[Federal Register Volume 63, Number 223 (Thursday, November 19, 1998)]
[Rules and Regulations]
[Pages 64191-64195]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30992]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 412

[HCFA-1049-FC]
RIN 0938-AJ26


Medicare Program; Limited Additional Opportunity to Request 
Certain Hospital Wage Data Revisions for FY 1999

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

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period provides hospitals with a 
limited additional opportunity to request certain revisions to their 
wage data used to calculate the FY 1999 hospital wage index. In 
addition, it explains the criteria that must be met to request a 
revision, the types of revisions that will be considered, the 
procedures for requesting a revision, the implementation of wage index 
revisions, and other related issues. Requests for wage data revisions 
must be received by the date and time specified in the ``DATES'' 
section of this preamble. We will implement revisions to the hospital 
wage index in accordance with this final rule with comment period on a 
prospective basis only.

DATES: Effective date: The provisions of this final rule with comment 
period are effective on November 19, 1998.
    Request date: Requests for wage data revisions will be considered 
if we receive them at the appropriate address, as provided below, no 
later than 5 p.m. eastern standard time on December 3, 1998.
    Comment date: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. eastern 
standard time on December 21, 1998.

ADDRESSES: Request for wage data revisions: Revision request must be 
sent to the following address: Health Care Financing Administration, 
Center for Health Plans and Providers, Division of Acute Care, Mail 
Stop: C4-05-27, 7500 Security Boulevard, Baltimore, MD 21244-1850, 
Attention: Stephen Phillips.
    Comments: Mail an original and 3 copies of written comments to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-1049-FC, P.O. Box 7517, 
Baltimore, MD 21244-1850.
    If you prefer, you may deliver an original and 3 copies of your 
written comments to one of the following addresses: Room 443-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, D.C. 
20201, or Room C5-14-03, 7500 Security Boulevard, Baltimore, Maryland 
21244-1850.
    Information collection requirements: For comments that relate to 
information collection requirements, mail a copy of comments to the 
following: Health Care Financing Administration, Office of Information 
Services, Information Technology Investment Management Group, Division 
of HCFA Enterprise Standards, Room C2-26-17, 7500 Security Boulevard, 
Baltimore, MD 21244-1850, Attn: John Burke HCFA-1049-NC, and the Office 
of Management and Budget, Office of Information and Regulatory Affairs, 
Room 10235, New Executive Office Building, Washington, DC 20503, Attn: 
Allison Herron Eydt, HCFA Desk Officer.

FOR FURTHER INFORMATION CONTACT: Stephen Phillips, (410) 786-4531.

SUPPLEMENTARY INFORMATION:

Comments, Procedures, Availability of Copies, and Electronic Access

    Because of staff and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-1049-FC. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 443-G of 
the Department's office at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 to 5 p.m. (phone: 
(202) 690-7890).
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or Master Card 
number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8. As an alternative, you can view and 
photocopy the Federal Register document at most libraries designated as 
Federal Depository Libraries and at many other public and academic 
libraries throughout the country that receive the Federal Register.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available on a Wide 
Area Information Server (WAIS) through the Internet and via 
asynchronous dial-in. Internet users can access the database by using 
the World Wide Web; the Superintendent of Documents home page address 
is http://www.access.gpo.gov/nara____ docs/, by using local WAIS 
client software, or by telnet to swais.access.gpo.gov, then login as 
guest (no password required). Dial-in users should use communications 
software and modem to call (202) 512-1661; type swais, then login as 
guest (no password required). For general information about GPO Access, 
contact the GPO Access User Support Team by sending Internet e-mail to 
[email protected]; by faxing to (202) 512-1262; or by calling 
(202) 512-1530 between 7 a.m. and 5 p.m. eastern standard time, Monday 
through Friday, except for Federal holidays.

I. Introduction

    Section 1886(d)(3)(E) of the Social Security Act (the Act) requires 
that, as part of the methodology for determining prospective payments 
to hospitals for inpatient operating costs, the Secretary must adjust 
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 addition, section 
1886(d)(3)(E) of the Act requires that the hospital wage index be 
updated annually and that updates or adjustments to the hospital wage 
index be budget neutral.
    In the July 31, 1998 Federal Register (63 FR 40966), we published 
hospital inpatient prospective payment rates and policies for Federal 
fiscal year (FY) 1999, including the hospital wage index. The FY 1999 
wage index is based on data from Medicare cost reports for cost 
reporting periods beginning in FY 1995. This cost report data is 
submitted by hospitals and certified by hospitals. Before the 
calculation of the FY 1999 hospital wage index was published on July 
31, 1998, we provided opportunities to hospitals to request wage data 
revisions and to verify wage data in HCFA's files. We established

[[Page 64192]]

deadlines for requesting wage data revisions.
    Notwithstanding these deadlines, numerous hospitals have contacted 
us to request revisions to the data reflected in the FY 1999 hospital 
wage index. Many of these requests relate to issues arising from 
hospitals failing to report costs in the first place and failing to 
request revisions, or hospitals that failed to verify the final wage 
data. However, it has come to our attention that certain aspects of the 
development of the FY 1999 wage index may have led to some confusion 
among the hospital community.
    In light of the totality of the circumstances, as discussed below 
in section III of this preamble, we are providing hospitals with an 
additional opportunity to request limited types of revisions to the 
wage data used to calculate the FY 1999 hospital wage index. This final 
rule with comment period explains the types of revisions we will 
consider, the procedures for requesting revisions, the implementation 
of wage index revisions, and related issues.

II. Development of the FY 1999 Wage Index

    As noted above, the FY 1999 hospital wage index is based on data 
submitted by hospitals on Medicare cost reports for cost reporting 
periods beginning in FY 1995. These cost reports reflected changes to 
the manner in which we required hospitals to report certain types of 
costs, in particular, certain ``wage-related costs.''
    The development of the FY 1999 wage index also reflected changes to 
the process for requesting wage data revisions. Under the timetable for 
developing the wage index for FY 1998, we released a public use wage 
data file in mid-August 1997, and hospitals could request corrections 
for certain errors (data entry or tabulation errors) up until September 
15, 1997 (after publication of the final rule on August 29, 1997, thus 
necessitating publication of a subsequent correction notice). For the 
development of the FY 1999 wage index, we revised the timetable for 
making available public use wage data files and for requesting 
revisions to wage data.
    The new process was designed so that the wage index published in 
the final rule would incorporate all revisions, including those to 
correct data entry or tabulation errors by the intermediary or HCFA as 
reflected in a ``final'' public use file released prior to publication 
of the final rule. We gave hospitals opportunities to examine the wage 
data used to construct the proposed and the final FY 1999 hospital wage 
indices, by making available two public use data files containing the 
FY 1995 hospital wage data. In memoranda dated February 2 and April 21, 
1998, we instructed Medicare fiscal intermediaries to inform the 
hospitals they serve of the availability of the wage data files and the 
process and time frame for hospitals to request revisions. The proposed 
and the final wage data files were made available February 6 and May 
14, 1998, respectively, through the Internet on HCFA's home page 
(http://www.hcfa.gov). We instructed fiscal intermediaries to advise 
hospitals of the alternative availability of these data through their 
representative hospital organizations or directly from HCFA.
    Thus, under the timetable for developing the FY 1999 wage index, we 
made available the final public use wage data file in May (rather than 
August) and hospitals had to request corrections for data entry or 
tabulation errors by the intermediary or HCFA by June 5, 1998 (rather 
than mid-September as in past years).
    After developing the final wage index, it came to our attention 
that hospitals may have been confused by certain aspects of the 
development of the FY 1999 wage index, as discussed below.

III. Provisions of the Final Rule With Comment Period

A. Limited Additional Opportunity to Request Certain Wage Data 
Revisions for FY 1999

    As explained further below, in this final rule with comment period, 
we are providing hospitals a limited opportunity to request limited 
types of revisions to the wage data used to calculate the FY 1999 wage 
index. We are also addressing related issues. We are providing 
hospitals with an additional opportunity to request certain limited 
types of revisions because of the unique confluence of circumstances 
relating to the development and application of the FY 1999 wage index 
(as explained further below).

B. Criteria for Requesting Revisions and Explanation of the Types 
of Revisions

    We are providing a window of opportunity from the date of 
publication of this final rule with comment period until the date and 
time specified in the DATES section of this preamble for hospitals to 
request revisions to their FY 1995 wage data, if they meet one of the 
following criteria:
     The hospital's data on the May 1998 public use file is 
recorded as zero on Line 28 of Worksheet S-3, Part III (wage-related 
costs).
     The hospital's data on the May 1998 public use file is 
recorded as zero in either column 3 or 4 (but not both), with nonzero 
data in the other column, for Lines 2, 4, 6, or 33 of Worksheet S-3, 
Part III.
     The hospital properly requested a wage data revision by 
March 9, 1998, the fiscal intermediary approved a revision (as 
reflected in a revised Worksheet S-3), but the fiscal intermediary or 
HCFA made a data entry or tabulation error.
    We address each category in more detail below. We will not consider 
requests for other types of revisions. Requests from hospitals meeting 
these criteria must be limited to these specific criteria.
1. Zero Wage-related Costs on Line 28 of Worksheet S-3, Part III
    The Medicare cost reports for cost reporting periods beginning in 
FY 1995 reflected changes to the wage data portions (Parts II, III, and 
IV) of Worksheet S-3. The FY 1999 wage index reflects, for the first 
time, these changes to the cost report. We discussed these changes in 
the rulemaking process for FY 1995, and we see no reason why hospitals 
should not have properly reported these costs. Most hospitals did 
report these costs, but it has come to our attention that a number of 
hospitals incorrectly reported zero costs or otherwise did not include 
costs on Line 28 of Worksheet S-3, Part III (wage-related costs).
    If the May 1998 public use file reflects zero wage-related costs 
for a hospital, the hospital may request a revision to Line 28 of 
Worksheet S-3, Part III. The hospital must provide adequate verifiable 
documentation to support the costs.
2. Zero Costs or Zero Hours (But Not Both) on Lines 2, 4, 6, or 33 of 
Worksheet S-3, Part III
    For certain categories of costs, hospitals are required to report 
both hours and dollars. It has come to our attention that a number of 
hospitals reported either (1) nonzero dollars but zero hours or (2) 
nonzero hours but zero dollars, on Lines 2, 4, 6, or 33 of Worksheet S-
3. To calculate each hospital's average hourly wage, we summed the 
dollars (Column 3) and hours (Column 4), respectively, for lines 2, 4, 
6, 32, and 33. However, if a hospital reported zero dollars or zero 
hours, but not both, for any of these lines (this situation did not 
arise on line 32), we excluded the corresponding nonzero amount for 
that line in

[[Page 64193]]

calculating the hospital's average hourly wage.
    Under this final rule with comment period, we are permitting 
hospitals to request revisions if the hospital improperly reported zero 
dollars or zero hours, but not both, for Lines 2, 4, 6, or 33 of 
Worksheet S-3. In order for a hospital's request for revision to be 
granted, a hospital must satisfactorily justify that these costs and 
hours should be included. For example, if a hospital reported $500,000 
in physician Part A salaries but reported zero hours attributable to 
physician Part A services, in order for a request to be granted, the 
hospital must report accurate hours related to those costs or otherwise 
explain why that $500,000 should be included in the calculation.
3. Data Entry or Tabulation Errors
    On May 14, 1998, we made available a ``final'' public use wage data 
file. In the May 8 proposed rule, we stated, ``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,'' the hospital had to request a revision by June 5, 
1998 in order for the data to be revised.
    It has come to our attention that the revised timetable for 
releasing the final wage file (May, rather than August) and the revised 
deadline for requesting revisions for data entry or tabulation errors 
(June 5, rather than mid-September) may have led to some confusion. If 
a hospital properly requested a revision by March 9, 1998, and the 
fiscal intermediary approved the revision (as reflected in a revised 
Worksheet S-3), but there was an error in data entry or tabulation, we 
will consider a hospital's request for revision to the wage data 
notwithstanding the June 5, 1998 deadline. Thus, we are effectively 
extending the June 5, 1998 deadline for correcting certain data entry 
or tabulation errors.

C. Rationale for Accepting Limited Types of Revisions

    We will consider requests only for the limited types of revisions 
specified above. We will not consider requests for other types of 
revisions.
    We are providing for these limited revisions because of the 
totality of the circumstances, including--
     The number of hospitals contacting us about the same types 
of problems;
     The hardship that might result for a number of hospitals 
if we did not revise the wage data;
     The changes to the Medicare cost report, reflected for the 
first time in the FY 1999 wage index;
     The revised statutory timetable for publishing the 
proposed and final hospital inpatient prospective payment system rules, 
effective for the first time for FY 1999 (see section 4644 of the 
Balanced Budget Act of 1997); and
     The revised timetable for finalizing wage data (including 
the revised timetable for releasing the final public use wage data file 
and the revised timetable for requesting corrections of data entry and 
tabulation errors), applied for the first time in developing the FY 
1999 wage index.
    None of these factors, by itself, would be sufficient grounds for 
making a mid-year revision. For example, we believe we should not make 
a wage index revision merely because a single individual hospital might 
receive significantly lower payments as a result of its failure to 
properly report costs or its failure to properly request revisions and 
verify data. In deciding which types of revisions we would make, we 
considered the factors above not only in combination with each other, 
but also in light of the previous opportunities we provided to 
hospitals to verify data and request revisions.
    We evaluated the totality of the circumstances and decided it was 
appropriate to make limited types of revisions. As indicated earlier, 
we believe most problems with wage data arise because hospitals fail to 
properly report costs on the cost report, fail to properly request 
revisions, or fail to verify the data that the intermediary and HCFA 
are using to calculate the wage index. We believe it would not be 
necessary or appropriate to consider, at this time, requests for any 
and all types of revisions to the FY 1995 wage data. We note that, if 
we permitted hospitals to request any and all revisions, it would 
presumably take longer for hospitals to receive revised wage indexes 
for FY 1999.
    Also, we emphasize that this final rule with comment period should 
not be construed as an acknowledgment that the development of the FY 
1999 wage index, as reflected in the July 31 Federal Register, was in 
any way unfair or unreasonable. Moreover, it should not be construed as 
an acknowledgment that mid-year corrections may be appropriate in other 
contexts or in other years. Many of our policies reflect balancing the 
competing considerations of finality, accuracy, and certainty, and many 
aspects of developing payment rates and policies require the use of the 
best data available at the time. As stated above, we are providing for 
limited wage data revisions for FY 1999 because of the totality of the 
circumstances in this context.

D. Procedures for Submission of Requests and Evaluation of Requests

    A hospital seeking a revision to its FY 1995 wage data under the 
applicable criteria must submit a written request to both its fiscal 
intermediary and HCFA, clearly explaining the basis for the request. 
Each request must include all information and supporting documentation 
needed for HCFA and the fiscal intermediary to determine whether the 
request meets the applicable criteria, and to verify the accuracy of 
the requested revision.
    A hospital seeking a revision must submit its request to the HCFA 
official whose name appears in the ADDRESSES section of the preamble. 
The request must be received by date and time specified in the DATES 
section of this preamble.
    Upon receipt of a request for revision, HCFA will confer with the 
hospital's fiscal intermediary as necessary and appropriate. We will 
review each request and the supporting documentation and make a 
decision as to whether to grant the request in full, reject it in full, 
or grant it in part and reject it in part.

E. Implementation of Wage Index Revisions

    We will implement the wage index revisions we make in accordance 
with the process described in this final rule with comment period on a 
prospective basis only. We note that the timing of wage index 
revisions, as well as other adjustments described below, will depend in 
part on the number of the requests that we receive. Also, we note that 
this process might result in wage index revisions for hospitals that do 
not request revisions, not only hospitals in the same labor market area 
as hospitals that request revisions, but also all other hospitals. This 
is because the hospital wage index measures relative wage levels across 
geographic areas, and reflects the average hourly wage in each labor 
market area as well as the national average hourly wage.

IV. Other Related Issues

A. Budget Neutrality and Adjustment to Standardized Amounts

    Under section 1886(d)(3)(E) of the Act, ``adjustments or updates'' 
to the hospital wage index for a fiscal year ``shall be made in a 
manner that assures that aggregate payments . . . in the fiscal year 
are not greater than or less than those that would have been made in 
the year without such adjustment.'' Accordingly, to the extent that 
mid-year revisions to the hospital wage index would affect aggregate 
payments, we

[[Page 64194]]

will apply a budget neutrality adjustment to the standardized amounts 
so that aggregate payments ``are not greater than or less than those 
that would have been made in the year without [mid-year wage index] 
adjustment.'' With respect to individual hospitals who do not request 
revisions, we anticipate that the combined impact of wage index 
revisions and the budget neutrality adjustment will be minimal, because 
the ``cost'' of permitting wage index revisions to some hospitals will 
be spread out over all prospective payment hospitals.
    As discussed in numerous Federal Register documents, we calculate a 
budget neutrality adjustment by simulating payments with and without 
the adjustment to the wage indexes. We would implement the budget 
neutrality adjustment (on a prospective basis) at the same time we 
implement the revised wage indexes.
    Also, we note that the capital prospective payment system 
incorporates the hospital wage index for operating costs. Accordingly, 
we will incorporate the wage index revisions made in accordance with 
this final rule with comment period into capital prospective payments, 
including the geographic adjustment factor (GAF).

B. The Relationship Between Wage Revisions and the MGCRB Process

    Under section 1886(d)(10) of the Act, the Medicare Geographic 
Classification Review Board (MGCRB) considers applications by hospitals 
to be reclassified to another geographic area for purposes of the wage 
index. For purposes of evaluating a hospital's application for 
reclassification for FY 2000, the MGCRB will use hospitals' average 
hourly wages incorporating all of the revisions made in accordance with 
this final rule with comment period at the time the MGCRB rules on the 
hospital's application.

V. Response to Comments

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

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

    We ordinarily publish a notice of proposed rulemaking to provide a 
period of public comment on a rule. However, we may waive that 
procedure if we find good cause that prior notice and comment would be 
impracticable, unnecessary, or contrary to public interest.
    We find that it would be impracticable to undertake prior notice 
and comment procedures before implementing this final rule with comment 
period. This final rule with comment period provides hospitals with a 
limited opportunity to request very limited types of revisions to the 
wage data used to calculate the FY 1999 hospital wage index. As 
discussed earlier, we are providing this process for mid-year revisions 
because of the totality of the circumstances arising this year. These 
circumstances include the number of hospitals contacting us about the 
same types of wage data problems (reflecting apparent confusion about 
certain aspects of the development of the FY 1999 wage index) and the 
hardship that might result if we did not revise the wage data for these 
hospitals. If we delayed the wage data revision process in order to 
complete notice and comment procedures, we would delay the 
implementation of revised wage indexes and thus diminish the extent to 
which we address the potential hardship that might result for certain 
hospitals. Also, it is essential to finalize the FY 1999 wage index 
process expeditiously because the MGCRB will soon be evaluating and 
making decisions on applications for hospital geographic 
reclassification for FY 2000. The MGCRB's decision-making process for 
these applications requires analysis of the wage data used to calculate 
the FY 1999 wage index, and delaying the wage data revision process 
might result in problems in the MGCRB process.
    For these reasons, we find that it would be impracticable to 
complete notice and comment procedures before providing hospitals with 
the opportunity to request revisions to the wage data used to calculate 
the FY 1999 wage index. Therefore, we find good cause to waive the 
notice of proposed rulemaking and to issue this document as a final 
rule with comment period. We are providing a 30-day period for public 
comment.
    Also, we normally provide a delay of 30 days in the effective date 
of a regulation. However, if adherence to this procedure would be 
impracticable, unnecessary, or contrary to the public interest, we may 
waive the delay in the effective date. For the reasons discussed above, 
it is important that the provisions of this final rule with comment 
period have immediate effect so that we can finalize the FY 1999 wage 
index. Therefore, we find good cause to waive the usual 30-day delay in 
the effective date.

VII. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA), agencies are 
required to provide a 60-day notice in the Federal Register and solicit 
public comment before a collection of information requirement is 
submitted to the Office of Management and Budget (OMB) for review and 
approval. In order to fairly evaluate whether an information collection 
should be approved by OMB, section 3506(c)(2)(A) of the PRA requires 
that we solicit comment on the following issues:
     Whether the information collection is necessary and useful 
to carry out the proper functions of the agency;
     The accuracy of the agency's estimate of the information 
collection burden;
     The quality, utility, and clarity of the information to be 
collected; and
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    While a hospital seeking a revision to its FY 1995 cost report wage 
data must submit a request, including all information and supporting 
documentation needed to determine whether the request meets the 
applicable criteria and to verify the accuracy of the requested 
revision, HCFA believes this request for information meets one of the 
exceptions to the definition of information under the PRA and is 
therefore not subject to the PRA. In summary, 5 CFR 1320.3(h)(9) states 
that information does not include, ``facts or opinions solicited 
through nonstandardized follow-up questions designed to clarify 
responses to approved collections of information''. Since we believe 
this voluntary request is not standardized and is designed only to 
provide hospitals with an additional opportunity to clarify information 
previously provided to HCFA in their 1995 cost report (HCFA-2552, OMB 
approval #0938-0050, current expiration date of 8/31/2000), HCFA 
believes that this exception to the PRA applies.
    If you want to comment on this issue, please mail copies directly 
to the HCFA and OMB officials whose names appear

[[Page 64195]]

in the ADDRESSES section of this preamble.

VIII. Regulatory Impact Statement

    We have examined the impacts of this final rule with comment period 
as required by Executive Order 12866 and the Regulatory Flexibility Act 
(RFA) (Public Law 96-354). Executive Order 12866 directs agencies to 
assess all costs and benefits of available regulatory alternatives and, 
when regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
The RFA requires agencies to analyze options for regulatory relief of 
small businesses. For purposes of the RFA, small entities include small 
businesses, nonprofit organizations, and government agencies. Most 
hospitals and most other providers and suppliers are small entities, 
either by nonprofit status or by having revenues of $5 million or less 
annually. For purposes of the RFA, all hospitals are considered to be 
small entities.
    Section 1102(b) of the Act, requires us to prepare a regulatory 
impact analysis if a rule may have a significant impact on the 
operations of a substantial number of small rural hospitals. Such an 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area (MSA) and has fewer than 50 beds.
    The implementation of this final rule with comment period will have 
isolated positive payment impacts in areas whose wage indexes include 
hospitals receiving wage data revisions as described above. We believe 
approximately 163 hospitals had zero on Line 28 of Worksheet S-3, Part 
III, on the May 1998 public use file. In addition, we believe 
approximately 127 hospitals had zero in either column 3 or 4 (but not 
both), with nonzero data in the other column, for Lines 2, 4, 6, or 33 
of Worksheet S-3, Part III, on the May 1998 public use file. We do not 
know how many, if any, hospitals may be eligible under the third 
criterion: the hospital properly requested a wage data revision by 
March 9, 1998, the fiscal intermediary approved a revision, but the 
fiscal intermediary or HCFA made a data entry or tabulation error on 
the May 1998 public use file.
    Of the approximately 163 hospitals potentially eligible under the 
first criterion, there are 59 rural hospitals (located in 15 different 
States) and 104 urban hospitals (located in 63 different MSAs). Of the 
approximately 127 hospitals potentially eligible under the second 
criterion, there are 40 rural hospitals and 87 urban hospitals.
    All other hospitals' wage index values are likely to decrease 
slightly as a result of any revisions under this process. This is 
because the revisions will likely have the effect of slightly 
increasing the national average hourly wage ($20.7325 in the July 31, 
1998 final rule (63 FR 40973)). Therefore, hospitals in areas without 
any revisions may experience a slight decrease in their wage index 
values when their area's unchanged average hourly wage is compared to 
the higher national average hourly wage.
    In addition, as described above in section IV.A., we intend to 
implement any necessary budget neutrality adjustment at the same time 
we implement revised wage indexes. The impact of this adjustment will 
depend on the changes to the hospital wage index. With respect to 
hospitals in labor market areas whose average hourly wage is not 
affected, we believe the combined effect of the higher national average 
hourly wage and budget neutrality will be minimal. We will estimate and 
publish the entire impacts of payment changes associated with any 
revisions to hospitals' wage indexes in the subsequent document to this 
final rule with comment period.

IX. Contract With America Advancement Act (Public Law 104-121)

    This rule has been determined to be a major rule as defined in 
Title 5, United States Code, section 804(2). Although the actual impact 
of this final rule with comment period cannot be determined prior to 
reviewing the revision requests, we believe it could range from $0 to 
$500 million. Ordinarily, under 5 U.S.C. 801, as added by section 251 
of Pub. L. 104-121, a major rule shall take effect 60 days after the 
later of (1) the date a report on the rule is submitted to the Congress 
or (2) the date the rule is published in the Federal Register. However, 
section 808(2) of Title 5, United States Code, provides that, 
notwithstanding 5 U.S.C. 801, a major rule shall take effect at such 
time as the Federal agency promulgating the rule determines, if for 
good cause the agency finds that notice and public procedure are 
impracticable, unnecessary, or contrary to the public interest. As 
indicated above, for good cause we find that it was impracticable to 
complete notice and comment procedures before publication of this rule. 
Accordingly, pursuant to 5 U.S.C. 808(2), this final rule with comment 
period is effective on November 19, 1998.

.(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: October 30, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Approved: November 3, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 98-30992 Filed 11-17-98; 10:27 am]
BILLING CODE 4120-01-P