[Federal Register Volume 70, Number 62 (Friday, April 1, 2005)]
[Rules and Regulations]
[Pages 16724-16729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6379]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412 and 413

[CMS-1213-CN]
RIN 0938-AL50


Medicare Program; Prospective Payment System for Inpatient 
Psychiatric Facilities; Final Rule; Correction

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

ACTION: Correction of final rule.

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SUMMARY: This document corrects errors that appeared in the final rule 
published in the Federal Register on November 15, 2004, entitled 
``Medicare Program; Prospective Payment System for Inpatient 
Psychiatric Facilities.'' This document also supplements the November 
15, 2004 final rule.

DATES: Effective January 1, 2005.

FOR FURTHER INFORMATION CONTACT: Janet Samen, (410) 786-9161.

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 04-24787 of November 15, 2004 (69 FR 66922), there were 
several errors that are identified in the ``Summary of Errors'' section 
and corrected in the ``Correction of Errors'' section below. In 
addition to clarifying ambiguities and correcting typographical errors 
and incorrect references, this document is a supplement to the document 
published on November 15, 2004, entitled ``Medicare Program; 
Prospective Payment System for Inpatient Psychiatric Facilities'' 
(hereinafter referred to as the IPF PPS final rule or final rule) 
because it includes a timely submitted comment and our response that we 
inadvertently failed to include in the final rule. The provisions of 
this correction notice are effective as if they had been included in 
the final rule. Accordingly, the corrections are effective January 1, 
2005.

II. Summary of Errors

    In the November 15, 2004 final rule, in payment calculation 
examples, we stated that we computed a wage adjustment factor for each 
case by multiplying the Medicare 2005 hospital wage index for each 
facility by the labor-related share and adding the non-labor share. We 
used the correct labor share value of 72.247 percent on page 66953 in 
Table 8 of the final rule. However, we inadvertently did not use the 
correct labor-related and non-labor share values in other portions of 
the final rule. Instead of using 72.247 percent for the labor share and 
27.753 percent for the non-labor share, we used a value of 72.528 
percent for the labor share and 27.472 percent for the non-labor share. 
This error only affected the values in the payment calculation examples 
on pages 66942, 66943, 66960, and 66961 of the final rule (See sections 
III.A.9, III.A.10 and the values in the outlier calculation example in 
section III.A.25 of this correction notice). These errors did not have 
any effect on actual payments. The table in Addendum A on page 66982 of 
the final rule that contains the labor and non-labor portion of the Per 
Diem Rate is also corrected in section III.C of this correction notice.

[[Page 16725]]

The table reflects the incorrect percentages for the labor- and non-
labor-related shares, and therefore the dollar amounts are incorrect. 
However, as with the above examples, this error does not represent a 
change in policy from the final rule, and it did not affect any actual 
Medicare payments. In addition, we issued Change Request 3541 (CR3541), 
Transmittal 384, on December 1, 2004 that clarified the correct labor 
and non-labor portions of the Federal per diem base rate.
    One of the patient-level adjustments we proposed was a comorbidity 
adjustment. We provided a comorbidity list in the preamble of the 
proposed rule (68 FR 66930 and 66931). In the final rule, we made 
changes to the proposed IPF PPS comorbidity category list. We revised 
the list by: (1) Adding a new category entitled ``Developmental 
Disabilities''; (2) deleting the HIV category and moving it into the 
``Infectious Diseases'' category; and (3) changing the titles of two 
categories, ``Malignant Neoplasms'' to ``Oncology Treatment,'' and 
``Atherosclerosis of the extremity with Gangrene'' to ``Gangrene.'' 
However, we inadvertently published several inconsistencies in the list 
of comorbidities. In order to receive the comorbidity adjustment for 
malignant neoplasms, we reported that IPFs will be required to code the 
ICD-9-CM code for the specific malignant neoplasm from ICD-9-CM chapter 
2 codes (140 through 239) and one of the two ICD-9-CM procedures codes 
(chemotherapy (V58.0) or radiation treatment (V58.1)) to indicate the 
treatment modality the patient received. The ICD-9-CM chapter 2 codes 
for Neoplasm actually includes both benign and malignant neoplasm 
codes. Therefore, in order to be consistent with our policy, we are 
clarifying in section III.A.7.c of this correction notice that we are 
including all of the codes in ICD-9-CM chapter 2 for Neoplasm. We are 
also deleting the word ``malignant'' in the three places it appears on 
page 66939 in the final rule. In addition, we inadvertently reported V 
codes instead of the ICD-9-CM radiation and chemotherapy procedure 
codes. In order to be consistent with our policy, we deleted the V 
codes and reported the correct ICD-9-CM procedure codes. We are 
clarifying the policy in sections III.A.7 through III.A.13 of this 
correction notice.
    Several ICD-9-CM codes were inadvertently omitted or reported 
incorrectly in the preamble of the final rule. These mistakes include: 
Chronic Obstructive Pulmonary Disease (for which we incorrectly 
reported code V461 instead of V4611, and neglected to report code 
V4612); Infectious Diseases category (for which we incorrectly reported 
code 0100 instead of code 01000); Oncology Treatment category (for 
which we incorrectly reported code 140 instead of code 1400); and Renal 
Failure, Acute category (for which we incorrectly reported codes 6363 
and 6373, and neglected to report several codes). In addition, we 
inadvertently omitted one code from under the Drug and/or Alcohol 
Induced Mental Disorders. We are also revising the Diabetes category to 
include both Type I and Type II Diabetes because this comorbidity 
category contains diagnosis codes for both types of Diabetes and we 
neglected to include Type II in the final rule. We are correcting these 
mistakes in sections III.A.8.a through III.A.8.g and section III.A.11 
of this correction notice.
    On page 66945 of the preamble, we included a claims processing 
description that we believe is operational and therefore inappropriate 
for inclusion in the final rule. In the preamble of the final rule on 
page 66966, we indicate that we will issue operational instructions to 
address specific billing issues. Therefore, we are deleting the 
paragraph on page 66945 that explains the processing of claims for the 
IPF PPS (see section III.A.12.f of this correction). The coding logic 
that identifies the primary diagnosis code as non-psychiatric and 
searches the secondary codes for a psychiatric code to assign a DRG 
code for an adjustment will be provided in the claims processing 
instructions. In the event that the coding logic is changed in the 
future, we need only make changes to the claims processing instructions 
rather than to the regulations.
    In the Code First example we provided in the final rule on page 
66945, we made a typographic error and listed the ICD-9-CM code for 
Dementia as ``33.82'' instead of ``331.82.'' In addition, we 
inadvertently omitted two 5-digit ICD-9-CM codes (294.10 and 294.11) 
that fall under 294.1. Finally, the website we provided for the 
Official Guidelines for Coding and Reporting was incorrect. We are 
making these corrections in section III.A.12 of this correction notice.
    In the preamble of the final rule, we indicate in several places 
that IPFs must indicate on their claims the revenue code and procedure 
code for Electroconvulsive Therapy (ECT) (Rev code 901 and procedure 
code 90870) and the number of units of ECT, that is, the number of ECT 
treatments the patient received during the IPF stay. We explain that 
providing these data will ensure that facilities are appropriately 
reimbursed for the treatments they provided. We inadvertently referred 
to the Current Procedural Terminology (CPT) procedure code 90870 for 
ECT treatments rather than using the ICD-9-CM procedure code 94.27. 
Therefore, sections III.A.15.b and c of this correction notice replace 
the CPT procedure code 90870 with the ICD-9-CM procedure code.
    In the preamble of the final rule on page 66951, we state that the 
ECT rate is adjusted by the facility characteristics, but we neglected 
to mention that the Cost of Living Adjustment (COLA) is one of these 
characteristics. The COLA is described elsewhere in the final rule on 
pages 66957 and 66958 and the correction of this omission does not 
represent a change in our policy. We are making this correction in 
section III.A.15.d of this correction notice.
    In section III.A.17.b of this notice, we correct a typographical 
error in Table 8 on page 66953. Each of the values listed in the second 
column is correct, including the final total. However, we incorrectly 
reported the sum of the first four values (the subtotal) as 68.818 
instead of 68.878. The incorrect value was not factored into any 
payment calculations, so no Medicare payments were affected by this 
error.
    In sections III.A.19 through III.A.21 and in section III.B (under 
Sec.  412.422) of this correction notice, we describe the teaching 
status adjustments. Beginning on page 66954 of the final rule, we 
presented the public comments and our responses to the proposed 
changes. However, we inadvertently omitted one comment that was timely 
submitted regarding our proposed teaching adjustment. The commenter 
asked if the IPF PPS would compensate for a school of nursing and a 
pastoral care teaching program. We indicate that we will pay for such 
programs, and that these payments are ``pass-through'' paid outside the 
PPS. We insert that comment and our response in section III.A.21. We 
also amend the preamble and the regulation text to correct the range of 
approved medical education programs that are treated as pass-through 
costs. The range listed in the final rule inadvertently did not cover 
all approved programs. This correction clarifies that the list of 
programs includes direct graduate medical education and nursing and 
allied health education activities. The correction of this list of 
programs is consistent with our policy as published in the final rule 
and does not reflect a change in policy.
    We neglected to state in the final rule that we will be obtaining 
the total Medicare inpatient routine charges from the Provider 
Statistical &

[[Page 16726]]

Reimbursement Reconciliation Reports (PS&R) associated with the 
applicable cost report for IPFs that are distinct part units. This is 
how we routinely obtain charges, but we neglected to include this 
statement in our final rule. The clarification is made in section 
III.A.26 of this correction notice.
    Throughout the final rule, we explain that the IPF PPS is effective 
for cost reporting periods beginning on or after January 1, 2005. 
However, on page 66970 of the preamble to the final rule, we mistakenly 
stated that the methodology used for determining the Federal per diem 
base rate for cost reporting periods beginning on or after ``January 5, 
2005'' includes certain factors. We correct this typographical error, 
changing January 5, to January 1, in section III.A.27 of this 
correction notice.
    The Federal per diem base rate is $575.95, as indicated in the 
final rule, including in Table 8 on page 66982. However, on page 66972, 
in the Regulatory Impact Analysis, we mistakenly noted that the Federal 
per diem base rate is $572.00. In section III.A.28 of this notice, we 
correct the value of the Federal per diem base rate to be consistent 
with the rest of the final rule. This error had no payment implications 
as the incorrect number was not used in any calculations or payments.
    In addition to correcting errors in the preamble, we also corrected 
several sections of the regulation text (see section III.B. of this 
correction notice). In discussing the Federal per diem base rate (Sec.  
412.424), we incorrectly described the rate as ``unadjusted'' in Sec.  
412.424(c)(1). In order to be consistent with the actual policy, as 
described on pages 66931 through 66933 of the final rule, we changed 
``unadjusted'' to ``adjusted'' to reflect that the Federal per diem 
base rate is the rate that has been adjusted for budget neutrality, 
behavioral offset, and outlier and stop-loss payments.
    We inadvertently created a paragraph for high-cost adjustment cases 
that virtually duplicates Sec.  412.424(d)(3)(i), the provision on 
outlier payments. Therefore, we deleted the paragraph titled 
``Adjustment for high-cost cases.''
    In the final rule, we included Sec.  412.424(d)(3), which sets 
forth our specific outliers policy for discharges occurring in cost 
reporting periods beginning on or after January 1, 2005. However, we 
meant to set forth our general outliers policy as reflected in the 
preamble of the final rule on page 66960, not the specific policy for 
the IPF PPS implementation period. Therefore, we corrected the section 
on outlier payments to describe our general outliers methodology that 
is not specific to the IPF PPS implementation period.
    In Sec.  412.426 of the regulation text, we inadvertently used 
incorrect dates for the cost reporting periods for the transition 
period from a blended PPS payment to a full PPS payment. Our policy is 
clear from the discussion in the preamble on pages 66964 through 66966 
that the transition period dates correlate to the cost reporting year. 
However, in Sec.  412.426, we inadvertently inserted the dates that 
reflect the IPF PPS update cycle instead of cost reporting years. This 
correction does not reflect a change in policy, rather, it conforms the 
regulation text to the actual policy. The errors did not affect 
payments in any way. In fact, no claims are being processed under the 
new bill processing system for the IPF PPS until its implementation on 
April 4, 2005.
    In the final rule, on page 66952, we indicated that the wage 
indexes we are using are the pre-classified FY 2005 hospital wage 
indexes, as set forth in Addenda B1 and B2. In Addendum A, we 
incorrectly identified the wage index we are using as the ``IPPS'' wage 
index. Therefore, in this correction notice, we correct the reference 
to the wage index from ``IPPS'' to the pre-reclassified FY 2005 
hospital wage index.
    In Addendum B1, an incorrect wage index value was reported and an 
MSA designation was incorrectly reported. The errors, however, are only 
in the Addendum. The correct wage index value and MSA designation were 
reflected in PRICER at the time of the effective date of the final 
rule. The errors had no effect on payment, and the correction is being 
made to conform the wage index value and MSA designation to the actual 
policy that was in place at the time the final rule was effective.
    In the preamble of the final rule, on pages 66959 and 66960, we set 
forth our policy of providing a facility-level adjustment for IPFs for 
both psychiatric hospitals and acute care hospitals with a distinct 
part psychiatric unit that maintain a qualifying emergency department 
(ED). We intended that the adjustment only be provided to hospitals 
with EDs that are staffed and equipped to furnish a comprehensive array 
of emergency services and that meet the definition of a ``dedicated 
emergency department'' as specified in Sec.  489.24 and the definition 
of ``provider-based status'' (as corrected, from ``provider-based 
entity'' to ``provider-based status'' in section III.A.24.a, below) as 
specified in Sec.  413.65. We defined a full-service ED in order to 
avoid providing an ED adjustment to an intake unit that is not 
comparable to a full-service ED with respect to the array of emergency 
services available. We provided that the ED adjustment will be 
incorporated into the variable per diem adjustment for the first day of 
each stay. That is, IPFs with qualifying EDs will receive a higher 
variable per diem adjustment for the first day of each stay than will 
other IPFs. (See page 66960 of the final rule.) However, in Addendum A, 
under the Variable Per Diem Adjustments chart, for Day 1 (on both 
lines), we erroneously indicated an adjustment factor for a facility 
with and without a ``24/7'' full-service ED. Our definition of full-
service ED does not include any reference to ``24/7.'' Therefore, the 
reference may be confusing and could raise questions. In order to be 
consistent with our definition of a full-service ED, we are deleting 
the references to ``24/7'' in section III.C of this correction notice. 
In addition, although we believe that describing a full-service ED as 
providing a ``comprehensive array of emergency services'' was clear, we 
are further clarifying that full-service EDs furnish medical as well as 
psychiatric treatment.
    In the final rule, on page 66937, we stated that our policy is that 
we will provide the Federal per diem base rate payment under the IPF 
PPS for claims with a principal diagnosis included in Chapter Five of 
the ICD-9-CM or the DSM-IV-TR. In the final rule, on pages 67014 
through 67015, we provided a chart, Addendum C--Code First, which lists 
the ICD-9-CM Disease Code First instructions as of 2005 (effective 
October 1, 2004). These codes are the mental disorder codes 290 through 
319, included in Chapter Five of ICD-9-CM. We inadvertently included 
code 320.7, Bacterial Meningitis. Because code 320.7 is not a mental 
disorder code, we are removing it in section III.C of this correction 
notice.
    In addition to the preamble corrections described above, we made 
incorrect cross-references and other typographical errors in the final 
rule that we are correcting in this document.

III. Correction of Errors

A. Preamble Corrections

    In the final rule published on November 15, 2004 (69 FR 66922), 
make the following corrections:
    1. On page 66922, in column 3 of the Table of Contents, lines 37 
through 38, ``Addendum A: Proposed Inpatient PPS Adjustments'' is 
corrected to ``Addendum A: Psychiatric Prospective Payment Rate and 
Adjustment Factors.''

[[Page 16727]]

    2. On page 66923, in column 3, in line 16, remove the period after 
the word ``example.''
    3. On page 66924, in column 1, in the second full paragraph, line 
1, remove the parenthesis before the word ``We.''
    4. On page 66932, in column 1, in line 19, the words ``Federal per 
diem base rate'' are corrected to ``average cost per day''.
    5. On page 66934, in column 3, in line 1, the word ``conditions'' 
is corrected to ``condition categories.''
    6. On page 66936,
    a. In column 2, in the third full paragraph, in lines 6 and 7, the 
phrase ``labor-related share (.72528) and adding the non-labor share 
(.27472)'' is corrected to ``labor-related share (0.72247) and adding 
the non-labor share (0.27753).''
    b. In column 3, in the second paragraph, in line 6, add the words 
``all of'' before the word ``these.''
    7. On page 66939,
    a. In column 1, in line 1, the word ``constructive'' is corrected 
to ``obstructive.''
    b. In column 2, in the first full paragraph, in lines 9, 18, and 
21, the word ``malignant'' is removed.
    c. In column 2, in the first full paragraph, in lines 13 through 
16, the sentence ``As a result, we have added two ICD-9-CM codes, one 
for chemotherapy (V58.0) and one for radiation treatment (V58.1).'' is 
corrected to ``As a result, we have added ICD-9-CM procedure codes for 
radiation therapy (92.21 through 92.29) and for chemotherapy (99.25).''
    d. In column 2, in the first full paragraph, in lines 22 through 
26, the phrase ``one of the two ICD-9-CM procedures codes (chemotherapy 
((V58.0)) or radiation treatment ((V58.1)) to indicate the treatment 
modality the patient received.'' Is corrected to ``an ICD-9-CM 
procedure code for radiation therapy codes (92.21 through 92.29) or for 
chemotherapy (99.25).''
    8. On page 66940,
    a. In column 1, in Table 4, in row 8, and on page 66944, in column 
1, in Table 5, in row 7, ``Uncontrolled Type I Diabetes Mellitus, with 
or without complications'' is corrected to ``Uncontrolled Diabetes 
Mellitus''. We are also revising the chart on page 66984 in line 9 in 
the same manner.
    b. In column 2, in Table 4, in row 11, ``0411'' is corrected to 
``04110''.
    c. In columns 2 and 3, in Table 4, in row 11, ``0100'' is corrected 
to ``01000''.
    d. In column 2, in Table 4, in row 12, insert the code ``29212''.
    e. In column 3, in Table 4, in row 5, remove the figures ``6363 and 
6373'' and add in their place the figures ``63630, 63631, 63632, 63730, 
63731, and 63732.''
    f. In column 3, in Table 4, in row 7, ``Treatment 140 through 2399 
WITH either V580 or V581'' is corrected to ``Treatment 1400 through 
2399 WITH either 92.21 through 92.29 or 99.25''.
    g. In column 3, in Table 4, in row 15, remove the code ``V461'' and 
add in its place the codes ``V4611 and V4612''.
    9. On page 66942,
    a. In column 2 of the chart, in row 25, the figure ``0.72528'' is 
corrected to ``0.72247''.
    b. In column 2 of the chart in row 26, the figure ``0.27472'' is 
corrected to ``0.27753''.
    c. In column 3 of the chart, in row 25, the figure ``417.73'' is 
corrected to ``416.11''.
    d. In column 3 of the chart in row 26, the figure ``158.22'' is 
corrected to ``159.84''.
    e. In column 1, in Step 1, in lines 5 and 6, the figures ``(0.7743 
x 417.73 = $323.45) are corrected to ``(0.7743 x 416.11 = $322.19).''
    f. In column 1, in Step 2, in lines 5 and 6, the figures ``($323.45 
+ 158.22 = $481.67)'' are corrected to ``(322.19 + 159.84 = $482.03).''
    g. In column 3, in Step 3, in line 5, the figures ``($481.67 x 
1.4181 = 683.06)'' are corrected to ``($482.03 x 1.4181 = $683.57).''
    10. On page 66943, in column 1, in Step 3, the second numeric 
multiplier, 683.06, and the dollar amounts in each of the equations and 
in the Federal per diem payment amount, are revised as follows:

Day 1 (adjustment factor 1.31) x 683.57.................   =     $895.48
Day 2 (adjustment factor 1.12) x 683.57.................   =      765.60
Day 3 (adjustment factor 1.08) x 683.57.................   =      738.26
Day 4 (adjustment factor 1.05) x 683.57.................   =      717.75
Day 5 (adjustment factor 1.04) x 683.57.................   =      710.91
Day 6 (adjustment factor 1.02) x 683.57.................   =      697.24
Day 7 (adjustment factor 1.01) x 683.57.................   =      690.41
Day 8 (adjustment factor 1.01) x 683.57.................   =      690.41
Day 9 (adjustment factor 1.00) x 683.57.................   =      683.57
Day 10 (adjustment factor 1.00) x 683.57................   =      683.57
                                                              ----------
    Federal per diem payment amount.....................   =    7,273.20
 

    11. On page 66944,
    a. In column 1, in Table 5, in row 3, ``Tracheotomy'' is corrected 
to ``Tracheostomy''.
    b. In column 2, in Table 5, in row 4, remove the figures ``6363 and 
6373'' and add in their place the figures ``63630, 63631, 63632, 63730, 
63731, and 63732''.
    c. In column 2, in Table 5, in row 6, ``1400 through 2399 WITH 
either V58.0 OR V58.1'' is corrected to ``1400 through 2399 WITH either 
92.21 through 92.29 or 99.25''.
    d. In column 2, in Table 5, in row 11, insert the code ``29212''.
    e. In column 2, in Table 5, in row 14, remove the words ``and 
V461'' and insert ``V4611 and V4612''.
    12. On page 66945,
    a. In column 1, in lines 10 through 11, ``www.cdc.gov/nchs/data/
ics9/icdguide.pdf'' is corrected to ``www.cdc.gov/nchs/data/icd9/
icdguide.pdf.''
    b. In column 3, in the first full paragraph, in line 1, the code 
``294.1'' is corrected to ``294.11''.
    c. In column 3, in the first full paragraph, in line three, the 
words ``With Behavioral Disturbance'' are added before the words ``is 
designated''.
    d. In column 3, under the subheading for ``294.1 Dementia in 
Conditions Classified Elsewhere,'' in line 6, the code ``(33.82)'' is 
corrected to ``(331.82)''.
    e. In column 3, under the subheading for ``294.1 Dementia in 
Conditions Classified Elsewhere'' and before the paragraph that begins 
with ``In accordance with the ICD-9-CM'' insert the following 
subheading: ``294.10 Dementia in Conditions Classified Elsewhere 
Without Behavioral Disturbances (not allowed as principal DX)'' and 
294.11 Dementia in Conditions Classified Elsewhere With Behavioral 
Disturbances (not allowed as principal DX)''.
    f. In column 3, in the paragraph that begins with ``In accordance 
with'', in line 8, remove the words ``states ``code first any 
underlying physical condition as:'' and add in its place the words ``is 
designated as ``code first,'' indicating that all 5 digit diagnosis 
codes that fall under 294.1 (codes 294.10 and 294.11) must follow the 
code first rule. According to the code first requirements,''.
    In the same paragraph, in lines 55 through 64, remove the sentences 
``The submitted claim goes through the CMS processing system that will 
identify the primary diagnosis code as non-psychiatric and search the 
secondary codes for a psychiatric code to assign a DRG code for 
adjustment. The system will continue to search the secondary codes for 
those that are appropriate for comorbidity adjustment.''
    13. On page 66946,
    a. In column 1, in lines 7 through 9, the words ``appropriate 
treatment V

[[Page 16728]]

code V580 chemotherapy or V581 radiation.'' is corrected to 
``appropriate procedure code from radiation therapy codes (92.21 
through 92.29) or chemotherapy (99.25).''
    b. In column 1, in line 10, the cross-reference ``VI.B.5.C.'' is 
corrected to ``VI.B.6.c''.
    c. In column 1, in line 16, the phrase ``(code 90870)'' is 
corrected to ``(code 94.27).''
    14. On page 66950, in column 2, in the third response to comment, 
in line 6, ``say'' is corrected to ``stay''.
    15. On page 66951,
    a. In column 1, in the first response to comment, in line 17, the 
cross-reference ``VI.B.5.b.'' is corrected to ``VI.C.4.d''.
    b. In column 1, in the first comment under the heading c, in line 
3, remove ``(procedure code 90870)'' and replace it with ``(ICD-9-CM 
procedure code 94.27)''.
    c. In column 2, in the third full paragraph, in line 8, remove 
``procedure code 90870'' and replace it with ``ICD-9-CM procedure code 
94.27''.
    d. In column 2, in the fifth full paragraph, in lines 11 through 
13, the sentence ``We will adjust the ECT rate for wage differences in 
the same manner that we adjust the per diem rate.'' is corrected to 
``We will adjust the ECT rate by the area wage index and any applicable 
cost of living adjustment (COLA), in the same manner that we adjust the 
per diem rate.''
    e. In column 3, in line 16, the word ``ETC'' is corrected to 
``ECT''.
    16. On page 66952, in column 1, in line 1, the word ``my'' is 
corrected to ``may''.
    17. On page 66953,
    a. In column 2, in the second paragraph of the response to comment, 
in line 10, remove the number ``0'' before the word ``labor-related'' 
and add in its place ``The''.
    b. In column 2, in the second paragraph of the response to comment, 
in line 14; in column 3, Table 8, row 6; and in column 3, line 5; the 
figure ``68.818'' is corrected to ``68.878''.
    18. On page 66954,
    a. In column 2, in the first full paragraph, in line 9, the cross-
reference ``VIII'' is corrected to ``XII''.
    b. In column 3, in the first full paragraph, in line 12, the cross-
reference ``V.C.3.'' is corrected to ``V.D.2''.
    19. On page 66955, in column 1, line 24, the reference ``Sec.  
413.83'' is corrected to ``Sec.  413.85''.
    20. On page 66956,
    a. In column 3, in Step 2 of the response to comment under Step 2, 
in line 8, the figure ``5.1'' is corrected to ``5.0''.
    b. In column 3, in Step 2 of the response to comment under Step 2, 
in line 11, the figure ``9.9'' is corrected to ``9.8''.
    21. On page 66957, in column 1, before the sub-heading, ``Other 
Facility-Level Adjustments,'' the following comment and response are 
added:
    Comment: One commenter asked if the IPF PPS would compensate for a 
school of nursing and a pastoral care teaching program.
    Response: Under 42 CFR 413.85, hospitals that operate approved 
nursing or allied health education programs may receive Medicare 
payment on a reasonable cost basis for costs of these programs. The 
payment is a ``pass-through'' (that is, it is paid separately and 
distinctly from the IPF PPS; similarly, it was paid separately from the 
TEFRA target amounts). If a freestanding IPF operates an approved 
nursing or allied health program, we pay the IPF for Medicare's share 
of the reasonable costs of the program (for example, costs incurred for 
trainee stipends and compensation of teachers). If an IPPS hospital 
with a psychiatric unit has a nursing or allied health program, then we 
will pay the IPPS hospital for training costs incurred in the IPPS and 
the psychiatric unit parts of the hospital.
    22. On page 66958, in column 3, in line 17, the number ``8'' is 
corrected to ``9''.
    23. On page 66959, in column 3, in line 7, the word ``a'' is 
corrected to ``an''.
    24. On page 66960,
    a. In column 1, in line 18, the word ``entity'' is corrected to 
``status''.
    b. In column 1, at the end of the first paragraph, add the 
following sentence: ``We intend to pay the ED adjustment to IPFs with 
EDs that furnish medical as well as psychiatric emergency treatment.''
    c. In column 1, in paragraph 4, in line 3, remove the word ``of'' 
before the word ``the''.
    d. In column 3, in the third full paragraph, in line 4, the figure 
``$7267.75'' is corrected to ``$7273.20''.
    e. In column 3, in Step 1, in lines 3 and 4, the figure ``0.72528'' 
is corrected to ``0.72247'', and the figure ``$3201.03'' is corrected 
to ``$3188.63''.
    f. In column 3, in Step 2, in lines 3 through 5, the figures 
``$5700 x 0.27472 (non-labor share) = $1565.90 $1565.90 + $3201.03 = 
$4766.93'' are corrected to

``$5700 x 0.27753 (non-labor share) = $1581.92
$1581.92 + $3188.63 = $4770.55''.

    g. In column 3, in Step 3, in line 3, the figure ``$4766.96'' is 
corrected to ``$4770.55'' and in line 4, the figure ``$5577.31'' is 
corrected to ``$5581.54''.
    25. On page 66961,
    a. In column 1, in line 1, the figures ``$5577.31 + $7267.75 = 
$12,845.06'' are corrected to ``$5581.54 + $7273.20 = $12,854.74''.
    b. In column 1, in line 3, the figure ``$12,845.06'' is corrected 
to ``$12,854.74''.
    c. In column 1, in Step 1, in line 4, the figures ``$12,845.06 = 
$3954.94'' are corrected to ``$12854.74 = $3945.26''.
    d. In column 1, in Step 2, in line 3, the figures ``$3594.94/10 = 
$395.49'' are corrected to ``$3945.26/10 = $394.53''.
    e. In column 1, in Step 3, in lines 3 and 4, the figures ``$395.49 
x 0.80 = $316.40'' and the figures ``$316.40 x 9 days = $2847.60'' are 
corrected to ``$394.53 x 0.80 = $315.62'' and ``$315.62 x 9 days = 
$2840.58'', respectively.
    f. In column 1, in Step 4, in line 3, the figures ``395 x 0.60 = 
$237.30'' are corrected to ``$394.53 x 0.60 = $236.72''.
    g. In column 1, in the paragraph after Step 4, in line 3, the 
figure ``$3084.90'' is corrected to ``$3077.30'' and in line 4, the 
figures ``$2847.60 + $237.30'' are corrected to ``$2840.58 + $236.72''.
    26. On page 66962, in column 3, in the second full paragraph, in 
line 4, remove the words ``estimated by dividing Medicare routine costs 
on'' and add in their place the words ``obtained from the PS&R report 
associated with the applicable cost report. (If PS&R data are not 
available, estimate Medicare routine charges.'' In line 11, add a close 
parenthesis after the word ``charges'' and in line 21, add the words 
``or M'' before the words ``in the third position.''
    27. On page 66970, in column 3, in line 20, the date ``January 5'' 
is corrected to ``January 1''.
    28. On page 66972, in column 3, in the last paragraph, in line 7, 
the figure ``$572'' is corrected to ``$575.95''.

B. Corrections to the Regulations Text

0
Accordingly, 42 CFR chapter IV is corrected by making the following 
correcting amendments to part 412:

PART 412--[CORRECTED]

0
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).


Sec.  412.402  [Corrected]

0
2. In Sec.  412.402 under the definition of ``Qualifying emergency 
department,'' the word ``meting'' is corrected to ``meeting''.

[[Page 16729]]

Sec.  412.422  [Corrected]

0
3. In Sec.  412.422(b)(1) ``Sec.  413.79 through Sec.  413.75'' is 
corrected to ``Sec.  413.75 through Sec.  413.85''.


Sec.  412.424  [Corrected]

0
4. In Sec.  412.424,
0
a. In paragraph (c)(1), in the second and third sentences, the word 
``unadjusted'' is corrected to ``adjusted''.
0
b. In paragraph (d) introductory text, the words ``and the patient-
level adjustments applicable'' are corrected to ``patient-level 
adjustments and other policy adjustments applicable to the case.''
0
c. In paragraph (d)(3)(i), the words ``per diem'' before the words 
``payment amount'' are removed.
0
d. Paragraph (d)(3)(v) is removed.
0
e. Paragraph (d)(3)(i)(B) is corrected to read as follows:


Sec.  412.424  Methodology for calculating the Federal per diem payment 
amount.

* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (B) The outlier payment equals a percentage of the difference 
between the IPF's estimated cost for the case and the adjusted 
threshold amount specified by CMS for each day of the inpatient stay.
* * * * *


Sec.  412.426  [Corrected]

0
5. In Sec.  412.426,
0
a. In paragraph (a) introductory text, ``June 30, 2008'' is corrected 
to ``January 1, 2008''.
0
b. In paragraph (a)(1), ``June 30, 2006'' is corrected to ``January 1, 
2006''.
0
c. In paragraph (a)(2), ``July 1, 2006'' is corrected to ``January 1, 
2006'' and ``June 30, 2007'' is corrected to ``January 1, 2007''.
0
d. In paragraph (a)(3), ``July 1, 2007'' is corrected to ``January 1, 
2007'' and ``June 30, 2008'' is corrected to ``January 1, 2008''.
0
e. In paragraph (a)(4), ``July 1, 2008'' is corrected to ``January 1, 
2008''.

C. Corrections of Addenda

Addendum A
    1. On page 66982,
    a. In column 2 of the Per Diem Rate chart, in rows 2 and 3, the 
figure ``$417.73'' is corrected to ``$416.11'' and the figure 
``$158.22'' is corrected to ``$159.84''.
    b. In column 2 of the Facility Adjustments chart, in row 2, the 
words ``Same as IPPS'' are corrected to ``See Addenda B1 and B2''.
    c. In column 1 of the Variable Per Diem Adjustments chart, in rows 
2 and 3, the figure ``24/7'' is removed.
Addendum B1
    1. On page 66989, in column 2 of the Table, in row 10, remove the 
words ``Stanly, NC''.
    2. On page 67012, in column 3 of the Table, in row 6, the figure 
``0.9468'' is corrected to ``0.9486''.
Addendum C
    1. On page 67015, in columns 1 and 2, the last row is removed.

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

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we 
can waive the notice and comment procedures if the Secretary finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefore in the notice.
    The policies and payment methodology expressed in the November 15, 
2004 final rule have previously been subjected to notice and comment 
procedures. This correction notice makes changes to conform the 
regulation text to the policies described in the preamble of the 
November 15, 2004 final rule. This correction notice also revises the 
preamble of the November 15, 2004 final rule to make clarifications, 
correct references, include an inadvertently omitted comment and 
response, and correct typographical errors. This correction notice is 
intended to ensure that the November 15, 2004 final rule accurately 
reflects the policies expressed in the final rule. Therefore, we find 
it unnecessary to undertake further notice and comment procedures with 
respect to this correction notice.
    We are also waiving the 30-day delay in effective date for this 
correction notice. We ordinarily provide a 30-day delay in the 
effective date of the provisions of a notice. Section 553(d) of the 
Administrative Procedure Act ordinarily requires a 30-day delay in the 
effective date of final rules after the date of their publication in 
the Federal Register. This 30-day delay in effective date can be 
waived, however, if an agency finds for good cause that the delay is 
impracticable, unnecessary, or contrary to the public interest, and the 
agency incorporates a statement of the findings and its reasons in the 
rule issued. In addition, section 1871(e)(1)(B) of the Social Security 
Act, as amended by section 903(b) of Pub. L. 108-173, provides that 
substantive changes may only take effect prior to the 30-day effective 
date if the waiver of the 30-day period is necessary to comply with 
statutory requirements or the application of the 30-day delay is 
contrary to the public interest. We believe that it is in the public 
interest to ensure that the November 15, 2004 final rule accurately 
represents our prospective payment methodology and payment rates and 
that a delay in the effective date of these corrections would be 
contrary to the public interest.
    We also find that it is in the public interest to apply the changes 
in this correction notice retroactively to January 1, 2005, the 
effective date of the November 15, 2004 final rule. Section 
1871(e)(1)(A) of the Social Security Act, as amended by section 903(a) 
of Pub. L. 108-173, provides that a substantive change in regulations 
shall not be applied retroactively to items and services furnished 
before the effective date of the change, unless the Secretary finds 
that such retroactive application is necessary to comply with statutory 
requirements or failure to apply the change retroactively would be 
contrary to the public interest. In section III.A, III.B, and III.C of 
this correction notice, we have made substantive corrections to errors 
in the preamble, regulatory impact analysis, regulation text, and the 
Addenda of the November 15, 2004 final rule to ensure that the final 
rule accurately reflects our policies and payment methodologies. 
Although the November 15, 2004 final rule contained errors, we 
implemented correct policies and payment methodologies as of January 1, 
2005. Therefore, not applying these changes retroactively to January 1, 
2005 would have a disruptive effect on IPF PPS. As a result, we are 
applying the changes in this correction notice retroactively to January 
1, 2005 because we believe it would be contrary to the public interest 
to do otherwise.

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

    Dated: March 23, 2005.
Ann C. Agnew,
Executive Secretary to the Department.
[FR Doc. 05-6379 Filed 3-31-05; 8:45 am]
BILLING CODE 4120-01-P