[Federal Register Volume 64, Number 149 (Wednesday, August 4, 1999)]
[Notices]
[Pages 42393-42403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20013]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-1054-N]
RIN 0938-AJ62


Medicare Program; Hospice Wage Index

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

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces the annual update to the hospice wage 
index as required by statute. This update is effective October 1, 1999. 
The wage index is used to reflect local differences in wage levels. The 
hospice wage index methodology and values are based on recommendations 
of a negotiated rulemaking advisory committee and were originally 
published in the Federal Register on August 8, 1997. This update is the 
third year of a 3-year transition period. The third transition year 
begins October 1, 1999 and ends September 30, 2000.

EFFECTIVE DATE: This notice is effective on October 1, 1999.

FOR FURTHER INFORMATION CONTACT: Carol Blackford, (410) 786-5909

SUPPLEMENTARY INFORMATION:

I. Background

A. Statute and Regulations

    Hospice Care is an approach to treatment that recognizes that the 
impending death of an individual warrants a change in the focus from 
curative care to palliative care (relief of pain and other 
uncomfortable symptoms). The goal of hospice care is to help terminally 
ill individuals continue life with minimal disruption to normal 
activities while remaining primarily in the home environment. A hospice 
uses an interdisciplinary approach to deliver medical, social, 
psychological, emotional, and spiritual services through use of a broad 
spectrum of professional and other caregivers, with the goal of making 
the individual as physically and emotionally comfortable as possible. 
Counseling and respite services are available to the family of the 
hospice patient. Hospice programs consider both the patient and the 
family as a unit of care.
    Section 1861(dd) of the Social Security Act (the Act) provides for 
coverage of hospice care for terminally ill Medicare beneficiaries who 
elect to receive care from a participating hospice. The statutory 
authority for payment to hospices participating in the Medicare program 
is contained in section 1814(i) of the Act.
    Our regulations at 42 CFR part 418 (issued on December 16, 1983, 
effective for hospice services furnished on or after November 1, 1983) 
established eligibility requirements and payment standards and 
procedures, defined covered services, and delineated the conditions a 
hospice must meet to be approved for participation in the Medicare 
program. Subpart G of part 418 provides for payment to hospices based 
on one of four prospectively determined rates for each day in which a 
qualified Medicare beneficiary is under the care of a hospice. The four 
rate categories are routine home care, continuous home care, inpatient 
respite care, and general inpatient care. Payment rates are established 
for each category.
    Section 4442 of the Balanced Budget Act of 1997, Public Law 105-C3, 
amended section 1814 (i)(2) of the Act to require payment for routine 
and continuous home care to be made based on the geographic location at 
which the service is furnished. The site of service provision was 
effective October 1, 1997 and was implemented through a Program 
Memorandum (transmittal A-97-11) issued in September of 1997.
    Section 418.306(c), that requires the rates to be adjusted by a 
wage index, was revised on August 8, 1997, through publication of a 
final rule in the Federal Register (62 FR 42860). This rule implemented 
a new methodology for calculating the hospice wage index that was based 
on the recommendations of a negotiated rulemaking committee. The 
committee reached consensus on a methodology and the resulting 
committee statement, describing that consensus, was included as an 
attachment to the August 8, 1997 hospice wage index final rule. The 
provisions of the final hospice wage index rule are as follows:
     The revised hospice wage index will be phased in over a 3-
year transition period. For the first year of the transition period, a 
blended index was calculated by adding two-thirds of the 1983 index 
value for an area to one-third of the revised wage index value for that 
area. During the second year of the transition period, the calculation 
was similar, except that the blend was one-third of the 1983 index 
value and two-thirds of the revised wage index value for that area. 
During the third transition year, the revised wage index will be fully 
implemented. The first transition year occurred October 1, 1997 through 
September 30, 1998. The second transition year occurred October 1, 1998 
through September 30, 1999.
     All hospice wage index values of 0.8 or greater are 
subject to a budget neutrality adjustment to ensure that Medicare does 
not pay any more in the aggregate than it would have paid with the 
previous wage index. The budget neutrality adjustment is calculated by 
multiplying the hospice wage index for a given area by the budget 
neutrality adjustment factor. The budget neutrality adjustment is to be 
applied annually, both during and after the transition period.
     All hospice wage index values below 0.8 receive the 
greater of the following adjustments--the wage index floor, a 15 
percent increase, subject to a maximum wage index value of 0.8; or, the 
budget neutrality adjustment.
     The wage index is to be updated annually, in the Federal 
Register, based on the most current available hospital wage data.

B. Update to the Hospice Wage Index

    The third year of the 3-year transition period begins October 1, 
1999 and ends September 30, 2000. In accordance with the agreement 
signed by members of the Hospice Wage Index Negotiated Rulemaking 
Committee, we are using 1998 hospital area wage index data, including 
any changes to the definitions of Metropolitan Statistical Areas

[[Page 42394]]

(MSAs), that allow us to publish this notice at least 4 months in 
advance of the October 1, 1999 effective date.
    Additionally, the wage index value for hospices in counties that 
are no longer in the same MSA as they were in 1983 will no longer be 
blended with the wage index for the original MSA designation. These 
hospices will receive the full wage index for their current MSA 
designation. All wage index values are adjusted by a budget neutrality 
factor of 1.065982 and are subject to the wage index floor adjustment, 
if applicable. All of the calculations described above have been 
completed by us and are built into the wage index values reflected in 
both Tables A and B below. A detailed description of the method used to 
compute the hospice wage index is contained in both the September 4, 
1996 (61 FR 46579) hospice wage index proposed rule and the August 8, 
1997 (62 FR 42860) hospice wage index final rule.
    Because the hospice wage index is calculated using the pre-
reclassified hospital wage index, it is important to note that the 
method for calculating the Puerto Rico hospital wage index was changed 
with the publication of the Hospital Inpatient Prospective Payment 
System (PPS) and Fiscal Year 1998 Rates final rule in August 29, 1997 
(62 FR 45984 and 45986). The Puerto Rico hospital wage index is 
calculated in the same manner as the national wage index, but is based 
solely on Puerto Rico's wage data. As explained in the PPS final rule, 
the total adjusted salaries are added to fringe benefits for all 
hospitals in Puerto Rico and then divided by the sum by the total hours 
for Puerto Rico to arrive at an overall average hourly wage. For each 
labor market area in Puerto Rico, the hospital wage index is calculated 
by dividing the area average hourly wage by the overall Puerto Rico 
average hourly wage.

C. Tables

               Table A--Hospice Wage Index for Urban Areas
------------------------------------------------------------------------
                              Urban area (constituent
      MSA code No.              counties or county        Wage index \2\
                                 equivalents) \1\
------------------------------------------------------------------------
0040....................  Abilene, TX...................          0.8508
                          Taylor, TX
0060....................  Aguadilla, PR.................          0.5436
                          Aguada, PR
                          Aguadilla, PR
                          Moca, PR
0080....................  Akron, OH.....................          1.0553
                          Portage, OH
                          Summit, OH
0120....................  Albany, GA....................          0.8501
                          Dougherty, GA
                          Lee, GA
0160....................  Albany-Schenectady-Troy, NY             0.9178
                          Albany, NY
                          Montgomery, NY
                          Rensselaer, NY
                          Saratoga, NY
                          Schenectady, NY
                          Schoharie, NY
0200....................  Albuquerque, NM...............          0.9181
                          Bernalillo, NM Sandoval, NM
                          Valencia, NM
0220....................  Alexandria, LA................          0.9089
                          Rapides, LA
0240....................  Allentown-Bethlehem-Easton, PA          1.0877
                          Carbon, PA
                          Lehigh, PA
                          Northampton, PA
0280....................  Altoona, PA...................          0.9951
                          Blair, PA
0320....................  Amarillo, TX..................          0.9033
                          Potter, TX
                          Randall, TX
0380....................  Anchorage, AK.................          1.3664
                          Anchorage, AK
0440....................  Ann Arbor, MI.................          1.1761
                          Lenawee, MI
                          Livingston, MI
                          Washtenaw, MI
0450....................  Anniston, AL..................          0.9229
                          Calhoun, AL
0460....................  Appleton-Oshkosh-Neenah, WI             0.9407
                          Calumet, WI
                          Outagamie, WI
                          Winnebago, WI
0470....................  Arecibo, PR...................          0.5597
                          Arecibo, PR
                          Camuy, PR
                          Hatillo, PR
0480....................  Asheville, NC.................          0.9530
                          Buncombe, NC
                          Madison, NC
0500....................  Athens, GA....................          0.9245
                          Clarke, GA
                          Madison, GA
                          Oconee, GA
  0520..................  Atlanta, GA...................          1.0569
                          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                   1.2297
                          Atlantic, NJ
                          Cape May, NJ
0600....................  Augusta-Aiken, GA-SC .........          0.9842
                          Columbia, GA
                          McDuffie, GA
                          Richmond, GA
                          Aiken, SC
                          Edgefield, SC
0640....................  Austin-San Marcos, TX                   0.9361
                          Bastrop, TX
                          Caldwell, TX
                          Hays, TX
                          Travis, TX
                          Williamson, TX
0680....................  Bakersfield, CA ..............          1.0160
                          Kern, CA
0720....................  Baltimore, MD ................          1.0278
                          Anne Arundel, MD
                          Baltimore, MD
                          Baltimore City, MD
                          Carroll, MD
                          Harford, MD
                          Howard, MD
                          Queen Anne's, MD
0733....................  Bangor, ME ...................          1.0099
                          Penobscot, ME
0743....................  Barnstable-Yarmouth, MA                 1.6397
                          Barnstable, MA
0760....................  Baton Rouge, LA...............          0.9457
                          Ascension, LA
                          East Baton Rouge, LA
                          Livingston, LA
                          West Baton Rouge, LA
0840....................  Beaumont-Port Arthur, TX                0.9230
                          Hardin, TX
                          Jefferson, TX
                          Orange, TX
0860....................  Bellingham, WA................          1.2188
                          Whatcom, WA
0870....................  Benton Harbor, MI.............          0.9094
                          Berrien, MI
0875....................  Bergen-Passaic, NJ............          1.2990
                          Bergen, NJ
                          Passaic, NJ
0880....................  Billings, MT..................          0.9746
                          Yellowstone, MT
0920....................  Biloxi-Gulfport-Pascagoula, MS          0.8822
                          Hancock, MS
                          Harrison, MS
                          Jackson, MS
0960....................  Binghamton, NY................          0.9657
                          Broome, NY
                          Tioga, NY
1000....................  Birmingham, AL................          0.9672
                          Blount, AL

[[Page 42395]]


                          Jefferson, AL
                          St. Clair, AL
                          Shelby, AL
1010....................  Bismarck, ND..................          0.8555
                          Burleigh, ND
                          Morton, ND
1020....................  Bloomington, IN                         0.9557
                          Monroe, IN
1040....................  Bloomington-Normal, IL                  0.9435
                          McLean, IL
1080....................  Boise City, ID................          0.9764
                          Ada, ID
                          Canyon, ID
1123....................  Boston-Worcester-Lawrence-              1.2013
                           Lowell-Brockton, MA-NH
                          Bristol, MA
                          Essex, MA
                          Middlesex, MA
                          Norfolk, MA
                          Plymouth, MA
                          Suffolk, MA
                          Worcester, MA
                          Hillsborough, NH
                          Merrimack, NH
                          Rockingham, NH
                          Strafford, NH
1125....................  Boulder-Longmont, CO                    1.0700
                          Boulder, CO
1145....................  Brazoria, TX..................          0.9494
                          Brazoria, TX
1150....................  Bremerton, WA.................          1.1784
                          Kitsap, WA
1240....................  Brownsville-Harlingen-San               0.8780
                           Benito, TX
                          Cameron, TX
1260....................  Bryan-College Station, TX               0.8336
                          Brazos, TX
1280....................  Buffalo-Niagara Falls, NY               1.0220
                          Erie, NY
                          Niagara, NY
1303....................  Burlington, VT................          1.0209
                          Chittenden, VT
                          Franklin, VT
                          Grand Isle, VT
1310....................  Caguas, PR....................          0.5060
                          Caguas, PR
                          Cayey, PR
                          Cidra, PR
                          Gurabo, PR
                          San Lorenzo, PR
1320....................  Canton-Massillon, OH                    0.9394
                          Carroll, OH
                          Stark, OH
1350....................  Casper, WY....................          0.9275
                          Natrona, WY
1360....................  Cedar Rapids, IA..............          0.9396
                          Linn, IA
1400....................  Champaign-Urbana, IL                    0.9299
                          Champaign, IL
1440....................  Charleston-North Charleston,            0.9715
                           SC
                          Berkeley, SC
                          Charleston, SC
                          Dorchester, SC
1480....................  Charleston, WV................          0.9583
                          Kanawha, WV
                          Putnam, WV
1520....................  Charlotte-Gastonia-Rock Hill,           1.0325
                           NC-SC
                          Cabarrus, NC
                          Gaston, NC
                          Lincoln, NC
                          Mecklenburg, NC
                          Rowan, NC
                          Stanly, NC
                          Union, NC
                          York, SC
1540....................  Charlottesville, VA...........          1.0950
                          Albemarle, VA
                          Charlottesville City, VA
                          Fluvanna, VA
                          Greene, VA
1560....................  Chattanooga, TN-GA                      0.9673
                          Catoosa, GA
                          Dade, GA
                          Walker, GA
                          Hamilton, TN
                          Marion, TN
1580....................  Cheyenne, WY..................          0.8687
                          Laramie, WY
1600....................  Chicago, IL...................          1.1151
                          Cook, IL
                          DeKalb, IL
                          Du Page, IL
                          Grundy, IL
                          Kane, IL
                          Kendall, IL
                          Lake, IL
                          McHenry, IL
                          Will, IL
1620....................  Chico-Paradise, CA                      1.0814
                          Butte, CA
1640....................  Cincinnati, OH-KY-IN                    1.0228
                          Brown, OH
                          Clermont, OH
                          Hamilton, OH
                          Warren, OH
                          Boone, KY
                          Campbell, KY
                          Gallatin, KY
                          Grant, KY
                          Kenton, KY
                          Pendleton, KY
                          Dearborn, IN
                          Ohio, IN
1660....................  Clarksville-Hopkinsville, TN-           0.8570
                           KY
                          Christian, KY
                          Montgomery, TN
1680....................  Cleveland-Lorain-Elyria, OH             1.0538
                          Ashtabula, OH
                          Cuyahoga, OH
                          Geauga, OH
                          Lake, OH
                          Lorain, OH
                          Medina, OH
1720....................  Colorado Springs, CO                    1.0010
                          El Paso, CO
1740....................  Columbia, MO..................          0.9532
                          Boone, MO
1760....................  Columbia, SC..................          0.9903
                          Lexington, SC
                          Richland, SC
1800....................  Columbus, GA-AL...............          0.9073
                          Chattahochee, GA
                          Harris, GA
                          Muscogee, GA
                          Russell, AL
1840....................  Columbus, OH..................          1.0426
                          Delaware, OH
                          Fairfield, OH
                          Franklin, OH
                          Licking, OH
                          Madison, OH
                          Pickaway, OH
1880....................  Corpus Christi, TX............          0.9075
                          Nueces, TX
                          San Patricio, TX
1900....................  Cumberland, MD-WV                       0.8786
                          Allegany, MD
                          Mineral, WV
1920....................  Dallas, TX....................          0.9987
                          Collin, TX
                          Dallas, TX
                          Denton, TX
                          Ellis, TX
                          Henderson, TX
                          Hunt, TX
                          Kaufman, TX
                          Rockwall, TX
1950....................  Danville, VA..................          0.9641
                          Danville City, VA
                          Pittsylvania, VA
1960....................  Davenport-Moline-Rock Island,           0.8968
                           IA-IL
                          Scott, IA
                          Henry, IL
                          Rock Island, IL
2000....................  Dayton-Springfield, OH                  1.0239
                          Clark, OH
                          Greene, OH
                          Miami, OH
                          Montgomery, OH
2020....................  Daytona Beach, FL                       0.9737
                          Flagler, FL
                          Volusia, FL
2030....................  Decatur, AL...................          0.8776
                          Lawrence, AL
                          Morgan, AL
2040....................  Decatur, IL...................          0.8565
                          Macon, IL
2080....................  Denver, CO....................          1.1013
                          Adams, CO
                          Arapahoe, CO

[[Page 42396]]


                          Denver, CO
                          Douglas, CO
                          Jefferson, CO
2120....................  Des Moines, IA................          0.9005
                          Dallas, IA
                          Polk, IA
                          Warren, IA
2160....................  Detroit, MI...................          1.1240
                          Lapeer, MI
                          Macomb, MI
                          Monroe, MI
                          Oakland, MI
                          St. Clair, MI
                          Wayne, MI
2180....................  Dothan, AL....................          0.8413
                          Dale, AL
                          Houston, AL
2190....................  Dover, DE.....................          0.9981
                          Kent, DE
2200....................  Dubuque, IA...................          0.8765
                          Dubuque, IA
2240....................  Duluth-Superior, MN-WI                  1.0619
                          St. Louis, MN
                          Douglas, WI
2281....................  Dutchess County, NY                     1.1225
                          Dutchess, NY
2290....................  Eau Claire, WI................          0.9139
                          Chippewa, WI
                          Eau Claire, WI
2320....................  El Paso, TX...................          0.9823
                          El Paso, TX
2330....................  Elkhart-Goshen, IN............          0.9919
                          Elkhart, IN
2335....................  Elmira, NY....................          0.8997
                          Chemung, NY
2340....................  Enid, OK......................          0.8510
                          Garfield, OK
2360....................  Erie, PA......................          0.9883
                          Erie, PA
2400....................  Eugene-Springfield, OR                  1.1932
                          Lane, OR
2440....................  Evansville-Henderson, IN-KY             0.9091
                          Posey, IN
                          Vanderburgh, IN
                          Warrick, IN
                          Henderson, KY
2520....................  Fargo-Moorhead, ND-MN                   1.0148
                          Clay, MN
                          Cass, ND
2560....................  Fayetteville, NC                        0.8943
                          Cumberland, NC
2580....................  Fayetteville-Springdale-                0.9182
                           Rogers, AR.
                          Benton, AR
                          Washington, AR
2620....................  Flagstaff, AZ-UT..............          1.0109
                          Coconino, AZ
                          Kane, UT
2640....................  Flint, MI.....................          1.1759
                          Genesee, MI
2650....................  Florence, AL..................          0.8182
                          Colbert, AL
                          Lauderdale, AL
2655....................  Florence, SC..................          0.9062
                          Florence, SC
2670....................  Fort Collins-Loveland, CO               1.1481
                          Larimer, CO
2680....................  Ft. Lauderdale, FL............          1.0454
                          Broward, FL
2700....................  Fort Myers-Cape Coral, FL               0.9532
                          Lee, FL
2710....................  Fort Pierce-Port St. Lucie, FL          1.0917
                          Martin, FL
                          St. Lucie, FL
2720....................  Fort Smith, AR-OK                       0.8126
                          Crawford, AR
                          Sebastian, AR
                          Sequoyah, OK
2750....................  Fort Walton Beach, FL                   0.9183
                          Okaloosa, FL
2760....................  Fort Wayne, IN................          0.9644
                          Adams, IN
                          Allen, IN
                          De Kalb, IN
                          Huntington, IN
                          Wells, IN
                          Whitley, IN
2800....................  Fort Worth-Arlington, TX                1.0360
                          Hood, TX
                          Johnson, TX
                          Parker, TX
                          Tarrant, TX
2840....................  Fresno, CA....................          1.1406
                          Fresno, CA
                          Madera, CA
2880....................  Gadsden, AL...................          0.9358
                          Etowah, AL
2900....................  Gainesville, FL...............          1.0077
                          Alachua, FL
2920....................  Galveston-Texas City, TX                1.1613
                          Galveston, TX
2960....................  Gary, IN......................          1.0058
                          Lake, IN
                          Porter, IN
2975....................  Glens Falls, NY...............          0.9050
                          Warren, NY
                          Washington, NY
2980....................  Goldsboro, NC.................          0.9093
                          Wayne, NC
2985....................  Grand Forks, ND-MN                      0.9419
                          Grand Forks, ND
                          Polk, MN
2995....................  Grand Junction, CO                      0.8825
                          Mesa, CO
3000....................  Grand Rapids-Muskegon-Holland,          1.0629
                           MI
                          Allegan, MI
                          Kent, MI
                          Muskegon, MI
                          Ottawa, MI
3040....................  Great Falls, MT...............          0.9457
                          Cascade, MT
3060....................  Greeley, CO...................          1.0081
                          Weld, CO
3080....................  Green Bay, WI.................          0.9760
                          Brown, WI
3120....................  Greensboro-Winston-Salem-High           1.0177
                           Point, NC
                          Alamance, NC
                          Davidson, NC
                          Davie, NC
                          Forsyth, NC
                          Guilford, NC
                          Randolph, NC
                          Stokes, NC
                          Yadkin, NC
3150....................  Greenville, NC................          1.0056
                          Pitt, NC
3160....................  Greenville-Spartanburg-                 0.9830
                           Anderson, SC
                          Anderson, SC
                          Cherokee, SC
                          Greenville, SC
                          Pickens, SC
                          Spartanburg, SC
3180....................  Hagerstown, MD................          1.0855
                          Washington, MD
3200....................  Hamilton-Middletown, OH                 0.9842
                          Butler, OH
3240....................  Harrisburg-Lebanon-Carlisle,            1.0724
                           PA
                          Cumberland, PA
                          Dauphin, PA
                          Lebanon, PA
                          Perry, PA
3283....................  Hartford, CT..................          1.2612
                          Hartford, CT
                          Litchfield, CT
                          Middlesex, CT
                          Tolland, CT
3285....................  Hattiesburg, MS...............          0.8000
                          Forrest, MS
                          Lamar, MS
3290....................  Hickory-Morganton-Lenoir, NC            0.9492
                                                           Alexander, NC
                                                               Burke, NC
                                                            Caldwell, NC
                                                             Catawba, NC
3320....................  Honolulu, HI..................          1.2269
                                                            Honolulu, HI
3350....................  Houma, LA.....................          0.8738
                                                           Lafourche, LA
                                                          Terrebonne, LA
3360....................  Houston, TX...................          1.0541
                                                            Chambers, TX
                                                           Fort Bend, TX
                                                              Harris, TX
                                                             Liberty, TX
                                                          Montgomery, TX
                                                              Waller, TX

[[Page 42397]]


3400....................  Huntington-Ashland, WV-KY-OH            1.0284
                                                                Boyd, KY
                                                              Carter, KY
                                                             Greenup, KY
                                                            Lawrence, OH
                                                              Cabell, WV
                                                               Wayne, WV
3440....................  Huntsville, AL................          0.8938
                                                           Limestone, AL
                                                             Madison, AL
3480....................  Indianapolis, IN..............          1.0480
                                                               Boone, IN
                                                            Hamilton, IN
                                                             Hancock, IN
                                                           Hendricks, IN
                                                             Johnson, IN
                                                             Madison, IN
                                                              Marion, IN
                                                              Morgan, IN
                                                              Shelby, IN
3500....................  Iowa City, IA.................          1.0107
                                                             Johnson, IA
3520....................  Jackson, MI...................          0.9833
                                                             Jackson, MI
3560....................  Jackson, MS...................          0.8839
                                                               Hinds, MS
                                                             Madison, MS
                                                              Rankin, MS
3580....................  Jackson, TN...................          0.9125
                                                             Madison, TN
                                                             Chester, TN
3600....................  Jacksonville, FL..............          0.9487
                                                                Clay, FL
                                                               Duval, FL
                                                              Nassau, FL
                                                           St. Johns, FL
3605....................  Jacksonville, NC..............          0.8055
                                                              Onslow, NC
3610....................  Jamestown, NY.................          0.8165
                                                          Chautauqua, NY
3620....................  Janesville-Beloit, WI                   0.9648
                                                                Rock, WI
3640....................  Jersey City, NJ...............          1.2363
                                                              Hudson, NJ
3660....................  Johnson City-Kingsport-                 0.9352
                           Bristol, TN-VA
                                                              Carter, TN
                                                             Hawkins, TN
                                                            Sullivan, TN
                                                              Unicoi, TN
                                                          Washington, TN
                                                           Bristol City,
                                                                      VA
                                                               Scott, VA
                                                          Washington, VA
3680....................  Johnstown, PA.................          0.9188
                                                             Cambria, PA
                                                            Somerset, PA
3700....................  Jonesboro, AR.................          0.8000
                                                           Craighead, AR
3710....................  Joplin, MO....................          0.8392
                                                              Jasper, MO
                                                              Newton, MO
3720....................  Kalamazoo-Battlecreek, MI               1.2079
                                                             Calhoun, MI
                                                           Kalamazoo, MI
                                                           Van Buren, MI
3740....................  Kankakee, IL..................          1.0039
                                                            Kankakee, IL
3760....................  Kansas City, KS-MO                      1.0281
                                                             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...................          0.9731
                                                             Kenosha, WI
3810....................  Killeen-Temple, TX............          1.0776
                                                                Bell, TX
                                                             Coryell, TX
3840....................  Knoxville, TN.................          0.9506
                                                            Anderson, TN
                                                              Blount, TN
                                                                Knox, TN
                                                              Loudon, TN
                                                              Sevier, TN
                                                               Union, TN
3850....................  Kokomo, IN....................          0.9887
                                                              Howard, IN
                                                              Tipton, IN
3870....................  La Crosse, WI-MN..............          0.9501
                                                             Houston, MN
                                                           La Crosse, WI
3880....................  Lafayette, LA.................          0.8800
                                                              Acadia, LA
                                                           Lafayette, LA
                                                          St. Landry, LA
                                                          St. Martin, LA
3920....................  Lafayette, IN.................          0.9424
                                                             Clinton, IN
                                                          Tippecanoe, IN
3960....................  Lake Charles, LA..............           0.818
                                                           Calcasieu, LA
3980....................  Lakeland-Winter Haven, FL               0.9529
                                                                Polk, FL
4000....................  Lancaster, PA.................          1.0192
                                                           Lancaster, PA
40......................  Lansing-East Lansing, MI                1.0756
                                                             Clinton, MI
                                                               Eaton, MI
                                                              Ingham, MI
4080....................  Laredo, TX....................          0.8000
                                                                Webb, TX
4100....................  Las Cruces, NM................          0.9455
                                                            Dona Ana, NM
4120....................  Las Vegas, NV-AZ                        1.2166
                          Mohave, AZ
                          Clarke, NV
                          Nye, NV
4150....................  Lawrence, KS..................          0.9226
                          Douglas, KS
4200....................  Lawton, OK....................           0.271
                          Comanche, OK
4243....................  Lewiston-Auburn, ME                     0.9753
                          Androscoggin, ME
4280....................  Lexington, KY.................          0.9067
                          Bourbon, KY
                          Clark, KY
                          Fayette, KY
                          Jessamine, KY
                          Madison, KY
                          Scott, KY
                          Woodford, KY
4320....................  Lima, OH......................          0.9539
                          Allen, OH
                          Auglaize, OH
4360....................  Lincoln, NE...................          0.9917
                          Lancaster, NE
4400....................  Little Rock-North Little Rock,          0.9064
                           AR
                          Faulkner, AR
                          Lonoke, AR
                          Pulaski, AR
                          Saline, AR
4420....................  Longview-Marshall, TX                   0.9272
                          Gregg, TX
                          Harrison, TX
                          Upshur, TX
4480....................  Los Angeles-Long Beach, CA              1.2882
                          Los Angeles, CA
4520....................  Louisville, KY-IN.............          0.9693
                          Clark, IN
                          Floyd, IN
                          Harrison, IN
                          Scott, IN
                          Bullitt, KY
                          Jefferson, KY
                          Oldham, KY
4600....................  Lubbock, TX...................          0.9057
                          Lubbock, TX
4640....................  Lynchburg, VA.................          0.9487
                          Amherst, VA
                          Bedford, VA
                          Bedford City, VA
                          Campbell, VA
                          Lynchburg City, VA
4680....................  Macon, GA.....................          0.9573
                          Bibb, GA
                          Houston, GA
                          Jones, GA
                          Peach, GA
                          Twiggs, GA
4720....................  Madison, WI...................          1.0679
                          Dane, WI
4800....................  Mansfield, OH.................          0.9097
                          Crawford, OH
                          Richland, OH
4840....................  Mayaguez, PR..................          0.5061
                          Anasco, PR
                          Cabo Rojo, PR

[[Page 42398]]


                          Hormigueros, PR
                          Mayaguez, PR
                          Sabana Grande, PR
                          San German, PR
4880....................  McAllen-Edinburg-Mission, TX            0.9480
                          Hidalgo, TX
4890....................  Medford-Ashland, OR                     1.0681
                          Jackson, OR
4900....................  Melbourne-Titusville-Palm Bay,          0.9824
                           FL
                          Brevard, Fl
4920....................  Memphis, TN-AR-MS                       0.8913
                          Crittenden, AR
                          DeSoto, MS
                          Fayette, TN
                          Shelby, TN
                          Tipton, TN
4940....................  Merced, CA....................          1.0695
                          Merced, CA
5000....................  Miami, FL.....................          1.0678
                          Dade, FL
5015....................  Middlesex-Somerset-Hunterdon,           1.1888
                           NJ
                          Hunterdon, NJ
                          Middlesex, NJ
                          Somerset, NJ
5080....................  Milwaukee-Waukesha, WI                  0.9973
                          Milwaukee, WI
                          Ozaukee, WI
                          Washington, WI
                          Waukesha, WI
5120....................  Minneapolis-St. Paul, MN-WI             1.1570
                          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
5140....................  Missoula, MT..................          0.9795
                          Missoula, MT
5160....................  Mobile, AL....................          0.8930
                          Baldwin, AL
                          Mobile, AL
5170....................  Modesto, CA...................          1.1029
                          Stanislaus, CA
5190....................  Monmouth-Ocean, NJ                      1.2064
                          Monmouth, NJ
                          Ocean, NJ
5200....................  Monroe, LA....................          0.8761
                          Ouachita, LA
5240....................  Montgomery, AL................          0.8337
                          Autauga, AL
                          Elmore, AL
                          Montgomery, AL
5280....................  Muncie, IN....................          1.0035
                          Delaware, IN
5330....................  Myrtle Beach, SC..............          0.8719
                          Horry, SC
5345....................  Naples, FL....................          1.0848
                          Collier, FL
5360....................  Nashville, TN.................          1.0106
                          Cheatham, TN
                          Davidson, TN
                          Dickson, TN
                          Robertson, TN
                          Rutherford TN
                          Sumner, TN
                          Williamson, TN
                          Wilson, TN
5380....................  Nassau-Suffolk, NY                      1.4490
                          Nassau, NY
                          Suffolk, NY
5483....................  New Haven-Bridgeport-Stamford-          1.3141
                           Waterbury-Danbury, CT
                          Fairfield, CT
                          New Haven, CT
5523....................  New London-Norwich, CT                  1.2382
                          New London, CT
5560....................  New Orleans, LA...............          0.9924
                          Jefferson, LA
                          Orleans, LA
                          Plaquemines, LA
                          St. Bernard, LA
                          St. Charles, LA
                          St. James, LA
                          St. John The Baptist, LA
                          St. Tammany, LA
5600....................  New York, NY..................          1.5415
                          Bronx, NY
                          Kings, NY
                          New York, NY
                          Putnam, NY
                          Queens, NY
                          Richmond, NY
                          Rockland, NY
                          Westchester, NY
5640....................  Newark, NJ....................          1.2649
                          Essex, NJ
                          Morris, NJ
                          Sussex, NJ
                          Union, NJ
                          Warren, NJ
5660....................  Newburgh, NY-PA...............          1.1891
                          Orange, NY
                          Pike, PA
5720....................  Norfolk-Virginia Beach-Newport          0.8821
                           News, VA-NC.
                          Currituck, NC
                          Chesapeake City, VA
                          Gloucester, VA
                          Hampton City, VA
                          James City, VA
                          Isle of Wight, VA
                          Mathews, VA
                          Newport News City, VA
                          Norfolk City, VA
                          Poquoson City, VA
                          Portsmouth City, VA
                          Suffolk City, VA
                          Virginia Beach City VA
                          Williamsburg City, VA
                          York, VA
5775....................  Oakland, CA...................          1.5982
                          Alameda, CA
                          Contra Costa, CA
5790....................  Ocala, FL.....................          0.9756
                          Marion, FL
5800....................  Odessa-Midland, TX                      0.9227
                          Ector, TX
                          Midland, TX
5880....................  Oklahoma City, OK                       0.9283
                          Canadian, OK
                          Cleveland, OK
                          Logan, OK
                          McClain, OK
                          Oklahoma, OK
                          Pottawatomie, OK
5910....................  Olympia, WA...................          1.2282
                          Thurston, WA                    ..............
5920....................  Omaha, NE-IA..................          1.0630
                          Pottawattamie, IA
                          Cass, NE
                          Douglas, NE
                          Sarpy, NE
                          Washington, NE
                  5945..  Orange County, CA                       1.2282
                          Orange, CA
5960....................  Orlando, FL...................          1.0460
                          Lake, FL
                          Orange, FL
                          Osceola, FL
                          Seminole, FL
5990....................  Owensboro, KY.................          0.8284
                          Daviess, KY
6015....................  Panama City, FL...............          0.9068
                          Bay, FL
6020....................  Parkersburg-Marietta, WV-OH...          0.8545
                          Washington, OH
                          Wood, WV
6080....................  Pensacola, FL.................          0.8790
                          Escambia, FL
                          Santa Rosa, FL
6120....................  Peoria-Pekin, IL..............          0.8590
                          Peoria, IL
                          Tazewell, IL
                          Woodford, IL
6160....................  Philadelphia, PA-NJ                     1.2120
                          Burlington, NJ
                          Camden, NJ
                          Gloucester, NJ
                          Salem, NJ

[[Page 42399]]


                          Bucks, PA
                          Chester, PA
                          Delaware, PA
                          Montgomery, PA
                          Philadelphia, PA
6200....................  Phoenix-Mesa, AZ..............          1.0224
                          Maricopa, AZ
                          Pinal, AZ
6240....................  Pine Bluff, AR................          0.8434
                          Jefferson, AR
6280....................  Pittsburgh, PA................          1.0435
                          Allegheny, PA
                          Beaver, PA
                          Butler, PA
                          Fayette, PA
                          Washington, PA
                          Westmoreland, PA
6323....................  Pittsfield, MA................          1.1533
                          Berkshire, MA
6340....................  Pocatello, ID.................          0.9372
                          Bannock, ID
6360....................  Ponce, PR.....................          0.5506
                          Guayanilla, PR
                          Juana Diaz, PR
                          Penuelas, PR
                          Ponce, PR
                          Villalba, PR
                          Yauco, PR
6403....................  Portland, ME..................          1.0192
                          Cumberland, ME
                          Sagadahoc, ME
                          York, ME
6440....................  Portland-Vancouver, OR-WA               1.1916
                          Clackamas, OR
                          Columbia, OR
                          Multnomah, OR
                          Washington, OR
                          Yamhill, OR
                          Clark, WA
6483....................  Providence-Warwick-Pawtucket,           1.1514
                           RI
                          Bristol, RI
                          Kent, RI
                          Newport, RI
                          Providence, RI
                          Washington, RI
6520....................  Provo-Orem, UT................          1.0537
                          Utah, UT
6560....................  Pueblo, CO....................          0.9287
                          Pueblo, CO
6580....................  Punta Gorda, FL...............          0.9627
                          Charlotte, FL
6600....................  Racine, WI....................          0.9732
                          Racine, WI
6640....................  Raleigh-Durham-Chapel Hill, NC          1.0459
                          Chatham, NC
                          Durham, NC
                          Franklin, NC
                          Johnston, NC
                          Orange, NC
                          Wake, NC
6660....................  Rapid City, SD................          0.8750
                          Pennington, SD
6680....................  Reading, PA...................          0.9843
                          Berks, PA
6690....................  Redding, CA...................          1.2640
                          Shasta, CA
6720....................  Reno, NV......................          1.1827
                          Washoe, NV
6740....................  Richland-Kennewick-Pasco, WA            1.0966
                          Benton, WA
                          Franklin, WA
6760....................  Richmond-Petersburg, VA                 0.9819
                          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....................  Rivee-San Bernardino, CA                1.1467
                          San Bernardino, CA
6800....................  Roanoke, VA...................          0.9070
                          Botetourt, VA
                          Roanoke, VA
                          Roanoke City, VA
                          Salem City, VA
6820....................  Rochester, MN.................          1.2470
                          Olmsted, MN
6840....................  Rochester, NY.................          1.0294
                          Genesee, NY
                          Livingston, NY
                                                             Ontario, NY
                          Ontario, NY
                          Orleans, NY
                          Wayne NY
6880....................  Rockford, IL..................          0.9183
                          Boone, IL
                          Ogle, IL
                          Winnebago, IL
6895....................  Rocky Mount, NC...............          0.9607
                          Edgecombe, NC
                          Nash, NC
6920....................  Sacramento, CA................          1.2751
                          El Dorado, CA
                          Placer, CA
                          Sacramento, CA
6960....................  Saginaw-Bay City-Midland, MI            1.0113
                          Bay, MI
                          Midland, MI
                          Saginaw, MI
6980....................  St. Cloud, MN.................          1.0219
                          Benton, MN
                          Stearns, MN
7000....................  St. Joseph, MO................          1.0541
                          Andrew, MO
                          Buchanan, MO
7040....................  St. Louis, MO-IL..............          0.9755
                          Franklin, MO
                          Jefferson, MO
                          Lincoln, MO
                          St. Charles, MO
                          St. Louis, MO
                          St. Louis City, MO
                          Warren, MO
                          Clinton, IL
                          Jersey, IL
                          Madison, IL
                          Monore, IL
                          St. Clair, IL
7080....................  Salem, OR.....................          1.0557
                          Marion, OR
                          Polk, OR
7120....................  Salinas, CA...................          1.6141
                          Monterey, CA
7160....................  Salt Lake City-Ogden, UT                1.0018
                          Davis, UT
                          Salt Lake, UT
                          Weber, UT
7200....................  San Angelo, TX................          0.8150
                          Tom Green, TX
7240....................  San Antonio, TX...............          0.8634
                          Bexar, TX
                          Comal, TX
                          Guadalupe, TX
                          Wilson, TX
7320....................  San Diego, CA.................          1.3074
                          San Diego, CA
7360....................  San Francisco, CA.............          1.4878
                          Marin, CA
                          San Francisco, CA
                          San Mateo, CA
7400....................  San Jose, CA..................          1.4739
                          Santa Clara, CA
7440....................  San Juan-Bayamon, PR                    0.5316
                          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

[[Page 42400]]


                          Yabucoa, PR
7460....................  San Luis Obispo-Atascadero-             1.2007
                           Paso Robles, CA
                          San Luis Obispo, CA
7480....................  Santa Barbara-Santa Maria-              1.1933
                           Lompoc, CA
                          Santa Barbara, CA
7485....................  Santa Cruz-Watsonville, CA              1.4903
                          Santa Cruz, CA
7490....................  Santa Fe, NM..................          1.0289
                          Los Alamos, NM
                          Santa Fe, NM
7500....................  Santa Rosa, CA................          1.4494
                          Sonoma, CA
7510....................  Sarasota-Bradenton, FL                  1.0161
                          Manatee, FL
                          Sarasota, FL
7520....................  Savannah, GA..................          1.0724
                          Bryan, GA
                          Chatham, GA
                          Effingham, GA
7560....................  Scranton--Wilkes-Barre--                0.8847
                           Hazleton, PA
                          Columbia, PA
                          Lackawanna, PA
                          Luzerne, PA
                          Wyoming, PA
7600....................  Seattle-Bellevue-Everett, WA            1.2287
                          Island, WA
                          King, WA
                          Snohomish, WA
7610....................  Sharon, PA....................          0.9431
                          Mercer, PA
7620....................  Sheboygan, WI.................          0.8768
                          Sheboygan, WI
7640....................  Sherman-Denison, TX                     0.9135
                          Grayson, TX
7680....................  Shreveport-Bossier City, LA             1.0005
                          Bossier, LA
                          Caddo, LA
                          Webster, LA
7720....................  Sioux City, IA-NE.............          0.9041
                          Woodbury, IA
                          Dakota, NE
7760....................  Sioux Falls, SD...............          0.9500
                          Lincoln, SD
                          Minnehaha, SD
7800....................  South Bend, IN................          1.0510
                          St. Joseph, IN
7840....................  Spokane, WA...................          1.1649
                          Spokane, WA
7880....................  Springfield, IL...............          0.9295
                          Menard, IL
                          Sangamon, IL
7920....................  Springfield, MO...............          0.8604
                          Christian, MO
                          Greene, MO
                          Webster, MO
8003....................  Springfield, MA...............          1.1715
                          Hampden, MA
                          Hampshire, MA
8050....................  State College, PA.............          1.0072
                          Centre, PA
8080....................  Steubenville-Weirton, OH-WV             0.8984
                          Jefferson, OH
                          Brooke, WV
                          Hancock, WV
8120....................  Stockton-Lodi, CA.............          1.1806
                          San Joaquin, CA
8140....................  Sumter, SC....................          0.8663
                          Sumter, SC
8160....................  Syracuse, NY..................          1.0020
                          Cayuga, NY
                          Madison, NY
                          Onondaga, NY
                          Oswego, NY
8200....................  Tacoma, WA....................          1.1065
                          Pierce, WA
8240....................  Tallahassee, FL...............          0.9006
                          Gadsden, FL
                          Leon, FL
8280....................  Tampa-St. Petersburg-                   0.9714
                           Clearwater, FL.
                          Hernando, FL
                          Hillsborough, FL
                          Pasco, FL
                          Pinellas, FL
8320....................  Terre Haute, IN...............          0.9584
                          Clay, IN
                          Vermillion, IN
                          Vigo, IN
8360....................  Texarkana, AR-Texarkana, TX             0.9067
                          Miller, AR
                          Bowie, TX
8400....................  Toledo, OH....................          1.0650
                          Fulton, OH
                          Lucas, OH
                          Wood, OH
8440....................  Topeka, KS....................          1.0459
                          Shawnee, KS
8480....................  Trenton, NJ...................          1.1202
                          Mercer, NJ
8520....................  Tucson, AZ....................          0.9624
                          Pima, AZ
8560....................  Tulsa, OK.....................          0.9021
                          Creek, OK
                          Osage, OK
                          Rogers, OK
                          Tulsa, OK
                          Wagoner, OK
8600....................  Tuscaloosa, AL................          0.8145
                          Tuscaloosa, AL
8640....................  Tyler, TX.....................          0.9400
                          Smith, TX
8680....................  Utica-Rome, NY................          0.8973
                          Herkimer, NY
                          Oneida, NY
8720....................  Vallejo-Fairfield-Napa, CA              1.4298
                          Napa, CA
                          Solano, CA
8735....................  Ventura, CA...................          1.1741
                          Ventura, CA
8750....................  Victoria, TX..................          0.8934
                          Victoria, TX
8760....................  Vineland-Millville-Bridgeton,           1.1129
                           NJ
                          Cumberland, NJ
8780....................  Visalia-Tulare-Porterville, CA          1.0748
                          Tulare, CA
8800....................  Waco, TX......................          0.8923
                          McLennan, TX
8840....................  Washington, DC-MD-VA-WV                 1.1520
                          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                0.8483
                          Black Hawk, IA
8940....................  Wausau, WI....................          1.0375
                          Marathon, WI
8960....................  West Palm Beach-Boca Raton, FL          1.0893
                          Palm Beach, FL
9000....................  Wheeling, WV-OH...............          0.8130
                          Belmont, OH
                          Marshall, WV
                          Ohio, WV
9040....................  Wichita, KS...................          0.9485
                          Butler, KS
                          Harvey, KS
                          Sedgwick, KS
9080....................  Wichita Falls, TX.............          0.8347
                          Archer, TX
                          Wichita, TX
9140....................  Williamsport, PA..............          0.9121
                          Lycoming, PA
9160....................  Wilmington-Newark, DE-MD                1.2651
                          New Castle, DE

[[Page 42401]]


                          Cecil, MD
9200....................  Wilmington, NC................          0.9959
                          Brunswick, NC
                          New Hanover, NC
9260....................  Yakima, WA....................          1.0999
                          Yakima, WA
9270....................  Yolo, CA......................          1.1974
                          Yolo, CA
9280....................  York, PA......................          1.0031
                          York, PA
9320....................  Youngstown-Warren, OH                   1.0463
                          Columbiana, OH
                          Mahoning, OH
                          Trumbull, OH
9340....................  Yuba City, CA.................          1.1582
                          Sutter, CA
                          Yuba, CA
9360....................  Yuma, AZ......................          1.0722
                          Yuma, AZ
------------------------------------------------------------------------
\1\ This column lists each MSA area name (in italics) and each county ,
  or county equivalent, in the MSA area. Counties not listed in this
  Table are considered to be Rural Areas. Wage Index values for these
  areas are found in Table B.
\2\ Wage index values are based on FY 1998 hospital cost report data
  prior to reclassification. This wage index is further adjusted. Wage
  index values greater than 0.8 are subject to a budget neutrality
  adjustment of 1.065982. Wage index values below 0.8 are adjusted to be
  the greater of a 15 percent increase, subject to a maximum wage index
  value of 0.8, or an adjustment by multiplying the hospital wage index
  value for a given area by the budget neutrality adjustment. All of
  these adjustments have been completed by HCFA and are built into the
  wage index values reflected in this table.


                  Table B.--WAGE INDEX FOR RURAL AREAS
------------------------------------------------------------------------
                                                                  Wage
        MSA code No.                    Nonurban area             Index
-------------------------------------------------------------------\3\--
9901........................  Alabama.........................    0.8000
9902........................  Alaska..........................    1.3250
9903........................  Arizona.........................    0.8516
9904........................  Arkansas........................    0.8000
9905........................  California......................    1.0637
9906........................  Colorado........................    0.8993
9907........................  Connecticut.....................    1.2871
9908........................  Delaware........................    0.9388
9910........................  Florida.........................    0.9463
9911........................  Georgia.........................    0.8408
9912........................  Hawaii..........................    1.1630
9913........................  Idaho...........................    0.9036
9914........................  Illinois........................    0.8438
9915........................  Indiana.........................    0.8933
9916........................  Iowa............................    0.8290
9917........................  Kansas..........................    0.8000
9918........................  Kentucky........................    0.8362
9919........................  Louisiana.......................    0.8000
9920........................  Maine...........................    0.9026
9921........................  Maryland........................    0.9119
9922........................  Massachusetts...................    1.1549
9923........................  Michigan........................    0.9461
9924........................  Minnesota.......................    0.9162
9925........................  Mississippi.....................    0.8000
9926........................  Missouri........................    0.8000
9927........................  Montana.........................    0.8952
9928........................  Nebraska........................    0.8180
9929........................  Nevada..........................    0.9867
9930........................  New Hampshire...................    1.0916
9931........................  New Jersey \4\..................  ........
9932........................  New Mexico......................    0.8815
9933........................  New York........................    0.9155
9934........................  North Carolina..................    0.8647
9935........................  North Dakota....................    0.8000
9936........................  Ohio............................    0.9081
9937........................  Oklahoma........................    0.8000
9938........................  Oregon..........................    1.0564
9939........................  Pennsylvania....................    0.9236
9940........................  Puerto Rico.....................    0.4692
9941........................  Rhode Island \4\................  ........
9942........................  South Carolina..................    0.8577
9943........................  South Dakota....................    0.8003
9944........................  Tennessee.......................    0.8000
9945........................  Texas...........................    0.8064
9946........................  Utah............................    0.9444
9947........................  Vermont.........................    1.0037
9948........................  Virgin Islands..................    0.5276
9949........................  Virginia........................    0.8375
9950........................  Washington......................    1.1181
9951........................  West Virginia...................    0.8395
9952........................  Wisconsin.......................    0.9286
9953........................  Wyoming.........................    0.9347
9965........................  Guam............................   0.9611
------------------------------------------------------------------------
\3\ Wage index values are based on FY 1998 hospital cost report data
  prior to reclassification. This wage index is further adjusted. Wage
  index values greater than 0.8 are subject to a budget neutrality
  adjustment of 1.065982. Wage index values below 0.8 are adjusted to be
  the greater of a 15 percent increase, subject to a maximum wage index
  value of 0.8, or an adjustment by multiplying the hospital wage index
  value for a given area by the budget neutrality adjustment. All of
  these adjustments have been completed by HCFA and are built into the
  wage index values reflected in this table.
\4\ All counties within the State are classified as urban.

II. Regulatory Impact Statement

A. Background

    We have examined the impacts of this notice as required by 
Executive Order 12866, the Unfunded Mandate Reform Act, and the 
Regulatory Flexibility Act (RFA) (Pub. L. 96-354). In this notice, we 
identified an impact on hospices as a result of changes in the way we 
compute the hospice wage index. The change in the methodology for 
computing the wage index was determined through a negotiated rulemaking 
committee and implemented in the August 8, 1997 final rule (62 FR 
42860). This notice only describes the effects of those changes in 
conjunction with the annual update to the hospice wage index. We 
believe these changes to be insignificant.
1. Executive Order 12866 and RFA
    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). We have determined that 
this notice is not an economically significant rule under this 
Executive Order. The RFA requires agencies to analyze options for 
regulatory relief for small businesses. For purposes of the RFA, States 
and individuals are not considered small entities. However, most 
providers, physicians, and health care suppliers are small entities, 
either by nonprofit status or by having revenues of $5 million or less 
annually. Approximately 73 percent of Medicare certified hospices are 
identified as being voluntary, government, or other agency, and 
therefore are considered small entities. Because the National Hospice 
Organization estimates that approximately 65 percent of hospice 
patients are Medicare beneficiaries, we have not considered other 
sources of revenue in this analysis.
    As discussed below, both urban and rural areas in Puerto Rico will 
experience the most significant decrease, 7.6 and 11.6 percent 
respectively, in payments under this wage index. Looking at the effects 
of this rule on Puerto Rico, we see that 21 of the 29 hospices in urban 
Puerto Rico can be considered small entities that will experience an 
7.6 percent decrease in Medicare payments. Therefore, we anticipate 
this rule will have a significant impact on a substantial number of 
small entities. However, the methodology for the hospice wage index was 
previously determined by consensus through a negotiated rulemaking 
committee that included representatives of national hospice 
associations; rural, urban, large and small hospices; multi-site 
hospices; and consumer groups. Based on all of the options considered, 
the committee determined that the methodology described in the 
committee statement, and adopted into the August 8, 1997 final rule, 
was favorable for the hospice community as a whole, as well as for the 
beneficiaries that they serve. Therefore, we believe that mitigating 
the effects of small entities has been taken into consideration.

[[Page 42402]]

2. Congressional Review
    Section 804(2) of Title 5, United States Code (as added by section 
251 of Public Law 104-121 rule of the Public Law), specifies that a 
``major rule'' is any rule that the Office of Management and Budget 
finds is likely to result in--
     An annual effect on the economy of $100 million or more;
     A major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or
     Significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based enterprises to compete with foreign-based enterprises in 
domestic and export markets.
    We estimate that the impact of this notice will not be $100 million 
or more; therefore, this rule is not a major rule as defined in Title 
5, United States Code, section 804(2) and is not being forwarded to 
Congress for a 60-day review period.
3. Unfunded Mandate
    The Unfunded Mandate Reform Act of 1995 also requires (in section 
202) that agencies prepare an assessment of anticipated costs and 
benefits for any rule that may result in an annual expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more. The notice has no 
consequential effect on State, local, or tribal governments. We believe 
the private sector costs of this rule fall below the threshold, as 
well.
4. Rural Hospital Impact
    Section 1102(b) of the Act requires us to prepare a regulatory 
impact analysis for any notice 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 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 a Metropolitan 
Statistical Area and has fewer than 50 beds.
    Because this notice has no direct impact on small hospitals, in 
accordance with 5 U.S.C. 604, the Secretary certifies that this notice 
will not have a significant impact on the operations of a substantial 
number of small rural hospitals.

B. Anticipated Effects

    This impact analysis compares hospice payments under the FY 1999 
hospice wage index (Column 3 of the table) to the estimated payments 
using the FY 2000 wage index (Column 4). The wage index blend for the 
second transition year (FY 1999) was one-third of the 1983 wage index 
added to two-thirds of the new wage index. The third transition year 
(FY 2000) fully implements the revised wage index. The data used in 
developing the quantitative analysis for this notice were obtained from 
the December 1998 update of the national claims history file of all 
bills submitted during fiscal year 1998. We deleted bills from hospices 
that have since closed. In addition to the information contained in 
Table C below, we have compared estimated payments using the original 
1983 hospice wage index to estimated payments using the FY 2000 wage 
index and determined the new wage index methodology to be budget 
neutral as required by the negotiated rulemaking committee agreement.
    Table C demonstrates the results of our analysis. In Column 2 of 
the table (below) we indicate the number of routine home care days that 
were included in our analysis, although the analysis was performed on 
all types of hospice care. Column 3 of the table indicates payments 
that were made using the FY 1999 wage index. Column 4 of Table C is 
based on FY 1998 claims and estimates payments to be made to hospices 
using the FY 2000 wage index. The final column, which compares Columns 
3 and 4, shows the percent change in estimated hospice payments made 
based on the category of the hospice.
    Table C categorizes hospices by various geographic and provider 
characteristics. The first row displays the results of the impact 
analysis for all Medicare certified hospices. The second and third rows 
of the table categorize hospices according to their geographic location 
(urban and rural). There are 1,375 hospices located in urban areas 
included in our analysis and 786 hospices located in rural areas. The 
next two groupings in the table indicate the number of hospices by 
census region, also broken down by urban and rural hospices. The sixth 
grouping shows the impact on hospices based on the size of the 
hospice's program. We determined that the majority of hospice payments 
are made at the routine home care rate. Therefore, we based the size of 
each individual hospice's program on the number of routine home care 
days provided in 1998. The next grouping shows the impact on hospices 
by type of ownership. The final grouping shows the impact on hospices 
defined by whether they are provider-based or freestanding.
    The results of our analysis show that the greatest increases are 
for urban and rural hospices in the New England region, 3.0 percent and 
2.7 percent respectively, and for rural hospices in the Pacific region, 
with 2.3 percent. The greatest decreases, besides Puerto Rico, are the 
urban West South Central and urban East North Central regions with 2.7 
percent and 2.0 percent respectively. The most dramatic shift occurs in 
Puerto Rico, where urban payments decrease by 7.6 percent and rural 
payments decrease by 11.6 percent.
    With the FY 99 wage index, Puerto Rico experienced a 11.6 percent 
decrease for urban areas and a 12.3 percent decrease for rural areas. 
The total percentage decrease in payments Puerto Rico will experience 
with the new hospice wage index is 21 percent for urban areas and 26.3 
percent for rural areas, which is consistent with the estimated impact 
information HCFA provided to the negotiated rulemaking committee during 
their deliberations. Since the wage index values for the Puerto Rico 
region are more than 15 percent below the 1983 wage index value of 0.8, 
this region is most affected by the revision to the wage index floor. 
However, as mentioned above, Puerto Rico's hospital wage index is 
calculated in the same manner as the national hospital wage index but 
is based solely on Puerto Rico's wage data. This has an impact on 
Puerto Rico's hospice wage index in that the hospice wage index is 
calculated using the pre-reclassified hospital wage index.
    Small hospice programs show small increases while larger programs 
experience only a negligible decrease. Government-based hospices show 
slight increases in payment due to the wage index change while 
proprietary hospices show slight decreases. Finally, freestanding 
hospices show slight decreases in their wage index values while 
provider-based hospice programs show small increases.
    We have reviewed this notice under the threshold criteria of 
Executive Order 12612. We have determined that it does not 
significantly affect the rights, roles, and responsibilities of States.

[[Page 42403]]



                                  Table C.--Impact of Hospice Wage Index Change
----------------------------------------------------------------------------------------------------------------
                                                                                         Estimated
                                                               Number of     Payments     payments     Percent
                                                  Number of     routine      using FY     using FY    change in
                                                   hospices    home care    1999 wage    2000 wage     hospice
                                                                days in      index in     index in     payments
                                                               thousands    thousands    thousands
                                                         (1)          (2)          (3)          (4)          (5)
----------------------------------------------------------------------------------------------------------------
All............................................        2,161       18,455    2,135,750    2,128,347         -0.3
Urban Hospices.................................        1,375       15,717    1,877,146    1,868,228         -0.5
Rural Hospices.................................          786        2,738      258,604      260,118          0.6
Region (Urban):
    New England................................           98          607       79,780       82,145          3.0
    Middle Atlantic............................          176        1,970      249,012      252,129          1.3
    South Atlantic.............................          188        3,509      433,746      433,786          0.0
    East North Central.........................          223        2,546      301,352      295,253         -2.0
    East South Central.........................          101          890       92,734       91,468         -1.4
    West North Central.........................           98          930       97,912       98,233          0.3
    West South Central.........................          185        2,090      224,483      218,502         -2.7
    Mountain...................................           90          945      125,720      123,558         -1.7
    Pacific....................................          187        2,028      257,817      259,665          0.7
    Puerto Rico................................           29          203       14,592       13,489         -7.6
Region (Rural):
    New England................................           25           69        7,178        7,372          2.7
    Middle Atlantic............................           36          162       16,287       16,306          0.1
    South Atlantic.............................          115          601       55,752       55,890          0.2
    East North Central.........................          132          490       46,469       46,864          0.9
    East South Central.........................           81          376       34,460       34,534          0.2
    West North Central.........................          168          358       33,204       33,579          1.1
    West South Central.........................           88          279       24,492       24,408         -0.3
    Mountain...................................           84          181       17,817       17,872          0.3
    Pacific....................................           54          202       21,593       22,098          2.3
    Puerto Rico................................            3           19        1,352        1,195        -11.6
Size (Routine Home Care Days):
    0-1,754 Days...............................          540          457       46,196       46,452          0.6
    1,754-4,373 Days...........................          539        1,603      164,904      164,822          0.0
    4,372-9,681 Days...........................          541        3,616      385,755      385,020         -0.2
    9,681+Days.................................          541       12,778    1,538,895    1,532,054         -0.4
Type of Ownership:
    Voluntary..................................        1,374       12,342    1,427,656    1,427,863          0.0
    Proprietary................................          574        5,535      648,731      640,829         -1.2
    Government.................................          180          494       50,974       51,319          0.7
    Other......................................           33           83        8,389        8,335         -0.6
Hospice Base:
    Freestanding...............................          841       10,368    1,211,588    1,202,380         -0.8
    Home Health Agency.........................          757        4,852      558,520      559,505          0.3
    Hospital...................................          542        3,107      349,520      349,793          0.1
    Skilled Nursing Facility...................           21          127       16,597       16,669          0.4
----------------------------------------------------------------------------------------------------------------

    Authority: Section 1814(I) of the Social Security Act (42 U.S.C. 
1395f (I)(1))

(Catalog of Federal Domestic Assistance Program No. 93.743 
Medicare--Hospital Insurance Program; and No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: May 27, 1999.
Nancy-Ann Min DeParle,
Administrator.
    Dated: July 2, 1999.
Donna E. Shalala,
Secretary.
[FR Doc. 99-20013 Filed 7-30-99; 1:30 pm]
BILLING CODE 4120-01-P