[Federal Register Volume 67, Number 125 (Friday, June 28, 2002)]
[Notices]
[Pages 43616-43629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16409]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-1198-NC]
RIN 0938-AL16


Medicare Program; Update to the Prospective Payment System for 
Home Health Agencies for FY 2003

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice with comment period.

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SUMMARY: This notice with comment period sets forth an update to the 
60-day national episode rates and the national per-visit amounts under 
the Medicare prospective payment system for home health agencies.

DATES: Effective Date: The rate updates in this notice with comment 
period are effective on October 1, 2002.
    Comment Period: We will consider comments if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on August 
27, 2002.

ADDRESSES: In commenting, please refer to file code CMS-1198-NC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission. Mail written comments (one original and 
three copies) to the following address only: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, Attention: 
CMS-1198-NC, P.O. Box 8016,Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver (by hand or courier) your written 
comments (one original and three copies) to one of the following 
addresses:
    Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, 
SW., Washington, DC 20201, or Room C5-14-03, 7500 Security 
Boulevard,Baltimore, MD 21244-1850.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Susan Levy, (410) 786-9364; Chester 
Robinson, (410) 786-6959

SUPPLEMENTARY INFORMATION:
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available for public inspection as they are received, generally 
beginning approximately 3 weeks after publication of a document, at the 
headquarters of the Centers for Medicare & Medicaid Services, 7500 
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public comments, phone (410) 786-7197.
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Government Printing Office.

I. Background

Payment to Home Health Agencies

A. Balanced Budget Act of 1997
    The Balanced Budget Act of 1997 (BBA), Public Law 105-33, enacted 
on August 5, 1997, significantly changed the way Medicare pays for 
Medicare home health services. Until the implementation of a home 
health

[[Page 43617]]

prospective payment system (HH PPS) on October 1, 2000, home health 
agencies (HHAs) received payment under a cost-based reimbursement 
system. Section 4603 of the BBA governed the development of the HH PPS 
by adding section 1895 to the Social Security Act (the Act).
B. System for Payment of Home Health Services
    Generally, Medicare makes payment under the home health prospective 
payment system on the basis of a national standardized 60-day episode 
payment, adjusted for case-mix and wage index. For episodes with four 
or fewer visits, Medicare pays on the basis of a national per-visit 
amount by discipline, referred to as a low utilization payment 
adjustment (LUPA). Medicare also adjusts the 60-day episode payment for 
certain intervening events that give rise to a partial episode payment 
(PEP) adjustment or a significant change in condition (SCIC) 
adjustment. For certain cases that exceed a specific cost threshold, an 
outlier adjustment may also be available. For a complete and full 
description of the home health prospective payment system as required 
by the BBA and as refined by the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act (OCESAA) for FY 1999, Pub. L. 105-277, 
enacted on October 21, 1998, and the Medicare, Medicaid and SCHIP 
Balanced Budget Refinement Act of 1999 (BBRA), Public Law 106-113, 
enacted on November 29, 1999, see the July 3, 2000 HH PPS final rule 
(65 FR 41128).
C. Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000
    Section 1895(b)(3)(A)(i)(III) of the Act, as redesignated by 
section 501 of the Medicare, Medicaid and SCHIP Benefits Improvement 
and Protection Act of 2000 (BIPA), Public Law 106-554, enacted on 
December 21, 2000, delays until FY 2003 the application of the 15 
percent reduction on the interim payment limits for home health 
services as applied to the home health prospective payment rates 
required by earlier legislation. Section 501 of BIPA also amends 
section 302(c) of the BBRA, to now require a report to the Congress by 
the Comptroller General of the United States no later than April 1, 
2002 on the 15 percent reduction issue.
    Section 502 of the BIPA sets forth a special rule for payment for 
FY 2001 based on adjustment of the published prospective payment 
amounts. This special payment rule has the effect of restoring the 
market basket reduction already incorporated into the home health 
prospective payment system (HH PPS) rates. The adjustment provides the 
effect of a full market basket adjustment to the HH PPS rates for FY 
2001. The statute also requires paying episodes and national per-visit 
amounts for low utilization payment adjustments (LUPAs) ending on or 
after April 1, 2001 and before October 1, 2001 an additional 2.2 
percent.
    Section 508 of the BIPA also requires, for home health services 
furnished in a rural area (as defined in section 1886(d)(2)(D) of the 
Act) on or after April 1, 2001 and before April 1, 2003, that the 
Secretary increase the payment amount otherwise made under section 1895 
of the Act for the services by 10 percent. The statute waives budget 
neutrality for purposes of this increase since it specifically states 
that the Secretary not reduce the standard prospective payment amount 
(or amounts) under section 1895 of the Act applicable to home health 
services furnished during a period to offset the increase in payments 
resulting in the application of this section of the statute.

II. Analysis of and Responses to Comments on the Home Health 
Prospective Payment System June 29, 2001 Notice With Comment Period

    On June 29, 2001, we published a notice with comment period in the 
Federal Register (66 FR 34687) that set forth an update to the 60-day 
national episode rates and the national per-visit amounts under the 
Medicare prospective payment system for home health agencies (HHAs) for 
FY 2002. In this section, we respond to the two public comments that we 
received on the FY 2002 HH PPS:
    Comment: Commenters recommended that we use the hospital wage index 
with consideration of statutorily established floors and 
administratively determined classifications. Further the commenter 
asked that the wage index used in determining the home health payment 
rate should be the same hospital wage index used and published for 
hospitals during the same fiscal year.
    Response: As we have explained in the June 29, 2001 notice with 
comment period, we believe the use of the most recent available pre-
floor and pre-reclassified hospital wage index data results in the 
appropriate adjustment to the labor portion of the costs as required by 
statute. By statute, the hospital wage index is adjusted to account for 
geographic reclassification of hospitals. The geographic 
reclassification applies only to hospitals. In addition, the hospital 
wage index has specific floors that are required by statute and apply 
only to hospitals. Because these reclassifications and floors do not 
apply to HHAs, we use the most recent available pre-floor and pre-
classified hospital wage index data to adjust the home health payment 
rates. We recognize that the pre-floor and pre-classified hospital wage 
index differs slightly from the numbers published in the Medicare 
inpatient hospital prospective payment system (PPS) regulations but 
note that the wage indices published in the July 3, 2000 HH PPS final 
rule and subsequent annual updates reflect the most recent available 
pre-floor and pre-classified hospital wage index available at the time 
of publication.
    Comment: Commenters suggested that we recalculate the base HH PPS 
rates to incorporate a different assumption than the published 
assumption of the 5 percent low utilization payment adjustment episodes 
in the base year of HH PPS. The commenters believe the recalculation 
should be characterized as an error on the face of the original 
calculation rather than viewed as a rebasing.
    Response: In establishing the payment unit for HH PPS, including 
the 5 percent low utilization payment adjustment episode, we used the 
best available data in determining the payment rates for the base year 
for HH PPS. The statute provides for an annual update of the HH PPS 
payment rates. The statute does not contemplate a recalculation of the 
initial base year after the rates are established. We further note that 
the statute provides for a limitation on review of the HH PPS, in 
particular the establishment of the payment unit and the computations 
of the initial standardized prospective payment amounts.

III. Provisions of this Notice with Comment Period

A. National Standardized 60-Day Episode Rate

    Medicare HH PPS has been effective since October 1, 2000. As set 
forth in the final rule published July 3, 2000 in the Federal Register 
(65 FR 41128), the unit of payment under Medicare HH PPS is a national 
standardized 60-day episode rate. As set forth in the July 3, 2000 
final rule at 42 CFR 484.220, we adjust the national standardized 60-
day episode rate by case-mix and wage index based on the site of 
service for the beneficiary. The FY 2003 HH PPS rates use the same 
case-mix methodology and application of the wage index adjustment to 
the labor portion of the HH PPS rates as set forth in the July 3, 2000 
final rule. We multiply the national 60-day episode

[[Page 43618]]

rate by the patient's applicable case-mix weight. We divide the case-
mix adjusted amount into a labor and nonlabor portion. We multiply the 
labor portion by the applicable wage index based on the site of service 
of the beneficiary. The labor portion of the rate continues to be 
.77668 and the nonlabor portion of the rate continues to be .22332. We 
add the wage adjusted portion to the nonlabor portion yielding the 
case-mix and wage adjusted 60-day episode rate subject to applicable 
adjustments.
    For FY 2003, we use again the design and case-mix methodology 
described in section III.G of the July 3, 2000 HH PPS final rule (65 FR 
41192 through 41203). For FY 2003, we base the wage index adjustment to 
the labor portion of the PPS rates on the most recent pre-floor and 
pre-reclassified hospital wage index available at the time of 
publication of this notice, which is discussed in section III.D of this 
notice with comment period.
    As discussed in the July 3, 2000 HH PPS final rule, for episodes 
with four or fewer visits, Medicare pays the national per-visit amount 
by discipline, referred to as a LUPA. We update the national per-visit 
amounts by discipline annually by the applicable home health market 
basket. We adjust the national per-visit amount by the appropriate wage 
index based on the site of service for the beneficiary as set forth in 
Sec. 484.230. We adjust the labor portion of the updated national per-
visit amounts by discipline used to calculate the LUPA by the most 
recent pre-floor and pre-reclassified hospital wage index available at 
the time of publication of this notice, as discussed in section III.D 
of this notice with comment period.
    As outlined in the July 3, 2000 HH PPS final rule, Medicare pays 
the 60-day case-mix and wage adjusted episode payment on a split 
percentage payment approach. The split percentage payment approach 
includes an initial percentage payment and a final percentage payment 
as set forth in Sec. 484.205(b)(1) and (b)(2). We may base the initial 
percentage payment on the submission of a request for anticipated 
payment and the final percentage payment on the submission of the claim 
for the episode, as discussed in regulations in Sec. 409.43. The claim 
for the episode that the HHA submits for the final percentage payment 
determines the total payment amount for the episode and whether we make 
an applicable adjustment to the 60-day case-mix and wage adjusted 
episode payment. The end date of the 60-day episode as reported on the 
claim determines the rate level at which Medicare will pay the claim 
for the fiscal period.
    As discussed in the July 3, 2000 HH PPS final rule, we may adjust 
the 60-day case-mix and wage adjusted episode payment based on the 
information submitted on the claim to reflect the following:
     A low utilization payment provided on a per-visit basis as 
set forth in Sec. 484.205(c) and Sec. 484.230.
     A partial episode payment adjustment as set forth in 
Sec. 484.205(d) and Sec. 484.235.
     A significant change in condition adjustment as set forth 
in Sec. 484.205(e) and Sec. 484.237.
     An outlier payment as set forth in Sec. 484.205(f) and 
Sec. 484.240.
    This notice with comment period reflects the updated national 60-
day episode rate, the national per-visit amounts used to calculate the 
LUPA, and imputed costs for the outlier payment for FY 2003 that are 
effective October 1, 2002.

B. FY 2003 Update to the Home Health Market Basket Index

    Section 1895(b)(3)(B)(ii) of the Act requires the standard 
prospective payment amounts to be increased by a factor equal to the 
home health market basket minus 1.1 percentage points for FY 2003. This 
has been codified in regulations in Sec. 484.225.
     FY 2003 Adjustments
    In calculating the annual update for the FY 2003 60-day episode 
rates, we first looked at the FY 2002 rates as a starting point. The FY 
2002 national 60-day episode rate is $2,274.17. Second, we took into 
account section 501 of BIPA.
    As stated in the background section of this update notice, section 
501 of BIPA revised the statute to require the application of the 15 
percent reduction on payment limits under the interim payment system 
(IPS), which is no longer in effect for home health services, for FY 
2003. This statutory provision required an estimation of what Medicare 
spending would have been in FY 2001 if the IPS were still in effect and 
its limits reduced by 15 percent updated to FY 2003 in determining the 
HH PPS rates. It is important to note that HH PPS, not the interim 
payment system, has been in effect since October 1, 2000. Originally, 
the Balanced Budget Act of 1997 (BBA), Public Law 105-33, enacted on 
August 5, 1997, statutory language required the base year PPS rates to 
be budget neutral to what we would have paid under the IPS if the per-
beneficiary and per-visit limits had been reduced by 15 percent. At the 
time of the BBA, when HHAs were paid the lower of their actual costs or 
the cost limits, most HHAs were paid at their limits. Absent any 
behavioral offset, lowering the IPS limits by 15 percent would have 
resulted in a straight reduction of 15 percent of Medicare spending for 
home health services.
    At the time the BBA was enacted, we believed that the industry 
would eventually alter their behavior to avoid reaching the cost 
limits, and therefore upon implementation of the 15 percent reduction, 
not all HHAs would reach the level of the limits as reduced. We 
believed that the industry would respond to the reduced limits by 
increasing the number of low-cost beneficiaries served, thereby 
increasing the costs and decreasing the effect of the limits.
    As a result of this anticipated behavior, we determined that the 
level by which actual payments would be reduced by lowering the limits 
would not be the same as the percent by which the limits themselves 
would be lowered. That is, the application of the 15 percent reduction 
in cost limits would lead to a 7 percent reduction in aggregate home 
health spending, hence, equivalently a 7 percent reduction in HH PPS 
payments. The statute requires us to look at the 15 percent reduction 
to the IPS limits updated to FY 2003. In determining how to calculate 
and implement the HH PPS rates using the required 15 percent reduction 
in cost limits, we still believe the HHAs would have altered their 
behavior to avoid reaching the limits. Thus, we retain our assumptions 
that result in the 7 percent reduction in overall payments. Based on 
the latest available reliable date, our best estimate is that a 15 
percent reduction in cost limits would result in a 7 percent reduction 
in aggregate home health spending and, therefore, equivalently a 7 
percent reduction on home health spending.
    Accordingly, we calculate the FY 2003 HH PPS rates by first 
reducing the FY 2002 HH PPS rates by 7 percent. That amount is updated 
by the applicable home health market basket increase minus 1.1 
percentage points, as required by the statute. It is important to note 
that Medicare home health payments are projected to continue to grow, 
even with the effect of the 15 percent reduction to the IPS limits. 
Under President Bush's FY 2003 budget, which assumes no further delays 
in the reduction, Medicare's total home health spending is projected to 
increase 12.2 percent in FY 2003, 8.3 percent in FY 2004, and 7.4 
percent in FY 2005.
    In order to calculate the FY 2003 national 60-day episode rate, the 
FY 2002 national 60-day episode rate ($2,274.17) is multiplied by .93 
to take into account section 501 of BIPA. The annual update for FY 2003 
is the home

[[Page 43619]]

health market basket minus 1.1 percentage points as defined in section 
1895(b)(3)(B)(ii) of the Act. The home health market basket increase 
for FY 2003 is 3.2 percent. The previous amount is increased by the FY 
2003 home health market basket increase minus 1.1 percentage points 
(2.1 percent) to yield the updated FY 2003 national 60-day episode rate 
($2,159.39).

  National 60-Day Episode Amounts Reduced by 7% Per Analysis of Section 501 of BIPA, Updated by the Home Health
   Market Basket Minus 1.1% for FY 2003 Before Case-Mix Adjustment, Wage Index Adjustment Based on the Site of
                          Service for the Beneficiary or Applicable Payment Adjustment
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                                                                                   Multiply by 1   Final FY 2003
                                                                   7% Reduction    plus the Home      Updated
Total standardized prospective payment amount per 60-day episode  Due to Section   Health Market   National 60-
                           for FY 2002                              501 of BIPA    Basket minus     day Episode
                                                                                       1.1%            Rate
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$2,274.17.......................................................          x  .93        x  1.021       $2,159.39
----------------------------------------------------------------------------------------------------------------

     National Per-visit Amounts Used to Pay LUPAs and Compute 
Imputed Costs used in Outlier Calculations.
    As discussed previously in this notice with comment period, the 
policies governing the LUPAs and outlier calculations set forth in the 
July 3, 2000 HH PPS final rule will continue during FY 2003. In 
calculating the annual update for the FY 2003 national per-visit 
amounts we use to pay LUPAs and to compute the imputed costs in outlier 
calculations, we again looked at the FY 2002 rates as a starting point. 
We used the same approach to implement section 501 of BIPA. The statute 
requires us to look at the 15 percent reduction to the IPS limits in FY 
2003, 2 years after HH PPS has been implemented and the IPS has ended. 
As stated previously, we believe the HHAs would have altered their 
behavior to avoid reaching the IPS limits. We have determined that 
behavioral response would translate the required 15 percent reduction 
in cost limits into a 7 percent reduction in overall payments in FY 
2003. In response to section 501 of BIPA, we reduced the national per-
visit amounts by home health discipline by 7 percent. Those amounts are 
then increased by the FY 2003 home health market basket increase minus 
1.1 percentage points to yield the updated per-visit amounts for each 
home health discipline for FY 2003. (See table below.)

National Per-Visit Amounts for LUPAs and Outlier Calculations Reduced by 7% Per Analysis of Section 501 of BIPA,
 Updated by the Home Health Market Basket Minus 1.1% for FY 2003 Before Wage Index Adjustment Based on the Site
 of Service for the Beneficiary or Applicable Payment Adjustment Updated by the Home Health Market Basket Minus
                                                1.1% for FY 2003
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                                              Final per-visit                    Multiply by 1   Final per-visit
                                              amounts per 60-    7% Reduction      plus Home      payment amount
         Home Health Discipline type          day episode for   Due to section   Health Market    per discipline
                                                FY 2002 for      501 of BIPA      Basket minus   for FY 2003 for
                                                   LUPAs                              1.1%            LUPAs
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Home Health Aide............................          $44.95           x  .93         x  1.021           $42.68
Medical Social Services.....................         $159.14           x  .93         x  1.021          $151.11
Occupational Therapy........................         $109.28           x  .93         x  1.021          $103.77
Physical Therapy............................         $108.55           x  .93         x  1.021          $103.07
Skilled Nursing.............................          $99.28           x  .93         x  1.021           $94.27
Speech-Language Pathology...................         $117.95           x  .93         x  1.021          $112.00
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C. Rural Add-On as Required by the BIPA

    Section 508 of the BIPA requires, for home health services 
furnished in a rural area (as defined in section 1886(d)(2)(D) of the 
Act) on or after April 1, 2001 and before April 1, 2003, that the 
Secretary increase by 10 percent the payment amount otherwise made 
under section 1895 of the Act for services. The statute waives budget 
neutrality related to this provision as it specifically states that the 
Secretary shall not reduce the standard prospective payment amount (or 
amounts) under section 1895 of the Act applicable to home health 
services furnished during a period to offset the increase in payments 
resulting in the application of this section of the statute.
    Section 508 provides for payment for the national standardized 
episode amounts and LUPA national per-visit amounts for the first half 
of FY 2003 by an additional 10 percent for home health services 
furnished in rural areas where the site of service for the beneficiary 
is a non-MSA area. By statute, the 10 percent rural add-on applies to 
home health services furnished in a rural area (as defined in section 
1886(d)(2)(D) of the Act) on or after April 1, 2001 and before April 1, 
2003. Therefore, the 10 percent rural add-on ends mid-FY 2003 for 
episodes ending on or after April 1, 2003. The applicable case-mix and 
wage index adjustment is subsequently applied for the provision of home 
health services where the site of service is the non-Metropolitan 
Statistical Area (MSA) of the beneficiary. Similarly, the applicable 
wage index adjustment is subsequently applied to the LUPA per-visit 
amounts adjusted for the provision of home health services where the 
site of service for the beneficiary is a non-MSA area. We implemented 
this provision for FY 2001 on April 1, 2001 through the Program 
Memorandum, ``Restoration of Full Home Health Market Basket Update for 
Home Health Services for Fiscal Year 2001 and Temporary 10 Percent 
Payment Increase for Home Health Services Furnished in a Rural Area for 
24 Months Under the

[[Page 43620]]

Home Health Prospective Payment System (HH PPS)'' (Transmittal A-01-06 
issued January 16, 2001) and for FY 2002 through the FY 2002 annual HH 
PPS update notice published on June 29, 2001 in the Federal Register 
(66 FR 34687). (See FY 2003 add-on noted in tables below.)

  FY 2003 Rural Add-On to 60-day Episode Payment Amounts Ending Before
April 1, 2003 for Beneficiaries Who Reside in a Non-MSA Area Before Case-
  Mix Adjustment, Wage Index Adjustment Based on the Site of Service of
            the Beneficiary, or Applicable Payment Adjustment
------------------------------------------------------------------------
                                                          FY 2003 Final
                                                          payment amount
                                                            per 60-day
                                                          episode ending
 Payment amount per 60-day episode for                   before April 1,
                FY 2003                    10% add-on       2003 for a
                                                         beneficiary who
                                                          60-day resides
                                                         in a rural non-
                                                             MSA area
------------------------------------------------------------------------
$2,159.39.............................         x  1.10        $2,375.33
------------------------------------------------------------------------


 FY 2003 Rural Add-On to LUPA Per-Visit Amounts For Episodes Ending Before April 1, 2003 Before Wage Adjustment
 Based on the Site of Service of the Beneficiary Who Resides in a Non-MSA Area or Payment Applicable Adjustment
----------------------------------------------------------------------------------------------------------------
                                                                                             FY 2003 Final per-
                                                              Final per-                    visit payment amount
                                                             visit payment                   per 60-day episodes
                                                            amount per 60-                   ending Before April
                Home Health Discipline type                  day episodes     10% add-on      1, 2003 for LUPAs
                                                              for FY 2003                     for a beneficiary
                                                               for LUPAs                    who resides in a non-
                                                                                                  MSA area
----------------------------------------------------------------------------------------------------------------
Home Health Aide..........................................         $ 42.68         x  1.10               $ 46.95
Medical Social Services...................................         $151.11         x  1.10               $166.22
Occupational Therapy......................................         $103.77         x  1.10               $114.15
Physical Therapy..........................................         $103.07         x  1.10               $113.38
Skilled Nursing...........................................         $ 94.27         x  1.10               $103.70
Speech-Language pathology.................................         $112.00         x  1.10               $123.20
----------------------------------------------------------------------------------------------------------------

D. Wage Index

    Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the 
Secretary to establish area wage adjustment factors that reflect the 
relative level of wages and wage-related costs applicable to the 
furnishing of home health services and to provide appropriate 
adjustments to the episode payment amounts under HH PPS to account for 
area wage differences. We apply the appropriate wage index value to the 
labor portion of the HH PPS rates based on the geographic area in which 
the beneficiary received home health services. We determine each HHA's 
labor market area based on definitions of MSAs issued by the Office of 
Management and Budget (OMB).
    As discussed previously and set forth in the July 3, 2000 final 
rule, the statute provides that the wage adjustment factors may be the 
factors used by the Secretary for purposes of section 1886(d)(3)(E) of 
the Act for hospital wage adjustment factors. Again, as discussed in 
the July 3, 2000 final rule, we used the most recent pre-floor and pre-
reclassified hospital wage index available at the time of publication 
of this notice to adjust the labor portion of the HH PPS rates based on 
the geographic area in which the beneficiary receives the home health 
services. We believe the use of the most recent available pre-floor and 
pre-reclassified hospital wage index data results in the appropriate 
adjustment to the labor portion of the costs as required by statute. 
(See addenda A and B of this notice with comment period, respectively, 
for the rural and urban hospital wage indexes.)

E. Clarification of Policy Governing Current Accelerated Payment Policy

    Since the implementation of the HH PPS in 2000, we have received 
questions concerning the regulations governing accelerated payments 
under HH PPS. We wish to clarify the provisions for accelerated 
payments for HHAs set forth in Sec. 484.245(a). This general rule was 
not meant to be restrictive, but to complement the regulations 
governing intermediary accelerated payments to providers in 
Sec. 413.64(g). The regulations at Sec. 413.64(g) governing the 
criteria for accelerated payments to providers have not changed under 
HH PPS. Accelerated payments are permitted under HH PPS for HHAs that 
meet the longstanding qualifying criteria. When a provider requests an 
accelerated payment, it may be made to the provider, as set forth in 
Sec. 413.64(g). This provision includes an HHA that is receiving 
payment under the HH PPS under several conditions. For example, an HHA 
continues to be eligible to receive accelerated payment under 
Sec. 413.64(g) if it is experiencing financial difficulties because 
there is a delay by the intermediary in making payments or in 
exceptional situations, in which the HHA has experienced a temporary 
delay in preparing and submitting bills to the intermediary beyond its 
normal billing cycle.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a proposed notice in the Federal Register to 
provide

[[Page 43621]]

a period for public comment before the provisions of a notice such as 
this take effect. We can waive this procedure, however, if we find good 
cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest and we incorporate a 
statement of finding and its reasons in the notice issued.
    We believe it is unnecessary to undertake a proposed notice with 
comment period as the statute requires annual updates to the HH PPS 
rates, the methodologies used to update the rate have been previously 
subject to public comment, and this notice reflects the application of 
previously established methodologies. Further, the rural add-on and 
adjustments to FY 2001 HH PPS rates that were required by the BIPA 
before this annual update for the FY 2003 PPS rates are dictated by 
statute and do not require an exercise of discretion. In addition, the 
clarification to the accelerated payment policy reflects no substantive 
change in policy and practice. Therefore, for good cause, we waive 
prior notice and comment procedures. As indicated previously, we are, 
however, providing a 60-day comment period for public comment.

V. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

VI. Response to Comments

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

VII. Regulatory Impact Analysis

A. Overall Impact

    We have examined the impacts of this notice as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review) 
and the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 
96-354). Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). The update 
set forth in this notice applies to Medicare payments under HH PPS in 
FY 2003. Accordingly, the analysis that follows describes the impact in 
FY 2003 only. We estimate that there will be an additional $320 million 
in FY 2003 expenditures attributable to the FY 2003 market basket 
increase of 2.1 percent. The statute requires the FY 2003 home health 
market basket increase of 3.2 percent to be reduced by 1.1 percentage 
points. Section 501 of BIPA requires the application of the 15 percent 
reduction on payment limits under the IPS, which is no longer in 
effect, for home health services updated to FY 2003. This statutory 
provision requires the estimation of what Medicare spending would have 
been if the IPS limits were reduced by 15 percent and updated to FY 
2003. To achieve this level of home health spending, we will reduce the 
HH PPS rates by 7 percent. The impact on providers due to the 
implementation of the 7 percent reduction is to reduce Medicare home 
health spending by $821 million in FY 2003, $1,132 million in FY 2004, 
and $1,212 million in FY 2005. As stated above, the expenditures 
outlined in this notice exceed the $100 million yearly threshold for a 
major rule as defined in title 5, USC, section 804(2), and for a 
significant regulatory action as defined in E.O. 12866.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a MSA and has fewer 
than 100 beds. We have determined that this notice with comment period 
will not have a significant economic impact on the operations of a 
substantial number of small rural hospitals.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $10 
million or less annually. For purposes of the RFA, we consider most 
HHAs to be small entities. Individuals and States are not included in 
the definition of a small entity. This notice with comment period 
reflects the statutory update to the HH PPS rates published in the July 
3, 2000 final rule as amended by the BIPA, but will have a significant 
positive effect upon small entities.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. We believe this notice with comment period 
will not mandate expenditures in that amount.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it publishes a notice with comment period that 
imposes substantial direct requirement costs on State and local 
governments, preempts State law, or otherwise has Federalism 
implications. We have reviewed this notice under the threshold criteria 
of Executive Order 13132, Federalism. We have determined that this 
notice will not have substantial direct effects on the rights, roles, 
and responsibilities of States.

B. Anticipated Effects

    In accordance with the requirements of section 1895(b)(3) of the 
Act, we publish an update for each subsequent fiscal year that will 
provide an update to the payment rates. Section 1895(b)(3) of the Act 
requires us, for FY 2003, to increase the prospective payment amounts 
by the home health market basket increase minus 1.1 percentage points. 
The home health market basket increase for FY 2003 is 3.2 percent. 
Taking into account the provisions of section 1895(b)(3) of the Act, 
the FY 2003 home health market basket increase of 3.2 percent is 
reduced by 1.1 percentage points yielding a 2.1 percent increase for FY 
2003. For the sake of clarity, we have also included the amounts as 
increased by the rural add-on provision under section 508 of the BIPA.
    Before we determine the impact of the update of the FY 2002 
national 60-day episode rate by the applicable home health market 
basket increase, we need to review prior legislation affecting home 
health payment systems. Section 4602 of the BBA implemented IPS for FY 
1998 through FY 1999, which was composed of both per-visit limits and a 
per-beneficiary limit. The per-visit limits were similar to the per-
visit limits

[[Page 43622]]

previously in place but reduced to 105 percent of the median (previous 
limits were set at 112 percent of the mean) and applied in the 
aggregate (that is, across disciplines, while the limits were specified 
for each of six disciplines). The per-beneficiary limit was a blend of 
an agency-specific rate and a national rate for agencies having a 1994 
cost report and a national rate for those agencies not in existence in 
FY 1994. An agency was paid the lower of the following:
     Its actual costs.
     The costs from applying each of the per-discipline limits 
to the number of visits of that discipline, in the aggregate.
     The costs from applying the agency-specific limit to the 
number of beneficiaries served by that agency.
    Section 4603 of BBA required that a PPS be implemented beginning 
with FY 2000. The implementation of PPS was, however, postponed until 
FY 2001 by section 5101(c) of OCESAA. BBA required that initial budget 
neutrality under HH PPS for FY 2000 be calculated for what expenditures 
would have been in FY 2000 if the IPS had continued to be in effect, 
but with both the per-visit and per-beneficiary limits in effect on 
September 30, 1999 (the last day of FY 1999) reduced by 15 percent. 
That is, we had to estimate what Medicare expenditures would have been 
if the IPS had continued for another year, but with the per-visit and 
per-beneficiary limits reduced by 15 percent. This further reduction of 
the per-visit and per-beneficiary limits was to ensure that home health 
spending was below the levels of the IPS.
    BIPA did not delay the starting date for HH PPS. However, it did 
delay application of the 15-percent reduction in the IPS cost limits. 
The statute requires that HH PPS rates, beginning with FY 2003, be 
equal to the amounts that would have been effective for the IPS for FY 
2001 with a 15-percent reduction in per-visit and per-beneficiary cost 
limits in effect on September 30, 2000, the last day of the IPS. The 
updates for FY 2003, as otherwise applied, would be added to the HH PPS 
reduced rates.
    The key to the calculation is the estimation of what Medicare home 
health expenditures would have been in FY 2001. The determination of 
those expenditures requires, by statute, an estimation of those 
expenditures with the per-visit and per-beneficiary limits reduced by 
15 percent. The estimate entails three key elements.
    First, it requires an estimate of the distribution of agencies' 
costs relative to per-visit and per-beneficiary aggregate limits. For 
example, if all agencies' costs were at or above the per-visit or per-
beneficiary limits, lowering the limits by 15 percent would have saved 
15 percent. Similarly, if some agencies' costs were between 85 percent 
and 100 percent of either cost limit, lowering the cost limits by 15 
percent would achieve less than 15 percent savings. Likewise, if some 
agencies' costs were below 85 percent of both cost limits, lowering the 
limits by 15 percent would not achieve savings (since agencies would be 
paid their actual costs).
    Second, an estimation of home health expenditures for FY 2001 
requires an estimate of the annual increase in the cost limits under 
IPS if the IPS cost limits were continued. Since IPS did not apply for 
FY 2001, the annual increase in cost limits that would have applied 
must be estimated. We also need to estimate how costs have increased 
relative to the cost limits. For example, the cost limits were 
increased by the market basket but agency costs would have most likely 
increased by some higher percentage.
    Finally, under the statutory parameters, the estimate requires an 
assessment of the behavioral response of HHAs to a lowering of the per-
visit and per-beneficiary limits that we estimate for FY 2001 home 
health expenditures. An assessment of behavioral response is 
particularly important given the patterns of Medicare home health 
spending and utilization that have fluctuated dramatically over the 
last 10 years. Dramatic increases in home health spending reflect very 
large increases in the number of visits per person served and increases 
in the number of persons receiving home health services. This is the 
behavioral response expected under a cost-based reimbursement system. 
Furthermore, HH PPS provides an incentive for agencies to provide fewer 
visits than before since they are paid a flat dollar amount to cover 
all services within a 60-day time period. Preliminary FY 2001 data show 
that the number of home health visits in the first year of HH PPS has 
decreased by a significant percentage compared to FY 2000, the last 
year of IPS. Meanwhile, reimbursement per visit is projected to 
increase substantially. This is the type of behavioral response that is 
consistent with the incentives of the new payment system.
    Taking into account all these considerations and using the latest 
available reliable data, we have determined that at the time the BBA 
was passed, the 15-percent reduction in the limits would result in a 7-
percent reduction in aggregate home health spending. We continue to 
believe that this is the best estimate of the level to which spending 
would have been reduced under the conditions prescribed by the BBA, 
namely extension of the IPS through FY 2001 (the first year of HH PPS) 
but with a 15-percent reduction in each of the IPS cost limits. 
Therefore, to achieve this level of home health spending, we will 
reduce the HH PPS payments by 7 percent.
    At the time the BBA's enactment, the most recent settled cost 
report data for HHAs showed that most agencies' costs were at about the 
level of the existing cost limits. If the limits were lowered by 15 
percent then, absent changes in the level of services provided, the 
resulting reduction in the HH PPS rates would be 15 percent. For 
example, if home health spending costs were $10 billion and all 
agencies were at the level of the limits, this level would also be $10 
billion. If the level of the cost limits were lowered to $10 billion 
multiplied by (1 minus .15) it would be equal to $8.5 billion. Then 
savings to the Medicare program would be cost-limits divided by costs, 
for example, 1.5 billion divided by 10 billion or 15 percent.
    CMS actuaries believed, based on past experience, that agencies 
would alter the nature and quantity of the services provided to achieve 
costs below the cost limits. Therefore, a full 15 percent reduction 
would not be required. The actuaries assumed that 50 percent of total 
HHA costs would be for agencies that reached the per beneficiary limits 
and 45 percent of total HHA costs would be for agencies that reached 
the per-visit limit. The actuaries further assumed that the remaining 5 
percent of total HHA costs were under both limits before the 15 percent 
reduction. After the reduction, about 5 percent of their costs would 
now be over the limits. The actuaries assumed that 65 percent of the 
savings from the per beneficiary limit reduction would be lost and 50 
percent of the savings from the per-visit limit reduction would be 
lost. For example, (.65 multiplied by .5) added to (.5 multiplied by 
.45) or 55 percent of the 15 percent reduction would be lost. This 
results in a net savings of (1-.55) multiplied by .15) added to (.05 
multiplied by.05), or 7 percent. Thus, the actuaries estimate that HHAs 
faced with a potential 15 percent reduction would alter HHA behavior 
and would likely sustain a real reduction of only 7 percent. Because 
the real conditions under which behavior would change cannot be 
replicated, the actuaries continue to believe this model is the most 
appropriate expression of the statute's requirement for an estimate.
    Both the applicable home health market basket increase of 2.1 
percent for

[[Page 43623]]

FY 2003 and the 7 percent reduction in aggregate home health PPS 
payments due to the required 15 percent reduction in the estimation of 
the IPS limits apply to all Medicare participating HHAs. We do not 
believe there is a differential impact due to the aggregate nature of 
the update.
    We implemented the rural add-on amounts for FY 2002, effective on 
April 1, 2001 through the Program Memorandum, ``Restoration of Full 
Home Health Market Basket Update for Home Health Services for Fiscal 
Year 2001 and Temporary 10 Percent Payment Increase for Home Health 
Services Furnished in a Rural Area for 24 Months Under the Home Health 
Prospective Payment System (HH PPS)'' (Transmittal A-01-06, issued 
January 16, 2001) and the FY 2002 HH PPS Update Notice (66 FR 34687). 
Section 508 of the BIPA provides a 10 percent rural add-on for home 
health services furnished to beneficiaries whose site of service is a 
rural area (non-MSA) for 24 months beginning with episodes ending on or 
after April 1, 2001 and before April 1, 2003. The 10 percent rural add 
on applies to episodes ending before April 1, 2003 and, therefore, will 
end mid FY 2003, as required by the statute.
1. Effects on the Medicare Program
    This notice with comment period merely provides a percentage update 
to all Medicare HHAs. Therefore, we have not furnished any impact 
tables. We increase the payment to each Medicare HHA equally by the 
home health market basket update for FY 2003, as required by statute. 
There is no differential impact among provider types. The impact is in 
the aggregate. We estimate that there will be an additional $320 
million in FY 2003 expenditures attributable to the applicable FY 2003 
market basket increase of 2.1 percent. As stated above, expenditures 
outlined in this notice exceed the $100 million yearly threshold for a 
major rule, as defined in Title 5, U.S.C., section 804(2) and for a 
significant regulatory action, as defined in E.O. 12866.
    As discussed previously, section 501 of BIPA impacts the estimated 
Medicare home health expenditures in FY 2003. Section 
1864(b)(3)(A)(i)(III) of the Act, as redesignated by section 501 of the 
BIPA, requires for FY 2003 the estimation of what would have been paid 
under the IPS with the IPS cost limits reduced by 15 percent, if the 
IPS had been updated to FY 2003. At that time of the BBA, lowering the 
limits by 15 percent would have resulted in a reduction of 15 percent 
from Medicare home health spending, without any behavioral offset. 
However, as explained previously, we anticipate that due to the 
behavioral responses, the level by which actual payments would be 
reduced by lowering the IPS cost limits would not be the same as the 
percent by which the cost limits themselves would be lowered. The full 
impact of Medicare savings attributable to the 15 percent reduction in 
the IPS limits is lower due to the behavioral responses of the 
industry. The total savings reflecting the behavioral responses is 
divided by the estimates for spending, which yields the percent at 
which aggregate home health spending is lowered. That is, 
implementation of the 15 percent reduction in IPS cost limits would 
lead to a 7 percent reduction in aggregate home health spending and, 
therefore, equivalently a 7 percent reduction in home health payments. 
The statute requires us to look at the 15 percent reduction to the IPS 
limits updated to FY 2003. We believe the HHAs would have altered their 
behavior to avoid the cost limits and maintain that our assumptions 
surrounding the 7 percent reduction in overall payments is correct. 
Based on the latest available data, our best estimate is that a 15 
percent reduction in cost limits would result in a 7 percent reduction 
in aggregate home health spending and, therefore yield a 7 percent 
increase in home health payments. Both the home health market basket 
increase of 2.1 percent for FY 2003 and the 7 percent reduction in 
aggregate home health PPS payments due to the application of the 
required 15 percent reduction in estimated IPS cost limits apply to all 
Medicare participating HHAs. We do not believe there is a differential 
impact because of the aggregate nature of the update.
    As discussed above, we implemented a rural add-on of a 10-percent 
payment increase to the episode and per-visit payment amounts under the 
HH PPS for Medicare home health services furnished in a rural area for 
a 24-month period. The 10-percent rural add-on increases estimated 
Medicare home health expenditures by $220 million in FY 2003.

(Source: President's FY 2003 Budget)

    We provide impact tables below that display projected Medicare home 
health spending, which includes the 15 percent reduction in the IPS 
cost limits, as required by statute, that translate into a 7 percent 
reduction in HH PPS rates in FY 2003. Under the President's FY 2003 
Budget, which assumes no further delays in the reduction, Medicare's 
total home health spending is projected to increase 12.2 percent in FY 
2003, 8.3 percent in FY 2004, and 7.4 percent in FY 2005.
    The President's Budget for FY 2003 projects a 12.2 percent increase 
in home health spending in FY 2003. Approximately 6.8 percent of this 
increase is because payments for services rendered in FY 2002 will not 
be actually paid until FY 2003, hence a ``cash lag'' occurs. Per 
episode payments incurred in FY 2002 but not paid until FY 2003 will be 
at higher levels than payments for the same services both provided and 
paid in FY 2003 because per-episode rates will be reduced in FY 2003 to 
reflect the payment reduction required by BIPA. The remaining 5.4 
percent is accounted for by additional assumptions concerning projected 
increases in utilization and case mix, a 2.1 percent inflation 
increase, and the 10 percent rural add-on required by BIPA. These 
factors interact with the rate reduction required by BIPA to produce 
the 5.4 percent increase in overall spending.

  Includes 7% reduction due to the ``15% Cut in IPS Limits'' Effective 10/1/2002 as Required by Section 501 of
                                                      BIPA
----------------------------------------------------------------------------------------------------------------
                               FY                                      2003            2004            2005
----------------------------------------------------------------------------------------------------------------
In millions.....................................................         $14,851         $16,080         $17,268
% increase......................................................            12.2             8.3             7.4


------------------------------------------------------------------------
                                                   Additional FY 2003
                                                  Medicare Home Health
   FY 2003 update to Home Health PPS rates       estimated expenditures
             required by the Act                  due to annual update
                                                  required by statute
------------------------------------------------------------------------
Section 1895(b)(3)(B) of the Act requires HH   $320 million.
 PPS rates increased by home health market
 basket minus 1.1 percentage points in FY
 2003 (2.4% increase).


[[Page 43624]]


------------------------------------------------------------------------
                                                   Additional FY 2003
  Provision of Medicare, Medicaid, and SCHIP      Medicare Home Health
  Benefits Improvement and Protection Act of     estimated expenditures
                 2000 (BIPA)                   due to the BIPA provision
------------------------------------------------------------------------
Section 508--10-percent rural add-on for       $220 million.
 Medicare home health services furnished in a
 rural area.
------------------------------------------------------------------------

(Source: President's FY 2003 Budget)
2. Effects on Providers
    This notice implements statutorily required adjustments to Medicare 
HH PPS rates for providers of Medicare home health services. We do not 
anticipate specific effects on other providers. This notice with 
comment period reflects the statutorily required annual update to the 
Medicare HH PPS rates published in the July 3, 2000 final rule and 
applies to the Medicare HHAs. We do not believe there is a differential 
impact because of the consistent and aggregate nature of the update.

C. Alternatives Considered

    As discussed in section II, this notice with comment period 
reflects an annual update to the HH PPS rates as required by statute. 
Due to the lack of discretion provided in the statutory requirements 
governing this notice with comment period, we believe the statute 
provides no latitude for alternatives other than the approach set forth 
in this notice reflecting the FY 2003 annual update to the HH PPS 
rates. Also, as discussed in section II, for clarification this notice 
addresses the 10 percent rural add-on required under section 508 of the 
BIPA for home health services furnished to beneficiaries who reside in 
a rural non-MSA area. Other than the positive effect of the market 
basket increase, this notice with comment period will not have a 
significant economic impact nor will it impose an additional burden on 
small entities. When a regulation or notice imposes additional burden 
on small entities, we are required under the RFA to examine 
alternatives for reducing burden. Since this notice with comment period 
will not impose an additional burden, we have not examined 
alternatives.

D. Conclusion

    We have examined the economic impact of this notice with comment 
period on small entities and have determined that the economic impact 
is positive, significant, and that all HHAs will be affected. To the 
extent that small rural hospitals are affiliated with HHAs, the impact 
on these facilities will also be positive. Finally, we have determined 
that the economic effects described above are largely the result of 
BIPA provisions that this notice addresses. We continue to analyze the 
appropriateness and accuracy of payments for differing case mixes.
    In accordance with the provisions of Executive Order 12866, this 
notice with comment period was reviewed by the Office of Management and 
Budget.

   Addendum A.--FY 2002 Wage Index for Rural Areas--Pre-Floor and Pre-
                              Reclassified
------------------------------------------------------------------------
                          MSA Name                            Wage Index
------------------------------------------------------------------------
ALABAMA....................................................       0.7339
ALASKA.....................................................       1.1862
ARIZONA....................................................       0.8681
ARKANSAS...................................................       0.7489
CALIFORNIA.................................................       0.9659
COLORADO...................................................       0.8811
CONNECTICUT................................................       1.2077
DELAWARE...................................................       0.9589
FLORIDA....................................................       0.8794
GEORGIA....................................................       0.8295
GUAM.......................................................       0.9611
HAWAII.....................................................       1.1112
IDAHO......................................................       0.8718
ILLINOIS...................................................       0.8053
INDIANA....................................................       0.8721
IOWA.......................................................       0.8147
KANSAS.....................................................       0.7812
KENTUCKY...................................................       0.7963
LOUISIANA..................................................       0.7596
MAINE......................................................       0.8721
MARYLAND...................................................       0.8859
MASSACHUSETTS..............................................       1.1454
MICHIGAN...................................................       0.9000
MINNESOTA..................................................       0.9035
MISSISSIPPI................................................       0.7528
MISSOURI...................................................       0.7891
MONTANA....................................................       0.8655
NEBRASKA...................................................       0.8142
NEVADA.....................................................       0.9727
NEW HAMPSHIRE..............................................       0.9779
NEW JERSEY \1\.............................................  ...........
NEW MEXICO.................................................       0.8676
NEW YORK...................................................       0.8547
NORTH CAROLINA.............................................       0.8535
NORTH DAKOTA...............................................       0.7879
OHIO.......................................................       0.8668
OKLAHOMA...................................................       0.7566
OREGON.....................................................       1.0027
PENNSYLVANIA...............................................       0.8607
PUERTO RICO................................................       0.4800
RHODE ISLAND \1\...........................................  ...........
SOUTH CAROLINA.............................................       0.8512
SOUTH DAKOTA...............................................       0.7861
TENNESSEE..................................................       0.7928
TEXAS......................................................       0.7712
UTAH.......................................................       0.9051
VERMONT....................................................       0.9466
VIRGINIA...................................................       0.8241
VIRGIN ISLANDS.............................................       0.6747
WASHINGTON.................................................       1.0209
WEST VIRGINIA..............................................       0.8067
WISCONSIN..................................................       0.9066
WYOMING....................................................       0.8747
------------------------------------------------------------------------
\1\ All counties within the State are classified as Urban.


   Addendum B.--FY 2002 Wage Index for Urban Areas--Pre-Floor and Pre-
                              Reclassified
------------------------------------------------------------------------
                                Urban area  (Constituent
            MSA                         Counties)             Wage index
------------------------------------------------------------------------
0040.......................  ABILENE, TX...................       0.7965
0060.......................  AGUADILLA, PR.................       0.4683
0080.......................  AKRON, OH.....................       0.9876
0120.......................  ALBANY, GA....................       1.0640
0160.......................  ALBANY-SCHENECTADY-TROY, NY...       0.8500
0200.......................  ALBUQUERQUE, NM...............       0.9759
0220.......................  ALEXANDRIA, LA................       0.8029
0240.......................  ALLENTOWN-BETHLEHEM-EASTON, PA       1.0077
0280.......................  ALTOONA, PA...................       0.9126
0320.......................  AMARILLO, TX..................       0.8711
0380.......................  ANCHORAGE,AK..................       1.2570
0440.......................  ANN ARBOR, MI.................       1.1098
0450.......................  ANNISTON, AL..................       0.8276
0460.......................  APPLETON-OSHKOSH-NEENAH, WI...       0.9241

[[Page 43625]]

 
0470.......................  ARECIBO, PR...................       0.4630
0480.......................  ASHEVILLE, NC.................       0.9200
0500.......................  ATHENS, GA....................       0.9842
0520.......................  ATLANTA, GA...................       1.0058
0560.......................  ATLANTIC-CAPE MAY, NJ.........       1.1293
0580.......................  AUBURN-OPELIKA, AL............       0.8230
0600.......................  AUGUSTA-AIKEN, GA-SC..........       0.9970
0640.......................  AUSTIN-SAN MARCOS, TX.........       0.9630
0680.......................  BAKERSFIELD, CA...............       0.9519
0720.......................  BALTIMORE, MD.................       0.9856
0733.......................  BANGOR, ME....................       0.9593
0743.......................  BARNSTABLE-YARMOUTH, MA.......       1.3626
0760.......................  BATON ROUGE, LA...............       0.8149
0840.......................  BEAUMONT-PORT ARTHUR, TX......       0.8442
0860.......................  BELLINGHAM, WA................       1.1826
0870.......................  BENTON HARBOR, MI.............       0.8887
0875.......................  BERGEN-PASSAIC, NJ............       1.1689
0880.......................  BILLINGS, MT..................       0.9352
0920.......................  BILOXI-GULFPORT-PASCAGOULA, MS       0.8440
0960.......................  BINGHAMTON, NY................       0.8446
1000.......................  BIRMINGHAM, AL................       0.8808
1010.......................  BISMARCK, ND..................       0.7984
1020.......................  BLOOMINGTON, IN...............       0.8842
1040.......................  BLOOMINGTON-NORMAL, IL........       0.9038
1080.......................  BOISE CITY, ID................       0.9050
1123.......................  BOSTON-WORCESTER-LAWRENCE-           1.1383
                              LOWELL-BROCKTON, M.
1125.......................  BOULDER-LONGMONT, CO..........       0.9799
1145.......................  BRAZORIA, TX..................       0.8209
1150.......................  BREMERTON, WA.................       1.0758
1240.......................  BROWNSVILLE-HARLINGEN-SAN            0.9012
                              BENITO, TX.
1260.......................  BRYAN-COLLEGE STATION, TX.....       0.9328
1280.......................  BUFFALO-NIAGARA FALLS, NY.....       0.9459
1303.......................  BURLINGTON, VT................       0.9883
1310.......................  CAGUAS, PR....................       0.4699
1320.......................  CANTON-MASSILLON, OH..........       0.8956
1350.......................  CASPER, WY....................       0.9496
1360.......................  CEDAR RAPIDS, IA..............       0.8699
1400.......................  CHAMPAIGN-URBANA, IL..........       0.9306
1440.......................  CHARLESTON-NORTH CHARLESTON,         0.9206
                              SC.
1480.......................  CHARLESTON, WV................       0.9264
1520.......................  CHARLOTTE-GASTONIA-ROCK HILL,        0.9336
                              NC-SC.
1540.......................  CHARLOTTESVILLE, VA...........       1.0566
1560.......................  CHATTANOOGA, TN-GA............       0.9369
1580.......................  CHEYENNE, WY..................       0.8288
1600.......................  CHICAGO, IL...................       1.1046
1620.......................  CHICO-PARADISE, CA............       0.9856
1640.......................  CINCINNATI, OH-KY-IN..........       0.9473
1660.......................  CLARKSVILLE-HOPKINSVILLE, TN-        0.8337
                              KY.
1680.......................  CLEVELAND-LORAIN-ELYRIA, OH...       0.9457
1720.......................  COLORADO SPRINGS, CO..........       0.9744
1740.......................  COLUMBIA, MO..................       0.8686
1760.......................  COLUMBIA, SC..................       0.9492
1800.......................  COLUMBUS, GA-AL...............       0.8440
1840.......................  COLUMBUS, OH..................       0.9565
1880.......................  CORPUS CHRISTI, TX............       0.8341
1890.......................  CORVALLIS, OR.................       1.1646
1900.......................  CUMBERLAND, MD-WV.............       0.8306
1920.......................  DALLAS, TX....................       0.9936
1950.......................  DANVILLE, VA..................       0.8613
1960.......................  DAVENPORT-ROCK ISLAND-MOLINE,        0.8638
                              IA-IL.
2000.......................  DAYTON-SPRINGFIELD, OH........       0.9225
2020.......................  DAYTONA BEACH, FL.............       0.8972
2030.......................  DECATUR, AL...................       0.8775
2040.......................  DECATUR, IL...................       0.7987
2080.......................  DENVER, CO....................       1.0328
2120.......................  DES MOINES, IA................       0.8779
2160.......................  DETROIT, MI...................       1.0487
2180.......................  DOTHAN, AL....................       0.7948
2190.......................  DOVER, DE.....................       1.0296
2200.......................  DUBUQUE, IA...................       0.8519
2240.......................  DULUTH-SUPERIOR, MN-WI........       1.0284

[[Page 43626]]

 
2281.......................  DUTCHESS COUNTY, NY...........       1.0532
2290.......................  EAU CLAIRE, WI................       0.8899
2320.......................  EL PASO, TX...................       0.9215
2330.......................  ELKHART-GOSHEN, IN............       0.9638
2335.......................  ELMIRA, NY....................       0.8415
2340.......................  ENID, OK......................       0.8357
2360.......................  ERIE, PA......................       0.8716
2400.......................  EUGENE-SPRINGFIELD, OR........       1.1471
2440.......................  EVANSVILLE-HENDERSON, IN-KY...       0.8514
2520.......................  FARGO-MOORHEAD, ND-MN.........       0.9267
2560.......................  FAYETTEVILLE, NC..............       0.9027
2580.......................  FAYETTEVILLE-SPRINGDALE-             0.8445
                              ROGERS, AR.
2620.......................  FLAGSTAFF, ARIZONA-UTAH.......       1.0556
2640.......................  FLINT, MI.....................       1.0913
2650.......................  FLORENCE, AL..................       0.7845
2655.......................  FLORENCE, SC..................       0.8722
2670.......................  FORT COLLINS-LOVELAND, CO.....       1.0045
2680.......................  FORT LAUDERDALE, FL...........       1.0293
2700.......................  FORT MYERS-CAPE CORAL, FL.....       0.9374
2710.......................  FORT PIERCE-PORT ST. LUCIE, FL       1.0214
2720.......................  FORT SMITH, AR-OK.............       0.8053
2750.......................  FORT WALTON BEACH, FL.........       0.9002
2760.......................  FORT WAYNE, IN................       0.9203
2800.......................  FORT WORTH-ARLINGTON, TX......       0.9394
2840.......................  FRESNO, CA....................       0.9984
2880.......................  GADSDEN, AL...................       0.8792
2900.......................  GAINESVILLE, FL...............       0.9481
2920.......................  GALVESTON-TEXAS CITY, TX......       1.0313
2960.......................  GARY, IN......................       0.9530
2975.......................  GLENS FALLS, NY...............       0.8336
2980.......................  GOLDSBORO, NC.................       0.8709
2985.......................  GRAND FORKS, ND-MN............       0.9069
2995.......................  GRAND JUNCTION, CO............       0.9569
3000.......................  GRAND RAPIDS-MUSKEGON-HOLLAND,       1.0048
                              MI.
3040.......................  GREAT FALLS, MT...............       0.8870
3060.......................  GREELEY, CO...................       0.9495
3080.......................  GREEN BAY, WI.................       0.9208
3120.......................  GREENSBORO-WINSTON-SALEM-HIGH        0.9539
                              POINT, NC.
3150.......................  GREENVILLE, NC................       0.9289
3160.......................  GREENVILLE-SPARTANBURG-              0.9217
                              ANDERSON, SC.
3180.......................  HAGERSTOWN, MD................       0.8365
3200.......................  HAMILTON-MIDDLETOWN, OH.......       0.9287
3240.......................  HARRISBURG-LEBANON-CARLISLE,         0.9425
                              PA.
3283.......................  HARTFORD, CT..................       1.1533
3285.......................  HATTIESBURG, MS...............       0.7476
3290.......................  HICKORY-MORGANTON-LENOIR, NC..       0.9367
3320.......................  HONOLULU, HI..................       1.1539
3350.......................  HOUMA, LA.....................       0.7975
3360.......................  HOUSTON, TX...................       0.9631
3400.......................  HUNTINGTON-ASHLAND, WV-KY-OH..       0.9616
3440.......................  HUNTSVILLE, AL................       0.8883
3480.......................  INDIANAPOLIS, IN..............       0.9698
3500.......................  IOWA CITY, IA.................       0.9859
3520.......................  JACKSON, MI...................       0.9257
3560.......................  JACKSON, MS...................       0.8491
3580.......................  JACKSON, TN...................       0.9013
3600.......................  JACKSONVILLE, FL..............       0.9223
3605.......................  JACKSONVILLE, NC..............       0.7622
3610.......................  JAMESTOWN, NY.................       0.8050
3620.......................  JANESVILLE-BELOIT, WI.........       0.9739
3640.......................  JERSEY CITY, NJ...............       1.1178
3660.......................  JOHNSON CITY-KINGSPORT-              0.8617
                              BRISTOL, TN-VA.
3680.......................  JOHNSTOWN, PA.................       0.8723
3700.......................  JONESBORO, AR.................       0.8425
3710.......................  JOPLIN, MO....................       0.8727
3720.......................  KALAMAZOO-BATTLE CREEK, MI....       1.0639
3740.......................  KANKAKEE, IL..................       0.9889
3760.......................  KANSAS CITY, MO-KS............       0.9536
3800.......................  KENOSHA, WI...................       0.9568
3810.......................  KILLEEN-TEMPLE, TX............       0.8471
3840.......................  KNOXVILLE, TN.................       0.8890

[[Page 43627]]

 
3850.......................  KOKOMO, IN....................       0.9126
3870.......................  LA CROSSE, WI-MN..............       0.9250
3880.......................  LAFAYETTE, LA.................       0.8544
3920.......................  LAFAYETTE, IN.................       0.9121
3960.......................  LAKE CHARLES, LA..............       0.7765
3980.......................  LAKELAND-WINTER HAVEN, FL.....       0.9067
4000.......................  LANCASTER, PA.................       0.9296
4040.......................  LANSING-EAST LANSING, MI......       0.9653
4080.......................  LAREDO, TX....................       0.7849
4100.......................  LAS CRUCES, NM................       0.8621
4150.......................  LAWRENCE, KS..................       0.7812
4120.......................  LAS VEGAS, NV-AZ..............       1.1182
4200.......................  LAWTON, OK....................       0.8682
4243.......................  LEWISTON-AUBURN, ME...........       0.9287
4280.......................  LEXINGTON, KY.................       0.8791
4320.......................  LIMA, OH......................       0.9470
4360.......................  LINCOLN, NE...................       1.0173
4400.......................  LITTLE ROCK-NORTH LITTLE ROCK,       0.8955
                              AR.
4420.......................  LONGVIEW-MARSHALL, TX.........       0.8571
4480.......................  LOS ANGELES-LONG BEACH, CA....       1.1948
4520.......................  LOUISVILLE, KY-IN.............       0.9529
4600.......................  LUBBOCK, TX...................       0.8449
4640.......................  LYNCHBURG, VA.................       0.9103
4680.......................  MACON, GA.....................       0.8957
4720.......................  MADISON, WI...................       1.0337
4800.......................  MANSFIELD, OH.................       0.8708
4840.......................  MAYAGUEZ, PR..................       0.4860
4880.......................  MCALLEN-EDINBURG-MISSION, TX..       0.8378
4890.......................  MEDFORD-ASHLAND, OR...........       1.0314
4900.......................  MELBOURNE-TITUSVILLE-PALM BAY,       0.9913
                              FL.
4920.......................  MEMPHIS, TN-AR-MS.............       0.8978
4940.......................  MERCED, CA....................       0.9947
5000.......................  MIAMI, FL.....................       0.9950
5015.......................  MIDDLESEX-SOMERSET-HUNTERDON,        1.1469
                              N.
5080.......................  MILWAUKEE-WAUKESHA, WI........       0.9971
5120.......................  MINNEAPOLIS-ST. PAUL, MN-WI...       1.0930
5140.......................  MISSOULA, MONTANA.............       0.9364
5160.......................  MOBILE, AL....................       0.8082
5170.......................  MODESTO, CA...................       1.0820
5190.......................  MONMOUTH-OCEAN, NJ............       1.0851
5200.......................  MONROE, LA....................       0.8201
5240.......................  MONTGOMERY, AL................       0.7359
5280.......................  MUNCIE, IN....................       0.9939
5330.......................  MYRTLE BEACH, SC..............       0.8771
5345.......................  NAPLES, FL....................       0.9699
5360.......................  NASHVILLE, TN.................       0.9754
5380.......................  NASSAU-SUFFOLK, NY............       1.3643
5483.......................  NEW HAVEN-BRIDGEPORT-STAMFORD-       1.2238
                              WATERBURY-DANB.
5523.......................  NEW LONDON-NORWICH, CT........       1.1526
5560.......................  NEW ORLEANS, LA...............       0.9036
5600.......................  NEW YORK-NEWARK, NY-NJ-PA.....       1.4427
5640.......................  NEWARK, NJ....................       1.1622
5660.......................  NEWBURGH, NY-PA...............       1.1113
5720.......................  NORFOLK-VIRGINIA BEACH-NEWPORT       0.8579
                              NEWS, VA-NC.
5775.......................  OAKLAND, CA...................       1.5319
5790.......................  OCALA, FL.....................       0.9556
5800.......................  ODESSA-MIDLAND, TX............       1.0104
5880.......................  OKLAHOMA CITY, OK.............       0.8694
5910.......................  OLYMPIA, WA...................       1.1350
5920.......................  OMAHA, NE-IA..................       0.9712
5945.......................  ORANGE COUNTY, CA.............       1.1123
5960.......................  ORLANDO, FL...................       0.9642
5990.......................  OWENSBORO, KY.................       0.8334
6015.......................  PANAMA CITY, FL...............       0.9061
6020.......................  PARKERSBURG-MARIETTA, WV-OH...       0.8133
6080.......................  PENSACOLA, FL.................       0.8361
6120.......................  PEORIA-PEKIN, IL..............       0.8773
6160.......................  PHILADELPHIA, PA-NJ...........       1.0947
6200.......................  PHOENIX-MESA, AZ..............       0.9638
6240.......................  PINE BLUFF, AR................       0.7895
6280.......................  PITTSBURGH, PA................       0.9560

[[Page 43628]]

 
6323.......................  PITTSFIELD, MA................       1.0278
6340.......................  POCATELLO, ID.................       0.9448
6360.......................  PONCE, PR.....................       0.5218
6403.......................  PORTLAND, ME..................       0.9427
6440.......................  PORTLAND-VANCOUVER,OR-WA......       1.1111
6483.......................  PROVIDENCE-WARWICK-PAWTUCKET,        1.0805
                              RI.
6520.......................  PROVO-OREM, UT................       0.9843
6560.......................  PUEBLO, CO....................       0.8604
6580.......................  PUNTA GORDA, FL...............       0.9015
6600.......................  RACINE, WI....................       0.9333
6640.......................  RALEIGH-DURHAM-CHAPEL HILL, NC       0.9818
6660.......................  RAPID CITY, SD................       0.8869
6680.......................  READING, PA...................       0.9583
6690.......................  REDDING, CA...................       1.1155
6720.......................  RENO, NV......................       1.0421
6740.......................  RICHLAND-KENNEWICK-PASCO, WA..       1.0960
6760.......................  RICHMOND-PETERSBURG, VA.......       0.9678
6780.......................  RIVERSIDE-SAN BERNADINO, CA...       1.1112
6800.......................  ROANOKE, VA...................       0.8371
6820.......................  ROCHESTER, MN.................       1.1462
6840.......................  ROCHESTER, NY.................       0.9347
6880.......................  ROCKFORD, IL..................       0.9204
6895.......................  ROCKY MOUNT, NC...............       0.9109
6920.......................  SACRAMENTO, CA................       1.1831
6960.......................  SAGINAW-BAY CITY-MIDLAND, MI..       0.9590
6980.......................  ST. CLOUD, MN.................       0.9851
7000.......................  ST JOSEPH, MO.................       0.7891
7040.......................  ST. LOUIS, MO-IL..............       0.8931
7080.......................  SALEM, OR.....................       1.0011
7120.......................  SALINAS, CA...................       1.4684
7160.......................  SALT LAKE CITY-OGDEN, UT......       0.9863
7200.......................  SAN ANGELO, TX................       0.8193
7240.......................  SAN ANTONIO, TX...............       0.8584
7320.......................  SAN DIEGO, CA.................       1.1265
7360.......................  SAN FRANCISCO, CA.............       1.4140
7400.......................  SAN JOSE, CA..................       1.4193
7440.......................  SAN JUAN-BAYAMON, PR..........       0.4762
7460.......................  SAN LUIS OBISPO-ATASCADERO-          1.0990
                              PASO ROBLES, CA.
7480.......................  SANTA BARBARA-SANTA MARIA-           1.0802
                              LOMPOC, CA.
7485.......................  SANTA CRUZ-WATSONVILLE, CA....       1.3970
7490.......................  SANTA FE, NM..................       1.0194
7500.......................  SANTA ROSA, CA................       1.3034
7510.......................  SARASOTA-BRADENTON, FL........       1.0090
7520.......................  SAVANNAH, GA..................       1.0018
7560.......................  SCRANTON-WILKES-BARRE-               0.8683
                              HAZLETON, PA.
7600.......................  SEATTLE-BELLEVUE-EVERETT, WA..       1.1361
7610.......................  SHARON, PA....................       0.7926
7620.......................  SHEBOYGAN, WI.................       0.8427
7640.......................  SHERMAN-DENISON, TX...........       0.9373
7680.......................  SHREVEPORT-BOSSIER CITY, LA...       0.9050
7720.......................  SIOUX CITY, IA-NE.............       0.8767
7760.......................  SIOUX FALLS, SD...............       0.9139
7800.......................  SOUTH BEND, IN................       0.9993
7840.......................  SPOKANE, WA...................       1.0668
7880.......................  SPRINGFIELD, IL...............       0.8676
7920.......................  SPRINGFIELD, MO...............       0.8567
8003.......................  SPRINGFIELD, MA...............       1.0881
8050.......................  STATE COLLEGE, PA.............       0.9133
8080.......................  STEUBENVILLE-WEIRTON, OH-WV...       0.8637
8120.......................  STOCKTON-LODI, CA.............       1.0815
8140.......................  SUMTER, SC....................       0.7794
8160.......................  SYRACUSE, NY..................       0.9621
8200.......................  TACOMA, WA....................       1.1616
8240.......................  TALLAHASSEE, FL...............       0.8527
8280.......................  TAMPA-ST. PETERSBURG-                0.8925
                              CLEARWATER, FL.
8320.......................  TERRE HAUTE, IN...............       0.8532
8360.......................  TEXARKANA, TX-TEXARKANA, AR...       0.8327
8400.......................  TOLEDO, OH....................       0.9809
8440.......................  TOPEKA, KS....................       0.8912
8480.......................  TRENTON, NJ...................       1.0416
8520.......................  TUCSON, AZ....................       0.8967

[[Page 43629]]

 
8560.......................  TULSA, OK.....................       0.8902
8600.......................  TUSCALOOSA, AL................       0.8171
8640.......................  TYLER, TX.....................       0.9641
8680.......................  UTICA-ROME, NY................       0.8329
8720.......................  VALLEJO-FARIFIELD-NAPA, CA....       1.3562
8735.......................  VENTURA, CA...................       1.0994
8750.......................  VICTORIA, TX..................       0.8328
8760.......................  VINELAND-MILLVILLE-BRIDGETON,        1.0441
                              NJ.
8780.......................  VISALIA-TULARE-PORTERVILLE, CA       0.9628
8800.......................  WACO, TX......................       0.8129
8840.......................  WASHINGTON, DC-MD-VA-WV.......       1.0962
8920.......................  WATERLOO-CEDAR FALLS, IA......       0.8041
8940.......................  WAUSAU, WI....................       0.9696
8960.......................  WEST PALM BEACH-BOCA RATON, FL       0.9777
9000.......................  WHEELING, WV-OH...............       0.7985
9040.......................  WICHITA, KS...................       0.9606
9080.......................  WICHITA FALLS, TX.............       0.7867
9140.......................  WILLIAMSPORT, PA..............       0.8628
9160.......................  WILMINGTON-NEWARK, DE-MD......       1.0877
9200.......................  WILMINGTON, NC................       0.9409
9260.......................  YAKIMA, WA....................       1.0567
9270.......................  YOLO, CA......................       0.9701
9280.......................  YORK, PA......................       0.9441
9320.......................  YOUNGSTOWN-WARREN, OH.........       0.9563
9340.......................  YUBA CITY, CA.................       1.0359
9360.......................  YUMA, AZ......................       0.8989
------------------------------------------------------------------------


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


    Dated: March 12, 2002.
Thomas A. Scully,
Administrator, Health Care Financing Administration.

    Dated: May 10, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-16409 Filed 6-27-02; 8:45 am]
BILLING CODE 4120-01-P