Abnormality in fetal heart  N                           14  383, 384                              
               rate/rhythm, antepartum                                                                          
               condition or complication.                                                                       
763.81......  Abnormality in fetal heart  N                           15  390                                   
               rate or rhythm before the                                                                        
               onset of labor.                                                                                  
763.82......  Abnormality in fetal heart  N                           15  390                                   
               rate or rhythm during                                                                            
               labor.                                                                                           
763.83......  Abnormality in     N                           15  390                                   
               fetal heart rate or                                                                              
               rhythm, unspecified as to                                                                        
               time of onset.                                                                                   
763.89......  Other specified             N                           15  390                                   
               complications of labor                                                                           
               and delivery affecting                                                                           
               fetus and newborn.                                                                               
780.71......  Chronic fatigue syndrome..  N                           23  463, 464                              
                                                                      25  490                                   
780.79......  Other malaise and  N                           23  463, 464                              
               fatigue.                                               25  490                                   
786.03......  Apnea.....................  Y                            4  99, 100                               
                                                                      25  490                                   
786.04......  Cheyne-Stokes respiration.  Y                            4  99, 100                               
                                                                      25  490                                   
786.05......  Shortness of breath.......  N                            4  99, 100                               
                                                                      25  490                                   
786.06......  Tachypnea.................  N                            4  99, 100                               
                                                                      25  490                                   
786.07......  Wheezing..................  N                            4  99, 100                               
                                                                      25  490                                   
965.61......  Poisoning by propionic      N                           21  449, 450, 451                         
               acid derivatives.                                                                                
965.69......  Poisoning by other          N                           21  449, 450, 451                         
               antirheumatics.                                                                                  
995.86......  Malignant hyperthermia....  Y                           21  454, 455                              
996.55......  Mechanical complications    Y                           21  452, 453                              
               due to artificial skin                                                                           
               graft and decellularized                                                                         
               allodermis.                                                                                      
996.56......  Mechanical complications    Y                           21  452, 453                              
               due to peritoneal                                                                                
               dialysis catheter.                                                                               
996.68......  Infection and inflammatory  Y                           21  452, 453                              
               reaction due to                                                                                  
               peritoneal dialysis                                                                              
               catheter.                                                                                        
V02.51......  Carrier or suspected        N                           23  467                                   
               carrier of Group B                                                                               
               streptococcus.                                                                                   
V02.52......  Carrier or suspected        N                           23  467                                   
               carrier of other                                                                                 
               streptococcus.                                                                                   
V02.59......  Carrier or suspected        N                           23  467                                   
               carrier of other                                                                                 
               specified bacterial                                                                              
               diseases.                                                                                        
V10.48......  Personal history of         N                           17  411, 412                              
               malignant neoplasm of                                                                            
               epididymis.                                                                                      
V13.61......  Personal history of         N                           23  467                                   
               hypospadias.                                                                                     
V13.69......  Personal history other      N                           23  467                                   
               congenital malformation.                                                                         
V16.51......  Family history of           N                           23  467                                   
               malignant neoplasm of                                                                            
               kidney.                                                                                          
V16.59......  Family history of           N                           23  467                                   
               malignant neoplasm of                                                                            
               other urinary organs.                                                                            
V18.61......  Family history of           N                           23  467                                   
               polycystic kidney.                                                                               
V18.69......  Family history of other     N                           23  467                                   
               kidney diseases.                                                                                 
V23.81......  Supervision of high-risk    Y                           14  469                                   
               pregnancy of elderly                                                                             
               primigravida.                                                                                    
V23.82......  Supervision of high-risk    Y                           14  469                                   
               pregnancy of elderly                                                                             
               multigravida.                                                                                    
V23.83......  Supervision of high-risk    Y                           14  469                                   
               pregnancy of young                                                                               
               primigravida.                                                                                    
V23.84......  Supervision of high-risk    Y                           14  469                                   
               pregnancy of young                                                                               
               multigravida.                                                                                    
V23.89......  Supervision of other high-  Y                           14  469                                   
               risk pregnancy.                                                                                  
V26.51......  Tubal ligation status.....  N                           23  467                                   
V26.52......  Vasectomy status..........  N                           23  467                                   
V29.3.......  Observation for suspected   N                           23  467                                   
               genetic or metabolic                                                                             
               condition.                                                                                       
V43.83......  Organ or tissue replaced    N                           23  467                                   
               by artificial skin.                                                                              
V44.50......  Unspecified cystostomy      N                           23  467                                   
               status.                                                                                          
V44.51......  Cutaneous-vesicostomy       N                           23  467                                   
               status.                                                                                          
V44.52......  Appendico-vesicostomy       N                           23  467                                   
               status.                                                                                          
V44.59......  Other cystostomy status...  N                           23  467                                   
V56.2.......  Fitting and adjustment of   N                           11  317                                   
               peritoneal dialysis                                                                              
               catheter.                                                                                        
V58.62......  Encounter for aftercare     N                           23  465, 466                              
               for long-term (current)                                                                          
               use of antibiotics.                                                                              
V76.44......  Special screening for       N                           23  467                                   
               malignant neoplasm of                                                                            
               prostate.                                                                                        
V76.45......  Special screening for       N                           23  467                                   
               malignant neoplasm of                                                                            
               testis.                                                                                          
----------------------------------------------------------------------------------------------------------------
\1\ Classified as a ``major complication'' in this DRG.                                                         
\2\ Classified as a ``major problem'' in these DRGs.                                                            
\3\ HIV major related condition in this DRG.                                                                    


[[Page 25658]]


                                         Table 6B.--New Procedure Codes                                         
----------------------------------------------------------------------------------------------------------------
  Procedure                                                                                                     
    code              Description                 OR              MDC                       DRG                 
----------------------------------------------------------------------------------------------------------------
36.31.......  Open chest transmyocardial  Y                            5  108                                   
               revascularization.                                                                               
36.32.......  Other transmyocardial       Y                            5  108                                   
               revascularization.                                                                               
36.39.......  Other heart                 Y                            5  108                                   
               revascularization.                                                                               
37.67.......  Implantation of             Y                            5  110, 111                              
               cardiomyostimulation                                   21  442, 443                              
               system.                                                24  486                                   
75.37.......  Amnioinfusion.............  N                                                                     
86.67.......  Dermal regenerative graft.  Y                            1  7, 8                                  
                                                                       3  63                                    
                                                                       5  120                                   
                                                                       6  170, 171                              
                                                                       8  217                                   
                                                                       9  263, 264, 265,                        
                                                                      10  266                                   
                                                                      21  287                                   
                                                                      22  439                                   
                                                                      24  458, 472                              
                                                                          504, 506, 507                         
                                                                          486                                   
92.30.......  Stereotactic radiosurgery,  N \1\                        1  7, 8                                  
               not otherwise specified.                               10  292, 293                              
                                                                      17  401, 402, 408                         
92.31.......  Single source photon        N                            1  7, 8                                  
               radiosurgery.                                          10  292, 293                              
                                                                      17  401, 402, 408                         
92.32.......  Multi-source photon         N                            1  7, 8                                  
               radiosurgery.                                          10  292, 293                              
                                                                      17  401, 402, 408                         
92.33.......  Particulate radiosurgery..  N                            1  7, 8                                  
                                                                      10  292, 293                              
                                                                      17  401, 402, 408                         
92.39.......  Stereotactic radiosurgery,  N                            1  7, 8                                  
               not elsewhere classified.                              10  292, 293                              
                                                                      17  401, 402, 408                         
96.29.......  Reduction of                N                                                                     
               intussusception of                                                                               
               alimentary tract.                                                                                
99.10.......  Injection or infusion of    N                                                                     
               thrombolytic agent.                                                                              
99.20.......  Injection or infusion of    N                                                                     
               platelet inhibitor.                                                                              
----------------------------------------------------------------------------------------------------------------
\1\ Nonoperating room, but affecting DRG                                                                        


                                        Table 6C.--Invalid Diagnosis Code                                       
----------------------------------------------------------------------------------------------------------------
  Diagnosis                                                                                                     
    codes             Description                 CC              MDC                       DRG                 
----------------------------------------------------------------------------------------------------------------
482.4.......  Pneumonia due to            Y                            4  79, 80, 81                            
               Staphylococcus.                                         5  121 \1\                               
                                                                      15  387, 389 \2\                          
                                                                      25  489 \3\                               
519.0.......  Tracheostomy complication.  Y                          PRE  482                                   
                                                                       4  101, 102                              
564.8.......  Other specified functional  N                            6  182, 183, 184                         
               disorders of intestine.                                                                          
763.8.......  Other specified             N                           15  390                                   
               complications of labor                                                                           
               and delivery affecting                                                                           
               fetus and newborn.                                                                               
780.7.......  Malaise and fatigue.......  N                           23  463, 464                              
                                                                      25  490                                   
965.6.......  Poisoning by                N                           21  449, 450, 451                         
               antirheumatics                                                                                   
               [antiphlogistics].                                                                               
V02.5.......  Carrier or suspected        N                           23  467                                   
               carrier of other                                                                                 
               specified bacterial                                                                              
               diseases.                                                                                        
V13.6.......  Personal history of         N                           23  467                                   
               congenital malformations.                                                                        
V16.5.......  Family history of           N                           23  467                                   
               malignant neoplasm of                                                                            
               urinary organs.                                                                                  
V18.6.......  Family history of kidney    N                           23  467                                   
               diseases.                                                                                        
V23.8.......  Supervision of other high-  Y                           14  469                                   
               risk pregnancy.                                                                                  
V44.5.......  Cystostomy status.........  N                           23  467                                   
----------------------------------------------------------------------------------------------------------------
\1\ Classified as a ``major complication'' in this DRG.                                                         
\2\ Classified as a ``major problem'' in these DRGs.                                                            
\3\ HIV major related condition in this DRG.                                                                    


[[Page 25659]]


                                       Table 6D.--Invalid Procedure Codes                                       
----------------------------------------------------------------------------------------------------------------
  Procedure                                                                                                     
    code              Description                 OR              MDC                       DRG                 
----------------------------------------------------------------------------------------------------------------
36.3........  Other heart                 Y                            5  108                                   
               revascularization.                                                                               
92.3........  Stereotactic radiosurgery.  N \1\                        1  7, 8                                  
                                                                      10  292, 293                              
                                                                      17  401, 402, 408                         
----------------------------------------------------------------------------------------------------------------
\1\ Nonoperation room but effecting DRG.                                                                        


                                    Table 6E.--Revised Diagnosis Code Titles                                    
----------------------------------------------------------------------------------------------------------------
  Diagnosis                                                                                                     
    code              Description                 CC              MDC                       DRG                 
----------------------------------------------------------------------------------------------------------------
518.81......  Acute respiratory failure.  Y                            4   87                                   
                                                                      22  506, 507                              
659.60......  Elderly multigravida        N                           14  370, 371, 372, 373, 374, 375          
               unspecified as to episode                                                                        
               of care or not applicable.                                                                       
659.61......  Elderly multigravida        N                           14  370, 371, 372, 373, 374, 375          
               delivered, with mention                                                                          
               of antepartum condition.                                                                         
659.63......  Elderly multigravida with   N                           14  383, 384                              
               antepartum condition or                                                                          
               complication.                                                                                    
V56.1.......  Fitting and adjustment of   N                           11  317                                   
               extracorporeal dialysis                                                                          
               catheter.                                                                                        
V82.4.......  Maternal postnatal          N                           23  467                                   
               screening of chromosomal                                                                         
               anomalies.                                                                                       
----------------------------------------------------------------------------------------------------------------


[[Page 25660]]


             Table 6F.--Additions to the CC Exclusions List             
                            Page 1 of 3 Pages                           
   CCs that are added to the list are in Table 6F--Additions to the CC  
    Exclusions List. Each of the principal diagnoses is shown with an   
asterisk, and the revisions to the CC Exclusions List are provided in an
 indented column immediately following the affected principal diagnosis.
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
*01100    *01123    *01146   *01172   *01195   *01281   *11515     48249
  48240     48240     48240    48240    48240    48240    48240  *48230 
  48241     48241     48241    48241    48241    48241    48241    48240
  48249     48249     48249    48249    48249    48249    48249    48241
*01101    *01124    *01150   *01173   *01196   *01282   *11595     48249
  48240     48240     48240    48240    48240    48240    48240  *48231 
  48241     48241     48241    48241    48241    48241    48241    48240
  48249     48249     48249    48249    48249    48249    48249    48241
*01102    *01125    *01151   *01174   *01200   *01283   *1221      48249
  48240     48240     48240    48240    48240    48240    48240  *48232 
  48241     48241     48241    48241    48241    48241    48241    48240
  48249     48249     48249    48249    48249    48249    48249    48241
*01103    *01126    *01152   *01175   *01201   *01284   *1304      48249
  48240     48240     48240    48240    48240    48240    48240  *48239 
  48241     48241     48241    48241    48241    48241    48241    48240
  48249     48249     48249    48249    48249    48249    48249    48241
*01104    *01130    *01153   *01176   *01202   *01285   *1363      48249
  48240     48240     48240    48240    48240    48240    48240  *48240 
  48241     48241     48241    48241    48241    48241    48241    01100
  48249     48249     48249    48249    48249    48249    48249    01101
*01105    *01131    *01154   *01180   *01203   *01286   *3373      01102
  48240     48240     48240    48240    48240    48240    3350     01103
  48241     48241     48241    48241    48241    48241    33510    01104
  48249     48249     48249    48249    48249    48249    33511    01105
*01106    *01132    *01155   *01181   *01204   *01790     33519    01106
  48240     48240     48240    48240    48240    48240    33520    01110
  48241     48241     48241    48241    48241    48241    33521    01111
  48249     48249     48249    48249    48249    48249    33522    01112
*01110    *01133    *01156   *01182   *01205   *01791     33523    01113
  48240     48240     48240    48240    48240    48240    33524    01114
  48241     48241     48241    48241    48241    48241    33529    01115
  48249     48249     48249    48249    48249    48249    3358     01116
*01111    *01134    *01160   *01183   *01206   *01792     3359     01120
  48240     48240     48240    48240    48240    48240  *4800      01121
  48241     48241     48241    48241    48241    48241    48240    01122
  48249     48249     48249    48249    48249    48249    48241    01123
*01112    *01135    *01161   *01184   *01210   *01793     48249    01124
  48240     48240     48240    48240    48240    48240  *4801      01125
  48241     48241     48241    48241    48241    48241    48240    01126
  48249     48249     48249    48249    48249    48249    48241    01130
*01113    *01136    *01162   *01185   *01211   *01794     48249    01131
  48240     48240     48240    48240    48240    48240  *4802      01132
  48241     48241     48241    48241    48241    48241    48240    01133
  48249     48249     48249    48249    48249    48249    48241    01134
*01114    *01140    *01163   *01186   *01212   *01795     48249    01135
  48240     48240     48240    48240    48240    48240  *4808      01136
  48241     48241     48241    48241    48241    48241    48240    01140
  48249     48249     48249    48249    48249    48249    48241    01141
*01115    *01141    *01164   *01190   *01213   *01796     48249    01142
  48240     48240     48240    48240    48240    48240  *4809      01143
  48241     48241     48241    48241    48241    48241    48240    01144
  48249     48249     48249    48249    48249    48249    48241    01145
*01116    *01142    *01165   *01191   *01214   *0212      48249    01146
  48240     48240     48240    48240    48240    48240  *481       01150
  48241     48241     48241    48241    48241    48241    48240    01151
  48249     48249     48249    48249    48249    48249    48241    01152
*01120    *01143    *01166   *01192   *01215   *0310      48249    01153
  48240     48240     48240    48240    48240    48240  *4820      01154
  48241     48241     48241    48241    48241    48241    48240    01155
  48249     48249     48249    48249    48249    48249    48241    01156
*01121    *01144    *01170   *01193   *01216   *0391      48249    01160
  48240     48240     48240    48240    48240    48240  *4821      01161
  48241     48241     48241    48241    48241    48241    48240    01162
  48249     48249     48249    48249    48249    48249    48241    01163
*01122    *01145    *01171   *01194   *01280   *11505     48249    01164
  48240     48240     48240    48240    48240    48240  *4822      01165
  48241     48241     48241    48241    48241    48241    48240    01166
  48249     48249     48249    48249    48249    48249    48241    01170
------------------------------------------------------------------------


[[Page 25661]]


                            Page 2 of 3 Pages                           
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
  01171     4955      01183    5078     01195    48240    48241    48249
  01172     4956      01184    5080     01196    48241    48249  *5061  
  01173     4957      01185    5081     01200    48249  *4950      48240
  01174     4958      01186    5171     01201  *48283     48240    48241
  01175     4959      01190  *48249     01202    48240    48241    48249
  01176     5060      01191    01100    01203    48241    48249  *5062  
  01180     5061      01192    01101    01204    48249  *4951      48240
  01181     5070      01193    01102    01205  *48284     48240    48241
  01182     5071      01194    01103    01206    48240    48241    48249
  01183     5078      01195    01104    01210    48241    48249  *5063  
  01184     5080      01196    01105    01211    48249  *4952      48240
  01185     5081      01200    01106    01212  *48289     48240    48241
  01186     5171      01201    01110    01213    48240    48241    48249
  01190   *48241      01202    01111    01214    48241    48249  *5064  
  01191     01100     01203    01112    01215    48249  *4953      48240
  01192     01101     01204    01113    01216  *4829      48240    48241
  01193     01102     01205    01114    0310     48240    48241    48249
  01194     01103     01206    01115    11505    48241    48249  *5069  
  01195     01104     01210    01116    11515    48249  *4954      48240
  01196     01105     01211    01120    1304   *4830      48240    48241
  01200     01106     01212    01121    1363     48240    48241    48249
  01201     01110     01213    01122    481      48241    48249  *5070  
  01202     01111     01214    01123    4820     48249  *4955      48240
  01203     01112     01215    01124    4821   *4831      48240    48241
  01204     01113     01216    01125    4822     48240    48241    48249
  01205     01114     0310     01126    48230    48241    48249  *5071  
  01206     01115     11505    01130    48231    48249  *4956      48240
  01210     01116     11515    01131    48232  *4838      48240    48241
  01211     01120     1304     01132    48239    48240    48241    48249
  01212     01121     1363     01133    48240    48241    48249  *5078  
  01213     01122     481      01134    48241    48249  *4957      48240
  01214     01123     4820     01135    48249  *4841      48240    48241
  01215     01124     4821     01136    48281    48240    48241    48249
  01216     01125     4822     01140    48282    48241    48249  *5080  
  0310      01126     48230    01141    48283    48249  *4958      48240
  11505     01130     48231    01142    48284  *4843      48240    48241
  11515     01131     48232    01143    48289    48240    48241    48249
  1304      01132     48239    01144    4829     48241    48249  *5081  
  1363      01133     48240    01145    4830     48249  *4959      48240
  481       01134     48241    01146    4831   *4845      48240    48241
  4820      01135     48249    01150    4838     48240    48241    48249
  4821      01136     48281    01151    4841     48241    48249  *5088  
  4822      01140     48282    01152    4843     48249  *496       48240
  48230     01141     48283    01153    4845   *4846      48240    48241
  48231     01142     48284    01154    4846     48240    48241    48249
  48232     01143     48289    01155    4847     48241    48249  *5089  
  48239     01144     4829     01156    4848     48249  *500       48240
  48240     01145     4830     01160    485    *4847      48240    48241
  48241     01146     4831     01161    486      48240    48241    48249
  48249     01150     4838     01162    4870     48241    48249  *5171  
  48281     01151     4841     01163    4950     48249  *501       48240
  48282     01152     4843     01164    4951   *4848      48240    48241
  48283     01153     4845     01165    4952     48240    48241    48249
  48284     01154     4846     01166    4953     48241    48249  *5178  
  48289     01155     4847     01170    4954     48249  *502       48240
  4829      01156     4848     01171    4955   *485       48240    48241
  4830      01160     485      01172    4956     48240    48241    48249
  4831      01161     486      01173    4957     48241    48249  *51881 
  4838      01162     4870     01174    4958     48249  *503       51883
  4841      01163     4950     01175    4959   *486       48240    51884
  4843      01164     4951     01176    5060     48240    48241    78603
  4845      01165     4952     01180    5061     48241    48249    78604
  4846      01166     4953     01181    5070     48249  *504     *51882 
  4847      01170     4954     01182    5071   *4870      48240    51883
  4848      01171     4955     01183    5078     48240    48241    51884
  485       01172     4956     01184    5080     48241    48249    78603
  486       01173     4957     01185    5081     48249  *505       78604
  4870      01174     4958     01186    5171   *4871      48240  *51883 
  4950      01175     4959     01190  *48281     48240    48241    51881
  4951      01176     5060     01191    48240    48241    48249    51882
  4952      01180     5061     01192    48241    48249  *5060      51883
  4953      01181     5070     01193    48249  *494       48240    51884
  4954      01182     5071     01194  *48282     48240    48241    78603
------------------------------------------------------------------------


[[Page 25662]]


                            Page 3 of 3 Pages                           
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
  78604     53642   *99656     56962    V2384    V2384                  
  7991      53649     99655  *99791     V2389    V2389                  
*51884      56962     99656    53640  *V230      V239                   
  51881     9974      99659    53641    V2381  *V2389                   
  51882   *53642      99660    53642    V2382    V237                   
  51883     53640     99661    53649    V2383    V2381                  
  51884     53641     99662    56962    V2384    V2382                  
  78603     53642     99663    99586    V2389    V2383                  
  78604     53649     99664    99655  *V231      V2384                  
  7991      56962     99665    99656    V2381    V2389                  
*51889      9974      99666    99668    V2382    V239                   
  48240   *53649      99667  *99799     V2383  *V239                    
  48241     53640     99668    53640    V2384    V2381                  
  48249     53641     99669    53641    V2389    V2382                  
*51900      53642     99670    53642  *V232      V2383                  
  51900     53649     99671    53649    V2381    V2384                  
  51901     56962     99672    56962    V2382    V2389                  
  51902     9974      99673    99586    V2383                           
  51909   *56960      99674    99655    V2384                           
*51901      56962     99675    99656    V2389                           
  51900   *56961      99676    99668  *V233                             
  51901     56962     99677  *9980      V2381                           
  51902   *56962      99678    99586    V2382                           
  51909     56960     99679  *99811     V2383                           
*51902      56961   *99659     99586    V2384                           
  51900     56962     99655  *99812     V2389                           
  51901     56969     99656    99586  *V234                             
  51902   *56969      99668  *99813     V2381                           
  51909     56962   *99660     99586    V2382                           
*51909    *74861      99655  *99881     V2383                           
  51900     48240     99656    53640    V2384                           
  51901     48241     99668    53641    V2389                           
  51902     48249   *99668     53642  *V235                             
  51909   *78603      99655    53649    V2381                           
*5191       78603     99656    56962    V2382                           
  51900     78604     99659    99586    V2383                           
  51901   *78604      99660  *99883     V2384                           
  51902     78603     99661    53640    V2389                           
  51909     78604     99662    53641  *V237                             
*5198     *7991       99663    53642    V2381                           
  48240     51883     99664    53649    V2382                           
  48241     51884     99665    56962    V2383                           
  48249     78603     99666    99586    V2384                           
  51883     78604     99667  *99889     V2389                           
  51884   *9584       99668    53640  *V2381                            
  51900     99586     99669    53641    V237                            
  51901   *9954       99670    53642    V2381                           
  51902     99586     99671    53649    V2382                           
  51909   *99586      99672    56962    V2383                           
  78603     99586     99673    99586    V2384                           
  78604   *99652      99674  *9989      V2389                           
*5199       99655     99675    53640    V239                            
  48240   *99655      99676    53641  *V2382                            
  48241     99652     99677    53642    V237                            
  48249     99655     99678    53649    V2381                           
  51883     99660     99679    56962    V2382                           
  51884     99661   *99669     99586    V2383                           
  51900     99662     99655  *V220      V2384                           
  51901     99663     99656    V2381    V2389                           
  51902     99665     99668    V2382    V239                            
  51909     99666   *99670     V2383  *V2383                            
  78603     99667     99655    V2384    V237                            
  78604     99669     99656    V2389    V2381                           
*53640      99670     99668  *V221      V2382                           
  53640     99671   *99679     V2381    V2383                           
  53641     99672     99655    V2382    V2384                           
  53642     99673     99656    V2383    V2389                           
  53649     99674     99668    V2384    V239                            
  56962     99675   *9974      V2389  *V2384                            
  9974      99676     53640  *V222      V237                            
*53641      99677     53641    V2381    V2381                           
  53640     99678     53642    V2382    V2382                           
  53641     99679     53649    V2383    V2383                           
------------------------------------------------------------------------


[[Page 25663]]


             Table 6G.--Deletions to the CC Exclusions List             
[CCs that are deleted from the list are in Table 6G--Deletions to the CC
    Exclusions List. Each of the principal diagnoses is shown with an   
asterisk, and the revisions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.]
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
*01100    *01146    *01195   *11515     01143    48282    4824     4824 
  4824      4824      4824     4824     01144    48283  *4870    *5178  
*01101    *01150    *01196   *11595     01145    48284    4824     4824 
  4824      4824      4824     4824     01146    48289  *4871    *51889 
*01102    *01151    *01200   *1221      01150    4829     4824     4824 
  4824      4824      4824     4824     01151    4830   *494     *5190  
*01103    *01152    *01201   *1304      01152    4831     4824     5190 
  4824      4824      4824     4824     01153    4838   *4950    *5191  
*01104    *01153    *01202   *1363      01154    4841     4824     5190 
  4824      4824      4824     4824     01155    4843   *4951    *5198  
*01105    *01154    *01203   *4800      01156    4845     4824     4824 
  4824      4824      4824     4824     01160    4846   *4952      5190 
*01106    *01155    *01204   *4801      01161    4847     4824   *5199  
  4824      4824      4824     4824     01162    4848   *4953      4824 
*01110    *01156    *01205   *4802      01163    485      4824     5190 
  4824      4824      4824     4824     01164    486    *4954    *74861 
*01111    *01160    *01206   *4808      01165    4870     4824     4824 
  4824      4824      4824     4824     01166    4950   *4955    *V220  
*01112    *01161    *01210   *4809      01170    4951     4824     V238 
  4824      4824      4824     4824     01171    4952   *4956    *V221  
*01113    *01162    *01211   *481       01172    4953     4824     V238 
  4824      4824      4824     4824     01173    4954   *4957    *V222  
*01114    *01163    *01212   *4820      01174    4955     4824     V238 
  4824      4824      4824     4824     01175    4956   *4958    *V230  
*01115    *01164    *01213   *4821      01176    4957     4824     V238 
  4824      4824      4824     4824     01180    4958   *4959    *V231  
*01116    *01165    *01214   *4822      01181    4959     4824     V238 
  4824      4824      4824     4824     01182    5060   *496     *V232  
*01120    *01166    *01215   *48230     01183    5061     4824     V238 
  4824      4824      4824     4824     01184    5070   *500     *V233  
*01121    *01170    *01216   *48231     01185    5071     4824     V238 
  4824      4824      4824     4824     01186    5078   *501     *V234  
*01122    *01171    *01280   *48232     01190    5080     4824     V238 
  4824      4824      4824     4824     01191    5081   *502     *V235  
*01123    *01172    *01281   *48239     01192    5171     4824     V238 
  4824      4824      4824     4824     01193  *48281   *503     *V237  
*01124    *01173    *01282   *4824      01194    4824     4824     V238 
  4824      4824      4824     01100    01195  *48282   *504     *V238  
*01125    *01174    *01283     01101    01196    4824     4824     V237 
  4824      4824      4824     01102    01200  *48283   *505       V238 
*01126    *01175    *01284     01103    01201    4824     4824     V239 
  4824      4824      4824     01104    01202  *48284   *5060    *V239  
*01130    *01176    *01285     01105    01203    4824     4824     V238 
  4824      4824      4824     01106    01204  *48289   *5061           
*01131    *01180    *01286     01110    01205    4824     4824          
  4824      4824      4824     01111    01206  *4829    *5062           
*01132    *01181    *01790     01112    01210    4824     4824          
  4824      4824      4824     01113    01211  *4830    *5063           
*01133    *01182    *01791     01114    01212    4824     4824          
  4824      4824      4824     01115    01213  *4831    *5064           
*01134    *01183    *01792     01116    01214    4824     4824          
  4824      4824      4824     01120    01215  *4838    *5069           
*01135    *01184    *01793     01121    01216    4824     4824          
  4824      4824      4824     01122    0310   *4841    *5070           
*01136    *01185    *01794     01123    11505    4824     4824          
  4824      4824      4824     01124    11515  *4843    *5071           
*01140    *01186    *01795     01125    1304     4824     4824          
  4824      4824      4824     01126    1363   *4845    *5078           
*01141    *01190    *01796     01130    481      4824     4824          
  4824      4824      4824     01131    4820   *4846    *5080           
*01142    *01191    *0212      01132    4821     4824     4824          
  4824      4824      4824     01133    4822   *4847    *5081           
*01143    *01192    *0310      01134    48230    4824     4824          
  4824      4824      4824     01135    48231  *4848    *5088           
*01144    *01193    *0391      01136    48232    4824     4824          
  4824      4824      4824     01140    48239  *485     *5089           
*01145    *01194    *11505     01141    4824     4824     4824          
  4824      4824      4824     01142    48281  *486     *5171           
------------------------------------------------------------------------


[[Page 25664]]


                                   Table 7A.--Medicare Prospective Payment System; Selected Percentile Lengths of Stay                                  
                                                        [FY97 MEDPAR Update 12/97 Grouper V15.0]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Number        Arithmetic         10th            25th            50th            75th            90th     
                   DRG                      discharges       mean LOS       percentile      percentile      percentile      percentile      percentile  
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................           36587          9.6084               2               4               7              12              20
2.......................................            6967         10.0350               3               5               8              13              20
3.......................................               3          9.3333               7               7               9              12              12
4.......................................            6322          7.7259               1               3               5               9              17
5.......................................          101105          3.6387               1               2               2               4               8
6.......................................             355          3.0225               1               1               2               4               7
7.......................................           12601         10.0945               2               4               7              12              20
8.......................................            3030          3.1845               1               1               2               4               7
9.......................................            1692          6.4923               1               3               5               8              13
10......................................           19727          6.8631               2               3               5               8              14
11......................................            2960          4.1365               1               2               3               5               8
12......................................           38339          6.6619               2               3               5               8              12
13......................................            6315          5.4716               2               3               4               6               9
14......................................          372136          6.2938               2               3               5               8              12
15......................................          145631          3.8599               1               2               3               5               7
16......................................           13905          5.9283               2               3               4               7              11
17......................................            3212          3.4315               1               2               3               4               7
18......................................           27489          5.5809               2               3               4               7              10
19......................................            7294          3.8174               1               2               3               5               7
20......................................            6590         10.1862               2               5               8              13              19
21......................................            1369          6.8152               2               3               5               8              14
22......................................            2789          4.6587               2               2               4               6               9
23......................................            6884          4.2594               1               2               3               5               8
24......................................           57890          5.0641               1               2               4               6              10
25......................................           22696          3.4294               1               2               3               4               7
26......................................              34          3.1176               1               1               2               4               6
27......................................            4153          5.4211               1               1               3               7              12
28......................................           13896          5.9431               1               2               4               7              12
29......................................            4266          3.5375               1               1               3               4               7
31......................................            3075          4.4062               1               2               3               5               8
32......................................            1343          2.9717               1               1               2               3               6
34......................................           20072          5.4331               1               3               4               7              11
35......................................            4264          3.5561               1               2               3               4               7
36......................................            5393          1.5366               1               1               1               1               2
37......................................            1685          3.7187               1               1               2               4               8
38......................................             116          2.5948               1               1               2               3               5
39......................................            1898          2.0327               1               1               1               2               4
40......................................            2281          3.1806               1               1               2               4               7
42......................................            4026          2.0904               1               1               1               2               4
43......................................             120          3.4250               1               2               3               5               7
44......................................            1343          5.0551               2               3               4               6               9
45......................................            2414          3.4731               1               2               3               4               6
46......................................            3148          4.6436               1               2               4               6               9
47......................................            1220          3.2975               1               1               3               4               7
48......................................               2          4.5000               4               4               5               5               5
49......................................            2277          5.0097               1               2               4               6               9
50......................................            3004          1.9767               1               1               2               2               3
51......................................             299          2.8194               1               1               1               3               6
52......................................              89          2.7528               1               1               2               3               7
53......................................            2989          3.6554               1               1               2               4               8
54......................................               2          6.0000               5               5               7               7               7
55......................................            1686          2.9543               1               1               2               3               6
56......................................             684          2.8436               1               1               2               3               6
57......................................             608          3.7237               1               1               3               4               7
59......................................             120          2.4333               1               1               2               3               5
60......................................               1          4.0000               4               4               4               4               4
61......................................             278          4.5144               1               1               2               5              10
62......................................               4          1.2500               1               1               1               1               2
63......................................            3676          4.4502               1               2               3               5               9
64......................................            3408          6.7183               1               2               5               8              14
65......................................           29086          2.9715               1               2               2               4               5
66......................................            6812          3.2606               1               2               3               4               6
67......................................             489          3.7996               1               2               3               4               7
68......................................           11522          4.1519               1               2               3               5               7
69......................................            3450          3.3183               1               2               3               4               6
70......................................              37          2.5405               1               1               2               3               4
71......................................              99          3.9394               1               2               3               6               7
72......................................             817          3.7931               1               2               3               5               7
73......................................            6282          4.4062               1               2               3               6               8
74......................................               2          2.5000               2               2               3               3               3

[[Page 25665]]

                                                                                                                                                        
75......................................           40757         10.2370               4               5               8              13              20
76......................................           41668         11.3195               3               5               9              14              21
77......................................            2040          4.8819               1               2               4               7              10
78......................................           30845          7.3107               3               5               7               9              12
79......................................          247000          8.4030               3               4               7              10              15
80......................................            8299          5.8754               2               3               5               7              10
81......................................               6         12.6667               2               3               6               8               8
82......................................           71035          7.1298               2               3               6               9              14
83......................................            7249          5.5655               2               3               4               7              10
84......................................            1290          3.3256               1               2               3               4               6
85......................................           22415          6.6640               2               3               5               8              13
86......................................            1501          3.8741               1               2               3               5               7
87......................................           73076          6.3172               1               3               5               8              12
88......................................          388565          5.4142               2               3               4               7              10
89......................................          469073          6.2791               2               4               5               8              11
90......................................           38989          4.4632               2               3               4               6               8
91......................................              48          3.9375               1               2               3               5               7
92......................................           14464          6.3794               2               3               5               8              12
93......................................            1314          4.3653               1               2               4               6               8
94......................................           13391          6.4833               2               3               5               8              12
95......................................            1388          3.8739               1               2               3               5               7
96......................................           61778          4.8513               2               3               4               6               9
97......................................           25587          3.8266               1               2               3               5               7
98......................................              28          4.9286               1               2               3               5              13
99......................................           26442          3.0393               1               1               2               4               6
100.....................................           10283          2.1219               1               1               2               3               4
101.....................................           20140          4.4383               1               2               3               5               9
102.....................................            4520          2.7914               1               1               2               3               5
103.....................................             490         48.0898               9              14              29              67             115
104.....................................           29151         12.4470               4               7              10              16              23
105.....................................           25542          9.6459               4               6               8              11              17
106.....................................          106585         10.6917               6               7               9              12              17
107.....................................           68972          7.9520               4               5               7               9              13
108.....................................            8075         11.7282               4               6               9              14              22
110.....................................           62245          9.6084               2               5               8              12              18
111.....................................            5581          5.8094               2               4               6               7               9
112.....................................          118470          3.9277               1               1               3               5               8
113.....................................           46689         12.2570               4               6               9              15              24
114.....................................            8489          8.3873               2               4               7              11              16
115.....................................           15007          8.7475               2               4               7              11              17
116.....................................          208927          4.1747               1               2               3               5               8
117.....................................            3726          3.9847               1               1               2               5               9
118.....................................            6481          2.9303               1               1               2               3               6
119.....................................            1629          5.3640               1               1               3               7              13
120.....................................           37814          8.1649               1               2               5              10              18
121.....................................          170012          6.6480               2               4               6               8              12
122.....................................           83182          4.2023               1               2               4               6               7
123.....................................           43363          4.4029               1               1               2               5              10
124.....................................          154194          4.4587               1               2               4               6               9
125.....................................           62627          2.8721               1               1               2               4               6
126.....................................            5399         12.4253               4               6               9              15              25
127.....................................          719871          5.5133               2               3               4               7              10
128.....................................           16049          6.0323               3               4               5               7               9
129.....................................            4455          2.9495               1               1               1               3               7
130.....................................           98047          5.9926               2               3               5               7              10
131.....................................           24574          4.6703               1               3               4               6               8
132.....................................          174092          3.1532               1               2               3               4               6
133.....................................            6631          2.4803               1               1               2               3               5
134.....................................           30358          3.4496               1               2               3               4               6
135.....................................            8217          4.3269               1               2               3               5               8
136.....................................            1113          2.9695               1               1               2               4               5
138.....................................          209079          4.0464               1               2               3               5               8
139.....................................           67303          2.5774               1               1               2               3               5
140.....................................          107658          2.9719               1               1               2               4               5
141.....................................           81733          3.8534               1               2               3               5               7
142.....................................           36613          2.7911               1               1               2               3               5
143.....................................          143826          2.2585               1               1               2               3               4
144.....................................           78710          5.2279               1               2               4               7              10
145.....................................            6350          2.8698               1               1               2               4               6
146.....................................           10372         10.2717               5               7               9              12              17

[[Page 25666]]

                                                                                                                                                        
147.....................................            1779          6.7482               4               5               7               8              10
148.....................................          146892         12.2593               5               7              10              15              22
149.....................................           14387          6.8504               4               5               6               8              10
150.....................................           23756         10.8870               4               6               9              13              19
151.....................................            4149          5.8894               2               3               5               8              10
152.....................................            4713          8.3393               4               5               7              10              14
153.....................................            1604          5.6359               3               4               5               7               8
154.....................................           34348         13.3603               4               7              10              16              25
155.....................................            4743          4.6884               1               2               4               6               9
156.....................................               2         18.0000               6               6              30              30              30
157.....................................            9287          5.3854               1               2               4               7              11
158.....................................            4110          2.6190               1               1               2               3               5
159.....................................           18320          4.9678               1               2               4               6               9
160.....................................            9765          2.6768               1               1               2               3               5
161.....................................           14601          4.0877               1               2               3               5               9
162.....................................            7065          2.0350               1               1               1               2               4
163.....................................               5         11.8000               4               4              11              13              22
164.....................................            5272          8.5277               4               5               7              10              15
165.....................................            1639          4.9555               2               3               5               6               8
166.....................................            3542          5.1256               2               3               4               6               9
167.....................................            2325          2.8456               1               2               2               4               5
168.....................................            1700          4.5476               1               2               3               6               9
169.....................................             843          2.5326               1               1               2               3               5
170.....................................           12774         11.2370               2               5               8              14              23
171.....................................            1004          4.8337               1               2               4               6               9
172.....................................           32993          7.1114               2               3               5               9              14
173.....................................            2135          3.9611               1               1               3               5               8
174.....................................          248770          4.9263               2               3               4               6               9
175.....................................           21672          3.0085               1               2               3               4               5
176.....................................           18343          5.4925               2               3               4               7              10
177.....................................           11138          4.5572               2               2               4               6               8
178.....................................            3486          3.2114               1               2               3               4               6
179.....................................           12485          6.4200               2               3               5               8              12
180.....................................           93327          5.4284               2               3               4               7              10
181.....................................           21330          3.5057               1               2               3               4               6
182.....................................          234973          4.3571               1               2               3               5               8
183.....................................           69893          3.0179               1               1               2               4               6
184.....................................              91          3.1648               1               2               2               4               7
185.....................................            4046          4.4881               1               2               3               6               9
187.....................................             870          3.9908               1               2               3               5               8
188.....................................           75257          5.5524               1               2               4               7              11
189.....................................            8618          3.2060               1               1               2               4               6
190.....................................              59          5.2712               1               2               4               7              11
191.....................................           10625         14.5648               4               7              11              18              29
192.....................................             831          6.7088               2               4               6               8              12
193.....................................            7334         12.5020               5               7              10              15              22
194.....................................             773          6.9288               3               4               6               9              12
195.....................................            7094          9.8105               4               6               8              12              17
196.....................................            1260          5.7254               2               4               5               7              10
197.....................................           25012          8.6285               3               5               7              10              15
198.....................................            6357          4.5945               2               3               4               6               8
199.....................................            2037         10.1733               3               5               8              14              20
200.....................................            1339         11.4593               2               4               8              14              23
201.....................................            1651         14.2938               4               6              11              18              29
202.....................................           28649          6.7440               2               3               5               8              13
203.....................................           29508          6.8400               2               3               5               9              14
204.....................................           53140          6.0853               2               3               5               7              11
205.....................................           22927          6.5500               2               3               5               8              13
206.....................................            1614          4.0694               1               2               3               5               8
207.....................................           35502          5.1397               1               2               4               6              10
208.....................................            9472          2.8992               1               1               2               4               6
209.....................................          362634          5.4336               3               4               5               6               8
210.....................................          141586          7.0191               3               4               6               8              12
211.....................................           26005          5.1476               3               4               5               6               8
212.....................................              13          3.7692               1               2               4               5               6
213.....................................            7496          8.4066               2               4               6              11              16
216.....................................            6117          9.8190               2               4               7              12              19
217.....................................           20587         12.9505               3               5               9              16              27
218.....................................           23700          5.3217               2               3               4               6              10
219.....................................           18252          3.2882               1               2               3               4               5

[[Page 25667]]

                                                                                                                                                        
220.....................................               5          3.2000               1               1               3               4               7
223.....................................           18540          2.6177               1               1               2               3               5
224.....................................            7682          2.0607               1               1               2               3               4
225.....................................            5644          4.3556               1               2               3               5               9
226.....................................            5540          5.9224               1               2               4               7              12
227.....................................            4597          2.7261               1               1               2               3               5
228.....................................            2757          3.4345               1               1               2               4               8
229.....................................            1100          2.3827               1               1               2               3               5
230.....................................            2386          4.5306               1               2               3               5               9
231.....................................           10685          4.5647               1               2               3               5               9
232.....................................             496          3.8327               1               1               2               4               9
233.....................................            4903          7.6490               2               3               5               9              16
234.....................................            2258          3.6151               1               2               3               5               7
235.....................................            5348          5.3113               1               2               4               6              10
236.....................................           39380          5.1518               1               3               4               6               9
237.....................................            1593          3.6353               1               2               3               5               7
238.....................................            7851          8.8615               3               4               7              11              17
239.....................................           59615          6.4289               2               3               5               8              12
240.....................................           13635          6.6882               2               3               5               8              13
241.....................................            2905          3.9983               1               2               3               5               7
242.....................................            2634          6.7358               2               3               5               8              13
243.....................................           81633          4.8627               2               3               4               6               9
244.....................................           12420          4.9928               2               3               4               6               9
245.....................................            4361          3.7420               1               2               3               5               7
246.....................................            1273          3.9309               1               2               3               5               7
247.....................................           12240          3.4938               1               2               3               4               7
248.....................................            8122          4.6959               1               2               4               6               9
249.....................................           10840          3.6358               1               1               3               4               7
250.....................................            3561          4.2263               1               2               3               5               8
251.....................................            2210          2.9570               1               1               2               4               5
252.....................................               1          1.0000               1               1               1               1               1
253.....................................           19384          4.8629               1               3               4               6               9
254.....................................            9275          3.3439               1               2               3               4               6
255.....................................               2          3.5000               1               1               6               6               6
256.....................................            5517          5.1064               1               2               4               6              10
257.....................................           21137          2.9877               1               2               2               3               5
258.....................................           16396          2.1344               1               1               2               3               3
259.....................................            3772          3.0803               1               1               2               3               7
260.....................................            4464          1.5383               1               1               1               2               2
261.....................................            1967          2.2466               1               1               2               3               4
262.....................................             659          4.2231               1               1               3               6               9
263.....................................           27474         11.3931               3               5               8              14              22
264.....................................            3318          7.0530               2               3               5               8              14
265.....................................            4309          6.5331               1               2               4               8              13
266.....................................            2464          3.4054               1               1               2               4               7
267.....................................             250          4.6400               1               2               3               5               9
268.....................................             875          3.5783               1               1               2               4               7
269.....................................            9415          7.8786               2               3               6              10              16
270.....................................            2662          3.1480               1               1               2               4               7
271.....................................           22961          7.1545               3               4               6               9              13
272.....................................            5940          6.4330               2               3               5               8              12
273.....................................            1307          4.7980               1               2               4               6               8
274.....................................            2409          6.7430               1               3               5               8              14
275.....................................             210          3.5143               1               1               2               4               7
276.....................................             932          4.4678               1               2               4               6               8
277.....................................           81663          5.9066               2               3               5               7              10
278.....................................           24598          4.4950               2               3               4               6               8
279.....................................              12          5.0000               2               2               4               7               9
280.....................................           14156          4.3177               1               2               3               5               8
281.....................................            5945          3.1527               1               1               3               4               6
282.....................................               2          2.0000               2               2               2               2               2
283.....................................            5201          4.8029               1               2               4               6               9
284.....................................            1656          3.3255               1               2               3               4               6
285.....................................            5534         11.0193               3               5               8              13              21
286.....................................            2141          6.9650               3               4               5               8              13
287.....................................            6161         11.2446               3               5               8              13              22
288.....................................            1478          5.9303               2               3               5               6               9
289.....................................            5457          3.2448               1               1               2               3               7
290.....................................            8922          2.5158               1               1               2               3               4
291.....................................              66          1.7576               1               1               1               2               3

[[Page 25668]]

                                                                                                                                                        
292.....................................            5029         10.7174               2               4               8              14              21
293.....................................             347          5.5476               1               2               4               7              12
294.....................................           82039          4.9200               1               2               4               6               9
295.....................................            3593          3.9585               1               2               3               5               7
296.....................................          235524          5.3934               2               3               4               7              10
297.....................................           32715          3.6521               1               2               3               4               7
298.....................................              91          3.7253               1               1               2               4               8
299.....................................             968          5.3657               1               2               4               7              10
300.....................................           16820          6.2855               2               3               5               8              12
301.....................................            2395          3.8113               1               2               3               5               7
302.....................................            7784         10.1382               5               6               8              12              18
303.....................................           19638          9.2247               4               5               7              10              16
304.....................................           12813          8.9904               2               4               7              11              18
305.....................................            2552          3.8985               1               2               3               5               7
306.....................................           10658          5.5019               1               2               3               7              12
307.....................................            2355          2.3996               1               1               2               3               4
308.....................................            9167          6.0165               1               2               4               8              13
309.....................................            3541          2.5945               1               1               2               3               5
310.....................................           26694          4.2835               1               2               3               5               9
311.....................................            7805          1.9543               1               1               1               2               4
312.....................................            1731          4.3437               1               1               3               6               9
313.....................................             587          2.3799               1               1               2               3               5
314.....................................               1         10.0000              10              10              10              10              10
315.....................................           28283          8.0413               1               2               5              10              18
316.....................................           93071          6.8024               2               3               5               9              14
317.....................................             787          2.8666               1               1               2               3               6
318.....................................            6194          6.1022               1               3               5               8              12
319.....................................             407          2.9902               1               1               2               4               6
320.....................................          177474          5.5698               2               3               4               7              10
321.....................................           23679          4.0416               2               2               3               5               7
322.....................................              82          4.1098               2               2               3               4               7
323.....................................           16931          3.2166               1               1               2               4               6
324.....................................            7513          1.9385               1               1               1               2               4
325.....................................            7409          3.9591               1               2               3               5               8
326.....................................            2192          2.7199               1               1               2               3               5
327.....................................               9          2.8889               1               1               2               3               4
328.....................................             759          3.7167               1               2               3               5               7
329.....................................              87          2.2644               1               1               1               3               4
331.....................................           43598          5.5769               1               3               4               7              11
332.....................................            4517          3.5603               1               1               3               5               7
333.....................................             306          4.9477               1               2               4               6              11
334.....................................           18572          4.9690               3               3               4               6               8
335.....................................           10338          3.7163               2               3               3               4               5
336.....................................           54082          3.6046               1               2               3               4               7
337.....................................           31770          2.2858               1               1               2               3               4
338.....................................            2767          4.7879               1               2               3               6              10
339.....................................            1987          4.1726               1               1               3               5               9
340.....................................               2          1.0000               1               1               1               1               1
341.....................................            4909          2.9589               1               1               2               3               6
342.....................................            1007          3.4518               1               2               2               4               7
344.....................................            3882          2.6285               1               1               1               3               5
345.....................................            1343          3.6389               1               1               2               4               8
346.....................................            4844          5.8179               1               3               4               7              11
347.....................................             365          3.1370               1               1               2               4               6
348.....................................            3181          4.2521               1               2               3               5               8
349.....................................             632          2.7658               1               1               2               4               5
350.....................................            6114          4.3999               2               2               4               5               8
352.....................................             638          3.6160               1               2               3               4               7
353.....................................            2816          6.9457               3               4               5               8              12
354.....................................            9926          5.7743               3               3               4               6              10
355.....................................            5640          3.4624               2               3               3               4               5
356.....................................           28862          2.6478               1               2               2               3               4
357.....................................            6330          9.0289               3               5               7              11              17
358.....................................           27373          4.3708               2               3               3               5               7
359.....................................           27990          2.9775               2               2               3               3               4
360.....................................           17843          3.1581               1               2               3               4               5
361.....................................             540          3.3259               1               1               2               3               7
363.....................................            3943          3.3109               1               2               2               3               6
364.....................................            1828          3.5656               1               1               2               5               8
365.....................................            2298          6.8903               1               2               5               9              14

[[Page 25669]]

                                                                                                                                                        
366.....................................            4368          6.8116               1               3               5               8              14
367.....................................             506          2.8893               1               1               2               3               6
368.....................................            2895          6.3530               2               3               5               8              12
369.....................................            2588          3.0622               1               1               2               4               6
370.....................................            1154          5.4610               2               3               4               5               9
371.....................................            1157          3.4754               2               3               3               4               5
372.....................................             975          3.1549               1               2               2               3               5
373.....................................            3868          2.1171               1               1               2               2               3
374.....................................             147          3.0340               1               2               2               3               3
375.....................................               9          5.1111               2               2               3               9              10
376.....................................             214          2.9252               1               2               2               3               6
377.....................................              52          4.4808               1               2               3               6               9
378.....................................             168          2.5952               1               1               2               3               4
379.....................................             334          3.5868               1               1               2               3               7
380.....................................              87          2.0345               1               1               2               2               3
381.....................................             187          2.1283               1               1               1               2               4
382.....................................              40          1.2750               1               1               1               1               2
383.....................................            1460          3.7301               1               2               3               4               8
384.....................................             123          2.6585               1               1               2               3               6
385.....................................               1          2.0000               2               2               2               2               2
389.....................................               9          8.6667               1               3               7              10              15
390.....................................              13          6.0000               2               2               4               5              17
392.....................................            2513         10.3828               4               5               7              12              21
394.....................................            1805          7.0853               1               2               4               8              16
395.....................................           70948          4.7241               1               2               3               6               9
396.....................................              15         18.4667               1               2               5              11              15
397.....................................           18814          5.5200               1               2               4               7              11
398.....................................           18127          6.0414               2               3               5               7              11
399.....................................            1322          3.7239               1               2               3               5               7
400.....................................            7225          9.3664               2               3               6              12              20
401.....................................            6653         11.0137               2               4               8              14              23
402.....................................            1464          3.8907               1               1               3               5               9
403.....................................           38919          8.1409               2               3               6              10              17
404.....................................            3797          4.4464               1               2               3               6               9
406.....................................            3308          9.5299               2               4               7              12              20
407.....................................             634          4.3202               1               2               4               5               8
408.....................................            2667          7.5047               1               2               5               9              16
409.....................................            4644          5.8404               2               3               4               6              11
410.....................................           59252          3.4182               1               2               3               4               6
411.....................................              18          2.8889               1               1               2               2               6
412.....................................              24          2.3333               1               1               2               3               4
413.....................................            7781          7.4429               2               3               6               9              15
414.....................................             676          4.2219               1               2               3               5               8
415.....................................           45158         14.3432               4               7              11              18              28
416.....................................          230365          7.3967               2               4               6               9              14
417.....................................              41          5.9024               2               2               5               7              11
418.....................................           21184          6.1906               2               3               5               8              11
419.....................................           15269          5.0200               2               3               4               6               9
420.....................................            2680          3.9474               1               2               3               5               7
421.....................................           12113          3.9569               1               2               3               5               7
422.....................................              86          3.3372               1               2               2               5               7
423.....................................           10723          7.7520               2               3               6               9              15
424.....................................            1621         14.2961               2               5              10              18              29
425.....................................           15405          4.1352               1               2               3               5               8
426.....................................            4449          4.9020               1               2               3               6              10
427.....................................            1633          4.8010               1               2               3               6              10
428.....................................             940          7.1755               1               2               4               8              14
429.....................................           32769          7.1661               2               3               5               8              14
430.....................................           56829          8.7198               2               4               7              11              17
431.....................................             217          7.3088               1               3               5               9              13
432.....................................             409          5.2152               1               2               3               6              12
433.....................................            6811          3.2053               1               1               2               4               7
434.....................................           21537          5.1804               2               3               4               6               9
435.....................................           14552          4.4078               1               2               4               5               8
436.....................................            3322         13.9618               4               7              13              21              28
437.....................................           12779          9.2061               3               5               8              12              16
439.....................................            1138          7.7065               1               3               5               9              16
440.....................................            5155          8.9081               2               3               6              10              19
441.....................................             570          3.4333               1               1               2               4               7
442.....................................           16247          8.1177               1               3               6              10              17

[[Page 25670]]

                                                                                                                                                        
443.....................................            3153          3.3321               1               1               2               4               7
444.....................................            3425          4.5007               1               2               3               5               8
445.....................................            1243          3.3628               1               2               3               4               6
446.....................................               1          2.0000               2               2               2               2               2
447.....................................            4257          2.5130               1               1               2               3               5
449.....................................           27905          3.7822               1               1               3               5               8
450.....................................            6171          2.0826               1               1               1               2               4
451.....................................               9          2.7778               1               1               1               4               5
452.....................................           22863          5.0341               1               2               4               6              10
453.....................................            3796          2.9236               1               1               2               4               6
454.....................................            3855          4.6905               1               2               3               6               9
455.....................................             758          2.7401               1               1               2               3               5
456.....................................             194          8.5670               1               1               3               9              21
457.....................................             128          3.5859               1               1               1               3               9
458.....................................            1526         15.0308               3               7              12              19              31
459.....................................             480          8.9771               2               3               6              11              19
460.....................................            2327          6.0812               1               3               4               7              12
461.....................................            3047          4.4322               1               1               2               4              11
462.....................................           10348         12.4504               4               6              10              16              23
463.....................................           13983          4.4209               1               2               3               5               8
464.....................................            3556          3.3751               1               2               3               4               6
465.....................................             210          2.9095               1               1               1               3               5
466.....................................            1748          4.0955               1               1               2               4               9
467.....................................            1332          4.3949               1               1               2               4               7
468.....................................           61704         13.4718               3               6              10              17              27
471.....................................           12918          6.0694               3               4               5               7              10
472.....................................             179         27.2179               1               8              19              37              55
473.....................................            8429         12.7713               2               3               7              18              33
475.....................................          109339         11.1900               2               5               9              15              22
476.....................................            5924         11.9158               3               6              10              15              22
477.....................................           28747          8.1623               1               3               6              11              17
478.....................................          123286          7.4571               1               3               5               9              15
479.....................................           18337          3.8430               1               2               3               5               7
480.....................................             400         26.7550               8              11              20              32              53
481.....................................             256         27.1133              16              20              24              32              43
482.....................................            6596         12.7329               4               7              10              15              23
483.....................................           41763         40.0560              14              21              33              50              73
484.....................................             391         14.6931               2               6              11              18              27
485.....................................            3471          9.5906               4               5               7              11              18
486.....................................            2244         12.3382               1               5              10              16              25
487.....................................            4210          7.3983               2               3               6               9              14
488.....................................             865         17.0532               4               7              12              22              35
489.....................................           14894          8.9049               2               4               6              11              19
490.....................................            4863          5.4148               1               2               4               7              11
491.....................................           11011          3.6593               2               2               3               4               6
492.....................................            2334         17.1418               4               5              12              27              36
493.....................................           56210          5.6284               1               2               5               7              11
494.....................................           25155          2.4285               1               1               2               3               5
495.....................................             125         16.9920               7              10              13              19              31
496.....................................             895         10.5821               4               6               8              13              20
497.....................................           21969          6.2886               2               3               5               7              11
498.....................................           12500          3.5058               1               2               3               5               6
499.....................................           36205          4.9604               2               2               4               6               9
500.....................................           36448          2.8726               1               2               2               4               5
501.....................................            1895         10.4391               4               6               8              12              19
502.....................................             468          6.5876               3               4               6               8              10
503.....................................            6317          4.2169               1               2               3               5               8
                                         ----------------                                                                                               
                                                11244775                                                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                   Table 7B.--Medicare Prospective Payment System; Selected Percentile Lengths of Stay                                  
                                                        [FY97 MEDPAR Update 12/97 Grouper V16.0]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Number        Arithmetic         10th            25th            50th            75th            90th     
                   DRG                      discharges       mean LOS       percentile      percentile      percentile      percentile      percentile  
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................           36587          9.6084               2               4               7              12              20
2.......................................            6967         10.0350               3               5               8              13              20
3.......................................               3          9.3333               7               7               9              12              12

[[Page 25671]]

                                                                                                                                                        
4.......................................            6322          7.7259               1               3               5               9              17
5.......................................          101105          3.6387               1               2               2               4               8
6.......................................             355          3.0225               1               1               2               4               7
7.......................................           12601         10.0945               2               4               7              12              20
8.......................................            3030          3.1845               1               1               2               4               7
9.......................................            1692          6.4923               1               3               5               8              13
10......................................           19727          6.8631               2               3               5               8              14
11......................................            2960          4.1365               1               2               3               5               8
12......................................           38339          6.6619               2               3               5               8              12
13......................................            6315          5.4716               2               3               4               6               9
14......................................          372136          6.2938               2               3               5               8              12
15......................................          145631          3.8599               1               2               3               5               7
16......................................           13905          5.9283               2               3               4               7              11
17......................................            3212          3.4315               1               2               3               4               7
18......................................           27489          5.5809               2               3               4               7              10
19......................................            7294          3.8174               1               2               3               5               7
20......................................            6590         10.1862               2               5               8              13              19
21......................................            1369          6.8152               2               3               5               8              14
22......................................            2789          4.6587               2               2               4               6               9
23......................................            6884          4.2594               1               2               3               5               8
24......................................           57890          5.0641               1               2               4               6              10
25......................................           22696          3.4294               1               2               3               4               7
26......................................              34          3.1176               1               1               2               4               6
27......................................            4153          5.4211               1               1               3               7              12
28......................................           13896          5.9431               1               2               4               7              12
29......................................            4266          3.5375               1               1               3               4               7
31......................................            3075          4.4062               1               2               3               5               8
32......................................            1343          2.9717               1               1               2               3               6
34......................................           20072          5.4331               1               3               4               7              11
35......................................            4264          3.5561               1               2               3               4               7
36......................................            5393          1.5366               1               1               1               1               2
37......................................            1685          3.7187               1               1               2               4               8
38......................................             116          2.5948               1               1               2               3               5
39......................................            1898          2.0327               1               1               1               2               4
40......................................            2281          3.1806               1               1               2               4               7
42......................................            4026          2.0904               1               1               1               2               4
43......................................             120          3.4250               1               2               3               5               7
44......................................            1343          5.0551               2               3               4               6               9
45......................................            2414          3.4731               1               2               3               4               6
46......................................            3148          4.6436               1               2               4               6               9
47......................................            1220          3.2975               1               1               3               4               7
48......................................               2          4.5000               4               4               5               5               5
49......................................            2277          5.0097               1               2               4               6               9
50......................................            3004          1.9767               1               1               2               2               3
51......................................             299          2.8194               1               1               1               3               6
52......................................              89          2.7528               1               1               2               3               7
53......................................            2989          3.6554               1               1               2               4               8
54......................................               2          6.0000               5               5               7               7               7
55......................................            1686          2.9543               1               1               2               3               6
56......................................             684          2.8436               1               1               2               3               6
57......................................             608          3.7237               1               1               3               4               7
59......................................             120          2.4333               1               1               2               3               5
60......................................               1          4.0000               4               4               4               4               4
61......................................             278          4.5144               1               1               2               5              10
62......................................               4          1.2500               1               1               1               1               2
63......................................            3676          4.4502               1               2               3               5               9
64......................................            3408          6.7183               1               2               5               8              14
65......................................           29086          2.9715               1               2               2               4               5
66......................................            6812          3.2606               1               2               3               4               6
67......................................             489          3.7996               1               2               3               4               7
68......................................           11522          4.1519               1               2               3               5               7
69......................................            3450          3.3183               1               2               3               4               6
70......................................              37          2.5405               1               1               2               3               4
71......................................              99          3.9394               1               2               3               6               7
72......................................             817          3.7931               1               2               3               5               7
73......................................            6282          4.4062               1               2               3               6               8
74......................................               2          2.5000               2               2               3               3               3
75......................................           40757         10.2370               4               5               8              13              20
76......................................           41668         11.3195               3               5               9              14              21
77......................................            2040          4.8819               1               2               4               7              10

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78......................................           30845          7.3107               3               5               7               9              12
79......................................          247000          8.4030               3               4               7              10              15
80......................................            8299          5.8754               2               3               5               7              10
81......................................               6         12.6667               2               3               6               8               8
82......................................           71035          7.1298               2               3               6               9              14
83......................................            7249          5.5655               2               3               4               7              10
84......................................            1290          3.3256               1               2               3               4               6
85......................................           22415          6.6640               2               3               5               8              13
86......................................            1501          3.8741               1               2               3               5               7
87......................................           73076          6.3172               1               3               5               8              12
88......................................          388565          5.4142               2               3               4               7              10
89......................................          469073          6.2791               2               4               5               8              11
90......................................           38989          4.4632               2               3               4               6               8
91......................................              48          3.9375               1               2               3               5               7
92......................................           14464          6.3794               2               3               5               8              12
93......................................            1314          4.3653               1               2               4               6               8
94......................................           13391          6.4833               2               3               5               8              12
95......................................            1388          3.8739               1               2               3               5               7
96......................................           61778          4.8513               2               3               4               6               9
97......................................           25587          3.8266               1               2               3               5               7
98......................................              28          4.9286               1               2               3               5              13
99......................................           26442          3.0393               1               1               2               4               6
100.....................................           10283          2.1219               1               1               2               3               4
101.....................................           20140          4.4383               1               2               3               5               9
102.....................................            4520          2.7914               1               1               2               3               5
103.....................................             490         48.0898               9              14              29              67             115
104.....................................           29920         12.5288               4               7              10              16              23
105.....................................           26799          9.7413               4               6               8              11              17
106.....................................            4737         10.9261               5               7               9              13              19
107.....................................          101848         10.6808               6               7               9              12              17
108.....................................            6049         11.2420               4               6               9              14              21
109.....................................           68972          7.9520               4               5               7               9              13
110.....................................           62245          9.6084               2               5               8              12              18
111.....................................            5581          5.8094               2               4               6               7               9
112.....................................          118470          3.9277               1               1               3               5               8
113.....................................           46689         12.2570               4               6               9              15              24
114.....................................            8489          8.3873               2               4               7              11              16
115.....................................           15007          8.7475               2               4               7              11              17
116.....................................          208927          4.1747               1               2               3               5               8
117.....................................            3726          3.9847               1               1               2               5               9
118.....................................            6481          2.9303               1               1               2               3               6
119.....................................            1629          5.3640               1               1               3               7              13
120.....................................           37814          8.1649               1               2               5              10              18
121.....................................          170012          6.6480               2               4               6               8              12
122.....................................           83182          4.2023               1               2               4               6               7
123.....................................           43363          4.4029               1               1               2               5              10
124.....................................          154194          4.4587               1               2               4               6               9
125.....................................           62627          2.8721               1               1               2               4               6
126.....................................            5399         12.4253               4               6               9              15              25
127.....................................          719871          5.5133               2               3               4               7              10
128.....................................           16049          6.0323               3               4               5               7               9
129.....................................            4455          2.9495               1               1               1               3               7
130.....................................           98047          5.9926               2               3               5               7              10
131.....................................           24574          4.6703               1               3               4               6               8
132.....................................          174092          3.1532               1               2               3               4               6
133.....................................            6631          2.4803               1               1               2               3               5
134.....................................           30358          3.4496               1               2               3               4               6
135.....................................            8217          4.3269               1               2               3               5               8
136.....................................            1113          2.9695               1               1               2               4               5
138.....................................          209079          4.0464               1               2               3               5               8
139.....................................           67303          2.5774               1               1               2               3               5
140.....................................          107658          2.9719               1               1               2               4               5
141.....................................           81733          3.8534               1               2               3               5               7
142.....................................           36613          2.7911               1               1               2               3               5
143.....................................          143826          2.2585               1               1               2               3               4
144.....................................           78710          5.2279               1               2               4               7              10
145.....................................            6350          2.8698               1               1               2               4               6
146.....................................           10372         10.2717               5               7               9              12              17
147.....................................            1779          6.7482               4               5               7               8              10
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152.....................................            4713          8.3393               4               5               7              10              14
153.....................................            1604          5.6359               3               4               5               7               8
154.....................................           34348         13.3603               4               7              10              16              25
155.....................................            4743          4.6884               1               2               4               6               9
156.....................................               2         18.0000               6               6              30              30              30
157.....................................            9287          5.3854               1               2               4               7              11
158.....................................            4110          2.6190               1               1               2               3               5
159.....................................           18320          4.9678               1               2               4               6               9
160.....................................            9765          2.6768               1               1               2               3               5
161.....................................           14601          4.0877               1               2               3               5               9
162.....................................            7065          2.0350               1               1               1               2               4
163.....................................               5         11.8000               4               4              11              13              22
164.....................................            5272          8.5277               4               5               7              10              15
165.....................................            1639          4.9555               2               3               5               6               8
166.....................................            3542          5.1256               2               3               4               6               9
167.....................................            2325          2.8456               1               2               2               4               5
168.....................................            1700          4.5476               1               2               3               6               9
169.....................................             843          2.5326               1               1               2               3               5
170.....................................           12774         11.2370               2               5               8              14              23
171.....................................            1004          4.8337               1               2               4               6               9
172.....................................           32993          7.1114               2               3               5               9              14
173.....................................            2135          3.9611               1               1               3               5               8
174.....................................          248770          4.9263               2               3               4               6               9
175.....................................           21672          3.0085               1               2               3               4               5
176.....................................           18343          5.4925               2               3               4               7              10
177.....................................           11138          4.5572               2               2               4               6               8
178.....................................            3486          3.2114               1               2               3               4               6
179.....................................           12485          6.4200               2               3               5               8              12
180.....................................           93327          5.4284               2               3               4               7              10
181.....................................           21330          3.5057               1               2               3               4               6
182.....................................          234973          4.3571               1               2               3               5               8
183.....................................           69893          3.0179               1               1               2               4               6
184.....................................              91          3.1648               1               2               2               4               7
185.....................................            4046          4.4881               1               2               3               6               9
187.....................................             870          3.9908               1               2               3               5               8
188.....................................           75257          5.5524               1               2               4               7              11
189.....................................            8618          3.2060               1               1               2               4               6
190.....................................              59          5.2712               1               2               4               7              11
191.....................................           10625         14.5648               4               7              11              18              29
192.....................................             831          6.7088               2               4               6               8              12
193.....................................            7334         12.5020               5               7              10              15              22
194.....................................             773          6.9288               3               4               6               9              12
195.....................................            7094          9.8105               4               6               8              12              17
196.....................................            1260          5.7254               2               4               5               7              10
197.....................................           25012          8.6285               3               5               7              10              15
198.....................................            6357          4.5945               2               3               4               6               8
199.....................................            2037         10.1733               3               5               8              14              20
200.....................................            1339         11.4593               2               4               8              14              23
201.....................................            1651         14.2938               4               6              11              18              29
202.....................................           28649          6.7440               2               3               5               8              13
203.....................................           29508          6.8400               2               3               5               9              14
204.....................................           53140          6.0853               2               3               5               7              11
205.....................................           22927          6.5500               2               3               5               8              13
206.....................................            1614          4.0694               1               2               3               5               8
207.....................................           35502          5.1397               1               2               4               6              10
208.....................................            9472          2.8992               1               1               2               4               6
209.....................................          362634          5.4336               3               4               5               6               8
210.....................................          141586          7.0191               3               4               6               8              12
211.....................................           26005          5.1476               3               4               5               6               8
212.....................................              13          3.7692               1               2               4               5               6
213.....................................            7496          8.4066               2               4               6              11              16
216.....................................            6117          9.8190               2               4               7              12              19
217.....................................           20587         12.9505               3               5               9              16              27
218.....................................           23700          5.3217               2               3               4               6              10
219.....................................           18252          3.2882               1               2               3               4               5
220.....................................               5          3.2000               1               1               3               4               7
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[[Page 25674]]

                                                                                                                                                        
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227.....................................            4597          2.7261               1               1               2               3               5
228.....................................            2757          3.4345               1               1               2               4               8
229.....................................            1100          2.3827               1               1               2               3               5
230.....................................            2386          4.5306               1               2               3               5               9
231.....................................           10685          4.5647               1               2               3               5               9
232.....................................             496          3.8327               1               1               2               4               9
233.....................................            4903          7.6490               2               3               5               9              16
234.....................................            2258          3.6151               1               2               3               5               7
235.....................................            5348          5.3113               1               2               4               6              10
236.....................................           39380          5.1518               1               3               4               6               9
237.....................................            1593          3.6353               1               2               3               5               7
238.....................................            7851          8.8615               3               4               7              11              17
239.....................................           59615          6.4289               2               3               5               8              12
240.....................................           13635          6.6882               2               3               5               8              13
241.....................................            2905          3.9983               1               2               3               5               7
242.....................................            2634          6.7358               2               3               5               8              13
243.....................................           81633          4.8627               2               3               4               6               9
244.....................................           12420          4.9928               2               3               4               6               9
245.....................................            4361          3.7420               1               2               3               5               7
246.....................................            1273          3.9309               1               2               3               5               7
247.....................................           12240          3.4938               1               2               3               4               7
248.....................................            8122          4.6959               1               2               4               6               9
249.....................................           10840          3.6358               1               1               3               4               7
250.....................................            3561          4.2263               1               2               3               5               8
251.....................................            2210          2.9570               1               1               2               4               5
252.....................................               1          1.0000               1               1               1               1               1
253.....................................           19384          4.8629               1               3               4               6               9
254.....................................            9275          3.3439               1               2               3               4               6
255.....................................               2          3.5000               1               1               6               6               6
256.....................................            5517          5.1064               1               2               4               6              10
257.....................................           21137          2.9877               1               2               2               3               5
258.....................................           16396          2.1344               1               1               2               3               3
259.....................................            3772          3.0803               1               1               2               3               7
260.....................................            4464          1.5383               1               1               1               2               2
261.....................................            1967          2.2466               1               1               2               3               4
262.....................................             659          4.2231               1               1               3               6               9
263.....................................           27474         11.3931               3               5               8              14              22
264.....................................            3318          7.0530               2               3               5               8              14
265.....................................            4309          6.5331               1               2               4               8              13
266.....................................            2464          3.4054               1               1               2               4               7
267.....................................             250          4.6400               1               2               3               5               9
268.....................................             875          3.5783               1               1               2               4               7
269.....................................            9415          7.8786               2               3               6              10              16
270.....................................            2662          3.1480               1               1               2               4               7
271.....................................           22961          7.1545               3               4               6               9              13
272.....................................            5940          6.4330               2               3               5               8              12
273.....................................            1307          4.7980               1               2               4               6               8
274.....................................            2409          6.7430               1               3               5               8              14
275.....................................             210          3.5143               1               1               2               4               7
276.....................................             932          4.4678               1               2               4               6               8
277.....................................           81663          5.9066               2               3               5               7              10
278.....................................           24598          4.4950               2               3               4               6               8
279.....................................              12          5.0000               2               2               4               7               9
280.....................................           14156          4.3177               1               2               3               5               8
281.....................................            5945          3.1527               1               1               3               4               6
282.....................................               2          2.0000               2               2               2               2               2
283.....................................            5201          4.8029               1               2               4               6               9
284.....................................            1656          3.3255               1               2               3               4               6
285.....................................            5534         11.0193               3               5               8              13              21
286.....................................            2141          6.9650               3               4               5               8              13
287.....................................            6161         11.2446               3               5               8              13              22
288.....................................            1478          5.9303               2               3               5               6               9
289.....................................            5457          3.2448               1               1               2               3               7
290.....................................            8922          2.5158               1               1               2               3               4
291.....................................              66          1.7576               1               1               1               2               3
292.....................................            5029         10.7174               2               4               8              14              21
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295.....................................            3593          3.9585               1               2               3               5               7
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297.....................................           32715          3.6521               1               2               3               4               7
298.....................................              91          3.7253               1               1               2               4               8
299.....................................             968          5.3657               1               2               4               7              10
300.....................................           16820          6.2855               2               3               5               8              12
301.....................................            2395          3.8113               1               2               3               5               7
302.....................................            7784         10.1382               5               6               8              12              18
303.....................................           19638          9.2247               4               5               7              10              16
304.....................................           12813          8.9904               2               4               7              11              18
305.....................................            2552          3.8985               1               2               3               5               7
306.....................................           10658          5.5019               1               2               3               7              12
307.....................................            2355          2.3996               1               1               2               3               4
308.....................................            9167          6.0165               1               2               4               8              13
309.....................................            3541          2.5945               1               1               2               3               5
310.....................................           26694          4.2835               1               2               3               5               9
311.....................................            7805          1.9543               1               1               1               2               4
312.....................................            1731          4.3437               1               1               3               6               9
313.....................................             587          2.3799               1               1               2               3               5
314.....................................               1         10.0000              10              10              10              10              10
315.....................................           28283          8.0413               1               2               5              10              18
316.....................................           93071          6.8024               2               3               5               9              14
317.....................................             787          2.8666               1               1               2               3               6
318.....................................            6194          6.1022               1               3               5               8              12
319.....................................             407          2.9902               1               1               2               4               6
320.....................................          177474          5.5698               2               3               4               7              10
321.....................................           23679          4.0416               2               2               3               5               7
322.....................................              82          4.1098               2               2               3               4               7
323.....................................           16931          3.2166               1               1               2               4               6
324.....................................            7513          1.9385               1               1               1               2               4
325.....................................            7409          3.9591               1               2               3               5               8
326.....................................            2192          2.7199               1               1               2               3               5
327.....................................               9          2.8889               1               1               2               3               4
328.....................................             759          3.7167               1               2               3               5               7
329.....................................              87          2.2644               1               1               1               3               4
331.....................................           43598          5.5769               1               3               4               7              11
332.....................................            4517          3.5603               1               1               3               5               7
333.....................................             306          4.9477               1               2               4               6              11
334.....................................           18572          4.9690               3               3               4               6               8
335.....................................           10338          3.7163               2               3               3               4               5
336.....................................           54082          3.6046               1               2               3               4               7
337.....................................           31770          2.2858               1               1               2               3               4
338.....................................            2767          4.7879               1               2               3               6              10
339.....................................            1987          4.1726               1               1               3               5               9
340.....................................               2          1.0000               1               1               1               1               1
341.....................................            4909          2.9589               1               1               2               3               6
342.....................................            1007          3.4518               1               2               2               4               7
344.....................................            3882          2.6285               1               1               1               3               5
345.....................................            1343          3.6389               1               1               2               4               8
346.....................................            4844          5.8179               1               3               4               7              11
347.....................................             365          3.1370               1               1               2               4               6
348.....................................            3181          4.2521               1               2               3               5               8
349.....................................             632          2.7658               1               1               2               4               5
350.....................................            6114          4.3999               2               2               4               5               8
352.....................................             638          3.6160               1               2               3               4               7
353.....................................            2816          6.9457               3               4               5               8              12
354.....................................            9926          5.7743               3               3               4               6              10
355.....................................            5640          3.4624               2               3               3               4               5
356.....................................           28862          2.6478               1               2               2               3               4
357.....................................            6330          9.0289               3               5               7              11              17
358.....................................           27373          4.3708               2               3               3               5               7
359.....................................           27990          2.9775               2               2               3               3               4
360.....................................           17843          3.1581               1               2               3               4               5
361.....................................             540          3.3259               1               1               2               3               7
363.....................................            3943          3.3109               1               2               2               3               6
364.....................................            1828          3.5656               1               1               2               5               8
365.....................................            2298          6.8903               1               2               5               9              14
366.....................................            4368          6.8116               1               3               5               8              14
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[[Page 25676]]

                                                                                                                                                        
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371.....................................            1157          3.4754               2               3               3               4               5
372.....................................             975          3.1549               1               2               2               3               5
373.....................................            3868          2.1171               1               1               2               2               3
374.....................................             147          3.0340               1               2               2               3               3
375.....................................               9          5.1111               2               2               3               9              10
376.....................................             214          2.9252               1               2               2               3               6
377.....................................              52          4.4808               1               2               3               6               9
378.....................................             168          2.5952               1               1               2               3               4
379.....................................             334          3.5868               1               1               2               3               7
380.....................................              87          2.0345               1               1               2               2               3
381.....................................             187          2.1283               1               1               1               2               4
382.....................................              40          1.2750               1               1               1               1               2
383.....................................            1460          3.7301               1               2               3               4               8
384.....................................             123          2.6585               1               1               2               3               6
385.....................................               1          2.0000               2               2               2               2               2
389.....................................               9          8.6667               1               3               7              10              15
390.....................................              13          6.0000               2               2               4               5              17
392.....................................            2513         10.3828               4               5               7              12              21
394.....................................            1805          7.0853               1               2               4               8              16
395.....................................           70948          4.7241               1               2               3               6               9
396.....................................              15         18.4667               1               2               5              11              15
397.....................................           18814          5.5200               1               2               4               7              11
398.....................................           18127          6.0414               2               3               5               7              11
399.....................................            1322          3.7239               1               2               3               5               7
400.....................................            7225          9.3664               2               3               6              12              20
401.....................................            6653         11.0137               2               4               8              14              23
402.....................................            1464          3.8907               1               1               3               5               9
403.....................................           38919          8.1409               2               3               6              10              17
404.....................................            3797          4.4464               1               2               3               6               9
406.....................................            3308          9.5299               2               4               7              12              20
407.....................................             634          4.3202               1               2               4               5               8
408.....................................            2667          7.5047               1               2               5               9              16
409.....................................            4644          5.8404               2               3               4               6              11
410.....................................           59252          3.4182               1               2               3               4               6
411.....................................              18          2.8889               1               1               2               2               6
412.....................................              24          2.3333               1               1               2               3               4
413.....................................            7781          7.4429               2               3               6               9              15
414.....................................             676          4.2219               1               2               3               5               8
415.....................................           45158         14.3432               4               7              11              18              28
416.....................................          230365          7.3967               2               4               6               9              14
417.....................................              41          5.9024               2               2               5               7              11
418.....................................           21184          6.1906               2               3               5               8              11
419.....................................           15269          5.0200               2               3               4               6               9
420.....................................            2680          3.9474               1               2               3               5               7
421.....................................           12113          3.9569               1               2               3               5               7
422.....................................              86          3.3372               1               2               2               5               7
423.....................................           10723          7.7520               2               3               6               9              15
424.....................................            1621         14.2961               2               5              10              18              29
425.....................................           15405          4.1352               1               2               3               5               8
426.....................................            4449          4.9020               1               2               3               6              10
427.....................................            1633          4.8010               1               2               3               6              10
428.....................................             940          7.1755               1               2               4               8              14
429.....................................           32769          7.1661               2               3               5               8              14
430.....................................           56829          8.7198               2               4               7              11              17
431.....................................             217          7.3088               1               3               5               9              13
432.....................................             409          5.2152               1               2               3               6              12
433.....................................            6811          3.2053               1               1               2               4               7
434.....................................           21537          5.1804               2               3               4               6               9
435.....................................           14552          4.4078               1               2               4               5               8
436.....................................            3322         13.9618               4               7              13              21              28
437.....................................           12779          9.2061               3               5               8              12              16
439.....................................            1138          7.7065               1               3               5               9              16
440.....................................            5155          8.9081               2               3               6              10              19
441.....................................             570          3.4333               1               1               2               4               7
442.....................................           16247          8.1177               1               3               6              10              17
443.....................................            3153          3.3321               1               1               2               4               7
444.....................................            3425          4.5007               1               2               3               5               8

[[Page 25677]]

                                                                                                                                                        
445.....................................            1243          3.3628               1               2               3               4               6
446.....................................               1          2.0000               2               2               2               2               2
447.....................................            4257          2.5130               1               1               2               3               5
449.....................................           27905          3.7822               1               1               3               5               8
450.....................................            6171          2.0826               1               1               1               2               4
451.....................................               9          2.7778               1               1               1               4               5
452.....................................           22863          5.0341               1               2               4               6              10
453.....................................            3796          2.9236               1               1               2               4               6
454.....................................            3855          4.6905               1               2               3               6               9
455.....................................             758          2.7401               1               1               2               3               5
461.....................................            3047          4.4322               1               1               2               4              11
462.....................................           10348         12.4504               4               6              10              16              23
463.....................................           13983          4.4209               1               2               3               5               8
464.....................................            3556          3.3751               1               2               3               4               6
465.....................................             210          2.9095               1               1               1               3               5
466.....................................            1748          4.0955               1               1               2               4               9
467.....................................            1332          4.3949               1               1               2               4               7
468.....................................           61704         13.4718               3               6              10              17              27
471.....................................           12918          6.0694               3               4               5               7              10
473.....................................            8429         12.7713               2               3               7              18              33
475.....................................          109339         11.1900               2               5               9              15              22
476.....................................            5924         11.9158               3               6              10              15              22
477.....................................           28747          8.1623               1               3               6              11              17
478.....................................          123286          7.4571               1               3               5               9              15
479.....................................           18337          3.8430               1               2               3               5               7
480.....................................             400         26.7550               8              11              20              32              53
481.....................................             256         27.1133              16              20              24              32              43
482.....................................            6596         12.7329               4               7              10              15              23
483.....................................           41763         40.0560              14              21              33              50              73
484.....................................             391         14.6931               2               6              11              18              27
485.....................................            3471          9.5906               4               5               7              11              18
486.....................................            2244         12.3382               1               5              10              16              25
487.....................................            4210          7.3983               2               3               6               9              14
488.....................................             865         17.0532               4               7              12              22              35
489.....................................           14894          8.9049               2               4               6              11              19
490.....................................            4863          5.4148               1               2               4               7              11
491.....................................           11011          3.6593               2               2               3               4               6
492.....................................            2334         17.1418               4               5              12              27              36
493.....................................           56210          5.6284               1               2               5               7              11
494.....................................           25155          2.4285               1               1               2               3               5
495.....................................             125         16.9920               7              10              13              19              31
496.....................................             895         10.5821               4               6               8              13              20
497.....................................           21969          6.2886               2               3               5               7              11
498.....................................           12500          3.5058               1               2               3               5               6
499.....................................           36205          4.9604               2               2               4               6               9
500.....................................           36448          2.8726               1               2               2               4               5
501.....................................            1895         10.4391               4               6               8              12              19
502.....................................             468          6.5876               3               4               6               8              10
503.....................................            6317          4.2169               1               2               3               5               8
504.....................................             157         31.5669               8              14              25              39              57
505.....................................             171          5.8421               1               1               1               4              11
506.....................................            1130         16.7522               4               8              13              21              34
507.....................................             391          8.9668               2               4               7              12              17
508.....................................            1206          7.7355               2               3               5               9              16
509.....................................             462          4.8528               1               2               3               6              10
510.....................................            1006          6.8897               2               3               5               8              13
511.....................................             311          4.8135               1               2               3               6               9
                                         ----------------                                                                                               
                                                11244775                                                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 25678]]


 Table 8A.--Statewide Average Operating Cost-to-Charge Ratios For Urban 
             and Rural Hospitals (Case Weighted) March 1998             
------------------------------------------------------------------------
                         State                           Urban    Rural 
------------------------------------------------------------------------
ALABAMA...............................................    0.373    0.446
ALASKA................................................    0.503    0.731
ARIZONA...............................................    0.375    0.540
ARKANSAS..............................................    0.515    0.457
CALIFORNIA............................................    0.363    0.481
COLORADO..............................................    0.467    0.565
CONNECTICUT...........................................    0.546    0.532
DELAWARE..............................................    0.506    0.488
DISTRICT OF COLUMBIA..................................    0.521  .......
FLORIDA...............................................    0.384    0.389
GEORGIA...............................................    0.497    0.497
HAWAII................................................    0.430    0.559
IDAHO.................................................    0.564    0.582
ILLINOIS..............................................    0.445    0.546
INDIANA...............................................    0.559    0.597
IOWA..................................................    0.513    0.640
KANSAS................................................    0.429    0.644
KENTUCKY..............................................    0.496    0.519
LOUISIANA.............................................    0.442    0.496
MAINE.................................................    0.620    0.576
MARYLAND..............................................    0.765    0.818
MASSACHUSETTS.........................................    0.540    0.571
MICHIGAN..............................................    0.467    0.580
MINNESOTA.............................................    0.532    0.611
MISSISSIPPI...........................................    0.478    0.499
MISSOURI..............................................    0.441    0.516
MONTANA...............................................    0.524    0.569
NEBRASKA..............................................    0.482    0.639
NEVADA................................................    0.320    0.584
NEW HAMPSHIRE.........................................    0.573    0.586
NEW JERSEY............................................    0.436  .......
NEW MEXICO............................................    0.466    0.510
NEW YORK..............................................    0.553    0.633
NORTH CAROLINA........................................    0.523    0.461
NORTH DAKOTA..........................................    0.620    0.666
OHIO..................................................    0.533    0.576
OKLAHOMA..............................................    0.460    0.529
OREGON................................................    0.546    0.624
PENNSYLVANIA..........................................    0.407    0.527
PUERTO RICO...........................................    0.481    0.569
RHODE ISLAND..........................................    0.571  .......
SOUTH CAROLINA........................................    0.472    0.494
SOUTH DAKOTA..........................................    0.537    0.620
TENNESSEE.............................................    0.481    0.508
TEXAS.................................................    0.427    0.536
UTAH..................................................    0.538    0.635
VERMONT...............................................    0.615    0.577
VIRGINIA..............................................    0.476    0.499
WASHINGTON............................................    0.599    0.662
WEST VIRGINIA.........................................    0.592    0.573
WISCONSIN.............................................    0.568    0.641
WYOMING...............................................    0.495    0.694
------------------------------------------------------------------------


    Table 8B.--Statewide Average Capital Cost-to-Charge Ratios (Case    
                          Weighted) March 1998                          
------------------------------------------------------------------------
                             State                                Ratio 
------------------------------------------------------------------------
ALABAMA........................................................    0.047
ALASKA.........................................................    0.066
ARIZONA........................................................    0.043
ARKANSAS.......................................................    0.054
CALIFORNIA.....................................................    0.038
COLORADO.......................................................    0.052
CONNECTICUT....................................................    0.042
DELAWARE.......................................................    0.058
DISTRICT OF COLUMBIA...........................................    0.040
FLORIDA........................................................    0.046
GEORGIA........................................................    0.049
HAWAII.........................................................    0.045
IDAHO..........................................................    0.054
ILLINOIS.......................................................    0.042
INDIANA........................................................    0.059
IOWA...........................................................    0.054
KANSAS.........................................................    0.052
KENTUCKY.......................................................    0.051
LOUISIANA......................................................    0.067
MAINE..........................................................    0.040
MARYLAND.......................................................    0.013
MASSACHUSETTS..................................................    0.056
MICHIGAN.......................................................    0.046
MINNESOTA......................................................    0.056
MISSISSIPPI....................................................    0.054
MISSOURI.......................................................    0.049
MONTANA........................................................    0.052
NEBRASKA.......................................................    0.057
NEVADA.........................................................    0.068
NEW HAMPSHIRE..................................................    0.066
NEW JERSEY.....................................................    0.039
NEW MEXICO.....................................................    0.047
NEW YORK.......................................................    0.053
NORTH CAROLINA.................................................    0.047
NORTH DAKOTA...................................................    0.075
OHIO...........................................................    0.053
OKLAHOMA.......................................................    0.054
OREGON.........................................................    0.055
PENNSYLVANIA...................................................    0.043
PUERTO RICO....................................................    0.054
RHODE ISLAND...................................................    0.033
SOUTH CAROLINA.................................................    0.053
SOUTH DAKOTA...................................................    0.061
TENNESSEE......................................................    0.056
TEXAS..........................................................    0.052
UTAH...........................................................    0.056
VERMONT........................................................    0.047
VIRGINIA.......................................................    0.058
WASHINGTON.....................................................    0.066
WEST VIRGINIA..................................................    0.056
WISCONSIN......................................................    0.052
WYOMING........................................................    0.056
------------------------------------------------------------------------

Appendix A--Regulatory Impact Analysis

I. Introduction

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), unless we certify that a proposed rule would not have 
a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, we consider all hospitals to be 
small entities.
    Also, section 1102(b) of the Social Security Act requires us to 
prepare a regulatory impact analysis for any proposed rule that may 
have a significant impact on the operations of a substantial number 
of small rural hospitals. Such an analysis must conform to the 
provisions of section 603 of the RFA. With the exception of 
hospitals located in certain New England counties, for purposes of 
section 1102(b) of the Act, we define a small rural hospital as a 
hospital with fewer than 100 beds that is located outside of a 
Metropolitan Statistical Area (MSA) or New England County 
Metropolitan Area (NECMA). Section 601(g) of the Social Security 
Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain 
New England counties as belonging to the adjacent NECMA. Thus, for 
purposes of the prospective payment system, we classify these 
hospitals as urban hospitals.
    It is clear that the changes being proposed in this document 
would affect both a substantial number of small rural hospitals as 
well as other classes of hospitals, and the effects on some may be 
significant. Therefore, the discussion below, in combination with 
the rest of this proposed rule, constitutes a combined regulatory 
impact analysis and regulatory flexibility analysis.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

II. Objectives

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

III. Limitations of Our Analysis

    As has been the case in previously published regulatory impact 
analyses, the following quantitative analysis presents the projected 
effects of our proposed policy changes, as well as statutory changes 
effective for FY 1999, on various hospital groups. We estimate the 
effects of individual policy changes by estimating payments per case 
while holding all other payment policies constant. We use the best 
data available, but we do not attempt to predict behavioral 
responses to our policy changes, and we do not make adjustments for 
future changes in such variables as admissions, lengths of stay, or 
case mix. As we have done in previous proposed rules, we are 
soliciting comments and information about the anticipated effects of 
these changes on hospitals and our methodology for estimating them.

IV. GME Payment to Nonhospital Providers

    In the past, Medicare only paid hospitals for GME costs. 
Therefore, FQHCs, RHCs and Medicare+Choice organizations may have 
been reluctant to train many residents since they would incur costs 
in training the residents but would not be reimbursed for those 
costs by Medicare. Under this proposed regulation, where the non-
hospital site incurs all or substantially all of the costs of the 
training at that site, Medicare will reimburse

[[Page 25679]]

the provider for Medicare's share of the reasonable costs of the 
training. The proposal to allow for payments directly to these non-
hospital sites for the costs of training residents in approved 
programs will facilitate more training of residents in settings that 
will be similar to the settings that many of those residents will 
ultimately practice after their training is completed. Additionally, 
this could result in an increase in the number of physicians 
practicing in underserved areas.
    In addition, hospitals are currently allowed to count residents, 
working in nonhospital sites in their count of residents and the 
hospital would be paid GME payments, if it paid for all or 
substantially all of the costs of the program at the non-hospital 
site. Previously the regulation defined the statutory requirement of 
``all or substantially all'' to mean at least the residents'' 
salaries and fringe benefits. Under the proposal we would redefine 
``all or substantially all'' of the costs of the program at the 
nonhospital site to also include the GME portion of the teaching 
physicians' salaries and fringe benefits. This will require 
hospitals to incur more of the costs of the training at the 
nonhospital site in order to receive both direct and indirect GME 
payments for those residents.
    Section 4625 of the Balanced Budget Act, which provides for 
direct graduate medical education payments to nonhospital providers, 
would have minimal impact in the context of total graduate medical 
education costs. We believe that the most significant impact 
resulting from section 4625 will be the movement of resident 
training from the inpatient setting to the nonhospital setting. We 
expect that such a shift in the site where resident training occurs 
will result in little if any additional cost to Medicare. In 
addition to the expected shift in training from the inpatient 
setting to the nonhospital setting, in relatively few cases, section 
4625 could result in additional resident training being paid by 
Medicare. However, Medicare's share of costs incurred in those 
nonhospital sites based on Medicare utilization is often generally 
low, so we expect the impact of the cost of training of any 
additional residents to be negliglible.

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

    The prospective payment systems for hospital inpatient operating 
and capital-related costs encompass nearly all general, short-term, 
acute care hospitals that participate in the Medicare program. There 
were 45 Indian Health Service hospitals in our database, which we 
excluded from the analysis due to the special characteristics of the 
prospective payment method for these hospitals. Among other short-
term, acute care hospitals, only the 50 such hospitals in Maryland 
remain excluded from the prospective payment system under the waiver 
at section 1814(b)(3) of the Act. Thus, as of March 1998, we have 
included 4,956 hospitals in our analysis. This represents about 82 
percent of all Medicare-participating hospitals. The majority of 
this impact analysis focuses on this set of hospitals.
    The remaining 18 percent are specialty hospitals that are 
excluded from the prospective payment system and continue to be paid 
on the basis of their reasonable costs (subject to a rate-of-
increase ceiling on their inpatient operating costs per discharge). 
These hospitals include psychiatric, rehabilitation, long-term care, 
children's, and cancer hospitals. The impacts of our proposed policy 
changes on these hospitals are discussed below.

VI. Impact on Excluded Hospitals and Units

    As of March 1998, there were 1,082 specialty hospitals excluded 
from the prospective payment system and instead paid on a reasonable 
cost basis subject to the rate-of-increase ceiling under 
Sec. 413.40. In addition, there were 2,393 psychiatric and 
rehabilitation units in hospitals otherwise subject to the 
prospective payment system. These excluded units are also paid in 
accordance with Sec. 413.40.
    As required by section 1886(b)(3)(B) of the Act, the update 
factor applicable to the rate-of-increase limit for excluded 
hospitals and units for FY 1999 would be between 0 and 2.5 percent, 
depending on the hospital's costs in relation to its limit.
    The impact on excluded hospitals and units of the proposed 
update in the rate-of-increase limit depends on the cumulative cost 
increases experienced by each excluded hospital or unit since its 
applicable base period. For excluded hospitals and units that have 
maintained their cost increases at a level below the percentage 
increases in the rate-of-increase limits since their base period, 
the major effect will be on the level of incentive payments these 
hospitals and units receive. Conversely, for excluded hospitals and 
units with per-case cost increases above the cumulative update in 
their rate-of-increase limits, the major effect will be the amount 
of excess costs that would not be reimbursed.
    We note that, under Sec. 413.40(d)(3), an excluded hospital or 
unit whose costs exceed 110 percent of its rate-of-increase limit 
receives its rate-of-increase limit plus 50 percent of the 
difference between its reasonable costs and 110 percent of the 
limit, not to exceed 110 percent of its limit. In addition, under 
the various provisions set forth in Sec. 413.40, certain excluded 
hospitals and units can obtain payment adjustments for justifiable 
increases in operating costs that exceed the limit. At the same 
time, however, by generally limiting payment increases, we continue 
to provide an incentive for excluded hospitals and units to restrain 
the growth in their spending for patient services.

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

A. Basis and Methodology of Estimates

    In this proposed rule, we are announcing policy changes and 
payment rate updates for the prospective payment systems for 
operating and capital-related costs. We estimate the total payment 
impact of these changes on FY 1999 payments compared to FY 1998 
payments, to be approximately a $400 million reduction. We have 
prepared separate impact analyses of the proposed changes to each 
system. This section deals with changes to the operating prospective 
payment system.
    The data used in developing the quantitative analyses presented 
below are taken from the FY 1997 MedPAR file and the most current 
provider-specific file that is used for payment purposes. Although 
the analyses of the changes to the operating prospective payment 
system do not incorporate cost data, the most recently available 
hospital cost report data were used to categorize hospitals. Our 
analysis has several qualifications. First, we do not make 
adjustments for behavioral changes that hospitals may adopt in 
response to these proposed policy changes. Second, due to the 
interdependent nature of the prospective payment system, it is very 
difficult to precisely quantify the impact associated with each 
proposed change. Third, we draw upon various sources for the data 
used to categorize hospitals in the tables. In some cases, 
particularly the number of beds, there is a fair degree of variation 
in the data from different sources. We have attempted to construct 
these variables with the best available source overall. For 
individual hospitals, however, some miscategorizations are possible.
    Using cases in the FY 1997 MedPAR file, we simulated payments 
under the operating prospective payment system given various 
combinations of payment parameters. Any short-term, acute care 
hospitals not paid under the general prospective payment systems 
(Indian Health Service hospitals and hospitals in Maryland) are 
excluded from the simulations. Payments under the capital 
prospective payment system, or payments for costs other than 
inpatient operating costs, are not analyzed here. Estimated payment 
impacts of proposed FY 1999 changes to the capital prospective 
payment system are discussed below in section VII of this Appendix.
    The proposed changes discussed separately below are the 
following:
     The effects of implementing the expanded transfer 
definition enacted by section 4407 of the BBA, which counts as a 
transfer any discharge from one of 10 DRGs if upon discharge the 
patient is admitted to an excluded hospital or distinct part unit or 
a skilled nursing facility, or is provided home health care that is 
related to the hospitalization within 3 days of the date of 
discharge.
     The effects of the annual reclassification of diagnoses 
and procedures and the recalibration of the DRG relative weights 
required by section 1886(d)(4)(C) of the Act.
     The effects of changes in hospitals' wage index values 
reflecting the wage index update (FY 1995 data).
     The effects of two proposed changes to the wage index: 
(1) including the costs associated with Part A physician costs under 
contract; and (2) removing the overhead costs related to departments 
excluded from the wage data used to calculate the wage index (for 
example, skilled nursing facilities and distinct part units).
     The effects of geographic reclassifications by the 
Medicare Geographic Classification Review Board (MGCRB) that will be 
effective in FY 1999.

[[Page 25680]]

     The total change in payments based on FY 1999 policies 
relative to payments based on FY 1998 policies.
    To illustrate the impacts of the FY 1999 proposed changes, our 
analysis begins with a FY 1999 baseline simulation model using: The 
FY 1998 GROUPER (version 15.0); the FY 1998 wage index; the transfer 
definition prior to implementation of section 4407 of the BBA; and 
no MGCRB reclassifications. Outlier payments are set at 5.1 percent 
of total DRG payments.
    Each proposed and statutory policy change is then added 
incrementally to this baseline model, finally arriving at an FY 1999 
model incorporating all of the changes. This allows us to isolate 
the effects of each change.
    Our final comparison illustrates the percent change in payments 
per case from FY 1998 to FY 1999. Four factors have significant 
impacts here. First is the update to the standardized amounts. In 
accordance with section 1886(d)(3)(A)(iv) of the Act, we are 
proposing to update the large urban and the other areas average 
standardized amounts for FY 1999 using the most recently forecasted 
hospital market basket increase for FY 1999 of 2.6 percent minus 1.9 
percentage points. Similarly, section 1886(b)(3)(C)(ii) of the Act 
provides that the update factor applicable to the hospital-specific 
rates for sole community hospitals (SCHs), essential access 
community hospitals (EACHs) (which are treated as SCHs for payment 
purposes), and Medicare-dependent, small rural hospitals (MDHs) is 
equal to the market basket increase of 2.6 percent minus 1.9 
percentage points (for an update of 0.7 percent).
    A second significant factor impacting changes in hospitals' 
payments per case from FY 1998 to FY 1999 is a change in MGCRB 
reclassification status from one year to the next. That is, 
hospitals reclassified in FY 1998 that are no longer reclassified in 
FY 1999 may have a negative payment impact going from FY 1998 to FY 
1999; conversely, hospitals not reclassified in FY 1998 that are 
reclassified in FY 1999 may have a positive impact. In some cases, 
these impacts can be quite substantial, so if a relatively small 
number of hospitals in a particular category lose their 
reclassification status, the percentage increase in payments for the 
category may be below the national mean.
    A third significant factor is that we currently estimate that 
actual outlier payments during FY 1998 will be 5.4 percent of actual 
total DRG payments. When the FY 1998 final rule was published, we 
projected FY 1998 outlier payments would be 5.1 percent of total DRG 
payments, and the standardized amounts were reduced correspondingly. 
The effects of the slightly higher than expected outlier payments 
during FY 1998 (as discussed in the Addendum to this proposed rule) 
are reflected in the analyses below comparing our current estimates 
of FY 1998 payments per case to estimated FY 1999 payments per case.
    Fourth, payments per case in FY 1999 are reduced from FY 1998 
for hospitals that receive the indirect medical education (IME) or 
the disproportionate share (DSH) adjustments. Section 
1886(d)(5)(B)(ii) of the Act provides that the IME adjustment is 
reduced from approximately a 7.0 percent increase for every 10 
percent increase in a hospital's resident-to-bed ratio in FY 1998, 
to a 6.5 percent increase in FY 1999. Similarly, in accordance with 
section 1886(d)(5)(F)(ix) of the Act, the DSH adjustment for FY 1999 
is reduced by 2 percent from what would otherwise have been paid, 
compared to a 1 percent reduction for FY 1998.
    Table I demonstrates the results of our analysis. The table 
categorizes hospitals by various geographic and special payment 
consideration groups to illustrate the varying impacts on different 
types of hospitals. The top row of the table shows the overall 
impact on the 4,956 hospitals included in the analysis. This is 132 
fewer hospitals than were included in the impact analysis in the FY 
1998 final rule with comment period (62 FR 46119).
    The next four rows of Table I contain hospitals categorized 
according to their geographic location (all urban, which is further 
divided into large urban and other urban, or rural). There are 2,792 
hospitals located in urban areas (MSAs or NECMAs) included in our 
analysis. Among these, there are 1,588 hospitals located in large 
urban areas (populations over 1 million), and 1,204 hospitals in 
other urban areas (populations of 1 million or fewer). In addition, 
there are 2,164 hospitals in rural areas. The next two groupings are 
by bed-size categories, shown separately for urban and rural 
hospitals. The final groupings by geographic location are by census 
divisions, also shown separately for urban and rural hospitals.
    The second part of Table I shows hospital groups based on 
hospitals' FY 1999 payment classifications, including any 
reclassifications under section 1886(d)(10) of the Act. For example, 
the rows labeled urban, large urban, other urban, and rural show the 
numbers of hospitals paid based on these categorizations (after 
consideration of geographic reclassifications) are 2,877, 1,681, 
1,196, and 2,079, respectively.
    The next three groupings examine the impacts of the proposed 
changes on hospitals grouped by whether or not they have residency 
programs (teaching hospitals that receive an IME adjustment), 
receive DSH payments, or some combination of these two adjustments. 
There are 3,875 nonteaching hospitals in our analysis, 841 teaching 
hospitals with fewer than 100 residents, and 240 teaching hospitals 
with 100 or more residents.
    In the DSH categories, hospitals are grouped according to their 
DSH payment status, and whether they are considered urban or rural 
after MGCRB reclassifications. Hospitals in the rural DSH 
categories, therefore, represent hospitals that were not 
reclassified for purposes of the standardized amount or for purposes 
of the DSH adjustment. (They may, however, have been reclassified 
for purposes of the wage index.) The next category groups hospitals 
considered urban after geographic reclassification, in terms of 
whether they receive the IME adjustment, the DSH adjustment, both, 
or neither.
    The next row separately examines hospitals that available data 
show may qualify under section 4401(b) of the BBA for the special 
temporary relief provision, which grants an additional 0.3 percent 
update to the standardized amounts (in addition to the 0.7 percent 
update other hospitals would receive during FY 1999), resulting in a 
1.0 percent update for this category of hospitals. To be eligible, a 
hospital must not be an MDH, nor may it receive either IME or DSH 
payments. It must also experience a negative margin on its operating 
prospective payments during FY 1999. We estimated eligible hospitals 
based on whether they had a negative operating margin on their FY 
1995 cost report (latest available data). Finally, to qualify, a 
hospital must be located in a State where the aggregate FY 1995 
operating prospective payments were less than the aggregate 
associated costs for all of the non-IME, non-DSH, non-MDH hospitals 
in the State. There are 356 hospitals in this row.
    The next four rows examine the impacts of the proposed changes 
on rural hospitals by special payment groups (SCHs, rural referral 
centers (RRCs), MDHs, and EACHs), as well as rural hospitals not 
receiving a special payment designation. The RRCs (137), SCH/EACHs 
(633), MDHs (351), and SCH/EACH and RRCs (54) shown here were not 
reclassified for purposes of the standardized amount. There is one 
SCH that will be reclassified for the standardized amount in FY 1999 
that, therefore, is not included in these rows. There are six EACHs 
included in our analysis and three EACH/RRCs.
    The next two groupings are based on type of ownership and the 
hospital's Medicare utilization expressed as a percent of total 
patient days. These data are taken primarily from the FY 1995 
Medicare cost report files, if available (otherwise FY 1994 data are 
used). Data needed to determine ownership status or Medicare 
utilization percentages were unavailable for 95 hospitals. For the 
most part, these are new hospitals.
    The next series of groupings concern the geographic 
reclassification status of hospitals. The first three groupings 
display hospitals that were reclassified by the MGCRB for both FY 
1998 and FY 1999, or for either of those 2 years, by urban/rural 
status. The next rows illustrate the overall number of FY 1999 
reclassifications, as well as the numbers of reclassified hospitals 
grouped by urban and rural location. The final row in Table I 
contains hospitals located in rural counties but deemed to be urban 
under section 1886(d)(8)(B) of the Act.

[[Page 25681]]



                                  Table I.--Impact Analysis of Changes for FY 1999 Operating Prospective Payment System                                 
                                                         [Percent changes in payments per case]                                                         
                                                                                                                                                        
                                                           PAC tran.                           Contract    Allocated              MGCRB recl-           
                                               Number of     prov-      DRG re-    New wage   phys. pt a   overhead    DRG & WI     assifi-    All FY 99
                                               hosps.\1\   ision \2\  calib. \3\   data \4\    costs \5\   costs \6\    changes   cation \8\    changes 
                                                     (0)         (1)         (2)         (3)         (4)         (5)         (6)         (7)         (8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
(BY GEOGRAPHIC LOCATION):                                                                                                                               
    ALL HOSPITALS...........................       4,956        -0.6         0.1         0.1         0.0        -0.1         0.0         0.0        -0.7
    URBAN HOSPITALS.........................       2,792        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.4        -1.1
        LARGE URBAN.........................       1,588        -0.7         0.1        -0.3         0.0        -0.2        -0.5        -0.4        -1.4
        OTHER URBAN.........................       1,204        -0.6         0.1         0.4         0.0        -0.2         0.2        -0.3        -0.5
    RURAL HOSPITALS.........................       2,164        -0.4         0.1         0.9        -0.1         0.3         1.3         2.4         1.5
    BED SIZE (URBAN):                                                                                                                                   
        0-99 BEDS...........................         690        -0.8         0.2        -0.3         0.0        -0.1        -0.3        -0.5        -0.7
        100-199 BEDS........................         936        -0.8         0.2        -0.2         0.0        -0.1        -0.3        -0.4        -1.0
        200-299 BEDS........................         566        -0.7         0.1        -0.1         0.0        -0.1        -0.3        -0.3        -0.9
        300-499 BEDS........................         448        -0.6         0.1         0.0         0.0        -0.2        -0.3        -0.5        -1.2
        500 OR MORE BEDS....................         152        -0.5         0.1         0.3         0.0        -0.3         0.1        -0.2        -1.2
    BED SIZE (RURAL):                                                                                                                                   
        0-49 BEDS...........................       1,135        -0.3         0.1         0.9        -0.1         0.5         1.3        -0.1         1.3
        50-99 BEDS..........................         635        -0.4         0.1         0.8        -0.1         0.3         1.1         0.9         1.1
        100-149 BEDS........................         229        -0.5         0.1         0.8        -0.1         0.4         1.3         3.3         1.3
        150-199 BEDS........................          91        -0.5         0.1         1.0        -0.1         0.3         1.5         3.9         2.7
        200 OR MORE BEDS....................          74        -0.4         0.1         1.0         0.0         0.2         1.4         4.6         1.6
    URBAN BY CENSUS DIVISION:                                                                                                                           
        NEW ENGLAND.........................         152        -0.7         0.1        -2.4        -0.1         0.1        -2.7         0.1        -3.5
        MIDDLE ATLANTIC.....................         425        -0.4         0.2         0.4         0.3        -0.2         0.6        -0.5        -0.5
        SOUTH ATLANTIC......................         413        -0.6         0.1         0.8        -0.1        -0.2         0.6        -0.6        -0.3
        EAST NORTH CENTRAL..................         475        -0.8         0.1         0.0        -0.1        -0.4        -0.6        -0.3        -1.5
        EAST SOUTH CENTRAL..................         159        -0.6         0.1         0.5        -0.1        -0.4         0.0        -0.5        -0.7
        WEST NORTH CENTRAL..................         186        -0.7         0.0         0.9         0.0         0.1         1.0        -0.6         0.1
        WEST SOUTH CENTRAL..................         350        -0.9         0.1        -1.1         0.1        -0.2        -1.4        -0.1        -2.0
        MOUNTAIN............................         126        -0.8         0.1         0.4         0.2        -0.2         0.5        -0.6        -0.3
        PACIFIC.............................         458        -0.8         0.1        -0.5        -0.1         0.0        -0.7        -0.3        -1.4
        PUERTO RICO.........................          48        -0.2         0.3         0.8        -0.3        -0.3         0.3        -0.5         0.3
    RURAL BY CENSUS DIVISION:                                                                                                                           
        NEW ENGLAND.........................          53        -0.4         0.0         1.3         0.1         0.0         1.4         0.6        -0.4
        MIDDLE ATLANTIC.....................          80        -0.3         0.1         0.9         0.1         0.0         1.2         1.2         1.1
        SOUTH ATLANTIC......................         286        -0.4         0.2         0.8        -0.1         0.3         1.1         3.3         2.0
        EAST NORTH CENTRAL..................         284        -0.5         0.1         1.0        -0.3         0.3         1.2         1.9         1.5
        EAST SOUTH CENTRAL..................         269        -0.4         0.1         1.5        -0.1         0.3         1.9         2.5         2.0

[[Page 25682]]

                                                                                                                                                        
        WEST NORTH CENTRAL..................         499        -0.4         0.0         1.1         0.0         0.7         1.9         2.1         1.8
        WEST SOUTH CENTRAL..................         341        -0.5         0.1         0.3        -0.1         0.5         0.8         3.1         0.7
        MOUNTAIN............................         206        -0.3         0.0         0.3        -0.1         0.5         0.8         1.6         1.2
        PACIFIC.............................         141        -0.6         0.1         0.4        -0.1         0.4         1.0         2.3         1.1
        PUERTO RICO.........................           5        -0.4         0.1         2.3         0.1        -0.3         2.2         1.9         0.8
(BY PAYMENT CATEGORIES):                                                                                                                                
    URBAN HOSPITALS.........................       2,877        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.3        -1.0
        LARGE URBAN.........................       1,681        -0.7         0.1        -0.3         0.0        -0.2        -0.4        -0.3        -1.3
        OTHER URBAN.........................       1,196        -0.6         0.1         0.4         0.0        -0.2         0.2        -0.4        -0.5
    RURAL HOSPITALS.........................       2,079        -0.4         0.1         0.9        -0.1         0.4         1.3         2.0         1.4
    TEACHING STATUS:                                                                                                                                    
        NON-TEACHING........................       3,875        -0.7         0.1         0.2        -0.1         0.0         0.2         0.3        -0.1
        LESS THAN 100 RES...................         841        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.3        -0.9
        100+ RESIDENTS......................         240        -0.6         0.1         0.0         0.1        -0.2        -0.1        -0.3        -1.7
    DISPROPORTIONATE SHARE HOSPITALS (DSH):                                                                                                             
        NON-DSH.............................       3,074        -0.6         0.1         0.1         0.0        -0.1         0.1         0.3        -0.4
        URBAN DSH:                                                                                                                                      
            100 BEDS OR MORE................       1,402        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.3        -1.1
            FEWER THAN 100 BEDS.............          93        -0.7         0.2        -0.2        -0.1        -0.1        -0.3        -0.5        -0.7
        RURAL DSH:                                                                                                                                      
            SOLE COMMUNITY (SCH)............         156        -0.2         0.1         0.8        -0.1         0.2         1.1        -0.1         1.3
            REFERRAL CENTERS (RRC)..........          47        -0.5         0.2         1.3        -0.1         0.3         1.9         4.8         2.9
        OTHER RURAL DSH HOSP.:                                                                                                                          
            100 BEDS OR MORE................          64        -0.6         0.2         1.2        -0.1         0.4         1.8         1.3         0.8
            FEWER THAN 100 BEDS.............         120        -0.3         0.1         1.4        -0.1         0.4         1.8         0.0         1.7
    URBAN TEACHING AND DSH:                                                                                                                             

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        BOTH TEACHING AND DSH...............         700        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.4        -1.4
        TEACHING AND NO DSH.................         328        -0.6         0.0         0.0         0.0        -0.3        -0.2        -0.1        -1.0
        NO TEACHING AND DSH.................         795        -0.8         0.2         0.0        -0.1        -0.1        -0.1        -0.2        -0.6
        NO TEACHING AND NO DSH..............       1,054        -0.7         0.1        -0.2         0.0        -0.1        -0.3        -0.3        -0.6
    SPECIAL UPDATE HOSPITALS (UNDER SEC.                                                                                                                
     4401(b) OF PUBLIC LAW 105-33)..........         356        -0.6         0.2         0.1        -0.1        -0.1         0.1         0.3        -0.3
    RURAL HOSPITAL TYPES:                                                                                                                               
        NONSPECIAL STATUS HOSPITALS.........         904        -0.5         0.2         1.1        -0.1         0.5         1.6         1.1         1.0
        RRC.................................         137        -0.6         0.1         1.2         0.0         0.4         1.8         5.6         2.5
        SCH/EACH............................         633        -0.2         0.0         0.4         0.0         0.2         0.6         0.1         0.8
        MDH.................................         351        -0.3         0.1         1.1        -0.1         0.5         1.5         0.4         1.3
        SCH/EACH AND RRC....................          54        -0.2         0.0         0.3         0.0         0.1         0.4         1.5         1.3
    TYPE OF OWNERSHIP:                                                                                                                                  
        VOLUNTARY...........................       2,859        -0.6         0.1         0.1         0.0        -0.1        -0.1        -0.1        -0.8
        PROPRIETARY.........................         671        -0.9         0.2         0.1        -0.1        -0.1        -0.1         0.1        -0.9
        GOVERNMENT..........................       1,331        -0.5         0.1         0.3        -0.1         0.0         0.3         0.3        -0.3
        UNKNOWN.............................          95        -0.7         0.2         0.3        -0.1        -0.1         0.2        -0.2        -0.7
    MEDICARE UTILIZATION AS A PERCENT OF                                                                                                                
     INPATIENT DAYS:                                                                                                                                    
        0-25................................         249        -0.7         0.2        -0.7        -0.1        -0.1        -1.0         0.1        -1.6
        25-50...............................       1,267        -0.7         0.1         0.0         0.0        -0.1        -0.2        -0.2        -1.2
        50-65...............................       1,975        -0.6         0.1         0.2         0.0        -0.1         0.1         0.1        -0.4
        OVER 65.............................       1,370        -0.6         0.1         0.3         0.0         0.0         0.4         0.0         0.0
        UNKNOWN.............................          95        -0.7         0.2         0.3        -0.1        -0.1         0.2        -0.2        -0.7
HOSPITALS RECLASSIFIED BY THE MEDICARE                                                                                                                  
 GEOGRAPHIC REVIEW BOARD:                                                                                                                               
    RECLASSIFICATION STATUS DURING FY 98 AND                                                                                                            
     FY 99:                                                                                                                                             
        RECLASSIFIED DURING BOTH FY98 AND                                                                                                               
         FY99...............................         311        -0.5         0.1         0.6        -0.1         0.1         0.8         6.6        -0.1
            URBAN...........................          70        -0.5         0.1         0.2        -0.1        -0.3        -0.1         5.4        -0.5
            RURAL...........................         241        -0.5         0.1         1.0        -0.1         0.4         1.5         7.5         0.2
        RECLASSIFIED DURING FY99 ONLY.......         178        -0.5         0.1         0.8        -0.1         0.2         1.0         4.0         4.7

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            URBAN...........................          25        -0.5         0.1         0.4        -0.1         0.0         0.4         3.1         1.9
            RURAL...........................         153        -0.5         0.1         1.0        -0.1         0.3         1.3         4.4         6.1
        RECLASSIFIED DURING FY98 ONLY.......         111        -0.7         0.1         0.6         0.0        -0.2         0.5        -0.5        -3.1
            URBAN...........................          38        -0.7         0.1         0.5         0.1        -0.3         0.2        -0.6        -2.2
            RURAL...........................          73        -0.4         0.1         0.9        -0.1         0.4         1.3        -0.5        -6.1
    FY 99 RECLASSIFICATIONS:                                                                                                                            
        ALL RECLASSIFIED HOSP...............         489        -0.5         0.1         0.7        -0.1         0.1         0.9         5.7         1.6
            STAND. AMOUNT ONLY..............          94        -0.6         0.1         0.6         0.1        -0.3         0.5         1.0        -0.3
            WAGE INDEX ONLY.................         281        -0.5         0.1         0.5        -0.1         0.3         0.8         6.6        -0.9
            BOTH............................          47        -0.6         0.2         0.9        -0.1        -0.4         0.6         3.8        -1.6
            NONRECLASSIFIED.................       4,507        -0.7         0.1         0.1         0.0        -0.1        -0.1        -0.4        -0.7
        ALL URBAN RECLASS...................          95        -0.5         0.1         0.3        -0.1        -0.2         0.0         4.7         0.2
            STAND. AMOUNT ONLY..............          25        -0.4         0.2         0.9         0.1        -0.4         0.7         0.7         0.0
            WAGE INDEX ONLY.................          45        -0.5         0.1         0.0        -0.1         0.1        -0.1         6.5         0.6
            BOTH............................          25        -0.5         0.1         0.6        -0.2        -0.6        -0.1         2.9        -0.5
            NONRECLASSIFIED.................       2,670        -0.7         0.1         0.0         0.0        -0.2        -0.2        -0.6        -1.1
        ALL RURAL RECLASS...................         394        -0.5         0.1         1.0        -0.1         0.4         1.4         6.3         2.5
            STAND. AMOUNT ONLY..............          57        -0.5         0.1         1.1        -0.2         0.3         1.5         5.1         2.4
            WAGE INDEX ONLY.................         309        -0.5         0.1         0.9        -0.1         0.4         1.4         6.1         2.3
            BOTH............................          28        -0.6         0.1         1.1        -0.1         0.3         1.6         9.2         3.8
            NONRECLASSIFIED.................       1,770        -0.3         0.1         0.9        -0.1         0.3         1.2        -0.5         0.8
    OTHER RECLASSIFIED HOSPITALS (SECTION                                                                                                               
     1886(d)(8)(B)).........................          27        -0.5         0.1        -0.9         0.2        -0.3        -0.9         0.7        -0.6
                                              ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the        
  national total. Discharge data are from FY 1997, and hospital cost report data are from reporting periods beginning in FY 1994 and FY 1995.           
\2\ This column displays the impact of the change enacted by section 4407 of the BBA, which defines discharges from 1 of 10 DRGs to postacute care as   
  transfers. Under our proposed policy, 3 of the 10 DRGs would be paid under an alternative methodology where they would receive 50 percent of the full 
  DRG amount on the first day and 50 percent of the current per diem transfer payment amount for each remaining day of the stay. The remaining seven    
  DRGs would be paid using our current transfer payment methodology.                                                                                    
\3\ This column displays the payment impact of the recalibration of the DRG weights based on FY 1997 MedPAR data and the DRG classification changes, in 
  accordance with section 1886(d)(4)(C) of the Act.                                                                                                     

[[Page 25685]]

                                                                                                                                                        
\4\ This column shows the payment effects of updating the data used to calculate the wage index with data from the FY 1995 cost reports.                
\5\ This column displays the impact of adding contract Part A physician costs to the wage data.                                                         
\6\ This column illustrates the payment impact of removing the overhead costs allocated to departments where the directly assigned costs are already    
  excluded from the wage index calculation (for example, SNFs and distinct part units).                                                                 
\7\ This column displays the combined impact of the reclassification and recalibration of the DRGs, the updated and revised wage data used to calculate 
  the wage index, and the budget neutrality adjustment factor for these two changes, in accordance with sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of
  the Act. Thus, it represents the combined impacts shown in columns 2, 3, 4, and 5, and the FY 1999 budget neutrality factor of 0.999227.              
\8\ Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects shown here   
  demonstrate the FY 1999 payment impact of going from no reclassifications to the reclassifications scheduled to be in effect for FY 1999.             
  Reclassification for prior years has no bearing on the payment impacts shown here.                                                                    
\9\ This column shows changes in payments from FY 1998 to FY 1999. It incorporates all of the changes displayed in columns 1, 6, and 7 (the changes     
  displayed in columns 2, 3, 4 and 5 are included in column 6). It also displays the impact of the FY 1999 update, changes in hospitals'                
  reclassification status in FY 1999 compared to FY 1998, the difference in outlier payments from FY 1998 to FY 1999, and the reductions to payments    
  through the IME and DSH adjustments taking effect during FY 1999. The sum of these columns may be different from the percentage changes shown here due
  to rounding and interactive effects.                                                                                                                  

B. Impact of the Proposed Implementation of the Expanded Transfer 
Definition (Column 1)

    Section 1886(d)(5)(J) of the Act (added by section 4407 of the 
BBA) requires the Secretary to select 10 DRGs for which discharges 
(from any one of these DRGs) to a postacute care provider will be 
treated as a transfer beginning with discharges on or after October 
1, 1998. Column 1 shows the impact of this provision.
    Although the expanded definition encompasses only 10 DRGs, they 
were selected, in accordance with the statute, based upon their 
large and disproportionate volume of cases receiving postacute care. 
We estimate that approximately 25 percent of all cases receiving 
follow-up postacute care come from these 10 DRGs. Therefore, the 
overall payment impact of this change is significant (a 0.6 percent 
decrease in payments per case).
    The 10 DRGs that we are proposing to include under this 
provision are identified in section V.A. of the preamble to this 
proposed rule. In addition to selecting 10 DRGs, the statute 
authorizes the Secretary to develop an alternative transfer payment 
methodology for DRGs where a substantial portion of the costs of the 
cases occur very early in the stay. This is particularly likely to 
happen in some surgical DRGs because of the high cost of the 
surgical procedure. Based on our analysis comparing the costs per 
case for these cases with payments under our current transfer 
payment methodology, we are proposing to pay the current transfer 
per diem for all DRGs except DRGs 209, 210, and 211. For those three 
DRGs, the alternative payment methodology we are proposing is 50 
percent of the full DRG payment amount for the first day of the 
stay, plus 50 percent of the current per diem transfer payment for 
each remaining day, up to the full DRG payment.
    To simulate the impact of these proposed policies, we adjusted 
hospitals' transfer-adjusted discharges and case-mix index values 
(using version 15 of the GROUPER) to reflect the impact of this 
expansion in the transfer definition. The transfer-adjusted 
discharge amount is calculated one of two ways, depending on the 
transfer payment methodology. Under our current transfer payment 
methodology, and for all but the three DRGs receiving special 
payment consideration, this adjustment is made simply by adding one 
to the length of stay and dividing that amount by the geometric mean 
length of stay for the DRG (not to exceed 1.0). For example, a 
transfer after 3 days from a DRG with a geometric mean length of 
stay of 6 days would have a transfer-adjusted discharge weight of 
0.667 ((3+1)/6).
    For transfers from any one of the three DRGs receiving the 
alternative payment methodology, the transfer-adjusted discharge 
amount is 0.5 (to reflect that these cases receive half the full DRG 
amount the first day), plus one-half of the result of dividing one 
plus the length of stay prior to transfer by the geometric mean 
length of stay for the DRG. As with the above adjustment, the result 
is equal to the lesser of the transfer-adjusted DRG or 1.
    The transfer-adjusted case-mix index values are calculated by 
summing the transfer-adjusted DRG weights and dividing by the 
transfer-adjusted discharges. The transfer-adjusted DRG weights are 
calculated by multiplying the DRG weight by the lesser of 1 or the 
transfer-adjusted discharge for the case, divided by the geometric 
mean length of stay for the DRG. In this way, simulated payments per 
case can be compared before and after the change to the transfer 
policy.
    This change has the greatest impact among urban hospitals (0.7 
percent decrease). Among urban hospitals, smaller hospitals (under 
200 beds) are most affected, with a 0.8 percent reduction in 
payments. For urban hospitals grouped by census division, Puerto 
Rico and the Middle Atlantic division have the smallest negative 
impacts, 0.2 and 0.4 percent decreases, respectively. The Middle 
Atlantic division has traditionally had the longest average lengths 
of stay, therefore, it is not surprising that the impact is smallest 
here. Transfer cases with a length of stay more than the (geometric) 
mean length of stay minus one day do not experience any payment 
impact under this provision. (Full payment is reached one day prior 
to the mean length of stay due to the double per diem paid for the 
first day under our current transfer payment methodology.) The small 
impact in Puerto Rico would indicate that these hospitals also are 
not discharging patients to postacute care early in the stay.
    Rural hospitals experience a smaller payment impact overall, 
especially the smallest rural hospitals: Those with fewer than 50 
beds (a 0.3 percent decrease). The smallest impacts among rural 
census divisions are in the Middle Atlantic and the Mountain. The 
largest rural impact is in the Pacific division, with a 0.6 percent 
decrease. This change is consistent with the shorter lengths of stay 
in this geographic region.
    The largest negative impact is a 0.9 percent decrease in 
payments, observed among urban West South Central hospitals, and 
proprietary hospitals. The smallest negative impact besides urban 
Puerto Rico hospitals occurs in SCHs (0.2 percent decrease). Those 
SCHs paid based on their hospital-specific amount would see no 
impact related to this change, since there is no transfer adjustment 
made to the hospital-specific amount.

C. Impact of the Proposed Changes to the DRG Classifications and 
Relative Weights (Column 2)

    In column 2 of Table I, we present the combined effects of the 
DRG reclassifications and recalibration, as discussed in section II 
of the preamble to this proposed rule. Section 1886(d)(4)(C)(I) of 
the Act requires us to annually make appropriate classification 
changes and to recalibrate the DRG weights in order to reflect 
changes in treatment patterns, technology, and any other factors 
that may change the relative use of hospital resources.
    We compared aggregate payments using the FY 1998 DRG relative 
weights (GROUPER version 15) to aggregate payments using the 
proposed FY 1999 DRG relative weights (GROUPER version 16). Overall, 
payments increase by 0.1 percent due to the DRG changes, although 
this is prior to applying the budget neutrality factor for DRG and 
wage index changes (see column 6). Consistent with the minor changes 
we are proposing for the FY 1999 GROUPER, the redistributional 
impacts of DRG reclassifications and recalibration across hospital 
groups are very small (a 0.1 percent increase for large and other 
urban hospitals, as well as for rural hospitals). Within hospital 
categories, the net effects for urban hospitals are small positive 
changes for all hospitals (a 0.2 percent increase for hospitals with 
fewer than 200 beds and a 0.1 percent increase for larger 
hospitals). Among rural hospitals, all hospital categories 
experience an increase of 0.1 percent.
    The breakdowns by urban census division show that the increase 
among urban hospitals is spread across all census categories, with 
the largest increase (0.3 percent) for hospitals in Puerto Rico. For 
rural hospitals, there is no impact (that is, a 0.0 percent change) 
for hospitals in the New England, West North Central, and Mountain 
census divisions. All other divisions experience a 0.1 percent 
increase.
    This pattern of small increases or no change applies to all 
other hospital categories. Overall, we attribute this change to the 
increasing severity of illness of

[[Page 25686]]

hospital inpatients. That is, as greater numbers of less acutely ill 
patients are treated outside the inpatient setting, the acuity of 
the remaining hospital inpatients increases. Although, in the past, 
this effect was seen more clearly in large urban and very large 
rural hospitals, which often had more outpatient settings available 
for patient treatment, hospitals in all areas now appear to be able 
to take advantage of this practice. Of course, in general, these 
positive impacts are very minor, with virtually no hospital group 
experiencing more than a 0.2 percent increase.

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

    Section 1886(d)(3)(E) of the Act requires that, beginning 
October 1, 1993, we annually update the wage data used to calculate 
the wage index. In accordance with this requirement, the proposed 
wage index for FY 1999 is based on data submitted for hospital cost 
reporting periods beginning on or after October 1, 1994 and before 
October 1, 1995. As with the previous column, the impact of the new 
data on hospital payments is isolated by holding the other payment 
parameters constant in the two simulations. That is, column 3 shows 
the percentage changes in payments when going from a model using the 
FY 1998 wage index based on FY 1994 wage data before geographic 
reclassifications to a model using the FY 1999 prereclassification 
wage index based on FY 1995 wage data.
    The wage data collected on the FY 1995 cost reports includes, 
for the first time, contract labor costs and hours for top 
management positions as allowable in the wage index calculation. In 
addition, the changes to wage-related costs associated with hospital 
and home office salaries that were discussed in the September 1, 
1994 final rule (59 FR 45355) are reflected in the FY 1995 data. 
These changes are reflected in column 3, as well as other year-to-
year changes in hospitals' labor costs.
    The results indicate that the new wage data have an overall 
impact of a 0.1 percent increase in hospital payments (prior to 
applying the budget neutrality factor, see column 6). Rural 
hospitals especially appear to benefit from the update. Their 
payments increase by 0.9 percent. These increases are attributable 
to relatively large increases in the wage index values for the rural 
areas of particular States; South Dakota, Hawaii, Mississippi, 
Wyoming, New Hampshire, and Iowa all had increases greater than 6 
percent in their prereclassification wage index values.
    Urban hospitals as a group are not significantly affected by the 
updated wage data. The gains of hospitals in other urban areas (0.4 
percent increase) are offset by decreases among hospitals in large 
urban areas (0.3 percent decrease). The negative impact among large 
urban areas appears to be largely due to a 5.8 percent decrease in 
the wage index values for the Boston MSA. This impact is especially 
evident in the 2.4 percent decrease for urban New England hospitals. 
Urban West South Central hospitals experience a 1.1 percent 
decrease, largely due to 11 Texas MSAs with FY 1999 wage indexes 
that fall by more than 7 percent. These appear to be primarily 
related to large changes in the average hourly wages of individual 
hospitals in MSAs with only a few hospitals. We would point out that 
the wage data used for the proposed wage index is not final, and we 
understand that many hospitals have submitted revision requests. To 
the extent these requests are granted by hospitals' fiscal 
intermediaries, these revisions are likely to affect the impacts 
shown in the final rule. In addition, we continue to verify the 
accuracy of the data for hospitals with extraordinary changes in 
their data from the prior year. We anticipate that all these 
verifications will be completed when we calculate the final FY 1999 
wage index.
    The largest increases are seen in the rural census divisions. 
Rural Puerto Rico experiences the greatest positive impact, 2.3 
percent. Hospitals in three other census divisions receive positive 
impacts over 1.0 percent; East South Central at 1.5 percent, New 
England at 1.3 percent, and West North Central at 1.1 percent. We 
believe these positive impacts of the new wage data for rural 
hospitals stem from the expansion of the contract labor definition, 
specifically to include certain management categories. On average, 
the hourly cost of contract labor increased for rural hospitals by 
5.9 percent. Among urban hospitals, the increase was 4.2 percent.

E. Impact of Including Contract Physician Part A Costs (Column 4)

    As discussed in section III.C.1 of the preamble, we began 
collecting separate wage data for both direct and contract physician 
Part A services on the FY 1995 cost report. This change was made in 
order to address any potential inequity of including only salaried 
Part A physician costs in the wage index while some States had laws 
prohibiting their hospitals from employing physicians directly 
(forcing hospitals to contract with physicians for administrative 
services). Based on our analysis, we are proposing to include 
contract physician Part A costs in the wage index calculation.
    Column 4 shows the payment impacts of including these data. 
Although only two States currently maintain the prohibition against 
hospitals directly employing physicians (Texas and California), many 
hospitals in other States reported these costs as well. Thus, the 
impacts of this proposed change extend well beyond Texas and 
California. In fact, the urban Middle Atlantic census division shows 
the largest positive impact from this change (0.3 percent).
    In general, hospitals in other areas experience either no 
changes due to this proposed policy, or small (0.1 percent) 
increases or decreases. However, urban hospitals in Puerto Rico and 
rural hospitals in the East North Central census division experience 
0.3 percent decreases. The negative rural East North Central impact 
is largely due to a negative impact of this change on the rural 
Wisconsin wage index.
    As noted above, the data used to prepare the proposed FY 1999 
wage index are subject to revision, and we understand that many 
hospitals requested changes to their contract physician Part A costs 
prior to the March 9 deadline for all requests for wage data changes 
to be submitted to the fiscal intermediaries. The extent of these 
requests and the number which are approved by the fiscal 
intermediaries may change the impacts in the final rule.

F. Impact of Removing Overhead Costs of Excluded Areas (Column 5)

    Prior years' wage index calculations have removed the direct 
wages and hours associated with certain subprovider components 
excluded from the prospective payment system; however, the overhead 
costs associated with these excluded components have not been 
removed. We revised the FY 1995 cost report to allow hospitals to 
report separately overhead salaries and hours, and we are proposing 
to remove the overhead costs and hours allocated to areas of the 
hospital excluded from the wage index calculation.
    Column 5 displays the impacts on FY 1999 payments per case of 
implementing this change. The overall impact is a 0.1 percent 
decline in payments; however, once again (as with the impacts of the 
FY 1995 data), the impact diverges along urban and rural lines. 
Urban hospitals lose 0.2 percent as a result of removing these 
overhead costs, while rural hospitals gain 0.3 percent. Among rural 
hospitals by bed size, the smallest rural hospitals benefit the 
most, with a 0.5 percent increase for rural hospitals with fewer 
than 50 beds.
    Hospitals in the rural West North Central census division 
experience the largest percentage increase (0.7 percent). The 
largest negative impacts are in Puerto Rico (urban and rural), and 
urban East North Central and urban East South Central.
    The combined wage index changes in Table I are determined by 
summing the individual impacts in columns 3, 4, and 5. For example, 
the rural West North Central census division gains 1.1 percent from 
the new wage data, and 0.7 percent from removing the overhead costs 
allocated to excluded areas. Therefore, the combined impact of the 
FY 1999 wage index for these hospitals is a 1.8 percent increase.
    The following chart compares the shifts in wage index values for 
labor market areas for FY 1999 relative to FY 1998. This chart 
demonstrates the impact of the proposed changes for the FY 1999 wage 
index relative to the FY 1998 wage index. The majority of labor 
market areas (282) experience less than a 5 percent change. A total 
of 54 labor market areas experience an increase of more than 5 
percent with 13 having an increase greater than 10 percent. A total 
of 34 areas experience decreases of more than 5 percent (all urban). 
Of those, 6 decline by 10 percent or more.

------------------------------------------------------------------------
                                                       Number of labor  
                                                        market areas    
    Percentage change in area wage index values    ---------------------
                                                     FY 1998    FY 1999 
------------------------------------------------------------------------
Increase more than 10 percent.....................          2         13
Increase more than 5 percent and less than 10                           
 percent..........................................         24         41
Increase or decrease less than 5 percent..........        334        282

[[Page 25687]]

                                                                        
Decrease more than 5 percent and less than 10                           
 percent..........................................          9         28
Decrease more than 10 percent.....................          1          6
------------------------------------------------------------------------

    Among urban hospitals, 164 would experience an increase of more 
than 5 percent and 29 more than 10 percent. More rural hospitals 
have increases greater than 5 percent (360), but none greater than 
10 percent. On the negative side, 268 urban hospitals but no rural 
hospitals have decreases in their wage index values of at least 5 
percent (30 of the urban hospitals have decreases greater than 10 
percent). The following chart shows the projected impact for urban 
and rural hospitals.

------------------------------------------------------------------------
                                                     Number of hospitals
    Percentage change in area wage index values    ---------------------
                                                      Urban      Rural  
------------------------------------------------------------------------
Increase more than 10 percent.....................         29          0
Increase more than 5 percent and less than 10                           
 percent..........................................        164        360
Increase or decrease less than 5 percent..........       2440       1924
Decrease more than 5 percent and less than 10                           
 percent..........................................        238          0
Decrease more than 10 percent.....................         30          0
------------------------------------------------------------------------

G. Combined Impact of DRG and Wage Index Changes--Including Budget 
Neutrality Adjustment (Column 6)

    The impact of DRG reclassifications and recalibration on 
aggregate payments is required by section 1886(d)(4)(C)(iii) of the 
Act to be budget neutral. In addition, section 1886(d)(3)(E) of the 
Act specifies that any updates or adjustments to the wage index are 
to be budget neutral. As noted in the Addendum to this proposed 
rule, we compared aggregate payments using the FY 1998 DRG relative 
weights and wage index to aggregate payments using the FY 1999 DRG 
relative weights and wage index. Based on this comparison, we 
computed a wage and recalibration budget neutrality factor of 
0.999227. In Table I, the combined overall impacts of the effects of 
both the DRG reclassifications and recalibration and the updated 
wage index are shown in column 6. The 0.0 percent impact for All 
Hospitals demonstrates that these changes, in combination with the 
budget neutrality factor, are budget neutral.
    For the most part, the changes in this column are the sum of the 
changes in columns 2, 3, 4, and 5, minus approximately 0.1 percent 
attributable to the budget neutrality factor. There may, of course, 
be some variation of plus or minus 0.1 percent due to rounding.

H. Impact of MGCRB Reclassifications (Column 7)

    Our impact analysis to this point has assumed hospitals are paid 
on the basis of their actual geographic location (with the exception 
of ongoing policies that provide that certain hospitals receive 
payments on bases other than where they are geographically located, 
such as hospitals in rural counties that are deemed urban under 
section 1886(d)(8)(B) of the Act). The changes in column 7 reflect 
the per case payment impact of moving from this baseline to a 
simulation incorporating the MGCRB decisions for FY 1999. As noted 
below, these decisions affect hospitals' standardized amount and 
wage index area assignments. In addition, rural hospitals 
reclassified for purposes of the standardized amount qualify to be 
treated as urban for purposes of the DSH adjustment.
    Beginning in 1998, by February 28 of each year, the MGCRB makes 
reclassification determinations that will be effective for the next 
fiscal year, which begins on October 1. (In previous years, these 
determinations were made by March 30.) The MGCRB may approve a 
hospital's reclassification request for the purpose of using the 
other area's standardized amount, wage index value, or both or for 
FYS 1999-2001 for purposes of qualifying for a DSH adjustment or to 
receive a higher DSH payment.
    The proposed FY 1999 wage index values incorporate all of the 
MGCRB's reclassification decisions for FY 1999. The wage index 
values also reflect any decisions made by the HCFA Administrator 
through the appeals and review process for MGCRB decisions as of 
February 27, 1998. Additional changes that result from the 
Administrator's review of MGCRB decisions or a request by a hospital 
to withdraw its application will be reflected in the final rule for 
FY 1999.
    The overall effect of geographic reclassification is required by 
section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, we 
applied an adjustment of 0.994019 to ensure that the effects of 
reclassification are budget neutral. (See section II.A.4 of the 
Addendum to this proposed rule.)
    As a group, rural hospitals benefit from geographic 
reclassification. Their payments rise 2.4 percent, while payments to 
urban hospitals decline 0.4 percent. Hospitals in other urban areas 
see a decrease in payments of 0.3 percent, while large urban 
hospitals lose 0.4 percent. Among urban hospital groups (that is, 
bed size, census division, and special payment status), payments 
generally decline.
    A positive impact is evident among all rural hospital groups 
except the smallest hospitals (under 50 beds), which experience a 
slight decrease of 0.1 percent. The smallest increase among the 
rural census divisions is 0.6 percent for New England. The largest 
increase is in rural South Atlantic, with an increase of 3.3 
percent.
    Among rural hospitals designated as RRCs, 108 hospitals are 
reclassified for purposes of the wage index only, leading to the 5.6 
percent increase in payments among RRCs overall. This positive 
impact on RRCs is also reflected in the category of rural hospitals 
with 200 or more beds, which has a 4.6 percent increase in payments.
    Rural hospitals reclassified for FY 1998 and FY 1999 experience 
a 6.6 percent increase in payments. This may be due to the fact that 
these hospitals have the most to gain from reclassification and have 
been reclassified for a period of years. Rural hospitals 
reclassified for FY 1999 only experience a 4.4 percent increase in 
payments, while rural hospitals reclassified for FY 1998 only 
experience a 0.5 percent decrease in payments. Urban hospitals 
reclassified for FY 1998 but not FY 1999 experience a 0.6 percent 
decline in payments overall. Urban hospitals reclassified for FY 
1999 but not for FY 1998 experience a 3.1 percent increase in 
payments.
    The FY 1999 Reclassification rows of Table I show the changes in 
payments per case for all FY 1999 reclassified and nonreclassified 
hospitals in urban and rural locations for each of the three 
reclassification categories (standardized amount only, wage index 
only, or both). The table illustrates that the largest impact for 
reclassified rural hospitals is for those hospitals reclassified for 
both the standardized amount and the wage index. These hospitals 
receive a 9.2 percent increase in payments. In addition, rural 
hospitals reclassified just for the wage index receive a 6.1 percent 
payment increase. The overall impact on reclassified hospitals is to 
increase their payments per case by an average of 5.7 percent for FY 
1999.
    Among the 27 rural hospitals deemed to be urban under section 
1886(d)(8)(B) of the Act, payments increase 0.7 percent due to MGCRB 
reclassification. This is because, although these hospitals are 
treated as being attached to an urban area in our baseline (their 
redesignation is ongoing, rather than annual like the MGCRB 
reclassifications), they are eligible for MGCRB reclassification. 
For FY 1999, one hospital in this category reclassified to a large 
urban area.
    The reclassification of hospitals primarily affects payment to 
nonreclassified hospitals through changes in the wage index and the 
geographic reclassification budget neutrality adjustment required by 
section 1886(d)(8)(D) of the Act. Among hospitals that are not 
reclassified, the overall impact of hospital reclassifications is an 
average decrease in payments per case of about 0.4 percent. Rural 
nonreclassified hospitals decrease slightly more, experiencing a 0.5 
percent decrease, and urban nonreclassified hospitals lose 0.6 
percent (the amount of the budget neutrality offset).
    The number of reclassifications for purposes of the standardized 
amount, or for both the standardized amount and the wage index, has 
increased from 149 in FY 1998 to 162 in FY 1999. The number of wage 
index only reclassifications increased from 284 in FY 1998 to 358 in 
FY 1999. These increases are mainly attributable to two changes made 
by the BBA. Section 4202 of the BBA amended section 1886(d)(10)(D) 
of the Act to allow RRCs to reclassify for wage index purposes based 
only on comparison of the RRC's average hourly wage to the average 
hourly wage of the area to which it applies to be reclassified. In 
addition, section 4203 provides that for FYs 1999-2001, a rural

[[Page 25688]]

hospital may be reclassified to an other urban area for the sole 
purpose of receiving a higher DSH payment.
    The foregoing analysis was based on MGCRB and HCFA Administrator 
decisions made by February 27 of this year. As previously noted, 
there may be changes to some MGCRB decisions through the appeals, 
review, and applicant withdrawal process. The outcome of these cases 
will be reflected in the analysis presented in the final rule.

I. All Changes (Column 8)

    Column 8 compares our estimate of payments per case, 
incorporating all changes reflected in this proposed rule for FY 
1999 (including statutory changes), to our estimate of payments per 
case in FY 1998. It includes the effects of the 0.7 percent update 
to the standardized amounts and the hospital-specific rates for 
SCHs, EACHs, and MDHs. It also reflects the 0.3 percentage point 
difference between the projected outlier payments in FY 1999 (5.1 
percent of total DRG payments) and the current estimate of the 
percentage of actual outlier payments in FY 1998 (5.4 percent), as 
described in the introduction to this Appendix and the Addendum to 
this proposed rule.
    Additional changes affecting the difference between FY 1998 and 
FY 1999 payments are the reductions to the IME and DSH adjustments 
enacted by the BBA. These changes initially went into effect during 
FY 1998 and include additional decreases in payment for each of 
several succeeding years. As noted in the introduction to this 
impact analysis, for FY 1999, IME is reduced to approximately a 6.5 
percent rate of increase, and DSH is reduced by 2 percent from what 
hospitals otherwise would receive. We estimate the overall effect of 
these statutory changes to be a 0.4 percent reduction in FY 1999 
payments. For hospitals receiving both IME and DSH, the impact is 
estimated to be a 0.9 percent reduction in payments per case.
    We also note that column 8 includes the impacts of FY 1999 MGCRB 
reclassifications compared to the payment impacts of FY 1998 
reclassifications. Therefore, when comparing FY 1999 payments to FY 
1998, the percent changes due to FY 1999 reclassifications shown in 
column 7 need to be offset by the effects of reclassification on 
hospitals' FY 1998 payments (column 7 of Table 1, August 29, 1997 
final rule with comment period; 62 FR 46119). For example, the 
impact of MGCRB reclassifications on rural hospitals' FY 1998 
payments was approximately a 2.2 percent increase, offsetting much 
of the 2.4 percent increase in column 7 for FY 1999. Therefore, the 
net change in FY 1999 payments due to reclassification for rural 
hospitals is actually closer to an increase of 0.2 percent relative 
to FY 1998. However, last year's analysis contained a somewhat 
different set of hospitals, so this might affect the numbers 
slightly.
    There might also be interactive effects among the various 
factors comprising the payment system that we are not able to 
isolate. For these reasons, the values in column 8 may not equal the 
sum of the changes in columns 1, 6, and 7, plus the other impacts 
that we are able to identify.
    The overall payment change from FY 1998 to FY 1999 for all 
hospitals is a 0.7 percent decrease. This reflects the 0.6 percent 
net change in total payments due to the postacute transfer change 
for FY 1999 shown in column 1; the 0.7 percent update for FY 1999, 
the 0.3 percent lower outlier payments in FY 1999 compared to FY 
1998 (5.1 percent compared to 5.4 percent); and the 0.4 percent 
reduction due to lower IME and DSH payments.
    Hospitals in urban areas experience a 1.1 percent drop in 
payments per case compared to FY 1998. Urban hospitals lose 0.9 
percent due to the expanded transfer definition and the DRG and wage 
index changes combined. The 0.4 percent negative impact due to 
reclassification is offset by an identical negative impact for FY 
1998. The impact of reducing IME and DSH is a 0.6 percent reduction 
in FY 1999 payments per case. Most of this negative impact is 
incurred by hospitals in large urban areas, where payments are 
expected to fall 1.4 percent per case compared to 0.5 percent per 
case for hospitals in other urban areas.
    Hospitals in rural areas, meanwhile, experience a 1.5 percent 
payment increase. As discussed previously, this is primarily due to 
a smaller negative impact due to the expanded transfer definition 
(0.4 percent decrease compared to 0.6 percent nationally) and the 
positive effect due to the wage index and DRG changes (1.3 percent 
increase).
    Among census divisions, urban New England displays the largest 
negative impact, 3.5 percent. This outcome is primarily related to the 
2.4 percent decrease due to the new wage data. Similarly, urban West 
South Central experiences a 2.0 percent drop in payments per case, due 
to a 1.1 percent drop due to the new wage data. The urban East North 
Central and the urban Pacific also experience overall payment declines 
of more than 1.0 percent, with 1.5 and 1.4 percent decreases, 
respectively. The West North Central is the only urban census category 
to experience a rise in payments, stemming primarily from a 0.9 percent 
increase due to the new wage data. Hospitals in this census division 
also are less reliant on IME and DSH funding, and are therefore, 
impacted less by these reductions.
    The only rural census division to experience a negative payment 
impact is New England (0.4 percent fall). This appears to result from a 
much smaller reclassification effect for rural New England hospitals in 
FY 1999. For FY 1998, the impact of MGCRB reclassification for these 
hospitals was a 2.1 percent increase (see 62 FR 46119). For FY 1999, 
the increase is only 0.6 percent. The largest increases by rural census 
division are in the South Atlantic and the East South Central, both 
with 2.0 percent increases in their FY 1999 payments per case. In the 
South Atlantic, this is primarily due to a larger FY 1999 benefit from 
MGCRB reclassifications. For the East South Central, it is largely due 
to a 1.5 percent increase from the FY 1995 wage data.
    Among special categories of rural hospitals, RRCs have the largest 
increase, 2.5 percent. This carries over to other categories as well: 
rural hospitals with between 150 and 200 beds have a 2.7 percent rise 
in payments (there are 37 RRCs in this category); and RRCs receiving 
DSH see a 2.9 percent increase.
    The largest negative payment impacts from FY 1998 to FY 1999 are 
among hospitals that were reclassified for FY 1998 and are not 
reclassified for FY 1999. Overall, these hospitals lose 3.1 percent. 
The urban hospitals in this category lose 2.2 percent, while the rural 
hospitals lose 6.1 percent. On the other hand, hospitals reclassified 
for FY 1999 that were not reclassified for FY 1998 would experience the 
greatest payment increases: 4.7 percent overall; 6.1 percent for 153 
rural hospitals in this category and 1.9 percent for 25 urban 
hospitals.

             Table II.--Impact Analysis of Changes for FY 1999 Operating Prospective Payment System             
                                               [Payments per case]                                              
                                                                                                                
                                                                            Average FY   Average FY             
                                                               Number of       1998         1999                
                                                               hospitals   payment per  payment per  All changes
                                                                               case         case                
                                                                      (1)      (2) \1\      (3) \1\          (4)
----------------------------------------------------------------------------------------------------------------
(BY GEOGRAPHIC LOCATION):                                                                                       
    ALL HOSPITALS...........................................        4,956        6,764        6,715         -0.7
    URBAN HOSPITALS.........................................        2,792        7,332        7,255         -1.1
    LARGE URBAN AREAS.......................................        1,588        7,891        7,782         -1.4

[[Page 25689]]

                                                                                                                
    OTHER URBAN AREAS.......................................        1,204        6,584        6,549         -0.5
    RURAL AREAS.............................................        2,164        4,461        4,528          1.5
BED SIZE (URBAN):                                                                                               
    0-99 BEDS...............................................          690        4,922        4,890         -0.7
    100-199 BEDS............................................          936        6,127        6,069         -1.0
    200-299 BEDS............................................          566        6,921        6,860         -0.9
    300-499 BEDS............................................          448        7,839        7,744         -1.2
    500 OR MORE BEDS........................................          152        9,724        9,607         -1.2
BED SIZE (RURAL):                                                                                               
    0-49 BEDS...............................................        1,135        3,663        3,712          1.3
    50-99 BEDS..............................................          635        4,173        4,218          1.1
    100-149 BEDS............................................          229        4,609        4,669          1.3
    150-199 BEDS............................................           91        4,799        4,927          2.7
    200 OR MORE BEDS........................................           74        5,603        5,692          1.6
URBAN BY CENSUS DIV.:                                                                                           
    NEW ENGLAND.............................................          152        7,873        7,597         -3.5
    MIDDLE ATLANTIC.........................................          425        8,168        8,123         -0.5
    SOUTH ATLANTIC..........................................          413        6,973        6,955         -0.3
    EAST NORTH CENTRAL......................................          475        7,016        6,909         -1.5
    EAST SOUTH CENTRAL......................................          159        6,558        6,511         -0.7
    WEST NORTH CENTRAL......................................          186        7,001        7,011          0.1
    WEST SOUTH CENTRAL......................................          350        6,807        6,672         -2.0
    MOUNTAIN................................................          126        7,065        7,045         -0.3
    PACIFIC.................................................          458        8,403        8,289         -1.4
    PUERTO RICO.............................................           48        3,049        3,057          0.3
RURAL BY CENSUS DIV.:                                                                                           
    NEW ENGLAND.............................................           53        5,308        5,285         -0.4
    MIDDLE ATLANTIC.........................................           80        4,802        4,857          1.1
    SOUTH ATLANTIC..........................................          286        4,606        4,697          2.0
    EAST NORTH CENTRAL......................................          284        4,492        4,559          1.5
    EAST SOUTH CENTRAL......................................          269        4,160        4,242          2.0
    WEST NORTH CENTRAL......................................          499        4,174        4,250          1.8
    WEST SOUTH CENTRAL......................................          341        3,989        4,019          0.7
    MOUNTAIN................................................          206        4,815        4,871          1.2
    PACIFIC.................................................          141        5,603        5,664          1.1
    PUERTO RICO.............................................            5        2,369        2,389          0.8
(BY PAYMENT CATEGORIES):                                                                                        
    URBAN HOSPITALS.........................................        2,877        7,289        7,215         -1.0
    LARGE URBAN AREAS.......................................        1,681        7,795        7,691         -1.3
    OTHER URBAN AREAS.......................................        1,196        6,564        6,533         -0.5
    RURAL AREAS.............................................        2,079        4,440        4,501          1.4
TEACHING STATUS:                                                                                                
    NON-TEACHING............................................        3,875        5,478        5,472         -0.1
    FEWER THAN 100 RESIDENTS................................          841        7,219        7,155         -0.9
    100 OR MORE RESIDENTS...................................          240       10,987       10,796         -1.7
DISPROPORTIONATE SHARE HOSPITALS (DSH):                                                                         
    NON-DSH.................................................        3,074        5,830        5,809         -0.4
    URBAN DSH:                                                                                                  
        100 BEDS OR MORE....................................        1,402        7,941        7,850         -1.1
        FEWER THAN 100 BEDS.................................           93        5,024        4,990         -0.7
    RURAL DSH:                                                                                                  
        SOLE COMMUNITY (SCH)................................          156        4,255        4,310          1.3
        REFERRAL CENTERS (RRC)..............................           47        5,293        5,446          2.9
    OTHER RURAL DSH HOSP.:                                                                                      
        100 BEDS OR MORE....................................           64        4,196        4,229          0.8
        FEWER THAN 100 BEDS.................................          120        3,572        3,633          1.7
    URBAN TEACHING AND DSH:                                                                                     
        BOTH TEACHING AND DSH...............................          700        8,961        8,837         -1.4
        TEACHING AND NO DSH.................................          328        7,390        7,318         -1.0
        NO TEACHING AND DSH.................................          795        6,342        6,303         -0.6
        NO TEACHING AND NO DSH..............................        1,054        5,661        5,626         -0.6
    SPECIAL UPDATE HOSPITALS (UNDER SEC. 4401(b) OF PUBLIC                                                      
     LAW 105-33.............................................          356        5,322        5,305         -0.3
    RURAL HOSPITAL TYPES:                                                                                       
        NONSPECIAL STATUS                                                                                       
        HOSPITALS...........................................          904        3,948        3,986          1.0

[[Page 25690]]

                                                                                                                
        RRC.................................................          137        5,182        5,309          2.5
        SCH/EACH............................................          633        4,490        4,525          0.8
        MDH.................................................          351        3,701        3,747          1.3
        SCH/EACH AND RRC....................................           54        5,363        5,433          1.3
    TYPE OF OWNERSHIP:                                                                                          
        VOLUNTARY...........................................        2,859        6,949        6,894         -0.8
        PROPRIETARY.........................................          671        6,148        6,092         -0.9
        GOVERNMENT..........................................        1,331        6,233        6,215         -0.3
        UNKNOWN.............................................           95        7,984        7,928         -0.7
    MEDICARE UTILIZATION AS A PERCENT OF INPATIENT DAYS:                                                        
        0-25................................................          249        8,884        8,740         -1.6
        25-50...............................................        1,267        8,243        8,142         -1.2
        50-65...............................................        1,975        6,168        6,143         -0.4
        OVER 65.............................................        1,370        5,250        5,247          0.0
        UNKNOWN.............................................           95        7,984        7,928         -0.7
HOSPITALS RECLASSIFIED BY THE MEDICARE GEOGRAPHIC REVIEW                                                        
 BOARD:                                                                                                         
    RECLASSIFICATION STATUS DURING FY98 AND FY99:                                                               
        RECLASSIFIED DURING BOTH FY98 AND FY99..............          311        5,995        5,989         -0.1
            URBAN...........................................           70        7,505        7,468         -0.5
            RURAL...........................................          241        5,250        5,258          0.2
        RECLASSIFIED DURING FY99 ONLY.......................          178        5,512        5,773          4.7
            URBAN...........................................           25        8,442        8,605          1.9
            RURAL...........................................          153        4,705        4,993          6.1
        RECLASSIFIED DURING FY98 ONLY.......................          111        6,192        6,000         -3.1
            URBAN...........................................           38        7,018        6,865         -2.2
            RURAL...........................................           73        4,458        4,185         -6.1
    FY 99 RECLASSIFICATIONS:                                                                                    
        ALL RECLASSIFIED HOSP...............................          489        5,815        5,908          1.6
            STAND. AMT. ONLY................................           94        5,938        5,920         -0.3
            WAGE INDEX ONLY.................................          281        5,994        5,940         -0.9
            BOTH............................................           47        6,390        6,290         -1.6
            NONRECLASS......................................        4,507        6,844        6,795         -0.7
        ALL URBAN RECLASS...................................           95        7,767        7,786          0.2
            STAND. AMT. ONLY................................           25        5,922        5,924          0.0
            WAGE INDEX ONLY.................................           45        9,138        9,194          0.6
            BOTH............................................           25        6,679        6,647         -0.5
            NONRECLASS......................................        2,670        7,327        7,245         -1.1
        ALL RURAL RECLASS...................................          394        5,026        5,149          2.5
            STAND. AMT. ONLY................................           57        4,516        4,626          2.4
            WAGE INDEX ONLY.................................          309        5,086        5,204          2.3
            BOTH............................................           28        5,038        5,230          3.8
            NONRECLASS......................................        1,770        4,106        4,137          0.8
    OTHER RECLASSIFIED HOSPITALS (SECTION 1886(d)(8)(B))....           27        4,725        4,695        -0.6 
----------------------------------------------------------------------------------------------------------------
\1\ These payment amounts per case do not reflect any estimates of annual case-mix increase.                    

    Table II presents the projected impact of the proposed changes 
for FY 1999 for urban and rural hospitals and for the different 
categories of hospitals shown in Table I. It compares the projected 
payments per case for FY 1999 with the average estimated per case 
payments for FY 1998, as calculated under our models. Thus, this 
table presents, in terms of the average dollar amounts paid per 
discharge, the combined effects of the changes presented in Table I. 
The percentage changes shown in the last column of Table II equal 
the percentage changes in average payments from column 8 of Table I.

VIII. Impact of Proposed Changes in the Capital Prospective Payment 
System

A. General Considerations

    We now have data that were unavailable in previous impact 
analyses for the capital prospective payment system. Specifically, 
we have cost report data available for the fourth year of the 
capital prospective payment system (cost reports beginning in FY 
1995) available through the December 1997 update of the Health Care 
Provider Cost Report Information System (HCRIS). We also have 
updated information on the projected aggregate amount of obligated 
capital approved by the fiscal intermediaries. However, our impact 
analysis of payment changes for capital-related costs is still 
limited by the lack of hospital-specific data on several items. 
These are the hospital's projected new capital costs for each year, 
its projected old capital costs for each year, and the actual 
amounts of obligated capital that will be put in use for patient 
care and recognized as Medicare old capital costs in each year. The 
lack of this information affects our impact analysis in the 
following ways:
     Major investment in hospital capital assets (for 
example in building and major fixed equipment) occurs at irregular 
intervals. As a result, there can be significant variation in the 
growth rates of Medicare capital-related costs per case among 
hospitals. We do not have the necessary hospital-specific budget 
data to project the hospital capital growth rate for individual 
hospitals.

[[Page 25691]]

     Moreover, our policy of recognizing certain obligated 
capital as old capital makes it difficult to project future capital-
related costs for individual hospitals. Under Sec. 412.302(c), a 
hospital is required to notify its intermediary that it has 
obligated capital by the later of October 1, 1992, or 90 days after 
the beginning of the hospital's first cost reporting period under 
the capital prospective payment system. The intermediary must then 
notify the hospital of its determination whether the criteria for 
recognition of obligated capital have been met by the later of the 
end of the hospital's first cost reporting period subject to the 
capital prospective payment system or 9 months after the receipt of 
the hospital's notification. The amount that is recognized as old 
capital is limited to the lesser of the actual allowable costs when 
the asset is put in use for patient care or the estimated costs of 
the capital expenditure at the time it was obligated. We have 
substantial information regarding intermediary determinations of 
projected aggregate obligated capital amounts. However, we still do 
not know when these projects will actually be put into use for 
patient care, the actual amount that will be recognized as obligated 
capital when the project is put into use, or the Medicare share of 
the recognized costs. Therefore, we do not know actual obligated 
capital commitments for purposes of the FY 1999 capital cost 
projections. In Appendix B of this proposed rule, we discuss the 
assumptions and computations that we employ to generate the amount 
of obligated capital commitments for use in the FY 1999 capital cost 
projections.
    In Table III of this section, we present the redistributive 
effects that are expected to occur between ``hold-harmless'' 
hospitals and ``fully prospective'' hospitals in FY 1999. In 
addition, we have integrated sufficient hospital-specific 
information into our actuarial model to project the impact of the 
proposed FY 1999 capital payment policies by the standard 
prospective payment system hospital groupings. While we now have 
actual information on the effects of the transition payment 
methodology and interim payments under the capital prospective 
payment system and cost report data for most hospitals, we still 
need to randomly generate numbers for the change in old capital 
costs, new capital costs for each year, and obligated amounts that 
will be put in use for patient care services and recognized as old 
capital each year. We continue to be unable to predict accurately FY 
1999 capital costs for individual hospitals, but with the most 
recent data hospitals' experience under the capital prospective 
payment system, there is adequate information to estimate the 
aggregate impact on most hospital groupings.

B. Projected Impact Based on the Proposed FY 1999 Actuarial Model

    1. Assumptions. In this impact analysis, we model dynamically 
the impact of the capital prospective payment system from FY 1998 to 
FY 1999 using a capital cost model. The FY 1999 model, as described 
in Appendix B of this proposed rule, integrates actual data from 
individual hospitals with randomly generated capital cost amounts. 
We have capital cost data from cost reports beginning in FY 1989 
through FY 1995 as reported on the December 1997 update of HCRIS, 
interim payment data for hospitals already receiving capital 
prospective payments through PRICER, and data reported by the 
intermediaries that include the hospital-specific rate 
determinations that have been made through January 1, 1998 in the 
provider-specific file. We used these data to determine the proposed 
FY 1999 capital rates. However, we do not have individual hospital 
data on old capital changes, new capital formation, and actual 
obligated capital costs. We have data on costs for capital in use in 
FY 1995, and we age that capital by a formula described in Appendix 
B. Therefore, we need to randomly generate only new capital 
acquisitions for any year after FY 1995. All Federal rate payment 
parameters are assigned to the applicable hospital.
    For purposes of this impact analysis, the FY 1999 actuarial 
model includes the following assumptions:
     Medicare inpatient capital costs per discharge will 
change at the following rates during these periods:

        Average percentage change in capital costs per discharge        
------------------------------------------------------------------------
                                                              Percentage
                        Fiscal Year                             Change  
------------------------------------------------------------------------
1997.......................................................        -2.20
1998.......................................................        -0.44
1999.......................................................         0.61
------------------------------------------------------------------------

We have reduced our estimate of the growth in Medicare costs per 
discharge from the August 29, 1997 final rule with comment period to 
this proposed rule based on later cost data. We are now estimating a 
much smaller increase in costs per discharge.
     The Medicare case-mix index will increase by 1.0 
percent in FY 1998 and FY 1999.
     The Federal capital rate and hospital-specific rate 
were updated in FY 1996 by an analytical framework that considers 
changes in the prices associated with capital-related costs, and 
adjustments to account for forecast error, changes in the case-mix 
index, allowable changes in intensity, and other factors. The 
proposed FY 1999 update for inflation is 0.20 percent (see section 
III of the Addendum).
    2. Results. We have used the actuarial model to estimate the 
change in payment for capital-related costs from FY 1998 to FY 1999. 
Table III shows the effect of the capital prospective payment system 
on low capital cost hospitals and high capital cost hospitals. We 
consider a hospital to be a low capital cost hospital if, based on a 
comparison of its initial hospital-specific rate and the applicable 
Federal rate, it will be paid under the fully prospective payment 
methodology. A high capital cost hospital is a hospital that, based 
on its initial hospital-specific rate and the applicable Federal 
rate, will be paid under the hold-harmless payment methodology. 
Based on our actuarial model, the breakdown of hospitals is as 
follows:

                               Capital Transition Payment Methodology for FY 1999                               
----------------------------------------------------------------------------------------------------------------
                                                                                         Percent of   Percent of
                      Type of hospital                         Percent of   Percent of    capital      capital  
                                                               hospitals    discharges     costs       payments 
----------------------------------------------------------------------------------------------------------------
Low Cost Hospital...........................................           67           62           53           58
High Cost Hospital..........................................           33           38           47           42
----------------------------------------------------------------------------------------------------------------

    A low capital cost hospital may request to have its hospital-
specific rate redetermined based on old capital costs in the current 
year, through the later of the hospital's cost reporting period 
beginning in FY 1994 or the first cost reporting period beginning 
after obligated capital comes into use (within the limits 
established in Sec. 412.302(e) for putting obligated capital in to 
use for patient care). If the redetermined hospital-specific rate is 
greater than the adjusted Federal rate, these hospitals will be paid 
under the hold-harmless payment methodology. Regardless of whether 
the hospital became a hold-harmless payment hospital as a result of 
a redetermination, we continue to show these hospitals as low 
capital cost hospitals in Table III.
    Assuming no behavioral changes in capital expenditures, Table III 
displays the percentage change in payments from FY 1998 to FY 1999 
using the above described actuarial model. With the proposed Federal 
rate, we estimate aggregate Medicare capital payments will increase by 
2.60 percent in FY 1999.

[[Page 25692]]



                                      Table III.--Impact of Proposed Changes for FY 1999 on Payments per Discharge                                      
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                Percent 
                                                   Number of                 Adjusted   Average    Hospital     Hold    Exceptions    Total      change 
                                                   hospitals   Discharges    federal    federal    specific   harmless    payment    payment    over FY 
                                                                             payment    percent    payment    payment                             1998  
--------------------------------------------------------------------------------------------------------------------------------------------------------
         FY 1998 Payments per Discharge:                                                                                                                
Low Cost Hospitals...............................      3,260     6,746,172    $458.89      72.51     $86.07      $4.04       $8.87    $557.88  .........
    Fully Prospective............................      3,021     6,102,199     440.78      70.00      95.16  .........        8.21     544.15  .........
    100% Federal Rate............................        208       567,402     661.26     100.00  .........  .........       11.10     672.36  .........
    Hold Harmless................................         31        76,570     402.65      59.69  .........     355.79       45.50     803.94  .........
High Cost Hospitals..............................      1,637     4,163,057     636.32      95.82  .........      36.64       16.72     689.68  .........
    100% Federal Rate............................      1,398     3,701,256     667.50     100.00  .........  .........       11.65     679.14  .........
    Hold Harmless................................        239       461,801     386.44      60.70  .........     330.33       57.34     774.12  .........
                                                  ------------------------------------------------------------------------------------------------------
      Total Hospitals............................      4,897    10,909,229     526.60      81.67      53.23      16.48       11.87     608.18  .........
         FY 1999 Payments per Discharge:                                                                                                                
Low Cost Hospitals...............................      3,260     6,596,003    $529.51      81.61     $58.10      $3.38       $9.53    $597.52       7.11
    Fully Prospective............................      3,021     5,966,449     513.52      80.00      64.23  .........        8.47     586.21       7.73
    100% Federal Rate............................        211       561,909     674.19     100.00  .........  .........       10.98     685.17       1.91
    Hold Harmless................................         28        67,646     445.71      64.76  .........     329.56       91.77     867.04       7.85
High Cost Hospitals..............................      1,637     4,068,306     655.17      97.22  .........      25.50       23.85     704.52       2.15
    100% Federal Rate............................      1,417     3,678,286     681.02     100.00  .........  .........       16.94     697.97       2.77
    Hold Harmless................................        220       390,020     411.40      67.81  .........     265.94       88.99     766.33      -1.01
                                                  ------------------------------------------------------------------------------------------------------
      Total Hospitals............................      4,897    10,664,309     575.59      87.73      35.93      11.82       15.00     638.34       4.96
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We project that low capital cost hospitals paid under the fully 
prospective payment methodology will experience an average increase 
in payments per case of 7.73 percent, and high capital cost 
hospitals will experience an average increase of 2.15 percent.
    For hospitals paid under the fully prospective payment 
methodology, the Federal rate payment percentage will increase from 
70 percent to 80 percent and the hospital-specific rate payment 
percentage will decrease from 30 to 20 percent in FY 1999. The 
Federal rate payment percentage for hospitals paid under the hold-
harmless payment methodology is based on the hospital's ratio of new 
capital costs to total capital costs. The average Federal rate 
payment percentage for high cost hospitals receiving a hold-harmless 
payment for old capital will increase from 60.70 percent to 67.81 
percent. We estimate the percentage of hold-harmless hospitals paid 
based on 100 percent of the Federal rate will increase from 85.6 
percent to 86.8 percent. We estimate that high cost hold-harmless 
hospitals will experience a decrease in payments of 1.01 percent 
from FY 1998 to FY 1999. The apparent decrease occurs because we 
estimate that there will be 19 fewer high-cost hold-harmless 
hospitals in FY 1999. These 19 hospitals may have higher payments 
than the remaining hospitals, hence the apparent decrease when they 
are removed from the group. This decrease is partially offset by an 
increase in the Federal portion of the hospital's payments and a 
projected increase in exceptions payments.
    We expect that the average hospital-specific rate payment per 
discharge will decrease from $95.16 in FY 1998 to $64.23 in FY 1999. 
This is partly due to the decrease in the hospital-specific rate 
payment percentage from 30 percent in FY 1998 to 20 percent in FY 
1999.
    We are proposing no changes in our exceptions policies for FY 
1999. As a result, the minimum payment levels would be:
     90 percent for sole community hospitals;
     80 percent for urban hospitals with 100 or more beds 
and a disproportionate share patient percentage of 20.2 percent or 
more; or
     70 percent for all other hospitals.
    We estimate that exceptions payments will increase from 1.95 
percent of total capital payments in FY 1998 to 2.35 percent of 
payments in FY 1999. Since the August 29, 1997 final rule with 
comment period, we have reduced our estimates of capital cost per 
case based on more recent data. Although we still estimate that more 
hospitals will receive exceptions payment in FY 1999 than in FY 1998 
fewer hospitals will have costs over the exceptions threshold then 
we previously estimated. The projected distribution of the exception 
payments is shown in the table below:

                  Estimated FY 1999 Exceptions Payments                 
------------------------------------------------------------------------
                                                              Percent of
               Type of hospital                  Number of    exceptions
                                                 hospitals     payments 
------------------------------------------------------------------------
Low Capital Cost..............................          178           39
High Capital Cost.............................          200           61
                                               -------------------------
    Total.....................................          378          100
------------------------------------------------------------------------

C. Cross-Sectional Comparison of Capital Prospective Payment 
Methodologies

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

  Table IV.--Distribution by Method of Payment (Hold-Harmless/Fully Prospective) of Hospitals Receiving Capital 
                                                    Payments                                                    
----------------------------------------------------------------------------------------------------------------
                                                                               (2) Hold-harmless                
                                                                          --------------------------     (3)    
                                                               (1) Total    Percentage                Percentage
                                                                 No. of     paid hold-   Percentage   paid fully
                                                               Hospitals     harmless    paid fully  prospective
                                                                               (A)      federal (B)      rate   
----------------------------------------------------------------------------------------------------------------
By Geographic Location:                                                                                         
    All hospitals...........................................        4,897          5.1         33.2         61.7
    Large urban areas (populations over 1 million)..........        1,558          5.7         40.7         53.6

[[Page 25693]]

                                                                                                                
    Other urban areas (populations of 1 million or fewer)...        1,188          6.2         40.8         52.9
    Rural areas.............................................        2,151          4.0         23.7         72.4
    Urban hospitals.........................................        2,746          5.9         40.8         53.3
        0-99 beds...........................................          653          5.8         33.8         60.3
        100-199 beds........................................          928          8.5         45.9         45.6
        200-299 beds........................................          565          5.8         40.9         53.3
        300-499 beds........................................          448          2.2         40.8         56.9
        500 or more beds....................................          152          2.0         38.2         59.9
    Rural hospitals.........................................        2,151          4.0         23.7         72.4
        0-49 beds...........................................        1,124          3.5         16.1         80.4
        50-99 beds..........................................          633          4.3         28.8         67.0
        100-149 beds........................................          229          4.8         38.0         57.2
        150-199 beds........................................           91          7.7         25.3         67.0
        200 or more beds....................................           74          1.4         48.6         50.0
By Region                                                                                                       
    Urban by Region.........................................        2,746          5.9         40.8         53.3
        New England.........................................          151          0.0         27.8         72.2
        Middle Atlantic.....................................          421          4.5         34.0         61.5
        South Atlantic......................................          409          5.4         53.5         41.1
        East North Central..................................          472          5.5         30.5         64.0
        East South Central..................................          157         10.8         48.4         40.8
        West North Central..................................          183          6.0         36.6         57.4
        West South Central..................................          332         13.3         55.7         31.0
        Mountain............................................          122          4.9         50.8         44.3
        Pacific.............................................          451          3.3         37.7         59.0
        Puerto Rico.........................................           48          6.3         22.9         70.8
    Rural by Region.........................................        2,151          4.0         23.7         72.4
        New England.........................................           53          0.0         22.6         77.4
        Middle Atlantic.....................................           79          5.1         25.3         69.6
        South Atlantic......................................          282          2.5         33.0         64.5
        East North Central..................................          283          3.2         19.1         77.7
        East South Central..................................          267          1.9         34.1         64.0
        West North Central..................................          498          3.6         16.1         80.3
        West South Central..................................          339          3.8         27.4         68.7
        Mountain............................................          205         10.7         15.6         73.7
        Pacific.............................................          140          5.0         23.6         71.4
    Large urban areas (populations over 1 million)..........        1,651          5.9         40.5         53.7
    Other urban areas (populations of 1 million or fewer)...        1,180          5.8         41.1         53.1
    Rural areas.............................................        2,066          4.0         23.0         73.0
Teaching Status:                                                                                                
    Non-teaching............................................        3,818          5.1         32.8         62.0
    Fewer than 100 Residents................................          840          5.7         35.1         59.2
    100 or more Residents...................................          239          1.7         33.5         64.9
Disproportionate share hospitals (DSH):                                                                         
    Non-DSH.................................................        3,029          5.3         28.9         65.8
    Urban DSH:                                                                                                  
        100 or more beds....................................        1,397          5.2         43.7         51.0
        Less than 100 beds..................................           87          1.1         29.9         69.0
    Rural DSH:                                                                                                  
        Sole Community (SCH/EACH)...........................          156          5.1         22.4         72.4
        Referral Center (RRC/EACH)..........................           47          2.1         53.2         44.7
        Other Rural:                                                                                            
            100 or more beds................................           64          4.7         37.5         57.8
            Less than 100 beds..............................          117          0.9         28.2         70.9
Urban teaching and DSH:                                                                                         
    Both teaching and DSH...................................          699          4.0         36.6         59.4
    Teaching and no DSH.....................................          327          6.7         31.5         61.8
    No teaching and DSH.....................................          785          5.9         48.5         45.6
    No teaching and no DSH..................................        1,020          6.8         40.5         52.7
Rural Hospital Types:                                                                                           
    Non special status hospitals............................          894          2.0         24.0         73.9
    RRC/EACH................................................          137          2.2         40.1         57.7
    SCH/EACH................................................          632          8.2         19.9         71.8
    Medicare-dependent hospitals (MDH)......................          349          1.1         17.5         81.4
    SCH, RRC and EACH.......................................           54         11.1         33.3         55.6

[[Page 25694]]

                                                                                                                
Type of Ownership:                                                                                              
    Voluntary...............................................        2,847          4.9         33.0         62.1
    Proprietary.............................................          656         10.1         58.2         31.7
    Government..............................................        1,329          3.2         21.1         75.7
Medicare Utilization as a Percent of Inpatient Days:                                                            
    0-25....................................................          238          4.2         30.7         65.1
    25-50...................................................        1,260          5.9         41.0         53.2
    50-65...................................................        1,970          5.6         33.0         61.4
    Over 65.................................................        1,364          3.8         26.6         69.6
----------------------------------------------------------------------------------------------------------------

    As we explain in Appendix B, we were not able to determine a 
hospital-specific rate for 59 of the 4,956 hospitals in our 
database. Consequently, the payment methodology distribution is 
based on 4,897 hospitals. These data should be fully representative 
of the payment methodologies that will be applicable to hospitals.
    The cross-sectional distribution of hospital by payment 
methodology is presented by: (1) Geographic location, (2) region, 
and (3) payment classification. This provides an indication of the 
percentage of hospitals within a particular hospital grouping that 
will be paid under the fully prospective payment methodology and the 
hold-harmless payment methodology.
    The percentage of hospitals paid fully Federal (100 percent of 
the Federal rate) as hold-harmless hospitals is expected to increase 
to 33.2 percent in FY 1999. We note that the number of hospitals 
paid fully Federal as hold-harmless hospitals has not increased as 
quickly as we predicted in the August 29, 1997 final rule with 
comment period because of revised estimates.
    Table IV indicates that 61.7 percent of hospitals will be paid 
under the fully prospective payment methodology. (This figure, 
unlike the figure of 67 percent for low cost capital hospitals in 
the previous section, takes account of the effects of 
redeterminations. In other words, this figure does not include low 
cost hospitals that, following a hospital-specific rate 
redetermination, are now paid under the hold-harmless methodology.) 
As expected, a relatively higher percentage of rural and 
governmental hospitals (73.0 percent and 75.7 percent, respectively 
by payment classification) are being paid under the fully 
prospective methodology. This is a reflection of their lower than 
average capital costs per case. In contrast, only 31.7 percent of 
proprietary hospitals are being paid under the fully prospective 
methodology. This is a reflection of their higher than average 
capital costs per case. (We found at the time of the August 30, 1991 
final rule (56 FR 43430) that 62.7 percent of proprietary hospitals 
had a capital cost per case above the national average cost per 
case.)

D. Cross-Sectional Analysis of Changes in Aggregate Payments

    We used our FY 1999 actuarial model to estimate the potential 
impact of our proposed changes for FY 1999 on total capital payments 
per case, using a universe of 4,897 hospitals. The individual 
hospital payment parameters are taken from the best available data, 
including: The January 1, 1998 update to the provider-specific file, 
cost report data, and audit information supplied by intermediaries. 
In Table V we present the results of the cross-sectional analysis 
using the results of our actuarial model and the aggregate impact of 
the FY 1999 payment policies. Columns 3 and 4 show estimates of 
payments per case under our model for FY 1998 and FY 1999. Column 5 
shows the total percentage change in payments from FY 1998 to FY 
1999. Column 6 presents the percentage change in payments that can 
be attributed to Federal rate changes alone.
    Federal rate changes represented in Column 6 include the 1.5 
percent increase in the Federal rate, a 1.0 percent increase in case 
mix, changes in the adjustments to the Federal rate (for example, 
the effect of the new hospital wage index on the geographic 
adjustment factor), and reclassifications by the MGCRB. Column 5 
includes the effects of the Federal rate changes represented in 
Column 6. Column 5 also reflects the effects of all other changes, 
including: the change from 70 percent to 80 percent in the portion 
of the Federal rate for fully prospective hospitals, the hospital-
specific rate update, changes in the proportion of new to total 
capital for hold-harmless hospitals, changes in old capital (for 
example, obligated capital put in use), hospital-specific rate 
redeterminations, and exceptions. The comparisons are provided by: 
(1) Geographic location, (2) region, and (3) payment classification.
    The simulation results show that, on average, capital payments 
per case can be expected to increase 5.0 percent in FY 1999. The 
results show that the effect of the Federal rate changes alone is to 
increase payments by 1.5 percent. In addition to the increase 
attributable to the Federal rate changes, a 3.5 percent increase is 
attributable to the effects of all other changes.
    Our comparison by geographic location shows that urban and rural 
hospitals will experience slightly different rates of increase in 
capital payments per case (4.8 percent and 6.3 percent, 
respectively). This difference is due to the lower rate of increase 
for urban hospitals relative to rural hospitals (1.3 percent and 3.2 
percent, respectively) from the Federal rate changes alone. Urban 
hospitals will gain approximately the same as rural hospitals (3.5 
percent versus 3.1 percent) from the effects of all other changes.
    All regions are estimated to receive increases in total capital 
payments per case, partly due to the increased share of payments 
that are based on the Federal rate (from 70 to 80 percent). Changes 
by region vary from a low of 3.6 percent increase (West South 
Central urban region) to a high of 7.8 percent increase (Pacific 
rural region).
    By type of ownership, government hospitals are projected to have 
the largest rate of increase (6.2 percent, 1.9 percent due to 
Federal rate changes and 4.3 percent from the effects of all other 
changes). Payments to voluntary hospitals will increase 5.1 percent 
(a 1.5 percent increase due to Federal rate changes and a 3.6 
percent increase from the effects of all other changes) and payments 
to proprietary hospitals will increase 2.8 percent (a 1.1 percent 
increase due to Federal rate changes and a 1.7 percent increase from 
the effects of all other changes).
    Section 1886(d)(10) of the Act established the MGCRB. Hospitals 
may apply for reclassification for purposes of the standardized 
amount, wage index, or both and for purposes of DSH, for FY 1999-
2001. Although the Federal capital rate is not affected, a 
hospital's geographic classification for purposes of the operating 
standardized amount does affect a hospital's capital payments as a 
result of the large urban adjustment factor and the disproportionate 
share adjustment for urban hospitals with 100 or more beds. 
Reclassification for wage index purposes affects the geographic 
adjustment factor since that factor is constructed from the hospital 
wage index.
    To present the effects of the hospitals being reclassified for 
FY 1999 compared to the effects of reclassification for FY 1998, we 
show the average payment percentage increase for hospitals 
reclassified in each

[[Page 25695]]

fiscal year and in total. For FY 1999 reclassifications, we indicate 
those hospitals reclassified for standardized amount purposes only, 
for wage index purposes only, and for both purposes. The 
reclassified groups are compared to all other nonreclassified 
hospitals. These categories are further identified by urban and 
rural designation.
    Hospitals reclassified for FY 1999 as a whole are projected to 
experience a 6.8 percent increase in payments (a 3.5 percent 
increase attributable to Federal rate changes and a 3.3 percent 
increase attributable to the effects of all other changes). Payments 
to nonreclassified hospitals will increase slightly less (5.1 
percent) than reclassified hospitals (6.8 percent) overall. Payments 
to nonreclassified hospitals will increase less than reclassified 
hospitals from the Federal rate changes (1.5 percent compared to 3.5 
percent), but they will gain about the same from the effects of all 
other changes (3.6 percent compared to 3.3 percent).

                  Table V.--Comparison of Total Payments Per Case (FY 1998 Compared to FY 1999)                 
----------------------------------------------------------------------------------------------------------------
                                                                                                       Portion  
                                                 Number of    Average FY   Average FY               attributable
                                                 hospitals    1998 pay-    1999 pay-   All changes   to federal 
                                                              ments/case   ments/case                rate change
----------------------------------------------------------------------------------------------------------------
By Geographic Location:                                                                                         
    All hospitals.............................        4,897          608          638          5.0           1.5
    Large urban areas (populations over 1                                                                       
     million).................................        1,558          700          732          4.5           1.1
    Other urban areas (populations of 1                                                                         
     million of fewer)........................        1,188          601          633          5.2           1.5
    Rural areas...............................        2,151          405          431          6.3           3.2
    Urban hospitals...........................        2,746          658          689          4.8           1.3
        0-99 beds.............................          653          482          502          4.1           1.2
        100-199 beds..........................          928          584          605          3.6           1.1
        200-299 beds..........................          565          628          661          5.4           1.3
        300-499 beds..........................          448          686          720          4.9           1.2
        500 or more beds......................          152          824          866          5.1           1.4
    Rural hospitals...........................        2,151          405          431          6.3           3.2
        0-49 beds.............................        1,124          325          348          6.9           2.9
        50-99 beds............................          633          382          407          6.6           2.8
        100-149 beds..........................          229          421          446          5.9           3.0
        150-199 beds..........................           91          442          469          6.0           3.8
        200 or more beds......................           74          500          531          6.2           3.7
By Region:                                                                                                      
    Urban by Region...........................        2,746          658          689          4.8           1.3
        New England...........................          151          659          685          4.0          -0.4
        Middle Atlantic.......................          421          708          743          5.0           1.8
        South Atlantic........................          409          649          678          4.4           1.8
        East North Central....................          472          616          650          5.5           1.0
        East South Central....................          157          611          633          3.6           0.8
        West North Central....................          183          638          673          5.6           2.3
        West South Central....................          332          664          688          3.6           0.5
        Mountain..............................          122          691          728          5.4           1.6
        Pacific...............................          451          719          755          5.1           1.0
        Puerto Rico...........................           48          277          288          4.1           1.9
    Rural by Region...........................        2,151          405          431          6.3           3.2
        New England...........................           53          475          497          4.5           1.9
        Middle Atlantic.......................           79          413          443          7.4           3.4
        South Atlantic........................          282          430          455          5.9           3.5
        East North Central....................          283          401          431          7.4           3.4
        East South Central....................          267          376          400          6.6           3.4
        West North Central....................          498          390          411          5.6           3.4
        West South Central....................          339          370          390          5.5           2.5
        Mountain..............................          205          434          461          6.4           2.4
        Pacific...............................          140          478          515          7.8           2.8
By Payment Classification:                                                                                      
    All hospitals.............................        4,897          608          638          5.0           1.5
    Large urban areas (populations over 1                                                                       
     million).................................        1,651          692          724          4.5           1.1
    Other urban areas (populations of 1                                                                         
     million of fewer)........................        1,180          599          631          5.2           1.5
    Rural areas...............................        2,066          402          427          6.2           3.0
    Teaching Status:                                                                                            
        Non-teaching..........................        3,818          517          540          4.5           1.7
        Fewer than 100 Residents..............          840          647          682          5.4           1.3
        100 or more Residents.................          239          889          936          5.3           1.3
        Urban DSH:                                                                                              
            100 or more beds..................        1,397          693          727          4.9           1.3
            Less than 100 beds................           87          444          467          5.1           1.1
        Rural DSH:                                                                                              
            Sole Community (SCH/EACH).........          156          364          383          5.2           2.5
            Referral Center (RRC/EACH)........           47          462          494          7.0           4.5
            Other Rural:                                                                                        
            100 or more beds..................           64          384          400          4.3           2.8
            Less than 100 beds................          117          320          340          6.3           3.3
    Urban teaching and DSH:                                                                                     
        Both teaching and DSH.................          699          761          801          5.3           1.2
        Teaching and no DSH...................          327          659          696          5.5           1.3

[[Page 25696]]

                                                                                                                
        No teaching and DSH...................          785          585          610          4.3           1.3
        No teaching and no DSH................        1,020          558          579          3.7           1.3
    Rural Hospital Types:                                                                                       
        Non special status hospitals..........          894          367          389          6.0           2.6
        RRC/EACH..............................          137          475          506          6.5           3.9
        SCH/EACH..............................          632          391          416          6.2           2.4
        Medicare-dependent hospitals (MDH)....          349          324          355          9.5           3.6
        SCH, RRC and EACH.....................           54          483          500          3.5           3.1
    Hospitals Reclassified by the Medicare                                                                      
     Geographic Classification Review Board:                                                                    
        Reclassification Status During FY98                                                                     
         and FY99:                                                                                              
            Reclassified During Both FY98 and                                                                   
             FY99.............................          311          540          566          4.8           1.7
        Reclassified During FY99 Only.........          178          487          537         10.4           6.8
        Reclassified During FY98 Only.........          110          580          587          1.2          -1.4
        FY99 Reclassifications:                                                                                 
            All Reclassified Hospitals........          489          520          555          6.8           3.5
            All Nonreclassified Hospitals.....        4,449          614          646          5.1           1.5
            All Urban Reclassified Hospitals..           95          663          708          6.8           2.3
            Urban Nonreclassified Hospitals...        2,624          659          689          4.7           1.2
            All Reclassified Rural Hospitals..          394          462          494          6.8           4.2
            Rural Nonreclassified Hospitals...        1,757          369          391          6.0           2.4
        Other Reclassified Hospitals (Section                                                                   
         1886 (D)(8)(B))......................           27          461          476          3.3           1.1
    Type of Ownership:                                                                                          
        Voluntary.............................        2,847          622          653          5.1           1.5
        Proprietary...........................          656          617          634          2.8           1.1
        Government............................        1,329          530          563          6.2           1.9
    Medicare Utilization as a Percent of                                                                        
     Inpatient Days:                                                                                            
        0-25..................................          238          685          725          5.8           1.1
        25-50.................................        1,260          724          759          4.7           1.3
        50-65.................................        1,970          565          594          5.2           1.6
----------------------------------------------------------------------------------------------------------------

Appendix B: Technical Appendix on the Capital Cost Model and Required 
Adjustments

    Under section 1886(g)(1)(A) of the Act, we set capital 
prospective payment rates for FY 1992 through FY 1995 so that 
aggregate prospective payments for capital costs were projected to 
be 10 percent lower than the amount that would have been payable on 
a reasonable cost basis for capital-related costs in that year. To 
implement this requirement, we developed the capital acquisition 
model to determine the budget neutrality adjustment factor. Even 
though the budget neutrality requirement expired effective with FY 
1996, we must continue to determine the recalibration and geographic 
reclassification budget neutrality adjustment factor, and the 
reduction in the Federal and hospital-specific rates for exceptions 
payments. To determine these factors, we must continue to project 
capital costs and payments.
    We have used the capital acquisition model since the start of 
prospective payments for capital costs. We now have 4 years of cost 
reports under the capital prospective payment system. For FY 1998, 
we developed a new capital cost model to replace the capital 
acquisition model. This revised model makes use of the data from 
these cost reports.
    The following cost reports are used in the capital cost model 
for this proposed rule: The December 31, 1997 update of the cost 
reports for PPS-IX (cost reporting periods beginning in FY 1992), 
PPS-X (cost reporting periods beginning in FY 1993), PPS-XI (cost 
reporting periods beginning in FY 1994), and PPS-XII (cost reporting 
periods beginning in FY 1995). In addition, to model payments, we 
use the January 1, 1998 update of the provider-specific file, and 
the March 1994 update of the intermediary audit file.
    Since hospitals under alternative payment system waivers (that 
is, hospitals in Maryland) are currently excluded from the capital 
prospective payment system, we excluded these hospitals from our 
model.
    We developed FY 1992 through FY 1998 hospital-specific rates 
using the provider-specific file and the intermediary audit file. 
(We used the cumulative provider-specific file, which includes all 
updates to each hospital's records, and chose the latest record for 
each fiscal year.) We checked the consistency between the provider-
specific file and the intermediary audit file. We ensured that 
increases in the hospital-specific rates were at least as large as 
the published updates (increases) for the hospital-specific rates 
each year. We were able to match hospitals to the files as shown in 
the following table:

------------------------------------------------------------------------
                                                              Number of 
                           Source                             hospitals 
------------------------------------------------------------------------
Provider-Specific File Only................................           99
Provider-Specific and Audit File...........................         4857
                                                            ------------
    Total..................................................         4956
------------------------------------------------------------------------

    Eighty-six of the 4,956 hospitals had unusable or missing data 
or had no cost reports available. We determined from the cost 
reports that 27 of the 86 hospitals were paid under the hold-
harmless methodology. Since the hospital-specific amount is not used 
to determine payments for these hospitals, we were able to include 
these 27 hospitals in the analysis. We used the cost report data of 
4,897 hospitals for the analysis. Fifty-nine hospitals could not be 
used in the analysis because of insufficient information. These 
hospitals account for approximately 0.3 percent of admissions, 
therefore, any effects from the elimination of their cost report 
data should be minimal.
    We analyzed changes in capital-related costs (depreciation, 
interest, rent, leases, insurance, and taxes) reported in the cost 
reports. We found a wide variance among hospitals in the growth of 
these costs. For hospitals with more than 100 beds, the distribution 
and mean of these cost increases were different for large changes in 
bed-size (greater than 20 percent). We also analyzed 
changes in the growth in old capital and new capital for cost 
reports that provided this information. For old capital, we limited 
the analysis to decreases in old capital. We did this since the 
opportunity for most hospitals to treat ``obligated'' capital put 
into service as

[[Page 25697]]

old capital has expired. Old capital costs should, therefore, 
decrease as assets become fully depreciated, and as interest costs 
decrease as the loan is amortized.
    The new capital cost model separates the hospitals into three 
mutually exclusive groups. Hold-harmless hospitals with data on old 
capital were placed in the first group. Of the remaining hospitals, 
those hospitals with fewer than 100 beds comprise the second group. 
The third group consists of all hospitals that did not fit into 
either of the groups. Each of these groups displayed unique patterns 
of growth in capital costs. We found that the gamma distribution is 
useful in explaining and describing the patterns of increase in 
capital costs. A gamma distribution is a statistical distribution 
that can be used to describe patterns of growth rates, with greatest 
proportion of rates being at the low end. We use the gamma 
distribution to estimate individual hospital rates of increase as 
follows:
    (1) For hold-harmless hospitals, old capital cost changes were 
fitted to a truncated gamma distribution, that is, a gamma 
distribution covering only the distribution of cost decreases. New 
capital costs changes were fitted to the entire gamma distribution 
allowing for both decreases and increases.
    (2) For hospitals with fewer than 100 beds (small), total 
capital cost changes were fitted to the gamma distribution allowing 
for both decreases and increases.
    (3) Other (large) hospitals were further separated into three 
groups:
     Bed-size decreases over 20 percent (decrease).
     Bed-size increases over 20 percent (increase).
     Other (no-change).
    Capital cost changes for large hospitals were fitted to gamma 
distributions for each bed-size change group, allowing for both 
decreases and increases in capital costs. We analyzed the 
probability distribution of increases and decreases in bed-size for 
large hospitals. We found the probability somewhat dependent on the 
prior year change in bed-size and factored this dependence into the 
analysis. Probabilities of bed-size change were determined. Separate 
sets of probability factors were calculated to reflect the 
dependence on prior year change in bed-size (increase, decrease, and 
no change).
    The gamma distributions were fitted to changes in aggregate 
capital costs for the entire hospital. We checked the relationship 
between aggregate costs and Medicare per discharge costs. For large 
hospitals, there was a small variance, but the variance was larger 
for small hospitals. Since costs are used only for the hold-harmless 
methodology and to determine exceptions, we decided to use the gamma 
distributions fitted to aggregate cost increases for estimating 
distributions of cost per discharge increases.
    Capital costs per discharge calculated from the cost reports 
were increased by random numbers drawn from the gamma distribution 
to project costs in future years. Old and new capital were projected 
separately for hold-harmless hospitals. Aggregate capital per 
discharge costs were projected for all other hospitals. Because the 
distribution of increases in capital costs varies with changes in 
bed-size for large hospitals, we first projected changes in bed-size 
for large hospitals before drawing random numbers from the gamma 
distribution. Bed-size changes were drawn from the uniform 
distribution with the probabilities dependent on the previous year 
bed-size change. The gamma distribution has a shape parameter and a 
scaling parameter. (We used different parameters for each hospital 
group, and for old and new capital.)
    We used discharge counts from the cost reports to calculate 
capital cost per discharge. To estimate total capital costs for FY 
1997 (the MedPAR data year) and later, we use the number of 
discharges from the MEDPAR data. Some hospitals have considerably 
more discharges in FY 1997 than in the years for which we calculated 
cost per discharge from the cost report data. Consequently, a 
hospital with few cost report discharges would have a high capital 
cost per discharge since fixed costs would be allocated over only a 
few discharges. If discharges increase substantially, the cost per 
discharge would decrease because fixed costs would be allocated over 
more discharges. If the projection of capital cost per discharge is 
not adjusted for increases in discharges, the projection of 
exceptions would be overstated. We address this situation by 
recalculating the cost per discharge with the MedPAR discharges if 
the MedPAR discharges exceed the cost report discharges by more than 
20 percent. We do not adjust for increases of less than 20 percent 
because we have not received all of the FY 1997 discharges, and we 
have removed some discharges from the analysis because they are 
statistical outliers. This adjustment reduces our estimate of 
exceptions payments, and consequently, the reduction to the Federal 
rate for exceptions is smaller. We will continue to monitor our 
modeling of exceptions payments and make adjustments as needed.
    The average national capital cost per discharge generated by 
this model is the combined average of many randomly generated 
increases. This average must equal the projected average national 
capital cost per discharge, which we projected separately (outside 
this model). We adjusted the shape parameter of the gamma 
distributions so that the modeled average capital cost per discharge 
matches our projected capital cost per discharge. The shape 
parameter for old capital was not adjusted since we are modeling the 
aging of ``existing'' assets. This model provides a distribution of 
capital costs among hospitals that is consistent with our aggregate 
capital projections.
    Once each hospital's capital-related costs are generated, the 
model projects capital payments. We use the actual payment 
parameters (for example, the case-mix index and the geographic 
adjustment factor) that are applicable to the specific hospital.
    To project capital payments, the model first assigns the 
applicable payment methodology (fully prospective or hold-harmless) 
to the hospital as determined from the provider-specific file and 
the cost reports. The model simulates Federal rate payments using 
the assigned payment parameters and hospital-specific estimated 
outlier payments. The case-mix index for a hospital is derived from 
the FY 1997 MedPAR file using the FY 1998 DRG relative weights 
published in section V. of the Addendum to this proposed rule. The 
case-mix index is increased each year after FY 1997 based on 
analysis of past experiences in case-mix increases. Based on 
analysis of recent case-mix increases, we estimate that case-mix 
will increase 1.0 percent in FY 1998 and 1.0 percent in FY 1999. 
(Since we are using FY 1997 cases for our analysis, the FY 1997 
increase in case mix has no effect on projected capital payments.)
    Changes in geographic classification and revisions to the 
hospital wage data used to establish the hospital wage index affect 
the geographic adjustment factor. Changes in the DRG classification 
system and the relative weights affect the case-mix index.
    Section 412.308(c)(4)(ii) requires that the estimated aggregate 
payments for the fiscal year, based on the Federal rate after any 
changes resulting from DRG reclassifications and recalibration and 
the geographic adjustment factor, equal the estimated aggregate 
payments based on the Federal rate that would have been made without 
such changes. For FY 1998, the budget neutrality adjustment factor 
was 1.00015.
    Since we implemented a separate geographic adjustment factor for 
Puerto Rico, we propose to apply separate budget neutrality 
adjustments for the national geographic adjustment factor and the 
Puerto Rico geographic adjustment factor. We propose to apply the 
same budget neutrality factor for DRG reclassifications and 
recalibration nationally and for Puerto Rico. Separate adjustments 
were unnecessary for FY 1998 since the geographic adjustment factor 
for Puerto Rico was implemented in 1998.
    To determine the factors for FY 1999, we first determined the 
portions of the Federal national and Puerto Rico rates that would be 
paid for each hospital in FY 1999 based on its applicable payment 
methodology. Using our model, we then compared, separately for the 
national rate and the Puerto Rico rate, estimated aggregate Federal 
rate payments based on the FY 1998 DRG relative weights and the FY 
1998 geographic adjustment factor to estimated aggregate Federal 
rate payments based on the FY 1998 relative weights and the FY 1999 
geographic adjustment factor. In making the comparison, we held the 
FY 1999 Federal rate portion constant and set the other budget 
neutrality adjustment factor and the exceptions reduction factor to 
1.00. We determined that, to achieve budget neutrality for the 
changes in the national geographic adjustment factor, an incremental 
budget neutrality adjustment of 0.99995 for FY 1999 should be 
applied to the previous cumulative FY 1998 adjustment of 1.00015, 
yielding a cumulative adjustment of 1.00010 through FY 1999. Since 
this is the first adjustment for Puerto Rico, the incremental and 
cumulative adjustment for Puerto Rico would be 0.99887 through 1999. 
We apply these new adjustments then compare estimated aggregate 
Federal rate payments based on the FY 1998 DRG relative weights and 
the FY 1999 geographic adjustment factors to estimated aggregate

[[Page 25698]]

Federal rate payments based on the FY 1999 DRG relative weights and 
the FY 1999 geographic adjustment factors. The incremental 
adjustment for DRG classifications and changes in relative weights 
would be 1.00328 nationally and for Puerto Rico. The cumulative 
adjustments for DRG classifications and changes in relative weights 
and for changes in the geographic adjustment factors through 1999 
would be 1.00338 nationally, and 1.00215 for Puerto Rico. The 
following table summarizes the adjustment factors for each fiscal 
year:

                     Budget Neutrality Adjustment for DRG Reclassifications and Recalibration and the Geographic Adjustment Factors                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              National                                                 Puerto Rico                      
                                     -------------------------------------------------------------------------------------------------------------------
                                                 Incremental Adjustment                                    Incremental Adjustment                       
             Fiscal year             ---------------------------------------------             ---------------------------------------------            
                                       Geographic         DRG                       Cumulative   Geographic         DRG                       Cumulative
                                       Adjustment  Reclassifications    Combined                 Adjustment  Reclassifications    Combined              
                                         Factor    and Recalibration                               Factor    and Recalibration                          
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992................................  ...........  .................  ...........     1,000.00  ...........  .................  ...........  ...........
1993................................  ...........  .................     0.998.00     0.998.00  ...........  .................  ...........  ...........
1994................................  ...........  .................      1.00531      1.00330  ...........  .................  ...........  ...........
1995................................  ...........  .................      0.99980      1.00310  ...........  .................  ...........  ...........
1996................................  ...........  .................      0.99940      1.00250  ...........  .................  ...........  ...........
1997................................  ...........  .................      0.99873      1.00123  ...........  .................  ...........  ...........
1998................................  ...........  .................      0.99892      1.00015  ...........  .................  ...........      1.00000
1999................................      0.99995         1.00328         1.00323      1.00338      0.99887         1.00328         1.00215      1.00215
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The methodology used to determine the recalibration and 
geographic (DRG/GAF) budget neutrality adjustment factor is similar 
to that used in establishing budget neutrality adjustments under the 
prospective payment system for operating costs. One difference is 
that, under the operating prospective payment system, the budget 
neutrality adjustments for the effect of geographic 
reclassifications are determined separately from the effects of 
other changes in the hospital wage index and the DRG relative 
weights. Under the capital prospective payment system, there is a 
single DRG/GAF budget neutrality adjustment factor (the national 
rate and the Puerto Rico rate are determined separately) for changes 
in the geographic adjustment factor (including geographic 
reclassification) and the DRG relative weights. In addition, there 
is no adjustment for the effects that geographic reclassification 
has on the other payment parameters, such as the payments for 
serving low-income patients or the large urban add-on payments.
    In addition to computing the DRG/GAF budget neutrality 
adjustment factor, we used the model to simulate total payments 
under the prospective payment system.
    Additional payments under the exceptions process are accounted 
for through a reduction in the Federal and hospital-specific rates. 
Therefore, we used the model to calculate the exceptions reduction 
factor. This exceptions reduction factor ensures that aggregate 
payments under the capital prospective payment system, including 
exceptions payments, are projected to equal the aggregate payments 
that would have been made under the capital prospective payment 
system without an exceptions process. Since changes in the level of 
the payment rates change the level of payments under the exceptions 
process, the exceptions reduction factor must be determined through 
iteration.
    In the August 30, 1991 final rule (56 FR 43517), we indicated 
that we would publish each year the estimated payment factors 
generated by the model to determine payments for the next 5 years. 
The table below provides the actual factors for fiscal years 1992 
through 1998, the proposed factors for fiscal year 1999, and the 
estimated factors that would be applicable through FY 2003. We 
caution that these are estimates for fiscal years 2000 and later, 
and are subject to revisions resulting from continued methodological 
refinements, receipt of additional data, and changes in payment 
policy changes. We note that in making these projections, we have 
assumed that the cumulative national DRG/GAF budget neutrality 
adjustment factor will remain at 1.00338 (1.00215 for Puerto Rico) 
for FY 1999 and later because we do not have sufficient information 
to estimate the change that will occur in the factor for years after 
FY 1999.
    The projections are as follows:

[[Page 25699]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               Federal  
                                                             Update     Exceptions     Budget         DRG/GAF        Outlier      Federal    rate (after
                       Fiscal year                           factor     reduction    neutrality     adjustment      adjustment      rate       outlier  
                                                                          factor       factor       factor \1\        factor     adjustment   reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992....................................................          N/A       0.9813       0.9602  ................        .9497  ...........       415.59
1993....................................................         6.07        .9756        .9162             .9980        .9496  ...........       417.29
1994....................................................         3.04        .9485        .8947            1.0053        .9454     \2\.9260       378.34
1995....................................................         3.44        .9734        .8432             .9998        .9414  ...........       376.83
1996....................................................         1.20        .9849          N/A             .9994        .9536     \3\.9972       461.96
1997....................................................         0.70        .9358          N/A             .9987        .9481  ...........       438.92
1998....................................................         0.90        .9659          N/A             .9989        .9382     \4\.8222       371.51
1999....................................................         0.20        .9761          N/A            1.0032        .9378  ...........       377.25
2000....................................................         0.80        .9749          N/A        \5\ 1.0000     \5\.9378  ...........       379.80
2001....................................................         0.80        .9720          N/A            1.0000        .9378  ...........       381.70
2002....................................................         0.90   \6\ 1.0000          N/A            1.0000        .9378  ...........       396.23
2003....................................................         0.90   \6\ 1.0000          N/A            1.0000        .9378   \4\ 1.0255      410.01 
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Note: The incremental change over the previous year.                                                                                                
\2\ Note: OBRA 1993 adjustment.                                                                                                                         
\3\ Note: Adjustment for change in the transfer policy.                                                                                                 
\4\ Note: Balanced Budget Act of 1997 adjustment.                                                                                                       
\5\ Note: Future adjustments are, for purposes of this projection, assumed to remain at the same level.                                                 
\6\ Note: We are unable to estimate exceptions payments for the year under the special exceptions provision (Sec.  412.348(g) of the regulations)       
  because the regular exceptions provision (Sec.  412.348(e)) expires.                                                                                  


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

I. Background

    Several provisions of the Act address the setting of update 
factors for inpatient services furnished in FY 1999 by hospitals 
subject to the prospective payment system and those excluded from 
the prospective payment system. Section 1886(b)(3)(B)(i)(XIV) of the 
Act sets the FY 1999 percentage increase in the operating cost 
standardized amounts equal to the rate of increase in the hospital 
market basket minus 1.9 percent for prospective payment hospitals in 
all areas. Section 1886(b)(3)(B)(iv) of the Act sets the FY 1999 
percentage increase in the hospital-specific rates applicable to 
sole community and Medicare-dependent, small rural hospitals equal 
to the rate set forth in section 1886(b)(3)(B)(i) of the Act, that 
is, the same update factor as all other hospitals subject to the 
prospective payment system, or the rate of increase in the market 
basket minus 1.9 percentage points. (We note that, as provided in 
section 4401(b) of the Balanced Budget Act of 1997, certain 
hospitals that do not receive indirect medical education or 
disproportionate share payments and are not designated as Medicare-
dependent, small rural hospitals will receive an update that is 0.3 
percent higher than the update for other prospective payment 
hospitals. Section 1886(b)(3)(B)(ii) of the Act sets the FY 1999 
percentage increase in the rate of increase limits for hospitals 
excluded from the prospective payment system equal to the rate of 
increase in the excluded hospital market basket minus a percentage 
between 0 and 2.5 percent percentage points, depending on the 
hospital's costs in relation to its limit.
    In accordance with section 1886(d)(3)(A) of the Act, we are 
proposing to update the standardized amounts, the hospital-specific 
rates, and the rate-of-increase limits for hospitals excluded from 
the prospective payment system as provided in section 1886(b)(3)(B) 
of the Act. Based on the fourth quarter 1997 forecast of the FY 1999 
market basket increase of 2.6 percent for hospitals subject to the 
prospective payment system, the proposed updates to the standardized 
amounts are 0.7 percent (that is, the market basket rate of increase 
minus 1.9 percent) for hospitals in both large urban and other 
areas. The proposed update to the hospital-specific rate applicable 
to sole community and Medicare-dependent, small rural hospitals is 
also 0.7 percent. The proposed update for hospitals excluded from 
the prospective payment system is the percentage increase in the 
excluded hospital market basket (currently estimated at 2.5 percent) 
less a percentage between 0 and 2.5 percentage points, or an update 
equal to between 0 and 2.5 percent.
    Section 1886(e)(4) of the Act requires that the Secretary, 
taking into consideration the recommendations of the Medicare 
Payment Advisory Commission (MedPAC), recommend update factors for 
each fiscal year that take into account the amounts necessary for 
the efficient and effective delivery of medically appropriate and 
necessary care of high quality. Under section 1886(e)(5) of the Act, 
we are required to publish the update factors recommended under 
section 1886(e)(4) of the Act. Accordingly, this appendix provides 
the recommendations of appropriate update factors, the analysis 
underlying our recommendations, and our responses to the MedPAC 
recommendations concerning the update factors.
    In its March 1, 1998 report, MedPAC stated that the legislated 
update of market basket increase minus 1.9 percentage points will 
provide a reasonable level of payment to hospitals. Although MedPAC 
suggests that a somewhat lower update could be justified in light of 
changes in the utilization and provision of hospital inpatient care, 
the Commission does not believe it is necessary to recommend a lower 
update for FY 1999. MedPAC did not make a separate recommendation 
for the hospital-specific rates applicable to sole community and 
Medicare-dependent, small rural hospitals. We discuss MedPAC's 
recommendations concerning the update factors and our responses to 
these recommendations below.

II. Secretary's Recommendations

    Under section 1886(e)(4) of the Act, we are recommending that an 
appropriate update factor for the standardized amounts is 0.7 
percent for hospitals located in large urban and other areas. We are 
also recommending an update of 0.7 percent to the hospital-specific 
rate for sole community hospitals and Medicare-dependent, small 
rural hospitals. These figures are consistent with the President's 
FY 1999 budget recommendations, which reflect the update provided by 
section 4401(a) of the Balanced Budget Act of 1997. We believe these 
recommended update factors would ensure that Medicare acts as a 
prudent purchaser and provide incentives to hospitals for increased 
efficiency, thereby contributing to the solvency of the Medicare 
Part A Trust Fund. When the President's budget was submitted, the 
market basket rate of increase was projected at 2.7 percent. As 
noted above, this proposed recommendation is based on the most 
recent forecast of the market basket, 2.6 percent.
    We recommend that hospitals excluded from the prospective 
payment system receive an update of between 0 and 2.5 percent. The 
update for excluded hospitals and units is equal to the increase in 
the excluded hospital operating market basket, less a percentage 
between 0 and 2.5 percentage points depending on the hospital's or 
unit's costs in relation to its rate-of-increase limit. The market 
basket rate of increase is currently forecast at 2.5 percentage 
points. This recommendation is consistent with the President's FY 
1999 budget, although we note that the market basket rate of 
increase was forecast at 2.7 percent when the budget was submitted.
    As required by section 1886(e)(4) of the Act, we have taken into 
consideration the recommendations of MedPAC in setting these 
recommended update factors. Our responses to the MedPAC 
recommendations concerning the update factors are discussed below.

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

    For FY 1999, MedPAC's update framework would support an update 
of the increase in the hospital market basket minus a figure between 
4.4 percentage points and 1.1 percentage points. MedPAC notes that 
costs per case have grown more slowly than payments per case since 
1992 and, as a result, overall Medicare operating margins for 
hospitals have been rising. MedPAC predicts that Medicare operating 
margins will continue to be quite favorable even with the payment 
reductions enacted by the Balanced Budget Act of 1997. MedPAC 
further notes that Medicare payments are just one of many factors 
that affect hospital margins. Thus, while MedPAC agrees with the 
proposed update of market basket increase minus 1.9 percentage 
points for 1999, that update is closer to the higher end than the 
lower end of MedPAC's update framework. The Commission emphasizes 
that, because of uncertainty about the future and the extent of 
changes in productivity and service delivery, its recommendation 
applies for only one year. MedPAC's estimate of the market basket 
increase is 2.5 percent, which is 0.1 percentage points below HCFA's 
current estimate. MedPAC's market basket estimate focuses on 
employee compensation changes in the hospital industry and the 
economy in general, while HCFA's market basket forecast gives less 
weight to the projected changes in the hospital industry's wages. 
Thus, MedPAC's update framework reflects a 0.1 percent adjustment 
for this difference.
    Response: We agree with MedPAC's recommendation of an update for 
FY 1999 for prospective payment system hospitals of market basket 
minus 1.9 percentage points. Our recommendation is supported by the 
following analyses that measure changes in hospital productivity, 
scientific and technological advances, practice pattern changes, and 
changes in case mix:

a. Productivity

    Service level productivity is defined as the ratio of total 
service output to full-time equivalent employees (FTEs). While we 
recognize that productivity is a function of many variables (for 
example, labor, nonlabor material, and capital inputs), we use a 
labor productivity measure since this update framework applies to 
operating payment. To recognize that we are apportioning the short 
run output changes to the labor input and not considering the 
nonlabor inputs, we weight our productivity measure for operating 
costs by the share of direct labor services in the market basket 
rate of increase to determine the expected effect on cost per case.
    Our recommendation for the service productivity component is 
based on historical trends in productivity and total output for both 
the hospital industry and the general economy, and projected levels 
of future hospital service output. MedPAC's predecessor, the 
Prospective Payment Assessment Commission (ProPAC), estimated 
cumulative service productivity growth to be 4.9 percent from 1985-
1989, or 1.2 percent annually. At the same time, MedPAC estimated 
total output growth at 3.4 percent

[[Page 25705]]

annually, implying a ratio of service productivity growth to output 
growth of 0.35.
    Since it is not possible at this time to develop a productivity 
measure specific to Medicare patients, we examined productivity 
(output per hour) and output (gross domestic product) for the 
economy. Depending on the exact time period, annual changes in 
productivity range from 0.3 to 0.35 percent of the change in output 
(that is, a 1.0 percent increase in output would be correlated with 
a 0.3 to 0.35 percent change in output per hour).
    Under our framework, the recommended update is based in part on 
expected productivity--that is, projected service output during the 
year, multiplied by the historical ratio of service productivity to 
total service output, multiplied by the share of labor in total 
operating inputs, as calculated in the hospital market basket rate 
of increase. This method estimates an expected labor productivity 
improvement in the same proportion to expected total service growth 
that has occurred in the past and assumes that, at a minimum, growth 
in FTEs changes proportionally to the growth in total service 
output. Thus, the recommendation allows for unit productivity to be 
smaller than the historical averages in years that output growth is 
relatively low and larger in years that output growth is higher than 
the historical averages. Based on the above estimates from both the 
hospital industry and the economy, we have chosen to employ the 
range of ratios of productivity change to output change of 0.30 to 
0.35.
    The expected change in total hospital service output is the 
product of projected growth in total admissions (adjusted for 
outpatient usage), projected real case-mix growth, and expected 
quality enhancing intensity growth, net of expected decline in 
intensity due to reduction of cost ineffective practice. Case-mix 
growth and intensity numbers for Medicare are used as proxies for 
those of the total hospital, since case-mix increases (used in the 
intensity measure as well) are unavailable for non-Medicare 
patients. Thus, expected output growth is simply the sum of the 
expected change in intensity (0.0 percent), projected admissions 
change (-2.0 percent for FY 1999), and projected real case-mix 
growth (0.8 percent), or -1.2 percent. The share of direct labor 
services in the market basket rate of increase (consisting of wages, 
salaries, and employee benefits) is 61.4 percent.
    Multiplying the expected change in total hospital service output 
(-1.2 percent) by the ratio of historical service productivity 
change to total service growth of 0.30 to 0.35 and by the direct 
labor share percentage 61.4, provides our productivity standard of 
-0.2 to -0.3 percent.
    MedPAC believes that the update should also take into account 
the effects of product change. MedPAC analysis indicates that 
between 1992 and 1996, the decline in length of stay and 
corresponding increase in the intensity of services per day resulted 
in a net reduction of about 11 percent for services provided per 
hospital admission. In the past, ProPAC expected hospitals to 
achieve productivity gains ranging from 0.5 percent to 2.0 percent 
per year. This year, recognizing changes in lengths of stay and 
sites of service, MedPAC believes a product adjustment in the range 
of -3.0 to -1.0 percentage points is appropriate. In addition, 
MedPAC's update framework contains a productivity adjustment of 
between -0.7 to -0.3 percent, which is slightly more optimistic than 
our estimate.

b. Intensity

    We base our intensity standard on the combined effect of three 
separate factors: Changes in the use of quality enhancing services, 
changes in the use of services due to shifts in within-DRG severity, 
and changes in the use of services due to reductions of cost-
ineffective practices. For FY 1999, we recommend an adjustment of 
0.0 percent. The basis of this recommendation is discussed below.
    We have no empirical evidence that accurately gauges the level 
of quality-enhancing technology changes. A study published in the 
Winter 1992 issue of the Health Care Financing Review, 
``Contributions of case mix and intensity change to hospital cost 
increases'' (p. 151-163), suggests that one-third of the intensity 
change is attributable to high-cost technology. The balance was 
unexplained but the authors speculated that it is attributable to 
fixed costs in service delivery.
    Typically, a specific new technology increases cost in some uses 
and decreases cost in other uses. Concurrently, health status is 
improved in some situations while in other situations it may be 
unaffected or even worsened using the same technology. It is 
difficult to separate out the relative significance of each of the 
cost increasing effects for individual technologies and new 
technologies.
    All things being equal, per-discharge fixed costs tend to 
fluctuate in inverse proportion to changes in volume. Fixed costs 
exist whether patients are treated or not. If volume is declining, 
per-discharge fixed costs will rise, but the reverse is true if 
volume is increasing.
    Following methods developed by HCFA's Office of the Actuary for 
deriving hospital output estimates from total hospital charges, we 
have developed Medicare-specific intensity measures based on a 5-
year average using FY 1993-FY 1997 MedPAR billing data. Case-mix 
constant intensity is calculated as the change in total Medicare 
charges per discharge adjusted for changes in the average charge per 
unit of service as measured by the Medical CPI hospital component 
and changes in real case mix. Thus, in order to measure changes in 
intensity, one must measure changes in real case mix.
    For FY 1993-FY 1997, observed case mix index change ranged from 
a low of 0.8 percent to a high of 1.7 percent, with a 5-year average 
change of 1.3 percent. Based on evidence from past studies of case-
mix change, we estimate that real case mix change fluctuates between 
1.0 and 1.4 percent and the observed values generally fall in this 
range. The average percentage change in charge per discharge was 3.4 
percent and the average annual change in the medical CPI was 5.7 
percent. Dividing the change in charge per discharge by the quantity 
of the real case-mix index change and the medical CPI, yields an 
average annual change in intensity of -3.4 percent. Assuming the 
technology/fixed cost ratio still holds, technology would account 
for a -1.1 percent annual decline while fixed costs would account 
for a -2.3 percent annual decline. The decline in fixed costs per 
discharge makes intuitive sense as volume, measured by total 
discharges, as increased during the period. Since we estimate that 
intensity has declined during that period, we are recommending a 0.0 
percent intensity adjustment for FY 1999.

c. Quality Enhancing New Science and Technology

    For FY 1999, MedPAC has computed the adjustment for scientific 
and technological advances to be a future-oriented policy target 
intended to provide additional funds for hospitals to adopt quality-
enhancing, cost increasing health care innovations. As in past 
recommendations, MedPAC has included an adjustment ranging from 0.3 
to 1.0 percentage points. MedPAC believes that the cost-competitive 
environment now faced by hospitals may dampen the adoption of new 
technologies as they closely evaluate their relative costs and 
benefits. Therefore, MedPAC recommends an adjustment of 0.5 
percentage points for the increase in operating costs due to 
scientific and technological advances.

d. Change in Case Mix

    Our analysis takes into account projected changes in case mix, 
adjusted for changes attributable to improved coding practices. For 
our FY 1999 update recommendation, we are projecting a 1.0 percent 
increase in the case-mix index. We define real case-mix increase as 
actual changes in the mix (and resource requirements) of Medicare 
patients as opposed to changes in coding behavior that result in 
assignment of cases to higher-weighted DRGs, but do not reflect 
greater resource requirements. For FY 1999, we believe that real 
case-mix increase is equal to our projected change in case mix less 
0.2 percent. We estimate that changes in coding behavior account for 
an increase of 0.2 percentage points in our projected case-mix 
change. Thus, we are projecting an increase of 0.8 percentage points 
for the real case-mix index.
    Unlike ProPAC's case-mix recommendation in previous years, 
MedPAC did not make a specific percentage change recommendation but 
rather estimated a range from -0.2 to 0.2 percentage point change 
based on changes in the 1998 case mix index.

e. Effect of FY 1997 DRG Reclassification and Recalibration

    We estimate that DRG reclassification and recalibration for FY 
1997 resulted in a 0.0 percent increase in the case-mix index when 
compared with the case-mix index that would have resulted if we had 
not made the reclassification and recalibration changes to the 
GROUPER. MedPAC does not make an adjustment for DRG reclassification 
and recalibration in its update recommendation.

f. Correction for Market Basket Forecast Error

    The estimated market basket percentage increase used to update 
the FY 1997 payment

[[Page 25706]]

rates was 2.5 percent. Our most recent data indicate the actual FY 
1997 increase was 2.1 percent. The resulting forecast error in the 
FY 1997 market basket rate of increase is 0.4 percentage points. 
Under our update framework, we make a forecast error correction if 
our estimate is off by 0.25 percentage points or more. Therefore, we 
are recommending an adjustment of -0.4 percentage points to reflect 
this overestimation of the FY 1997 market basket rate of increase. 
The following is a summary of the update ranges supported by our 
analyses compared to MedPAC's framework.

                             Table 1.--Comparison of FY 1999 Update Recommendations                             
----------------------------------------------------------------------------------------------------------------
                                                    HHS                                   MedPAC                
----------------------------------------------------------------------------------------------------------------
Market Basket....................  MB...................................  MB                                    
Difference between HCFA & MedPAC   .....................................  -0.1                                  
 Market Baskets.                                                                                                
            Subtotal.............  MB...................................  MB                                    
Policy Adjustments Factors:                                                                                     
    Productivity.................  -0.3 to -0.2.........................  -0.7 to -0.3                          
    Product......................  (3)..................................  -3.0 to -1.0                          
    Intensity....................  0.0..................................                                        
        Science & Technology.....  .....................................  0.0 to 0.5                            
        Practice Patterns........  .....................................  (1)                                   
        Real Within DRG Change...  .....................................  (2)                                   
            Subtotal.............  -0.3 to -0.2.........................  -3.7 to -0.8                          
Case-Mix Adjustment Factors:                                                                                    
    Projected Case-Mix Change....  -1.0.................................  ......................................
    Real Across DRG Change.......  0.8..................................  -0.2 to 0.0                           
    Real Within DRG Change.......  (3)..................................  0.0 to 0.2                            
            Subtotal.............  -0.2.................................  -0.2 to 0.2                           
Effect of 1996 Reclassification &  0.0..................................  ......................................
 Recalibration.                                                                                                 
Forecast Error Correction........  -0.4.................................  -0.4                                  
            Total Recommended      MB -0.9 to MB -0.8...................  MB -4.4 to MB -1.1                    
             Update.                                                                                            
----------------------------------------------------------------------------------------------------------------
\1\ Included in MedPAC's Productivity Measure.                                                                  
\2\ Included in MedPAC's Case-Mix Adjustment.                                                                   
\3\ Included in HHS' Intensity Factor.                                                                          

    Because we are not recommending a negative adjustment for 
intensity (as our methodology would suggest is appropriate), the 
update suggested by our framework appears to be more generous than 
the recommendation of MedPAC. While the above framework would 
support an update of the market basket increase minus 0.9 percentage 
points, we are recommending an update of the market basket increase 
minus 1.9 percentage points (0.7 percent). We believe that this 
update factor appropriately adjusts for changes occurring in health 
care delivery including the relative decrease in use of hospital 
inpatient services and the corresponding increase in use of hospital 
outpatient and postacute care services. We agree with MedPAC that a 
0.7 percent update for FY 1999 would not disadvantage the hospital 
industry nor harm Medicare beneficiaries. We also recommend that the 
hospital-specific rates applicable to sole community and Medicare-
dependent, small rural hospitals be increased by the same update, 
0.7 percentage points.

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

    MedPAC recommends an update factor equal to a 2.1 percent 
average increase for TEFRA target amounts for excluded hospitals and 
units. The update formula enacted by section 4411(a) of the Balanced 
Budget Act is equal to the increase in the excluded hospital market 
basket less a percentage point between 0 and 2.5 percent, depending 
on the hospital's or unit's costs in relation to the target amount. 
MedPAC's recommendation reflects a reduction of 0.4 percentage 
points from HCFA's market basket increase forecast of 2.5 percent. 
The reduction consists of an adjustment of -0.4 percentage points to 
account for the forecast error in the FY 1997 market basket rate of 
increase, and no allowance for new technology.
    Response: We recommend that hospitals excluded from the 
prospective payment system also receive a 2.5 percent increase in 
the market basket used in the update formula for TEFRA target amount 
updates provided to the prospective payment hospitals. We believe 
this update would ensure that Medicare acts as a prudent purchaser 
and would provide incentives to hospitals for increased efficiency, 
thereby contributing to the solvency of the Medicare Part A Trust 
Fund.

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[FR Doc. 98-12207 Filed 5-7-98; 8:45 am]
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