[Federal Register Volume 68, Number 95 (Friday, May 16, 2003)]
[Proposed Rules]
[Pages 26786-26837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11829]
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Part IV
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 412
Medicare Program; Inpatient Rehabilitation Facility Prospective Payment
System for FY 2004; Proposed Rule
Federal Register / Vol. 68, No. 95 / Friday, May 16, 2003 / Proposed
Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1474-P]
RIN 0938-AL95
Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for FY 2004
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule updates the prospective payment rates for
inpatient rehabilitation facilities (IRFs) for Federal fiscal year 2004
as required under section 1886(j)(3)(C) of the Social Security Act (the
Act). Section 1886(j)(5) of the Act requires the Secretary of Health
and Human Services (the Secretary) to publish in the Federal Register
on or before August 1 before each fiscal year, the classification and
weighting factors for the IRF case-mix groups and a description of the
methodology and data used in computing the prospective payment rates
for that fiscal year. In addition, in this proposed rule, we are
proposing new policies, and changing or clarifying existing policies
regarding the prospective payment system (PPS) within the authority
granted under sections 1886(j) and 1886(d) of the Act.
DATES: We will consider comments if we receive them at the appropriate
addresses, as provided below, no later than 5 p.m. on July 7, 2003.
ADDRESSES: In commenting, please refer to file code CMS-1474-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission or e-mail.
Mail written comments (one original and two copies) to the
following address only: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1474-P, P.O.
Box 8010, Baltimore, MD 21244-8010.
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
two copies) to one of the following addresses: Room 445-G, Hubert H.
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201,
or Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.) 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: Robert Kuhl, (410) 786-4597, Pete Diaz
(410) 786-1235 or Nora Hoban, (410) 786-0675.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments
received timely will be 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 Security Boulevard, Baltimore, Maryland 21244,
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Table of Contents
I. Background
A. Requirements for Updating the Prospective Payment Rates for
Inpatient Rehabilitation Facilities (IRFs)
B. General Overview of the Current IRF PPS
C. Operational Overview of the Current IRF PPS
D. Proposals for FY 2004
II. Requirements and Conditions for Payment Under the IRF PPS
A. Background of Subpart B Provisions
B. Regulatory Background of the 75 Percent Rule
C. CMS Evaluation of the 75 Percent Rule
III. Research to Support Case-Mix Refinements to the IRF PPS
A. Research on IRFs
B. RAND Research Background
C. Data for Continuing Research
D. Staff Time Measurement Data
E. Monitoring
F. Need to Develop Quality Indicators for IRFs
IV. The IRF PPS Patient Assessment Process
A. Background
B. Patient Rights
C. When the IRF-PAI Must Be Completed
D. Transmission of IRF-PAI Data
E. Proposed Revision of the Definition of Discharge
F. Waiver of the Penalty for Transmitting the IRF-PAI Data Late
G. General Information Regarding the IRF-PAI Assessment Process
V. Patient Classification System for the IRF PPS
VI. Proposed Fiscal Year 2004 Federal Prospective Payment Rates
A. Expiration of the IRF PPS Transition Period
B. Description of the Proposed IRF Standardized Payment Amount
C. Proposed Adjustments to Determine the Proposed FY 2004
Standard Payment Conversion Factor
1. IRF Market Basket Index
2. Proposed Area Wage Adjustment
3. Updated Wage Data
4. Proposed Updated Labor-Related Share
5. Proposed Budget Neutral Wage Adjustment Update Methodology
D. Proposed Update of Payment Rates Under the IRF PPS for FY
2004
E. Examples of Computing the Total Proposed Adjusted IRF
Prospective Payments
F. Computing Total Payments Under the IRF PPS for the Transition
Period
G. IRF-specific Wage Data
H. Proposed Adjustment for High-Cost Outliers under the IRF
Prospective Payment System
1. Current Outlier Payment Provision under the IRF PPS
2. Proposed Changes to the IRF Outlier Payment Methodology
3. Proposed Adjustment to IRF Outlier Payments
4. Proposed Change to the Methodology for Calculating the
Federal Prospective Payment Rates
VII. Provisions of the Proposed Rule
VIII. Collection of Information Requirements
IX. Responses to Comments
X. Regulatory Impact Analysis Regulations Text
Addendum--Tables
1--Proposed Relative Weights for Case-Mix Groups (CMGs)
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2--Proposed Fiscal Year 2004 Federal Prospective Payments for Case-
Mix Groups (CMGs)
3A--Proposed Urban Wage Index
3B--Proposed Rural Wage Index
4--Acceptable Impairment Group Codes
5--Acceptable ICD-9-CM Codes
Addendum--Charts
1--Estimates on Compliance With the 75 Percent Rule (2002 Data)
2--Example of Applying The Patient Assessment Instrument Discharge
Assessment and Transmission Dates
3--Excluded Hospital With Capital Input Price Index (FY 1992 and
Proposed FY 1997) Structure and Weights
4--Proposed Excluded Hospital with Capital Input Price Index (FY
1997) Vintage Weights
5--Percent Changes in the 1992-based and proposed 1997-based
Excluded Hospital with Capital Market Baskets, FY 1999-2004
6--Proposed FY 2004 Labor-Related Share Relative Importance
7--Examples of Computing an IRF's Proposed Federal Prospective
Payment
8--Projected Impact of Proposed FY 2004 Update
Appendix
Appendix A--Methodology to Determine Compliance With the 75 Percent
Rule
Appendix B--Inpatient Rehabilitation Facility Patient Privacy Forms
Privacy Act Statement--Health Care Records, Data Collection
Information Summary for Patients in Inpatient Rehabilitation
Facilities
I. Background
A. Requirements for Updating the Prospective Payment Rates for
Inpatient Rehabilitation Facilities (IRFs)
On August 7, 2001, we published a final rule entitled ``Medicare
Program; Prospective Payment System for Inpatient Rehabilitation
Facilities (CMS-1069-F)'' in the Federal Register (66 FR 41316), that
established a PPS for IRFs as authorized under section 1886(j) of the
Act and codified at subpart P of part 412 of the Medicare regulations.
In the August 7, 2001 final rule, we set forth per discharge Federal
prospective payment rates for fiscal year (FY) 2002 that provided
payment for inpatient operating and capital costs of furnishing covered
rehabilitation services (that is, routine, ancillary, and capital
costs) but not costs of approved educational activities, bad debts, and
other services or items that are outside the scope of the IRF PPS. The
provisions of that final rule were effective for cost reporting periods
beginning on or after January 1, 2002. (On July 1, 2002, we also
published a correcting amendment to the final rule (CMS-1069-F2) in the
Federal Register (67 FR 44073). Any reference to the August 7, 2001
final rule in this proposed rule includes the provisions effective in
the correcting amendment.)
Section 1886(j)(5) of the Act and Sec. 412.628 of the regulations
require the Secretary to publish in the Federal Register, on or before
August 1 of the preceding fiscal year, the classifications and
weighting factors for the IRF case-mix groups (CMGs) and a description
of the methodology and data used in computing the prospective payment
rates for the upcoming fiscal year. On August 1, 2002, we published a
notice in the Federal Register (67 FR 49928) to update the IRF Federal
prospective payment rates from FY 2002 to FY 2003 using the methodology
described in Sec. 412.624 of the regulations. As stated in that
notice, we used the same classifications and weighting factors for the
IRF CMGs that were set forth in the August 7, 2001 final rule to update
the IRF Federal prospective payment rates from FY 2002 to FY 2003. The
FY 2003 Federal prospective payment rates are effective for discharges
on or after October 1, 2002 and before October 1, 2003.
In this proposed rule, we are proposing to update the IRF Federal
prospective payment rates from FY 2003 to FY 2004 using the methodology
described in Sec. 412.624 of the regulations. See section VI of this
proposed rule for further discussion of the proposed FY 2004 Federal
prospective payment rates. The proposed FY 2004 Federal prospective
payment rates will be effective for discharges on or after October 1,
2003 and before October 1, 2004.
B. General Overview of the Current IRF PPS
Section 4421 of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-
33), as amended by section 125 of the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), and by
section 305 of the Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (BIPA) (Pub. L. 106-554), provides for the
implementation of a per discharge PPS, through new section 1886(j) of
the Act, for inpatient rehabilitation hospitals and inpatient
rehabilitation units of a hospital (IRFs). Payments under the IRF PPS
encompass inpatient operating and capital costs of furnishing covered
rehabilitation services (that is, routine, ancillary, and capital
costs) but not costs of approved educational activities, bad debts, and
other services or items outside the scope of the IRF PPS. Although a
complete discussion of the IRF PPS provisions appears in the August 7,
2001 final rule (66 FR 41316), we provide below a general description
of the IRF PPS.
The IRF PPS, as described in the August 7, 2001 final rule, uses
Federal prospective payment rates across 100 distinct CMGs. Ninety-five
CMGs were constructed using rehabilitation impairment categories,
functional status (both motor and cognitive), and age (in some cases,
cognitive status and age may not be a factor in defining a CMG). Five
special CMGs were constructed to account for very short stays and for
patients who expire in the IRF.
For each of the CMGs, we developed relative weighting factors to
account for a patient's clinical characteristics and expected resource
needs. Thus, the weighting factors account for the relative difference
in resource use across all CMGs. Within each CMG, the weighting factors
were ``tiered'' based on the estimated effect that the existence of
certain comorbidities have on resource use.
The Federal PPS rates were established using a standardized payment
amount (also referred to as the budget neutral conversion factor in the
August 7, 2001 final rule (66 FR 41364 through 41367)). For each of the
tiers within a CMG, the relative weighting factors were applied to the
budget neutral conversion factor to compute the unadjusted Federal
prospective payment rates. Adjustments that account for geographic
variations in wages (wage index), the percentage of low-income patients
(LIPs), and location in a rural area would be applied to the IRF's
unadjusted Federal prospective payment rates. In addition, adjustments
would be made to account for the early transfer of a patient,
interrupted stays, and high cost outliers.
Lastly, the IRF's final prospective payment amount would be
determined under the transition methodology prescribed in section
1886(j) of the Act. Specifically, for cost reporting periods that began
on or after January 1, 2002 and before October 1, 2002, section
1886(j)(1) of the Act and Sec. 412.626 of the regulations provide that
IRFs transition into the prospective payment systems receiving a
``blended payment.'' For cost reporting periods that began on or after
January 1, 2002 and before October 1, 2002, these blended payments
consisted of 66\2/3\ percent of the Federal IRF PPS rate and 33\1/3\
percent of the payment that the IRF would have been paid had the IRF
PPS not been implemented. However, during the transition period, an IRF
with a cost reporting period beginning on or after January 1, 2002 and
before October 1, 2002 could have elected to bypass this blended
payment
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and be paid 100 percent of the Federal IRF PPS rate. For cost reporting
periods beginning on or after October 1, 2002 (FY 2003), however, the
transition methodology expired, and payments for all IRFs consist of
100 percent of the Federal IRF PPS.
We established a CMS website that contains useful information
regarding the IRF PPS. The website URL is www.cms.hhs.gov/providers/irfpps/default.asp and may be accessed to download or view
publications, software, and other information pertinent to the IRF PPS.
C. Operational Overview of the Current IRF PPS
As described in the August 7, 2001 final rule, upon the admission
and discharge of a Medicare Part A fee-for-service patient, the IRF is
required to complete the appropriate sections of a patient assessment
instrument, the Inpatient Rehabilitation Facility--Patient Assessment
Instrument (IRF-PAI). All required data must be electronically encoded
into the IRF's PAI software product. Generally, the software product
includes patient grouping programming called the GROUPER software. The
GROUPER software uses specific PAI data elements to classify (or group)
the patient into a distinct CMG and account for the existence of any
relevant comorbidities. The GROUPER software produces a 5-digit CMG
number. The first digit is an alpha-character that indicates the
comorbidity tier. The last 4 digits represent the distinct CMG number.
(Free downloads of the Inpatient Rehabilitation Validation and Entry
(IRVEN) software product, including the GROUPER software, are available
at the CMS website at www.cms.hhs.gov/providers/irfpps/default.asp).
Once the patient is discharged, the IRF completes the Medicare
claim (UB-92 or its equivalent) using the 5-digit CMG number and sends
it to the appropriate Medicare fiscal intermediary (FI). (Claims
submitted to Medicare must comply with the electronic claim
requirements contained at www.cms.hhs.gov/providers/edi/default.asp, as
reported in the Health Insurance Portability and Accountability Act
(HIPAA) program claim memoranda issued by CMS and also published at
that web site, and as listed in the addenda to the Medicare
Intermediary Manual, Part 3, section 3600. Instructions for the limited
number of claims submitted to Medicare on paper are located in section
3604 of Part 3 of the Medicare Intermediary Manual.) The Medicare FI
processes the claim through its software system. This software system
includes pricing programming called the PRICER software. The PRICER
software uses the CMG number, along with other specific claim data
elements and provider-specific data, to adjust the IRF's prospective
payment for interrupted stays, transfers, short stays, and deaths and
then applies the applicable adjustments to account for the IRF's wage
index, percentage of LIPs, rural location, and outlier payments.
D. Proposals for FY 2004
In this proposed rule, we are proposing to update the data used to
compute the IRF wage indices. In the August 7, 2001 final rule, we used
FY 1997 acute care hospital wage data to compute the IRF wage indices
for FY 2002. The August 1, 2002 notice that set forth the updated FY
2003 IRF Federal prospective payment rates also used 1997 acute care
hospital wage data to compute the FY 2003 IRF wage indices.
In this proposed rule, we are proposing to update the IRF wage
indices for FY 2004 by using FY 1999 acute care hospital data. We
believe that the FY 1999 acute care hospital data are the best
available because they are currently the most recent complete final
data. However, any adjustments or updates made under section 1886(j)(6)
of the Act must be made in a budget neutral manner. Therefore, in
section VI of this proposed rule, we are proposing a methodology to
update the wage indices for FY 2004 using 1999 acute care hospital data
in a budget neutral manner.
In this proposed rule, we are also proposing to update the
underlying data used to compute the IRF market basket index. As
explained in Appendix D of the August 7, 2001 final rule, we used 1992
cost report data as the underlying data to develop the excluded
hospital with capital market basket that formed the basis of the FY
2002 and FY 2003 IRF market basket index. In section VI of this
proposed rule, we are proposing to use 1997 cost report data, the most
recent data available, to form the basis of the FY 2004 IRF market
basket index.
In section II of this proposed rule, we are proposing to modify or
clarify certain criteria for a hospital or a hospital unit to be
classified as an IRF. As stated in the August 7, 2001 final rule, we
did not change the survey and certification procedures applicable to
entities seeking classification as an IRF. Currently, to be paid under
the IRF PPS, a hospital or unit of a hospital must first be deemed to
be excluded from the diagnosis-related group (DRG)-based acute care
hospital PPS under the general requirements in subpart B of part 412 of
the regulations. Second, the excluded hospital or unit must meet the
conditions for payment under the IRF PPS at Sec. 412.604 of the
regulations.
Lastly, we are proposing, in various sections of this proposed
rule, to modify or clarify existing provisions of the IRF PPS. However,
we are not proposing refinements to the FY 2002 case-mix classification
system (the CMGs and the corresponding relative weights) and the case-
level and facility-level adjustments, due to the lack of available data
to make such changes.
II. Requirements and Conditions for Payment Under the IRF PPS
As issued in the August 7, 2001 final rule, Sec. 412.604
``Conditions for payment under the prospective payment system for
inpatient rehabilitation facilities'' describes the conditions that
must be met for an IRF to be paid under the IRF PPS. Section 412.604(a)
states the general requirements for payment to be made under the IRF
PPS and the effects on Medicare payment if the conditions described
therein are not met. Section 412.604(b) states the existing regulatory
provisions that must be met for a hospital or unit of a hospital to be
excluded from the acute care inpatient hospital PPS and to be
classified as an IRF. Section 412.604(c) requires an IRF to complete a
patient assessment instrument for each Medicare Part A fee-for-service
patient admitted. Section 412.604(d) describes the limitations on IRFs
for charging beneficiaries that receive Medicare covered services.
Section 412.604(e) describes the requirements associated with
furnishing inpatient hospital services directly or under arrangement.
Section 412.604(f) states the reporting and recordkeeping requirements
that IRFs must meet.
In this section of the proposed rule, we describe proposed changes,
if any, to the conditions or underlying requirements of Sec. 412.604.
Section 412.604(a) General Requirements
Under paragraph (a)(2), we propose to change the word ``we'' to
``CMS or its Medicare fiscal intermediary'' to read as follows:
``If an inpatient rehabilitation facility fails to comply fully
with these conditions with respect to inpatient hospital services
furnished to one or more Medicare Part A fee-for-service beneficiaries,
CMS or its Medicare fiscal intermediary may, as appropriate--
(i) Withhold (in full or in part) or reduce Medicare payment to the
inpatient rehabilitation facility until the facility provides adequate
assurances of compliance; or
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(ii) Classify the inpatient rehabilitation facility as an inpatient
hospital that is subject to the conditions of subpart C of this part
and is paid under the prospective payment systems specified in Sec.
412.1(a)(1).''
Section 412.604(b) Inpatient Rehabilitation Facilities Subject to the
Prospective Payment System
Section 412.604(b) states that, ``subject to the special payment
provisions of Sec. 412.22(c), an inpatient rehabilitation facility
must meet the general criteria set forth in Sec. 412.22 and the
criteria to be classified as a rehabilitation hospital or
rehabilitation unit set forth in Sec. 412.23(b), Sec. 412.25, and
Sec. 412.29 for exclusion from the inpatient hospital prospective
payment systems specified in Sec. 412.1(a)(1).'' The general criteria
set forth in Sec. 412.22 and the criteria to be classified as a
rehabilitation hospital or rehabilitation unit set forth in Sec.
412.23(b), Sec. 412.25, and Sec. 412.29 are under subpart B of part
412 of the regulations. In the August 7, 2001 final rule implementing
the IRF PPS, we did not make any changes to the exclusion criteria and
requirements to be classified as an IRF under subpart B of part 412.
Since the implementation of the IRF PPS, a number of questions have
been raised on the application of some of these requirements and the
necessity of other criteria. Below, we will discuss each requirement as
it relates to the classification of an IRF.
A. Background of Subpart B Provisions
Section 601 of the Social Security Amendments of 1983 (Pub. L. 98-
21) added section 1886 to the Act that established a PPS for acute care
inpatient hospital services for cost reporting periods beginning on or
after October 1, 1983. Under section 1886(d)(1)(B) of the Act, several
types of hospitals and units of hospitals are excluded from the
inpatient hospital PPS. Sections 1886(d)(1)(B)(ii) and 1886(d)(1)(B) of
the Act specify that rehabilitation hospitals and rehabilitation units
of hospitals (as defined by the Secretary) are excluded from the
inpatient PPS.
Extensive discussion and public comments on developing the criteria
under which a hospital or unit of a hospital can be excluded from the
inpatient PPS as an IRF began with the September 1, 1983 publication of
the interim final rule with comment period in the Federal Register (48
FR 39752). (That interim final rule discussed the provisions necessary
to implement section 1886 of the Act.) On January 3, 1984, we published
a final rule (49 FR 234) that responded to public comments on the
provisions of the September 1, 1983 interim final rule and established
the initial set of criteria that must be met by a hospital or unit of a
hospital seeking exclusion from the inpatient hospital PPS as an IRF.
Since the publication of these earlier rules, the criteria to be an IRF
have been revised and codified at subpart B of part 412 of the current
Medicare regulations.
Section 412.20 Hospital Services Subject to the Prospective Payment
Systems
In the August 7, 2001 final rule, we added Sec. 412.20(b) stating
that covered inpatient hospital services furnished to Medicare
beneficiaries by a rehabilitation hospital or rehabilitation unit that
meet the conditions of Sec. 412.604 are paid under the PPS described
in subpart P of this part.
In this proposed rule, we are proposing to redesignate current
Sec. 412.20(b) as paragraph (b)(1) of Sec. 412.20 and add paragraph
(b)(2) to ensure that inpatient hospital services will not be paid
under the IRF PPS if the services are paid by a health maintenance
organization (HMO) or competitive medical plan (CMP) that elects not to
have CMS make payments to an IRF for services, which are inpatient
hospital services, furnished to the HMO's or CMP's Medicare enrollees
under part 417 of this chapter. This proposed provision is similar to
the provision at Sec. 412.20(b)(3) that prohibits payments under the
acute care hospital PPS for similar HMO or CMP services.
Section 412.22 Excluded Hospitals and Hospital Units: General Rules
Section 412.22(h) describes the requirements to be a satellite
facility that is excluded from the acute care hospital PPS. The
following describes our proposal to eliminate the provision that limits
the bed size of a satellite IRF.
In the July 30, 1999 Federal Register (64 FR 41540), we revised
Sec. 412.22(h) to require that in order to be excluded from the acute
care hospital inpatient PPS, a satellite of a hospital: (1) Effective
for cost reporting periods beginning on or after October 1, 2002, is
not under the control of the governing body or chief executive officer
of the hospital in which it is located, and furnishes inpatient care
through the use of medical personnel who are not under the control of
the medical staff or chief medical officer of the hospital in which it
is located; (2) must maintain admission and discharge records that are
separately identified from those of the hospital in which it is located
and are readily available; (3) cannot commingle beds with beds of the
hospital in which it is located; (4) must be serviced by the same FI as
the hospital of which it is a part; (5) must be treated as a separate
cost center of the hospital of which it is a part; (6) for cost
reporting and apportionment purposes, must use an accounting system
that properly allocates costs and maintains adequate data to support
the basis of allocation; and (7) must report costs in the cost report
of the hospital of which it is a part, covering the same fiscal period
and using the same method of apportionment as the hospital of which it
is a part. In addition, the satellite facility must independently
comply with the qualifying criteria for exclusion from the acute care
hospital inpatient PPS. Lastly, the total number of State-licensed and
Medicare-certified beds (including those of the satellite facility) for
a hospital (other than a children's hospital) that was excluded from
the acute care hospital inpatient PPS for the most recent cost
reporting period beginning before October 1, 1997, may not exceed the
hospital's number of beds on the last day of that cost reporting
period.
In Sec. 412.22(h)(1), we define a satellite as ``a part of a
hospital that provides inpatient services in a building also used by
another hospital, or in one or more entire buildings located on the
same campus as buildings used by another hospital.'' Satellite
arrangements exist when an existing hospital that is excluded from the
acute care hospital inpatient PPS and that is either a freestanding
hospital or a hospital-within-a-hospital under Sec. 412.22(e) shares
space in a building or on a campus occupied by another hospital in
order to establish an additional location for the excluded hospital.
The July 30, 1999 acute care hospital inpatient PPS final rule (64 FR
41532-41534) includes a detailed discussion of our policies regarding
Medicare payments for satellite facilities of hospitals excluded from
the acute care hospital inpatient PPS.
In accordance with section 1886(b) of the Act, as amended by
sections 4414 and 4416 of Pub. L. 105-33, we established two different
target limits on payments to excluded hospitals, depending upon when
the IRF was established. The target amount limit for an IRF with a cost
reporting period beginning before October 1, 1997 was set at the 75th
percentile of the target amounts of IRFs, as specified in Sec.
413.40(c)(4)(iii), updated to the applicable cost reporting period. For
IRFs with a cost reporting period beginning on or after October 1,
1997, under section 4416 of Pub. L. 105-33, the payment amount for the
hospital's
[[Page 26790]]
first two 12-month cost reporting periods, as specified at Sec.
413.40(f)(2)(ii)(A) and (B), could not exceed 110 percent of the
national median of target amounts of IRFs for cost reporting periods
ending during FY 1996, updated by the hospital market basket increase
percentage to the first cost reporting period in which the IRF receives
payment.
Because we were concerned that a number of pre-1997 excluded
hospitals (including IRFs), governed by Sec. 413.40(c)(4)(iii), would
seek to create satellite arrangements in order to avoid the effect of
the lower payment caps that would apply to new hospitals under Sec.
413.40(f)(2)(ii), we established rules regarding the exclusion of and
payments to satellites of existing facilities. If the number of beds in
the hospital or unit (including both the base hospital or unit and the
satellite location) exceeds the number of State-licensed and Medicare-
certified beds in the hospital or unit on the last day of the
hospital's or unit's last cost reporting period beginning before
October 1, 1997, the facility would be paid under the acute care
hospital inpatient DRG system. Therefore, while an excluded hospital or
unit could ``transfer'' bed capacity from a base facility to a
satellite, if it increased total bed capacity beyond the level it had
in the most recent cost reporting period before October 1, 1997 (see 64
FR 41532-41533, July 30, 1999), the hospital will not be paid as a
hospital excluded from the acute care hospital inpatient PPS. However,
no similar limitation was imposed with respect to the number of total
beds in excluded hospitals and units and satellite facilities of those
excluded hospitals and units established after October 1, 1997, since
those excluded hospitals and units were subject to the lower payment
limits of section 4416 of Pub. L. 105-33, and would, therefore, not
benefit from the higher payment cap on target amounts under Sec.
413.40(c)(4) by creating a satellite facility.
On March 22, 2002, we published a proposed rule in the Federal
Register (67 FR 13416) that set forth the proposed Medicare PPS for
long-term care hospitals (LTCHs). Discussion of the comments received
on that LTCH proposed rule and our responses were published in a final
rule on August 30, 2002 Federal Register (67 FR 55954). Specific
comments received were discussed on page 56013 of the LTCH final rule
that urged us to eliminate the bed-number criteria in Sec.
412.22(h)(2)(i) for pre-1997 IRFs since the applicable PPS is fully
phased in. The rationale for the bed-number criteria provision at Sec.
412.22(h)(2)(i) was the potential for circumventing the PPS by creating
a satellite location that could have their payment based on a higher
TEFRA target amount cap. However, once an IRF's payment under the IRF
PPS does not include a TEFRA-based payment (referred to as the
facility-specific payment under the transition period described in
Sec. 412.626) and is based on 100 percent of the Federal prospective
payment rate, we believe that the need for the bed-number criteria does
not exist because IRF prospective payments will be the same regardless
of when the IRF was established. Because all IRFs will be paid 100
percent of the proposed FY 2004 Federal prospective payment rates, we
are proposing to eliminate the bed-number criteria by amending Sec.
412.22(h) for freestanding satellite IRFs. We are also proposing to
eliminate the bed-number criteria for IRF satellite units of a hospital
by amending Sec. 412.25(e) to conform with the proposed change in
Sec. 412.22(h).
Section 412.23 Excluded Hospitals: Classifications
Classification as an IRF--``The 75 Percent Rule''
Under the Sec. 412.23(b)(2) of the regulations, a facility may be
classified as an IRF if it can show that during its most recent 12-
month cost reporting period it served an inpatient population of whom
at least 75 percent required intensive rehabilitation services for the
treatment of one or more of the following conditions:
1. Stroke.
2. Spinal cord injury.
3. Congenital deformity.
4. Amputation.
5. Major multiple trauma.
6. Fracture of femur (hip fracture).
7. Brain injury.
8. Polyarthritis, including rheumatoid arthritis.
9. Neurological disorders, including multiple sclerosis, motor
neuron diseases, polyneuropathy, muscular dystrophy, and Parkinson's
disease.
10. Burns.
Under Sec. 412.604(b), the requirement at Sec. 412.23(b)(2) must
be met as one of the conditions for payment under the IRF PPS. However,
even before the implementation of the IRF PPS, the rehabilitation
industry expressed an interest in having CMS re-examine the regulatory
criteria used to determine the classification of a unit or hospital as
an IRF. Recently this interest has focused on the regulatory
requirement at Sec. 412.23(b)(2) commonly known as the ``75 Percent
Rule.''
B. Regulatory Background of the 75 Percent Rule
We initially stipulated the ``75 percent'' requirement in the
September 1, 1983, interim final rule with comment period entitled
``Medicare Program; Prospective Payments for Medicare Inpatient
Hospital Services'' (48 FR 39752). That rule implemented the Social
Security Amendments of 1983 (Pub. L. 98-21), changing the method of
payment for inpatient hospital services from a cost-based,
retrospective reimbursement system to a diagnosis specific PPS.
However, the rule stipulated that in accordance with sections
1886(d)(1)(B) and 1886(d)(1)(B)(ii) of the Act both a rehabilitation
unit, which is a distinct part of a hospital, and a rehabilitation
hospital were excluded from the inpatient hospital PPS. We noted that
sections 1886(d)(1)(B) and 1886(d)(1)(B)(ii) of the Act also gave the
Secretary discretion in defining what is a ``rehabilitation unit'' and
a ``rehabilitation hospital.''
In order to define a rehabilitation hospital we consulted with the
Joint Commission on Accreditation of Hospitals (JCAH), and other
accrediting organizations. (JCAH is currently known as the Joint
Commission on Accreditation of Hospital Organizations.) The criteria we
included in our definition of a rehabilitation hospital incorporated
some of the accreditation requirements of these organizations. The
definition also included other criteria, which we believed
distinguished a rehabilitation hospital from a hospital that furnished
general medical and surgical services as well as some rehabilitation
services. One criterion was that ``The hospital must be primarily
engaged in furnishing intensive rehabilitation services as demonstrated
by patient medical records showing that, during the hospital's most
recently completed 12-month cost reporting period, at least 75 percent
of the hospital's inpatients were treated for one or more conditions
specified in these regulations that typically require intensive
inpatient rehabilitation.'' (48 FR 39756) This requirement was
originally specified in Sec. 405.471(c)(2)(ii) of the regulations. We
included this requirement, as a defining feature of a rehabilitation
hospital, because we believed ``that examining the types of conditions
for which a hospital's inpatients are treated, and the proportion of
patients treated for conditions that typically require intensive
inpatient rehabilitation, will help distinguish those hospitals in
which the provisions of rehabilitation
[[Page 26791]]
services is a primary, rather than a secondary, goal.'' (48 FR 39756)
Using a similar line of reasoning, we made compliance with the 75
percent rule one of the characteristics that defined a rehabilitation
unit.
The original medical conditions specified in Sec.
405.471(c)(2)(ii) were stroke, spinal cord injury, congenital
deformity, amputation, major multiple trauma, fracture of femur (hip
fracture), brain injury, and polyarthritis, including rheumatoid
arthritis. This list of 8 medical conditions was partly based upon the
information contained in a document entitled ``Sample Screening
Criteria for Review of Admissions to Comprehensive Medical
Rehabilitation Hospitals/Units.'' This document was a product of the
Committee on Rehabilitation Criteria for PSRO of the American Academy
of Physical Medicine and Rehabilitation and the American Congress of
Rehabilitation Medicine. In addition, we received input from with the
National Association of Rehabilitation Facilities, and the American
Hospital Association.
On January 3, 1984, we published a final rule entitled ``Medicare
Program; Prospective Payment for Medicare Inpatient Hospital Services''
(49 FR 234). On page 240 of that final rule, we summarized comments
that requested inclusion of neurological disorders, burns, chronic
pain, pulmonary disorders, and cardiac disorders in the 75 percent
rule's list of medical conditions. Our analysis of these comments led
us to agree that neurological disorders (including multiple sclerosis,
motor neuron diseases, polyneuropathy, muscular dystrophy, and
Parkinson's disease) and burns should be added to the 75 percent rule's
original list of 8 medical conditions. (49 FR 240) We did not agree
with comments that we lower from 75 to 60 the percentage of patients
that must meet one of the medical conditions. Nor did we agree with
comments urging us to use IRF resource consumption, instead of a
percentage of patients that must have one or more of the specified
medical conditions, to help define what is an IRF. (49 FR 239-240) We
also rejected suggestions, which proposed that when an IRF could not
meet the 75 percent rule the facility could still be defined as an IRF
based on the types of services it furnished.
On August 31, 1984, we published a final rule entitled ``Medicare
Program; Changes to the Inpatient Hospital Prospective Payment System
and Fiscal Year 1985 Rates'' (49 FR 34728). In that rule we explained
how the 75 percent rule applied to a new rehabilitation unit or
rehabilitation hospital, or when a rehabilitation unit wanted to expand
its size by adding beds.
On March 29, 1985, we published a final rule entitled ``Medicare
Program; Prospective Payment System for Hospital Inpatient Services;
Redesignation of Rules'' (50 FR 12740). That rule redesignated
provisions of Sec. 405.471 that addressed the 75 percent rule into
Sec. 412.23.
On August 30, 1991, we published a final rule entitled ``Medicare
Program; Changes to the Inpatient Hospital Prospective Payment System
and Fiscal Year 1992 Rates'' (56 FR 43196). Since October 1, 1983, the
regulations allowed a new rehabilitation hospital or new rehabilitation
unit, or an existing excluded rehabilitation unit which was to be
expanded by the addition of new beds, to be excluded from the acute
care PPS if, in addition to meeting other requirements, it submitted a
written certification that during its first cost reporting period it
would be in compliance with the 75 percent rule. The August 30, 1991,
rule specified that if these facilities were later found to have not
complied with the 75 percent rule CMS would determine the amount of
actual payment under the exclusion, compute what we would have paid for
the facility's services to Medicare patients under the acute care
hospital PPS, and recover any difference in accordance with the rules
on the recoupment of overpayments.
On September 1, 1992, we published a final rule entitled ``Medicare
Program; Changes to Hospital Inpatient Prospective Payment Systems and
Fiscal Year 1993 Rates'' (57 FR 39746). In the rule we acknowledged
that, for various reasons, a new rehabilitation hospital or a new
rehabilitation unit might need to begin operations at some time other
than at the start of its regular cost reporting period. Therefore, we
specified such an IRF could submit a written certification that it
would comply with the 75 percent rule for both a partial cost reporting
period of up to 11 months, as well as the subsequent full 12-month cost
reporting period.
On September 1, 1994, we published a final rule entitled ``Medicare
Program; Changes to the Hospital Inpatient Prospective Payment Systems
and FY 1995 Rates'' (59 FR 45330). In that rule, we stated that we had
miscellaneous comments requesting that oncology cases, pulmonary
disorders, cardiac disorders, and chronic pain be added to the 75
percent rule's list of medical conditions. (59 FR 45393) We responded
that although the 75 percent rule had not been addressed in the
associated May 27, 1994, proposed rule we would take these
miscellaneous comments into consideration if we decided to make changes
to the 75 percent rule.
When we published the August 7, 2001 final rule (66 FR 41316), we
acknowledged we had received comments requesting that we update the 75
percent rule's list of medical conditions, or eliminate the 75 percent
rule. (66 FR 41321) We responded that in our IRF PPS proposed rule we
had not proposed changing the 75 percent rule, believed that the
existing 75 percent rule was appropriate, and, therefore, would not be
revising the 75 percent rule. However, we also stated that data
obtained after we implemented the IRF PPS could lead us to reconsider
revising the 75 percent rule.
C. CMS Evaluation of the 75 Percent Rule
In the spring of 2002 we surveyed the fiscal intermediaries (FIs)
in order to ascertain what methods were being used to verify if IRFs
were complying with the 75 percent rule. Analysis of the survey data
made us aware that inconsistent methods were being used to determine if
an IRF was in compliance with the 75 percent rule, and that some IRFs
were not being reviewed to determine if they were in compliance with
the 75 percent rule. These survey results led us to become concerned
that some IRFs may be out of compliance with the regulations. In
addition, we were concerned that some FIs might be using methods to
verify compliance with the 75 percent rule, which may cause an IRF to
incorrectly be found out of compliance with the rule; this would thus
cause an IRF to inappropriately lose its classification as an IRF.
Therefore, on June 7, 2002, we suspended enforcement of the 75 percent
rule until we conducted a careful examination of this area and
determined whether changes were needed to the regulation, and the
operating procedures that govern how compliance with the regulation is
verified.
In addition to our review of FI administrative procedures, we
conducted an analysis of CMS administrative data to attempt to estimate
overall compliance with the regulation. We examined both IRF-PAI data
and claims from the years 1998, 1999, and 2002. Before discussing the
results of this analysis, we note that the data does have some
limitations. First, it is not possible to discern from the diagnosis
data on the IRF-PAI or the claim whether or not there was a medical
need to furnish the patient ``intensive rehabilitation.'' The diagnosis
is a determination of a
[[Page 26792]]
patient's clinical status, but that is different from determining that
there is a medical necessity to furnish treatment to a patient in an
IRF as opposed to another type of treatment setting. In addition, it
was not possible in many cases to map the diagnosis code on the claim
data to one of the ten medical conditions listed in Sec. 412.23(b)
because a large percentage of claims have an ICD-9-CM diagnosis code
that is a general code indicating only care involving the use of
rehabilitation procedures instead of a specific diagnosis.
Chart 1 ``Estimates of Compliance with the 75 Percent Rule'' below
shows the estimated percent of facilities with 75 percent of cases
falling into the 10 conditions (13.35 percent) using 2002 available
patient assessment data. Appendix A provides the technical detail
regarding the method used to determine the percent of IRFs in calendar
year 2002 that complied with the 75 percent rule. We believe our
findings may tend to undercount cases falling within the 10 conditions
because the IRF-PAI assessment process was first implemented during
2002. We believe that learning the IRF-PAI assessment process probably
resulted in IRFs erring when coding the impairment group on the IRF-PAI
assessment form. Nevertheless, we believe the analysis is useful for
providing an estimate of the overall compliance with this regulatory
requirement. Our findings showed that overall about 50 percent of cases
fall within the 10 conditions specified in the rule and the number of
facilities meeting the requirement based upon Medicare discharges
rather than all discharges is very low. In addition, it shows the
estimated percent of facilities that meet lower thresholds. Finally,
our analysis also found that a facility's Medicare case mix was a good
predictor of case mix for non-Medicare IRF patients.
BILLING CODE 4120-01-P
[GRAPHIC][TIFF OMITTED]TP16MY03.006
[[Page 26793]]
[GRAPHIC][TIFF OMITTED]TP16MY03.007
BILLING CODE 4120-01-C
While our estimate of compliance with the 75 percent rule is
somewhat limited by the data available, we do believe it clearly
demonstrates low compliance of the 75 percent rule by IRFs. Though IRFs
are now paid under a PPS, the 75 percent rule still serves the relevant
function of distinguishing IRFs from other types of inpatient
facilities, thus facilitating compliance with sections 1886(d)(1)(B)
and 1886(d)(1)(B)(ii) of the Act. Making this distinction is also
critical to fulfilling the requirements of section
[[Page 26794]]
1886(j)(1)(A), which requires Medicare to make payments to IRFs under a
PPS specifically designed for the services they furnish. Specifically,
the 75 percent rule has the effect of limiting the type of patient that
can be cared for in facilities identified as IRFs. This limitation
serves to ensure that only patients requiring this type of specialized
and more expensive care receive it. The medical conditions listed in
the 75 percent rule are conditions in which patients require the
services of rehabilitation professionals with specialized skills and
experiences that may not be available in other settings.
The largest group of patients treated in rehabilitation hospitals
but not considered in this analysis to meet the 75 percent rule is
patients with major joint replacements, specifically knee and hip
replacements. Joint replacement patients have been more commonly
admitted to rehabilitation hospitals in some areas of the country, and
nationally, less than one quarter of Medicare beneficiaries are
admitted to IRFs after surgery. Although some joint replacement
patients may have ``polyarthritis,'' or another of the ten conditions
specified in the 75 percent rule requiring intensive inpatient
rehabilitation, these cases were generally not counted towards a
facility's compliance with the 75 percent rule. Provider
representatives also have requested that conditions classified into the
cardiac and pulmonary RICs be added to the list of conditions in the 75
percent rule. These two RICs currently represent about 8 percent of
beneficiaries serviced in IRFs using the 2002 patient assessment data.
We note that many private insurers do not cover acute inpatient
rehabilitation care (in IRFs) for many of these patients whose
rehabilitation needs can be met in an alternative setting such as a
skilled nursing facility. We request comments on any conditions that
necessitate the intensive, multidisciplinary care that IRFs are
required to provide.
As mentioned previously, we surveyed the FIs to determine the
methods they were using to verify compliance with the 75 percent rule.
Our analysis of that survey data led us to suspend enforcement of the
75 percent rule. The process for determining compliance with the 75
percent rule needs to be improved. However, we believe that currently
there is no need to amend the regulation because it still appropriately
functions to help distinguish an IRF from other types of inpatient
treatment settings. We will instead be improving the method FIs use to
verify compliance with the 75 percent rule, and ensuring that FIs are
consistent in how they verify compliance with the 75 percent rule.
When we suspended enforcement of the 75 percent rule we specified
that the suspension of enforcement was not applicable to a facility
that was first seeking classification as an IRF in accordance with
Sec. 412.23(b)(8) or Sec. 412.30(b)(2). A facility first seeking
classification as an IRF in accordance with Sec. 412.23(b)(8) or Sec.
412.30(b)(2) only has to self-attest that during its next full 12-month
cost reporting period it will meet the 75 percent rule. Accordingly, a
facility first seeking classification as an IRF in accordance with
Sec. 412.23(b)(8) or Sec. 412.30(b)(2) has never had an FI verify
that its patient population actually met the 75 percent rule. Until the
medical conditions of this facility's patient population have been
evaluated this facility has not proven that for at least one full 12-
month cost reporting period it complied with the 75 percent rule and
was appropriately classified as an IRF. Therefore, until a facility had
proven that it qualified to be classified as an IRF because its patient
population actually met the 75 percent rule it could not be eligible
for suspension of enforcement of the 75 percent rule.
We will be instructing FIs to re-institute appropriate enforcement
action if a FI determines that an IRF has not met the 75 percent rule.
We realize that an IRF may need time to come into compliance with the
75 percent rule. An IRF's cost reporting period is the time period used
to ascertain compliance with the 75 percent rule. Therefore, we will be
instructing the FIs that the FI must use cost reporting periods that
begin on or after October 1, 2003, as the time period to ascertain an
IRF's compliance with the 75 percent rule.
While this proposed rule does not propose changes to the
regulations related to the 75 percent rule, we expect that improved
enforcement and compliance with the existing rule will have varying
impacts on providers and beneficiaries.
Our analysis, detailed earlier in this section, indicates that
approximately 50 percent of cases being cared for in IRFs fall outside
of the ten conditions listed in the regulations. In addition, it
estimates that potentially 86 percent of IRFs may currently be out of
compliance. We again note that this analysis is based on Medicare
administrative data (claims and patient assessments) rather than
detailed medical record data and, thus, is limited in its ability to
accurately classify all patients into one or more of the ten conditions
cited in the regulations. Thus, we would expect our estimates of
compliance to be higher if more detailed information from the medical
records were available to perform the analysis.
We also know from the data that cases observed in IRFs that do not
fall in one of the ten conditions have, on the average, lower lengths
of stay than those cases that fall into one of the ten conditions.
Specifically, the cases that do not fall into one of the ten conditions
(approximately 50 percent) account for approximately 40 percent of the
Medicare covered days. Conversely, 60 percent of the Medicare covered
days fall into one of the ten conditions.
While it is difficult to predict the aggregate impact of improved
compliance on provider revenues, we expect that IRFs and/or their
parent hospitals (80 percent of IRFs are units of acute care hospitals)
will change their behavior in a variety of ways. IRFs may change
admission practices to alter their case mix, either Medicare or total
patient population, by admitting patients with more intensive
rehabilitative needs that fall into the ten conditions. This could have
the effect of elevating the facility's revenues because cases requiring
more intensive rehabilitation care generally receive higher Medicare
payments than less complex cases.
For example, in each of the three years of data examined, lower
extremity joint replacements contained by far the largest number of
cases not in the ten conditions (44 percent in 2002). Other conditions
included cardiac (10.3 percent), pulmonary (4.8 percent) and pain (4.1
percent). IRFs specializing in or treating a significant number of such
cases may have to alter their admissions practice to achieve
compliance. Treating fewer joint replacement cases (that result in
relatively low payments under the IRF PPS) with cases requiring more
intensive treatment could actually increase a facility's revenues.
Conversely, some IRFs may not be able to find such cases and may be
required to reduce capacity and serve fewer patients in order to
achieve compliance, an action that may have the effect of lowering a
facility's revenues. Since compliance with the 75 percent rule could be
achieved with changes in admission practices for Medicare as well as
non-Medicare patients, the impact on Medicare revenues may vary.
The current regulation reflects the fact that a significant number
(up to 25 percent) of medically necessary admissions may fall outside
of the ten conditions. These cases can continue to be admitted and
treated under the regulation. Other cases may appropriately receive
rehabilitative care in alternative settings. For certain medically
complex cases, it may be
[[Page 26795]]
appropriate to lengthen the patient's stay in an acute care setting in
order to stabilize their condition to prepare the patient to
participate in rehabilitation. Alternative settings for rehabilitative
care could include the acute care hospital, skilled nursing facilities,
long-term care hospitals, outpatient rehabilitation, and home health
care. For this reason, we do not expect to see reduced access to care
for Medicare beneficiaries as a result of improved compliance. In
addition, because many hospitals having a Medicare certified IRF unit
also have one or more other subunits that provide rehabilitation,
revenues from these cases may be generated elsewhere within the same
hospital.
We have developed a case study (below) to illustrate the
differences in Medicare payment for cases that do not fall into one of
the ten conditions included in the 75 percent rule. As discussed above,
this type of case could be treated in an alternative setting. For this
example, we detail Medicare payment amounts for rehabilitation care in
four alternative settings (skilled nursing facility, home health, long
term care hospital, and outpatient rehabilitation). As noted above, 80
percent of IRFs are units of hospitals. These hospitals may now choose
to direct some patients to other settings. As explained above, it is
difficult to predict the approach any individual or group of IRFs will
follow in achieving compliance with this regulation, however, the case
study illustrates some of the potential Medicare payment effects
associated with providing similar levels of rehabilitation in different
settings.
Case Example
The following case example has been developed to illustrate the
payments under Medicare for levels of rehabilitative care received in
the various settings that may be a part of a hospital complex for a
patient that has a primary diagnosis of a lower extremity joint
replacement. The following case example describes one of the most
common patient conditions (not included in the 75 percent rule) but is
not meant to describe all possible conditions and their related payment
effects. The payments for each PPS described in the example are based
on case weights and standardized payment rates for 2003.
The clinical description of the case example is as follows:
A 74-year-old woman status post a right total knee arthroplasty
(TKA), with a wound infection, fever, and high white blood count are
noted on her second postoperative day. A work-up indicates the
existence of staphylococcus aureus septicemia. Patient lacks full
extension and has only 65 degrees of flexion on her third post-
operative day. The management options for this patient include:
extension of acute care length of stay; transfer to a long term care
hospital; admission to a skilled nursing facility; possibly home
health services or outpatient services.
Under the IRF PPS, this patient would be classified into case-mix
group 804 (lower extremity joint replacement with some functional
capabilities) with an average length of stay of 14 days. Furthermore,
the existence of staphylococcus aureus septicemia, a comorbid condition
(ICD-9-CM code 038.11), would place this patient into the tier 2
payment category. The corresponding 2003 unadjusted payment amount for
this patient would be $10,828.60.
Under the skilled nursing facility (SNF) PPS, this patient is
classified into either the very high (RVB) or ultra high (RUB)
rehabilitation group based on the hours of therapy she receives per
week. We believe that this patient would have a length of stay in the
SNF of either 14 days or 20 days. The corresponding 2003 unadjusted
payment amount for this patient would be $4,446.82 for RVB and 14 days,
$6,670.23 for RVB and 20 days, $6,352.60 for RUB and 14 days, or
$7,672.40 for RUB and 20 days.
Under the long-term care hospital PPS, this patient would be
classified into patient group 238 and would have a length of stay of
either 14 days or 24 or more days. The corresponding 2003 unadjusted
payment amount for this patient would be $17,671.22 for 14 days or
$28,296.21 for 24 or more days.
Under the home health PPS, this patient would be placed into the
High/High/Moderate group. The corresponding 2003 unadjusted payment
amount for this patient would be $5,165.26 for home health services
delivered for a 60-day period.
Under outpatient therapy, assuming 2 hours of physical therapy and
1 hour of occupational therapy given during 12 days, payment for this
patient would be $4,108.16
If the patient remained in the original surgical acute care
hospital stay, under the inpatient acute care hospital PPS this patient
would be classified in to DRG 209 and payment at the 50th percentile
would be $9,047.36. This illustrative example shows that this facility
may have lower payments for the care of this patient relative to the
IRF PPS payment if this patient is cared for in an SNF or receives home
health or outpatient services. However, the facility may have higher
payments relative to the IRF PPS payment if this patient is placed in a
long-term care hospital unit. Overall, the example does show that this
facility could continue to receive Medicare payments for this type of
patient in a setting other than their IRF unit, and have the option of
changing its IRF admitting practices without any potential negative
effect on patient access to rehabilitative care. However, we invite
public comment of this issue.
Section 412.29 Excluded Rehabilitation Units: Additional Requirements
Under Sec. 412.29(a), an IRF unit must have met either the
requirements for new units or converted units under Sec. 412.30.
Section 412.29(a)(2) contains an incorrect reference to the
requirements for converted units as ``Sec. 412.30(b).'' The correct
reference to the requirements for converted units is Sec. 412.30(c).
Accordingly, we are proposing to make a technical correction by
changing the reference in paragraph (a)(2) to state ``Converted units
under Sec. 412.30(c).''
Section 412.30 Exclusion of New Rehabilitation Units and Expansion of
Units Already Excluded
Under Sec. 412.30(b)(2), a hospital that seeks exclusion of a new
IRF unit may provide written certification that the inpatient
population the hospital intends the unit to serve meets the
requirements of Sec. 412.23(b)(2). Section 412.30(b)(3) contains an
incorrect reference to the required written certification described in
``(a)(2)'' of this section. The correct reference to the written
certification is described in paragraph (2) of Sec. 412.30(b).
Accordingly, we are proposing to make a technical correction by
changing the current reference to Sec. 412.23(a)(2) in Sec.
412.23(b)(3) to state ``The written certification described in
paragraph (b)(2) * * *''.
Section 412.30(d)(1) defines new bed capacity for the purposes of
expanding an existing excluded IRF unit. Section 412.30(d)(2)(i)
contains an incorrect reference to the definition of new bed capacity
under paragraph ``(c)(1)'' of this section. The correct reference to
the definition of new bed capacity is paragraph (d)(1). Accordingly, we
are proposing a technical correction to change the current reference to
paragraph (c)(1) in paragraph (d)(2)(i) to state ``* * * under
paragraph (d)(1) of this section.''
[[Page 26796]]
III. Research To Support Case-Mix Refinements to the IRF PPS
A. Research on IRFs
As described in the August 7, 2001 final rule, we contracted with
the RAND Corporation (RAND) to analyze IRF data to support our efforts
in developing the CMG patient classification system and the IRF PPS. As
discussed below, we are continuing our contract with RAND to support us
in developing refinements to the classification and PPS, and in
developing a system to monitor the effects of the IRF PPS. In addition,
under a separate contract, we are developing and defining measures to
monitor the quality of care and services provided to Medicare
beneficiaries receiving care in an IRF.
B. RAND Research Background
In 1995, the RAND Corporation (RAND) began extensive CMS-sponsored
research to assist us in developing a per-discharge based inpatient
rehabilitation PPS model using patient classification system known as
Functional Independence Measures-Functional Related Groups (FIM-FRGs)
using 1994 data. Initial results of RAND's earliest research were
revealed in September 1997 and are contained in two reports available
through the National Technical Information Service (NTIS). The reports
are entitled ``Classification System for Inpatient Rehabilitation
Patients--A Review and Proposed Revisions to the Functional
Independence Measure-Function Related Groups,'' NTIS order number PB98-
105992INZ; and ``Prospective Payment System for Inpatient
Rehabilitation,'' NTIS order number PB98-106024INZ.
In summarizing these reports, RAND found in the research based on
1994 data that, with limitations, the FIM-FRGs were effective
predictors of resource use based on the proxy measurement: length of
stay. FRGs based upon FIM motor score, cognitive scores, and age
remained stable over time. Researchers at RAND developed, examined, and
evaluated a model payment system based upon FIM-FRG classifications
that explains approximately 50 percent of patient costs and
approximately 60 percent to 65 percent of the costs at the facility
level. Based on this earlier analysis, RAND concluded that an IRF PPS
using this model is feasible.
In July 1999, we contracted with RAND to update the earlier study.
The update used their earlier research and included an analysis of FIM
data, the FRGs, and the model rehabilitation PPS using more recent data
from a greater number of IRFs. The purpose of updating the earlier
research was to develop the underlying data necessary to support the
Medicare IRF PPS based on case-mix groups for the proposed rule. RAND
expanded the scope of their earlier research to include the examination
of several payment elements, such as comorbidities, facility-level
adjustments, and implementation issues, including evaluation and
monitoring. This research was used in our development of the IRF PPS.
RAND issued a report on its research which can be found on our Web site
at http:cms.hhs.gov/providers/irfpps/research.asp.
C. Continuing Research
RAND's data efforts over the past year were concentrated on
archiving data from the first phase of the project, constructing the
analytic files for monitoring special studies, and preparing for post-
IRF data that will be used for monitoring and for refinement. RAND's
monitoring effort seeks to measure changes in IRF, post-IRF, and post-
acute care after implementation of the IRF PPS. The refinement effort
necessitates that the methods used to create the initial set of CMGs
weights, and facility adjustments be applied to more recent IRF data.
Section 125(b) of the BBRA provides that the Secretary shall
conduct a study of the impact on utilization and beneficiary access to
services of the implementation of the IRF prospective payment system. A
report on the study must be submitted to the Congress not later than 3
years after the date the IRF prospective payment system is first
implemented. Accordingly, to continue RAND's research, data from other
health care settings are needed to assess the impact on utilization and
beneficiary access to services because the IRF PPS can have an impact
among other settings that deliver rehabilitative services. If we only
analyzed data from IRFs, our assessment of utilization and access would
not be complete. In addition to the data obtained from the IRF Medicare
claims, functional measures from the IRF PAI, and cost reports, other
data are required that shows the utilization and access of
rehabilitative services delivered in other settings, such as skilled
nursing facilities, long-term care facilities, home health agencies,
and outpatient rehabilitation facilities. Analysis of these data may
show changes in utilization of inpatient rehabilitation services and if
the types or severity of patients treated in IRFs differs significantly
from the data used to create the CMGs, case-mix refinements may be
needed.
In the next phase of their research, RAND will be developing and
testing possible improvements to the payment system using existing
data. This analysis will focus on potential improvements to the methods
used to establish the CMGs, facility adjustments (such as teaching,
rural, and low-income adjustments), and comorbidities.
In constructing the CMGs for the IRF PPS, one of our primary goals
was to create payments that would match payment to resource use as
closely as possible. It is important to continue to examine the IRF PPS
to ensure that the system remains a good predictor of resource use over
time. Further, more complete data will be available in which we can
assess the reliability and validity of the IRF PPS. We also expect
improvements with certain data elements. For example, prior to
implementation of the IRF PPS, IRFs were not required to code
comorbidities. As a result of implementing the IRF PPS, we expect that
IRFs will improve coding comorbidities because they may affect their
payment amount. These improved data will allow us to determine the
effects various conditions have on the cost of a case.
RAND will use post-IRF PPS data when it becomes available, as well
as existing data to support their research. RAND research includes:
analyses of methodological improvements in the creation of CMGs,
methodological improvements to the statistical approaches used to
derive payment adjustments and characterizing IRFs into groups based on
their case mix. As mentioned in Section I of this proposed rule,
currently, RAND does not have enough post-IRF PPS data to analyze
potential modifications to the classification and payment systems.
Further, we will need a sufficient amount of these data to be able to
determine our future refinements, if any are needed. Because IRFs began
to be paid under the IRF PPS based on their cost report start date that
occurred on or after January 1, 2002, sufficient data will not be
available for those facilities whose cost report start date occurs
later in the calendar year. Therefore, in this proposed rule, we are
not proposing to change the CMG classification system or the facility
level and case level adjustments, other than the wage adjustment. The
proposed changes for the wage adjustment are discussed in detail in
Section VI of this proposed rule.
D. Staff Time Measurement Data
As described in the August 7, 2001 final rule, we contracted with
Aspen Systems Corporation (ASPEN) to collect
[[Page 26797]]
actual resource use or staff time measurement (STM) data in a sample of
IRFs. Data were collected using the MDS-PAC patient assessment
instrument. FIM data were collected at the same time. We believe that
these data that measure actual nursing and therapy time spent on
patient care may be used to enhance our ability to refine the CMGs.
RAND received ASPEN's analytical database in early spring 2002.
After a brief period of working with the data, RAND discovered that
their study required details that were not in this summary database.
Specifically, about half of the cases within the analytic database had
data for only the first part of the patient's stay. RAND needed to have
data on how staff time use changed during the stay and the analytic
database contained only the averages of the observed portions of the
patient's stay. RAND needed data on patients during the second part of
their stay.
In late July 2002, RAND received the backup data, but did not
assess it until late August 2002. Further technical questions about the
data still exist and must be answered before the modeling of the data
can occur.
E. Monitoring
A greater part of the ongoing work to be performed by RAND is an
analysis to develop a potential system of indicators to monitor the
impact and performance of the IRF PPS. As part of their analysis, RAND
will case-mix adjust these measures and distinguish between those that
will track the direct impact of PPS on IRFs and IRF patients, and those
that will track changes in the pool of potential IRF patients. We
anticipate that RAND will develop a set of possible indicators needed
to monitor the IRF PPS, develop potential access to care models and
measures, and define a possible measure of outcomes.
F. Need To Develop Quality Indicators for IRFs
The IRF-PAI is the data collection instrument for IRFs. It contains
a blend of FIM items and proposed quality and medical needs questions.
These quality and medical needs questions (which are currently
collected on a voluntary basis) may need to be modified to encapsulate
those data necessary for calculation of a quality indicator. One of the
primary tasks of the RAND contract is to identify quality indicators
pertinent to the inpatient rehabilitation setting and determine what
information is necessary to calculate those quality indicators. These
tasks include reviewing literature and other sources for existing
rehabilitation quality indicators. It also involves identifying
organizations involved in measuring or monitoring quality of care in
the inpatient rehabilitation setting. RAND will convene a technical
expert panel to identify a series of quality indicators that can be
measured using the IRF-PAI. In addition, quality indicators and data
elements must be developed for calculation as well as the independent
testing of the developed indicators.
IV. The IRF PPS Patient Assessment Process
A. Background
On August 7, 2001, we published the IRF PPS final rule (66 FR
41316), which described how the IRF would use the IRF Patient
Assessment Instrument (PAI) to assess an IRF patient. During the fall
of 2001, we conducted training on the IRF-PAI assessment process. The
training was held in the cities of Baltimore, Maryland, Chicago,
Illinois, San Francisco, California, and Atlanta, Georgia. The training
was videotaped. During the training sessions we stated that any IRF
could obtain the videotapes free of charge. In addition, we stated on
the CMS IRF PPS website that any IRF could obtain copies of the
videotapes. The IRS-PAI manual, which contains detailed instructions
regarding the completion of the IRS-PAI, is also available on the CMS
IRF PPS website.
B. Patient Rights
Section 412.608 specifies that prior to performing the IRS-PAI
assessment, the IRF must inform the patient of the rights contained in
this section. The rights specified in Sec. 412.608 are as follows:
(1) The right to be informed of the purpose of the collection of
the patient assessment data;
(2) The right to have the patient assessment information collected
be kept confidential and secure;
(3) The right to be informed that the patient assessment
information will not be disclosed to others, except for legitimate
purposes allowed by the Federal Privacy Act and Federal and State
regulations;
(4) The right to refuse to answer patient assessment questions; and
(5) The right to see, review, and request changes on his or her
patient assessment.
In addition to the rights specified in Sec. 412.608, a patient has
privacy rights under the Privacy Act of 1974 (5 U.S.C. Sec.
552a(e)(3)), and 45 CFR 5b.4(a)(3). The Privacy Act and 45 CFR
5b.4(a)(3) require that an individual be informed under what authority,
and for what purpose, individually identifiable information is being
collected by a Federal agency and maintained in a system of records. In
order to ensure compliance with the Privacy Act of 1974, and 45 CFR
5b.4(a)(3), we are proposing that prior to performing the IRS-PAI
assessment an IRF clinician must give to each Medicare inpatient two
forms. We have published these forms in Appendix B of this proposed
rule. In addition, we are proposing that the form entitled ``Privacy
Act Statement--Health Care Records'' is a detailed description of the
patient's privacy rights under the Privacy Act of 1974. Also, we are
proposing that the form entitled ``Data Collection Information Summary
for Patients in Inpatient Rehabilitation Facilities'' is the simplified
plain language description of the Privacy Act Statement--Health Care
Records. Additionally, we are proposing that by giving both of these
forms to the patient before beginning the IRS-PAI assessment, the IRF
would fulfill the requirement that the patient be informed of the five
rights specified in Sec. 412.608. Accordingly we are proposing to
amend Sec. 412.608 to read as follows:
Patient's rights regarding the collection of patient assessment
data.
(a) Before performing an assessment using the inpatient
rehabilitation facility patient assessment instrument, a clinician of
the inpatient rehabilitation facility must give a Medicare inpatient
each of these forms--
(1) The form entitled ``Privacy Act Statement--Health Care
Records;'' and
(2) The simplified plain language description of the Privacy Act
Statement--Health Care Records which is a form entitled ``Data
Collection Information Summary for Patients in Inpatient Rehabilitation
Facilities.''
(b) The inpatient rehabilitation facility must document in the
Medicare inpatient's clinical record that the Medicare inpatient has
been given the documents specified in paragraph (a) of this section.
(c) The Data Collection Information Summary for Patients in
Inpatient Rehabilitation Facilities is the simplified plain language
description of the Privacy Act Statement--Health Care Records.
(d) By giving the Medicare inpatient the forms specified in
paragraph (a) of this section the inpatient rehabilitation facility
will inform the Medicare patient of--
(1) Their privacy rights under the Privacy Act of 1974 and 45 CFR
5b.4(a)(3); and
(2) The following rights:
[[Page 26798]]
(i) The right to be informed of the purpose of the collection of
the patient assessment data;
(ii) The right to have the patient assessment information collected
be kept confidential and secure;
(iii) The right to be informed that the patient assessment
information will not be disclosed to others, except for legitimate
purposes allowed by the Federal Privacy Act and Federal and State
regulations;
(iv) The right to refuse to answer patient assessment questions;
and
(v) The right to see, review, and request changes on his or her
patient assessment.
(e) The patient rights specified in this section are in addition to
the patient rights specified in Sec. 482.13 of this chapter.
It should be noted that when the IRF clinician gives the patient
the forms entitled ``Data Collection Information Summary for Patients
in Inpatient Rehabilitation Facilities'' and the ``Privacy Act
Statement--Health Care Records'' prior to performing an assessment,
these forms do not satisfy the privacy provisions contained in the
HIPAA Privacy Rule (65 FR 82462 as modified by 67 FR 53182). For
example, these forms do not meet the privacy notice requirements of the
HIPAA Privacy Rule (see 45 CFR Sec. 164.520). Health plans and health
care providers must meet the notice requirements of the HIPAA Privacy
Rule by giving a Notice of Privacy Practices to their patients. The
Notice of Privacy Practices describes a health plan or health care
provider's uses and disclosures of protected health information and the
individual rights that patients have with respect to their protected
health information.
C. When the IRF-PAI Must Be Completed
According to Sec. 412.606(b), an IRF must use the IRF-PAI to
assess Medicare Part A fee-for-service inpatients. According to Sec.
412.610(c)(1)(i)(A), the admission assessment covers the first 3
calendar days of the inpatient's current IRF Medicare Part A fee-for-
service hospitalization. According to Sec. 412.610(c)(1)(i)(B), the
admission assessment reference date is the third day of the 3-day
admission assessment time period. Section 412.610(c)(1)(i)(C) specifies
that the IRF-PAI for the admission assessment ``Must be completed on
the calendar day that follows the admission assessment reference day.''
We are concerned IRFs believe Sec. 412.610(c)(1)(i)(C) means that
they may not start to record data on the IRF-PAI before the calendar
day that follows the admission assessment reference day, which is not
our intent. The ``completion requirement'' of the IRF-PAI means when
the IRF's staff must have finished recording on the IRF-PAI the
assessment data that the IRF's clinical staff obtained during an
assessment of the inpatient that was performed during the admission
assessment time period. In other words, the date when the IRF-PAI must
be completed is a deadline date when the process of recording data on
the IRF-PAI must be finished. The IRF's staff is permitted to enter
assessment data on the IRF-PAI prior to the deadline date.
How data are recorded on the IRF-PAI is specified in the IRF-PAI
item-by-item guide, which is entitled the ``IRF-PAI Training Manual
Revised 01/16/02.'' The instructions contained in the IRF-PAI item-by-
item guide are, when possible, very similar to the rules for coding the
patient assessment instrument that we used as the model for the IRF-
PAI. The model for the IRF-PAI was the patient assessment instrument
published by Uniform Data System for Medical Rehabilitation (UDSmr).
The UDSmr rules for coding their assessment instrument specified that
an item's score should reflect the inpatient's lowest level of
functioning. Consequently, in order to be consistent with how an
inpatient's functional performance was scored on the UDSmr patient
assessment instrument, the IRF-PAI item-by-item guide likewise
specifies that a patient's assessment must indicate the patient's
lowest level of functioning.
During the admission assessment, an IRF clinician records different
types of data on the IRF-PAI. We believe that the sources of the data
recorded in the categories of the IRF-PAI entitled ``Identification
Information,'' ``Admission Information,'' and ``Payer Information''
makes these data easy and quick to obtain and record. For these
categories of data the source of the data may be the patient, the
patient's medical record, other patient documents, the patient's
family, or a person that has personal knowledge of the patient. In
contrast, in order to complete the data for the IRF-PAI categories
entitled ``Function Modifiers'' and ``FIMTM Instrument,''
the clinician observes the patient's functional performance over the
admission assessment time period, and makes clinical judgments
regarding the patient's performance. Consequently, due to how the data
for the Function Modifiers and FIMTM categories are
obtained, we believe it is the time span that it takes to assess the
patient's functional performance that will usually determine how long
it takes to complete the admission assessment.
Page III-3 of the IRF-PAI manual states that when determining the
level of the patient's functional performance the clinician is to
``record the lowest (most dependent) score.'' We believe that in the
time span between the patient's admission to and discharge from the
IRF, the patient's functional performance improves. We believe that on
the patient's admission day and the next few days a patient's
functional performance is poor in comparison to functional performance
on subsequent days of the patient's current IRF hospitalization.
Therefore, during the part of the admission assessment that is the
first or second day of the patient's current IRF hospitalization, we
believe that a patient's functional performance will usually be scored
as indicating the most dependence.
As stated previously, the IRF's clinical staff is permitted to
record assessment data on the IRF-PAI at any time during the admission
assessment process. Also, as stated previously, we believe it is the
scoring of the patient's functional performance that will determine how
long it takes to complete the admission assessment. The combination of:
(1) Being able to record assessment data at any time during the
admission assessment, (2) the requirement that the lowest level of
functional performance be recorded, and (3) that the lowest level of
functional performance will usually occur on the first or second day of
the admission assessment, makes it possible to finish obtaining and
recording all the assessment data before the day that follows the
admission assessment reference date. However, in accordance with Sec.
412.610(c)(1)(i)(C), an IRF has until the day following the admission
assessment reference day to complete the IRF-PAI.
In order to clarify that Sec. 412.610(c)(1)(i)(C) does not
prohibit the IRF from recording any or all of the data on the IRF-PAI
before the day that follows the admission assessment reference day, we
are proposing to amend Sec. 412.610(c)(1)(i)(C) to read as follows:
Must be completed by the calendar day that follows the admission
assessment reference day.
D. Transmission of IRF-PAI Data
As specified in Sec. 412.606(b), ``Patient assessment
instrument,'' an IRF must use the IRF-PAI to assess Medicare Part A
fee-for-service inpatients. There are nine categories of IRF-PAI
assessment data. The nine categories are entitled ``identification
information, admission
[[Page 26799]]
information, payer information, medical information, medical needs,
function modifiers, the FIMTM instrument, discharge
information, and quality indicators''. The data from some of these
categories are used to classify a patient into a CMG. It is the CMG
classification code, not the IRF-PAI raw data itself, that is part of
the claim data the IRF submits to its FI when the IRF submits data in
order to be paid for the services it furnished to the inpatient. We
believe that an IRF's clinical staff will initially use the paper
version of the IRF-PAI to record its assessment data. Then, in
accordance with Sec. 412.610(d), the IRF would use the data that it
recorded on the paper version of the IRF-PAI to enter the IRF-PAI data
into an electronic version of the document. The electronic version of
the IRF-PAI uses the patient assessment data to classify a patient into
a CMG. Under the IRF PPS, it is the CMG payment code, along with other
information that the IRF submits to the fiscal intermediary (FI), that
will determine the payment the IRF receives for the services the IRF
furnished to a Medicare Part A fee-for-service beneficiary.
Section 412.614, ``Transmission of patient assessment data,''
specifies that an IRF must transmit to us the IRF-PAI assessment data
for each Medicare Part A fee-for-service inpatient. It is the
electronic version of the IRF-PAI that enables an IRF to transmit the
IRF-PAI data to us. We require that IRFs transmit IRF-PAI data so that
we have the IRF-PAI data that are associated with the CMG payment code
that the IRF submitted to its FI.
In most cases an IRF will submit claims data, including the
patient's CMG, to the FI in order to be paid for the services it
furnished to a Medicare Part A fee-for-service inpatient. However,
there are situations when the IRF would submit claim data to its FI,
but the submission of the claim data is not for the purpose of being
paid for any of the services the IRF furnished to a Medicare Part A
fee-for-service inpatient.
In these situations, Medicare operational procedures that were in
effect before implementation of the IRF PPS requires an IRF to send
claim data to the FI. The purpose of the IRF sending claim data to the
FI in these situations is to enable Medicare to monitor a beneficiary's
period of entitlement. For instance, an IRF must still send the FI
claim data even if the inpatient's non-Medicare primary payer paid for
all of the IRF services the IRF furnished to the Medicare Part A fee-
for-service inpatient. Another instance when the IRF must still send
the FI claim data is when any of the services that an inpatient's non-
Medicare primary payer did not pay for also do not qualify for payment
under the IRF PPS.
We want to relieve the IRF of the burden of transmitting IRF-PAI
data to us when the IRF is not requesting that Medicare pay for any of
the services the IRF furnished to a Medicare Part A fee-for-service
inpatient. Accordingly, we are proposing to amend Sec. 412.614 by
specifying that Sec. 412.614(a) is a general rule that would read as
follows:
(a) Data format. General rule. The inpatient rehabilitation
facility must encode and transmit data for each Medicare Part A fee-
for-service inpatient--
We are also proposing to further amend Sec. 412.614 by adding a
new Sec. 412.614(a)(3), which would relieve the IRF of the burden of
having to transmit the IRF-PAI data for a Medicare Part A fee-for-
service inpatient when Medicare will not be paying the IRF for any of
the services the IRF furnished to that inpatient. New Sec.
412.614(a)(3) would read as follows:
Exception to the general rule. When the inpatient rehabilitation
facility does not submit claim data to Medicare in order to be paid for
any of the services it furnished to a Medicare Part A fee-for-service
inpatient, the inpatient rehabilitation facility is not required to,
but may, transmit to Medicare the inpatient rehabilitation facility
patient assessment data associated with the services furnished to that
same Medicare Part A fee-for-service inpatient.
E. Proposed Revision of the Definition of Discharge
According to Sec. 412.602, a discharge has occurred when the
patient has been formally released from the hospital, or has died in
the hospital, or when the patient stops receiving Medicare-covered Part
A inpatient rehabilitation services. Our intent in specifying this
definition of when a discharge has occurred under the IRF PPS was to
try to ensure that Medicare paid an IRF only for furnishing an IRF
level of services to the Medicare Part A fee-for-service inpatient.
However, in contrast to when a patient is formally released from the
IRF or dies, the time when a patient stops receiving Medicare-covered
Part A IRF services may be subject to different interpretations
resulting in different determinations of when a discharge has occurred.
The result of different determinations of when a discharge has occurred
is inconsistency in determining the discharge date. This inconsistency
could result in different IRFs furnishing the same services for the
same period of time, but being paid differently, because the discharge
date determines a patient's length-of-stay, and the patient's length-
of-stay is one of the factors that determines the amount of the CMG
payment. For example, according to Sec. 412.624(f), a patient's
length-of-stay as determined by the inpatient's discharge date may
affect the amount of the IRF's CMG payment when a patient is
transferred from an IRF to another site of care.
In addition, there may be cases when an IRF believes an inpatient
no longer has a medical need for Medicare-covered Part A inpatient
rehabilitation services, but the IRF believes that the inpatient has a
medical need for a SNF level of services. However, due to circumstances
beyond the IRF's control, the IRF is unable to formally release the
patient, because the IRF cannot place the patient in a SNF setting. In
that situation, according to section 1861(v)(1)(G)(i) of the Act and
Sec. 424.13(b), a physician may certify or recertify that the patient
needs to continue to be hospitalized in the IRF. The effect of the
physician's certification or recertification is that under Medicare the
patient is not considered discharged until the patient is formally
released from the IRF.
In consideration of what can occur when discharge is defined as
being when the inpatient stops receiving Medicare-covered Part A
inpatient rehabilitation services, we are proposing to amend Sec.
412.602 by revising the definition of ``discharge'' by removing the
phrase ``(2) The patient stops receiving Medicare-covered Part A
inpatient rehabilitation services, unless the patient qualifies for
continued hospitalization under Sec. 424.13(b) of this chapter; or''.
The proposed revised definition would read as follows:
Discharge. A Medicare patient in an inpatient rehabilitation
facility is considered discharged when--
(1) The patient is formally released from the inpatient
rehabilitation facility; or
(2) The patient dies in the inpatient rehabilitation facility.
F. Waiver of the Penalty for Transmitting the IRF-PAI Data Late
Section 412.614(c) ``Transmission dates'' states that the admission
and discharge assessment data must be transmitted together. The
discharge assessment is completed after the admission assessment has
been completed. Therefore, the date when the IRF-PAI data must be
transmitted is
[[Page 26800]]
determined by when the IRF-PAI discharge assessment is completed.
After the discharge assessment has been completed, Sec. 412.610(d)
``Encoding dates'' specifies that the data must be entered into the
electronic version of the IRF-PAI, a process which Sec. 412.602
defines as encoding the data. As specified in Sec. 412.610(d) the IRF
has 7 calendar days to encode the discharge assessment. In order for
the IRF-PAI data not to be considered as having been transmitted late,
Sec. 412.614(d)(2) specifies that the IRF-PAI data must be transmitted
to us no later than 10 calendar days from the date specified in Sec.
412.614(c). The date specified in Sec. 412.614(c) is the 7th calendar
day of the applicable encoding time period specified in Sec.
412.610(d). The 7th calendar day of the applicable encoding date
specified in Sec. 412.610(d) is the end of the discharge assessment
encoding time period because none of the data can be transmitted until
the discharge assessment has been encoded. The following example, which
is very similar to the Chart 3 on page 41332 of the August 7, 2001
final rule (66 FR 41316), is intended to clarify when CMS will
determine that the IRF-PAI data was transmitted late.
Chart 2.-- Example of Applying the Patient Assessment Instrument Discharge Assessment and Transmission Dates
----------------------------------------------------------------------------------------------------------------
IRF-PAI Date when
Assessment IRF-PAI IRF-PAI data IRF-PAI data
Assessment Type Discharge date reference completed encoded by transmitted transmission
date by by is late
----------------------------------------------------------------------------------------------------------------
Discharge Assessment.......... 10/16/03 10/16/03 10/20/03 10/26/03 11/01/03 11/12/03 *
----------------------------------------------------------------------------------------------------------------
* Or any day after 11/12/03.
If IRF-PAI data are transmitted later than 10 calendar days from
the transmission date specified in Sec. 412.614(c), Sec.
412.614(d)(2) specifies that we will assess a penalty by deducting 25
percent from the CMG payment that is associated with the IRF-PAI data
that were transmitted late. However, we believe that an IRF may
encounter an extraordinary situation, which is beyond its control, and
that extraordinary situation could render the IRF unable to comply with
Sec. 412.614(c). The IRF must fully describe in the appropriate
inpatient's clinical record, or by use of another documentation method
as selected by the IRF, the extraordinary situation which the IRF
encountered that resulted in the IRF being unable to comply with Sec.
412.614(c). Although an IRF may believe that the facility has
encountered an extraordinary situation, the IRF's belief does not mean
that CMS is obligated to also automatically determine that the
situation was of an extraordinary nature. CMS has the discretion to
determine whether the situation described by the IRF is extraordinary.
The extraordinary situation may be, but does not have to be, due to
the occurrence of an unusual event. Examples of unusual events include,
but are not limited to, fire, flood, earthquake, or other similar
incidents that inflict extensive damage to an IRF. Another example of
an extraordinary situation is the inability of an IRF to transmit any
IRF-PAI data for an extended time period, because during that entire
time period there was a problem with the data transmission system that
was beyond the control of the IRF. An example of a data transmission
system problem that is beyond the control of the IRF is the inability
of an IRF to transmit its IRF-PAI data because the computer used by CMS
to receive and process the data is malfunctioning. A further example of
a data transmission system problem that is beyond the control of the
IRF is the existence of a flaw in the software that was distributed by
CMS to IRFs, or a flaw in the software specifications made available by
CMS to vendors that prevent the IRF from transmitting its IRF-PAI data.
In addition, an extraordinary situation may include a situation in
which a facility has correctly followed CMS policies and procedures in
order to be classified as an IRF and obtain an IRF provider number, but
has experienced a delay in attaining an IRF provider number. In light
of these possibilities, we are proposing a new Sec. 412.614(e) to read
as follows: ``Exemption to being assessed a penalty for transmitting
the IRF-PAI data late.'' CMS may waive the penalty specified in
paragraph (d) of this section when, due to an extraordinary situation
that is beyond the control of an inpatient rehabilitation facility, the
inpatient rehabilitation facility is unable to transmit the patient
assessment data in accordance with paragraph (c) of this section. Only
CMS can determine if a situation encountered by an inpatient
rehabilitation facility is extraordinary and qualifies as a situation
for waiver of the penalty specified in paragraph (d)(2) of this
section. An extraordinary situation may be due to, but is not limited
to, fires, floods, earthquakes, or similar unusual events that inflict
extensive damage to an inpatient rehabilitation facility. An
extraordinary situation may be one that produces a data transmission
problem that is beyond the control of the inpatient rehabilitation
facility, as well as other situations determined by CMS to be beyond
the control of the inpatient rehabilitation facility. An extraordinary
situation must be fully documented by the inpatient rehabilitation
facility.''
G. General Information Regarding the IRF-PAI Assessment Process
We have received many questions regarding the IRF-PAI assessment
process policies. We have posted the answers to most of these questions
on the IRF PPS website.
1. The IRF PPS Website Address
The current internet address for the IRF PPS website is http://www.cms.hhs.gov/providers/irfpps/. Due to changes in CMS internet
policies during 2002, the current website address is different from the
one we published in the August 7, 2001 final rule.
2. Exceptions to the IRF-PAI Admission and Discharge Assessment Time
Period General Rules
Section 412.610(c)(1)(i) states the general rule that the time span
covered during the admission assessment is calendar days 1 through 3 of
the patient's current Medicare Part A fee-for-service IRF
hospitalization. Section 412.610(c)(2)(i) states the general rule that
the discharge assessment time period is a span of time that covers 3
calendar days, which includes the inpatient's discharge date, which is
the same date as the discharge assessment reference date, and the 2
calendar days
[[Page 26801]]
before the discharge date. We want to remind IRFs that, as specified in
Sec. 412.610(c)(1)(ii) and Sec. 412.610(c)(2)(iii), we may use the
IRF-PAI item-by-item guide and other instructions to identify items
that have a different admission or discharge assessment time period. We
may specify different admission and discharge assessment time periods
in order to capture patient information for payment and quality of care
monitoring objectives appropriately.
V. Patient Classification System for the IRF PPS
As previously stated, in this proposed rule we are proposing to use
the same case-mix classification system that was set forth in the
August 7, 2001 final rule. It is our intention to pursue the
development of possible refinements to the case-mix classification
system that will continue to improve the ability of the PPS to
accurately pay IRFs. We have awarded a contract to the RAND Corporation
(RAND) to conduct additional research that will, in the initial stages,
provide us with the data necessary to address the feasibility of
developing and proposing refinements. When the study has been
completed, we plan to review various approaches so that we can propose
an appropriate methodology to develop and apply refinements. Any
specific refinement proposal resulting from this research will be
published in the Federal Register.
Table 1, Proposed Relative Weights for Case-Mix Groups (CMGs),
presents the proposed CMGs, comorbidity tiers, and corresponding
Federal relative weights. We also present the average length of stay
for each CMG. As we discussed in the August 7, 2001 final rule (66 FR
41353), the average length of stay for each CMG, along with the
discharge destination, is used to determine when an IRF discharge meets
the definition of a transfer, which results in a per diem case level
adjustment (66 FR 41354). Because these data elements are not changing
as a result of this proposed rule, Table 1 is identical to Table 1 that
was published in the August 7, 2001 final rule (66 FR 41394 through
41396). The proposed relative weights reflect the inclusion of cases
with an interruption of stay (patient returns on day of discharge or
either of the next 2 days). The methodology we used to construct the
data elements in Table 1 is described in detail in the August 7, 2001
final rule (66 FR 41350 through 41353).
VI. Proposed Fiscal Year 2004 Federal Prospective Payment Rates
A. Expiration of the IRF PPS Transition Period
The transition period provision under section 1886(j)(1) of the Act
and Sec. 412.626 of the regulations expired for cost reporting periods
beginning on or after October 1, 2002 (FY 2003 and beyond).
Accordingly, the payment for discharges during FY 2004 will be based
entirely on the proposed adjusted FY 2004 IRF Federal PPS rates.
B. Description of the IRF Standardized Payment Amount
In the August 7, 2001 final rule, we established a standard payment
amount referred to as the budget neutral conversion factor under Sec.
412.624(c). In accordance with the methodology described in Sec.
412.624(c)(3)(i), the budget neutral conversion factor for FY 2002, as
published in the August 7, 2001 final rule, was $11,838.00. Under Sec.
412.624(c)(3)(i), this amount reflects, as appropriate, any adjustments
for outlier payments, budget neutrality, and coding and classification
changes as described in Sec. 412.624(d).
The budget neutral conversion factor is a standardized payment
amount and the amount reflects the budget neutrality adjustment for FY
2002, as described in Sec. 412.624(d)(2). The statute requires a
budget neutrality adjustment only for fiscal years 2001 and 2002.
Accordingly, we believe it is more consistent with the statute to refer
to the standardized payment as the standardized payment conversion
factor, rather than refer to it as a budget neutral conversion factor.
Thus, after careful consideration, we are proposing to change all
references to the budget neutral conversion factor in Sec. Sec.
412.624(c) and 412.624(d) to the ``standard payment conversion
factor.'' We believe that the standard payment conversion factor better
describes the standardized payment amount especially in those fiscal
years where a budget neutrality adjustment is not made.
Thus, under Sec. 412.624(c)(3)(i), the standard payment conversion
factor for FY 2002 of $11,838.00 reflected the budget neutrality
adjustment described in Sec. 412.624(d)(2). Under current revised
Sec. 412.624(c)(3)(ii), we updated the FY 2002 standard payment
conversion factor ($11,838.00) to FY 2003 by applying an increase
factor (the IRF market basket index) of 3.0 percent, as described in
the August 1, 2002 update notice (67 FR 49931). This yielded the FY
2003 standard payment conversion factor of $12,193.00 that was
published in the August 1, 2002 update notice (67 FR 49931). The FY
2003 standard payment conversion factor will be the basis of the
updated FY 2004 standard payment conversion factor that will also
reflect the adjustments described below.
C. Proposed Adjustments To Determine the Proposed FY 2004 Standard
Payment Conversion Factor
1. IRF Market Basket Index
Section 1886(j)(3)(C) of the Act requires the Secretary to
establish an increase factor that reflects changes over time in the
prices of an appropriate mix of goods and services included in IRF
services paid for under the IRF PPS, which is referred to as the IRF
market basket index. Accordingly, in updating the FY 2004 payment rates
set forth in this proposed rule, we propose to apply an appropriate
increase factor, that is equal to the IRF market basket, to the FY 2003
IRF standardized payment amount.
Beginning with the implementation of the IRF PPS in FY 2002 and
with the FY 2003 IRF PPS update, the 1992-based excluded hospital with
capital market basket has been used to determine the IRF market basket
factor for updating payments to rehabilitation facilities. The 1992-
based market basket reflected the distribution of costs in 1992 for
Medicare-participating freestanding rehabilitation, long-term care,
psychiatric, cancer, and children's hospitals. This information was
derived from the 1992 Medicare cost reports. A full discussion of the
methodology and data sources used to construct the 1992-based excluded
hospital with capital market basket is available in Appendix D of the
IRF PPS August 7, 2001 final rule Federal Register (66 FR 41427).
In this proposed rule, we propose to revise and rebase the excluded
hospital with capital market basket to a 1997 base year. We believe
that proposing to use 1997 data, rather than 1992 data, to construct
the IRF market basket will allow us to more appropriately estimate
increases in the costs of IRF goods and services from year to year.
The operating portion of the 1997-based excluded hospital with
capital market basket is derived from the 1997-based excluded hospital
market basket. The methodology used to develop the excluded hospital
market basket operating portion was described in the August 1, 2002
Federal Register (67 FR 50042-50044). In brief, the operating cost
category weights in the 1997-based excluded market basket added to
100.0. These weights were determined from the Medicare cost reports,
the 1997 Business Expenditure Survey from the
[[Page 26802]]
Bureau of the Census, and the 1997 Annual Input-Output data from the
Bureau of Economic Analysis. In using the 1997 data, we made two
methodological revisions to the 1997-based excluded hospital market
basket: (1) Changing the wage and benefit price proxies to use the
Employment Cost Index (ECI) wage and benefit data for hospital workers,
and (2) adding a cost category for blood and blood products.
Previously we used a combination of several ECIs, a great part of
which are listed in the 1992-based index such as the hospital,
professional, and technical workers ECIs. However, the ECI for hospital
workers better represents the movement of hospital wages, salaries, and
benefits and it is more reflective of current labor market conditions.
For the 1992-based market baskets we were unable to find an adequate
data source for the blood cost category. For the 1997-based excluded
hospital market basket, we were able to obtain this data from Medicare
cost reports. As discussed in the IPPS August 1, 2002 final rule (67 FR
50035), BIPA required that we adequately reflect the price of blood and
blood products in the hospital market basket when it was rebased and
revised, which was done for the FY 2003 IPPS payment rates.
We believe this revision is also appropriate for the excluded
hospital with capital market basket because it results in a more
precise measure of the cost category for blood and blood products.
When we add the weight for capital costs to the excluded hospital
market basket, the sum of the operating and capital weights must still
equal 100.0. Because capital costs account for 8.968 percent of total
costs for excluded hospitals in 1997, it holds that operating costs
must account for 91.032 percent. Each operating cost category weight
from the August 1, 2002 Federal Register (67 FR 50442-50444) was
rebased to the 1997-based excluded hospital market basket by
multiplying by 0.91032 to determine its weight in the 1997-based
excluded hospital with capital market basket.
The aggregate capital component of the 1997-based excluded hospital
market basket (8.968 percent) was determined from the same set of
Medicare cost reports used to derive the operating component. The
detailed capital cost categories of depreciation, interest, and other
capital expenses were also determined using the Medicare cost reports.
As explained below, two sets of weights for the capital portion of the
revised and rebased market basket needed to be determined. The first
set of weights identifies the proportion of capital expenditures
attributable to each capital cost category, while the second set
represents relative vintage weights for depreciation and interest. The
vintage weights identify the proportion of capital expenditures that is
attributable to each year over the useful life of capital assets within
a cost category (see IPPS final rule published in the August 1, 2002
Federal Register (67 FR 50046-50047)) for a discussion of how vintage
weights are determined).
The cost categories, price proxies, and base-year FY 1992 and
proposed FY 1997 weights for the excluded hospital with capital market
basket are presented in Chart 3 ``Excluded Hospital With Capital Input
Price Index (FY 1992 and Proposed FY 1997) Structure and Weights.''
Chart 4 ``Proposed Excluded Hospital with Capital Input Price Index (FY
1997) Vintage Weights'' presents the vintage weights for the proposed
1997-based excluded hospital with capital market basket.
Chart 3.--Excluded Hospital With Capital Input Price Index 1 2 (FY 1992 and Proposed FY 1997) Structure and
Weights
----------------------------------------------------------------------------------------------------------------
Proposed
Cost category Price wage variable Weights (%) weights (%)
base-year 1992 base-year 1997
----------------------------------------------------------------------------------------------------------------
TOTAL.................................. ................................... 100.000 100.000
--------------------------------------
Compensation............................... ................................... 57.935 57.579
Wages and Salaries......................... ECI--Wages and Salaries, Civilian 47.417 47.335
Hospital Workers.
Employee Benefits.......................... ECI--Benefits, Civilian Hospital 10.519 10.244
Workers to capture total costs
(operating and capital), In order
to capture total costs (operating
and capital), HCFA Occupational
Benefit Proxy.
Professional fees: Non-Medical............. ECI--Compensation: Prof. & 1.908 4.423
Technical Technical.
Utilities.................................. ................................... 1.524 1.180
Electricity................................ WPI--Commercial Electric Power..... 0.916 0.726
Fuel Oil, Coal, etc........................ WPI--Commercial Natural Gas........ 0.365 0.248
Water and Sewerage......................... CPI-U--Water & Sewage.............. 0.243 0.206
Professional Liability..................... HCFA--Professional Liability 0.983 0.733
Premiums.
All Other Products and Services............ ................................... 28.571 27.117
All Other Products......................... ................................... 22.027 17.914
Pharmaceuticals............................ WPI--Prescription Drugs............ 2.791 6.318
Food: Direct Purchase...................... WPI--Processed Foods............... 2.155 1.122
Food: Contract Service..................... CPI-U--Food Away from Home......... 0.998 1.043
Chemicals.................................. WPI--Industrial Chemicals.......... 3.413 2.133
Blood and Blood Products................... WPI--Blood and Derivatives......... 0.748
Medical Instruments........................ WPI--Med. Inst. & Equipment........ 2.868 1.795
Photographic Supplies...................... WPI--Photo Supplies................ 0.364 0.167
Rubber and Plastics........................ WPI--Rubber & Plastic Products..... 4.423 1.366
Paper Products............................. WPI--Convert. Paper and Paperboard. 1.984 1.110
Apparel.................................... WPI--Apparel....................... 0.809 0.478
Machinery and Equipment.................... WPI--Machinery & Equipment......... 0.193 0.852
Miscellaneous Products..................... WPI--Finished Goods excluding Food 2.029 0.783
and Energy.
All Other Services......................... ................................... 6.544 9.203
Telephone.................................. CPI-U--Telephone Services.......... 0.574 0.348
Postage.................................... CPI-U--Postage..................... 0.268 0.702
All Other: Labor........................... ECI--Compensation: Service Workers. 4.945 4.453
All Other: Non-Labor Intensive............. CPI-U--All Items (Urban)........... 0.757 3.700
[[Page 26803]]
Capital-Related Costs...................... ................................... 9.080 8.968
Depreciation............................... ................................... 5.611 5.586
Fixed Assets............................... Boeckh-Institutional Construction:. 3.570 3.503
Movable Equipment.......................... WPI--Machinery & Equipment: 11 Year 2.041 2.083
Useful Life.
Interest Costs............................. ................................... 3.212 2.682
Non-profit................................. Avg. Yield Municipal Bonds: 23 Year 2.730 2.280
Useful Life.
For-profit................................. Avg. Yield AAA Bonds: 23 Year 0.482 0.402
Useful Life.
Other Capital-Related Costs................ CPI-U--Residential Rent............ 0.257 0.699
----------------------------------------------------------------------------------------------------------------
\1\ The operating cost category weights in the excluded hospital market basket described in the August 1, 2002
Federal Register (67 FR 50442 through 50444) add to 100.0.
\2\ Due to rounding, weights sum to 1.000.
When we add an additional set of cost category weights (total
capital weight = 8.968 percent) to this original group, the sum of the
weights in the new index must still add to 100.0. Because capital costs
account for 8.968 percent of the market basket, then operating costs
account for 91.032 percent. Each weight in the 1997-based excluded
hospital market basket from the IPPS final rule published in the August
1, 2002 Federal Register (67 FR 50442-50444) was multiplied by 0.91032
to determine its weight in the 1997-based excluded hospital with
capital market basket.
Chart 4.--Proposed Excluded Hospital With Capital Input Price Index (FY 1997) Vintage Weights
----------------------------------------------------------------------------------------------------------------
Interest:
Fixed assets Movable assets capital-
Year from farthest to most recent (23-year (11-year related (23-
weights) weights) year weights)
----------------------------------------------------------------------------------------------------------------
1............................................................... 0.018 0.063 0.007
2............................................................... 0.021 0.068 0.009
3............................................................... 0.023 0.074 0.011
4............................................................... 0.025 0.080 0.012
5............................................................... 0.026 0.085 0.014
6............................................................... 0.028 0.091 0.016
7............................................................... 0.030 0.096 0.019
8............................................................... 0.032 0.101 0.022
9............................................................... 0.035 0.108 0.026
10.............................................................. 0.039 0.114 0.030
11.............................................................. 0.042 0.119 0.035
12.............................................................. 0.044 .............. 0.039
13.............................................................. 0.047 .............. 0.045
14.............................................................. 0.049 .............. 0.049
15.............................................................. 0.051 .............. 0.053
16.............................................................. 0.053 .............. 0.059
17.............................................................. 0.057 .............. 0.065
18.............................................................. 0.060 .............. 0.072
19.............................................................. 0.062 .............. 0.077
20.............................................................. 0.063 .............. 0.081
21.............................................................. 0.065 .............. 0.085
22.............................................................. 0.064 .............. 0.087
23.............................................................. 0.065 .............. 0.090
-----------------
Total*...................................................... 1.0000 1.0000 1.0000
----------------------------------------------------------------------------------------------------------------
* Due to rounding, weights sum to 1.000.
Chart 5 ``Percent Changes in the 1992-based and proposed 1997-based
Excluded Hospital with Capital Market Baskets, FY 1999-2004'' compares
the 1992-based excluded hospital with capital market basket to the
proposed 1997-based excluded hospital with capital market basket. As is
shown, the rebased and revised market basket grows slightly faster over
the 1999-2001 period than the 1992-based market basket. The major
reason for this was the switching of the wage and benefit proxy to the
ECI for hospital workers from the previous occupational blend. We
believe that the ECI is the most appropriate price proxy for measuring
changes in wage data facing IRFs. This wage series reflects actual wage
data reported by civilian hospitals to the Bureau of Labor Statistics.
The ECIs are fixed-weight indexes and strictly measure the change in
wage rates and employee benefits per hour. They are appropriately not
affected by shifts in skill mix. This differs from the proxy used in
the FY 1992-based index in which a blended occupational wage index was
used. The blended occupational wage proxy used in the FY 1992-based
index and the ECI for wages and salaries for hospitals both reflect a
fixed distribution of occupations within
[[Page 26804]]
a hospital. The major difference between the two proxies is in the
treatment of professional and technical wages (legal, accounting,
management, and consulting services from outside the facility). In the
blended occupational wage proxy, the professional and technical
category was blended evenly between the ECI for wages and salaries for
hospitals and the ECI for wages and salaries for professional and
technical occupations in the overall economy. The ECI for hospitals
reflects hospital-specific occupations. This revision had a similar
impact on the hospital PPS and excluded market baskets, as described in
the IPPS final rule published in the August 1, 2001 Federal Register.
The proposed FY 2004 increase in the 1997-based excluded hospital with
capital market basket is 3.3 percent.
Chart 5.--Percent Changes in the 1992-Based and Proposed 1997-Based Excluded Hospital With Capital Market
Baskets, FY 1999-2004
----------------------------------------------------------------------------------------------------------------
Percent Change,
Percent Change, Proposed FY 1997-
Fiscal Year FY 1992-based based Market
Market Basket Basket
----------------------------------------------------------------------------------------------------------------
Actual Historical % Increase (FY 1999-2001)
----------------------------------------------------------------------------------------------------------------
1999...................................................................... 2.3 2.7
2000...................................................................... 3.4 3.1
2001...................................................................... 3.9 4.0
--------------------
Average historical.................................................... 3.2 3.3
---------------------------------------------------------------------------
Forecasts (FY 2002-2004)
----------------------------------------------------------------------------------------------------------------
2002...................................................................... 2.7 3.6
2003...................................................................... 3.0 3.5
2004...................................................................... 3.0 3.3
--------------------
Average forecast...................................................... 2.9 3.5
----------------------------------------------------------------------------------------------------------------
Section 1886(j)(3)(c) requires that the increase in the IRF PPS
payment rate be based on an ``appropriate percentage increase in a
market basket of goods and services comprising services for which
payment is made under this subsection, which may be the market basket
percentage increase described in subsection (b)(3)(B)(iii).'' To date,
we have used a market basket based on the cost structure of all
excluded hospitals to satisfy this requirement, and have discussed in
prior rules why we feel this market basket provides a reasonable
measure of the price changes facing exempt hospitals.
In its March 2002 Report, the Medicare Payment Advisory Commission
(MedPAC) recommended the development of a market basket specific to IRF
services. As we mentioned in last year's final rule, we have been
researching the feasibility of developing such a market basket. This
research included analyzing data sources for cost category weights,
specifically the Medicare cost reports, and investigating other data
sources on cost, expenditure, and price information specific to IRFs.
As described in greater detail below, based on this research, we are
not proposing at this time to develop a market basket specific to IRF
services.
Our analysis of the Medicare cost reports indicates that the
distribution of costs among major cost report categories (wages,
pharmaceuticals, capital) for IRFs is not substantially different from
the 1997-based excluded hospital with capital market basket we propose
to use. In addition, the only data available to us was for these cost
categories (wages, pharmaceuticals, and capital) presenting a potential
problem since no other major cost category would be based on IRF data.
We conducted a sensitivity analysis of annual percent changes in
the market basket when the IRF weights for wages, pharmaceuticals, and
capital were substituted into the excluded hospital with capital market
basket. Other cost categories were recalibrated using ratios available
from the inpatient PPS hospital market basket. On average, between the
years 1995 through 2002, the excluded hospital with capital market
basket increased at essentially the same average annual rate (2.9
percent) as the market basket with IRF weights for wages,
pharmaceuticals, and capital (2.8 percent). In addition, in almost any
individual year the difference was 0.1 percentage point or less, which
is less than the 0.25 percentage point criterion that is used under the
IPPS update framework to determine whether a forecast error adjustment
is warranted.
The 0.25 percentage point criterion that determines whether a
forecast error adjustment is warranted has been used in the IPPS update
framework since the implementation of the IPPS. It serves as a
guideline for the level of forecast accuracy, since any forecast is
likely to contain enough imprecision that differences of one tenth or
two-tenths of a percentage point are not thought to be significant.
Thus, in this case if the forecast error is not at least greater than
two-tenths of a percentage point, it is thought to be similar enough to
the actual data as not to warrant an adjustment.
Based on the above, we continue to believe that the excluded
hospital with capital market basket is doing an adequate job of
reflecting the price changes facing IRFs. We will continue to solicit
comments about issues particular to IRFs that should be considered in
our development of the proposed 1997-based excluded hospital with
capital market basket, as well as encourage suggestions for additional
data sources that may be available. Our hope is that the additional
cost data being collected under the IRF PPS will eventually allow for
the development of a market basket derived specifically from IRF data.
As shown in Chart 4, for the payment rates set forth in this
proposed rule, the proposed FY 2004 IRF market basket increase factor
using 1997 data is 3.3 percent. Thus, we propose to apply the 3.3
percent increase, in addition to the proposed budget neutral wage
adjustment factor described below, to the FY 2003 standard payment
[[Page 26805]]
conversion factor ($12,193.00) to determine the proposed 2004 standard
payment conversion factor.
2. Proposed Area Wage Adjustment
Section 1886(j)(6) of the Act requires the Secretary to adjust the
proportion (as estimated by the Secretary from time to time) of
rehabilitation facilities' costs that are attributable to wages and
wage-related costs for area differences in wage levels by a factor
(established by the Secretary) reflecting the relative hospital wage
level in a geographic area of a rehabilitation facility compared to the
national average wage level for such facilities. The statute requires
the Secretary to update this wage index adjustment at least every 36
months. The Secretary is required to update this adjustment on the
basis of information available to the Secretary (and updated as
appropriate) of the wages and wage-related costs incurred in furnishing
rehabilitation services. Any adjustments or updates made under section
1886(j)(6) of the Act shall be made in a budget neutral manner.
3. Updated Wage Data
For the FY 2004 IRF PPS rates proposed in this proposed rule, we
are updating the IRF wage index. In implementing the FY 2002 and FY
2003 IRF PPS, we used FY 1997 acute care hospital wage data to develop
the IRF wage indices. We believe that the FY 1999 acute care hospital
data are the best available because they are currently the most recent
complete final data. Accordingly, we are proposing to update from the
FY 1997 acute care hospital wage data to the FY 1999 acute care
hospital wage data to develop the proposed wage indices contained in
this proposed rule. Tables 3A and 3B contain the proposed FY 2004 wage
indices for urban and rural areas respectively.
4. Proposed Updated Labor-Related Share
In implementing the FY 2002 and FY 2003 IRF PPS, we used the 1992
market basket data to determine the labor-related share (72.395
percent). As stated above, we are proposing to update the 1992 market
basket data to 1997. Doing so allows us to propose to use the 1997-
based excluded hospital market basket with capital costs to determine
the FY 2004 labor-related share.
We propose to calculate the FY 2004 labor-related share as the sum
of the weights for those cost categories contained in the proposed
1997-based excluded hospital with capital market basket that are
influenced by local labor markets. These cost categories include wages
and salaries, employee benefits, professional fees, labor-intensive
services and a 46 percent share of capital-related expenses. The
proposed labor-related share for FY 2004 is the sum of the FY 2004
relative importance of each labor-related cost category, and reflects
the different rates of price change for these cost categories between
the base year (FY 1997) and FY 2004. The proposed sum of the relative
importance for FY 2004 for operating costs (wages and salaries,
employee benefits, professional fees, and labor-intensive services) is
69.163 percent, as shown in Chart 6 ``FY 2004 Labor-Related Share
Relative Importance.'' The portion of capital that is influenced by
local labor markets is estimated to be 46 percent. Because the relative
importance of capital is 7.653 percent of the 1997-based excluded
hospital with capital market basket in FY 2004, we take 46 percent of
7.653 percent to determine the labor-related share of capital for FY
2004. The result is 3.520 percent, which we then add to the 69.163
percent calculated for operating costs to determine the total labor-
related relative importance for FY 2004. The resulting labor-related
share that we propose to use for IRFs in FY 2004 is 72.683 percent.
Chart 6.--Proposed FY 2004 Labor-Related Share Relative Importance
------------------------------------------------------------------------
Relative importance
Relative importance proposed 1997-based
Cost category 1992-based market market basket FY
basket FY 2004 2004
------------------------------------------------------------------------
Wages and salaries.......... 50.625 49.032
Employee benefits........... 11.903 11.050
Professional fees........... 2.055 4.523
Postage..................... 0.252 ....................
All other labor intensive 5.242 4.558
services...................
-----------------------
Subtotal................ 70.077 69.163
=======================
Labor-related share of 3.394 3.520
capital costs..............
-----------------------
Total................... 73.471 72.683
------------------------------------------------------------------------
Chart 6 above shows that rebasing the excluded hospital with
capital market basket lowers the increase in labor share that we are
proposing to use in FY 2004 relative to what it would have been had we
not rebased the excluded hospital with capital market basket. The
proposed labor-related share for FY 2004 of 72.683 percent reflects an
increase of 0.29 percent from the FY 2003 labor-related share of 72.395
percent. If we did not rebase the excluded hospital with capital market
basket, the labor-related share would have increased from 72.395
percent for FY 2003 to 73.471 percent for FY 2004 by approximately 1.1
percent, rather than the proposed increase of 0.29 percent. As we
previously stated, we are proposing a labor-related share of 72.683
percent for the FY 2004 IRF PPS payment rates set forth in the proposed
rule.
5. Proposed Budget Neutral Wage Adjustment Update Methodology
As stated above, for FY 2004, we are proposing to update the FY
2003 IRF wage indices by using FY 1999 acute care hospital wage data
and update the labor-related share by using the 1997 market basket
data. Since any adjustment or updates to the IRF wage index made under
section 1886(j)(6) of the Act shall be made in a budget neutral manner
as required by statute, we are proposing to amend the regulation at
Sec. 412.624(e)(1) to reflect this requirement. We are also proposing
to determine a budget neutral wage adjustment factor based on an
adjustment or update to the wage data to apply to the standard payment
conversion factor.
[[Page 26806]]
We propose to use the following steps to ensure that the FY 2004
IRF standard payment conversion factor reflects the update to the wage
indices and to the labor-related share in a budget neutral manner:
Step 1. We determine the total amount of the FY 2003 IRF PPS rates
using the FY 2003 standardized payment amount and the labor-related
share and the wage indices from FY 2003 (as published in the August 1,
2002 notice).
Step 2. We then calculate the total amount of IRF PPS payments
using the FY 2003 standardized payment amount and the proposed updated
FY 2004 labor-related share and wage indices described above.
Step 3. We divide the amount calculated in step 1 by the amount
calculated in step 2, which equals the proposed FY 2004 budget neutral
wage adjustment factor of 0.9954.
Step 4. We then apply the FY 2004 budget neutral wage adjustment
factor from step 3 to the FY 2003 IRF PPS standard payment conversion
factor after the application of the market basket update, described
above, to determine the proposed FY 2004 standardized payment amount.
D. Proposed Update of Payment Rates Under the IRF PPS for FY 2004
Once we calculate the proposed IRF market basket increase factor
and determine the proposed budget neutral wage adjustment factor, we
can determine the proposed updated Federal prospective payments for FY
2004. In accordance with proposed revised Sec. 412.624(c)(3)(i), we
apply the proposed IRF market basket increase factor of 3.3 percent to
the proposed standard payment conversion factor for FY 2003 ($12,193)
which equals $12,595. Then, we apply the proposed budget neutral wage
adjustment of .9954 to $12,595, which results in an updated proposed
standard payment conversion factor for FY 2004 of $12,537. The proposed
FY 2004 standard payment conversion factor is applied to each proposed
CMG weight shown in Table 1 to compute the proposed unadjusted IRF
prospective payment rates for FY 2004 shown in Table 2.
Table 2, Proposed FY 2004 Federal Prospective Payments for Case-Mix
Groups (CMGs) for FY 2004, displays the proposed CMGs, the proposed
comorbidity tiers, and the corresponding proposed unadjusted IRF
prospective payment rates for FY 2004.
E. Examples of Computing the Total Proposed Adjusted IRF Prospective
Payments
In general, under Sec. 412.624(e), we will adjust the Federal
prospective payment amount associated with a CMG, shown in Table 2, to
account an IRF's geographic wage variation, low-income patients and, if
applicable, location in a rural area.
The adjustment for an IRF's geographic wage variation includes the
proposed FY 2004 labor-related share adjustment of 72.683 percent and
the proposed FY 2004 IRF urban or rural wage indices in Tables 3A and
3B, respectively.
The adjustment for low-income patients is based on the formula to
account for the cost of furnishing care to low-income patients as
discussed in the August 7, 2001 IRF PPS final rule (67 FR 41360). The
formula to calculate the low-income patient or LIP adjustment is as
follows:
(1 + DSH) raised to the power of (.4838)
Where:
[GRAPHIC][TIFF OMITTED]TP16MY03.020
The adjustment for IRFs located in rural areas is an increase to
the Federal prospective payment amount of 19.14 percent. This
percentage increase is the same as the one described in the August 7,
2002 IRF PPS final rule (67 FR 41359).
To illustrate the proposed methodology that we will use for
adjusting the Federal prospective payments, we provide the following
example in Chart 7 below. One beneficiary is in Facility A, an IRF
located in rural Maryland, and another beneficiary is in Facility B, an
IRF located in the New York City metropolitan statistical area (MSA).
Facility A's disproportionate share hospital (DSH) adjustment is 5
percent, with a low-income patient (LIP) adjustment of (1.0239) and a
wage index of (0.8946), and the rural area adjustment (19.14 percent)
applies. Facility B's DSH is 15 percent, with a LIP adjustment of
(1.0700) and a wage index of (1.4414).
Both Medicare beneficiaries are classified to CMG 0112 (without
comorbidities). To calculate each IRF's total proposed adjusted Federal
prospective payment, we compute the wage-adjusted Federal prospective
payment and multiply the result by the appropriate LIP adjustment and
the rural adjustment (if applicable). The following chart illustrates
the components of the proposed adjusted payment calculation.
Chart 7.--Examples of Computing an IRF's Proposed Federal Prospective
Payment
------------------------------------------------------------------------
Facility A Facility B
------------------------------------------------------------------------
Federal Prospective Payment. $25,092.93 $25,092.93
Labor Share................. x 0.72683 x 0.72683
Labor Portion of Federal x 18,238.29 x 18,238.29
Payment....................
Wage Index--(shown in Tables x 0.8946 x 1.4414
3A or 3B)..................
Wage-Adjusted Amount........ = 16,315.98 = 26,288.67
Non-Labor Amount............ + 6,854.15 + 6,854.15
Wage-Adjusted Federal 23,170.13 33,142.82
Payment....................
Rural Adjustment............ x 1.1914 x 1.0000
=============================
=============================
------------------------------------------------------------------------
[[Page 26807]]
Thus, the proposed adjusted payment for facility A will be
$28,264.65, and the proposed adjusted payment for facility B will be
$35,462.82.
F. Computing Total Payments Under the IRF PPS for the Transition Period
Under section 1886(j)(1) of the Act and Sec. 412.626, payment for
all IRFs with cost reporting periods beginning on or after October 1,
2002 will consist of 100 percent of the proposed FY 2004 adjusted
Federal prospective payment (plus any applicable outlier payments under
Sec. 412.624(e)(4)) and there will not be any blended payments.
Accordingly, the proposed FY 2004 IRF PPS rates set forth in this
proposed rule would apply to all discharges on or after October 1, 2003
and before October 1, 2004.
G. IRF-Specific Wage Data
On page 41358 of the August 7, 2001 IRF PPS final rule, we
responded to comments regarding the development of a separate wage
index for IRFs. Specifically, we responded to these comments as
follows:
``At this time, we are unable to develop a separate wage index for
rehabilitation facilities. There is a lack of specific IRF wage and
staffing data necessary to develop a separate IRF wage index
accurately. Further, in order to accumulate the data needed for such an
effort, we would need to make modifications to the cost report. In the
future, we will continue to research a wage index specific to IRF
facilities. Because we do not have an IRF specific wage index that we
can compare to the hospital wage index, we are unable to determine at
this time the degree to which the acute care hospital data fully
represent IRF wages. However, we believe that a wage index based on
acute care hospital wage data is the best and most appropriate wage
index to use in adjusting payments to IRFs, since both acute care
hospitals and IRFs compete in the same labor markets.''
We still do not have any IRF-specific wage data to determine the
feasibility of developing an IRF-specific wage index or of developing
an adjustment to refine the acute care hospital wage data to reflect
inpatient rehabilitation services. We continue to look into alternative
ways to collect, analyze, develop, and audit IRF-specific wage data
that would reflect the wages and wage-related costs attributable to
rehabilitation facilities. We believe that the best source to collect
IRF-specific wage data is the Medicare cost report--the same source for
the acute care hospital wage data. These data must be accurate and
reliable, thus collecting these data would increase the recordkeeping
and reporting burden on IRFs. Initially, this burden would be imposed
to collect data just to determine the feasibility of developing an IRF-
specific wage index or development of an adjustment to the current IRF
wage index.
In addition, as stated earlier in this section of this proposed
rule, any adjustment or update to the wage index must be made in a
budget neutral manner in accordance with Sec. 1886(j)(6) of the Act.
Thus, the PPS rates for any one IRF could be affected in a positive or
negative direction, due to the application of the proposed updates to
the labor-related share and wage indices in a budget neutral manner.
Accordingly, given the current trend of reducing the Medicare cost
reporting burden of collecting data and given that any change to the
wage index be budget neutral, we are soliciting comments on possible
ways to adjust or refine the current IRF wage index, given those
restraints.
Since IRFs and hospitals compete in the same labor markets, we
propose to continue to use the acute care hospital wage data to develop
the IRF wage index as described earlier in this section of this
proposed rule.
H. Proposed Adjustment for High-Cost Outliers Under the IRF Prospective
Payment System
In this proposed rule, we are proposing changes to the methodology
for determining IRF payments for high-cost outliers. The intent of
these proposed changes is to ensure outlier payments are paid only for
truly high-cost cases. Further, these proposed changes will allow us to
create policies that are consistent among the various Medicare
prospective payment systems when appropriate.
We have become aware that under the existing acute care hospital
inpatient prospective payment system (IPPS), that some hospitals have
taken advantage of two system features in the IPPS outlier policy to
maximize their outlier payments. The first is the time lag between the
current charges on a submitted bill and the cost-to-charge ratio taken
from the most recent settled cost report. Second, statewide average
cost-to-charge ratios are used in those instances in which an acute
care hospital's operating or capital cost-to-charge ratios fall outside
reasonable parameters. We set forth these parameters and the statewide
cost-to-charge ratios in the annual notices of prospective payment
rates that are published by August 1 of each year in accordance with
Sec. 412.8(b). Currently, these parameters represent 3.0 standard
deviations (plus or minus) from the geometric mean of cost-to-charge
ratios for all hospitals. In some cases, hospitals may increase their
charges so far above costs that their cost-to-charge ratios fall below
3 standard deviations from the geometric mean of the cost-to-charge
ratio and a higher statewide average cost-to-charge ratio is applied to
determine if the acute care hospital should receive an outlier payment.
This disparity results in their cost-to-charge ratios being set too
high, which in turn results in an overestimation of their current costs
per case.
We believe the Congress intended that outlier payments under both
the IPPS and the IRF PPS would be made only in situations where the
cost of care is extraordinarily high in relation to the average cost of
treating comparable conditions or illnesses. Under the existing IPPS
outlier methodology, if hospitals' charges are not sufficiently
comparable in magnitude to their costs, the legislative purpose
underlying the outlier regulations is thwarted. Thus, on March 4, 2003,
we published a proposed rule (68 FR 10420-10429) ``Proposed Changes in
Methodology for Determining Payment for Extraordinarily High-Cost Cases
(Cost Outliers) Under the Acute Care Hospital Inpatient Prospective
Payment System,'' with an extensive discussion proposing new
regulations to ensure outlier payments are paid for truly high-cost
cases under the IPPS.
We believe the use of parameters is appropriate for determining
cost-to-charge ratios to ensure these values are reasonable and outlier
payments can be made in the most equitable manner possible. Further, we
believe the methodology of computing IRF outlier payments is
susceptible to the same payment enhancement practices identified under
the IPPS and, therefore, merit similar proposed revisions. Accordingly,
as discussed below, we are proposing in this proposed rule to make
revisions to the IRF outlier payment methodology.
1. Current Outlier Payment Provision Under the IRF PPS
Section 1886(j)(4) of the Act provides the Secretary with the
authority to make payments in addition to the basic IRF prospective
payments for cases incurring extraordinarily high costs. In the August
7, 2001 IRF PPS final rule, we codified at Sec. 412.624(e)(4) of the
regulations the provision to make an adjustment for additional payments
for outlier cases that have extraordinarily high costs relative to the
costs of most discharges. Providing additional payments for outliers
strongly improves the accuracy of the IRF PPS in
[[Page 26808]]
determining resource costs at the patient and facility level. These
additional payments reduce the financial losses that would otherwise be
caused by treating patients who require more costly care and,
therefore, reduce the incentives to underserve these patients.
Under Sec. 412.624(e)(4), we make outlier payments for any
discharges if the estimated cost of a case exceeds the adjusted IRF PPS
payment for the CMG plus the adjusted threshold amount ($11,211 which
is then adjusted for each IRF by the facilities wage adjustment, its
LIP adjustment, and its rural adjustment, if applicable). We calculate
the estimated cost of a case by multiplying the IRF's overall cost-to-
charge ratio by the Medicare allowable covered charge. In accordance
with Sec. 412.624(e)(4), we pay outlier cases 80 percent of the
difference between the estimated cost of the case and the outlier
threshold (the sum of the adjusted IRF PPS payment for the CMG and the
adjusted threshold amount).
On November 1, 2001, we published a Program Memorandum (Transmittal
A-01-131) with detailed intermediary instructions for calculating the
cost-to-charge ratios for the purposes of determining outlier payments
under the IRF PPS. We stated the following:
``Intermediaries will use the latest available settled cost report
and associated data in determining a facility's overall Medicare cost-
to-charge ratio specific to freestanding IRFs and for IRFs that are
distinct part units of acute care hospitals. Intermediaries will
calculate updated ratios each time a subsequent cost report settlement
is made. Further, retrospective adjustments to the data used in
determining outlier payments will not be made. If the overall Medicare
cost-to-charge ratio appears to be substantially out-of-line with
similar facilities, the intermediary should ensure that the underlying
costs and charges are properly reported. We are evaluating the use of
upper and lower cost-to-charge ratio thresholds (similar with the
outlier policy for acute care hospitals) in the future to ensure that
the distribution of outlier payments remains equitable.''
For this proposed rule, we are proposing to continue to use the
$11,211 threshold amount. This threshold amount was used in the FY 2003
IRF PPS payment rates and we believe it remains appropriate because the
data should not contain any of the inappropriate payment enhancement
practices that would result with the implementation of an outlier
policy. The data used to construct the existing IRF-PPS outlier
threshold consists of cost and charge data that was not influenced by
the incentives the current IRF PPS outlier policy may create.
Specifically, we used the IRF cost and charge data from the previous
cost-based reimbursement system to establish the outlier threshold.
These data were not inappropriately influenced by incentives to inflate
charges that are created with the existence of an outlier policy; there
is not a need for an outlier policy cost-based reimbursement because
IRFs, with some limits, would be paid their costs. This is unlike the
outlier situation in IPPS, which used post-PPS data to update its
annual threshold amount. The IPPS data reflected the practices that we
believe erroneously created inappropriate outlier payments.
We propose to continue to make outlier payments for any discharges
if the estimated cost of a case exceeds the adjusted IRF PPS payment
for the CMG plus the adjusted threshold amount ($11,211 which is then
adjusted for each IRF by the facility's wage adjustment, its LIP
adjustment, and its rural adjustment, if applicable). We propose to
continue to calculate the estimated cost of a case by multiplying an
IRF's overall cost-to-charge ratio by the Medicare allowable covered
charge. However, we are proposing to apply a ceiling to an IRF's cost-
to-charge ratios which is discussed below. In accordance with Sec.
412.624(e)(4), we will continue to pay outlier cases 80 percent of the
difference between the estimated cost of the case and the outlier
threshold (the sum of the adjusted IRF PPS payment for the CMG and the
adjusted threshold amount). In addition, under the existing methodology
described in the preamble to the August 7, 2001 IRF PPS final rule (66
FR 41363), we will continue to assign the applicable national average
for new IRFs.
2. Proposed Changes to the IRF Outlier Payment Methodology
Statistical Accuracy of Cost-to-Charge ratios
We believe that there is a need to ensure that the cost-to-charge
ratio used to compute an IRF's estimated costs should be subject to a
statistical measure of accuracy. Removing aberrant data from the
calculation of outlier payments will allow us to enhance the extent to
which outlier payments are equitably distributed and continue to reduce
incentives for IRFs to underserve patients who require more costly
care. Further, using a statistical measure of accuracy to address
aberrant cost-to-charge ratios will also allow us to be consistent with
the proposed outlier policy changes for the acute care hospital IPPS
discussed in the March 4, 2003 Cost Outlier proposed rule, (68 FR
10420). Therefore in this proposed rule, we are proposing the
following:
(1) To apply a ceiling to IRF's cost-to-charge ratio if a
facility's cost-to-charge ratio is above a ceiling. We will calculate
two national ceilings, one for IRFs located in rural areas and one for
facilities located in urban areas. We propose to compute this ceiling
by first calculating the national average and the standard deviation of
the cost-to-charge ratio for both urban and rural IRFs. (Because of the
small number of IRF's compared to the number of acute care hospitals,
we believe that statewide averages for IRFs, as proposed under the
IPPS, would not be statistically valid. Thus, we propose to use
national average cost-to-charge ratios in place of statewide averages.)
To determine the rural and urban ceiling, we propose to multiply each
of the standard deviations by 3 and add the result to the appropriate
national cost-to-charge ratio average (rural and urban). We believe
this method results in statistically valid ceilings. If an IRF's cost-
to-charge ratio is above the applicable ceiling it is considered to be
statistically inaccurate and we propose to assign the national (either
rural or urban) average cost-to-charge ratio to the IRF. Cost-to-charge
ratios above this ceiling are probably due to faulty data reporting or
entry, and, therefore, should not be used to identify and make payments
for outlier cases because such data are most likely erroneous and
therefore should not be relied upon. We propose to update the ceiling
and averages using this methodology every year and we will publish
these amounts in future program memoranda;
(2) Not assign the applicable national average cost-to-charge ratio
when an IRF's cost-to-charge ratio falls below a floor. We are
proposing this policy because, as is the case for acute care hospitals,
we believe IRFs could arbitrarily increase their charges in order to
maximize outlier payments. Even though this arbitrary increase in
charges should result in a lower cost-to-charge ratio in the future
(due to the lag time in cost report settlement), if we propose the use
of a floor, the IRF's cost-to-charge ratio would be raised to the
applicable national average. This application of the national average
could result in inappropriately higher outlier payments. Accordingly,
we are proposing to apply the IRF's actual cost-to-charge ratio to
determine the cost of the case rather than creating and applying a
floor. Applying an IRF's actual cost-to-charge ratio to charges in the
future to determine the cost of a case
[[Page 26809]]
will result in more appropriate outlier payments because it does not
overstate the actual cost-to-charge ratio. Therefore, consistent with
the proposed policy change for acute care hospitals under the IPPS, we
are proposing that to use an IRF's actual cost-to-charge ratio no
matter how low their ratio fall.
3. Proposed Adjustment of IRF Outlier Payments
Under the existing methodology for computing IRF outlier payments
as described in the preamble of the August 7, 2001 IRF PPS final rule
(66 FR 41363) and in the November 1, 2001 Program Memorandum discussed
above, we specify that the cost-to-charge ratio used to compute
estimated costs are obtained from the most recent settled Medicare cost
report. Further, we provided for no retroactive adjustment to the
outlier payments to account for differences between the cost-to-charge
ratio from the latest settled cost report and the actual cost-to-charge
ratio for the cost reporting period in which the outlier payment is
made. This policy is consistent with the existing outlier payment
policy for acute care hospitals under the IPPS. However, as discussed
in the IPPS March 4, 2003 Cost Outlier proposed rule (68 FR 10423), we
proposed to revise the methodology for determining cost-to-charge
ratios for acute care hospitals under the IPPS because we became aware
that payment vulnerabilities exist in the current IPPS outlier policy.
Because we believe the IRF outlier payment methodology is likewise
susceptible to the same payment vulnerabilities, we are proposing the
following:
(1) As proposed for acute care hospitals under the IPPS at proposed
Sec. 412.84(i) in the March 4, 2003 proposed rule (68 FR 10420), we
are proposing under Sec. 412.624(e)(4), by cross-referencing proposed
Sec. 412.84(i), that fiscal intermediaries would use more recent data
when determining an IRF's cost-to-charge ratio. Specifically, under
proposed Sec. 412.84(i), we are proposing that fiscal intermediaries
would use either the most recent settled IRF cost report or the most
recent tentative settled IRF cost report, whichever is later to obtain
the applicable IRF cost-to-charge ratio. In addition, as proposed under
Sec. 412.84(i), any reconciliation of outlier payments will be based
on a ratio of costs to charges computed from the relevant cost report
and charge data determined at the time the cost report coinciding with
the discharge is settled. As is the case with the proposed changes to
the outlier policy for acute care hospitals under the IPPS, we are
still assessing the procedural changes that would be necessary to
implement this change.
(2) As proposed for acute care hospitals under the IPPS at proposed
Sec. 412.84(m) in the March 4, 2003 proposed rule (68 FR 10420), we
are proposing under Sec. 412.624(e)(4), by cross-referencing proposed
Sec. 412.84(m), that IRF outlier payments may be adjusted to account
for the time value of money which is the value of money during the time
period it was inappropriately held by the IRF as an ``overpayment.'' We
also may adjust outlier payments for the time value of money for cases
that are ``underpaid'' to the IRF. In these cases, the adjustment will
result in additional payments to the IRF. We are proposing that any
adjustment will be based upon a widely available index to be
established in advance by the Secretary, and will be applied from the
midpoint of the cost reporting period to the date of reconciliation.
4. Proposed Change to the Methodology for Calculating the Federal
Prospective Payment Rates
Section 412.624(e)(4) Adjustment for high-cost outliers
We provide for an additional payment to a facility if its estimated
costs for a patient exceeds a fixed dollar amount (adjusted for area
wage levels and factors to account for treating low-income patients and
for rural locations) as specified by CMS. The additional payment equals
80 percent of the difference between the estimated cost of the patient
and the sum of the adjusted Federal prospective payment computed under
this section and the adjusted fixed dollar amount. Additional payments
made under this section will be subject to the adjustments at Sec.
412.84(i) except that national averages will be used instead of
statewide averages. Additional payments made under this section will
also be subject to adjustments at Sec. 412.84(m).
VII. Provisions of the Proposed Rule
Overall, in this proposed rule, we are proposing to update the IRF
Federal prospective payment rates from FY 2003 to FY 2004 using the
methodology described in Sec. 412.624 of the regulations. Our proposed
FY 2004 Federal prospective payment rates would be effective for
discharges on or after October 1, 2003 and before October 1, 2004.
We are proposing to update the IRF wage indices for FY 2004 by
using FY 1999 acute care hospital data. However, any adjustments or
updates made under section 1886(j)(6) of the Act must be made in a
budget neutral manner. Therefore, we are proposing a methodology to
update the wage indices for FY 2004 using 1999 acute care hospital data
in a budget neutral manner.
We are also proposing to modify certain criteria for a hospital or
a hospital unit to be classified as an IRF.
Section 412.20 Hospital services subject to the prospective payment
systems
We are proposing to redesignate current Sec. 412.20(b) and add a
new paragraph (b)(2) that states inpatient hospital services will not
be paid for under the IRF PPS if the services are paid by a health
maintenance organization (HMO) or competitive medical plan (CMP) that
elects not to have CMS make payments to an IRF for services, which are
inpatient hospital services, furnished to the HMO's or CMP's Medicare
enrollees under part 417.
Section 412.22 Excluded hospitals and hospital units: General rules
We are proposing to eliminate application of the bed-number
criteria in Sec. 412.22(h)(2)(i) for freestanding satellite IRFs by
revising Sec. 412.22(h)(2) and by adding Sec. 412.22(h)(7).
Section 412.25 Excluded hospital units: Common requirements
We are also proposing to eliminate application of the bed-number
criteria for IRF satellite units of a hospital in Sec. 412.25(e)(2)(i)
by revising Sec. 412.25(e)(2) and by adding Sec. 412.25(e)(5) to
conform with the proposed change in Sec. 412.22(h)(2)(i).
Section 412.29 Excluded rehabilitation units: Additional requirements
Under Sec. 412.29(a), an IRF unit must have met either the
requirements for new units or converted units under Sec. 412.30 in
order to be excluded from the inpatient acute care PPS. Section
412.29(a)(2) contains an incorrect reference to the requirements for
converted units under ``Sec. 412.30(b).'' The correct reference to the
requirements for converted units is Sec. 412.30(c). Accordingly, we
are proposing to make a technical correction by changing the reference
in Sec. 412.29(a)(2) to state ``Converted units under Sec.
412.30(c).''
Section 412.30 Exclusion of new rehabilitation units and expansion of
units already excluded
Section 412.30(b)(3) contains an incorrect reference to the
required written certification described in
[[Page 26810]]
paragraph ``(a)(2)'' of this section. The correct reference to the
written certification is described in paragraph (2) of Sec. 412.30(b).
Accordingly, we are proposing to make a technical correction by
changing the current reference to paragraph (a)(2) in paragraph (b)(3)
to state ``The written certification described in paragraph (b)(2) * *
*''.
Section 412.30(d)(2)(i) contains an incorrect reference to the
definition of new bed capacity under paragraph ``(c)(1)'' of this
section. The correct reference to the definition of new bed capacity is
paragraph (d)(1). Accordingly, we are proposing a technical correction
to change the current reference to paragraph (c)(1) in paragraph
(d)(2)(i) to state ``* * * under paragraph (d)(1) of this section.''
Revision of the Definition of Discharge in Sec. 412.602
According to Sec. 412.602, a discharge has occurred when the
patient has been formally released from the hospital, or has died in
the hospital, or when the patient stops receiving Medicare--covered
Part A inpatient rehabilitation services. We are proposing to amend
Sec. 412.602 by revising the definition of ``Discharge.'' Accordingly,
the revised definition would read as follows:
Discharge. A Medicare patient in an inpatient rehabilitation
facility is considered discharged when--
(1) The patient is formally released from the inpatient
rehabilitation facility; or
(2) The patient dies in the inpatient rehabilitation facility.
General Requirements for Payment Under the Prospective Payment System
for Inpatient Rehabilitation Facilities in Sec. 412.604
In Sec. 412.604, ``General requirements,'' in paragraph (a)(2)
introductory text, we are proposing to change the word ``we'' to ``CMS
or its Medicare fiscal intermediary'' to read as follows:
``If an inpatient rehabilitation facility fails to comply fully
with these conditions with respect to inpatient hospital services
furnished to one or more Medicare Part A fee-for-service beneficiaries,
CMS or its Medicare fiscal intermediary may, as appropriate--''
Addition of Requirement To Give Patient the Privacy Act Statement in
Sec. 412.608
Section 412.608 specifies that before performing the IRF-PAI
assessment, the IRF must inform the patient of the rights contained in
this section. The rights specified in Sec. 412.608 are--
(1) The right to be informed of the purpose of the collection of
the patient assessment data;
(2) The right to have the patient assessment information collected
be kept confidential and secure;
(3) The right to be informed that the patient assessment
information will not be disclosed to others, except for legitimate
purposes allowed by the Federal Privacy Act and Federal and State
regulations;
(4) The right to refuse to answer patient assessment questions; and
(5) The right to see, review, and request changes on his or her
patient assessment.
In addition to the rights specified in Sec. 412.608, a patient has
privacy rights under the Privacy Act of 1974 (5 U.S.C. Sec.
552a(e)(3)), and 45 CFR 5b.4(a)(3). The Privacy Act and 45 CFR
5b.4(a)(3) require that an individual be informed under what authority,
and for what purpose, individually identifiable information is being
collected by a Federal agency and maintained in a system of records. In
order to ensure that an IRF complies with the Privacy Act of 1974, and
45 CFR 5b.4(a)(3), we are proposing that before performing the IRF-PAI
assessment, an IRF clinician must give each Medicare inpatient two
forms. We have published these forms in Appendix B ``Inpatient
Rehabilitation Facility Patient Privacy Forms'' of this proposed rule.
In addition, we are proposing that the form entitled ``Privacy Act
Statement--Health Care Records'' is a detailed description of patient
privacy rights under the Privacy Act of 1974. Also, we are proposing
that the form entitled ``Inpatient Rehabilitation Facility Patient
Assessment Instrument (IRF-PAI) Data Collection Information Summary for
Patients in Inpatient Rehabilitation Facilities'' is the plain language
equivalent of the Privacy Act Statement--Health Care Records.
Additionally, we are proposing that by giving both of these forms to a
patient before starting the IRF-PAI assessment, the IRF would fulfill
the requirement that the patient be informed of the five rights
specified in Sec. 412.608. Accordingly, we are proposing to amend
Sec. 412.608 to read as follows:
Section 412.608 Patients Rights Regarding the Collection of Patient
Assessment Data
(a) Before performing an assessment using the patient assessment
instrument, a clinician of the inpatient rehabilitation facility must
give a Medicare inpatient each of these forms--
(1) The Privacy Act Statement--Health Care Records; and
(2) The Inpatient Rehabilitation Facility Patient Assessment
Instrument (IRF-PAI) Privacy Act Statement--Health Care Records.
(b) The Inpatient Rehabilitation Facility Patient Assessment
Instrument (IRF-PAI) Data Collection Information Summary for Patients
in Inpatient Rehabilitation Facilities is the plain language equivalent
of the Privacy Act Statement--Health Care Records.
(c) By giving the Medicare inpatient the forms specified in
paragraph (a) of this section the inpatient rehabilitation facility has
informed the Medicare patient of--
(1) His or her privacy rights under the Privacy Act of 1974 and 45
CFR 5b.4(a)(3); and
(2) The following rights:
(i) The right to be informed of the purpose of the collection of
the patient assessment data.
(ii) The right to have the patient assessment information collected
be kept confidential and secure.
(iii) The right to be informed that the patient assessment
information will not be disclosed to others, except for legitimate
purposes allowed by the Federal Privacy Act and Federal and State
regulations.
(iv) The right to refuse to answer patient assessment questions.
(v) The right to see, review, and request changes on his or her
patient assessment.
(d) The patient rights specified in this section are in addition to
the patient rights specified in Sec. 482.13 of this chapter.
By complying with the requirements specified in revised Sec.
412.608 the IRF has not met the separate requirement in 45 CFR 164.520
entitled ``Notice of privacy practices for protected health
information.'' Section 164.520 requires that a health plan or health
care provider give patients a Notice of Privacy Practices that must
describe the health plan's or health care provider's own uses and
disclosures of protected health information, and the individual rights
that patients have with respect to their protected health information.
When the IRF-PAI Must Be Completed (Sec. 412.610)
According to Sec. 412.606(b), an IRF must use the IRF-PAI to
assess Medicare Part A fee-for-service inpatients. Section
412.610(c)(1)(i)(C) specifies that the IRF-PAI for the admission
assessment ``Must be completed on the calendar day that follows the
admission assessment reference day.'' In order to clarify that
[[Page 26811]]
Sec. 412.610(c)(1)(i)(C) does not prohibit the IRF from recording any
or all of the data on the IRF-PAI before the day that follows the
admission assessment reference day, we are proposing to amend Sec.
412.610(c)(1)(i)(C) to read as follows: Must be completed by the
calendar day that follows the admission assessment reference day.
Transmission of IRF-PAI Data (Sec. 412.614)
As specified in Sec. 412.606(b), ``Patient assessment
instrument,'' an IRF must use the IRF-PAI to assess Medicare Part A
fee-for-service inpatients.
Section 412.614, ``Transmission of patient assessment data,''
specifies that an IRF must transmit to us the IRF-PAI assessment data
for each Medicare Part A fee-for-service inpatient. It is the
electronic version of the IRF-PAI that enables an IRF to transmit the
IRF-PAI data to us. We require that IRFs transmit IRF-PAI data so that
we have the IRF-PAI data that are associated with the CMG payment code
that the IRF submitted to its FI. We are proposing to amend Sec.
412.614 by specifying that Sec. 412.614(a) is a general rule that
would read as follows:
(a) Data format. General rule. The IRF must encode and transmit
data for each Medicare Part A fee-for-service inpatient--
We are proposing to amend Sec. 412.614 by adding a new Sec.
412.614(a)(3), which would relieve the IRF of having to transmit the
IRF-PAI data for a Medicare Part A fee-for-service inpatient when
Medicare will not be paying the IRF for any of the services the IRF
furnished to that inpatient. New Sec. 412.614(a)(3) would read as
follows:
Exception to the general rule. When the inpatient rehabilitation
facility does not submit claims data to Medicare in order to be paid
for any of the services it furnished to a Medicare Part A fee-for-
service inpatient, the inpatient rehabilitation facility is not
required, but may, transmit to Medicare the inpatient rehabilitation
facility patient assessment data associated with the services furnished
to that same Medicare Part A fee-for-service inpatient.
We are proposing a new Sec. 412.614(e) to read as follows:
``Exemption to being assessed a penalty for transmitting the IRF-PAI
data late. CMS may waive the penalty specified in paragraph (d) of this
section when, due to an extraordinary situation that is beyond the
control of an inpatient rehabilitation facility, the inpatient
rehabilitation facility is unable to transmit the patient assessment
data in accordance with paragraph (c) of this section. Only CMS can
determine if a situation encountered by an inpatient rehabilitation
facility is extraordinary and qualifies as a situation for waiver of
the penalty specified in paragraph (d)(2) of this section. An
extraordinary situation may be, but is not limited to, fires, floods,
earthquakes, or similar unusual events that inflict extensive damage to
an inpatient rehabilitation facility. An extraordinary situation may be
one that produces a data transmission problem that is beyond the
control of the inpatient rehabilitation facility, as well as other
situations determined by CMS to be beyond the control of the inpatient
rehabilitation facility. An extraordinary situation must be fully
documented by the inpatient rehabilitation facility.''
Proposed Update of Area Wage Data
In Sec. 412.624(e), ``Calculation of the adjusted Federal
prospective payment,'' in paragraph (1), ``Adjustment for area wage
levels,'' we are proposing that adjustments or updates to the wage data
used to adjust a facility's Federal prospective payment rate under
paragraph (e)(1) of this section will be made in a budget neutral
manner. We are also proposing to determine a budget neutral wage
adjustment factor, based on any adjustment or update to the wage data,
to apply to the standard payment conversion factor.
Proposed Adjustment for High-Cost Outliers Under the IRF Prospective
Payment System (Sec. 412.624)
As proposed for acute care hospitals under the IPPS at proposed
Sec. 412.84(i) in the March 4, 2003 proposed rule (68 FR 10420), we
are proposing under Sec. 412.624(e)(4), by cross-referencing proposed
Sec. 412.84(i), that fiscal intermediaries would use more recent data
when determining an IRF's cost-to-charge ratio. Specifically, under
proposed Sec. 412.84(i), we are proposing that fiscal intermediaries
would use either the most recent settled IRF cost report or the most
recent tentative settled IRF cost report, whichever is later, to obtain
the applicable IRF cost-to-charge ratio. In addition, as proposed under
Sec. 412.84(i), any reconciliation of outlier payments will be based
on a ratio of costs to charges computed from the relevant cost report
and charge data determined at the time the cost report coinciding with
the discharge is settled. (Because of the small number of IRFs compared
to the number of acute care hospitals, we believe that statewide
averages for IRFs, as proposed under the IPPS, would not be
statistically valid. Thus, we are proposing to use national average
cost-to-charge ratios in place of statewide averages.) As is the case
with the proposed changes to the outlier policy for acute care
hospitals under the IPPS, we are still assessing the procedural changes
that would be necessary to implement this change.
As proposed for acute care hospitals under the IPPS at proposed
Sec. 412.84(m) in the March 4, 2003 proposed rule (68 FR 10420), we
are proposing under Sec. 412.624(e)(4), by cross-referencing proposed
Sec. 412.84(m), that IRF outlier payments may be adjusted to account
for the time value of money which is the value of money during the time
period it was inappropriately held by the IRF as an ``overpayment.'' We
also may adjust outlier payments for the time value of money for cases
that ``underpaid'' to the IRF. In these cases, the adjustment will
result in additional payments to the IRF. We are proposing that any
adjustment will be based upon a widely available index to be
established in advance by the Secretary, and will be applied from the
midpoint of the cost reporting period to the date of reconciliation.
VIII. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), agencies are
required to provide a 60-day notice in the Federal Register and solicit
public comment when a collection of information requirement is
submitted to the Office of Management and Budget (OMB) for review and
approval. To fairly evaluate whether an information collection should
be approved by OMB, section 3506(c)(2)(A) of the PRA requires that we
solicit comments on the following issues:
[sbull] Whether the information collection is necessary and useful
to carry out the proper functions of the agency;
[sbull] The accuracy of the agency's estimate of the information
collection burden;
[sbull] The quality, utility, and clarity of the information to be
collected; and
[sbull] Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are therefore soliciting public comment on each of these issues
for the proposed information collection requirements discussed below.
Section 412.608 Patients' rights regarding the collection of patient
assessment data.
Under this section, before performing an assessment using the
inpatient rehabilitation facility patient assessment instrument, a
clinician of the inpatient rehabilitation facility must give a Medicare
inpatient the form entitled
[[Page 26812]]
``Privacy Act Statement--Health Care Records'' and the simplified plain
language description of the Privacy Act Statement--Health Care Records,
which is a form entitled ``Data Collection Information Summary for
Patients in Inpatient Rehabilitation Facilities;'' the inpatient
rehabilitation facility must document in the Medicare inpatient's
clinical record that the Medicare inpatient has been given the
documents specified in the section.
The burden associated with this section is the time it will take to
document that the patient has been given the requisite forms. We
estimate that it will take no more than a minute per patient. There
will be an estimated 390,000 admissions per year, for a total of 6,500
hours per year.
Section 412.614 Transmission of Patient Assessment Data
1. The inpatient rehabilitation facility must encode and transmit
data for each Medicare Part A fee-for-service inpatient.
These information collection requirements associated with the IRF
PPS are currently approved by OMB through July 31, 2005 under OMB
number 0938-0842.
2. Under paragraph (e), Exemption to being assessed a penalty for
transmitting the IRF-PAI data late, CMS may waive the penalty specified
in paragraph (d) of this section. To assist CMS in determining if a
waiver is appropriate the inpatient rehabilitation facility must fully
document the circumstances surrounding the occurrence.
Given that it is estimated that fewer than 10 instances will occur
on an annual basis to necessitate a waiver, this requirement is not
subject to the PRA as stipulated under 5 CFR 1320.3(c).
We have submitted a copy of this proposed rule to OMB for its
review of the information collection requirements in Sec. 412.604,
Sec. 412.608 and Sec. 412.614. These requirements are not effective
until they have been approved by OMB.
If you have any comments on any of these information collection and
record keeping requirements, please mail the original and 3 copies to
CMS within 60 days of this publication date directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Office of Regulations Development
and Issuances, Reports Clearance Officer, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
Attn: Julie Brown, CMS-1474-P; and Office of Information and
Regulatory Affairs, Office of Management and Budget, Room 10235, New
Executive Office Building, Washington, DC 20503, Attn: Brenda Aguilar,
CMS Desk Officer.
Comments submitted to OMB may also be emailed to the following
address: e-mail: [email protected]; or faxed to OMB at (202) 395-
6974.
IX. 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.
X. Regulatory Impact Analysis
A. Introduction
The August 7, 2001 IRS PPS final rule (66 FR 41316) established the
IRF PPS for the payment of inpatient hospital services furnished by a
rehabilitation hospital or rehabilitation unit of a hospital with cost
reporting periods beginning on or after January 1, 2002. We
incorporated a number of elements into the IRF PPS, such as case-level
adjustments, a wage adjustment, an adjustment for the percentage of
low-income patients, a rural adjustment, and outlier payments. The
August 1, 2002 IRF PPS notice (67 FR 49928) set forth updates of the
IRF PPS rates contained in the August 7, 2001 IRF PPS final rule. The
purpose of the updates set forth in the August 1, 2002 IRF PPS notice
was to provide an update to the IRF payment rates for discharges during
FY 2003. This proposed rule proposes updated IRF PPS rates for
discharges that occur during FY 2004.
In constructing these impacts, we do not attempt to predict
behavioral responses, and we do not make adjustments for future changes
in such variables as discharges or case-mix. We note that certain
events may combine to limit the scope or accuracy of our impact
analysis, because such an analysis is future-oriented and, thus,
susceptible to forecasting errors due to other changes in the
forecasted impact time period. Some examples of such possible events
are newly legislated general Medicare program funding changes by the
Congress, or changes specifically related to IRFs. In addition, changes
to the Medicare program may continue to be made as a result of the BBA,
the BBRA, the BIPA, or new statutory provisions. Although these changes
may not be specific to the IRF PPS, the nature of the Medicare program
is such that the changes may interact, and the complexity of the
interaction of these changes could make it difficult to predict
accurately the full scope of the impact upon IRFs.
We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
1. Executive Order 12866
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 this proposed rule, we are proposing to use an updated FY 2004
IRF market basket index and an updated FY 2004 IRF labor-related share
and wage indices to update the IRF PPS rates to FY 2004, as described
in section VI of this proposed rule. By updating the IRF PPS rates to
FY 2004, as proposed in this proposed rule, we estimate that the
overall cost to the Medicare program for IRF services in FY 2004 will
increase by $204.2 million over FY 2003 levels. The updates to the IRF
labor-related share and wage indices are made in a budget neutral
manner. Thus, updating the IRF labor-related share and the wage indices
to FY 2004 have no overall effect on estimated costs to the Medicare
program. Therefore, this estimated cost to the Medicare program is due
to the application of the proposed updated IRF market basket of 3.3
percent. Because the cost to the Medicare program is greater than $100
million, this proposed rule is considered a major rule as defined
above.
2. Regulatory Flexibility Act (RFA) and Impact on Small Hospitals
The RFA requires agencies to analyze the economic impact of our
regulations on small entities. If we determine that the regulation will
impose a significant burden on a substantial number of small entities,
we must examine options for reducing the burden. For purposes of the
RFA, small entities include small businesses, nonprofit organizations,
and governmental agencies. Most hospitals
[[Page 26813]]
are considered small entities, either by nonprofit status or by having
receipts of $6 million to $29 million in any 1 year. (For details, see
the Small Business Administration's regulation that set forth size
standards for health care industries at 65 FR 69432.) Because we lack
data on individual hospital receipts, we cannot determine the number of
small proprietary IRFs. Therefore, we assume that all IRFs are
considered small entities for the purpose of the analysis that follows.
Medicare fiscal intermediaries and carriers are not considered to be
small entities. Individuals and States are not included in the
definition of a small entity.
This proposed rule proposes a 3.3 percent increase to the Federal
PPS rates. We do not expect an incremental increase of 3.3 percent to
the Medicare Federal rates to have a significant effect on the overall
revenues of IRFs. Most IRFs are units of hospitals that provide many
different types of services (for example, acute care, outpatient
services) and the rehabilitation component of their business is
relatively minor in comparison. In addition, IRFs provide services to
(and generate revenues from) patients other than Medicare
beneficiaries. Accordingly, we certify that this proposed rule will not
have a significant impact on small entities.
Section 1102(b) of the Act requires us to prepare a regulatory
impact analysis for any proposed rule that will have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 603
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area (MSA) and has fewer than 100 beds.
This proposed rule will not have a significant impact on the
operations of small rural hospitals. As indicated above, this proposed
rule proposes a 3.3 percent increase to the Federal PPS rates. In
addition, we do not expect an incremental increase of 3.3 percent to
the Federal rates to have a significant effect on overall revenues or
operations since most rural hospitals provide many different types of
services (for example, acute care, outpatient services) and the
rehabilitation component of their business is relatively minor in
comparison. Accordingly, we certify that this proposed rule will not
have a significant impact on the operations of small rural hospitals.
3. Unfunded Mandates Reform Act
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 an expenditure in any 1 year by
State, local, or tribal governments, in the aggregate, or by the
private sector, of at least $110 million. This proposed rule will not
have a substantial effect on the governments mentioned nor will it
affect private sector costs.
4. Executive Order 13132
We examined this proposed rule in accordance with Executive Order
13132 and determined that it will not have a substantial impact on the
rights, roles, or responsibilities of State, local, or tribal
governments.
5. Overall Impact
For the reasons stated above, we have not prepared an analysis
under the RFA and section 1102(b) of the Act because we have determined
that this proposed rule will not have a significant impact on small
entities or the operations of small rural hospitals.
B. Anticipated Effects of the Proposed Rule
We discuss below the impacts of this proposed rule on the Federal
budget and on IRFs.
1. Budgetary Impact
Section 1886(j)(3)(C) of the Act requires annual updates to the IRF
PPS payment rates. Section 1886 (j)(6) of the Act requires the
Secretary to adjust or update the labor-related share and the wage
indices or the labor-related share and the wage indices the applicable
to IRFs not later than October 1, 2001 and at least every 36 months
thereafter. We project that updating the IRF PPS for discharges
occurring on or after October 1, 2003 and before October 1, 2004 will
cost the Medicare program $204.2 million. The proposed update to the
IRF labor-related share and wage indices if finalized will be made in a
budget neutral manner. Thus, updating the IRF labor-related share and
the wage indices to FY 2004 would have no overall effect on estimated
costs to the Medicare program. Therefore, this estimated cost to the
Medicare program is due to the application of the proposed updated IRF
market basket of 3.3 percent.
2. Impact on Providers
For the impact analyses shown in the August 7, 2001 IRF PPS final
rule, we simulated payments for 1,024 facilities. To construct the
impact analyses set forth in this proposed rule, we use the latest
available data. These data include the same facilities that were used
in constructing the impact analyses displayed in the August 7, 2001 IRF
PPS final rule (66 FR 41364-41365, and 41372). We do not have enough
post-IRF PPS data to develop the overall budgetary impact and the
impact on providers. Further, we will need a sufficient amount of these
data to be able to rely on them as the basis for the impact analysis.
Because IRFs began to be paid under the IRF PPS based on their cost
report start date that occurred on or after January 1, 2002, sufficient
Medicare claims data will not be available for those facilities whose
cost report start date occurs later in the calendar year. We do not
have enough post-IRF PPS data to develop the overall budgetary impact
and the impact on providers. Further, we will need a sufficient amount
of these data to be able to rely on them as the basis for the impact
analysis. Because IRFs began to be paid under the IRF PPS based on
their cost report start date that occurred on or after January 1, 2002,
sufficient Medicare claims data will not be available for those
facilities whose cost report start date occurs later in the calendar
year. The estimated monetary changes among the various classifications
of IRFs for discharges occurring on or after October 1, 2003 and before
October 1, 2004 is reflected in Chart 8 ``Projected Impact of Proposed
FY 2004 Update'' of this proposed rule.
3. Calculation of the Estimated FY 2003 IRF Prospective Payments
To estimate payments under the IRF PPS for FY 2003, we multiplied
each facility's case-mix index by the facility's number of Medicare
discharges, the FY 2003 standardized payment amount, the applicable FY
2003 labor-related share and wage indices, a low-income patient
adjustment, and a rural adjustment (if applicable). The adjustments
include the following:
The wage adjustment, calculated as follows: (.27605 + (.72395 x FY
2003 Wage Index)).
The disproportionate share adjustment, calculated as follows:
(1 + Disproportionate Share Percentage) raised to the power of
.4838).
The rural adjustment, if applicable, calculated by multiplying
payments by 1.1914.
4. Calculation of the Proposed Estimated FY 2004 IRF Prospective
Payments
To calculate proposed FY 2004 payments, we use the payment rates
described in this proposed rule that reflect the proposed 3.3 percent
market basket increase factor using the proposed FY 2004 labor-related
share
[[Page 26814]]
and wage indices, a low-income patient adjustment, and a rural
adjustment (if applicable). The proposed adjustments include the
following:
The proposed wage adjustment, calculated as follows: (.27605 +
(.72683 x FY 2004 Wage Index)).
The proposed disproportionate share adjustment, calculated as
follows: (1 + Disproportionate Share Percentage) raised to the power of
.4838).
The proposed rural adjustment, if applicable, calculated by
multiplying payments by 1.1914.
Chart 8 ``Projected Impact of Proposed FY 2004 Update'' illustrates
the aggregate impact of the proposed estimated FY 2004 updated payments
among the various classifications of facilities compared to the
estimated IRF PPS payment rates applicable for FY 2003.
The first column, Facility Classification, identifies the type of
facility. The second column identifies the number of facilities for
each classification type, and the third column lists the number of
cases. The fourth column indicates the impact of the proposed budget
neutral wage adjustment. The last column reflects the combined changes
including the proposed update to the FY 2003 payment rates by proposed
3.3 percent and the proposed budget neutral wage adjustment (including
the proposed FY 2004 labor-related share and the proposed FY 2004 wage
indices).
Chart 8.--Projected Impact of Proposed FY 2004 Update
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed budget
Facility classification Number of facilities Number of cases neutral wage Proposed total
adjustment change
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total
1,024 347,809 0.0% 3.3%
Urban unit...................................................... 725 206,926 -0.5 2.8
Rural unit...................................................... 131 26,507 0.2 3.5
Urban hospital.................................................. 156 109,691 0.9 4.3
Rural hospital.................................................. 12 4,685 -1.3 1.9
Total urban..................................................... 881 316,617 0.0 3.3
Total rural..................................................... 143 31,192 0.0 3.2
Urban by Region
New England..................................................... 32 15,039 0.1 3.5
Middle Atlantic................................................. 133 64,042 -1.5 1.8
South Atlantic.................................................. 112 52,980 0.5 3.8
East North Central.............................................. 171 55,071 -0.5 2.7
East South Central.............................................. 41 23,434 0.9 4.2
West North Central.............................................. 70 18,087 0.6 3.9
West South Central.............................................. 154 52,346 1.5 4.8
Mountain........................................................ 56 14,655 1.1 4.4
Pacific......................................................... 112 20,963 -0.7 2.6
Rural by Region
New England..................................................... 4 829 -0.2 3.1
Middle Atlantic................................................. 10 2,424 -1.3 1.9
South Atlantic.................................................. 20 6,192 -0.8 2.5
East North Central.............................................. 29 5,152 -0.5 2.8
East South Central.............................................. 10 3,590 0.2 3.5
West North Central.............................................. 22 3,820 1.7 4.9
West South Central.............................................. 32 7,317 0.6 3.9
Mountain........................................................ 9 1,042 -0.3 3.0
Pacific......................................................... 7 826 -1.2 2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
As Chart 8 illustrates, all IRFs are expected to benefit from the
proposed 3.3 percent market basket increase that would be applied to FY
2003 IRF PPS payment rates to develop the proposed FY 2004 rates.
However, there may be distributional impacts among various IRFs due to
the application of the proposed updates to the labor-related share and
proposed wage indices in a budget neutral manner.
To summarize, we have proposed that all facilities would receive a
3.3 percent increase in their unadjusted IRF PPS payments. The
estimated positive impact among all IRFs reflected in Chart 8 are due
to the effect of the proposed update to the IRF market basket index. We
also note that, while no changes in the regulations are being proposed,
we discuss the potential effects of improved compliance with the 75
percent rule in section II of this proposed rule.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget
(OMB).
List of Subjects in 42 CFR Part 412
Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV, part 412, as
set forth below:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart B--Hospital Services Subject to and Excluded From the
Prospective Payment Systems for Inpatient Operating Costs and
Inpatient Capital-Related Costs
2. In Sec. 412.20, the following changes are made:
A. Redesignate paragraph (b) as paragraph (b)(1).
B. Add paragraph (b)(2) to read as follows:
[[Page 26815]]
Sec. 412.20 Hospital services subject to the prospective payment
systems.
* * * * *
(b) * * *
(2) CMS will not pay for services under Subpart P of this part if
the services are paid for by a health maintenance organization (HMO) or
competitive medical plan (CMP) that elects not to have CMS make
payments to an inpatient rehabilitation facility for services, which
are inpatient hospital services, furnished to the HMO's or CMP's
Medicare enrollees, as provided under part 417 of this chapter.
* * * * *
3. In Sec. 412.22, the following changes are made:
A. Revise paragraph (h)(2) introductory text.
B. Add and reserve paragraph (h)(6).
C. Add paragraph (h)(7).
The revisions and addition read as follows:
Sec. 412.22 Excluded hospitals and hospital units: General rules.
* * * * *
(h) * * *
(2) Except as provided in paragraphs (h)(3) and (h)(7) of this
section, effective for cost reporting periods beginning on or after
October 1, 1999, a hospital that has a satellite facility must meet the
following criteria in order to be excluded from the acute care hospital
inpatient prospective payment systems for any period:
* * * * *
(6) [Reserved]
(7) The provisions of paragraph (h)(2)(i) of this section do not
apply to any inpatient rehabilitation facility that is subject to the
inpatient rehabilitation facility prospective payment system under
subpart P of this part, effective for cost reporting periods beginning
on or after October 1, 2003.
4. In Sec. 412.25, the following changes are made:
A. Revise paragraph (e)(2) introductory text.
B. Add paragraph (e)(5).
The revision and addition read as follows:
Sec. 412.25 Excluded hospital units: Common requirements.
* * * * *
(e) * * *
(2) Except as provided in paragraphs (e)(3) and (e)(5) of this
section, effective for cost reporting periods beginning on or after
October 1, 1999, a hospital that has a satellite facility must meet the
following criteria in order to be excluded from the acute care hospital
inpatient prospective payment systems for any period:
* * * * *
(5) The provisions of paragraph (e)(2)(i) of this section do not
apply to any inpatient rehabilitation facility that is subject to the
inpatient rehabilitation facility prospective payment system under
subpart P of this part, effective for cost reporting periods beginning
on or after October 1, 2003.
* * * * *
5. In Sec. 412.29, revise paragraph (a)(2) to read as follows:
Sec. 412.29 Excluded rehabilitation units: Additional requirements.
(a) * * *
(2) Converted units under Sec. 412.30(c).
* * * * *
6. In Sec. 412.30, the following changes are made:
A. Revise paragraph (b)(3).
B. Revise paragraph (d)(2)(i).
Sec. 412.30 Exclusion of new rehabilitation units and expansion of
units already excluded.
(b) * * *
(3) The written certification described in paragraph (b)(2) of this
section is effective for the first full cost reporting period during
which the unit is used to provide hospital inpatient care.
* * * * *
(d) * * *
(2) Conversion of existing bed capacity. (i) Bed capacity is
considered to be existing bed capacity if it does not meet the
definition of new bed capacity under paragraph (d)(1) of this section.
* * * * *
Subpart P--Prospective Payment for Inpatient Rehabilitation
Hospitals and Rehabilitation Units
7. In Sec. 412.602, republish the introductory text and revise the
definition of ``Discharge'' to read as follows:
Sec. 412.602 Definitions.
As used in this subpart--
* * * * *
Discharge. A Medicare patient in an inpatient rehabilitation
facility is considered discharged when--
(1) The patient is formally released from the inpatient
rehabilitation facility; or
(2) The patient dies in the inpatient rehabilitation facility.
* * * * *
8. In Sec. 412.604, revise paragraph (a)(2) introductory text to
read as follows:
Sec. 412.604 Conditions for payment under the prospective payment
system for inpatient rehabilitation facilities.
(a) * * *
(2) If an inpatient rehabilitation facility fails to comply fully
with these conditions with respect to inpatient hospital services
furnished to one or more Medicare Part A fee-for-service beneficiaries,
CMS or its Medicare fiscal intermediary may, as appropriate--
* * * * *
9. Section 412.608 is revised to read as follows:
Sec. 412.608 Patients' rights regarding the collection of patient
assessment data
(a) Before performing an assessment using the inpatient
rehabilitation facility patient assessment instrument, a clinician of
the inpatient rehabilitation facility must give a Medicare inpatient
each of these forms--
(1) The form entitled ``Privacy Act Statement--Health Care
Records;'' and
(2) The simplified plain language description of the Privacy Act
Statement--Health Care Records which is a form entitled ``Data
Collection Information Summary for Patients in Inpatient Rehabilitation
Facilities.''
(b) The inpatient rehabilitation facility must document in the
Medicare inpatient's clinical record that the Medicare inpatient has
been given the documents specified in paragraph (a) of this section.
(c) The Data Collection Information Summary for Patients in
Inpatient Rehabilitation Facilities is the simplified plain language
description of the Privacy Act Statement--Health Care Records.
(d) By giving the Medicare inpatient the forms specified in
paragraph (a) of this section the inpatient rehabilitation facility
will inform the Medicare patient of--
(1) Their privacy rights under the Privacy Act of 1974 and 45 CFR
5b.4(a)(3); and
(2) The following rights:
(i) The right to be informed of the purpose of the collection of
the patient assessment data;
(ii) The right to have the patient assessment information collected
be kept confidential and secure;
(iii) The right to be informed that the patient assessment
information will not be disclosed to others, except for legitimate
purposes allowed by the Federal Privacy Act and Federal and State
regulations;
(iv) The right to refuse to answer patient assessment questions;
and
(v) The right to see, review, and request changes on his or her
patient assessment.
(e) The patient rights specified in this section are in addition to
the patient rights specified in Sec. 482.13 of this chapter.
10. In Sec. 412.610, revise paragraph (c)(1)(i)(C) to read as
follows:
[[Page 26816]]
Sec. 412.610 Assessment schedule.
* * * * *
(c) * * *
(1) * * *
(i) * * *
(C) Must be completed by the calendar day that follows the
admission assessment reference day.
* * * * *
11. In Sec. 412.614, the following changes are made:
A. Redesignate paragraphs (a)(1) and (a)(2) as (a)(1)(i) and
(a)(1)(ii), respectively.
B. Redesignate the introductory text to paragraph (a) as (a)(1) and
add a heading to newly designated paragraph (a)(1).
C. Add a new paragraph (a)(2).
D. Add a new paragraph (e).
The revision and additions read as follows:
Sec. 412.614 Transmission of patient assessment data.
(a) Data format. (1) General rule. The inpatient rehabilitation
facility must encode and transmit data for each Medicare Part A fee-
for-service inpatient--
* * * * *
(2) Exception to the general rule. When the inpatient
rehabilitation facility does not submit claim data to Medicare in order
to be paid for any of the services it furnished to a Medicare Part A
fee-for-service inpatient, the inpatient rehabilitation facility is not
required to, but may, transmit to Medicare the inpatient rehabilitation
facility patient assessment data associated with the services furnished
to that same Medicare Part A fee-for-service inpatient.
* * * * *
(e) Exemption to being assessed a penalty for transmitting the IRF-
PAI data late. CMS may waive the penalty specified in paragraph (d) of
this section when, due to an extraordinary situation that is beyond the
control of an inpatient rehabilitation facility, the inpatient
rehabilitation facility is unable to transmit the patient assessment
data in accordance with paragraph (c) of this section. Only CMS can
determine if a situation encountered by an inpatient rehabilitation
facility is extraordinary and qualifies as a situation for waiver of
the penalty specified in paragraph (d)(2) of this section. An
extraordinary situation may be due to, but is not limited to, fires,
floods, earthquakes, or similar unusual events that inflict extensive
damage to an inpatient rehabilitation facility. An extraordinary
situation may be one that produces a data transmission problem that is
beyond the control of the inpatient rehabilitation facility, as well as
other situations determined by CMS to be beyond the control of the
inpatient rehabilitation facility. An extraordinary situation must be
fully documented by the inpatient rehabilitation facility.
12. In Sec. 412.624, the following changes are made:
A. Revise paragraph (c).
B. Revise paragraph (d).
C. Revise paragraph (e)(1).
D. Revise paragraph (e)(4).
The revisions read as follows:
Sec. 412.624 Methodology for calculating the Federal prospective
payment rates.
* * * * *
(c) Determining the Federal prospective payment rates. (1) General.
The Federal prospective payment rates will be established using a
standard payment amount referred to as the standard payment conversion
factor. The standard payment conversion factor is a standardized
payment amount based on average costs from a base year that reflects
the combined aggregate effects of the weighting factors, various
facility and case level adjustments, and other adjustments.
(2) Update the cost per discharge. CMS applies the increase factor
described in paragraph (a)(3) of this section to the facility's cost
per discharge determined under paragraph (b) of this section to compute
the cost per discharge for fiscal year 2002. Based on the updated cost
per discharge, CMS estimates the payments that would have been made to
the facility for fiscal year 2002 under part 413 of this chapter
without regard to the prospective payment system implemented under this
subpart.
(3) Computation of the standard payment conversion factor. The
standard payment conversion factor is computed as follows:
(i) For fiscal year 2002. Based on the updated costs per discharge
and estimated payments for fiscal year 2002 determined in paragraph
(c)(2) of this section, CMS computes a standard payment conversion
factor for fiscal year 2002, as specified by CMS, that reflects, as
appropriate, the adjustments described in paragraph (d) of this
section.
(ii) For fiscal years after 2002. The standard payment conversion
factor for fiscal years after 2002 will be the standardized payments
for the previous fiscal year updated by the increase factor described
in paragraph (a)(3) of this section, including adjustments described in
paragraph (d) of this section as appropriate.
(4) Determining the Federal prospective payment rate for each case-
mix group. The Federal prospective payment rates for each case-mix
group is the product of the weighting factors described in Sec.
412.620(b) and the standard payment conversion factor described in
paragraph (c)(3) of this section.
(d) Adjustments to the standard payment conversion factor. The
standard payment conversion factor described in paragraph (c)(3) of
this section will be adjusted for the following:
(1) Outlier payments. CMS determines a reduction factor equal to
the estimated proportion of additional outlier payments described in
paragraph (e)(4) of this section.
(2) Budget neutrality. CMS adjusts the Federal prospective payment
rates for fiscal year 2002 so that aggregate payments under the
prospective payment system, excluding any additional payments
associated with elections not to be paid under the transition period
methodology under Sec. 412.626(b), are estimated to equal the amount
that would have been made to inpatient rehabilitation facilities under
part 413 of this chapter without regard to the prospective payment
system implemented under this subpart.
(3) Coding and classification changes. CMS adjusts the standard
payment conversion factor for a given year if CMS determines that
revisions in case-mix classifications or weighting factors for a
previous fiscal year (or estimates that those revisions for a future
fiscal year) did result in (or would otherwise result in) a change in
aggregate payments that are a result of changes in the coding or
classification of patients that do not reflect real changes in case-
mix.
(e) * * *
(1) Adjustment for area wage levels. The labor portion of a
facility's Federal prospective payment is adjusted to account for
geographical differences in the area wage levels using an appropriate
wage index. The application of the wage index is made on the basis of
the location of the facility in an urban or rural area as defined in
Sec. 412.602. Adjustments or updates to the wage data used to adjust a
facility's Federal prospective payment rate under this paragraph will
be made in a budget neutral manner. CMS determines a budget neutral
wage adjustment factor, based on any adjustment or update to the wage
data, to apply to the standard payment conversion factor.
* * * * *
(4) Adjustment for high-cost outliers. CMS provides for an
additional payment to an inpatient rehabilitation
[[Page 26817]]
facility if its estimated costs for a patient exceeds a fixed dollar
amount (adjusted for area wage levels and factors to account for
treating low-income patients and for rural locations) as specified by
CMS. The additional payment equals 80 percent of the difference between
the estimated cost of the patient and the sum of the adjusted Federal
prospective payment computed under this section and the adjusted fixed
dollar amount. Additional payments made under this section will be
subject to the adjustments at Sec. 412.84(i) and at Sec. 412.84(m),
except that national averages will be used instead of statewide
averages. Additional payments made under this section will also be
subject to adjustments at Sec. 412.84(m).
* * * * *
Dated: March 18, 2003.
Thomas A Scully,
Administrator, Centers for Medicare & Medicaid Services.
Approved: May 6, 2003.
Tommy G. Thompson,
Secretary.
Note: The following appendices will not appear in the Code of
Federal Regulations:
Appendix A--Methodology to Determine Compliance with the 75 Percent
Rule
Section 412.23(b)(2) specifies that during the most recent cost
reporting period 75 percent of an IRF's inpatient population must have
had a medical condition that can be matched to one of ten medical
conditions specified in this section. This requirement is commonly
termed the ``75 percent rule.''
CMS used the IRF-PAI database to estimate the percentage of IRFs
that submitted IRF-PAI data during the first eight months of calendar
year 2002 that met the 75 percent rule. Under the existing IRF PPS
regulations, an IRF must send CMS an IRF-PAI data record that contains
data about each Medicare Part A fee-for-service inpatient admitted to
the IRF. The IRF-PAI is submitted by the IRF after the inpatient has
been discharged.
Section II of the preamble contains Chart 1 ``Estimates of
Compliance with the 75 Percent Rule.'' Chart 1 illustrates the
estimated percentage of IRFs whose Medicare inpatient populations had
medical conditions considered to be consistent with one or more of the
medical conditions in Sec. 412.23(b)(2). In addition, Chart 1 also
shows the estimated percentage of IRFs that met lower thresholds.
For example, in the ``65% rule'' column of Chart 1 shows the
percentage of IRFs that submitted IRF-PAI data during the first eight
months of calendar year 2002 that had 65 percent of their Medicare
inpatient population included in at least one of the ten medical
conditions specified in Sec. 412.23(b)(2).
An IRF-PAI data record was counted as meeting one of the ten
medical conditions specified in Sec. 412.23(b)(2) if its impairment
group code given in IRF-PAI item 21 is listed in one of the codes
listed in Table 4 ``Acceptable Impairment Group Codes'' below, or if
any of its diagnoses (IRF-PAI items 22 and 24a through 24j) are listed
in Table 5 ``Acceptable ICD-9-CM Codes'' below. (This list may not be
all inclusive, but represents a conservative list of diagnoses more
likely to be consistent with the ten diagnoses.)
Table 4 illustrates that the pairing of some impairment group codes
with specific etiologic diagnosis ICD-9-CM codes within the same IRF-
PAI data record resulted in that data record not being counted as
meeting one of the ten medical conditions specified in Sec.
412.23(b)(2). For example, if an IRF-PAI data record specified both the
impairment group code 02.1 (non-traumatic brain injury) and the
etiologic diagnosis ICD-9-CM code 215.0 (other benign neoplasms of
connective and other soft tissue of head and neck) then that admission
was not counted as meeting one of the medical conditions specified in
Sec. 412.23(b)(2). However, regardless of the impairment group code
specified in an IRF-PAI data record the data record for the admission
was counted as meeting one of the ten medical conditions specified in
Sec. 412.23(b)(2) if IRF-PAI items 22 and 24a through 24j contained an
ICD-9-CM code as specified in Table 5 ``Acceptable ICD-9-CM Codes''
below. The data analyzed represents 8 months of IRF-PAI data records.
Appendix B--Inpatient Rehabilitation Facility Patient Privacy Forms
BILLING CODE 4120-01-P
[[Page 26818]]
[GRAPHIC][TIFF OMITTED]TP16MY03.008
[[Page 26819]]
[GRAPHIC][TIFF OMITTED]TP16MY03.009
[[Page 26820]]
[GRAPHIC][TIFF OMITTED]TP16MY03.010
[[Page 26821]]
[GRAPHIC][TIFF OMITTED]TP16MY03.011
[[Page 26822]]
[GRAPHIC][TIFF OMITTED]TP16MY03.012
[[Page 26823]]
[GRAPHIC][TIFF OMITTED]TP16MY03.013
[[Page 26824]]
[GRAPHIC][TIFF OMITTED]TP16MY03.014
[[Page 26825]]
[GRAPHIC][TIFF OMITTED]TP16MY03.015
Table 2.--Proposed Fiscal Year 2004 Federal Prospective Payments for Case-Mix Groups (CMGs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Payment rate no
CMG Payment rate tier 1 Payment rate tier 2 Payment rate tier 3 comorbidities
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101............................................................ $5,990.21 $5,364.61 $5,112.61 $4,838.05
0102............................................................ 8,156.61 7,305.34 6,961.83 6,588.23
0103............................................................ 10,400.74 9,315.04 8,876.24 8,399.83
0104............................................................ 11,292.13 10,113.65 9,637.24 9,120.71
0105............................................................ 14,215.77 12,731.38 12,132.11 11,481.44
0106............................................................ 17,490.45 15,663.80 14,925.37 14,125.51
0107............................................................ 20,258.64 18,143.63 17,288.61 16,360.86
0108............................................................ 21,911.02 19,624.26 18,699.02 17,696.06
0109............................................................ 23,696.30 21,222.74 20,222.28 19,137.82
0110............................................................ 25,418.89 22,766.05 21,692.87 20,529.44
0111............................................................ 26,188.66 23,455.59 22,349.82 21,151.27
0112............................................................ 31,069.34 27,826.00 26,514.63 25,092.93
0113............................................................ 28,051.67 25,124.27 23,939.52 22,655.72
0114............................................................ 34,228.68 30,655.62 29,211.35 27,644.22
0201............................................................ 9,639.75 9,121.96 8,429.92 7,735.37
0202............................................................ 14,017.69 13,265.46 12,258.74 11,249.50
0203............................................................ 16,394.71 15,514.61 14,337.38 13,157.64
0204............................................................ 20,728.78 19,615.48 18,127.34 16,635.42
0205............................................................ 31,468.02 29,778.02 27,517.59 25,253.40
0301............................................................ 12,104.53 10,329.28 9,898.01 9,020.41
0302............................................................ 17,148.19 14,633.26 14,021.45 12,780.28
0303............................................................ 23,509.49 20,061.80 19,224.33 17,521.80
0304............................................................ 34,992.19 29,859.52 28,614.59 26,078.34
0401............................................................ 11,636.90 10,927.30 10,307.97 8,660.60
0402............................................................ 17,816.42 16,729.45 15,781.65 13,259.19
0403............................................................ 29,443.29 27,646.72 26,079.59 21,912.27
0404............................................................ 44,164.30 41,470.09 39,119.39 32,867.16
0501............................................................ 9,515.63 8,744.60 7,810.59 6,723.63
0502............................................................ 11,857.55 10,895.96 9,732.52 8,378.52
0503............................................................ 14,559.29 13,379.55 11,951.58 10,287.91
0504............................................................ 21,010.86 19,307.07 17,247.23 14,846.39
0505............................................................ 31,736.31 29,162.46 26,049.50 22,425.04
0601............................................................ 11,025.09 8,462.52 8,285.74 7,458.30
0602............................................................ 15,018.14 11,527.83 11,287.12 10,161.29
0603............................................................ 19,266.95 14,788.72 14,480.30 13,034.78
0604............................................................ 25,130.54 19,289.52 18,887.08 17,001.51
0701............................................................ 8,794.75 8,783.46 8,412.37 7,472.09
0702............................................................ 11,614.33 11,598.03 11,109.09 9,866.67
0703............................................................ 13,761.93 13,743.13 13,163.91 11,692.06
0704............................................................ 15,656.28 15,634.97 14,975.52 13,300.57
0705............................................................ 18,504.70 18,479.63 17,701.08 15,721.47
0801............................................................ 6,154.44 5,887.40 5,664.24 4,876.92
0802............................................................ 7,104.75 6,796.34 6,539.33 5,629.14
0803............................................................ 8,720.78 8,342.16 8,026.23 6,909.17
0804............................................................ 11,639.41 11,134.16 10,712.92 9,222.26
0805............................................................ 12,570.91 12,026.80 11,570.45 9,960.69
0806............................................................ 17,151.95 16,408.50 15,786.67 13,590.17
0901............................................................ 8,760.90 8,011.18 7,553.58 6,535.57
0902............................................................ 11,905.19 10,887.18 10,264.09 8,881.25
0903............................................................ 15,028.17 13,741.87 12,955.80 11,210.64
0904............................................................ 20,400.30 18,655.15 17,588.24 15,217.48
1001............................................................ 9,805.23 9,805.23 8,967.76 8,177.92
1002............................................................ 12,534.55 12,534.55 11,463.89 10,454.65
1003............................................................ 15,331.57 15,331.57 14,022.70 12,787.80
1004............................................................ 17,882.86 17,882.86 16,355.85 14,915.34
1005............................................................ 22,050.18 22,050.18 20,167.11 18,391.87
1101............................................................ 15,823.02 9,632.22 8,962.74 8,313.32
[[Page 26826]]
1102............................................................ 24,489.89 14,909.07 13,871.00 12,866.78
1103............................................................ 33,277.12 20,258.64 18,848.22 17,482.93
1201............................................................ 9,050.50 6,806.37 6,397.66 5,762.03
1202............................................................ 11,639.41 8,754.63 8,228.07 7,410.66
1203............................................................ 13,503.67 10,156.27 9,545.72 8,597.92
1204............................................................ 17,489.20 13,153.88 12,362.79 11,135.42
1205............................................................ 22,408.74 16,853.57 15,839.32 14,267.17
1301............................................................ 9,677.36 8,176.67 8,066.34 6,978.13
1302............................................................ 12,389.12 10,467.19 10,326.78 8,933.91
1303............................................................ 16,463.67 13,909.87 13,721.81 11,871.34
1304............................................................ 23,396.66 19,768.44 19,501.40 16,871.12
1401............................................................ 9,014.15 8,065.09 7,173.71 6,464.11
1402............................................................ 12,414.20 11,105.33 9,879.20 8,902.57
1403............................................................ 16,266.84 14,553.02 12,944.51 11,665.73
1404............................................................ 22,583.01 20,203.47 17,971.88 16,195.37
1501............................................................ 10,069.77 9,569.54 8,683.17 8,293.27
1502............................................................ 12,873.05 12,233.66 11,101.57 10,602.59
1503............................................................ 16,601.57 15,776.64 14,316.07 13,672.92
1504............................................................ 25,823.84 24,541.29 22,269.58 21,269.12
1601............................................................ 10,916.02 10,439.61 9,886.73 8,278.22
1602............................................................ 16,699.36 15,970.96 15,127.22 12,666.19
1701............................................................ 12,532.05 11,310.94 10,202.66 9,032.95
1702............................................................ 18,498.43 16,695.60 15,058.26 13,331.91
1703............................................................ 26,791.70 24,181.48 21,809.47 19,309.58
1801............................................................ 9,333.84 9,333.84 8,602.93 7,875.78
1802............................................................ 13,382.06 13,382.06 12,333.96 11,292.13
1803............................................................ 20,498.09 20,498.09 18,892.10 17,297.38
1804............................................................ 36,532.99 36,532.99 33,672.04 30,827.38
1901............................................................ 14,524.18 12,539.57 12,262.50 11,127.89
1902............................................................ 27,007.33 23,316.42 22,802.40 20,692.42
1903............................................................ 39,289.89 33,920.27 33,171.81 30,102.73
2001............................................................ 10,494.77 9,020.41 8,406.10 7,558.59
2002............................................................ 13,860.97 11,912.71 11,101.57 9,982.01
2003............................................................ 18,353.00 15,772.88 14,699.70 13,217.82
2004............................................................ 21,904.75 18,826.90 17,544.36 15,775.38
2005............................................................ 26,075.83 22,411.25 20,885.49 18,779.26
2101............................................................ 12,984.63 11,816.18 10,514.83 10,514.83
2102............................................................ 28,218.41 25,678.41 22,850.05 22,850.05
5001............................................................ .................... .................... .................... 2,069.87
5101............................................................ .................... .................... .................... 5,364.61
5102............................................................ .................... .................... .................... 15,533.42
5103............................................................ .................... .................... .................... 6,815.15
5104............................................................ .................... .................... .................... 21,438.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 3A.--Proposed Urban Wage Index
------------------------------------------------------------------------
Urban area (constituent
MSA counties or county Wage
equivalents) index
------------------------------------------------------------------------
0040........................... Abilene, TX.................. 0.7792
Taylor, TX
0060........................... Aguadilla, PR................ 0.4587
Aguada, PR
Aguadilla, PR
Moca, PR
0080........................... Akron, OH.................... 0.9600
Portage, OH
Summit, OH
0120........................... Albany, GA................... 1.0594
Dougherty, GA
Lee, GA
0160........................... Albany-Schenectady-Troy, NY.. 0.8384
Albany, NY
Montgomery, NY
Rensselaer, NY
Saratoga, NY
Schenectady, NY
Schoharie, NY
0200........................... Albuquerque, NM.............. 0.9315
Bernalillo, NM
Sandoval, NM
Valencia, NM
0220........................... Alexandria, LA............... 0.7859
Rapides, LA
0240........................... Allentown-Bethlehem-Easton, 0.9735
PA.
Carbon, PA
Lehigh, PA
Northampton, PA
0280........................... Altoona, PA.................. 0.9225
Blair, PA
0320........................... Amarillo, TX................. 0.9034
Potter, TX
Randall, TX
0380........................... Anchorage, AK................ 1.2358
Anchorage, AK
0440........................... Ann Arbor, MI................ 1.1103
Lenawee, MI
Livingston, MI
Washtenaw, MI
0450........................... Anniston,AL.................. 0.8044
Calhoun, AL
0460........................... Appleton-Oshkosh-Neenah, WI.. 0.8997
Calumet, WI
Outagamie, WI
Winnebago, WI
0470........................... Arecibo, PR.................. 0.4337
[[Page 26827]]
Arecibo, PR
Camuy, PR
Hatillo, PR
0480........................... Asheville, NC................ 0.9876
Buncombe, NC
Madison, NC
0500........................... Athens, GA................... 1.0211
Clarke, GA
Madison, GA
Oconee, GA
0520........................... Atlanta, GA.................. 0.9991
Barrow, GA
Bartow, GA
Carroll, GA
Cherokee, GA
Clayton, GA
Cobb, GA
Coweta, GA
De Kalb, GA
Douglas, GA
Fayette, GA
Forsyth, GA
Fulton, GA
Gwinnett, GA
Henry, GA
Newton, GA
Paulding, GA
Pickens, GA
Rockdale, GA
Spalding, GA
Walton, GA
0560........................... Atlantic City-Cape May, NJ... 1.1017
Atlantic City, NJ
Cape May, NJ
0580........................... Auburn-Opelika, AL........... 0.8325
Lee, AL
0600........................... Augusta-Aiken, GA-SC......... 1.0264
Columbia, GA
McDuffie, GA
Richmond, GA
Aiken, SC
Edgefield, SC
0640........................... Austin-San Marcos, TX........ 0.9637
Bastrop, TX
Caldwell, TX
Hays, TX
Travis, TX
Williamson, TX
0680........................... Bakersfield, CA.............. 0.9899
Kern, CA
0720........................... Baltimore, MD................ 0.9929
Anne Arundel, MD
Baltimore, MD
Baltimore City, MD
Carroll, MD
Harford, MD
Howard, MD
Queen Annes, MD
0733........................... Bangor, ME................... 0.9664
Penobscot, ME
0743........................... Barnstable-Yarmouth, MA...... 1.3202
Barnstable, MA
0760........................... Baton Rouge, LA.............. 0.8294
Ascension, LA
East Baton Rouge
Livingston, LA
West Baton Rouge, LA
0840........................... Beaumont-Port Arthur, TX..... 0.8324
Hardin, TX
Jefferson, TX
Orange, TX
0860........................... Bellingham, WA............... 1.2282
Whatcom, WA
0870........................... Benton Harbor, MI............ 0.9042
Berrien, MI
0875........................... Bergen-Passaic, NJ........... 1.2150
Bergen, NJ
Passaic, NJ
0880........................... Billings, MT................. 0.9022
Yellowstone, MT
0920........................... Biloxi-Gulfport-Pascagoula, 0.8757
MS.
Hancock, MS
Harrison, MS
Jackson, MS
0960........................... Binghamton, NY............... 0.8341
Broome, NY
Tioga, NY
1000........................... Birmingham, AL............... 0.9222
Blount, AL
Jefferson, AL
St. Clair, AL
Shelby, AL
1010........................... Bismarck, ND................. 0.7972
Burleigh, ND
Morton, ND
1020........................... Bloomington, IN.............. 0.8907
Monroe, IN
1040........................... Bloomington-Normal, IL....... 0.9109
McLean, IL
1080........................... Boise City, ID............... 0.9310
Ada, ID
Canyon, ID
1123........................... Boston-Worcester-Lawrence- 1.1235
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......... 0.9689
Boulder, CO
1145........................... Brazoria, TX................. 0.8535
Brazoria, TX
1150........................... Bremerton, WA................ 1.0944
Kitsap, WA
1240........................... Brownsville-Harlingen-San 0.8880
Benito, TX.
Cameron, TX
1260........................... Bryan-College Station, TX.... 0.8821
Brazos, TX
1280........................... Buffalo-Niagara Falls, NY.... 0.9365
Erie, NY
Niagara, NY
1303........................... Burlington, VT............... 1.0052
Chittenden, VT
Franklin, VT
Grand Isle, VT
1310........................... Caguas, PR................... 0.4371
Caguas, PR
Cayey, PR
Cidra, PR
Gurabo, PR
San Lorenzo, PR
1320........................... Canton-Massillon, OH......... 0.8932
Carroll, OH
Stark, OH
1350........................... Casper, WY................... 0.9690
Natrona, WY
1360........................... Cedar Rapids, IA............. 0.9056
Linn, IA
1400........................... Champaign-Urbana, IL. 1.0635
Champaign, IL
1440........................... Charleston-North Charleston, 0.9235
SC.
Berkeley, SC
Charleston, SC
Dorchester, SC
1480........................... Charleston, WV............... 0.8898
Kanawha, WV
Putnam, WV
1520........................... Charlotte-Gastonia-Rock Hill, 0.9850
NC-SC.
Cabarrus, NC
Gaston, NC
Lincoln, NC
Mecklenburg, NC
Rowan, NC
Stanly, NC
Union, NC
York, SC
1540........................... Charlottesville, VA.......... 1.0438
Albemarle, VA
Charlottesville City, VA
Fluvanna, VA
Greene, VA
1560........................... Chattanooga, TN-GA........... 0.8976
Catoosa, GA
Dade, GA
Walker, GA
Hamilton, TN
Marion, TN
1580........................... Cheyenne, WY................. 0.8628
Laramie, WY
1600........................... Chicago, IL.................. 1.1044
Cook, IL
[[Page 26828]]
De Kalb, IL
Du Page, IL
Grundy, IL
Kane, IL
Kendall, IL
Lake, IL
McHenry, IL
Will, IL
1620........................... Chico-Paradise, CA........... 0.9745
Butte, CA
1640........................... Cincinnati, OH-KY-IN......... 0.9381
Dearborn, IN
Ohio, IN
Boone, KY
Campbell, KY
Gallatin, KY
Grant, KY
Kenton, KY
Pendleton, KY
Brown, OH
Clermont, OH
Hamilton, OH
Warren, OH
1660........................... Clarksville-Hopkinsville, TN- 0.8406
KY.
Christian, KY
Montgomery, TN
1680........................... Cleveland-Lorain-Elyria, OH.. 0.9670
Ashtabula, OH
Geauga, OH
Cuyahoga, OH
Lake, OH
Lorain, OH
Medina, OH
1720........................... Colorado Springs, CO......... 0.9916
El Paso, CO
1740........................... Columbia, MO................. 0.8496
Boone, MO
1760........................... Columbia, SC................. 0.9307
Lexington, SC
Richland, SC
1800........................... Columbus, GA-AL.............. 0.8374
Russell, AL
Chattanoochee, GA
Harris, GA
Muscogee, GA
1840........................... Columbus, OH................. 0.9751
Delaware, OH
Fairfield, OH
Franklin, OH
Licking, OH
Madison, OH
Pickaway, OH
1880........................... Corpus Christi, TX........... 0.8729
Nueces, TX
San Patricio, TX
1890........................... Corvallis, OR................ 1.1453
Benton, OR
1900........................... Cumberland, MD-WV............ 0.7847
Allegany, MD
Mineral, WV
1920........................... Dallas, TX................... 0.9998
Collin, TX
Dallas, TX
Denton, TX
Ellis, TX
Henderson, TX
Hunt, TX
Kaufman, TX
Rockwall, TX
1950........................... Danville, VA................. 0.8859
Danville City, VA
Pittsylvania, VA
1960........................... Davenport-Moline-Rock Island, 0.8835
IA-IL.
Scott, IA
Henry, IL
Rock Island, IL
2000........................... Dayton-Springfield, OH....... 0.9282
Clark, OH
Greene, OH
Miami, OH
Montgomery, OH
2020........................... Daytona Beach, FL............ 0.9062
Flagler, FL
Volusia, FL
2030........................... Decatur, AL.................. 0.8973
Lawrence, AL
Morgan, AL
2040........................... Decatur, IL.................. 0.8055
Macon, IL
2080........................... Denver, CO................... 1.0601
Adams, CO
Arapahoe, CO
Broomfield, CO
Denver, CO
Douglas, CO
Jefferson, CO
2120........................... Des Moines, IA............... 0.8791
Dallas, IA
Polk, IA
Warren, IA
2160........................... Detroit, MI.................. 1.0448
Lapeer, MI
Macomb, MI
Monroe, MI
Oakland, MI
St. Clair, MI
Wayne, MI
2180........................... Dothan, AL................... 0.8137
Dale, AL
Houston, AL
2190........................... Dover, DE.................... 0.9356
Kent, DE
2200........................... Dubuque, IA.................. 0.8795
Dubuque, IA
2240........................... Duluth-Superior, MN-WI....... 1.0368
St. Louis, MN
Douglas, WI
2281........................... Dutchess County, NY.......... 1.0684
Dutchess, NY
2290........................... Eau Claire, WI............... 0.8952
Chippewa, WI
Eau Claire, WI
2320........................... El Paso, TX.................. 0.9265
El Paso, TX
2330........................... Elkhart-Goshen, IN........... 0.9722
Elkhart, IN
2335........................... Elmira, NY................... 0.8416
Chemung, NY
2340........................... Enid, OK..................... 0.8376
Garfield, OK
2360........................... Erie, PA..................... 0.8925
Erie, PA
2400........................... Eugene-Springfield, OR....... 1.0944
Lane, OR
2440........................... Evansville-Henderson, IN-KY.. 0.8177
Posey, IN
Vanderburgh, IN
Warrick, IN
Henderson, KY
2520........................... Fargo-Moorhead, ND-MN........ 0.9684
Clay, MN
Cass, ND
2560........................... Fayetteville, NC............. 0.8889
Cumberland, NC
2580........................... Fayetteville-Springdale- 0.8100
Rogers, AR.
Benton, AR
Washington, AR
2620........................... Flagstaff, AZ-UT............. 1.0682
Coconino, AZ
Kane, UT
2640........................... Flint, MI.................... 1.1135
Genesee, MI
2650........................... Florence, AL................. 0.7792
Colbert, AL
Lauderdale, AL
2655........................... Florence, SC................. 0.8780
Florence, SC
2670........................... Fort Collins-Loveland, CO.... 1.0066
Larimer, CO
2680........................... Ft. Lauderdale, FL........... 1.0297
Broward, FL
2700........................... Fort Myers-Cape Coral, FL.... 0.9680
Lee, FL
2710........................... Fort Pierce-Port St. Lucie, 0.9823
FL.
Martin, FL
St. Lucie, FL
2720........................... Fort Smith, AR-OK............ 0.7895
Crawford, AR
Sebastian, AR
Sequoyah, OK
2750........................... Fort Walton Beach, FL........ 0.9693
Okaloosa, FL
2760........................... Fort Wayne, IN............... 0.9457
Adams, IN
Allen, IN
De Kalb, IN
Huntington, IN
Wells, IN
Whitley, IN
2800........................... Forth Worth-Arlington, TX.... 0.9446
[[Page 26829]]
Hood, TX
Johnson, TX
Parker, TX
Tarrant, TX
2840........................... Fresno, CA................... 1.0216
Fresno, CA
Madera, CA
2880........................... Gadsden, AL.................. 0.8505
Etowah, AL
2900........................... Gainesville, FL.............. 0.9871
Alachua, FL
2920........................... Galveston-Texas City, TX..... 0.9465
Galveston, TX
2960........................... Gary, IN..................... 0.9584
Lake, IN
Porter, IN
2975........................... Glens Falls, NY.............. 0.8281
Warren, NY
Washington, NY
2980........................... Goldsboro, NC................ 0.8892
Wayne, NC
2985........................... Grand Forks, ND-MN........... 0.8897
Polk, MN
Grand Forks, ND
2995........................... Grand Junction, CO........... 0.9456
Mesa, CO
3000........................... Grand Rapids-Muskegon- 0.9525
Holland, MI.
Allegan, MI
Kent, MI
Muskegon, MI
Ottawa, MI
3040........................... Great Falls, MT.............. 0.8950
Cascade, MT
3060........................... Greeley, CO.................. 0.9237
Weld, CO
3080........................... Green Bay, WI................ 0.9502
Brown, WI
3120........................... Greensboro-Winston-Salem-High 0.9282
Point, NC.
Alamance, NC
Davidson, NC
Davie, NC
Forsyth, NC
Guilford, NC
Randolph, NC
Stokes, NC
Yadkin, NC
3150........................... Greenville, NC............... 0.9100
Pitt, NC
3160........................... Greenville-Spartanburg- 0.9122
Anderson, SC.
Anderson, SC
Cherokee, SC
Greenville, SC
Pickens, SC
Spartanburg, SC
3180........................... Hagerstown, MD............... 0.9268
Washington, MD
3200........................... Hamilton-Middletown, OH...... 0.9418
Butler, OH
3240........................... Harrisburg-Lebanon-Carlisle, 0.9223
PA.
Cumberland, PA
Dauphin, PA
Lebanon, PA
Perry, PA
3283........................... Hartford, CT................. 1.1549
Hartford, CT
Litchfield, CT
Middlesex, CT
Tolland, CT
3285........................... Hattiesburg, MS.............. 0.7659
Forrest, MS
Lamar, MS
3290........................... Hickory-Morganton-Lenoir, NC. 0.9028
Alexander, NC
Burke, NC
Caldwell, NC
Catawba, NC
3320........................... Honolulu, HI................. 1.1457
Honolulu, HI
3350........................... Houma, LA.................... 0.8385
Lafourche, LA
Terrebonne, LA
3360........................... Houston, TX.................. 0.9892
Chambers, TX
Fort Bend, TX
Harris, TX
Liberty, TX
Montgomery, TX
Waller, TX
3400........................... Huntington-Ashland, WV-KY-OH. 0.9636
Boyd, KY
Carter, KY
Greenup, KY
Lawrence, OH
Cabell, WV
Wayne, WV
3440........................... Huntsville, AL............... 0.8903
Limestone, AL
Madison, AL
3480........................... Indianapolis, IN............. 0.9717
Boone, IN
Hamilton, IN
Hancock, IN
Hendricks, IN
Johnson, IN
Madison, IN
Marion, IN
Morgan, IN
Shelby, IN
3500........................... Iowa City, IA................ 0.9587
Johnson, IA
3520........................... Jackson, MI.................. 0.9532
Jackson, MI
3560........................... Jackson, MS.................. 0.8607
Hinds, MS
Madison, MS
Rankin, MS
3580........................... Jackson, TN.................. 0.9275
Chester, TN
Madison, TN
3600........................... Jacksonville, FL............. 0.9381
Clay, FL
Duval, FL
Nassau, FL
St. Johns, FL
3605........................... Jacksonville, NC............. 0.8239
Onslow, NC
3610........................... Jamestown, NY................ 0.7976
Chautaqua, NY
3620........................... Janesville-Beloit, WI........ 0.9849
Rock, WI
3640........................... Jersey City, NJ.............. 1.1190
Hudson, NJ
3660........................... Johnson City-Kingsport- 0.8268
Bristol, TN-VA.
Carter, TN
Hawkins, TN
Sullivan, TN
Unicoi, TN
Washington, TN
Bristol City, VA
Scott, VA
Washington, VA
3680........................... Johnstown, PA................ 0.8329
Cambria, PA
Somerset, PA
3700........................... Jonesboro, AR................ 0.7749
Craighead, AR
3710........................... Joplin, MO................... 0.8613
Jasper, MO
Newton, MO
3720........................... Kalamazoo-Battlecreek, MI.... 1.0595
Calhoun, MI
Kalamazoo, MI
Van Buren, MI
3740........................... Kankakee, IL................. 1.0790
Kankakee, IL
3760........................... Kansas City, KS-MO........... 0.9736
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.................. 0.9686
Kenosha, WI
3810........................... Killeen-Temple, TX........... 1.0399
Bell, TX
Coryell, TX
3840........................... Knoxville, TN................ 0.8970
Anderson, TN
Blount, TN
Knox, TN
Loudon, TN
Sevier, TN
Union, TN
3850........................... Kokomo, IN................... 0.8971
Howard, IN
Tipton, IN
3870........................... La Crosse, WI-MN............. 0.9400
[[Page 26830]]
Houston, MN
La Crosse, WI
3880........................... Lafayette, LA................ 0.8475
Acadia, LA
Lafayette, LA
St. Landry, LA
St. Martin, LA
3920........................... Lafayette, IN................ 0.9278
Clinton, IN
Tippecanoe, IN
3960........................... Lake Charles, LA............. 0.7965
Calcasieu, LA
3980........................... Lakeland-Winter Haven, FL.... 0.9357
Polk, FL
4000........................... Lancaster, PA................ 0.9078
Lancaster, PA
4040........................... Lansing-East Lansing, MI..... 0.9726
Clinton, MI
Eaton, MI
Ingham, MI
4080........................... Laredo, TX................... 0.8472
Webb, TX
4100........................... Las Cruces, NM............... 0.8745
Dona Ana, NM
4120........................... Las Vegas, NV-AZ............. 1.1521
Mohave, AZ
Clark, NV
Nye, NV
4150........................... Lawrence, KS................. 0.7923
Douglas, KS
4200........................... Lawton, OK................... 0.8315
Comanche, OK
4243........................... Lewiston-Auburn, ME.......... 0.9179
Androscoggin, ME
4280........................... Lexington, KY................ 0.8581
Bourbon, KY
Clark, KY
Fayette, KY
Jessamine, KY
Madison, KY
Scott, KY
Woodford, KY
4320........................... Lima, OH..................... 0.9483
Allen, OH
Auglaize, OH
4360........................... Lincoln, NE.................. 0.9892
Lancaster, NE
4400........................... Little Rock-North Little, AR. 0.9097
Faulkner, AR
Lonoke, AR
Pulaski, AR
Saline, AR
4420........................... Longview-Marshall, TX........ 0.8629
Gregg, TX
Harrison, TX
Upshur, TX
4480........................... Los Angeles-Long Beach, CA... 1.2001
Los Angeles, CA
4520........................... Louisville, KY-IN............ 0.9276
Clark, IN
Floyd, IN
Harrison, IN
Scott, IN
Bullitt, KY
Jefferson, KY
Oldham, KY
4600........................... Lubbock, TX.................. 0.9646
Lubbock, TX
4640........................... Lynchburg, VA................ 0.9219
Amherst, VA
Bedford City, VA
Bedford, VA
Campbell, VA
Lynchburg City, VA
4680........................... Macon, GA.................... 0.9204
Bibb, GA
Houston, GA
Jones, GA
Peach, GA
Twiggs, GA
4720........................... Madison, WI.................. 1.0467
Dane, WI
4800........................... Mansfield, OH................ 0.8900
Crawford, OH
Richland, OH
4840........................... Mayaguez, PR................. 0.4914
Anasco, PR
Cabo Rojo, PR
Hormigueros, PR
Mayaguez, PR
Sabana Grande, PR
San German, PR
4880........................... McAllen-Edinburg-Mission, TX. 0.8428
Hidalgo, TX
4890........................... Medford-Ashland, OR.......... 1.0498
Jackson, OR
4900........................... Melbourne-Titusville-Palm 1.0253
Bay, FL.
Brevard, FL
4920........................... Memphis, TN-AR-MS............ 0.8920
Crittenden, AR
De Soto, MS
Fayette, TN
Shelby, TN
Tipton, TN
4940........................... Merced, CA................... 0.9837
Merced, CA
5000........................... Miami, FL.................... 0.9802
Dade, FL
5015........................... Middlesex-Somerset-Hunterdon, 1.1213
NJ.
Hunterdon, NJ
Middlesex, NJ
Somerset, NJ
5080........................... Milwaukee-Waukesha, WI....... 0.9893
Milwaukee, WI
Ozaukee, WI
Washington, WI
Waukesha, WI
5120........................... Minneapolis-St. Paul, MN-WI.. 1.0903
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................. 0.9157
Missoula, MT
5160........................... Mobile, AL................... 0.8108
Baldwin, AL
Mobile, AL
5170........................... Modesto, CA.................. 1.0498
Stanislaus, CA
5190........................... Monmouth-Ocean, NJ........... 1.0674
Monmouth, NJ
Ocean, NJ
5200........................... Monroe, LA................... 0.8137
Ouachita, LA
5240........................... Montgomery, AL............... 0.7734
Autauga, AL
Elmore, AL
Montgomery, AL
5280........................... Muncie, IN................... 0.9284
Delaware, IN
5330........................... Myrtle Beach, SC............. 0.8976
Horry, SC
5345........................... Naples, FL................... 0.9754
Collier, FL
5360........................... Nashville, TN................ 0.9578
Cheatham, TN
Davidson, TN
Dickson, TN
Robertson, TN
Rutherford, TN
Sumner, TN
Williamson, TN
Wilson, TN
5380........................... Nassau-Suffolk, NY........... 1.3357
Nassau, NY
Suffolk, NY
5483........................... New Haven-Bridgeport-Stamford- 1.2408
Waterbury-Danbury, CT.
Fairfield, CT
New Haven, CT
5523........................... New London-Norwich, CT....... 1.1767
New London, CT
5560........................... New Orleans, LA.............. 0.9046
Jefferson, LA
Orleans, LA
Plaquemines, LA
St. Bernard, LA
St. Charles, LA
St. James, LA
St. John The Baptist, LA
[[Page 26831]]
St. Tammany, LA
5600........................... New York, NY................. 1.4414
Bronx, NY
Kings, NY
New York, NY
Putnam, NY
Queens, NY
Richmond, NY
Rockland, NY
Westchester, NY
5640........................... Newark, NJ................... 1.1381
Essex, NJ
Morris, NJ
Sussex, NJ
Union, NJ
Warren, NJ
5660........................... Newburgh, NY-PA.............. 1.1387
Orange, NY
Pike, PA
5720........................... Norfolk-Virginia Beach- 0.8574
Newport News, VA-NC.
Currituck, NC
Chesapeake City, VA
Gloucester, VA
Hampton City, VA
Isle of Wight, VA
James City, VA
Mathews, VA
Newport News City, VA
Norfolk City, VA
Poquoson City,VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
York, VA
5775........................... Oakland, CA.................. 1.5072
Alameda, CA
Contra Costa, CA
5790........................... Ocala, FL.................... 0.9402
Marion, FL
5800........................... Odessa-Midland, TX........... 0.9397
Ector, TX
Midland, TX
5880........................... Oklahoma City, OK............ 0.8900
Canadian, OK
Cleveland, OK
Logan, OK
McClain, OK
Oklahoma, OK
Pottawatomie, OK
5910........................... Olympia, WA.................. 1.0960
Thurston, WA
5920........................... Omaha, NE-IA................. 0.9978
Pottawattamie, IA
Cass, NE
Douglas, NE
Sarpy, NE
Washington, NE
5945........................... Orange County, CA............ 1.1474
Orange, CA
5960........................... Orlando, FL.................. 0.9640
Lake, FL
Orange, FL
Osceola, FL
Seminole, FL
5990........................... Owensboro, KY................ 0.8344
Daviess, KY
6015........................... Panama City, FL.............. 0.8865
Bay, FL
6020........................... Parkersburg-Marietta, WV-OH.. 0.8127
Washington, OH
Wood, WV
6080........................... Pensacola, FL................ 0.8645
Escambia, FL
Santa Rosa, FL
6120........................... Peoria-Pekin, IL............. 0.8739
Peoria, IL
Tazewell, IL
Woodford, IL
6160........................... Philadelphia, PA-NJ.......... 1.0713
Burlington, NJ
Camden, NJ
Gloucester, NJ
Salem, NJ
Bucks, PA
Chester, PA
Delaware, PA
Montgomery, PA
Philadelphia, PA
6200........................... Phoenix-Mesa, AZ............. 0.9820
Maricopa, AZ
Pinal, AZ
6240........................... Pine Bluff, AR............... 0.7962
Jefferson, AR
6280........................... Pittsburgh, PA............... 0.9365
Allegheny, PA
Beaver, PA
Butler, PA
Fayette, PA
Washington, PA
Westmoreland, PA
6323........................... Pittsfield, MA............... 1.0235
Berkshire, MA
6340........................... Pocatello, ID................ 0.9372
Bannock, ID
6360........................... Ponce, PR.................... 0.5169
Guayanilla, PR
Juana Diaz, PR
Penuelas, PR
Ponce, PR
Villalba, PR
Yauco, PR
6403........................... Portland, ME................. 0.9794
Cumberland, ME
Sagadahoc, ME
York, ME
6440........................... Portland-Vancouver, OR-WA.... 1.0667
Clackamas, OR
Columbia, OR
Multnomah, OR
Washington, OR
Yamhill, OR
Clark, WA
6483........................... Providence-Warwick-Pawtucket, 1.0854
RI.
Bristol, RI
Kent, RI
Newport, RI
Providence, RI
Washington, RI
6520........................... Provo-Orem, UT............... 0.9984
Utah, UT
6560........................... Pueblo, CO................... 0.8820
Pueblo, CO
6580........................... Punta Gorda, FL.............. 0.9218
Charlotte, FL
6600........................... Racine, WI................... 0.9334
Racine, WI
6640........................... Raleigh-Durham-Chapel Hill, 0.9990
NC.
Chatham, NC
Durham, NC
Franklin, NC
Johnston, NC
Orange, NC
Wake, NC
6660........................... Rapid City, SD............... 0.8846
Pennington, SD
6680........................... Reading, PA.................. 0.9295
Berks, PA
6690........................... Redding, CA.................. 1.1135
Shasta, CA
6720........................... Reno, NV..................... 1.0648
Washoe, NV
6740........................... Richland-Kennewick-Pasco, WA. 1.1491
Benton, WA
Franklin, WA
6760........................... Richmond-Petersburg, VA...... 0.9477
Charles City County, VA
Chesterfield, VA
Colonial Heights City, VA
Dinwiddie, VA
Goochland, VA
Hanover, VA
Henrico, VA
Hopewell City, VA
New Kent, VA
Petersburg City, VA
Powhatan, VA
Prince George, VA
Richmond City, VA
6780........................... Riverside-San Bernardino, CA. 1.1365
Riverside, CA
San Bernardino, CA
6800........................... Roanoke, VA.................. 0.8614
Botetourt, VA
Roanoke, VA
Roanoke City, VA
Salem City, VA
6820........................... Rochester, MN................ 1.2139
Olmsted, MN
[[Page 26832]]
6840........................... Rochester, NY................ 0.9194
Genesee, NY
Livingston, NY
Monroe, NY
Ontario, NY
Orleans, NY
Wayne, NY
6880........................... Rockford, IL................. 0.9625
Boone, IL
Ogle, IL
Winnebago, IL
6895........................... Rocky Mount, NC.............. 0.9228
Edgecombe, NC
Nash, NC
6920........................... Sacramento, CA............... 1.1500
El Dorado, CA
Placer, CA
Sacramento, CA
6960........................... Saginaw-Bay City-Midland, MI. 0.9650
Bay, MI
Midland, MI
Saginaw, MI
6980........................... St. Cloud, MN................ 0.9700
Benton, MN
Stearns, MN
7000........................... St. Joseph, MO............... 0.8021
Andrews, MO
Buchanan, MO
7040........................... St. Louis, MO-IL............. 0.8855
Clinton, IL
Jersey, IL
Madison, IL
Monroe, IL
St. Clair, IL
Franklin, MO
Jefferson, MO
Lincoln, MO
St. Charles, MO
St. Louis, MO
St. Louis City, MO
Warren, MO
Sullivan City, MO
7080........................... Salem, OR.................... 1.0367
Marion, OR
Polk, OR
7120........................... Salinas, CA.................. 1.4623
Monterey, CA
7160........................... Salt Lake City-Ogden, UT..... 0.9945
Davis, UT
Salt Lake, UT
Weber, UT
7200........................... San Angelo, TX............... 0.8374
Tom Green, TX
7240........................... San Antonio, TX.............. 0.8753
Bexar, TX
Comal, TX
Guadalupe, TX
Wilson, TX
7320........................... San Diego, CA................ 1.1131
San Diego, CA
7360........................... San Francisco, CA............ 1.4142
Marin, CA
San Francisco, CA
San Mateo, CA
7400........................... San Jose, CA................. 1.4145
Santa Clara, CA
7440........................... San Juan-Bayamon, PR......... 0.4741
Aguas Buenas, PR
Barceloneta, PR
Bayamon, PR
Canovanas, PR
Carolina, PR
Catano, PR
Ceiba, PR
Comerio, PR
Corozal, PR
Dorado, PR
Fajardo, PR
Florida, PR
Guaynabo, PR
Humacao, PR
Juncos, PR
Los Piedras, PR
Loiza, PR
Luguillo, PR
Manati, PR
Morovis, PR
Naguabo, PR
Naranjito, PR
Rio Grande, PR
San Juan, PR
Toa Alta, PR
Toa Baja, PR
Trujillo Alto, PR
Vega Alta, PR
Vega Baja, PR
Yabucoa, PR
7460........................... San Luis Obispo-Atascadero- 1.1271
Paso Robles, CA.
San Luis Obispo, CA
7480........................... Santa Barbara-Santa Maria- 1.0481
Lompoc, CA.
Santa Barbara, CA
7485........................... Santa Cruz-Watsonville, CA... 1.3646
Santa Cruz, CA
7490........................... Santa Fe, NM................. 1.0712
Los Alamos, NM
Santa Fe, NM
7500........................... Santa Rosa, CA............... 1.3046
Sonoma, CA
7510........................... Sarasota-Bradenton, FL....... 0.9425
Manatee, FL
Sarasota, FL
7520........................... Savannah, GA................. 0.9376
Bryan, GA
Chatham, GA
Effingham, GA
7560........................... Scranton-Wilkes-Barre- 0.8599
Hazleton, PA.
Columbia, PA
Lackawanna, PA
Luzerne, PA
Wyoming, PA
7600........................... Seattle-Bellevue-Everett, WA. 1.1474
Island, WA
King, WA
Snohomish, WA
7610........................... Sharon, PA................... 0.7869
Mercer, PA
7620........................... Sheboygan, WI................ 0.8697
Sheboygan, WI
7640........................... Sherman-Denison, TX.......... 0.9255
Grayson, TX
7680........................... Shreveport-Bossier City, LA.. 0.8987
Bossier, LA
Caddo, LA
Webster, LA
7720........................... Sioux City, IA-NE............ 0.9046
Woodbury, IA
Dakota, NE
7760........................... Sioux Falls, SD.............. 0.9257
Lincoln, SD
Minnehaha, SD
7800........................... South Bend, IN............... 0.9802
St. Joseph, IN
7840........................... Spokane, WA.................. 1.0852
Spokane, WA
7880........................... Springfield, IL.............. 0.8659
Menard, IL
Sangamon, IL
7920........................... Springfield, MO.............. 0.8424
Christian, MO
Greene, MO
Webster, MO
8003........................... Springfield, MA.............. 1.0927
Hampden, MA
Hampshire, MA
8050........................... State College, PA............ 0.8941
Centre, PA
8080........................... Steubenville-Weirton, OH-WV.. 0.8804
Jefferson, OH
Brooke, WV
Hancock, WV
8120........................... Stockton-Lodi, CA............ 1.0506
San Joaquin, CA
8140........................... Sumter, SC................... 0.8273
Sumter, SC
8160........................... Syracuse, NY................. 0.9714
Cayuga, NY
Madison, NY
Onondaga, NY
Oswego, NY
8200........................... Tacoma, WA................... 1.0940
Pierce, WA
8240........................... Tallahassee, FL.............. 0.8504
Gadsden, FL
Leon, FL
8280........................... Tampa-St. Petersburg- 0.9065
Clearwater, FL.
Hernando, FL
Hillsborough, FL
Pasco, FL
Pinellas, FL
8320........................... Terre Haute, IN.............. 0.8599
Clay, IN
Vermillion, IN
Vigo, IN
[[Page 26833]]
8360........................... Texarkana, AR-Texarkana, TX.. 0.8088
Miller, AR
Bowie, TX
8400........................... Toledo, OH................... 0.9810
Fulton, OH
Lucas, OH
Wood, OH
8440........................... Topeka, KS................... 0.9199
Shawnee, KS
8480........................... Trenton, NJ.................. 1.0432
Mercer, NJ
8520........................... Tucson, AZ................... 0.8911
Pima, AZ
8560........................... Tulsa, OK.................... 0.8332
Creek, OK
Osage, OK
Rogers, OK
Tulsa, OK
Wagoner, OK
8600........................... Tuscaloosa, AL............... 0.8130
Tuscaloosa, AL
8640........................... Tyler, TX.................... 0.9521
Smith, TX
8680........................... Utica-Rome, NY............... 0.8465
Herkimer, NY
Oneida, NY
8720........................... Vallejo-Fairfield-Napa, CA... 1.3354
Napa, CA
Solano, CA
8735........................... Ventura, CA.................. 1.1096
Ventura, CA
8750........................... Victoria, TX................. 0.8756
Victoria, TX
8760........................... Vineland-Millville-Bridgeton, 1.0031
NJ.
Cumberland, NJ
8780........................... Visalia-Tulare-Porterville, 0.9429
CA.
Tulare, CA
8800........................... Waco, TX..................... 0.8073
McLennan, TX
8840........................... Washington, DC-MD-VA-WV...... 1.0851
District of Columbia, DC
Calvert, MD
Charles, MD
Frederick, MD
Montgomery, MD
Prince Georges, MD
Alexandria City, VA
Arlington, VA
Clarke, VA
Culpepper, VA
Fairfax, VA
Fairfax City, VA
Falls Church City, VA
Fauquier, VA
Fredericksburg City, VA
King George, VA
Loudoun, VA
Manassas City, VA
Manassas Park City, VA
Prince William, VA
Spotsylvania, VA
Stafford, VA
Warren, VA
Berkeley, WV
Jefferson, WV
8920........................... Waterloo-Cedar Falls, IA..... 0.8069
Black Hawk, IA
8940........................... Wausau, WI................... 0.9782
Marathon, WI
8960........................... West Palm Beach-Boca Raton, 0.9939
FL.
Palm Beach, FL
9000........................... Wheeling, OH-WV.............. 0.7670
Belmont, OH
Marshall, WV
Ohio, WV
9040........................... Wichita, KS.................. 0.9520
Butler, KS
Harvey, KS
Sedgwick, KS
9080........................... Wichita Falls, TX............ 0.8498
Archer, TX
Wichita, TX
9140........................... Williamsport, PA............. 0.8544
Lycoming, PA
9160........................... Wilmington-Newark, DE-MD..... 1.1173
New Castle, DE
Cecil, MD
9200........................... Wilmington, NC............... 0.9640
New Hanover, NC
Brunswick, NC
9260........................... Yakima, WA................... 1.0569
Yakima, WA
9270........................... Yolo, CA..................... 0.9434
Yolo, CA
9280........................... York, PA..................... 0.9026
York, PA
9320........................... Youngstown-Warren, OH........ 0.9358
Columbiana, OH
Mahoning, OH
Trumbull, OH
9340........................... Yuba City, CA................ 1.0276
Sutter, CA
Yuba, CA
9360........................... Yuma, AZ..................... 0.8589
Yuma, AZ
------------------------------------------------------------------------
Table 3B.--Proposed Rural Wage Index
------------------------------------------------------------------------
Wage
Nonurban area index
------------------------------------------------------------------------
Alabama....................................................... 0.7660
Alaska........................................................ 1.2293
Arizona....................................................... 0.8493
Arkansas...................................................... 0.7666
California.................................................... 0.9840
Colorado...................................................... 0.9015
Connecticut................................................... 1.2394
Delaware...................................................... 0.9128
Florida....................................................... 0.8814
Georgia....................................................... 0.8230
Guam.......................................................... 0.9611
Hawaii........................................................ 1.0255
Idaho......................................................... 0.8747
Illinois...................................................... 0.8204
Indiana....................................................... 0.8755
Iowa.......................................................... 0.8315
Kansas........................................................ 0.7923
Kentucky...................................................... 0.8079
Louisiana..................................................... 0.7567
Maine......................................................... 0.8874
Maryland...................................................... 0.8946
Massachusetts................................................. 1.1288
Michigan...................................................... 0.9000
Minnesota..................................................... 0.9151
Mississippi................................................... 0.7680
Missouri...................................................... 0.8021
Montana....................................................... 0.8481
Nebraska...................................................... 0.8204
Nevada........................................................ 0.9577
New Hampshire................................................. 0.9796
New Jersey \1\................................................ ........
New Mexico.................................................... 0.8872
New York...................................................... 0.8542
North Carolina................................................ 0.8666
North Dakota.................................................. 0.7788
Ohio.......................................................... 0.8613
Oklahoma...................................................... 0.7590
Oregon........................................................ 1.0303
Pennsylvania.................................................. 0.8462
Puerto Rico................................................... 0.4356
Rhode Island \1\.............................................. ........
South Carolina................................................ 0.8607
South Dakota.................................................. 0.7815
Tennessee..................................................... 0.7877
Texas......................................................... 0.7821
Utah.......................................................... 0.9312
Vermont....................................................... 0.9345
Virginia...................................................... 0.8504
Virgin Islands................................................ 0.7845
Washington.................................................... 1.0179
West Virginia................................................. 0.7975
Wisconsin..................................................... 0.9162
Wyoming....................................................... 0.9007
------------------------------------------------------------------------
\1\ All counties within the State are classified urban.
Table 4.--Acceptable Impairment Group Codes
------------------------------------------------------------------------
Associated
Excluded etiological rehabilitation
Impairment group codes diagnoses impairment
category
------------------------------------------------------------------------
01.1 Left body involvement None.................... 01 Stroke.
(right brain).
[[Page 26834]]
01.2 Right body involvement None.................... ...............
(left brain).
01.3 Bilateral Involvement... None.................... ...............
01.4 No Paresis.............. None.................... ...............
01.9 Other Stroke............ None.................... ...............
02.21 Open Injury............ None.................... 02 Traumatic
brain injury.
02.22 Closed Injury.......... None.................... ...............
02.1 Non-traumatic........... 331.0................... 03 Nontraumatic
331.2................... brain injury.
215.0...................
02.9 Other Brain............. None.................... ...............
04.210 Paraplegia, None.................... 04 Traumatic
Unspecified. spinal cord
injury.
04.211 Paraplegia, Incomplete None.................... ...............
04.212 Paraplegia, Complete.. None.................... ...............
04.220 Quadriplegia, None.................... ...............
Unspecified.
04.2211 Quadriplegia, None.................... ...............
Incomplete C1-4.
04.2212 Quadriplegia, None.................... ...............
Incomplete C5-8.
04.2221 Quadriplegia, None.................... ...............
Complete C1-4.
04.2222 Quadriplegia, None.................... ...............
Complete C5-8.
04.230 Other traumatic spinal None.................... ...............
cord dysfunction.
04.110 Paraplegia, None.................... 05 Nontraumatic
unspecified. spinal cord
injury.
04.111 Paraplegia, incomplete None.................... ...............
04.112 Paraplegia, complete.. None.................... ...............
04.120 Quadriplegia, None.................... ...............
unspecified.
04.1211 Quadriplegia, None.................... ...............
Incomplete C1-4.
04.1212 Quadriplegia, None.................... ...............
Incomplete C5-8.
04.1221 Quadriplegia, None.................... ...............
Complete C1-4.
04.1222 Quadriplegia, None.................... ...............
Complete C5-8.
04.130 Other non-traumatic None.................... ...............
spinal cord dysfunction.
03.1 Multiple Sclerosis...... None.................... 06
Neurological.
03.2 Parkinsonism............ None.................... ...............
03.3 Polyneuropathy.......... None.................... ...............
03.5 Cerebral Palsy.......... None.................... ...............
03.8 Neuromuscular Disorders. None.................... ...............
03.9 Other Neurologic........ None.................... ...............
08.11 Status post unilateral None.................... 07 Fracture of
hip fracture. lower
extremity.
08.12 Status post bilateral None.................... ...............
hip fractures.
08.3 Status post pelvic None.................... ...............
fracture.
05.3 Unilateral lower None.................... 10 Amputation,
extremity above the knee lower
(AK). extremity.
05.4 Unilateral lower None.................... ...............
extremity below the knee
(BK).
05.5 Bilateral lower None.................... ...............
extremity above the knee (AK/
AK).
05.6 Bilateral lower None.................... ...............
extremity above/below the
knee (AK/BK).
05.7 Bilateral lower None.................... ...............
extremity below the knee (BK/
BK).
05.1 Unilateral upper None.................... 11 Amputation,
extremity above the elbow other.
(AE).
05.2 Unilateral upper None.................... ...............
extremity below the elbow
(BE).
05.9 Other amputation........ None.................... ...............
06.1 Rheumatoid Arthritis.... 701.1................... 13 Rheumatoid,
710.1................... other
arthritis.
06.9 Other arthritis......... 701.1................... ...............
710.1...................
08.4 Status post major None.................... 17 Major
multiple fractures. multiple
trauma, no
brain injury
or spinal cord
injury.
14.9 Other multiple trauma... None.................... ...............
14.1 Brain and spinal cord None.................... 18 Major
injury. multiple
trauma, with
brain or
spinal cord
injury.
14.2 Brain and multiple None.................... ...............
fractures/amputation.
14.3 Spinal cord and multiple None.................... ...............
fractures/amputation.
3.4 Guillian Barre........... None.................... 19 Guillian
Barre.
12.1 Spina Bifida............ None.................... 20
Miscellaneous.
12.9 Other congenital........ None.................... ...............
11 Burns..................... None.................... 21 Burns.
------------------------------------------------------------------------
Table 5.--Acceptable ICD-9-CM Codes
------------------------------------------------------------------------
Code Label
------------------------------------------------------------------------
036.0 MENINGOCOCCALMENINGITIS
047.8 VIRAL MENINGITIS NEC
047.9 VIRAL MENINGITIS NOS
049.0 LYMPHOCYTICCHORIOMENING
049.9 VIRAL ENCEPHALITIS NOS
052.0 POSTVARICELLAENCEPHALIT
053.0 HERPES ZOSTER MENINGITIS
054.3 HERPETICENCEPHALITIS
[[Page 26835]]
054.5 HERPETICSEPTICEMIA
054.72 H SIMPLEX MENINGITIS
055.0 POSTMEASLESENCEPHALITIS
072.1 MUMPSMENINGITIS
072.2 MUMPSENCEPHALITIS
094.2 SYPHILITICMENINGITIS
112.83 CANDIDALMENINGITIS
114.2 COCCIDIOIDALMENINGITIS
115.01 HISTOPLASM CAPSUL MENING
115.11 HISTOPLASM DUBOIS MENING
115.91 HISTOPLASMOSISMENINGIT
130.0 TOXOPLASMMENINGOENCEPH
139.0 LATE EFF VIRAL ENCEPHAL
320.0 HEMOPHILUSMENINGITIS
320.1 PNEUMOCOCCALMENINGITIS
320.2 STREPTOCOCCALMENINGITIS
320.3 STAPHYLOCOCCMENINGITIS
320.7 MENING IN OTH BACT DIS
320.81 ANAEROBICMENINGITIS
320.82 MNINGTS GRAM-NEG BCT NEC
320.89 MENINGITIS OTH SPCF BACT
320.9 BACTERIAL MENINGITIS NOS
321.0 CRYPTOCOCCALMENINGITIS
321.1 MENING IN OTH FUNGAL DIS
321.2 MENING IN OTH VIRAL DIS
321.3 TRYPANOSOMIASISMENINGIT
321.4 MENINGIT D/T SARCOIDOSIS
321.8 MENING IN OTH NONBAC DIS
322.0 NONPYOGENICMENINGITIS
322.2 CHRONICMENINGITIS
322.9 MENINGITISNOS
323.0 ENCEPHALIT IN VIRAL DIS
323.6 POSTINFECTENCEPHALITIS
323.8 ENCEPHALITISNEC
323.9 ENCEPHALITISNOS
324.0 INTRACRANIALABSCESS
324.1 INTRASPINALABSCESS
324.9 CNS ABSCESS NOS
334.0 FRIEDREICHSATAXIA
334.1 HERED SPASTIC PARAPLEGIA
334.2 PRIMARY CEREBELLAR DEGEN
334.3 CEREBELLAR ATAXIA NEC
334.4 CEREBEL ATAX IN OTH DIS
334.8 SPINOCEREBELLAR DIS NEC
334.9 SPINOCEREBELLAR DIS NOS
335.0 WERDNIG-HOFFMANNDISEASE
335.10 SPINAL MUSCL ATROPHY NOS
335.11 KUGELBERG-WELANDERDIS
335.19 SPINAL MUSCL ATROPHY NEC
335.20 AMYOTROPHICSCLEROSIS
335.21 PROG MUSCULAR ATROPHY
335.22 PROGRESSIVE BULBAR PALSY
335.23 PSEUDOBULBARPALSY
335.24 PRIM LATERAL SCLEROSIS
335.29 MOTOR NEURON DISEASE NEC
335.8 ANT HORN CELL DIS NEC
335.9 ANT HORN CELL DIS NOS
336.0 SYRINGOMYELIA
336.1 VASCULARMYELOPATHIES
336.2 COMB DEG CORD IN OTH DIS
336.3 MYELOPATHY IN OTH DIS
336.8 MYELOPATHYNEC
336.9 SPINAL CORD DISEASE NOS
342.01 FLCCD HMIPLGA DOMNT SIDE
342.02 FLCCD HMIPLG NONDMNT SDE
342.10 SPSTC HMIPLGA UNSPF SIDE
342.11 SPSTC HMIPLGA DOMNT SIDE
342.12 SPSTC HMIPLG NONDMNT SDE
342.80 OT SP HMIPLGA UNSPF SIDE
342.81 OT SP HMIPLGA DOMNT SIDE
342.82 OT SP HMIPLG NONDMNT SDE
342.90 UNSP HEMIPLGA UNSPF SIDE
342.91 UNSP HEMIPLGA DOMNT SIDE
342.92 UNSP HMIPLGA NONDMNT SDE
343.0 CONGENITALDIPLEGIA
343.1 CONGENITALHEMIPLEGIA
343.2 CONGENITALQUADRIPLEGIA
343.3 CONGENITALMONOPLEGIA
343.4 INFANTILEHEMIPLEGIA
343.8 CEREBRAL PALSY NEC
343.9 CEREBRAL PALSY NOS
344.00 QUADRIPLEGIA, UNSPECIFD
344.01 QUADRPLG C1-C4, COMPLETE
344.02 QUADRPLG C1-C4, INCOMPLT
344.03 QUADRPLG C5-C7, COMPLETE
344.04 QUADRPLG C5-C7, INCOMPLT
344.09 OTHERQUADRIPLEGIA
344.1 PARAPLEGIANOS
344.2 DIPLEGIA OF UPPER LIMBS
344.30 MONPLGA LWR LMB UNSP SDE
344.31 MONPLGA LWR LMB DMNT SDE
344.32 MNPLG LWR LMB NONDMNT SD
344.40 MONPLGA UPR LMB UNSP SDE
344.41 MONPLGA UPR LMB DMNT SDE
344.42 MNPLG UPR LMB NONDMNT SD
344.5 MONOPLEGIANOS
344.60 CAUDA EQUINA SYND NOS
344.61 NEUROGENICBLADDER
344.81 LOCKED-INSTATE
344.89 OTH SPCF PARALYTIC SYND
344.9 PARALYSISNOS
348.1 ANOXIC BRAIN DAMAGE
348.4 COMPRESSION OF BRAIN
356.1 PERONEAL MUSCLE ATROPHY
356.2 HERED SENSORY NEUROPATHY
356.4 IDIO PROG POLYNEUROPATHY
359.0 CONG HERED MUSC DYSTRPHY
359.1 HERED PROG MUSC DYSTRPHY
359.5 MYOPATHY IN ENDOCRIN DIS
359.6 INFL MYOPATHY IN OTH DIS
359.8\*\ MYOPATHY NEC
359.9 MYOPATHYNOS
430 SUBARACHNOIDHEMORRHAGE
431 INTRACEREBRALHEMORRHAGE
432.0 NONTRAUM EXTRADURAL HEM
432.1 SUBDURALHEMORRHAGE
432.9 INTRACRANIAL HEMORR NOS
433.01 OCL BSLR ART W INFRCT
433.11 OCL CRTD ART W INFRCT
433.21 OCL VRTB ART W INFRCT
433.31 OCL MLT BI ART W INFRCT
433.81 OCL SPCF ART W INFRCT
433.91 OCL ART NOS W INFRCT
434.01 CRBL THRMBS W INFRCT
434.11 CRBL EMBLSM W INFRCT
434.91 CRBL ART OCL NOS W INFRC
438.11 LATE EFF CV DIS-APHASIA
438.20 LATE EF-HEMPLGA SIDE NOS
438.21 LATE EF-HEMPLGA DOM SIDE
438.22 LATE EF-HEMIPLGA NON-DOM
438.30 LATE EF-MPLGA UP LMB NOS
438.31 LATE EF-MPLGA UP LMB DOM
438.32 LT EF-MPLGA UPLMB NONDOM
438.40 LTE EF-MPLGA LOW LMB NOS
438.41 LTE EF-MPLGA LOW LMB DOM
438.42 LT EF-MPLGA LOWLMB NONDM
438.50 LT EF OTH PARAL SIDE NOS
438.51 LT EF OTH PARAL DOM SIDE
438.52 LT EF OTH PARALS NON-DOM
438.53 LT EF OTH PARALS-BILAT
710.0 SYST LUPUS ERYTHEMATOSUS
710.4 POLYMYOSITIS
714.0 RHEUMATOIDARTHRITIS
714.1 FELTYSSYNDROME
714.2 SYST RHEUM ARTHRITIS NEC
714.30 JUV RHEUM ARTHRITIS NOS
714.31 POLYART JUV RHEUM ARTHR
714.4 CHR POSTRHEUM ARTHRITIS
716.29 ALLERGARTHRITIS-MULT
720.0 ANKYLOSINGSPONDYLITIS
806.00 C1-C4 FX-CL/CORD INJ NOS
806.01 C1-C4 FX-CL/COM CORD LES
806.02 C1-C4 FX-CL/ANT CORD SYN
806.03 C1-C4 FX-CL/CEN CORD SYN
806.04 C1-C4 FX-CL/CORD INJ NEC
806.05 C5-C7 FX-CL/CORD INJ NOS
806.06 C5-C7 FX-CL/COM CORD LES
806.07 C5-C7 FX-CL/ANT CORD SYN
806.08 C5-C7 FX-CL/CEN CORD SYN
806.09 C5-C7 FX-CL/CORD INJ NEC
806.10 C1-C4 FX-OP/CORD INJ NOS
806.11 C1-C4 FX-OP/COM CORD LES
806.12 C1-C4 FX-OP/ANT CORD SYN
806.13 C1-C4 FX-OP/CEN CORD SYN
806.14 C1-C4 FX-OP/CORD INJ NEC
806.15 C5-C7 FX-OP/CORD INJ NOS
806.16 C5-C7 FX-OP/COM CORD LES
[[Page 26836]]
806.17 C5-C7 FX-OP/ANT CORD SYN
806.18 C5-C7 FX-OP/CEN CORD SYN
806.19 C5-C7 FX-OP/CORD INJ NEC
806.20 T1-T6 FX-CL/CORD INJ NOS
806.21 T1-T6 FX-CL/COM CORD LES
806.22 T1-T6 FX-CL/ANT CORD SYN
806.23 T1-T6 FX-CL/CEN CORD SYN
806.24 T1-T6 FX-CL/CORD INJ NEC
806.25 T7-T12 FX-CL/CRD INJ NOS
806.26 T7-T12 FX-CL/COM CRD LES
806.27 T7-T12 FX-CL/ANT CRD SYN
806.28 T7-T12 FX-CL/CEN CRD SYN
806.29 T7-T12 FX-CL/CRD INJ NEC
806.30 T1-T6 FX-OP/CORD INJ NOS
806.31 T1-T6 FX-OP/COM CORD LES
806.32 T1-T6 FX-OP/ANT CORD SYN
806.33 T1-T6 FX-OP/CEN CORD SYN
806.34 T1-T6 FX-OP/CORD INJ NEC
806.35 T7-T12 FX-OP/CRD INJ NOS
806.36 T7-T12 FX-OP/COM CRD LES
806.37 T7-T12 FX-OP/ANT CRD SYN
806.38 T7-T12 FX-OP/CEN CRD SYN
806.39 T7-T12 FX-OP/CRD INJ NEC
806.4 CL LUMBAR FX W CORD INJ
806.5 OPN LUMBAR FX W CORD INJ
806.60 FX SACRUM-CL/CRD INJ NOS
806.61 FX SACR-CL/CAUDA EQU LES
806.62 FX SACR-CL/CAUDA INJ NEC
806.69 FX SACRUM-CL/CRD INJ NEC
806.70 FX SACRUM-OP/CRD INJ NOS
806.71 FX SACR-OP/CAUDA EQU LES
806.72 FX SACR-OP/CAUDA INJ NEC
806.79 FX SACRUM-OP/CRD INJ NEC
806.8 VERT FX NOS-CL W CRD INJ
806.9 VERT FX NOS-OP W CRD INJ
850.2 CONCUSSION-MODERATECOMA
850.3 CONCUSSION-PROLONGCOMA
850.4 CONCUSSION-DEEPCOMA
851.02 CORTEX CONTUS-BRIEF COMA
851.03 CORTEX CONTUS-MOD COMA
851.04 CORTX CONTUS-PROLNG COMA
851.05 CORTEX CONTUS-DEEP COMA
851.12 OPN CORT CONTUS-BRF COMA
851.13 OPN CORT CONTUS-MOD COMA
851.14 OPN CORT CONTU-PROL COMA
851.15 OPN CORT CONTU-DEEP COMA
851.22 CORTEX LACERA-BRIEF COMA
851.23 CORTEX LACERAT-MOD COMA
851.24 CORTEX LACERAT-PROL COMA
851.25 CORTEX LACERAT-DEEP COMA
851.32 OPN CORTX LAC-BRIEF COMA
851.33 OPN CORTX LACER-MOD COMA
851.34 OPN CORTX LAC-PROLN COMA
851.35 OPN CORTEX LAC-DEEP COMA
851.42 CEREBELL CONTUS-BRF COMA
851.43 CEREBELL CONTUS-MOD COMA
851.44 CEREBEL CONTUS-PROL COMA
851.45 CEREBEL CONTUS-DEEP COMA
851.52 OPN CEREBE CONT-BRF COMA
851.53 OPN CEREBE CONT-MOD COMA
851.54 OPN CEREBE CONT-PROL COM
851.55 OPN CEREBE CONT-DEEP COM
851.62 CEREBEL LACER-BRIEF COMA
851.63 CEREBEL LACERAT-MOD COMA
851.64 CEREBEL LACER-PROLN COMA
851.65 CEREBELL LACER-DEEP COMA
851.72 OPN CEREBEL LAC-BRF COMA
851.73 OPN CEREBEL LAC-MOD COMA
851.74 OPN CEREBE LAC-PROL COMA
851.75 OPN CEREBE LAC-DEEP COMA
851.82 BRAIN LAC NEC-BRIEF COMA
851.83 BRAIN LACER NEC-MOD COMA
851.84 BRAIN LAC NEC-PROLN COMA
851.85 BRAIN LAC NEC-DEEP COMA
851.92 OPN BRAIN LAC-BRIEF COMA
851.93 OPN BRAIN LACER-MOD COMA
851.94 OPN BRAIN LAC-PROLN COMA
851.95 OPEN BRAIN LAC-DEEP COMA
852.03 SUBARACH HEM-MOD COMA
852.04 SUBARACH HEM-PROLNG COMA
852.05 SUBARACH HEM-DEEP COMA
852.06 SUBARACH HEM-COMA NOS
852.13 OP SUBARACH HEM-MOD COMA
852.14 OP SUBARACH HEM-PROL COM
852.15 OP SUBARACH HEM-DEEP COM
852.23 SUBDURAL HEMORR-MOD COMA
852.24 SUBDURAL HEM-PROLNG COMA
852.25 SUBDURAL HEM-DEEP COMA
852.26 SUBDURAL HEMORR-COMA NOS
852.33 OPN SUBDUR HEM-MOD COMA
852.34 OPN SUBDUR HEM-PROL COMA
852.35 OPN SUBDUR HEM-DEEP COMA
852.43 EXTRADURAL HEM-MOD COMA
852.44 EXTRADUR HEM-PROLN COMA
852.45 EXTRADURAL HEM-DEEP COMA
852.53 EXTRADURAL HEM-MOD COMA
852.54 EXTRADUR HEM-PROLN COMA
852.55 EXTRADUR HEM-DEEP COMA
853.03 BRAIN HEM NEC-MOD COMA
853.04 BRAIN HEM NEC-PROLN COMA
853.05 BRAIN HEM NEC-DEEP COMA
853.06 BRAIN HEM NEC-COMA NOS
853.13 BRAIN HEM OPEN-MOD COMA
853.14 BRAIN HEM OPN-PROLN COMA
853.15 BRAIN HEM OPEN-DEEP COMA
854.03 BRAIN INJ NEC-MOD COMA
854.04 BRAIN INJ NEC-PROLN COMA
854.05 BRAIN INJ NEC-DEEP COMA
854.06 BRAIN INJ NEC-COMA NOS
854.13 OPN BRAIN INJ-MOD COMA
854.14 OPN BRAIN INJ-PROLN COMA
854.15 OPN BRAIN INJ-DEEP COMA
887.0 AMPUT BELOW ELB, UNILAT
887.1 AMP BELOW ELB, UNIL-COMP
887.3 AMPUT ABV ELB, UNIL-COMP
887.4 AMPUTAT ARM, UNILAT NOS
887.5 AMPUT ARM, UNIL NOS-COMP
887.6 AMPUTATION ARM, BILAT
887.7 AMPUTAT ARM, BILAT-COMPL
897.0 AMPUT BELOW KNEE, UNILAT
897.1 AMPUTAT BK, UNILAT-COMPL
897.2 AMPUT ABOVE KNEE, UNILAT
897.3 AMPUT ABV KN, UNIL-COMPL
897.4 AMPUTAT LEG, UNILAT NOS
897.5 AMPUT LEG, UNIL NOS-COMP
897.6 AMPUTATION LEG, BILAT
897.7 AMPUTAT LEG, BILAT-COMPL
905.9 LATE EFF TRAUMAT AMPUTAT
907.0 LT EFF INTRACRANIAL INJ
907.2 LATE EFF SPINAL CORD INJ
952.00 C1-C4 SPIN CORD INJ NOS
952.01 COMPLETE LES CORD/C1-C4
952.02 ANTERIOR CORD SYND/C1-C4
952.03 CENTRAL CORD SYND/C1-C4
952.04 C1-C4 SPIN CORD INJ NEC
952.05 C5-C7 SPIN CORD INJ NOS
952.06 COMPLETE LES CORD/C5-C7
952.07 ANTERIOR CORD SYND/C5-C7
952.08 CENTRAL CORD SYND/C5-C7
952.09 C5-C7 SPIN CORD INJ NEC
952.10 T1-T6 SPIN CORD INJ NOS
952.11 COMPLETE LES CORD/T1-T6
952.12 ANTERIOR CORD SYND/T1-T6
952.13 CENTRAL CORD SYND/T1-T6
952.14 T1-T6 SPIN CORD INJ NEC
952.15 T7-T12 SPIN CORD INJ NOS
952.16 COMPLETE LES CORD/T7-T12
952.17 ANTERIOR CORD SYN/T7-T12
952.18 CENTRAL CORD SYN/T7-T12
[[Page 26837]]
952.19 T7-T12 SPIN CORD INJ NEC
952.2 LUMBAR SPINAL CORD INJUR
952.3 SACRAL SPINAL CORD INJUR
952.4 CAUDA EQUINA INJURY
952.8 SPIN CORD INJ-MULT SITE
952.9 SPINAL CORD INJURY NOS
997.60 AMPUTAT STUMP COMPL NOS
997.61 NEUROMA AMPUTATION STUMP
997.62 INFECTION AMPUTAT STUMP
997.69 AMPUTAT STUMP COMPL NEC
V49.63 STATUS AMPUT HAND
V49.64 STATUS AMPUT WRIST
V49.65 STATUS AMPUT BELOW ELBOW
V49.66 STATUS AMPUT ABOVE ELBOW
V49.67 STATUS AMPUT SHOULDER
V49.75 STATUS AMPUT BELOW KNEE
V49.76 STATUS AMPUT ABOVE KNEE
V49.77 STATUS AMPUT HIP
------------------------------------------------------------------------
\*\ Note code 359.8 has been replaced by 359.81 and 359.89
[FR Doc. 03-11829 Filed 5-8-03; 3:15 pm]
BILLING CODE 4120-01-P