[Federal Register Volume 70, Number 102 (Friday, May 27, 2005)]
[Rules and Regulations]
[Pages 30640-30643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10570]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 413

[CMS-1199-IFC]
RIN 0938-AN87


Medicare Program; Electronic Submission of Cost Reports: Revision 
to Effective Date of Cost Reporting Period

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period revises the 
existing effective date by which all organ procurement organizations 
(OPOs), rural health clinics (RHCs), Federally qualified health centers 
(FQHCs), and community mental health centers (CMHCs) are required to 
submit their Medicare cost reports in a standardized electronic format 
from cost reporting periods ending on or after December 31, 2004 to 
cost reporting periods ending on or after March 31, 2005.
    This interim final rule with comment does not affect the current 
cost reporting requirement for hospices and end-stage renal disease 
(ESRD) facilities. Hospices and ESRD facilities are required to 
continue to submit cost reports under the Medicare regulations in a 
standardized electronic format for cost reporting periods ending on or 
after December 31, 2004.

DATES: Effective date: These regulations are effective on June 27, 
2005.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on July 26, 2005.

ADDRESSES: In commenting, please refer to file code CMS-1199-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of three ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.cms.hhs.gov/regulations/ecomments. (Attachments should be in Microsoft Word, WordPerfect, or 
Excel; however, we prefer Microsoft Word.)
    2. By mail. You may 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-1199-
IFC, P.O. Box 8018, Baltimore, MD 21244-8018.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-7197 in advance to schedule your arrival 
with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201; or 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. All 
comments received before the close of the comment period are available 
for viewing by the public, including any

[[Page 30641]]

personally identifiable or confidential business information that is 
included in a comment. After the close of the comment period, CMS posts 
all electronic comments received before the close of the comment period 
on its public Web site.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Darryl E. Simms, (410) 786-4524.

SUPPLEMENTARY INFORMATION:
    Submitting Comments: We welcome comments from the public on all 
issues set forth in this rule to assist us in fully considering issues 
and developing policies. You can assist us by referencing the file code 
CMS-1199-IFC and the specific ``issue identifier'' that precedes the 
section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all electronic 
comments received before the close of the comment period on its public 
Web site as soon as possible after they are received. Hard copy 
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, Monday through Friday of each week from 8:30 a.m. to 4 
p.m. To schedule an appointment to view public comments, phone 1-800-
743-3951.

I. Background

    On August 23, 2003, we published in the Federal Register (68 FR 
50717), a final regulation that requires that all hospices, organ 
procurement organizations (OPOs), rural health clinics (RHCs), 
Federally qualified health centers (FQHCs), community mental health 
centers (CMHCs), and end-stage renal disease (ESRD) facilities submit 
Medicare cost reports in a standardized electronic format. This 
requirement is effective for cost reporting periods ending on or after 
December 31, 2004.
    The provider's electronic program must be capable of producing the 
CMS standardized output file in a form that can be read by the fiscal 
intermediary's automated system. This electronic file, which must 
contain the input data required to complete the cost report and to pass 
specified edits, must be forwarded to the fiscal intermediary for 
processing through its system.
    These facilities are generally paid under the Medicare program for 
the reasonable costs of the covered items and services they furnish to 
Medicare beneficiaries. Sections 1815(a) and 1833(e) of the Social 
Security Act (the Act) provided that no payments will be made to a 
provider unless it has furnished the information, requested by the 
Secretary of the Department of Health and Human Services (Secretary), 
needed to determine the amount of payments due the provider.
    In general, providers submit this information through cost reports 
that cover a 12-month period. Regulations governing the submission of 
cost reports are set forth in Sec.  413.20 and Sec.  413.24. Section 
413.20(a) specifies that all providers participating in the Medicare 
program are required to maintain sufficient financial records and 
statistical data for proper determination of costs payable under the 
Medicare program. In addition, providers must use standardized 
definitions and follow accounting, statistical, and reporting practices 
that are widely accepted in the health care industry and related 
fields. In Sec.  413.20(b) and Sec.  413.24(f), providers are required 
to submit cost reports annually, with the reporting period based on the 
provider's accounting year. Section 412.52 specifies that all hospitals 
participating in the prospective payment system must meet cost 
reporting requirements set forth at Sec.  413.20 and Sec.  413.24.
    Section 1886(f)(1)(B)(i) of the Act requires the Secretary to 
establish a standardized electronic cost reporting system for all 
hospitals participating in the Medicare program. This provision was 
effective for hospital cost reporting periods beginning on or after 
October 1, 1989. On January 2, 1997, we published a final rule in the 
Federal Register (62 FR 26) that revised Sec.  413.24(f)(4)(ii) to 
extend the electronic cost reporting requirements to skilled nursing 
facilities (SNFs) and home health agencies (HHAs).
    The required cost reports must be electronically transmitted to the 
intermediary in American Standard Code for Information Interchange 
(ASCII) format. In addition to the electronic file, hospitals, SNFs, 
and HHAs were initially required to submit a hard copy of the full cost 
report. The January 2, 1997 final rule revised Sec.  413.24(f)(4)(iv) 
to state that providers were required to submit, instead, a hard copy 
of a one-page settlement summary, a statement of certain worksheet 
totals found in the electronic file, and a statement signed by the 
provider's administrator or chief financial officer certifying the 
accuracy of the electronic file. To preserve the integrity of the 
electronic file, in the January 2, 1997 final rule we specified 
procedures regarding the processing of electronic cost reports once 
they are submitted to the intermediary.

II. Provisions of the Interim Final Rule

    This interim final rule revises the existing effective date for 
submission of electronic cost reports for OPOs, RHCs, FQHCs, and CMHCs 
from cost reporting periods ending on or after December 31, 2004 to 
cost reporting periods ending on or after March 31, 2005. As a result 
of the delays in the availability of the CMS free cost reporting 
software and commercially available cost reporting software, OPOs, 
RHCs, FQHCs, and CMHCs will now be required to file their cost reports 
in a standardized electronic format effective for cost reporting 
periods ending on or after March 31, 2005. This is a change from the 
August 23, 2003 final rule that established the electronic filing 
requirement for cost reporting periods ending on or after December 31, 
2004.
    Hospices and ESRD facilities will continue to be subject to the 
electronic filing requirements as referenced in the August 23, 2003 
final rule as software for these provider types is available. 
Therefore, all hospices and ESRD facilities are still required to 
submit standardized electronic cost reports for cost reporting periods 
ending on or after December 31, 2004. Standardized electronic cost 
reports have been in place since October 1989. Since that time, the 
accuracy of cost reporting has increased. Under this interim final 
rule, the only change is to the effective date for submission of 
electronic cost reporting for OPOs, RHCs, FQHCs, and CMHCs. These 
providers will still be given a transition period (described in the 
August 23, 2003 final rule (68 FR 50717)) beginning with the new 
effective date and are still required to provide a hard copy of the 
settlement summary, statement of certain worksheet totals, and a 
statement signed by the administrator or chief financial officer 
certifying the accuracy of the electronic file or the manually prepared 
cost report under the new effective date.

III. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, 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

[[Page 30642]]

this preamble, and, when we proceed with a subsequent document, we will 
respond to the comments in the preamble to that document.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and 
substances of the proposed rule or a description of the subjects and 
issues involved. This procedure can be waived, however, if an agency 
finds good cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the rule issued.
    Because of the delay in the availability of the requisite cost 
reporting software (CMS-provided and commercially available) needed to 
comply with the effective date provisions of the August 23, 2003 final 
rule, OPOs, RHCs, FQHCs, and CMHCs are not able to submit cost reports 
in a standardized electronic format for cost reporting periods ending 
December 31, 2004. These cost reports are due to their respective 
fiscal intermediaries (FIs) 150 days or 5 months following the close of 
the cost reporting period which is May 31, 2005. Revising the reporting 
requirement to be effective for cost reporting periods ending on or 
after March 31, 2005, provides the time for the contractors to develop 
the requisite cost reporting software. The new electronic filing 
requirement for cost reporting periods ending on or after March 31, 
2005 requires OPOs, RHCs, FQHCs, and CMHCs, with a March 31, 2005 cost 
reporting ending date to submit cost reporting data to FIs by August 
31, 2005. We find the notice-and-comment procedure impracticable since 
it is not feasible for these providers to meet the current effective 
date as the technology to meet the reporting requirement is not 
available. Also, this interim final rule with comment does not impose 
any additional requirements, but merely extends the effective date of 
the existing reporting requirement until the software is available. 
Therefore, we find good cause to waive notice-and-comment procedures 
and to issue this final rule on an interim basis. However, we are 
providing a 60-day public comment period.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. 
However, the requirements referenced and discussed below are currently 
approved by OMB.

Section 413.24 Adequate Cost Data and Cost Finding

    Currently Sec.  413.24 requires hospitals, to submit cost reports 
in a standardized electronic format for cost reporting periods 
beginning on or after October 1, 1989. SNFs, and HHAs must submit cost 
reports in a standardized electronic format for cost reporting periods 
ending on or after December 31, 1996. Hospices, ESRD facilities, OPOS, 
RHCs, FQHCs and CMHCs must submit cost reports in a standardized 
electronic format for cost reporting periods ending on or after 
December 31, 2004. These reporting requirements are currently approved 
as described below.
    This interim final rule revises the dates by which OPOs, RHCs, 
FQHCs, and CMHCs must submit cost reports in a standardized electronic 
format. Under the revised requirements OPOs, RHCs, FQHCs, and CMHCs 
must now submit cost reports in a standardized electronic format for 
cost reporting periods ending on or after March 31, 2005, rather than 
December 31, 2004. This change does not impose any new burden.
    As noted above, while all the above reporting requirements are 
subject to the PRA, they are currently approved under OMB approval 
numbers 0938-0050, ``Hospital/Healthcare Complex Cost Report,'' with a 
current expiration date of November 30, 2005, 0938-0463; ``Skilled 
Nursing Facility Cost Report,'' with a current expiration date of April 
30, 2007; 0938-0022, ``Home Health Agency Cost Report,'' with a current 
expiration date of April 30, 2007; 0938-0758, ``Hospice Cost Report,'' 
with a current expiration date of January 31, 2008; 0938-0102, ``Organ 
Procurement Agency/Laboratory Statement of Reimbursable Costs,'' with a 
current expiration date of August 31, 2006; 0938-0107, ``Independent 
Rural Health Clinic/Freestanding Federally Qualified Health Center Cost 
Report,'' with a current expiration date of October 31, 2005; 0938-
0236, ``Medicare Independent Renal Dialysis Facility Cost Report,'' 
with a current expiration date of June 30, 2007; and 0938-0657, ``End 
Stage Renal Disease Network Cost Report,'' with a current expiration 
date of September 30, 2006.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic 
Operations and Regulatory Affairs, Regulations Development Group, Attn: 
Jim Wickliffe, CMS-1199-IFC, Room C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850; and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Christopher Martin, CMS Desk Officer, CMS-1199-IFC, 
[email protected], Fax (202) 395-6974.

VI. Regulatory Impact Statement

    We have examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), 
section 1102(b) of the Social Security Act (the Act), the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). This rule 
does not reach the economic threshold and thus is not considered a 
major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity. We are not preparing an 
analysis for the RFA because we have determined that this rule will not 
have a significant economic impact on a substantial number of small 
entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a

[[Page 30643]]

significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined that this rule will not have a significant impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. This rule will have no consequential effect on 
the governments mentioned or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it publishes a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on State 
or local governments, the requirements of E.O. 13132 are not 
applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 413

    Health facilities, Kidney diseases, Medicare, Reporting and 
recordkeeping requirements.


0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR chapter IV, as set forth below:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES

0
1. The authority citation for part 413 continues to read as follows:

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and 
(n), 1871, 1881, 1883 and 1886 of the Social Security Act (42 U.S.C. 
1302, 1395dd(d), 1395f(b), 1395g, 1395l(a), (i) and (n), 1395hh, 
1395rr, 1395tt, and 1395ww).

Subpart B--Accounting Records and Reports

0
2. Section 413.24 is amended by--
0
A. Revising paragraph (f)(4)(ii).
0
B. Revising paragraph (f)(4)(iv).
    The revisions read as follows:


Sec.  413.24  Adequate cost data and cost finding.

* * * * *
    (f) * * *
    (4) * * *
    (i) * * *
    (ii) Effective for cost reporting periods beginning on or after 
October 1, 1989 for hospitals, cost reporting periods ending on or 
after December 31, 1996 for skilled nursing facilities and home health 
agencies, cost reporting periods ending on or after December 31, 2004 
for hospices, and end-stage renal disease facilities, and cost 
reporting periods ending on or after March 31, 2005 for organ 
procurement organizations, rural health clinics, Federally qualified 
health centers, and community mental health centers, a provider is 
required to submit cost reports in a standardized electronic format. 
The provider's electronic program must be capable of producing the CMS 
standardized output file in a form that can be read by the fiscal 
intermediary's automated system. This electronic file, which must 
contain the input data required to complete the cost report and to pass 
specified edits, must be forwarded to the fiscal intermediary for 
processing through its system.
* * * * *
    (iv) Effective for cost reporting periods ending on or after 
September 30, 1994 for hospitals, cost reporting periods ending on or 
after December 31, 1996 for skilled nursing facilities and home health 
agencies, cost reporting periods ending on or after December 31, 2004 
for hospices and end-stage renal disease facilities, and cost reporting 
periods ending on or after March 31, 2005 for organ procurement 
organizations, rural health clinics, Federally qualified health 
centers, and community mental health centers, a provider must submit a 
hard copy of a settlement summary, a statement of certain worksheet 
totals found within the electronic file, and a statement signed by its 
administrator or chief financial officer certifying the accuracy of the 
electronic file or the manually prepared cost report. During a 
transition period (first two cost-reporting periods on or after 
December 31, 2004 for hospices and end-stage renal disease facilities, 
and the first two cost-reporting periods on or after March 31, 2005 for 
organ procurement organizations, rural health clinics, Federally 
qualified health centers, community mental health centers) providers 
must submit a hard copy of the completed cost report forms in addition 
to the electronic file. The following statement must immediately 
precede the dated signature of the provider's administrator or chief 
financial officer:

    I hereby certify that I have read the above certification 
statement and that I have examined the accompanying electronically 
filed or manually submitted cost report and the Balance Sheet 
Statement of Revenue and Expenses prepared by ---------- (Provider 
Name(s) and Number(s)) for the cost reporting period beginning ----
-- and ending ------ and that to the best of my knowledge and 
belief, this report and statement are true, correct, complete and 
prepared from the books and records of the provider in accordance 
with applicable instructions, except as noted. I further certify 
that I am familiar with the laws and regulations regarding the 
provision of health care services, and that the services identified 
in this cost report were provided in compliance with such laws and 
regulations.
* * * * *

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

    Dated: April 14, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: May 3, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-10570 Filed 5-26-05; 8:45 am]
BILLING CODE 4120-01-P