[Federal Register Volume 71, Number 93 (Monday, May 15, 2006)]
[Proposed Rules]
[Pages 28106-28165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4409]



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Part III





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 Federal Fiscal Year 2007; Proposed Rule

  Federal Register / Vol. 71, No. 93 / Monday, May 15, 2006 / Proposed 
Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1540-P]
RIN 0938-AO16


Medicare Program; Inpatient Rehabilitation Facility Prospective 
Payment System for Federal Fiscal Year 2007

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates 
for inpatient rehabilitation facilities (IRFs) for Federal fiscal year 
(FY) 2007 (for discharges occurring on or after October 1, 2006 and on 
or before September 30, 2007) 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 to publish in the Federal Register on or before 
the August 1 that precedes the start of each fiscal year, the 
classification and weighting factors for the inpatient rehabilitation 
facility prospective payment system's case-mix groups and a description 
of the methodology and data used in computing the prospective payment 
rates for that fiscal year.
    We are proposing to revise existing policies regarding the 
prospective payment system within the authority granted under section 
1886(j) of the Act. In addition, we are proposing to revise the current 
regulation text at 42 CFR 412.23(b)(2)(i) and (b)(2)(ii) to reflect the 
changes enacted under section 5005 of the Deficit Reduction Act of 
2005.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on July 7, 2006.

ADDRESSES: In commenting, please refer to file code CMS-1540-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.cms.hhs.gov/eRulemaking. Click 
on the link ``Submit electronic comments on CMS regulations with an 
open comment period.'' (Attachments should be in Microsoft Word, 
WordPerfect, or Excel; however, we prefer Microsoft Word.)
    2. By regular 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-1540-P, P.O. Box 8012, Baltimore, MD 21244-8012.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send 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-1540-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    4. 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) 786-7195 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 Hubert H. Humphrey (HHH) 
Building is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the Centers for Medicare & Medicaid Services (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 received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:

Pete Diaz, (410) 786-1235, for information regarding the 75 percent 
rule.
Susanne Seagrave, (410) 786-0044, for information regarding the new 
payment policy proposals.
Zinnia Ng, (410) 786-4587, for information regarding the wage index and 
prospective payment rate calculation.

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-1540-P 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 comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on 
CMS Regulations'' on that Web site to view public comments.
    Comments received timely will also 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.

Table of Contents

I. Background
    A. Historical Overview of the Inpatient Rehabilitation Facility 
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 
Through 2005
    B. Revisions Made by the IRF PPS Final Rule for FY 2006
    C. Requirements for Updating the IRF PPS Rates
    D. Operational Overview of the Current IRF PPS
    E. Brief Summary of Proposed Revisions to the IRF PPS for FY 
2007
II. Refinements to the Patient Classification System
    A. Proposed Changes to the Existing List of Tier Comorbidities
    B. Proposed Changes to the CMG Relative Weights
    1. Development of CMG Relative Weights
    2. Overview of the Methodology for Calculating the CMG Relative 
Weights
    3. Proposed Changes to the CMG Relative Weights and Average 
Lengths of Stay
III. Proposed FY 2007 Federal Prospective Payment Rates
    A. Proposed Reduction of the Standard Payment Amount to Account 
for Coding Changes
    B. Proposed FY 2007 IRF Market Basket Increase Factor and Labor-
Related Share
    C. Area Wage Adjustment

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    D. Description of the Proposed Methodology Used to Implement the 
Changes in a Budget Neutral Manner
    E. Proposed Budget Neutrality Factor Methodology for Fiscal Year 
2007
    F. Description of the Proposed IRF Standard Payment Conversion 
Factor and Proposed Payment Rates for FY 2007
    G. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates
 IV. Proposed Update to Payments for High-Cost Outliers Under the 
IRF PPS
    A. Proposed Update to the Outlier Threshold Amount for FY 2007
    B. Update to the IRF Cost-to-Charge Ratio Ceilings and Proposed 
Clarification to the Regulation Text for FY 2007
V. Other Issues
VI. Proposed Revisions to the Classification Criteria Percentage for 
IRFs
VII. Provisions of the Proposed Rule
    A. Section 412.23 Excluded Hospitals: Classifications
    B. Section 412.624 Methodology for Calculating the Federal 
Prospective Payment Rates
    C. Additional Proposed Changes
VIII. Collection of Information Requirements
IX. Response to Comments
X. Regulatory Impact Analysis
    A. Overall Impact
    B. Anticipated Effects of the Proposed Rule
    C. Accounting Statement
    D. Alternatives Considered
    E. Conclusion
Regulation Text
Addendum
Acronyms

    Because of the many terms to which we refer by acronym in this 
proposed rule, we are listing the acronyms used and their corresponding 
terms in alphabetical order below.

ADC Average Daily Census
SCA Adminstrative Simplification Compliance Act of 2002, Pub. L. 
107-105
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L. 
106-113
BIPA Medicare, Medicaid, and SCHIP [State Children's Health 
Insurance Program] Benefits Improvement and Protection Act of 2000, 
Pub. L. 106-554
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CFR Code of Federal Regulations
CMG Case-Mix Group
DRA Deficit Reduction Act of 2005, Pub. L. 109-171
DRG Diagnosis-Related Group
DSH Disproportionate Share Hospital
ECI Employment Cost Indexes
FI Fiscal Intermediary
FR Federal Register
FY Federal Fiscal Year
GDP Gross Domestic Product
HHH Hubert H. Humphrey Building
HIPAA Health Insurance Portability and Accountability Act, Pub. L. 
104-191
HIT Health Information Technology
IFMC Iowa Foundation for Medical Care
IPPS Inpatient Prospective Payment System
IRF Inpatient Rehabilitation Facility
IRF-PAI Inpatient Rehabilitation Facility-Patient Assessment 
Instrument
IRF PPS Inpatient Rehabilitation Facility Prospective Payment System
IRVEN Inpatient Rehabilitation Validation and Entry
LIP Low-Income Percentage
MEDPAR Medicare Provider Analysis and Review
MMA Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Pub. L. 108-173)
MSA Metropolitan Statistical Area
NAICS North American Industrial Classification System
OMB Office of Management and Budget
PAC Post Acute Care
PAI Patient Assessment Instrument
PPS Prospective Payment System
RAND RAND Corporation
RFA Regulatory Flexibility Act, Pub. L. 96-354
RIA Regulation Impact Analysis
RIC Rehabilitation Impairment Category
RPL Rehabilitation, Psychiatric, and Long-Term Care Hospital Market 
Basket
SCHIP State Children's Health Insurance Program
SIC Standard Industrial Code
TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-
248

I. Background

    [If you choose to comment on issues in this section, please 
include the caption ``Background'' at the beginning of your 
comments.]

A. Historical Overview of the Inpatient Rehabilitation Facility 
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002 
Through 2005

    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 
[State Children's Health Insurance Program] 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 prospective payment system (PPS), through section 1886(j) 
of the Social Security Act (the Act), for inpatient rehabilitation 
hospitals and inpatient rehabilitation units of a hospital (hereinafter 
referred to as 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) as 
revised in the FY 2006 IRF PPS final rule (70 FR 47880), we are 
providing below a general description of the IRF PPS for fiscal years 
(FYs) 2002 through 2005.
    Under the IRF PPS from FY 2002 through FY 2005, as described in the 
August 7, 2001 final rule, the Federal prospective payment rates were 
computed across 100 distinct case-mix groups (CMGs). We constructed 95 
CMGs using rehabilitation impairment categories (RICs), functional 
status (both motor and cognitive), and age (in some cases, cognitive 
status and age may not be a factor in defining a CMG). In addition, we 
constructed five special CMGs 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 accounted for the relative 
difference in resource use across all CMGs. Within each CMG, we created 
tiers based on the estimated effects that certain comorbidities would 
have on resource use.
    We established the Federal PPS rates using a standardized payment 
conversion factor (formerly referred to as the budget neutral 
conversion factor). For a detailed discussion of the budget neutral 
conversion factor, please refer to our August 1, 2003 final rule (68 FR 
45674, 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR 
47880), we discussed in detail the methodology for determining the 
standard payment conversion factor.
    We applied the relative weighting factors to the standard payment 
conversion factor to compute the unadjusted Federal prospective payment 
rates. Under the IRF PPS from FYs 2002 through 2005, we then applied 
adjustments for geographic variations in wages (wage index), the 
percentage of low-income patients, and location in a rural area (if 
applicable) to the IRF's unadjusted Federal prospective payment rates. 
In addition, we made adjustments to account for short-stay transfer 
cases, interrupted stays, and high cost outliers.
    For cost reporting periods that began on or after January 1, 2002 
and before October 1, 2002, we determined the final prospective payment 
amounts using the transition methodology prescribed in section 
1886(j)(1) of the Act. Under this provision, IRFs transitioning into 
the PPS were paid a blend of the Federal IRF PPS rate and the payment 
that the IRF would have received had the IRF PPS not been implemented. 
This provision also

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allowed IRFs to elect to bypass this blended payment and immediately be 
paid 100 percent of the Federal IRF PPS rate. The transition 
methodology expired as of cost reporting periods beginning on or after 
October 1, 2002 (FY 2003), and payments for all IRFs now consist of 100 
percent of the Federal IRF PPS rate.
    We established a CMS Web site as a primary information resource for 
the IRF PPS. The Web site URL is http://www.cms.hhs.gov/InpatientRehabFacPPS/ and may be accessed to download or view 
publications, software, data specifications, educational materials, and 
other information pertinent to the IRF PPS.

B. Revisions Made by the IRF PPS Final Rule for FY 2006

    Section 1886(j) of the Act confers broad statutory authority to 
propose refinements to the IRF PPS. The refinements described in this 
section were finalized in the FY 2006 IRF PPS final rule (70 FR 47880). 
The provisions of the FY 2006 IRF PPS final rule became effective for 
discharges beginning on or after October 1, 2005. We published 
correcting amendments to the FY 2006 IRF PPS final rule in the Federal 
Register on September 30, 2005 (70 FR 57166). Any reference to the FY 
2006 IRF PPS final rule in this proposed rule also includes the 
provisions effective in the correcting amendments.
    In the FY 2006 final rule (70 FR 47880 and 70 FR 57166), we 
finalized a number of refinements to the IRF PPS case-mix 
classification system (the CMGs and the corresponding relative weights) 
and the case-level and facility-level adjustments. These refinements 
were based on analyses by the RAND Corporation (RAND), a non-partisan 
economic and social policy research group, using calendar year 2002 and 
FY 2003 data. These were the first significant refinements to the IRF 
PPS since its implementation. In conducting the analysis, RAND used 
claims and clinical data for services furnished after the 
implementation of the IRF PPS. These newer data sets were more 
complete, and reflected improved coding of comorbidities and patient 
severity by IRFs. The researchers were able to use new data sources for 
imputing missing values and more advanced statistical approaches to 
complete their analyses. The RAND reports supporting the refinements 
made to the IRF PPS are available on the CMS Web site at: http://www.cms.hhs.gov/InpatientRehabFacPPS/09_Research.asp.
    The final key policy changes, effective for discharges occurring on 
or after October 1, 2005, are discussed in detail in the FY 2006 IRF 
PPS final rule (70 FR 47880 and 70 FR 57166). The following is a brief 
summary of the key policy changes:
    The FY 2006 IRF PPS final rule (70 FR 47880, 47917 through 47928) 
included the adoption of the Office of Management and Budget's (OMB's) 
Core-Based Statistical Area (CBSA) market area definitions in a budget 
neutral manner. This geographic adjustment was made using the most 
recent final wage data available (that is, pre-reclassification and 
pre-floor hospital wage index based on FY 2001 hospital wage data). In 
addition, we implemented a budget-neutral three-year hold harmless 
policy for rural IRFs in FY 2005 that became urban in FY 2006, as 
described in the FY 2006 IRF PPS final rule (70 FR 47880, 47923 through 
47925).
    The FY 2006 final rule (70 FR 47880, 47904) also implemented a 
payment adjustment to account for changes in coding that did not 
reflect real changes in case mix. In that final rule, we reduced the 
standard payment amount by 1.9 percent to account for such changes in 
coding following implementation of the IRF PPS. Our contractors 
conducted a series of analyses to identify real case mix change over 
time and the effect of this change on aggregate IRF PPS payments. The 
contractors identified the impact of changing case mix on the IRF PPS 
payment ranges. From calendar year 1999 through calendar year 2002, the 
real change in IRFs' case mix ranged from negative 2.4 percent to 
positive 1.5 percent. They attributed the remaining change in IRF 
payments (between 1.9 percent and 5.8 percent) to coding changes. For 
FY 2006, we implemented a reduction in the standard payment amount 
based on the lowest of these estimates. At the time, we stated that we 
would continue to analyze the data and would make additional coding 
adjustments, as needed.
    In addition, in the FY 2006 final rule (70 FR 47880, 47886 through 
47904), we made modifications to the CMGs, tier comorbidities, and 
relative weights in a budget-neutral manner. The final rule included a 
number of adjustments to the IRF classification system that are 
designed to improve the system's ability to predict IRF costs. The data 
indicated that moving or eliminating some comorbidity codes from the 
tiers, redefining the CMGs, and other minor changes to the system would 
improve the ability of the classification system to ensure that 
Medicare payments to IRFs continue to be aligned with the costs of 
care. These refinements resulted in 87 CMGs using Rehabilitation 
Impairment Categories (RICs), functional status (motor and cognitive 
scores), and age (in some cases, cognitive status and age may not be 
factors in defining CMGs). The five special CMGs remained the same as 
they had been before FY 2006 and continue to account for very short 
stays and for patients who expire in the IRF.
    In addition, the FY 2006 IRF PPS final rule (70 FR 47928 through 
47932) implemented a new teaching status adjustment for IRFs, similar 
to the one adopted for inpatient psychiatric facilities. We implemented 
the teaching status adjustment in a budget neutral manner.
    The FY 2006 IRF PPS final rule (70 FR 47880, 47908 through 47917) 
also revised and rebased the market basket. We finalized the use of a 
new market basket reflecting the operating and capital cost structures 
for rehabilitation, psychiatric, and long term care (RPL) hospitals to 
update IRF payment rates. The RPL market basket excludes data from 
cancer hospitals, children's hospitals, and religious non-medical 
institutions. In addition, we rebased the market basket to account for 
2002-based cost structures for RPL hospitals. Further, we calculated 
the labor-related share using the RPL market basket. The FY 2006 IRF 
market basket increase factor was 3.6 percent and the RPL labor-related 
share was 75.865 percent.
    In the FY 2006 final rule (70 FR 47880, 47932 through 47933), we 
updated the rural adjustment (from 19.14 percent to 21.3 percent), the 
low-income percentage (LIP) adjustment (from an exponent of 0.484 to an 
exponent of 0.6229), and the outlier threshold amount (from $11,211 to 
$5,129, as further revised in the FY 2006 IRF PPS correction notice (70 
FR 57166, 57168)). We implemented the changes to the rural and the LIP 
adjustments in a budget neutral manner.
    The final FY 2006 standard payment conversion factor, accounting 
for the refinements, was $12,762 (as discussed in the FY 2006 IRF PPS 
correction notice (70 FR 57166, 57168)).

C. Requirements for Updating the IRF PPS Rates

    On August 7, 2001, we published a final rule entitled ``Medicare 
Program; Prospective Payment System for Inpatient Rehabilitation 
Facilities'' 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,

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2001 final rule, we set forth the per discharge Federal prospective 
payment rates for FY 2002, which 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 the 
August 7, 2001 final rule were effective for cost reporting periods 
beginning on or after January 1, 2002. On July 1, 2002, we published a 
correcting amendment to the August 7, 2001 final rule in the Federal 
Register (67 FR 44073). Any references to the August 7, 2001 final rule 
in this proposed rule include 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 
the August 1 that precedes the start of each new FY, the 
classifications and weighting factors for the IRF CMGs and a 
description of the methodology and data used in computing the 
prospective payment rates for the upcoming FY. On August 1, 2002, we 
published a notice in the Federal Register (67 FR at 49928) to update 
the IRF Federal prospective payment rates from FY 2002 to FY 2003 using 
the methodology as described in Sec.  412.624. As stated in the August 
1, 2002 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. We continued to update the prospective payment rates in 
accordance with the methodology set forth in the August 7, 2001 final 
rule for each succeeding FY up to and including FY 2005. For FY 2006, 
however, we published a final rule that revised several IRF PPS 
policies (70 FR 47880), as summarized in sections I.B and I.C of this 
proposed rule. The provisions of the FY 2006 IRF PPS final rule became 
effective for discharges occurring on or after October 1, 2005. We 
published correcting amendments to the FY 2006 IRF PPS final rule in 
the Federal Register (70 FR 57166). Any reference to the FY 2006 IRF 
PPS final rule in this proposed rule includes the provisions effective 
in the correcting amendments.
    In this proposed rule for FY 2007, we are proposing to update the 
IRF Federal prospective payment rates. In addition, we will update the 
cost-to-charge ratios from FY 2006 to FY 2007 and the outlier 
threshold. We are also proposing a one-time, 2.9 percent reduction to 
the FY 2007 standard payment amount to account for changes in coding 
practices that do not reflect real changes in case mix. (See section 
III.A of this proposed rule for further discussion of the proposed 
reduction of the standard payment amount to account for coding 
changes.)
    We are also proposing changes to the tier comorbidities and the 
relative weights to ensure that IRF PPS payments reflect, as closely as 
possible, the costs of caring for patients in IRFs. (See section II for 
a detailed discussion of these proposed changes.) The proposed FY 2007 
Federal prospective payment rates would be effective for discharges 
occurring on or after October 1, 2006 and on or before September 30, 
2007.
    In addition, we are proposing to revise the regulation text in 
Sec.  412.23(b)(2)(i) and Sec.  412.23(b)(2)(ii) to reflect the 
statutory changes in section 5005 of the Deficit Reduction Act of 2005 
(DRA, Pub. L. 109-171). The proposed regulation text change would 
prolong the overall duration of the phased transition to the full 75 
percent threshold established in current regulation text in Sec.  
412.23(b)(2)(i) and Sec.  412.23(b)(2)(ii), by extending the 
transition's current 60 percent phase for an additional 12 months.

D. 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-PAI software product. Generally, the software product 
includes patient grouping programming called the GROUPER software. The 
GROUPER software uses specific Patient Assessment Instrument (PAI) data 
elements to classify (or group) patients into distinct CMGs and account 
for the existence of any relevant comorbidities.
    The GROUPER software produces a five-digit CMG number. The first 
digit is an alpha-character that indicates the comorbidity tier. The 
last four 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 Web 
site at http://www.cms.hhs.gov/InpatientRehabFacPPS/06_Software. asp)
    Once a patient is discharged, the IRF completes the Medicare claim 
(UB-92 or its equivalent) using the five-digit CMG number and sends it 
to the appropriate Medicare fiscal intermediary (FI). Claims submitted 
to Medicare must comply with both the Administrative Simplification 
Compliance Act (ASCA, Pub. L. 107-105), and the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA, Pub. L. 104-191). 
Section 3 of the ASCA amends section 1862(a) of the Act by adding 
paragraph (22) which requires the Medicare program, subject to section 
1862(h) of the Act, to deny payment under Part A or Part B for any 
expenses for items or services ``for which a claim is submitted other 
than in an electronic form specified by the Secretary.'' Section 
1862(h) of the Act, in turn, provides that the Secretary shall waive 
such denial in two types of cases and may also waive such denial ``in 
such unusual cases as the Secretary finds appropriate.'' See also the 
interim final rule on Electronic Submission of Medicare Claims (68 FR 
48805, August 15, 2003). Section 3 of the ASCA operates in the context 
of the administrative simplification provisions of HIPAA, which 
include, among others, the requirements for transaction standards and 
code sets codified as 45 CFR parts 160 and 162, subparts A and I 
through R (generally known as the Transactions Rule). The Transactions 
Rule requires covered entities, including covered providers, to conduct 
covered electronic transactions according to the applicable transaction 
standards. (See the program claim memoranda issued and published by CMS 
at: http://www.cms.hhs.gov/ElectronicBillingEDITrans/ and 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 low-income patients, 
rural location, and outlier payments. For discharges occurring on or 
after October 1, 2005, the IRF PPS payment also reflects the new 
teaching status adjustment that became effective

[[Page 28110]]

as of FY 2006, as discussed in the FY 2006 IRF PPS final rule (70 FR 
47880).

E. Brief Summary of Proposed Revisions to the IRF PPS for FY 2007

    In this proposed rule, we are proposing to make the following 
revisions and updates:
     Revise the IRF GROUPER software and the relative weight 
and average length of stay tables based on re-analysis of the data by 
CMS and our contractor, the RAND Corporation, as discussed in section 
II of this proposed rule.
     Reduce the standard payment amount by 2.9 percent to 
account for coding changes, as discussed in section III.A of this 
proposed rule.
     Update the FY 2007 IRF PPS payment rates by the proposed 
market basket, as discussed in section III.B of this proposed rule.
     Update the FY 2007 IRF PPS payment rates by the proposed 
labor related share, the wage indexes, and the second year of the hold 
harmless policy in a budget neutral manner, as discussed in sections 
III.C through G of this proposed rule.
     Update the outlier threshold for FY 2007 to $5,609, as 
discussed in section IV.A of this proposed rule.
     Update the urban and rural national cost-to-charge ratio 
ceilings for purposes of determining outlier payments under the IRF PPS 
and propose clarifications to the methodology described in the 
regulation text, as discussed in section IV.B of this proposed rule.
     Revise the regulation text at Sec.  412.23(b)(2)(i) and 
Sec.  412.23(b)(2)(ii) to reflect section 5005 of the DRA, which 
maintains the compliance percentage requirement transition at its 
current 60 percent phase for an additional 12 months, as discussed in 
section VI of this proposed rule.

II. Refinements to the Patient Classification System

    [If you choose to comment on issues in this section, please include 
the caption ``Refinements to the Patient Classification System'' at the 
beginning of your comments.]

A. Proposed Changes to the Existing List of Tier Comorbidities

    As discussed in the FY 2006 IRF PPS final rule (70 FR 47880, 47888 
through 47892), we finalized several changes to the comorbidity tiers 
associated with the CMGs for FY 2006.
    A comorbidity is a specific patient condition that is secondary to 
the patient's principal diagnosis or impairment. We use the patient's 
principal diagnosis or impairment to classify the patient into a 
rehabilitation impairment category (RIC), and then we use the patient's 
secondary diagnoses (or comorbidities) to determine whether to classify 
the patient into a higher-paying tier. A patient could have one or more 
comorbidities present during the inpatient rehabilitation stay. Our 
analysis for the August 7, 2001 final rule (66 FR 41316) found that the 
presence of certain comorbidities could have a major effect on the cost 
of furnishing inpatient rehabilitation care. We also found that the 
effect of comorbidities varied across RICs, significantly increasing 
the costs of patients in some RICs, while having no effect in others. 
Therefore, in determining whether the presence of a certain comorbidity 
should trigger placement in a higher-paying tier, we considered whether 
the comorbidity was an inherent part of the diagnosis that assigned the 
patient to the RIC. If it was an inherent part of the diagnosis, we 
excluded it from the RIC.
    The changes for FY 2006 included removing several tier comorbidity 
codes that RAND's analysis found were no longer positively related to 
treatment costs, moving the comorbidity code for patients needing 
dialysis to tier 1, and moving certain comorbidity codes among tiers 
based on their marginal cost, as determined by RAND's regression 
analysis. In accordance with the final rule, we implemented these 
changes by updating the IRF PPS GROUPER software for discharges 
occurring on or after October 1, 2005.
    In the FY 2006 IRF PPS final rule (70 FR 47880, 47892), we 
explained that the purpose of these changes was to place comorbidity 
codes in tiers based on RAND's analysis of how much the associated 
comorbidity would increase the costs of care in the IRF. (RAND's 
detailed analysis and methodology can be found in their report 
``Preliminary Analyses for Refinement of the Tier Comorbidities in the 
Inpatient Rehabilitation Facility Prospective Payment System,'' which 
is available on their Web site at http://www.rand.org/pubs/technicalreports/TR201/).
    After publishing the FY 2006 IRF PPS final rule, we continued to 
monitor the IRF classification system. As a result of our review and an 
analysis of recently updated data from RAND, we are proposing to 
implement some additional refinements (described below) to the 
comorbidity tiers for FY 2007 to ensure that IRF PPS payments continue 
to reflect as accurately as possible the costs of care in IRFs.
    Section 1886(j)(2)(C)(i) of the Act requires the Secretary from 
time to time to adjust the classifications and weighting factors for 
the IRF case-mix classification system as appropriate to reflect 
changes in treatment patterns, technology, case mix, number of payment 
units for which payment is made under the IRF PPS, and other factors 
which may affect the relative use of resources.
    Accordingly, as described below, we propose to revise the tier 
comorbidity list in the IRF GROUPER for FY 2007 to ensure that the list 
appropriately reflects current ICD-9-CM national coding guidelines (as 
discussed below) and to ensure that the comorbidity codes are in the 
most appropriate tiers, based on RAND's analysis of the amount the 
associated comorbidities add to treatment costs. We are proposing the 
following five types of changes to the list of tier comorbidities in 
the IRF PPS GROUPER for FY 2007:
     Adding four comorbidity codes, as shown in Table 1.
     Deleting five comorbidity codes, as shown in Table 2.
     Continuing to update the tier comorbidities in the IRF 
GROUPER, as appropriate, to reflect ICD-9-CM national coding 
guidelines, as discussed below.
     Moving nine comorbidity codes from tier 2 to tier 3, as 
shown in Table 3.
     Deleting all category codes from the IRF GROUPER, as shown 
in Table 4.
    We note that the proposed revisions to the IRF GROUPER described in 
this section are subject to change for the final rule based on the 
results of updated analysis.
    The proposed changes listed below in Tables 1 and 2 are related to 
the monitoring and updating of the comorbidity tiers that CMS has been 
doing on an annual basis since we first implemented the IRF PPS, as 
described in detail below. We will continue to provide ongoing 
monitoring of additions, deletions, and changes to the ICD-9 coding 
structure, in order to ensure that the list of tier comorbidities in 
the IRF GROUPER is as consistent as possible with current national 
coding guidelines (as discussed below).
    Each year since 1986, the National Center for Health Statistics 
(NCHS) and CMS have issued new diagnosis and procedure codes for the 
International Classification of Diseases, 9th Revision, Clinical 
Modification (ICD-9-CM). The ICD-9-CM Coordination and Maintenance 
Committee, sponsored jointly by NCHS and CMS, is responsible for 
determining these new code assignments each year. The new ICD-9 codes 
generally become effective on October 1 of each year, and replace 
previously assigned ``code equivalents.'' However, the ICD-9-CM 
Coordination and Maintenance Committee recently

[[Page 28111]]

indicated that it may begin updating the ICD-9 codes twice a year. A 
mid-year revision of the code assignments has not occurred yet, but we 
will monitor any such revisions that may occur and update the IRF 
coding instructions, as appropriate.
    In order to ensure that the list of tier comorbidities accurately 
reflects changes to the ICD-9-CM codes, we propose to continue to 
update the list of ICD-9 codes in the IRF GROUPER software, as 
appropriate. For example, to the extent that the ICD-9-CM Coordination 
and Maintenance Committee changes an ICD-9 code for a comorbid 
condition on our tier comorbidity list into one or more codes that 
provide additional detail, we are proposing (as a general rule) to 
update the IRF GROUPER software to reflect the new codes. However, we 
recognize that there may be situations in which the addition of one or 
more of these new codes to the list of tier comorbidities may not be 
appropriate. For example, a situation could occur in which an ICD-9 
code for a particular condition is divided into two more detailed 
codes, one of which represents a condition that generally increases the 
costs of care in an IRF and one of which does not. In such a case, we 
may propose through notice and comment procedures to delete the code 
that does not reflect increased costs of care in an IRF from the list 
of tier comorbidities in the IRF GROUPER software.
    We propose to continue to indicate changes to the GROUPER software 
that reflect national coding guidelines by posting a complete ICD-9 
table, including new, discontinued, and modified codes, on the IRF PPS 
Web site. We also propose to continue to report the complete list of 
ICD-9 codes associated with the tiers in the IRF GROUPER documentation, 
which is also posted on the IRF PPS Web site.
    In addition, we propose that the finalized list of tier 
comorbidities for FY 2007 that we are proposing to post on the IRF PPS 
website and in the IRF GROUPER documentation (also posted on the IRF 
PPS website) as of October 1, 2006 would generally reflect Appendix C 
of the August 7, 2001 final rule (66 FR 41316, 41414 through 41427) as 
modified by the tier comorbidity changes adopted in the FY 2006 IRF PPS 
final rule (70 FR 47880) and any tier comorbidity changes as adopted in 
the FY 2007 IRF PPS final rule, as well as changes adopted due to ICD-9 
national coding guideline updates. This version would constitute the 
baseline for any future updates to the tier comorbidities. Moreover, we 
note that, if we decide that a substantive change to the comorbid 
conditions on the list of tier comorbidities in the IRF GROUPER is 
appropriate, we will propose the change through notice and comment 
procedures.
    Accordingly, in Table 1, we propose to add comorbidity codes 
466.11, 466.19, 282.68, and 567.29 to the GROUPER for FY 2007 to be 
consistent with the national ICD-9-CM coding guidelines, as discussed 
above. In Table 1, on the basis of RAND's analysis, we also indicate 
the proposed tier assignment for each ICD-9 comorbidity code and any 
applicable RIC exclusions.

                                             Table 1.--ICD-9 Codes We Propose To Add to the IRF PPS GROUPER
--------------------------------------------------------------------------------------------------------------------------------------------------------
                ICD-9-CM                                                  ICD-9-CM label                                    Tier       RIC  exclusion
--------------------------------------------------------------------------------------------------------------------------------------------------------
466.11..................................  ACU BRONCHOLITIS D/T RSV......................................................        3  15
466.19..................................  ACU BRNCHLTS D/T OTH ORG......................................................        3  15
282.68..................................  OTH SICKLE-CELL DISEASE W/O CRISIS............................................        3  None
567.29..................................  OTH SUPPURATIVE PERITONITIS...................................................        3  None
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In Table 2, we list all of the comorbidity codes that we propose to 
delete from the IRF GROUPER for FY 2007. The clinical conditions that 
these codes represent were not part of the initial list of tier 
comorbidities in Appendix C of the August 7, 2001 final rule (66 FR 
41316, 41414 through 41427), but we inadvertently added these codes to 
the IRF GROUPER in our annual GROUPER updating process. Thus, we are 
proposing to delete these codes from the tier comorbidities for FY 
2007.

                                          Table 2.--Proposed ICD-9 Codes To Be Deleted From the IRF PPS GROUPER
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  ICD-9-CM                                                             ICD-9-CM label                                             Tier
--------------------------------------------------------------------------------------------------------------------------------------------------------
453.40......................................  VEN EMBOL THRMBS UNSPEC DP VSLS LWR EXTREM......................................................         3
453.41......................................  VEN EMBOL THRMBS DP VSLS PROX LWR EXTREM........................................................         3
453.42......................................  VEN EMBOL THRMBS DP VSLS DIST LWR EXTREM........................................................         3
799.01......................................  ASPHYXIA........................................................................................         3
799.02......................................  HYPOXEMIA.......................................................................................         3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Finally, in Table 3, we list the ICD-9 codes that we propose to 
move to a different tier to reflect the amount that the associated 
comorbidities increase the costs of care in the IRF. In the FY 2006 IRF 
GROUPER, we placed all of these codes in tier 2 based on the most up-
to-date list of tier comorbidities we had at the time CMS published the 
FY 2006 IRF PPS final rule. We have recently reanalyzed the data and 
found that these codes should be in tier 3, based on the amount that 
RAND's updated analysis shows that the associated comorbidities 
increase the costs of treatment in IRFs. Thus, we propose to move the 
ICD-9 codes listed in Table 3 from tier 2 to tier 3, so that IRF PPS 
payments will continue to reflect as closely as possible the costs of 
care.

[[Page 28112]]



             Table 3.--Proposed ICD-9 Codes To Be Moved From Tier 2 to Tier 3 in the IRF PPS GROUPER
----------------------------------------------------------------------------------------------------------------
                                                                                                         RIC
            ICD-9-CM                                  ICD-9-CM label                         Tier     exclusion
----------------------------------------------------------------------------------------------------------------
112.4...........................  CANDIDIASIS OF LUNG...................................          3           15
112.5...........................  DISSEMINATED CANDIDIASIS..............................          3         None
112.81..........................  CANDIDAL ENDOCARDITIS.................................          3           14
112.83..........................  CANDIDAL MENINGITIS...................................          3        03,05
112.84..........................  CANDIDAL ESOPHAGITIS..................................          3         None
785.4...........................  GANGRENE..............................................          3        10,11
995.90..........................  SIRS NOS..............................................          3         None
995.91..........................  SIRS INF W/O ORG DYS..................................          3         None
995.92..........................  SIRS INF W ORG DYS....................................          3         None
995.93..........................  SIRS NON-INF W/O ORG DYS..............................          3         None
995.94..........................  SIRS NON-INF W ORG DYS................................          3         None
----------------------------------------------------------------------------------------------------------------

    In our ongoing fiscal oversight of the IRF PPS, we will continue 
closely monitoring providers' use of the ICD-9 codes that increase IRF 
payments. To the extent that we find any inappropriate coding of 
particular ICD-9 codes that increase payments, we may reconsider the 
appropriateness of their inclusion on the list of tier comorbidities in 
the future.
    Finally, in order to clarify the ICD-9 comorbidity codes we use to 
increase payments to IRFs, we propose to remove the category codes 
listed in Appendix C of the August 7, 2001 final rule (66 FR 41316, 
41414 through 41427). We use the term ``category code'' to refer to a 
three-digit ICD-9 code for which one or more four- or five-digit ICD-9 
codes exist to describe the same condition.
    Appendix C of the August 7, 2001 final rule lists both ICD-9-CM 
codes and category codes to identify the comorbidity tiers. The 
category codes in that Appendix C are identified with an asterisk (*).
    ICD-9-CM diagnosis codes are composed of codes with three, four, or 
five digits. Occasionally, three digit codes are complete ICD-9-CM 
codes (examples include 037 (TETANUS) and 042 (HUMAN IMMUNODEFICIENCY 
VIRUS (HIV) DISEASE)), and thus should be used to code comorbidities on 
the IRF-PAI form. However, codes with three digits are generally 
included in the ICD-9-CM coding system as the heading of a category of 
codes that are further subdivided using a fourth and/or fifth digit to 
provide greater detail. In most cases, it is inappropriate for 
providers to use a category code to indicate a comorbidity on the IRF-
PAI form because the national ICD-9-CM coding guidelines require use of 
the more detailed codes. The national ICD-9-CM coding guidelines 
(published in the introduction to all releases of the ICD-9-CM codes 
themselves), were adopted, along with the ICD-9-CM codes themselves, as 
the standard medical data code set in compliance with the Health 
Insurance Portability and Accountability Act (HIPAA).
    To avoid any confusion regarding the fact that category codes 
should not be used to indicate comorbidities on the IRF-PAI form, we 
propose to remove the category codes from the tier comorbidities in the 
IRF GROUPER. This is consistent with the ICD-9-CM national coding 
guidelines. Table 4 contains the list of category codes we are 
proposing to delete from the list of tier comorbidities in the IRF 
GROUPER.
    We note that three of the codes listed in Table 4, 998.3 (POSTOP 
WOUND DISRUPTION), 567.2 (SUPPURAT PERITONITIS NEC), and 567.8 
(PERITONITIS NEC), were listed in Appendix C of the August 7, 2001 
final rule (70 FR 41316, 41414 through 41427) without asterisks because 
they were not category codes at the time, but we are proposing to 
delete them from the IRF GROUPER now because they became category codes 
in 2002 and 2005. In 2002, the ICD-9-CM Coordination and Maintenance 
Committee created ICD-9 codes 998.31 and 998.32 as more specific codes 
for the condition that was coded using 998.3 before 2002. Similarly, in 
2005, the committee created ICD-9 codes 567.21, 567.22, 567.23, and 
567.29 as more specific codes for the condition that was coded using 
567.2 before 2005, and codes 567.81, 567.82, and 567.89 as more 
specific codes for the condition that was coded using 567.8 before 
2005. Once the committee introduced these more specific codes, 998.3, 
567.2, and 567.8 became category codes. For this reason, we are 
proposing to delete them from the IRF GROUPER along with the other 
category codes. ICD-9 codes 998.31, 998.32, 567.21, 567.22, 567.23, 
567.29, 567.81, 567.82, and 567.89 will be included in the IRF GROUPER, 
but we will monitor these codes carefully to ensure that they are being 
used properly.

                       Table 4.--Category Codes We Propose To Delete From the IRF GROUPER
----------------------------------------------------------------------------------------------------------------
                  Category code                                         Category code label
----------------------------------------------------------------------------------------------------------------
011..............................................  PULMONARY TUBERCULOSIS.
011.0............................................  TB OF LUNG, INFILTRATIVE.
011.1............................................  TB OF LUNG, NODULAR.
011.2............................................  TB OF LUNG W CAVITATION.
011.3............................................  TUBERCULOSIS OF BRONCHUS.
011.4............................................  TB FIBROSIS OF LUNG.
011.5............................................  TB BRONCHIECTASIS.
011.6............................................  TUBERCULOUS PNEUMONIA.
011.7............................................  TUBERCULOUS PNEUMOTHORAX.
011.8............................................  PULMONARY TB NEC.
011.9............................................  PULMONARY TB NOS.
012..............................................  OTHER RESPIRATORY TB.
012.0............................................  TUBERCULOUS PLEURISY.
012.1............................................  TB THORACIC LYMPH NODES.

[[Page 28113]]

 
012.2............................................  ISOLATED TRACH/BRONCH TB.
012.3............................................  TUBERCULOUS LARYNGITIS.
012.8............................................  RESPIRATORY TB NEC.
013..............................................  CNS TUBERCULOSIS.
013.0............................................  TUBERCULOUS MENINGITIS.
013.1............................................  TUBERCULOMA OF MENINGES.
013.2............................................  TUBERCULOMA OF BRAIN.
013.3............................................  TB ABSCESS OF BRAIN.
013.4............................................  TUBERCULOMA SPINAL CORD.
013.5............................................  TB ABSCESS SPINAL CORD.
013.6............................................  TB ENCEPHALITIS/MYELITIS.
013.8............................................  CNS TUBERCULOSIS NEC.
013.9............................................  CNS TUBERCULOSIS NOS.
014..............................................  INTESTINAL TB.
014.0............................................  TUBERCULOUS PERITONITIS.
014.8............................................  INTESTINAL TB NEC.
015..............................................  TB OF BONE AND JOINT.
015.0............................................  TB OF VERTEBRAL COLUMN.
015.1............................................  TB OF HIP.
015.2............................................  TB OF KNEE.
015.5............................................  TB OF LIMB BONES.
015.6............................................  TB OF MASTOID.
015.7............................................  TB OF BONE NEC.
015.8............................................  TB OF JOINT NEC.
015.9............................................  TB OF BONE & JOINT NOS.
016..............................................  GENITOURINARY TB.
016.0............................................  TB OF KIDNEY.
016.1............................................  TB OF BLADDER.
016.2............................................  TB OF URETER.
016.3............................................  TB OF URINARY ORGAN NEC.
016.4............................................  TB OF EPIDIDYMIS.
016.5............................................  TB MALE GENITAL ORG NEC.
016.6............................................  TB OF OVARY AND TUBE.
016.7............................................  TB FEMALE GENIT ORG NEC.
016.9............................................  GENITOURINARY TB NOS.
017..............................................  TUBERCULOSIS NEC.
017.0............................................  TB SKIN & SUBCUTANEOUS.
017.1............................................  ERYTHEMA NODOSUM IN TB.
017.2............................................  TB OF PERIPH LYMPH NODE.
017.3............................................  TB OF EYE.
017.4............................................  TB OF EAR.
017.5............................................  TB OF THYROID GLAND.
017.6............................................  TB OF ADRENAL GLAND.
017.7............................................  TB OF SPLEEN.
017.8............................................  TB OF ESOPHAGUS.
017.9............................................  TB OF ORGAN NEC.
018..............................................  MILIARY TUBERCULOSIS.
018.0............................................  ACUTE MILIARY TB.
018.8............................................  MILIARY TB NEC.
018.9............................................  MILIARY TUBERCULOSIS NOS.
038.1............................................  STAPHYLOCOCC SEPTICEMIA.
038.4............................................  GRAM-NEG SEPTICEMIA NEC.
115..............................................  HISTOPLASMOSIS.
115.0............................................  HISTOPLASMA CAPSULATUM.
115.1............................................  HISTOPLASMA DUBOISII.
115.9............................................  HISTOPLASMOSIS UNSPEC.
415.1............................................  PULMON EMBOLISM/INFARCT.
441.0............................................  DISSECTING ANEURYSM.
453..............................................  OTH VENOUS THROMBOSIS.
466.1............................................  ACUTE BRONCHIOLITIS.
482.8............................................  BACTERIAL PNEUMONIA NEC.
567.2............................................  SUPPURAT PERITONITIS NEC.
567.8............................................  PERITONITIS NEC.
682..............................................  OTHER CELLULITIS/ABSCESS.
998.3............................................  POSTOP WOUND DISRUPTION.
998.5............................................  POSTOPERATIVE INFECTION.
----------------------------------------------------------------------------------------------------------------


[[Page 28114]]

    As explained in detail below, we propose to apply all of these 
proposed changes to the tier comorbidities and the proposed changes to 
the CMG relative weights (described below) in a budget neutral manner. 
In the next section, we discuss our methodology for calculating the 
appropriate proposed budget neutrality factor.

B. Proposed Changes to the CMG Relative Weights

1. Development of CMG Relative Weights
    Section 1886(j)(2)(B) of the Act requires that we assign an 
appropriate relative weight to each CMG. Relative weights account for 
the variance in cost per discharge and resource utilization among the 
payment groups and are a primary element of a case-mix adjusted PPS. 
Use of the most accurate CMG relative weights possible helps ensure 
that beneficiaries have access to care and receive the same appropriate 
services as other Medicare beneficiaries in the same CMG. In addition, 
prospective payments based on relative weights encourage provider 
efficiency and, therefore, help ensure a fair distribution of Medicare 
payments. Accordingly, as specified in Sec.  412.620(b)(1), we 
calculate a relative weight for each CMG that is proportional to the 
resources needed by an average inpatient rehabilitation case in that 
CMG. For example, cases in a CMG with a relative weight of 2, on 
average, will cost twice as much as cases in a CMG with a relative 
weight of 1.
2. Overview of the Methodology for Calculating the CMG Relative Weights
    As indicated in the original IRF PPS final rule (66 FR 41316) and 
the FY 2006 IRF PPS final rule (70 FR 47880, 47887 through 47888), in 
calculating the relative weights, we use a hospital-specific relative 
value method to estimate operating (routine and ancillary services) and 
capital costs of IRFs. For FY 2007, we have used this same methodology 
to recalculate the relative weights to reflect the changes in 
comorbidity coding discussed in the next section of this proposed rule. 
The process used to calculate the relative weights for this proposed 
rule is shown below.
    Step 1. We calculate the CMG relative weights by estimating the 
effects that comorbidities have on costs.
    Step 2. We adjust the cost of each Medicare discharge (case) to 
reflect the effects found in the first step.
    Step 3. We use the adjusted costs from the second step to calculate 
``relative adjusted weights'' in each CMG using the hospital-specific 
relative value method.
    Step 4. We calculate the CMG relative weights by modifying the 
``relative adjusted weight'' with the effects of the existence of the 
comorbidity tiers and normalizing the weights to 1.
3. Proposed Changes to the CMG Relative Weights and Average Lengths of 
Stay
    Relative weights that account for the variance in cost per 
discharge and resource utilization among payment groups are a primary 
element of a case-mix adjusted PPS. The accuracy of the relative 
weights helps to ensure that payments reflect as closely as possible 
the relative costs of IRF patients and, therefore, that beneficiaries 
have access to care and receive appropriate services.
    We are proposing to update the relative weights for FY 2007 based 
on a revised analysis of the data used to construct the relative 
weights for FY 2006. As part of CMS's ongoing monitoring of the IRF 
PPS, we recently reviewed the analysis for the FY 2006 final rule and 
discovered certain minor discrepancies. These discrepancies included 
ICD-9 codes in the 428.xx series that were not appropriately excluded 
from RIC 14, ICD-9 codes for tracheostomy that were incorrectly 
excluded from RIC 15, and two ICD-9 comorbidity codes--428.0 
(CONGESTIVE HEART FAILURE UNSPECIFIED) and V43.3 (HEART VALVE REPLACED 
BY OTHER MEANS)--that were incorrectly included in the analysis. Thus, 
we are proposing to revise the CMG relative weights for FY 2007 because 
the data file used in RAND's analysis was recently revised to correct 
these minor discrepancies so the file would comport with the policies 
outlined in the FY 2006 IRF PPS final rule and this proposed rule. This 
led to changes in the CMG relative weights.
    Based on RAND's reanalysis of the FY 2003 data using the corrected 
list of tier comorbidities and the same methodology we used to 
construct the CMG relative weights in the FY 2002 and FY 2006 IRF PPS 
final rules (66 FR 41316, 41351, and 70 FR 47880, 47887 through 47888), 
but using the correct tier comorbidities, we propose to update the CMG 
relative weights for FY 2007 to ensure that they continue to reflect as 
accurately as possible the costs of treatment for various types of 
patients in IRFs. Table 5 below contains the proposed new CMG relative 
weights and average lengths of stay for FY 2007. The proposed relative 
weights and average lengths of stay shown in Table 5 are subject to 
change for the final rule based on updated analysis and data.
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    We propose to make these revisions to the tier comorbidities and 
the CMG relative weights in a budget neutral manner, consistent with 
the budget neutral manner in which we implemented changes to the IRF 
classification system for FY 2006 as described in the FY 2006 IRF PPS 
final rule (70 FR 47880, 47900). The purpose of these proposed changes 
to the IRF classification system is to ensure that the existing 
resources in the IRF PPS are distributed as accurately as possible 
among IRFs according to the relative costliness of the types of 
patients they treat.
    To ensure that total estimated aggregate payments to IRFs do not 
change, we propose to apply a factor to the proposed standard payment 
amount to ensure that estimated aggregate payments due to the proposed 
changes to the tier comorbidities and the relative weights for FY 2007 
are not greater or less than those estimated payments that would have 
been made in FY 2007 without the proposed changes. To calculate an 
appropriate proposed budget neutrality factor to apply to the standard 
payment amount, we propose to use the following steps:
    Step 1. Calculate the estimated total amount of IRF PPS payments 
for FY 2007 (with no proposed changes to the tier comorbidities and the 
CMG relative weights).
    Step 2. Apply the proposed changes to the tier comorbidities and 
the CMG relative weights (as discussed above) to calculate the 
estimated total amount of IRF PPS payments for FY 2007.
    Step 3. Divide the amount calculated in step 1 by the amount 
calculated in step 2 to determine the proposed factor (1.0079) that 
would maintain the same total estimated aggregate payments in FY 2007 
with and without the proposed changes to the tier comorbidities and the 
CMG relative weights.
    Step 4. Apply the proposed budget neutrality factor (1.0079) to the 
FY 2006 IRF PPS standard payment amount after the application of the 
market basket update, the budget-neutral wage adjustment factor, and 
the proposed 2.9 percent reduction to account for coding changes that 
do not reflect real changes in case mix.
    In section III.D and section III.E of this proposed rule, we 
discuss the methodology and the factor we would apply to the proposed 
standard payment amount for FY 2007. The proposed budget neutrality 
factor for the proposed revisions to the tier comorbidities and the CMG 
relative weights is subject to change for the final rule based on 
updated analysis and data.

III. Proposed FY 2007 Federal Prospective Payment Rates

    [If you choose to comment on issues in this section, please 
include the caption ``Proposed FY 2007 Federal Prospective Payment 
Rates'' at the beginning of your comments.]

A. Proposed Reduction of the Standard Payment Amount To Account for 
Coding Changes

    Section 1886(j)(2)(C)(ii) of the Act requires the Secretary to 
adjust the per payment unit payment rate for IRF services to eliminate 
the effect of coding or classification changes that do not reflect real 
changes in case mix, to the extent that such changes affect aggregate 
payments under the classification system. As described in detail in the 
FY 2006 IRF PPS final rule (70 FR 47880), in accordance with this 
section of the Act, we applied a one-time adjustment of 1.9 percent to 
the standard payment amount for FY 2006 to account for changes in 
provider coding practices that, according to research conducted by the 
RAND Corporation under contract with us, increased Medicare payments to 
IRFs between 1999 and 2002. In that final rule, we stated that the 1.9 
percent reduction amount was ``the lowest possible amount of change 
attributable to coding change,'' as determined by RAND's analysis. 
Further, in that same final rule (70 FR 47880, 47906), we stated that 
we would continue to review the need for any further reduction in the 
standard payment amount in subsequent years as part of our overall 
monitoring and evaluation of the IRF PPS.
    Since publication of the FY 2006 final rule, we have continued our 
fiscal oversight of the IRF PPS, and have conducted detailed analyses 
of IRF payment and utilization practices. We believe the results of 
these analyses (described in detail below) indicate that a large 
portion of the increase in Medicare payments under the IRF PPS can be 
attributed to changes in provider coding practices that do not reflect 
real changes in case mix. Upon review of these data, and in accordance 
with section 1886(j)(2)(C)(ii) of the Act, we propose to apply a one-
time adjustment consisting of a 2.9 percent reduction to the proposed 
standard payment amount for FY 2007. This proposed adjustment would be 
in addition to the 1.9 percent adjustment implemented for FY 2006. Our 
rationale for these changes is described below. The resulting total 
adjustment of 4.8 percent (1.9 + 2.9 = 4.8) would still fall well 
within the range of estimates for reducing the standard payment amount 
as indicated by RAND's analysis. (RAND's analysis is detailed in the 
report entitled ``Preliminary Analyses of Changes in Coding and Case 
Mix Under the Inpatient Rehabilitation Facility Prospective Payment 
System,'' which

[[Page 28123]]

can be found on RAND's Web site at http://www.rand.org/pubs/technical_reports/TR213/.)
    As we discussed in detail in the FY 2006 IRF PPS final rule (70 FR 
47880), we had asked RAND to support us in developing potential 
refinements for the FY 2006 IRF PPS proposed rule (70 FR 30188). As 
part of this research, we asked RAND to examine changes in case mix and 
coding since the inception of the IRF PPS. We considered real changes 
in case mix to be those in which RAND found evidence that IRF patients 
required more resources in IRFs because they had more costly 
impairments, lower functional status, or more comorbidities in 2002 
than in 1999. Conversely, we considered observed case mix changes to be 
due to changes in coding practices if RAND found that IRF patients had 
the same impairments, functional status, and comorbidities in 2002 as 
they did in 1999, but were coded differently resulting in higher 
payment. Based on these distinctions, we asked RAND to quantify the 
amount of change that was due to real case mix change and the amount 
that was due to coding. The purpose of this analysis was to ensure that 
changes in Medicare payments would accurately reflect the actual change 
in IRFs' patient case mix (that is, the true cost of treating 
patients), rather than changes in coding practices.
    To examine the interaction between case mix and coding changes, 
RAND compared 2002 data from the first year of IRF PPS implementation 
with the 1999 (pre-PPS) data used to construct the IRF PPS. RAND's 
regression analysis of CY 2002 data showed that payments to IRFs were 
about 3.4 percent (or $140 million) higher than expected during 2002 
due to changes in the classification of patients in IRFs that did not 
reflect real changes in case mix. As described below and in detail in 
the FY 2006 IRF PPS final rule (70 FR 47880, 47904 through 47906), RAND 
estimated that between 1.9 and 5.8 percent of the increase in payments 
to IRFs was attributable to coding.
    As part of this study, RAND performed two sets of analyses on the 
1999 (pre-PPS) and 2002 (post-PPS) data to derive this range of 
estimates. RAND based its first analysis on examination of IRF 
patients' acute care hospital records. Using this analysis, RAND found 
little evidence that the patients admitted to IRFs in 2002 had higher 
resource needs (that is, more impairments, lower functioning, or more 
comorbidities) than the patients admitted in 1999. In fact, most of the 
changes in case mix that RAND documented from the acute care hospital 
records implied that IRF patients should have been less costly to treat 
in 2002 than in 1999. For example, when it compared the results of the 
2002 data with the 1999 data, RAND found a 16 percent decrease in the 
proportion of patients treated in IRFs following acute hospitalizations 
for stroke. Stroke patients tend to be relatively more costly than 
other types of patients for IRFs, because their care tends to be 
relatively more intensive. A decrease in the proportion of stroke 
patients relative to other types of patients, therefore, would likely 
contribute to a decrease in the overall expected costliness of IRF 
patients. (CMS is concerned about this finding because stroke patients 
represent a cohort of patients who have been demonstrated to benefit 
substantially from inpatient rehabilitation care. We will continue to 
monitor access to IRF care for stroke patients closely and will 
consider proposing appropriate refinements to the IRF PPS in the future 
to support access for this important population. We solicit comments on 
this issue.)
    RAND also found a 22 percent increase in the proportion of cases 
treated in IRFs following a lower extremity joint replacement. Lower 
extremity joint replacement patients tend to be relatively less costly 
for IRFs than other types of patients, because their care needs tend to 
be relatively less intensive. For this reason, the increase in the 
proportion of these patients treated in IRFs would suggest a decrease 
in the overall expected costliness of IRF patients. Because this 
analysis of IRF patients' acute care hospital records suggested that 
IRF patients in 2002 should have been less costly to treat than IRF 
patients in 1999, RAND estimated that coding changes likely led to as 
much as a 5.8 percent increase in IRF payments between 1999 and 2002.
    However, RAND recognized a limitation in relying solely on acute 
care hospital records, in that they do not reflect changes in a 
patient's condition that may occur after discharge from the hospital. 
For example, patients could develop impairments, functional problems, 
or comorbidities after leaving the acute care hospital that would make 
them more costly once they are in the IRF. Thus, RAND acknowledged that 
the 5.8 percent estimate was likely an ``upper bound,'' or a high-end 
estimate, of the amount of case mix change that was attributable to 
coding.
    For this reason, RAND performed a second analysis based on specific 
examples of coding in the IRF setting that we know have changed over 
time, such as direct indications of improvements in impairment coding, 
changes in coding instructions for bladder and bowel functioning, and 
dramatic increases in coding of certain conditions that affect 
patients' placement into tiers (resulting in higher payments). Since 
this analysis focused solely on the IRFs' classification of the 
patients, it automatically accounted for any changes in the patients' 
condition at the start of or during the IRF stay. However, this 
approach was limited in that it generally assumed that IRFs' coding 
practices did not change in response to implementation of the IRF PPS, 
other than for the specific, previously known examples listed above. 
That is, this analysis did not look beyond the specific, known examples 
to account for other, broader changes in IRFs' coding practices that 
may have occurred. For this reason, RAND acknowledged that the second 
analysis, based on the specific, known examples listed above, was 
likely a ``lower bound,'' or low-end estimate, of the amount of case 
mix change that was attributable to coding.
    For FY 2006, we proposed and implemented a 1.9 percent adjustment 
to the standard payment amount. At the time, we adjusted the standard 
payment amount by the lowest amount attributable to coding change 
because we wanted to provide some flexibility to account for the 
possibility that all or some of the observed changes may have been 
attributable to factors other than coding changes or could be temporary 
changes associated with the transition to a new payment system.
    Since publication of the FY 2006 final rule, however, CMS and 
MedPAC have conducted several analyses that indicate that coding 
changes had a larger impact on payment than we initially believed. 
First, recent MedPAC analyses found that, since the introduction of the 
IRF PPS, increases in IRF payments far outstripped increases in IRFs' 
costs. In fact, in its March 2006 report, MedPAC reported that IRF 
profit margins increased from 1.5 percent in 2001, the year before the 
introduction of the IRF PPS, to 11.1 percent in 2002, 17.7 percent in 
2003, and 16.3 in 2004. MedPAC also found that cost increases lagged 
far behind payment increases, with IRFs' costs increasing only 2.4 
percent and 3.6 percent in 2003 and 2004, respectively. The relatively 
low cost increases for these years suggest that patient severity could 
not have been increasing substantially over this time period. Thus, the 
rapid increases in IRF payments over this time period are likely 
attributable to coding increases

[[Page 28124]]

that do not reflect real changes in case mix.
    Based on our more recent analyses of IRF PPS payments, it is 
evident that changes in IRFs' coding practices associated with 
implementation of the IRF PPS (not related to real changes in case mix) 
likely had a greater effect on Medicare payments than we initially 
anticipated.
    These findings have led us to reevaluate the amount of case mix 
change attributable to coding, within the 1.9 to 5.8 percent range RAND 
estimated. Based on our updated payment analyses (described below), we 
now believe that the impact of coding on Medicare payments to IRFs is 
significantly higher than 1.9 percent, the lowest possible figure 
within RAND's range of estimates, and that it would be more appropriate 
at this time to propose a total coding adjustment to the proposed 
standard payment amount closer to the upper end of RAND's range of 
estimates.
    Further, as part of our ongoing analysis of provider coding 
practices, we analyzed IRF-PAI data from 2002 and 2005 to examine 
trends in the distribution of patients in each of the four payment 
tiers, and found that the proportion of patients shifted each year from 
the lowest to the higher-paying tiers.
    To illustrate, to determine the IRF PPS payment for a particular 
patient, we first classify the patient into a major group, called a 
RIC, based on the patient's primary reason for receiving inpatient 
rehabilitation (for example, a stroke). Next, we assign the patient to 
a CMG based on the patient's ability to perform specific activities of 
daily living, and, for certain CMGs, based on the patient's cognitive 
ability and age, as well.
    We also take into account special circumstances in determining the 
appropriate CMG, such as whether the case is a very short stay or 
whether the patient expires in the facility. Finally, we classify the 
patient into one of four tiers, based on the presence of any relevant 
comorbidities. One of the tiers contains patients with no relevant 
comorbidities. The other three tiers contain patients with increasingly 
costly comorbidities. For this reason, an IRF will receive higher 
payments for patients in one of the three more-costly tiers than for 
patients in the ``no comorbidity'' tier.
    As shown in Table 6, the proportion of IRF patients in the lowest-
paying tier, the tier for patients with ``no comorbidities,'' decreased 
by 6 percentage points between 2002 and 2005. Conversely, the 
proportion of patients in each of the three higher-paying tiers 
increased each year. However, MedPAC's analysis of IRFs' reported costs 
(described above) suggests that patient severity was not increasing 
substantially over this time period. Thus, we believe this lends 
further support to the conclusion that a substantial portion of the 
unexpected increase in IRF payments since the establishment of the IRF 
PPS is due to changes in provider coding practices.

                            Table 6.--Percent of IRF Patients in Each Tier, 2002-2005
----------------------------------------------------------------------------------------------------------------
                                                                              Percent
                      Tier                       ---------------------------------------------------------------
                                                       2002            2003            2004            2005
----------------------------------------------------------------------------------------------------------------
``No comorbidity'' tier.........................           74.42           72.01           70.81           68.41
Tier 3..........................................           14.74           15.54           16.00           18.39
Tier 2..........................................            9.04            9.95           10.44           10.16
Tier 1..........................................            1.80            2.50            2.75           3.03
----------------------------------------------------------------------------------------------------------------
Note: Tier 1 is the highest-paying tier, followed by tier 2 and then tier 3. The ``no comorbidity'' tier does
  not mean that the patient does not have any comorbidities, but that patients do not have any of the designated
  comorbidities that would elevate them to a higher-paying tier.

    Based on a review of the evidence above, we further analyzed 
providers' responses to the tier comorbidity changes that we finalized 
in the FY 2006 IRF PPS final rule (70 FR 47880). These changes became 
effective for discharges occurring on or after October 1, 2005, and, as 
described below, affect Medicare payments to IRFs.
    In the FY 2006 IRF PPS final rule (70 FR 47880), we finalized a 
number of changes to the comorbidity codes that we use to assign 
patients to one of the three higher-paying tiers, including adding or 
deleting certain comorbidity codes, and moving certain others among the 
tiers based on RAND's analysis of the marginal cost of these 
comorbidities. After we implemented these changes to the tier 
comorbidity codes for FY 2006, we found that facilities responded 
quickly to the coding changes. For example, in updating the GROUPER 
software, we inadvertently added one comorbidity code (278.02, 
overweight) to one of the higher-payment tiers, even though RAND's 
analysis did not indicate that this code belonged in a higher-paying 
tier. We had not adopted this particular code for addition to the tier 
in the FY 2006 IRF PPS final rule, and its addition to the IRF GROUPER 
software was simply a clerical error that we are in the process of 
correcting. However, the presence of this comorbidity code on the IRF 
patient assessment instrument (IRF-PAI) triggered an increased IRF per 
discharge payment in FY 2006. The increase in payment ranged from $171 
to $4,587 per discharge, depending on the patient's CMG classification.
    Once we discovered the inadvertent presence of code 278.02 in the 
higher-paying tier, we analyzed IRF-PAI data for the first quarter of 
FY 2006, the first period during which use of this code increased 
payment. We also reviewed IRF-PAI data to identify the way this 
particular code had been used before October 2005; that is, before it 
triggered increased payment. From January 2002 through October 2005, 
code 278.02 appeared as a coded comorbidity on only 8 IRF-PAI forms out 
of approximately 1.8 million total IRF-PAI forms submitted. For the 
first quarter of FY 2006, however, the same code, 278.02, appeared as a 
coded comorbidity on 2,315 IRF-PAI forms out of approximately 113,000 
total forms submitted in that quarter. The dramatic increase in the use 
of this ICD-9 code in such a short period of time leads us to believe 
that its increased use most likely reflects changes in the payment 
structure rather than in patient severity levels and suggests that 
providers respond more rapidly to coding changes than we initially 
believed.
    Based on these analyses and MedPAC's findings that costs were not 
increasing substantially in 2003 and 2004 (suggesting that patient 
acuity could not have been increasing substantially), we are now 
convinced that an additional coding adjustment for FY 2007 is needed to 
adjust for more of the impact of coding changes not related to real 
changes in case mix on IRF PPS payments. Therefore, for FY 2007, we

[[Page 28125]]

propose to reduce the IRF standard payment amount by 2.9 percent, which 
would result in a total adjustment (when combined with the 1.9 percent 
adjustment for FY 2006) of 4.8 percent (1.9 + 2.9 = 4.8). In this way, 
we can adjust the IRF PPS to reflect more fully the impact of coding 
changes on payments. Because 4.8 percent is well within the range of 
RAND's estimates of the effects of coding changes on IRF PPS payments, 
we continue to believe that we are still providing flexibility to 
account for the possibility that some of the observed changes may be 
attributable to factors other than coding changes. We note that in the 
course of our analysis, we also considered the possibility of making a 
somewhat lower adjustment of 2.3 percent, which would fall at 
approximately the middle of RAND's range of estimates. However, in view 
of the industry's extremely rapid adoption of coding changes, we 
believe that a 2.9 percent reduction would likely account more 
accurately for the actual degree of these changes. We are continuing to 
analyze the data and, therefore, the specific amount of payment 
adjustment is subject to change for the final rule based on the results 
of the ongoing analysis. We specifically invite comments on the figure 
that would represent the most appropriate adjustment to account for 
changes in coding practices.
    We propose to use the same methodology that we used in the FY 2006 
IRF PPS final rule (70 FR 47880, 47908) to reduce the standard payment 
amount to adjust for coding changes that affect payment. To reduce the 
standard payment amount by an additional 2.9 percent for FY 2007, we 
first update the FY 2006 standard payment conversion factor by the 
estimated market basket update of 3.4 percent ($12,762 x 1.034 = 
$13,196). Next, we propose to multiply this standard payment amount by 
0.971 (obtained by subtracting 0.029 from 1.000), which reduces the 
standard payment amount by 2.9 percent ($13,196 x 0.971 = $12,813).
    In section III.D of this proposed rule, we further propose to 
adjust the resulting amount of $12,813 by the proposed budget 
neutrality factors for the wage index, the second year of the hold 
harmless policy, and the proposed revisions to the CMG relative weights 
and tier comorbidities, producing the proposed FY 2007 standard payment 
conversion factor. In section III.D of this proposed rule, we provide a 
step-by-step calculation that results in the proposed FY 2007 standard 
payment conversion factor. The proposed FY 2007 standard payment 
conversion factor is subject to change in the final rule based on 
updated analysis and data.

B. Proposed FY 2007 IRF Market Basket Increase Factor and Labor-Related 
Share

    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 the 
covered IRF services, which is referred to as a market basket index. 
Accordingly, in updating the FY 2007 payment rates set forth in this 
proposed rule, we apply an appropriate increase factor to the FY 2006 
IRF PPS payment rates that is based on the rehabilitation, psychiatric, 
and long-term care hospital (RPL) market basket. In constructing the 
RPL market basket, we used the methodology set forth in the FY 2006 IRF 
PPS final rule (70 FR 47880, 47908 through 47915).
    As discussed in that final rule, the RPL market basket primarily 
uses the Bureau of Labor Statistics' (BLS) data as price proxies, which 
are grouped in one of the three BLS categories: Producer Price Indexes 
(PPI), Consumer Price Indexes (CPI), and Employment Cost Indexes (ECI). 
We evaluated and selected these particular price proxies using the 
criteria of reliability, timeliness, availability, and relevance, and 
believe they continue to be the best measures of price changes for the 
cost categories.
    Beginning April 2006 with the publication of March 2006 data, the 
BLS' ECI will use a different classification system, the North American 
Industrial Classification System (NAICS), instead of the Standard 
Industrial Codes (SIC), which will no longer exist. We have 
consistently used the ECI as the data source for our wages and salaries 
and other price proxies in the RPL market basket and are not making any 
changes to the usage at this time. However, we are soliciting comments 
on our continued use of the BLS ECI data in light of the BLS change in 
system usage to the NAICS-based ECI. The estimated FY 2007 IRF market 
basket increase factor and labor-related share in this proposed rule 
will be updated for the final rule based on the most recent data 
available from the BLS.
    We will use the same methodology described in the FY 2006 IRF PPS 
final rule to compute the FY 2007 IRF market basket increase factor and 
labor-related share. For this proposed rule, the FY 2007 IRF market 
basket increase factor is 3.4 percent. This is based on Global Insight, 
Inc. for the first quarter of 2006 (2006q1) forecast with historical 
data through the fourth quarter of 2005 (2005q4). We propose to update 
the market basket with more recent data for the final rule to the 
extent it is available.
    In addition, we have used the methodology described in the FY 2006 
IRF PPS final rule to update the labor-related share for FY 2007. In FY 
2004 and FY 2005, we updated the 1992 market basket data to 1997 based 
on the methodology described in the August 1, 2003 final rule (68 FR 
45688 through 45689). As discussed in the FY 2006 IRF PPS final rule 
(70 FR 47880, 47915 through 47917), we rebased and revised the market 
basket for FY 2006, using the 2002-based cost structures for IRFs, 
IPFs, and LTCHs to determine the FY 2006 labor-related share. For FY 
2007, we will use the same methodology discussed in the FY 2006 IRF PPS 
final rule (70 FR 47880, 47908 through 47917) to determine the FY 2007 
IRF labor-related share. As shown in Table 7, the total FY 2007 RPL 
labor-related share is 75.720 percent in this proposed rule. We propose 
to update the labor-related share with more recent data for the final 
rule to the extent it is available.

 Table 7.--Proposed FY 2007 IRF Labor-Related Share Relative Importance
------------------------------------------------------------------------
                                                        Proposed FY 2007
                                                          IRF  labor-
                    Cost category                       related relative
                                                           importance
------------------------------------------------------------------------
Wages and salaries...................................             52.534
Employee Benefits....................................             14.082
Professional fees....................................              2.890
All other labor intensive services...................              2.156
                                                      ==================
    Subtotal.........................................             71.662
                                                      ------------------
Labor-related share of capital costs.................              4.058
                                                      ==================
    Total............................................            75.720
------------------------------------------------------------------------
Source: Global Insight, Inc. 1stQtr 2006, @USMACRO/CONTROL0306 @CISSIM/
  CNTL08R3.SIM.

C. 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 attributable to wages and wage-related 
costs by a factor (established by the Secretary) reflecting the 
relative hospital wage level in the geographic area of the 
rehabilitation facility compared to the national average wage level for 
those facilities. The Secretary is required to update the wage index on 
the basis of information available to the Secretary on the wages and 
wage-related costs to furnish rehabilitation services. Any

[[Page 28126]]

adjustments or updates made under section 1886(j)(6) of the Act for a 
FY are made in a budget neutral manner.
    In the FY 2006 IRF PPS final rule (70 FR 47880, 47917), we 
established an IRF wage index based on FY 2001 acute care hospital wage 
data to adjust the FY 2006 IRF payment rates. We also adopted the CBSA-
based labor market area definitions set forth by the OMB (70 FR 47880, 
47917 through 47921). We applied a one-year blended wage index for FY 
2006 to mitigate the impact of the wage index change from the 
Metropolitan Statistical Area (MSA) to the CBSA-based labor market area 
definitions. In addition to the blended wage index, we also adopted a 
three-year budget neutral hold harmless policy beginning FY 2006 for 
IRFs that met the definition in Sec.  412.602 as rural in FY 2005 and 
became urban in FY 2006 under the CBSA-based designation.
    For FY 2007, we propose to maintain the methodology described in 
the FY 2006 IRF PPS final rule to determine the wage index, labor 
market area definitions, and hold harmless policy consistent with the 
rational outlined in that final rule (70 FR 47880, 47917 through 
47933). However for FY 2007, the proposed wage index will be based 
solely on the previously adopted CBSA-based labor market area 
definitions and its wage index (rather than on a blended wage index) 
because the FY 2006 blended wage index will expire for discharges on or 
after October 1, 2006 (70 FR 47880, 47921 through 47926). We propose to 
continue to use the most recent final pre-reclassified and pre-floor 
hospital wage data available (FY 2002 hospital wage data) based on the 
CBSA labor market area definitions consistent with the rational 
outlined in the FY 2006 IRF PPS final rule.
    Furthermore, we propose to continue to use the methodology 
described in that FY 2006 final rule in the event there is no hospital 
wage data available for urban or rural areas consistent with the 
rational outlined in the final rule (70 FR 47880, 47927). In addition, 
FY 2007 is the second year of the three-year phase out of the budget 
neutral hold harmless policy described in the FY 2006 IRF PPS final 
rule. For FY 2007, the hold harmless adjustment will be up to 6.38 
percent for IRFs that meet the criteria described in the FY 2006 final 
rule (70 FR 47880, 47923 through 47926).
    As we described in the FY 2006 final rule, certain titles to the 
CBSAs were changed based on OMB Bulletin No. 05-02 (November 2004). The 
title changes listed below are nomenclatures that do not result in 
substantive changes to the CBSA-based designations. The proposed wage 
index tables in the addendum reflect the following title changes:
     CBSA 36740: Orlando-Kissimmee, FL
     CBSA 37620: Parkersburg-Marietta-Vienna, WV-OH
     CBSA 42060: Santa Barbara-Santa Maria, CA
     CBSA 13644: Bethesda-Gaithersburg-Fredrick, MD
     CBSA 32580: McAllen-Edinburg-Mission, TX
     CBSA 26420: Houston-Sugar Land-Baytown, TX
     CBSA 35644: New York-White Plains-Wayne, NY-NJ
    To calculate the wage-adjusted facility payment for the payment 
rates set forth in this proposed rule, we multiply the unadjusted 
Federal prospective payment by the proposed FY 2007 RPL labor-related 
share (75.720 percent) to determine the labor-related portion of the 
Federal prospective payments. We then multiply this labor-related 
portion by the applicable proposed IRF wage index shown in Table 1 for 
urban areas and Table 2 for rural areas in the Addendum.
    In addition, because any adjustment or update to the IRF wage index 
made under section 1886(j)(6) of the Act must be made in a budget 
neutral manner, we have calculated a budget neutral wage adjustment 
factor as established in the August 1, 2003 final rule and codified at 
Sec.  412.624(e)(1), and described in the steps below. We propose to 
use the following steps to ensure that the FY 2007 IRF standard payment 
conversion factor reflects the update to the proposed wage indexes 
(based on the FY 2002 pre-reclassified and pre-floor hospital wage 
data) and the proposed labor-related share in a budget neutral manner:
    Step 1. Determine the total amount of the estimated FY 2006 IRF PPS 
rates, using the FY 2006 standard payment conversion factor and the 
labor-related share and the wage indexes from FY 2006 (as published in 
the FY 2006 IRF PPS final rule).
    Step 2. Calculate the total amount of estimated IRF PPS payments, 
using the FY 2006 standard payment conversion factor and the proposed 
FY 2007 labor-related share and proposed full CBSA urban and rural wage 
indexes.
    Step 3. Divide the amount calculated in step 1 by the amount 
calculated in step 2, which equals the FY 2007 budget neutral wage 
adjustment factor of 1.0017.
    Step 4. Apply the FY 2007 budget neutral wage adjustment factor 
from step 3 to the FY 2006 IRF PPS standard payment conversion factor 
after the application of the estimated market basket update to 
determine the FY 2007 standard payment conversion factor.

D. Description of the Proposed Methodology Used To Implement the 
Changes in a Budget Neutral Manner

    To ensure that total estimated aggregate payments to IRFs would not 
change with the proposed budget neutral changes described in this 
proposed rule, we are proposing to apply a factor to the standard 
payment amount for the proposed changes to ensure that estimated 
aggregate payments in FY 2007 would not be greater or less than those 
that would have been made in the year without the proposed changes. 
Using the methodology described below, we propose to apply the budget 
neutrality factors to the standard payment amount for the proposed 
changes to ensure that estimated aggregate payments in FY 2007 would be 
the same with or without the proposed changes. We are proposing to 
apply the two budget neutrality factors using the following steps:
    Step 1. Determine the proposed FY 2007 IRF PPS standard payment 
amount using the FY 2006 standard payment conversion factor ($12,762) 
increased by the estimated market basket (3.4 percent) and reduced by 
the proposed 2.9 percent adjustment to account for coding changes that 
do not reflect real changes in case mix, as discussed in section III.A 
of this proposed rule.
    Step 2. Multiply the wage index budget neutrality factor by the 
proposed standard payment amount computed in step 1 to account for the 
proposed wage index and labor-related share (1.0017), as discussed in 
section III.C of this proposed rule.
    Step 3. Calculate the estimated total amount of IRF PPS payments 
for FY 2007 (with no change to the tier comorbidities and the CMG 
relative weights, and without the hold harmless policy for FY 2007).
    Step 4. Apply the FY 2007 hold harmless policy to IRFs that meet 
the criteria as described in Sec.  412.624(e)(7) to calculate the 
estimated total amount of IRF PPS payment for FY 2007.
    Step 5. Divide the amount calculated in step 3 by the amount 
calculated in step 4 to determine the factor (1.0012) that keeps total 
estimated payments in FY 2007 the same with and without the change to 
the hold harmless policy.
    Step 6. Apply the factor computed in step 5 to the proposed 
standard payment amount in step 2, and calculate estimated total IRF 
PPS payments for FY 2007.
    Step 7. Apply the proposed new tier comorbidities and CMG relative 
weights

[[Page 28127]]

(as discussed in section II of this proposed rule) to calculate the 
estimated total amount of IRF PPS payments for FY 2007.
    Step 8. Divide the amount calculated in step 6 by the amount 
calculated in step 7 to determine the proposed factor (1.0079) that 
maintains the same total estimated aggregated payments in FY 2007 with 
and without the proposed revisions to the tier comorbidities and CMG 
relative weights.
    Each of these proposed budget neutrality factors increases the 
proposed standard payment amount. The proposed budget neutrality factor 
for the second year of the hold harmless policy would increase the 
proposed standard payment amount from $12,835 to $12,850. The proposed 
budget neutrality factor for the proposed revisions to the tier 
comorbidities and CMG relative weights would increase the standard 
payment amount from $12,850 to $12,952. As indicated previously, the 
proposed standard payment conversion factor would need to be increased 
in order to ensure that total estimated payments for FY 2007 with the 
proposed changes equal total estimated payments for FY 2007 without the 
proposed changes. This is because the continuation of the hold harmless 
policy and the proposed revisions to the tier comorbidities and CMG 
relative weights would result in a slight decrease, on average, to 
total estimated aggregate payments to IRFs if we were not to propose to 
implement the policies in a budget neutral manner. To maintain the same 
total estimated aggregate payments to all IRFs with and without the 
policies, we are proposing to redistribute payments among IRFs. Thus, 
some redistribution of payment would occur among facilities, while 
total estimated aggregate payments would not change. To determine how 
these proposed changes are estimated to affect payments among different 
types of facilities, please see Table 11 in this proposed rule.

E. Proposed Budget Neutrality Factor Methodology for Fiscal Year 2007

    In the FY 2006 final rule (70 FR 47880, 47937 through 47398), we 
revised the IRF regulation by adding Sec.  412.624(d)(4) to allow the 
Secretary the authority to apply a factor when revisions are made to 
the tier comorbidities and the CMGs, the rural adjustment, the LIP 
adjustment, the teaching status adjustment, the hold harmless 
adjustment, or other budget-neutral policies. To clarify, we are not 
proposing to revise for FY 2007 the rural adjustment of 21.3 percent, 
the LIP exponential factor of 0.6229, and the teaching status 
adjustment exponential factor of 0.9012, as described in the FY 2006 
IRF PPS final rule. Since we are not proposing changes to these 
policies, we do not need to calculate budget neutrality factors for 
these policies because they are assumed in the FY 2006 standard payment 
conversion factor.
    Although we are not calculating budget neutrality factors for the 
rural adjustment, the LIP adjustment, and the teaching status 
adjustment, we are continuing the budget neutral hold harmless policy 
(the second year of a three-year phase out of the rural adjustment) 
implemented in FY 2006 as well as proposing to revise the list of tier 
comorbidities and the CMG relative weights for FY 2007. Consistent with 
the hold harmless policy in the FY 2006 IRF PPS final rule, we are 
implementing the policy in a budget neutral manner for FY 2007. We are 
also proposing to implement the revisions to the tier comorbidities and 
the CMG relative weights in a budget neutral manner for FY 2007.
    Consistent with Sec.  412.624(d)(4), we apply a factor to the 
proposed standard payment amount in order to make the proposed changes 
described in this proposed rule in a budget neutral manner for FY 2007. 
We begin by using the methodology described in sections III.A and B of 
this proposed rule. We will use the FY 2006 standard payment conversion 
factor ($12,762) and apply the market basket (3.4 percent), which 
equals $13,196. Then, we propose to apply a one-time reduction to the 
standard payment amount of 2.9 percent as discussed in section III.A of 
this proposed rule, which equals $12,813. We will then apply the budget 
neutral wage adjustment (as described above in section III.C of this 
proposed rule) of 1.0017 to $12,813, which will result in a standard 
payment amount of $12,835.
    The factors we propose to apply are 1.0079 for the tier comorbidity 
and CMG relative weight changes and 1.0012 for the second year of the 
hold harmless policy. We propose to combine these factors, by 
multiplying the two factors to establish one proposed budget neutrality 
factor for the two changes (1.0012 x 1.0079 = 1.0091). We propose to 
apply this overall budget neutrality factor to $12,835 (the proposed 
standard payment amount that includes the 3.4 percent market basket, 
the proposed 2.9 percent reduction, and the budget neutrality factor 
for the wage index and labor related share), which would result in a 
proposed standard payment conversion factor of $12,952 for FY 2007.
    The proposed FY 2007 standard payment conversion factor would be 
applied to each of the proposed CMG relative weights shown in Table 5, 
``Proposed FY 2007 IRF PPS Relative Weights and Average Lengths of Stay 
for Case-Mix Groups,'' to compute the unadjusted IRF prospective 
payment rates for FY 2007 shown in Table 8. To clarify further, the 
proposed budget neutrality factors described above would only be 
applied for FY 2007. However, if necessary, we will apply budget 
neutrality factors in applicable years hereafter to the extent that 
further adjustments are made to the IRF PPS consistent with Sec.  
412.624(d)(4). Otherwise, the general methodology to determine the 
Federal prospective payment rate is described in Sec.  
412.624(c)(3)(ii).

F. Description of the Proposed IRF Standard Payment Conversion Factor 
and Proposed Payment Rates for FY 2007

    To calculate the proposed standard payment conversion factor for FY 
2007 and as illustrated in Table 8 below, we begin by applying the 
estimated market basket increase factor (3.4 percent) to the standard 
payment conversion factor for FY 2006 ($12,762), which equals $13,196. 
Then, we propose to apply a one-time 2.9 percent reduction to the 
standard payment amount to adjust for coding changes that have 
increased payments to IRFs since implementation of the IRF PPS, as 
discussed in section III.A of this proposed rule. This would result in 
a proposed standard payment amount of $12,813. We then apply the 
proposed budget neutrality factor for the wage index and labor related 
share of 1.0017, which would result in a proposed standard payment 
amount of $12,835. Then, we propose to apply a combined budget 
neutrality factor for the hold harmless provision and the revisions to 
the tier comorbidities and the CMG relative weights of 1.0091 (1.0012 x 
1.0079 = 1.0091), which would result in a proposed FY 2007 standard 
payment conversion factor of $12,952.

[[Page 28128]]



    Table 8.--Calculations To Determine the Proposed FY 2007 Standard
                        Payment Conversion Factor
------------------------------------------------------------------------
              Explanation for adjustment                  Calculations
------------------------------------------------------------------------
FY 2006 Standard Payment Conversion Factor...........            $12,762
Proposed FY 2007 Market Basket Increase Factor.......            x 1.034
                                                      ==================
    Subtotal.........................................           =$13,196
                                                      ------------------
Proposed One-Time 2.9% Reduction for Coding Changes..            x 0.971
                                                      ==================
    Subtotal.........................................           =$12,813
                                                      ------------------
Proposed Budget Neutrality Factor for the Wage Index            x 1.0017
 and Labor-Related Share.............................
                                                      ==================
    Subtotal.........................................           =$12,835
                                                      ------------------
Proposed Budget Neutrality Factor for the Hold                  x 1.0091
 Harmless Provision and Revisions to the Tier
 Comorbidities and the CMG Relative Weights..........
                                                      ==================
        Proposed FY 2007 Standard Payment Conversion            =$12,952
         Factor......................................
------------------------------------------------------------------------

    Finally, we would apply the proposed relative weights for each CMG 
and tier, shown in section II.B of this proposed rule, Table 5 
``Proposed FY 2007 IRF PPS Relative Weights and Average Lengths of Stay 
for Case-Mix Groups,'' to the proposed FY 2007 standard payment 
conversion factor.
    After the application of the proposed relative weights, the 
resulting proposed unadjusted IRF prospective payment rates for FY 2007 
are shown below in Table 9, ``Proposed FY 2007 Payment Rates Based on 
the Proposed Revisions.''
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G. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates

    In the FY 2006 final rule, we presented an example similar to the 
one in Table 10 below to illustrate the methodology we used to adjust 
the Federal prospective payments based on the refinements described in 
that final rule. Table 10 illustrates the proposed methodology for 
adjusting the Federal prospective payments (as described in sections 
III.D through F of this proposed rule). We have relabeled each step in 
Table 10 to illustrate more clearly how the case-level and facility-
level adjustments are applied to the unadjusted Federal prospective 
payments in the IRF PPS. Thus, the content in Table 10 is modified from 
that of Table 11 in the FY 2006 final rule (70 FR 57166, 57169), in 
order to illustrate the step-by-step computations to determine the 
hypothetical examples. The examples below are based on two hypothetical 
Medicare beneficiaries, both classified into CMG 0110 (without 
comorbidities). The unadjusted Federal prospective payment rate for CMG 
0110 (without comorbidities) can be found in Table 9 above.
    One beneficiary is in Facility A, an IRF located in rural Spencer 
County, Indiana, and another beneficiary is in Facility B, an IRF 
located in urban Harrison County, Indiana. Facility A, a non-teaching 
hospital, has a disproportionate share hospital (DSH) percentage of 5 
percent (which results in a LIP adjustment of 1.0309), a wage index of 
0.8624, and an applicable rural adjustment of 21.3 percent. Facility B, 
a teaching hospital, has a DSH percentage of 15 percent (which results 
in a LIP adjustment of 1.0910), a wage index of 0.9251, and an 
applicable teaching status adjustment of 0.109.
    To calculate each IRF's labor and non-labor portion of the Federal 
prospective payment, we begin by taking the unadjusted Federal 
prospective payment rate for CMG 0110 (without comorbidities) from 
Table 9 above. Then, we multiply the estimated labor-related share 
(75.720) described in section III.B by the unadjusted Federal 
prospective payment rate. To determine the non-labor portion of the 
Federal prospective payment rate, we subtract the labor portion of the 
Federal payment from the unadjusted Federal prospective payment.
    To compute the wage-adjusted Federal prospective payment, we 
multiply the result of the labor portion of the Federal payment by the 
appropriate wage index found in the Addendum in Tables 1 and 2, which 
will result in the wage-adjusted amount. Next, we compute the wage-
adjusted Federal payment by adding the wage-adjusted amount to the non-
labor portion.
    To adjust the Federal prospective payment by the facility-level 
adjustments, there are several steps. First, we take the wage-adjusted 
Federal prospective payment and multiply it by the appropriate rural 
and LIP adjustments (if applicable). Then, to determine the appropriate 
amount of additional payment for the teaching status adjustment (if 
applicable), we multiply the teaching status adjustment (0.109, in this 
example) by the wage-adjusted and rural-adjusted amount (if 
applicable). Finally, we add the additional teaching status payments 
(if applicable) to the wage, rural, and LIP-adjusted Federal 
prospective payment rate. Table 10 illustrates the components of the 
proposed adjusted payment calculation.
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    Thus, the proposed adjusted payment for Facility A would be 
$31,409.69 and the proposed adjusted payment for Facility B would be 
$31,739.15.

IV. Proposed Update to Payments for High-Cost Outliers Under the IRF 
PPS

    [If you choose to comment on issues in this section, please 
include the caption ``High-Cost Outliers Under the IRF PPS' at the 
beginning of your comments.]

A. Proposed Update to the Outlier Threshold Amount for FY 2007

    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. A case 
qualifies for an outlier payment if the estimated cost of the case 
exceeds the adjusted outlier threshold. We calculate the adjusted 
outlier threshold by adding the IRF PPS payment for the case (that is, 
the CMG payment adjusted by all of the relevant facility-level 
adjustments) and the adjusted threshold amount (also adjusted by all of 
the relevant facility-level adjustments). Then, we calculate the 
estimated cost of a case by multiplying the IRF's overall cost-to-
charge ratio by the Medicare allowable covered charge. If the estimated 
cost of the case is higher than the adjusted outlier threshold, we make

[[Page 28134]]

an outlier payment for the case equal to 80 percent of the difference 
between the estimated cost of the case and the outlier threshold.
    In the August 7, 2001 final rule (66 FR 41316, 41362 through 
41363), we discussed our rationale for setting the outlier threshold 
amount for the IRF PPS so that estimated outlier payments would equal 3 
percent of total estimated payments. FY 2006 was the first year for 
which we had sufficient post-PPS data (FY 2003) to adjust the outlier 
threshold amount. Therefore, in the FY 2006 IRF PPS final rule, as 
corrected by the September 30, 2005 correction notice (70 FR 47880 and 
70 FR 57166), we updated the outlier threshold amount for FY 2006 to 
$5,129 based on RAND's analysis of FY 2003 data. We also stated that we 
would continue to analyze the estimated outlier payments for subsequent 
years and adjust as appropriate in order to maintain estimated outlier 
payments at 3 percent of total estimated payments.
    For this proposed rule, we performed an updated analysis of FY 2004 
claims and IRF-PAI data using the same methodology described in the FY 
2006 IRF PPS final rule (70 FR 47880, 47934 through 47936). Based on 
this updated analysis, and consistent with the broad statutory 
authority conferred upon the Secretary in sections 1886(j)(4)(A)(i) and 
1886(j)(4)(A)(ii) of the Act, we propose to update the outlier 
threshold amount to $5,609 to set estimated outlier payments equal to 3 
percent of total estimated aggregate IRF payments for FY 2007.
    We propose to increase the outlier threshold amount for FY 2007 
because we estimate that IRF costs for FY 2007 would be 3.4 percent 
(the estimated market basket increase) higher than FY 2006 costs, but 
we estimate that IRF PPS (non-outlier) payments for FY 2007 would be 
about 0.5 percent higher than FY 2006 payments (3.4 percent minus the 
proposed 2.9 percent coding adjustment described in section III.A of 
this proposed rule). Since estimated IRF costs would increase by more 
than proposed IRF PPS payments under the proposed policies for FY 2007, 
more cases would qualify for outlier payments and estimated outlier 
payments would exceed 3 percent of total estimated payments if we did 
not propose to adjust the outlier threshold amount.
    The appropriate outlier threshold amount for FY 2007 depends on the 
other proposed policies, especially the 2.9 percent coding adjustment, 
described in this proposed rule. Therefore, the proposed outlier 
threshold amount for FY 2007 is subject to change in the final rule 
depending on the other policies contained in the final rule and updated 
analysis and data.

B. Update to the IRF Cost-to-Charge Ratio Ceilings and Proposed 
Clarification to the Regulation Text for FY 2007

    In accordance with the methodology stated in the August 1, 2003 
final rule (68 FR 45692 through 45694), as clarified below, we apply a 
ceiling to IRFs' cost-to-charge ratios (CCRs). We propose a 
clarification to the current regulation text in Sec.  412.624(e)(5) to 
emphasize that we calculate a single overall cost-to-charge ratio (CCR) 
for IRFs because IRF PPS payments are based on a prospective payment 
per discharge for both inpatient operating and capital-related costs. 
Specifically, we calculate an IRF's CCR using its total Medicare-
allowable costs (that is, the sum of its allowable operating and 
capital inpatient routine and ancillary costs) divided by its total 
Medicare charges (that is, the sum of its operating and capital 
inpatient routine and ancillary charges). Accordingly, we are proposing 
to revise the current regulation text in Sec.  412.624(e)(5) to clarify 
that we apply adjustments to IRFs' CCRs using the methodology described 
in Sec.  412.84(i) and Sec.  412.84(m), except that we use a single 
overall (combined operating and capital) cost-to-charge ratio for IRFs. 
We note that we are not proposing any changes to the substantive 
policies of how we calculate CCRs and national average CCRs, or of how 
we conduct reconciliation of outlier payments. Our proposal merely 
seeks to emphasize that the IRF PPS uses a single overall CCR instead 
of separate CCRs for operating and capital costs.
    Using the methodology described in the August 1, 2003 final rule, 
as clarified above, we propose to update the national urban and rural 
CCRs for IRFs. Under the proposed revision (clarification) to Sec.  
412.624(e)(5), we would apply the national urban and rural CCRs in the 
following situations:
     New IRFs that have not yet submitted their first Medicare 
cost report.
     IRFs whose overall CCR is in excess of 3 standard 
deviations above the corresponding national geometric mean, which we 
propose to set at 1.57 (based on the current estimate) for FY 2007.
     Other IRFs for whom accurate data with which to calculate 
an overall CCR are not available.
    Specifically, for FY 2007, we estimate a proposed national CCR of 
0.613 for rural IRFs and 0.488 for urban IRFs. For new facilities, we 
use these national ratios until the data become available for us to 
compute the facility's actual CCR using the first tentative settled or 
final settled cost report data, which we then use for the subsequent 
cost reporting period. We note that the proposed national average rural 
and urban CCRs and our estimate of 3 standard deviations above the 
corresponding national geometric mean in this section are subject to 
change in the final rule based on updated analysis and data.

V. Other Issues

[If you choose to comment on issues in this section, please include 
the caption ``Other Issues'' at the beginning of your comments.]

    Both Medicare's payment structures and the actual delivery of post 
acute care have evolved significantly over the past decade. Before the 
BBA, IRFs and other post-acute settings such as skilled nursing 
facilities (SNFs) were paid on the basis of cost. Since that time, we 
have implemented various legislative mandates that established 
prospective payment systems (PPSs) in these settings. The PPS 
methodologies used in these settings rely on patient-level clinical 
information to provide accurate pricing, support the provision of high 
quality services, and create incentives to deliver care more 
efficiently.
    Medicare is exploring refinements to the existing provider-oriented 
``silos'' to create a more seamless system for payment and delivery of 
post-acute care (PAC) under Medicare. This new model will be 
characterized by more consistent payments for the same type of care 
across different sites of service, quality-driven pay-for-performance 
incentives, and collection of uniform clinical assessment information 
to support quality and discharge planning functions.
    Section 5008 of the DRA provides a pathway to achieve the goals of 
the new model by providing for a demonstration on uniform assessment 
and data collection across different sites of service. We are in the 
early stages of developing a standard, comprehensive assessment 
instrument to be completed at hospital discharge and ultimately 
integrated with PAC assessments. The demonstration will enable us to 
test the usefulness of this instrument, and analyze cost and outcomes 
across different PAC sites. The lessons learned from this demonstration 
will inform efforts to improve the post-acute payment systems. The 
instrument is intended to cover the population admitted to all PAC 
settings (SNFs, IRFs, and long-term care hospitals) as well as 
residential-based PAC (home health agencies, outpatient programs).

[[Page 28135]]

    We have evaluated existing assessment instruments used by managed 
care and other insurers. These instruments will form the basis of our 
efforts to create a hospital discharge assessment tool that may be used 
in the following ways: To facilitate post-hospital placement decision 
making; to enhance the safety and quality of care during patient 
transfers through transmission of core information to a receiving 
provider; and to provide baseline information for longitudinal follow-
up of health and function.
    At this time, we do not offer specific proposals related to the 
preceding discussion. However, we believe that it is useful to 
encourage discussion of a broad range of ideas in order to assess the 
relative advantages and disadvantages of the various policies affecting 
PAC sites. Accordingly, in this proposed rule, we invite comments on 
these and other approaches.
    In the April 25, 2006 Inpatient Prospective Payment Systems 
proposed rule (71 FR 23996), we discussed in detail the Health Care 
Information Transparency Initiative and our efforts to promote 
effective use of health information technology (HIT) as a means to help 
improve health care quality and improve efficiency. Specifically, with 
regard to the transparency initiative, we discussed several potential 
options for making pricing and quality information available to the 
public (71 FR 24120 through 24121). We solicited comments on ways the 
Department can encourage transparency in health care quality and 
pricing whether through its leadership on voluntary initiatives or 
through regulatory requirements. We also sense sought comments on the 
Department's statutory authority to impose such requirements. In 
addition, we discussed the potential for HIT to facilitate improvements 
in the quality and efficiency of health care services (71 FR 24100 
through 24101). We solicited comments on our statutory authority to 
encourage the adoption and use of HIT. The 2007 Budget states that 
``the Administration supports the adoption of health information 
technology (IT) as a normal cost of doing business to ensure patients 
receive high quality care.'' We also sought comments on the appropriate 
role of HIT in potential value-based purchasing program, beyond the 
intrinsic incentives of a PPS to provide efficient care, encourage the 
avoidance of unnecessary costs, and increase quality of care. In 
addition, we sought comments on promotion of the use of effective HIT 
through Medicare conditions of participation.
    We intend to consider both the health care information transparency 
initiative and the use of health information technology as we refine 
and update all Medicare payment systems. Therefore, we seek comments on 
these initiatives as applied to IRF PPS in this proposed rule, and we 
may address these initiatives in the final IRF rule. We note that we 
are in the process of seeking input on these initiatives in various 
proposed Medicare payment rules being issued this year.

VI. Proposed Revisions to the Classification Criteria Percentage for 
IRFs

    [If you choose to comment on issues in this section, please 
include in the caption ``Revisions to the Classification Criteria 
Percentage for IRFs'' at the beginning of your comments.]

    The regulations implementing the IRF PPS provisions are presently 
in 42 CFR part 412, subpart P. In order to be paid under the IRF PPS, a 
hospital or unit of a hospital, must meet the requirements for 
classification as an IRF contained in subpart B of part 412, and must 
meet the specific conditions for payment under the IRF PPS at Sec.  
412.604 in order to be excluded from the inpatient hospital prospective 
payment system specified in Sec.  412.1(a)(1).
    As discussed in previous Federal Register publications (68 FR 26786 
(May 16, 2003), 68 FR 53266 (September 9, 2003), 69 FR 25752 (May 7, 
2004), and 70 FR 36640 (June 24, 2005)), Sec.  412 23(b)(2) specifies 
one criterion, commonly known as the ``75 percent rule,'' which 
Medicare uses for classifying a hospital or unit of a hospital as an 
IRF. This criterion sets a minimum percentage of a facility's total 
inpatient population that must meet one of 13 medical conditions listed 
in the regulation in order for the facility to be classified as an IRF. 
This minimum percentage is known as the ``compliance threshold.'' In 
the May 7, 2004 final rule (69 FR 25752), we revised Sec.  412.23(b)(2) 
to provide that the compliance threshold would gradually transition to 
the full 75 percent level over several cost reporting periods, as 
follows:
     For cost reporting periods beginning on or after July 1, 
2004, and before July 1, 2005, a compliance threshold of 50 percent.
     For cost reporting periods beginning on or after July 1, 
2005, and before July 1, 2006, a compliance threshold of 60 percent.
     For cost reporting periods beginning on or after July 1, 
2006 and before July 1, 2007, a compliance threshold of 65 percent.
     For cost reporting periods beginning on or after July 1, 
2007, a compliance threshold of 75 percent.
    Section 5005 of the DRA recently revised the compliance thresholds 
that must be met for certain cost reporting periods. Therefore, we will 
make conforming revision to the latter phases of the compliance 
threshold transition currently specified in Sec.  412.23(b)(2), as 
follows:
     For cost reporting periods beginning on or after July 1, 
2005 and before July 1, 2007, the compliance threshold will be 60 
percent.
     For cost reporting periods beginning on or after July 1, 
2007, and before July 1, 2008, the compliance threshold will be 65 
percent.
     For cost reporting periods beginning on or after July 1, 
2008, the compliance threshold will be 75 percent.
    Currently, in accordance with Sec.  412.23(b)(2)(i), a case with a 
principal diagnosis that does not match one of the 13 medical 
conditions listed in Sec.  412.23(b)(2)(iii) nonetheless can be 
considered as meeting one of those medical conditions if all of the 
following criteria are met:

    (1) The patient is admitted for inpatient rehabilitation for a 
condition that is not one of the conditions listed in Sec.  
412.23(b)(2)(iii);
    (2) The patient also has a comorbidity that falls within one of 
the conditions listed in Sec.  412.23(b)(2)(iii); and
    (3) The comorbidity has caused significant functional ability 
decline in the individual to such an extent that, even in the 
absence of the admitting condition, the individual would still 
require intensive rehabilitation treatment that is unique to IRFs 
paid under subpart P and cannot be appropriately performed in 
another setting.

    Thus, under Sec.  412.23(b)(2)(i), as long as the compliance 
percentage is still transitioning to the full 75 percent level, 
patients with a comorbidity that meets the conditions described above 
are counted toward meeting the facility's compliance percentage. 
However, under Sec.  412.23(b)(2)(ii), once the compliance percentage 
has completed the transition to the full 75 percent level, such 
patients will no longer be counted toward meeting the facility's 
compliance percentage. Under current regulations, the compliance 
percentage's transition to the full 75 percent level would be complete 
as of an IRF's first cost reporting period that begins on or after July 
1, 2007. Under the revised transition timeframes that we are now 
proposing in order to implement the DRA provision, a facility will not 
have to meet the full 75 percent compliance threshold until its first 
cost reporting period beginning on or after July 1,

[[Page 28136]]

2008. Consequently, we are also proposing that a comorbidity that meets 
the criteria as specified in Sec.  412.23(b)(2)(i) may continue to be 
used to determine the compliance threshold for cost reporting periods 
that begin before July 1, 2008, but not for those beginning on or after 
July 1, 2008.

VII. Provisions of the Proposed Rule

    [If you choose to comment on issues in this section, please 
include the caption ``Provisions of the Proposed Regulations'' at 
the beginning of your comments.]

    We are proposing to make revisions to the regulation text in order 
to implement the proposed policy changes for IRFs for FY 2007 and 
subsequent fiscal years. Specifically, we are proposing to make 
conforming changes in 42 CFR part 412. These proposed revisions and 
others are discussed in detail below.

A. Section 412.23 Excluded Hospitals: Classifications.

    As discussed in section VI of this proposed rule, we would revise 
the regulation text in paragraphs (b)(2)(i) and (b)(2)(ii) to reflect 
the applicable percentages specified in this section as amended by the 
DRA. To summarize, for cost reporting periods--
    (1) Beginning on or after July 1, 2005 and before July 1, 2007, the 
hospital has served an inpatient population of whom at least 60 
percent;
    (2) Beginning on or after July 1, 2007 and before July 1, 2008, the 
hospital has served an inpatient population of whom at least 65 
percent; and
    (3) Beginning on or after July 1, 2008, the hospital has served an 
inpatient population of whom at least 75 percent require intensive 
rehabilitative services for treatment of one or more of the conditions 
specified at paragraph (b)(2)(iii) of this section.
    Since we are revising the transition timeframes in order to 
implement the DRA provision, a facility will not have to meet the full 
75 percent compliance threshold until its first cost reporting period 
beginning on or after July 1, 2008. Consequently, a comorbidity that 
meets the criteria as specified in Sec.  412.23(b)(2)(i) may continue 
to be used to determine the compliance threshold for cost reporting 
periods that begin before July 1, 2008. However, for cost reporting 
periods beginning on or after July 1, 2008, a comorbidity specified in 
Sec.  412.23(b)(2)(i) will not be use to determine the compliance at 
the 75 percent threshold.

B. Section 412.624 Methodology for Calculating the Federal Prospective 
Payment Rates.

    In this section, we are proposing to revise the current regulation 
text in paragraph (e)(5) to clarify that the cost-to-charge ratio for 
IRFs is a single overall (combined operating and capital) cost-to-
charge ratio. We emphasize that we use the methodology described in 
Sec.  412.84(i) and Sec.  412.84(m) except that the IRF PPS uses a 
single overall (combined operating and capital) cost-to-charge ratio 
and national averages are used instead of statewide averages.

C. Additional Proposed Changes

     Revise the IRF GROUPER software and the relative weight 
and average lengths of stay tables based on the re-analysis RAND has 
done with the corrected tier list, as discussed in section II of this 
proposed rule.
     Reduce the standard payment amount by an additional 2.9 
percent to account more fully for coding changes, as discussed in 
detail in section III.A of this proposed rule.
     Update payment rates for rehabilitation facilities using 
the RPL market basket, RPL labor-related share, and CBSA urban and 
rural wage indexes, as discussed in section III.B through section III.C 
of this proposed rule.
     Update the outlier threshold for FY 2007 to $5,609, as 
discussed in section IV.A of this proposed rule.
     Update the upper threshold (ceiling) and the national 
average urban and rural cost-to-charge ratios for determining high-cost 
outlier payments, as discussed in detail in section IV.B of this 
proposed rule.

VIII. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

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

X. Regulatory Impact Analysis

[If you choose to comment on issues in this section, please include the 
caption ``Regulatory Impact Analysis'' at the beginning of your 
comments.]

A. Overall Impact

    We have examined the impacts of this proposed 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.
    Executive Order 12866 (as amended by Executive Order 13258, which 
merely reassigns responsibility of duties) 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 proposed rule is a major rule, as defined in Title 5, United 
States Code, section 804(2), because we estimate the impact to the 
Medicare program, and the annual effects to the overall economy, would 
be more than $100 million. We estimate that the total impact of these 
proposed changes for estimated FY 2007 payments compared to estimated 
FY 2006 payments would be an increase of approximately $40 million 
(this reflects a $230 million increase from the update to the payment 
rates and a $10 million increase due to updating the outlier threshold 
amount to increase estimated outlier payments from 2.9 percent in FY 
2006 to 3.0 percent in FY 2007, offset by a $200 million estimated 
decrease from the proposed reduction to the standard payment amount to 
account for changes in coding that do not reflect real changes in case 
mix).
    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 IRFs and most other providers and suppliers are considered small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. (For details, see the Small 
Business Administration's final rule that set forth size standards for 
health care

[[Page 28137]]

industries, at 65 FR 69432, November 17, 2000.) Because we lack data on 
individual hospital receipts, we cannot determine the number of small 
proprietary IRFs. Therefore, we assume that all IRFs (an approximate 
total of 1,200 IRFs, of which approximately 60 percent are nonprofit 
facilities) are considered small entities. The Department of Health and 
Human Services generally uses a revenue impact of 3 to 5 percent as a 
significance threshold under the RFA. Because the net effect of this 
proposed rule on almost all facilities would only be about 1 percent or 
less of revenues, and would be positive, we have concluded that this 
proposed rule would not have a significant effect on a substantial 
number of small entities. 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.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 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 and has fewer than 100 beds. As discussed in detail 
below, the rates and policies set forth in this proposed rule would not 
have an adverse impact on rural hospitals based on the data of the 181 
rural units and 20 rural hospitals in our database of 1,202 IRFs for 
which data were available.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) also requires that agencies assess anticipated costs and 
benefits before issuing any rule whose mandates require spending in any 
1 year of $100 million in 1995 dollars, updated annually for inflation. 
That threshold level is currently approximately $120 million. This 
proposed rule would not mandate any requirements for State, local, or 
tribal governments, nor would it affect private sector costs.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates 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. As stated above, this proposed rule would not have a 
substantial effect on State and local governments.

B. Anticipated Effects of the Proposed Rule

    We discuss below the impacts of this proposed rule on the budget 
and on IRFs.
1. Basis and Methodology of Estimates
    This proposed rule sets forth updates of the IRF PPS rates 
contained in the FY 2006 final rule and proposes a 2.9 percent decrease 
to the standard payment amount to account for the increase in estimated 
aggregate payments due to changes in coding. In addition, we propose 
updates to the comorbidity tiers and the CMG relative weights, and to 
the outlier threshold amount.
    Based on the above, we estimate the FY 2007 impact would be a net 
increase of $40 million in payments to IRF providers (this reflects a 
$230 million estimated increase from the update to the payment rates 
and a $10 million estimated increase due to updating the outlier 
threshold amount to increase estimated outlier payments from 2.9 
percent in FY 2006 to 3.0 percent in FY 2007, offset by a $200 million 
estimated decrease from the proposed reduction to the standard payment 
amount to account for the increase in estimated aggregate payments due 
to changes in coding). The impact analysis in Table 11 of this proposed 
rule represents the projected effects of the proposed policy changes in 
the IRF PPS for FY 2007 compared with estimated IRF PPS payments in FY 
2006 without the proposed policy changes. We estimate the effects by 
estimating payments while holding all other payment variables constant. 
We use the best data available, but we do not attempt to predict 
behavioral responses to these proposed changes, and we do not make 
adjustments for future changes in such variables as number of 
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 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, the MMA, the DRA, 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.
    In updating the proposed rates for FY 2007, we made a number of 
standard annual revisions and clarifications mentioned elsewhere in 
this proposed rule (for example, the update to the wage and market 
basket indexes used to adjust the Federal rates). These revisions would 
increase payments to IRFs by approximately $230 million.
    The aggregate change in payments associated with this proposed rule 
is estimated to be an increase in payments to IRFs of $40 million for 
FY 2007. The market basket increase of $230 million and the $10 million 
increase due to updating the outlier threshold amount to increase 
estimated outlier payments from 2.9 percent in FY 2006 to 3.0 percent 
in FY 2007, combined with the estimated decrease of $200 million due to 
the proposed reduction to the standard payment amount to account for 
coding changes (not related to real changes in case mix), results in a 
net change in estimated payments from FY 2006 to FY 2007 of $40 
million.
    The impacts are shown in Table 11. The following proposed changes 
are discussed separately below:
     The effects of applying the budget-neutral labor-related 
share and wage index adjustment, as required under section 1886(j)(6) 
of the Act.
     The effects of the expiration of the one-year budget-
neutral transition policy for adopting the new CBSA-based geographic 
area definitions announced by OMB in June 2003.
     The effects of the proposed update to the outlier 
threshold amount to increase total estimated outlier payments from 2.9 
to 3 percent of total estimated payments for FY 2007, consistent with 
section 1886(j)(4) of the Act.
     The effects of the annual market basket update (using the 
RPL market basket) to IRF PPS payment rates, as required by sections 
1886(j)(3)(A)(i) and 1886(j)(3)(C) of the Act.
     The effects of the proposed decrease to the standard 
payment amount to account for the increase in estimated aggregate 
payments due to changes in coding, as required under section 
1886(j)(2)(C)(ii) of the Act.
     The effects of the second year of the 3-year budget-
neutral hold-harmless policy for IRFs that were rural under Sec.  
412.602 during FY 2005, but are urban under Sec.  412.602 during FY 
2006 and FY 2007 and lose the rural adjustment, resulting in a loss of 
estimated IRF PPS payments if not for the hold harmless policy.

[[Page 28138]]

     The effect of the proposed budget-neutral revisions to the 
comorbidity tiers and the CMG relative weights, under the authority of 
section 1886(j)(2)(C)(i) of the Act.
     The total change in estimated payments based on the 
proposed FY 2007 policies relative to estimated FY 2006 payments 
without the proposed policies for FY 2007.
2. Description of Table 11
    The table below categorizes IRFs by geographic location, including 
urban or rural location and location with respect to CMS' nine regions 
of the country. In addition, the table divides IRFs into those that are 
separate rehabilitation hospitals (otherwise called freestanding 
hospitals in this section), those that are rehabilitation units of a 
hospital (otherwise called hospital units in this section), rural or 
urban facilities by ownership (otherwise called for-profit, non-profit, 
and government), and by teaching status. The top row of the table shows 
the overall impact on the 1,202 IRFs included in the analysis.
    The next 12 rows of Table 11 contain IRFs categorized according to 
their geographic location, designation as either a freestanding 
hospital or a unit of a hospital, and by type of ownership: all urban, 
which is further divided into urban units of a hospital, urban 
freestanding hospitals, and by type of ownership; and rural, which is 
further divided into rural units of a hospital, rural freestanding 
hospitals, and by type of ownership. There are 1,001 IRFs located in 
urban areas included in our analysis. Among these, there are 807 IRF 
units of hospitals located in urban areas and 194 freestanding IRF 
hospitals located in urban areas. There are 201 IRFs located in rural 
areas included in our analysis. Among these, there are 181 IRF units of 
hospitals located in rural areas and 20 freestanding IRF hospitals 
located in rural areas. There are 311 for-profit IRFs. Among these, 
there are 260 IRFs in urban areas and 51 IRFs in rural areas. There are 
743 non-profit IRFs. Among these, there are 630 urban IRFs and 113 
rural IRFs. There are 148 government-owned IRFs. Among these, there are 
111 urban IRFs and 37 rural IRFs.
    The remaining three parts of Table 11 show IRFs grouped by their 
geographic location within a region, and the last part groups IRFs by 
teaching status. First, IRFs located in urban areas are categorized 
with respect to their location within a particular one of the nine CMS 
geographic regions. Second, IRFs located in rural areas are categorized 
with respect to their location within a particular one of the nine CMS 
geographic regions. In some cases, especially for rural IRFs located in 
the New England, Mountain, and Pacific regions, the number of IRFs 
represented is small. Finally, IRFs are grouped by teaching status, 
including non-teaching IRFs, IRFs with an intern and resident to 
average daily census (ADC) ratio less than 10 percent, IRFs with an 
intern and resident to ADC ratio greater than or equal to 10 percent 
and less than or equal to 19 percent, and IRFs with an intern and 
resident to ADC ratio greater than 19 percent.
    The estimated impact of each proposed change to the facility 
categories listed above is shown in the columns of Table 11. The 
description of each column is as follows:
    Column (1) shows the facility classification categories described 
above.
    Column (2) shows the number of IRFs in each category.
    Column (3) shows the number of cases in each category.
    Column (4) shows the estimated effect of adjusting the outlier 
threshold amount so that estimated outlier payments increases from 2.9 
percent in FY 2006 to 3 percent of total estimated payments for FY 
2007.
    Column (5) shows the estimated effect of the market basket update 
to the IRF PPS payment rates.
    Column (6) shows the estimated effect of the update to the IRF 
labor-related share, wage index, and hold harmless policy.
    Column (7) shows the estimated effects of the proposed budget-
neutral revisions to the comorbidity tiers and the CMG relative 
weights.
    Column (8) shows the estimated effects of the proposed decrease in 
the standard payment amount to account for the increase in aggregate 
payments due to changes in coding that do not reflect real changes in 
case mix, as discussed in section III.A of this proposed rule. Section 
1886(j)(2)(C)(ii) of the Act requires us to adjust the per discharge 
PPS payment rate to eliminate the effect of coding or classification 
changes that do not reflect real changes in case mix if we determine 
that such changes result in a change in aggregate payments under the 
classification system.
    Column (9) compares our estimates of the payments per discharge, 
incorporating all proposed changes reflected in this proposed rule for 
FY 2007, to our estimates of payments per discharge in FY 2006 (without 
these proposed changes). The average estimated increase for all IRFs is 
approximately 0.6 percent. This estimated increase includes the effects 
of the 3.4 percent market basket update. It also includes the 0.1 
percent overall estimated increase to IRF payments from the proposed 
update to the outlier threshold amount, and the estimated impact of the 
proposed one-time 2.9 percent reduction to the standard payment amount 
to account for changes in coding that increased payments to IRFs. 
Because we propose to make the remainder of the changes outlined in 
this proposed rule in a budget-neutral manner, they would not affect 
total estimated IRF payments in the aggregate. However, as described in 
more detail in each section, they would affect the estimated 
distribution of payments among providers.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TP15MY06.029


[[Page 28140]]


[GRAPHIC] [TIFF OMITTED] TP15MY06.030

BILLING CODE 4120-01-C
3. Impact of the Proposed Update to the Outlier Threshold Amount 
(Column 4, Table 11)
    In the FY 2006 IRF PPS final rule (70 FR 30188), we used FY 2003 
patient-level claims data (the best, most complete data available at 
that time) to set the outlier threshold amount for FY 2006 so that 
estimated outlier payments would equal 3 percent of total estimated 
payments for FY 2006. For this proposed rule, we have updated our 
analysis using FY 2004 data. Between FYs 2003 and 2004, we observed 
that IRFs' cost-to-charge ratios continued to fall, a trend that has 
occurred each year since we first implemented the IRF PPS. We are still 
investigating the reasons for this. However, this decrease in cost-to-
charge ratios affected our estimate of outlier payments as a percentage 
of total estimated payments for FY 2006, which declined from 3 percent 
using the FY 2003 data to 2.9 percent using the updated FY 2004 data. 
Thus, we are proposing to adjust the outlier threshold amount for FY 
2007 to $5,609 in order to set total estimated outlier payments equal 
to 3 percent of total estimated payments in FY 2007 (see section IV.A 
of this proposed rule for a detailed discussion of the factors that 
influence how we arrive at the proposed outlier threshold amount). The 
estimated change in total payments between FY 2006 and FY 2007, 
therefore, includes a 0.1 percent overall estimated increase in 
payments because the outlier portion of total payments is estimated to 
increase from 2.9 percent to 3 percent.
    The impact of this proposed update (as shown in column 4 of Table 
11) is to increase estimated overall payments to IRFs by 0.1 percent. 
We estimate the largest increase in payments to be a 0.3 percent 
increase in payments to rural IRFs in the Mountain region. We do not 
estimate that any group of IRFs would experience a decrease in payments 
from this proposed update.
4. Impact of the Market Basket Update to the IRF PPS Payment Rates 
(Column 5, Table 11)
    In column 5 of Table 11, we present the estimated effects of the 
market basket update to the IRF PPS payment rates. In the aggregate, 
and across all hospital groups, the update would result in a 3.4 
percent increase in overall payments to IRFs.
    5. Impact of the Full CBSA Wage Index, Labor-Related Share, and the 
Hold Harmless Policy for FY 2007 (Column 6, Table 11)
    In column 6 of Table 11, we present the effects of the budget 
neutral wage index, labor-related share, and the hold harmless policy. 
In FY 2006, we provided a 1-year blended wage index and a 3-year phase 
out of the rural adjustment for IRFs that changed designation due to 
the change from MSAs to CBSAs (referenced as the hold harmless policy). 
We applied the blended wage index to all IRFs and the hold harmless 
policy to those IRFs that qualify, as described in Sec.  412.624(e)(7), 
in order to mitigate the impact of the change from the MSA-based labor 
area definitions to the CBSA-based labor area definitions for IRFs.
    As discussed in this proposed rule, the blended wage index expires 
in FY 2007 and will not be applied for discharges on or after October 
1, 2006. Since we are in the second year of the hold harmless policy, 
we are not proposing a change to this policy and will continue to apply 
it as described in the FY 2006 final rule in a budget neutral manner.
    As discussed in this proposed rule, we are proposing to update the 
wage index based on the CBSA-based labor market area definitions in a 
budget neutral manner. We will also apply the second year of the hold 
harmless policy in a budget neutral manner. Thus, in the aggregate, the 
estimated impact of the wage index and the labor-related share is zero 
percent.
    In the aggregate for all urban and all rural IRFs, we do not 
estimate that these changes would affect overall estimated payments to 
IRFs. However, we estimate these changes to have small distributional 
effects. We estimate the largest increase in payments to be a 2.8 
percent increase for rural IRFs in the Pacific region and the largest 
decrease in payments to be a 1.9 percent decrease among rural IRFs in 
the Mountain region.

[[Page 28141]]

6. Impact of the Proposed Changes to the Comorbidity Tiers and the CMG 
Relative Weights (Column 7, Table 11)
    In column 7 of Table 11, we present the effects of the proposed 
changes to the comorbidity tiers and the CMG relative weights. Since we 
are proposing to implement these changes in a budget neutral manner, we 
estimate that they would have no overall effect on payments to IRFs. 
Similarly, we estimate no overall effect of these proposed changes on 
payments to urban IRFs. However, we estimate a 0.1 percent increase in 
payments to rural IRFs. We estimate the largest increase in payments to 
be a 0.2 percent increase among rural government-owned IRFs and rural 
IRFs located in the Middle Atlantic and South Atlantic regions. We 
estimate the largest decrease to be a 0.4 percent decrease among 
teaching IRFs with intern and resident to average daily census ratios 
in the 10 percent to 19 percent category.
7. Impact of the Proposed 2.9 Percent Decrease to the Standard Payment 
Amount to Account for Coding Changes (Column 8, Table 11)
    In column 8 of Table 11, we present the effects of the proposed 
decrease in the standard payment amount to account for the increase in 
estimated aggregate payments due to changes in coding that do not 
reflect real changes in case mix.
    In the aggregate, and across all hospital groups, we estimate that 
the proposed policy would result in a 2.9 percent decrease in overall 
payments to IRFs. Thus, we estimate that the proposed 2.9 percent 
reduction in the standard payment amount would result in a cost savings 
to the Medicare program of approximately $200 million.

C. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 12 below, we 
have prepared an accounting statement showing the classification of the 
expenditures associated with the provisions of this proposed rule. This 
table provides our best estimate of the increase in Medicare payments 
under the IRF PPS as a result of the proposed changes presented in this 
proposed rule based on the data for 1,202 IRFs in our database. All 
estimated expenditures are classified as transfers to Medicare 
providers (that is, IRFs).

      Table 12.--Accounting Statement: Classification of Estimated
 Expenditures, From the 2006 IRF PPS Rate Year to the 2007 IRF PPS Rate
                                  Year
                              [In Millions]
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $40 million.
From Whom To Whom.........................  Federal Government to IRF
                                             Medicare Providers.
------------------------------------------------------------------------

D. Alternatives Considered

    Because we have determined that this proposed rule would have a 
significant economic impact on IRFs, we will discuss the alternative 
changes to the IRF PPS that we considered.
    We considered a proposed reduction to the standard payment amount 
by an amount of up to 3.9 percent (5.8 percent minus the 1.9 percent 
adjustment to the standard payment amount for FY 2006), because one of 
RAND's methodologies for determining the amount of real change in case 
mix and the amount of coding change that occurred between 1999 and 2002 
suggested that coding change could possibly have been responsible for 
up to 5.8 percent of the observed increase in IRFs' case mix. This 
suggests that we could potentially have proposed a reduction greater 
than 2.9 percent and as high as 3.9 percent. We also considered the 
possibility of making a somewhat lower adjustment of 2.3 percent, which 
would fall at approximately the middle of RAND's range of estimates. 
However, for the reasons discussed in section III.A of this proposed 
rule, we have instead decided to propose a 2.9 percent reduction to the 
standard payment amount. Further, in light of recent changes to the IRF 
PPS that affect IRF utilization trends, including the revised phase-in 
schedule of the IRF 75 percent rule compliance percentage, we believe 
it is appropriate to take an incremental approach to adjusting for 
coding changes. In this way, we maintain the flexibility to assess the 
impact of these changes and propose additional changes, if appropriate, 
in the future.
    We considered not proposing to update the comorbidity tiers and the 
CMG relative weights for FY 2007. However, as described in section II 
of this proposed rule, re-analysis of the data indicates that some 
minor technical revisions are appropriate to align the distribution of 
payments as closely as possible with the costs of IRF care.
    We also considered not proposing an update to the outlier threshold 
amount for FY 2007. However, analysis of updated FY 2004 data indicates 
that estimated outlier payments would not equal 3 percent of estimated 
total payment for FY 2007 unless we were to update the outlier 
threshold amount.

E. Conclusion (Column 9, Table 11)

    Overall, estimated payments per discharge for IRFs in FY 2007 are 
projected to increase by 0.6 percent, compared with those in FY 2006, 
as reflected in column 9 of Table 11. We estimate that IRFs in urban 
and rural areas would both experience a 0.6 percent increase in 
estimated payments per discharge compared with FY 2006. We estimate 
that rehabilitation units in urban areas would experience a 0.5 percent 
increase in estimated payments per discharge, while freestanding 
rehabilitation hospitals in urban areas would experience a 0.7 percent 
increase in estimated payments per discharge. We estimate that 
rehabilitation units in rural areas would experience a 0.6 percent 
increase in estimated payments per discharge, while freestanding 
rehabilitation hospitals in rural areas would experience a 0.7 percent 
increase in estimated payments per discharge.
    Overall, we estimate that the largest payment increase would be 3.5 
percent among rural IRFs in the Pacific region. We estimate that the 
largest overall decrease in estimated payments would be a 1.2 percent 
decrease for rural IRFs in the Mountain region.
    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 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 as follows:

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 P--Prospective Payment for Inpatient Rehabilitation 
Hospitals and Rehabilitation Units

    2. Section 412.23 is amended by--
    A. Revising paragraph (b)(2)(i) introductory text.

[[Page 28142]]

    B. Revising paragraph (b)(2)(ii).
    The revisions read as follows:


Sec.  412.23  Excluded hospitals: Classifications.

* * * * *
    (b) * * *
    (2) * * *
    (i) For cost reporting periods beginning on or after July 1, 2004 
and before July 1, 2005, the hospital has served an inpatient 
population of whom at least 50 percent, and for cost reporting periods 
beginning on or after July 1, 2005 and before July 1, 2007, the 
hospital has served an inpatient population of whom at least 60 
percent, and for cost reporting periods beginning on or after July 1, 
2007 and before July 1, 2008, the hospital has served an inpatient 
population of whom at least 65 percent required intensive 
rehabilitative services for treatment of one or more of the conditions 
specified at paragraph (b)(2)(iii) of this section. A patient with a 
comorbidity, as defined at Sec.  412.602, may be included in the 
inpatient population that counts toward the required applicable 
percentage if--
* * * * *
    (ii) For cost reporting periods beginning on or after July 1, 2008, 
the hospital has served an inpatient population of whom at least 75 
percent required intensive rehabilitative services for treatment of one 
or more of the conditions specified in paragraph (b)(2)(iii) of this 
section. A patient with a comorbidity as described in paragraph 
(b)(2)(i) of this section is not included in the inpatient population 
that counts toward the required 75 percent.
* * * * *
    3. In Sec.  412.624, paragraph (e)(5) is revised to read as 
follows:


Sec.  412.624  Methodology for calculating the Federal prospective 
payment rates.

* * * * *
    (e) * * *
    (5) Adjustment for high-cost outliers. CMS provides for an 
additional payment to an inpatient rehabilitation facility if its 
estimated costs for a patient exceed a fixed dollar amount (adjusted 
for area wage levels and factors to account for treating low-income 
patients, for rural location, and for teaching programs) 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. Effective for discharges occurring on or 
after October 1, 2003, additional payments made under this section will 
be subject to the adjustments at Sec.  412.84(i), except that CMS 
calculates a single overall combined operating and capital cost-to-
charge ratio (instead of a separate operating cost-to-charge ratio and 
a separate capital cost-to-charge ratio) and national averages will be 
used instead of statewide averages. Effective for discharges occurring 
on or after October 1, 2003, additional payments made under this 
section will also be subject to adjustments at Sec.  412.84(m), except 
that CMS calculates a single overall combined operating and capital 
cost-to-charge ratio (instead of a separate operating cost-to-charge 
ratio and a separate capital cost-to-charge ratio).
* * * * *

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

    Dated: March 30, 2006.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.

    Approved: May 8, 2006.
Michael O. Leavitt,
Secretary.
    The following addendum will not appear in the Code of Federal 
Regulations.

Addendum

    This addendum contains the tables referred to throughout the 
preamble of this proposed rule. The tables presented below are as 
follows:

Table 1.--Proposed Inpatient Rehabilitation Facility Urban Area Wage 
Index for Discharges Occurring from October 1, 2006 through 
September 30, 2007
Table 2.--Proposed Inpatient Rehabilitation Facility Rural Area Wage 
Index for Discharges Occurring from October 1, 2006 through 
September 30, 2007

Table 1.--Proposed Inpatient Rehabilitation Facility Urban Area Wage Index for Discharges Occurring From October
                                       1, 2006 Through September 30, 2007
----------------------------------------------------------------------------------------------------------------
            CBSA code                          Urban area (constituent counties)               Full  wage  index
----------------------------------------------------------------------------------------------------------------
10180...........................  Abilene, TX................................................             0.7896
                                   Callahan County, TX.......................................
                                   Jones County, TX..........................................
                                   Taylor County, TX.........................................
10380...........................  Aguadilla-Isabela-San Sebastian, PR........................             0.4738
                                   Aguada Municipio, PR......................................
                                   Aguadilla Municipio, PR...................................
                                   Anasco Municipio, PR......................................
                                   Isabela Municipio, PR.....................................
                                   Lares Municipio, PR.......................................
                                   Moca Municipio, PR........................................
                                   Rincon Municipio, PR......................................
                                   San Sebastian Municipio, PR...............................
10420...........................  Akron, OH..................................................             0.8982
                                   Portage County, OH........................................
                                   Summit County, OH.........................................
10500...........................  Albany, GA.................................................             0.8628
                                   Baker County, GA..........................................
                                   Dougherty County, GA......................................
                                   Lee County, GA............................................
                                   Terrell County, GA........................................
                                   Worth County, GA..........................................
10580...........................  Albany-Schenectady-Troy, NY................................             0.8589
                                   Albany County, NY.........................................
                                   Rensselaer County, NY.....................................

[[Page 28143]]

 
                                   Saratoga County, NY.......................................
                                   Schenectady County, NY....................................
                                   Schoharie County, NY......................................
10740...........................  Albuquerque, NM............................................             0.9684
                                   Bernalillo County, NM.....................................
                                   Sandoval County, NM.......................................
                                   Torrance County, NM.......................................
                                   Valencia County, NM.......................................
10780...........................  Alexandria, LA.............................................             0.8033
                                   Grant Parish, LA..........................................
                                   Rapides Parish, LA........................................
10900...........................  Allentown-Bethlehem-Easton, PA-NJ..........................             0.9818
                                   Warren County, NJ.........................................
                                   Carbon County, PA.........................................
                                   Lehigh County, PA.........................................
                                   Northampton County, PA....................................
11020...........................  Altoona, PA................................................             0.8944
                                   Blair County, PA..........................................
11100...........................  Amarillo, TX...............................................             0.9156
                                   Armstrong County, TX......................................
                                   Carson County, TX.........................................
                                   Potter County, TX.........................................
                                   Randall County, TX........................................
11180...........................  Ames, IA...................................................             0.9536
                                   Story County, IA..........................................
11260...........................  Anchorage, AK..............................................             1.1895
                                   Anchorage Municipality, AK................................
                                   Matanuska-Susitna Borough, AK.............................
11300...........................  Anderson, IN...............................................             0.8586
                                   Madison County, IN........................................
11340...........................  Anderson, SC...............................................             0.8997
                                   Anderson County, SC.......................................
11460...........................  Ann Arbor, MI..............................................             1.0859
                                   Washtenaw County, MI......................................
11500...........................  Anniston-Oxford, AL........................................             0.7682
                                   Calhoun County, AL........................................
11540...........................  Appleton, WI...............................................             0.9288
                                   Calumet County, WI........................................
                                   Outagamie County, WI......................................
11700...........................  Asheville, NC..............................................             0.9285
                                   Buncombe County, NC.......................................
                                   Haywood County, NC........................................
                                   Henderson County, NC......................................
                                   Madison County, NC........................................
12020...........................  Athens-Clarke County, GA...................................             0.9855
                                   Clarke County, GA.........................................
                                   Madison County, GA........................................
                                   Oconee County, GA.........................................
                                   Oglethorpe County, GA.....................................
12060...........................  Atlanta-Sandy Springs-Marietta, GA.........................             0.9793
                                   Barrow County, GA.........................................
                                   Bartow County, GA.........................................
                                   Butts County, GA..........................................
                                   Carroll County, GA........................................
                                   Cherokee County, GA.......................................
                                   Clayton County, GA........................................
                                   Cobb County, GA...........................................
                                   Coweta County, GA.........................................
                                   Dawson County, GA.........................................
                                   DeKalb County, GA.........................................
                                   Douglas County, GA........................................
                                   Fayette County, GA........................................
                                   Forsyth County, GA........................................
                                   Fulton County, GA.........................................
                                   Gwinnett County, GA.......................................
                                   Haralson County, GA.......................................
                                   Heard County, GA..........................................
                                   Henry County, GA..........................................
                                   Jasper County, GA.........................................

[[Page 28144]]

 
                                   Lamar County, GA..........................................
                                   Meriwether County, GA.....................................
                                   Newton County, GA.........................................
                                   Paulding County, GA.......................................
                                   Pickens County, GA........................................
                                   Pike County, GA...........................................
                                   Rockdale County, GA.......................................
                                   Spalding County, GA.......................................
                                   Walton County, GA.........................................
12100...........................  Atlantic City, NJ..........................................             1.1615
                                   Atlantic County, NJ.......................................
12220...........................  Auburn-Opelika, AL.........................................             0.8100
                                   Lee County, AL............................................
12260...........................  Augusta-Richmond County, GA-SC.............................             0.9748
                                   Burke County, GA..........................................
                                   Columbia County, GA.......................................
                                   McDuffie County, GA.......................................
                                   Richmond County, GA.......................................
                                   Aiken County, SC..........................................
                                   Edgefield County, SC......................................
12420...........................  Austin-Round Rock, TX......................................             0.9437
                                   Bastrop County, TX........................................
                                   Caldwell County, TX.......................................
                                   Hays County, TX...........................................
                                   Travis County, TX.........................................
                                   Williamson County, TX.....................................
12540...........................  Bakersfield, CA............................................             1.0470
                                   Kern County, CA...........................................
12580...........................  Baltimore-Towson, MD.......................................             0.9897
                                   Anne Arundel County, MD...................................
                                   Baltimore County, MD......................................
                                   Carroll County, MD........................................
                                   Harford County, MD........................................
                                   Howard County, MD.........................................
                                   Queen Anne's County, MD...................................
                                   Baltimore City, MD........................................
12620...........................  Bangor, ME.................................................             0.9993
                                   Penobscot County, ME......................................
12700...........................  Barnstable Town, MA........................................             1.2600
                                   Barnstable County, MA.....................................
12940...........................  Baton Rouge, LA............................................             0.8593
                                   Ascension Parish, LA......................................
                                   East Baton Rouge Parish, LA...............................
                                   East Feliciana Parish, LA.................................
                                   Iberville Parish, LA......................................
                                   Livingston Parish, LA.....................................
                                   Pointe Coupee Parish, LA..................................
                                   St. Helena Parish, LA.....................................
                                   West Baton Rouge Parish, LA...............................
                                   West Feliciana Parish, LA.................................
12980...........................  Battle Creek, MI...........................................             0.9508
                                   Calhoun County, MI........................................
13020...........................  Bay City, MI...............................................             0.9343
                                   Bay County, MI............................................
13140...........................  Beaumont-Port Arthur, TX...................................             0.8412
                                   Hardin County, TX.........................................
                                   Jefferson County, TX......................................
                                   Orange County, TX.........................................
13380...........................  Bellingham, WA.............................................             1.1731
                                   Whatcom County, WA........................................
13460...........................  Bend, OR...................................................             1.0786
                                   Deschutes County, OR......................................
13644...........................  Bethesda-Gaithersburg-Frederick, MD........................             1.1483
                                   Frederick County, MD......................................
                                   Montgomery County, MD.....................................
13740...........................  Billings, MT...............................................             0.8834
                                   Carbon County, MT.........................................
                                   Yellowstone County, MT....................................
13780...........................  Binghamton, NY.............................................             0.8562

[[Page 28145]]

 
                                   Broome County, NY.........................................
                                   Tioga County, NY..........................................
13820...........................  Birmingham-Hoover, AL......................................             0.8959
                                   Bibb County, AL...........................................
                                   Blount County, AL.........................................
                                   Chilton County, AL........................................
                                   Jefferson County, AL......................................
                                   St. Clair County, AL......................................
                                   Shelby County, AL.........................................
                                   Walker County, AL.........................................
13900...........................  Bismarck, ND...............................................             0.7574
                                   Burleigh County, ND.......................................
                                   Morton County, ND.........................................
13980...........................  Blacksburg-Christiansburg-Radford, VA......................             0.7954
                                   Giles County, VA..........................................
                                   Montgomery County, VA.....................................
                                   Pulaski County, VA........................................
                                   Radford City, VA..........................................
14020...........................  Bloomington, IN............................................             0.8447
                                   Greene County, IN.........................................
                                   Monroe County, IN.........................................
                                   Owen County, IN...........................................
14060...........................  Bloomington-Normal, IL.....................................             0.9075
                                   McLean County, IL.........................................
14260...........................  Boise City-Nampa, ID.......................................             0.9052
                                   Ada County, ID............................................
                                   Boise County, ID..........................................
                                   Canyon County, ID.........................................
                                   Gem County, ID............................................
                                   Owyhee County, ID.........................................
14484...........................  Boston-Quincy, MA..........................................             1.1558
                                   Norfolk County, MA........................................
                                   Plymouth County, MA.......................................
                                   Suffolk County, MA........................................
14500...........................  Boulder, CO................................................             0.9734
                                   Boulder County, CO........................................
14540...........................  Bowling Green, KY..........................................             0.8211
                                   Edmonson County, KY.......................................
                                   Warren County, KY.........................................
14740...........................  Bremerton-Silverdale, WA...................................             1.0675
                                   Kitsap County, WA.........................................
14860...........................  Bridgeport-Stamford-Norwalk, CT............................             1.2592
                                   Fairfield County, CT......................................
15180...........................  Brownsville-Harlingen, TX..................................             0.9804
                                   Cameron County, TX........................................
15260...........................  Brunswick, GA..............................................             0.9311
                                   Brantley County, GA.......................................
                                   Glynn County, GA..........................................
                                   McIntosh County, GA.......................................
15380...........................  Buffalo-Niagara Falls, NY..................................             0.9511
                                   Erie County, NY...........................................
                                   Niagara County, NY........................................
15500...........................  Burlington, NC.............................................             0.8905
                                   Alamance County, NC.......................................
15540...........................  Burlington-South Burlington, VT............................             0.9410
                                   Chittenden County, VT.....................................
                                   Franklin County, VT.......................................
                                   Grand Isle County, VT.....................................
15764...........................  Cambridge-Newton-Framingham, MA............................             1.1172
                                   Middlesex County, MA......................................
15804...........................  Camden, NJ.................................................             1.0517
                                   Burlington County, NJ.....................................
                                   Camden County, NJ.........................................
                                   Gloucester County, NJ.....................................
15940...........................  Canton-Massillon, OH.......................................             0.8935
                                   Carroll County, OH........................................
                                   Stark County, OH..........................................
15980...........................  Cape Coral-Fort Myers, FL..................................             0.9356
                                   Lee County, FL............................................

[[Page 28146]]

 
16180...........................  Carson City, NV............................................             1.0234
                                   Carson City, NV...........................................
16220...........................  Casper, WY.................................................             0.9026
                                   Natrona County, WY........................................
16300...........................  Cedar Rapids, IA...........................................             0.8825
                                   Benton County, IA.........................................
                                   Jones County, IA..........................................
                                   Linn County, IA...........................................
16580...........................  Champaign-Urbana, IL.......................................             0.9594
                                   Champaign County, IL......................................
                                   Ford County, IL...........................................
                                   Piatt County, IL..........................................
16620...........................  Charleston, WV.............................................             0.8445
                                   Boone County, WV..........................................
                                   Clay County, WV...........................................
                                   Kanawha County, WV........................................
                                   Lincoln County, WV........................................
                                   Putnam County, WV.........................................
16700...........................  Charleston-North Charleston, SC............................             0.9245
                                   Berkeley County, SC.......................................
                                   Charleston County, SC.....................................
                                   Dorchester County, SC.....................................
16740...........................  Charlotte-Gastonia-Concord, NC-SC..........................             0.9750
                                   Anson County, NC..........................................
                                   Cabarrus County, NC.......................................
                                   Gaston County, NC.........................................
                                   Mecklenburg County, NC....................................
                                   Union County, NC..........................................
                                   York County, SC...........................................
16820...........................  Charlottesville, VA........................................             1.0187
                                   Albemarle County, VA......................................
                                   Fluvanna County, VA.......................................
                                   Greene County, VA.........................................
                                   Nelson County, VA.........................................
                                   Charlottesville City, VA..................................
16860...........................  Chattanooga, TN-GA.........................................             0.9088
                                   Catoosa County, GA........................................
                                   Dade County, GA...........................................
                                   Walker County, GA.........................................
                                   Hamilton County, TN.......................................
                                   Marion County, TN.........................................
                                   Sequatchie County, TN.....................................
16940...........................  Cheyenne, WY...............................................             0.8775
                                   Laramie County, WY........................................
16974...........................  Chicago-Naperville-Joliet, IL..............................             1.0790
                                   Cook County, IL...........................................
                                   DeKalb County, IL.........................................
                                   DuPage County, IL.........................................
                                   Grundy County, IL.........................................
                                   Kane County, IL...........................................
                                   Kendall County, IL........................................
                                   McHenry County, IL........................................
                                   Will County, IL...........................................
17020...........................  Chico, CA..................................................             1.0511
                                   Butte County, CA..........................................
17140...........................  Cincinnati-Middletown, OH-KY-IN............................             0.9615
                                   Dearborn County, IN.......................................
                                   Franklin County, IN.......................................
                                   Ohio County, IN...........................................
                                   Boone County, KY..........................................
                                   Bracken County, KY........................................
                                   Campbell County, KY.......................................
                                   Gallatin County, KY.......................................
                                   Grant County, KY..........................................
                                   Kenton County, KY.........................................
                                   Pendleton County, KY......................................
                                   Brown County, OH..........................................
                                   Butler County, OH.........................................
                                   Clermont County, OH.......................................

[[Page 28147]]

 
                                   Hamilton County, OH.......................................
                                   Warren County, OH.........................................
17300...........................  Clarksville, TN-KY.........................................             0.8284
                                   Christian County, KY......................................
                                   Trigg County, KY..........................................
                                   Montgomery County, TN.....................................
                                   Stewart County, TN........................................
17420...........................  Cleveland, TN..............................................             0.8139
                                   Bradley County, TN........................................
                                   Polk County, TN...........................................
17460...........................  Cleveland-Elyria-Mentor, OH................................             0.9213
                                   Cuyahoga County, OH.......................................
                                   Geauga County, OH.........................................
                                   Lake County, OH...........................................
                                   Lorain County, OH.........................................
                                   Medina County, OH.........................................
17660...........................  Coeur d'Alene, ID..........................................             0.9647
                                   Kootenai County, ID.......................................
17780...........................  College Station-Bryan, TX..................................             0.8900
                                   Brazos County, TX.........................................
                                   Burleson County, TX.......................................
                                   Robertson County, TX......................................
17820...........................  Colorado Springs, CO.......................................             0.9468
                                   El Paso County, CO........................................
                                   Teller County, CO.........................................
17860...........................  Columbia, MO...............................................             0.8345
                                   Boone County, MO..........................................
                                   Howard County, MO.........................................
17900...........................  Columbia, SC...............................................             0.9057
                                   Calhoun County, SC........................................
                                   Fairfield County, SC......................................
                                   Kershaw County, SC........................................
                                   Lexington County, SC......................................
                                   Richland County, SC.......................................
                                   Saluda County, SC.........................................
17980...........................  Columbus, GA-AL............................................             0.8560
                                   Russell County, AL........................................
                                   Chattahoochee County, GA..................................
                                   Harris County, GA.........................................
                                   Marion County, GA.........................................
                                   Muscogee County, GA.......................................
18020...........................  Columbus, IN...............................................             0.9588
                                   Bartholomew County, IN....................................
18140...........................  Columbus, OH...............................................             0.9860
                                   Delaware County, OH.......................................
                                   Fairfield County, OH......................................
                                   Franklin County, OH.......................................
                                   Licking County, OH........................................
                                   Madison County, OH........................................
                                   Morrow County, OH.........................................
                                   Pickaway County, OH.......................................
                                   Union County, OH..........................................
18580...........................  Corpus Christi, TX.........................................             0.8550
                                   Aransas County, TX........................................
                                   Nueces County, TX.........................................
                                   San Patricio County, TX...................................
18700...........................  Corvallis, OR..............................................             1.0729
                                   Benton County, OR.........................................
19060...........................  Cumberland, MD-WV..........................................             0.9317
                                   Allegany County, MD.......................................
                                   Mineral County, WV........................................
19124...........................  Dallas-Plano-Irving, TX....................................             1.0228
                                   Collin County, TX.........................................
                                   Dallas County, TX.........................................
                                   Delta County, TX..........................................
                                   Denton County, TX.........................................
                                   Ellis County, TX..........................................
                                   Hunt County, TX...........................................
                                   Kaufman County, TX........................................

[[Page 28148]]

 
                                   Rockwall County, TX.......................................
19140...........................  Dalton, GA.................................................             0.9079
                                   Murray County, GA.........................................
                                   Whitfield County, GA......................................
19180...........................  Danville, IL...............................................             0.9028
                                   Vermilion County, IL......................................
19260...........................  Danville, VA...............................................             0.8489
                                   Pittsylvania County, VA...................................
                                   Danville City, VA.........................................
19340...........................  Davenport-Moline-Rock Island, IA-IL........................             0.8724
                                   Henry County, IL..........................................
                                   Mercer County, IL.........................................
                                   Rock Island County, IL....................................
                                   Scott County, IA..........................................
19380...........................  Dayton, OH.................................................             0.9064
                                   Greene County, OH.........................................
                                   Miami County, OH..........................................
                                   Montgomery County, OH.....................................
                                   Preble County, OH.........................................
19460...........................  Decatur, AL................................................             0.8469
                                   Lawrence County, AL.......................................
                                   Morgan County, AL.........................................
19500...........................  Decatur, IL................................................             0.8067
                                   Macon County, IL..........................................
19660...........................  Deltona-Daytona Beach-Ormond Beach, FL.....................             0.9299
                                   Volusia County, FL........................................
19740...........................  Denver-Aurora, CO..........................................             1.0723
                                   Adams County, CO..........................................
                                   Arapahoe County, CO.......................................
                                   Broomfield County, CO.....................................
                                   Clear Creek County, CO....................................
                                   Denver County, CO.........................................
                                   Douglas County, CO........................................
                                   Elbert County, CO.........................................
                                   Gilpin County, CO.........................................
                                   Jefferson County, CO......................................
                                   Park County, CO...........................................
19780...........................  Des Moines, IA.............................................             0.9669
                                   Dallas County, IA.........................................
                                   Guthrie County, IA........................................
                                   Madison County, IA........................................
                                   Polk County, IA...........................................
                                   Warren County, IA.........................................
19804...........................  Detroit-Livonia-Dearborn, MI...............................             1.0424
                                   Wayne County, MI..........................................
20020...........................  Dothan, AL.................................................             0.7721
                                   Geneva County, AL.........................................
                                   Henry County, AL..........................................
                                   Houston County, AL........................................
20100...........................  Dover, DE..................................................             0.9776
                                   Kent County, DE...........................................
20220...........................  Dubuque, IA................................................             0.9024
                                   Dubuque County, IA........................................
20260...........................  Duluth, MN-WI..............................................             1.0213
                                   Carlton County, MN........................................
                                   St. Louis County, MN......................................
                                   Douglas County, WI........................................
20500...........................  Durham, NC.................................................             1.0244
                                   Chatham County, NC........................................
                                   Durham County, NC.........................................
                                   Orange County, NC.........................................
                                   Person County, NC.........................................
20740...........................  Eau Claire, WI.............................................             0.9201
                                   Chippewa County, WI.......................................
                                   Eau Claire County, WI.....................................
20764...........................  Edison, NJ.................................................             1.1249
                                   Middlesex County, NJ......................................
                                   Monmouth County, NJ.......................................
                                   Ocean County, NJ..........................................

[[Page 28149]]

 
                                   Somerset County, NJ.......................................
20940...........................  El Centro, CA..............................................             0.8906
                                   Imperial County, CA.......................................
21060...........................  Elizabethtown, KY..........................................             0.8802
                                   Hardin County, KY.........................................
                                   Larue County, KY..........................................
21140...........................  Elkhart-Goshen, IN.........................................             0.9627
                                   Elkhart County, IN........................................
21300...........................  Elmira, NY.................................................             0.8250
                                   Chemung County, NY........................................
21340...........................  El Paso, TX................................................             0.8977
                                   El Paso County, TX........................................
21500...........................  Erie, PA...................................................             0.8737
                                   Erie County, PA...........................................
21604...........................  Essex County, MA...........................................             1.0538
                                   Essex County, MA..........................................
21660...........................  Eugene-Springfield, OR.....................................             1.0818
                                   Lane County, OR...........................................
21780...........................  Evansville, IN-KY..........................................             0.8713
                                   Gibson County, IN.........................................
                                   Posey County, IN..........................................
                                   Vanderburgh County, IN....................................
                                   Warrick County, IN........................................
                                   Henderson County, KY......................................
                                   Webster County, KY........................................
21820...........................  Fairbanks, AK..............................................             1.1408
                                   Fairbanks North Star Borough, AK..........................
21940...........................  Fajardo, PR................................................             0.4153
                                   Ceiba Municipio, PR.......................................
                                   Fajardo Municipio, PR.....................................
                                   Luquillo Municipio, PR....................................
22020...........................  Fargo, ND-MN...............................................             0.8486
                                   Cass County, ND...........................................
                                   Clay County, MN...........................................
22140...........................  Farmington, NM.............................................             0.8509
                                   San Juan County, NM.......................................
22180...........................  Fayetteville, NC...........................................             0.9416
                                   Cumberland County, NC.....................................
                                   Hoke County, NC...........................................
22220...........................  Fayetteville-Springdale-Rogers, AR-MO......................             0.8661
                                   Benton County, AR.........................................
                                   Madison County, AR........................................
                                   Washington County, AR.....................................
                                   McDonald County, MO.......................................
22380...........................  Flagstaff, AZ..............................................             1.2092
                                   Coconino County, AZ.......................................
22420...........................  Flint, MI..................................................             1.0655
                                   Genesee County, MI........................................
                                   22500 Florence, SC........................................             0.8947
                                   Darlington County, SC.....................................
                                   Florence County, SC.......................................
22520...........................  Florence-Muscle Shoals, AL.................................             0.8272
                                   Colbert County, AL........................................
                                   Lauderdale County, AL.....................................
22540...........................  Fond du Lac, WI............................................             0.9640
                                   Fond du Lac County, WI....................................
22660...........................  Fort Collins-Loveland, CO..................................             1.0122
                                   Larimer County, CO........................................
22744...........................  Fort Lauderdale-Pompano Beach-Deerfield....................             1.0432
                                   Beach, FL.................................................
                                   Broward County, FL........................................
22900...........................  Fort Smith, AR-OK..........................................             0.8230
                                   Crawford County, AR.......................................
                                   Franklin County, AR.......................................
                                   Sebastian County, AR......................................
                                   Le Flore County, OK.......................................
                                   Sequoyah County, OK.......................................
23020...........................  Fort Walton Beach-Crestview-Destin, FL.....................             0.8872
                                   Okaloosa County, FL.......................................

[[Page 28150]]

 
23060...........................  Fort Wayne, IN.............................................             0.9793
                                   Allen County, IN..........................................
                                   Wells County, IN..........................................
                                   Whitley County, IN........................................
23104...........................  Fort Worth-Arlington, TX...................................             0.9486
                                   Johnson County, TX........................................
                                   Parker County, TX.........................................
                                   Tarrant County, TX........................................
                                   Wise County, TX...........................................
23420...........................  Fresno, CA.................................................             1.0538
                                   Fresno County, CA.........................................
23460...........................  Gadsden, AL................................................             0.7938
                                   Etowah County, AL.........................................
23540...........................  Gainesville, FL............................................             0.9388
                                   Alachua County, FL........................................
                                   Gilchrist County, FL......................................
23580...........................  Gainesville, GA............................................             0.8874
                                   Hall County, GA...........................................
23844...........................  Gary, IN...................................................             0.9395
                                   Jasper County, IN.........................................
                                   Lake County, IN...........................................
                                   Newton County, IN.........................................
                                   Porter County, IN.........................................
24020...........................  Glens Falls, NY............................................             0.8559
                                   Warren County, NY.........................................
                                   Washington County, NY.....................................
24140...........................  Goldsboro, NC..............................................             0.8775
                                   Wayne County, NC..........................................
24220...........................  Grand Forks, ND-MN.........................................             0.7901
                                   Polk County, MN...........................................
                                   Grand Forks County, ND....................................
24300...........................  Grand Junction, CO.........................................             0.9550
                                   Mesa County, CO...........................................
24340...........................  Grand Rapids-Wyoming, MI...................................             0.9390
                                   Barry County, MI..........................................
                                   Ionia County, MI..........................................
                                   Kent County, MI...........................................
                                   Newaygo County, MI........................................
24500...........................  Great Falls, MT............................................             0.9052
                                   Cascade County, MT........................................
24540...........................  Greeley, CO................................................             0.9570
                                   Weld County, CO...........................................
24580...........................  Green Bay, WI..............................................             0.9483
                                   Brown County, WI..........................................
                                   Kewaunee County, WI.......................................
                                   Oconto County, WI.........................................
24660...........................  Greensboro-High Point, NC..................................             0.9104
                                   Guilford County, NC.......................................
                                   Randolph County, NC.......................................
                                   Rockingham County, NC.....................................
24780...........................  Greenville, NC.............................................             0.9425
                                   Greene County, NC.........................................
                                   Pitt County, NC...........................................
24860...........................  Greenville, SC.............................................             1.0027
                                   Greenville County, SC.....................................
                                   Laurens County, SC........................................
                                   Pickens County, SC........................................
25020...........................  Guayama, PR................................................             0.3181
                                   Arroyo Municipio, PR......................................
                                   Guayama Municipio, PR.....................................
                                   Patillas Municipio, PR....................................
25060...........................  Gulfport-Biloxi, MS........................................             0.8929
                                   Hancock County, MS........................................
                                   Harrison County, MS.......................................
                                   Stone County, MS..........................................
25180...........................  Hagerstown-Martinsburg, MD-WV..............................             0.9489
                                   Washington County, MD.....................................
                                   Berkeley County, WV.......................................
                                   Morgan County, WV.........................................

[[Page 28151]]

 
25260...........................  Hanford-Corcoran, CA.......................................             1.0036
                                   Kings County, CA..........................................
25420...........................  Harrisburg-Carlisle, PA....................................             0.9313
                                   Cumberland County, PA.....................................
                                   Dauphin County, PA........................................
                                   Perry County, PA..........................................
25500...........................  Harrisonburg, VA...........................................             0.9088
                                   Rockingham County, VA.....................................
                                   Harrisonburg City, VA.....................................
25540...........................  Hartford-West Hartford-East Hartford, CT...................             1.1073
                                   Hartford County, CT.......................................
                                   Litchfield County, CT.....................................
                                   Middlesex County, CT......................................
                                   Tolland County, CT........................................
25620...........................  Hattiesburg, MS............................................             0.7601
                                   Forrest County, MS........................................
                                   Lamar County, MS..........................................
                                   Perry County, MS..........................................
25860...........................  Hickory-Lenoir-Morganton, NC...............................             0.8921
                                   Alexander County, NC......................................
                                   Burke County, NC..........................................
                                   Caldwell County, NC.......................................
                                   Catawba County, NC........................................
25980...........................  Hinesville-Fort Stewart, GA................................         \1\ 0.7662
                                   Liberty County, GA........................................
                                   Long County, GA...........................................
26100...........................  Holland-Grand Haven, MI....................................             0.9055
                                   Ottawa County, MI.........................................
26180...........................  Honolulu, HI...............................................             1.1214
                                   Honolulu County, HI.......................................
26300...........................  Hot Springs, AR............................................             0.9005
                                   Garland County, AR........................................
26380...........................  Houma-Bayou Cane-Thibodaux, LA.............................             0.7894
                                   Lafourche Parish, LA......................................
                                   Terrebonne Parish, LA.....................................
26420...........................  Houston-Sugar Land-Baytown, TX.............................             0.9996
                                   Austin County, TX.........................................
                                   Brazoria County, TX.......................................
                                   Chambers County, TX.......................................
                                   Fort Bend County, TX......................................
                                   Galveston County, TX......................................
                                   Harris County, TX.........................................
                                   Liberty County, TX........................................
                                   Montgomery County, TX.....................................
                                   San Jacinto County, TX....................................
                                   Waller County, TX.........................................
26580...........................  Huntington-Ashland, WV-KY-OH...............................             0.9477
                                   Boyd County, KY...........................................
                                   Greenup County, KY........................................
                                   Lawrence County, OH.......................................
                                   Cabell County, WV.........................................
                                   Wayne County, WV..........................................
26620...........................  Huntsville, AL.............................................             0.9146
                                   Limestone County, AL......................................
                                   Madison County, AL........................................
26820...........................  Idaho Falls, ID............................................             0.9420
                                   Bonneville County, ID.....................................
                                   Jefferson County, ID......................................
26900...........................  Indianapolis, IN...........................................             0.9920
                                   Boone County, IN..........................................
                                   Brown County, IN..........................................
                                   Hamilton County, IN.......................................
                                   Hancock County, IN........................................
                                   Hendricks County, IN......................................
                                   Johnson County, IN........................................
                                   Marion County, IN.........................................
                                   Morgan County, IN.........................................
                                   Putnam County, IN.........................................
                                   Shelby County, IN.........................................

[[Page 28152]]

 
26980...........................  Iowa City, IA..............................................             0.9747
                                   Johnson County, IA........................................
                                   Washington County, IA.....................................
27060...........................  Ithaca, NY.................................................             0.9793
                                   Tompkins County, NY.......................................
27100...........................  Jackson, MI................................................             0.9304
                                   Jackson County, MI........................................
27140...........................  Jackson, MS................................................             0.8311
                                   Copiah County, MS.........................................
                                   Hinds County, MS..........................................
                                   Madison County, MS........................................
                                   Rankin County, MS.........................................
                                   Simpson County, MS........................................
27180...........................  Jackson, TN................................................             0.8964
                                   Chester County, TN........................................
                                   Madison County, TN........................................
27260...........................  Jacksonville, FL...........................................             0.9290
                                   Baker County, FL..........................................
                                   Clay County, FL...........................................
                                   Duval County, FL..........................................
                                   Nassau County, FL.........................................
                                   St. Johns County, FL......................................
27340...........................  Jacksonville, NC...........................................             0.8236
                                   Onslow County, NC.........................................
27500...........................  Janesville, WI.............................................             0.9538
                                   Rock County, WI...........................................
27620...........................  Jefferson City, MO.........................................             0.8387
                                   Callaway County, MO.......................................
                                   Cole County, MO...........................................
                                   Moniteau County, MO.......................................
                                   Osage County, MO..........................................
27740...........................  Johnson City, TN...........................................             0.7937
                                   Carter County, TN.........................................
                                   Unicoi County, TN.........................................
                                   Washington County, TN.....................................
27780...........................  Johnstown, PA..............................................             0.8354
                                   Cambria County, PA........................................
27860...........................  Jonesboro, AR..............................................             0.7911
                                   Craighead County, AR......................................
                                   Poinsett County, AR.......................................
27900...........................  Joplin, MO.................................................             0.8582
                                   Jasper County, MO.........................................
                                   Newton County, MO.........................................
28020...........................  Kalamazoo-Portage, MI......................................             1.0381
                                   Kalamazoo County, MI......................................
                                   Van Buren County, MI......................................
28100...........................  Kankakee-Bradley, IL.......................................             1.0721
                                   Kankakee County, IL.......................................
28140...........................  Kansas City, MO-KS.........................................             0.9476
                                   Franklin County, KS.......................................
                                   Johnson County, KS........................................
                                   Leavenworth County, KS....................................
                                   Linn County, KS...........................................
                                   Miami County, KS..........................................
                                   Wyandotte County, KS......................................
                                   Bates County, MO..........................................
                                   Caldwell County, MO.......................................
                                   Cass County, MO...........................................
                                   Clay County, MO...........................................
                                   Clinton County, MO........................................
                                   Jackson County, MO........................................
                                   Lafayette County, MO......................................
                                   Platte County, MO.........................................
                                   Ray County, MO............................................
28420...........................  Kennewick-Richland-Pasco, WA...............................             1.0619
                                   Benton County, WA.........................................
                                   Franklin County, WA.......................................
28660...........................  Killeen-Temple-Fort Hood, TX...............................             0.8526
                                   Bell County, TX...........................................

[[Page 28153]]

 
                                   Coryell County, TX........................................
                                   Lampasas County, TX.......................................
28700...........................  Kingsport-Bristol-Bristol, TN-VA...........................             0.8054
                                   Hawkins County, TN........................................
                                   Sullivan County, TN.......................................
                                   Bristol City, VA..........................................
                                   Scott County, VA..........................................
                                   Washington County, VA.....................................
28740...........................  Kingston, NY...............................................             0.9255
                                   Ulster County, NY.........................................
                                   28940 Knoxville, TN.......................................             0.8441
                                   Anderson County, TN.......................................
                                   Blount County, TN.........................................
                                   Knox County, TN...........................................
                                   Loudon County, TN.........................................
                                   Union County, TN..........................................
29020...........................  Kokomo, IN.................................................             0.9508
                                   Howard County, IN.........................................
                                   Tipton County, IN.........................................
29100...........................  La Crosse, WI-MN...........................................             0.9564
                                   Houston County, MN........................................
                                   La Crosse County, WI......................................
29140...........................  Lafayette, IN..............................................             0.8736
                                   Benton County, IN.........................................
                                   Carroll County, IN........................................
                                   Tippecanoe County, IN.....................................
29180...........................  Lafayette, LA..............................................             0.8428
                                   Lafayette Parish, LA......................................
                                   St. Martin Parish, LA.....................................
29340...........................  Lake Charles, LA...........................................             0.7833
                                   Calcasieu Parish, LA......................................
                                   Cameron Parish, LA........................................
29404...........................  Lake County-Kenosha County, IL-WI..........................             1.0429
                                   Lake County, IL...........................................
                                   Kenosha County, WI........................................
29460...........................  Lakeland, FL...............................................             0.8912
                                   Polk County, FL...........................................
29540...........................  Lancaster, PA..............................................             0.9694
                                   Lancaster County, PA......................................
29620...........................  Lansing-East Lansing, MI...................................             0.9794
                                   Clinton County, MI........................................
                                   Eaton County, MI..........................................
                                   Ingham County, MI.........................................
29700...........................  Laredo, TX.................................................             0.8068
                                   Webb County, TX...........................................
                                   29740 Las Cruces, NM......................................             0.8467
                                   Dona Ana County, NM.......................................
29820...........................  Las Vegas-Paradise, NV.....................................             1.1437
                                   Clark County, NV..........................................
29940...........................  Lawrence, KS...............................................             0.8537
                                   Douglas County, KS........................................
30020...........................  Lawton, OK.................................................             0.7872
                                   Comanche County, OK.......................................
30140...........................  Lebanon, PA................................................             0.8459
                                   Lebanon County, PA........................................
30300...........................  Lewiston, ID-WA............................................             0.9886
                                   Nez Perce County, ID......................................
                                   Asotin County, WA.........................................
30340...........................  Lewiston-Auburn, ME........................................             0.9331
                                   Androscoggin County, ME...................................
30460...........................  Lexington-Fayette, KY......................................             0.9075
                                   Bourbon County, KY........................................
                                   Clark County, KY..........................................
                                   Fayette County, KY........................................
                                   Jessamine County, KY......................................
                                   Scott County, KY..........................................
                                   Woodford County, KY.......................................
30620...........................  Lima, OH...................................................             0.9225
                                   Allen County, OH..........................................

[[Page 28154]]

 
30700...........................  Lincoln, NE................................................             1.0214
                                   Lancaster County, NE......................................
                                   Seward County, NE.........................................
30780...........................  Little Rock-North Little Rock, AR..........................             0.8747
                                   Faulkner County, AR.......................................
                                   Grant County, AR..........................................
                                   Lonoke County, AR.........................................
                                   Perry County, AR..........................................
                                   Pulaski County, AR........................................
                                   Saline County, AR.........................................
30860...........................  Logan, UT-ID...............................................             0.9164
                                   Franklin County, ID.......................................
                                   Cache County, UT..........................................
30980...........................  Longview, TX...............................................             0.8730
                                   Gregg County, TX..........................................
                                   Rusk County, TX...........................................
                                   Upshur County, TX.........................................
31020...........................  Longview, WA...............................................             0.9579
                                   Cowlitz County, WA........................................
31084...........................  Los Angeles-Long Beach-Glendale, CA........................             1.1783
                                   Los Angeles County, CA....................................
31140...........................  Louisville, KY-IN..........................................             0.9251
                                   Clark County, IN..........................................
                                   Floyd County, IN..........................................
                                   Harrison County, IN.......................................
                                   Washington County, IN.....................................
                                   Bullitt County, KY........................................
                                   Henry County, KY..........................................
                                   Jefferson County, KY......................................
                                   Meade County, KY..........................................
                                   Nelson County, KY.........................................
                                   Oldham County, KY.........................................
                                   Shelby County, KY.........................................
                                   Spencer County, KY........................................
                                   Trimble County, KY........................................
31180...........................  Lubbock, TX................................................             0.8783
                                   Crosby County, TX.........................................
                                   Lubbock County, TX........................................
31340...........................  Lynchburg, VA..............................................             0.8691
                                   Amherst County, VA........................................
                                   Appomattox County, VA.....................................
                                   Bedford County, VA........................................
                                   Campbell County, VA.......................................
                                   Bedford City, VA..........................................
                                   Lynchburg City, VA........................................
31420...........................  Macon, GA..................................................             0.9443
                                   Bibb County, GA...........................................
                                   Crawford County, GA.......................................
                                   Jones County, GA..........................................
                                   Monroe County, GA.........................................
                                   Twiggs County, GA.........................................
31460...........................  Madera, CA.................................................             0.8713
                                   Madera County, CA.........................................
31540...........................  Madison, WI................................................             1.0659
                                   Columbia County, WI.......................................
                                   Dane County, WI...........................................
                                   Iowa County, WI...........................................
31700...........................  Manchester-Nashua, NH......................................             1.0354
                                   Hillsborough County, NH...................................
                                   Merrimack County, NH......................................
31900...........................  Mansfield, OH..............................................             0.9891
                                   Richland County, OH.......................................
32420...........................  Mayaguez, PR...............................................             0.4020
                                   Hormigueros Municipio, PR.................................
                                   Mayagu3ez Municipio, PR...................................
32580...........................  McAllen-Edinburg-Mission, TX...............................             0.8934
                                   Hidalgo County, TX........................................
32780...........................  Medford, OR................................................             1.0225
                                   Jackson County, OR........................................

[[Page 28155]]

 
32820...........................  Memphis, TN-MS-AR..........................................             0.9397
                                   Crittenden County, AR.....................................
                                   DeSoto County, MS.........................................
                                   Marshall County, MS.......................................
                                   Tate County, MS...........................................
                                   Tunica County, MS.........................................
                                   Fayette County, TN........................................
                                   Shelby County, TN.........................................
                                   Tipton County, TN.........................................
32900...........................  Merced, CA.................................................             1.1109
                                   Merced County, CA.........................................
33124...........................  Miami-Miami Beach-Kendall, FL..............................             0.9750
                                   Miami-Dade County, FL.....................................
33140...........................  Michigan City-La Porte, IN.................................             0.9399
                                   LaPorte County, IN........................................
33260...........................  Midland, TX................................................             0.9514
                                   Midland County, TX........................................
33340...........................  Milwaukee-Waukesha-West Allis, WI..........................             1.0146
                                   Milwaukee County, WI......................................
                                   Ozaukee County, WI........................................
                                   Washington County, WI.....................................
                                   Waukesha County, WI.......................................
33460...........................  Minneapolis-St. Paul-Bloomington, MN-WI....................             1.1075
                                   Anoka County, MN..........................................
                                   Carver County, MN.........................................
                                   Chisago County, MN........................................
                                   Dakota County, MN.........................................
                                   Hennepin County, MN.......................................
                                   Isanti County, MN.........................................
                                   Ramsey County, MN.........................................
                                   Scott County, MN..........................................
                                   Sherburne County, MN......................................
                                   Washington County, MN.....................................
                                   Wright County, MN.........................................
                                   Pierce County, WI.........................................
                                   St. Croix County, WI......................................
33540...........................  Missoula, MT...............................................             0.9473
                                   Missoula County, MT.......................................
33660...........................  Mobile, AL.................................................             0.7891
                                   Mobile County, AL.........................................
33700...........................  Modesto, CA................................................             1.1885
                                   Stanislaus County, CA.....................................
33740...........................  Monroe, LA.................................................             0.8031
                                   Ouachita Parish, LA.......................................
                                   Union Parish, LA..........................................
33780...........................  Monroe, MI.................................................             0.9468
                                   Monroe County, MI.........................................
33860...........................  Montgomery, AL.............................................             0.8618
                                   Autauga County, AL........................................
                                   Elmore County, AL.........................................
                                   Lowndes County, AL........................................
                                   Montgomery County, AL.....................................
34060...........................  Morgantown, WV.............................................             0.8420
                                   Monongalia County, WV.....................................
                                   Preston County, WV........................................
34100...........................  Morristown, TN.............................................             0.7961
                                   Grainger County, TN.......................................
                                   Hamblen County, TN........................................
                                   Jefferson County, TN......................................
34580...........................  Mount Vernon-Anacortes, WA.................................             1.0454
                                   Skagit County, WA.........................................
34620...........................   Muncie, IN................................................             0.8930
                                   Delaware County, IN.......................................
34740...........................  Muskegon-Norton Shores, MI.................................             0.9664
                                   Muskegon County, MI.......................................
34820...........................  Myrtle Beach-Conway-North Myrtle Beach, SC.................             0.8934
                                   Horry County, SC..........................................
34900...........................  Napa, CA...................................................             1.2643
                                   Napa County, CA...........................................

[[Page 28156]]

 
34940...........................  Naples-Marco Island, FL....................................             1.0139
                                   Collier County, FL........................................
34980...........................  Nashville-Davidson--Murfreesboro, TN.......................             0.9790
                                   Cannon County, TN.........................................
                                   Cheatham County, TN.......................................
                                   Davidson County, TN.......................................
                                   Dickson County, TN........................................
                                   Hickman County, TN........................................
                                   Macon County, TN..........................................
                                   Robertson County, TN......................................
                                   Rutherford County, TN.....................................
                                   Smith County, TN..........................................
                                   Sumner County, TN.........................................
                                   Trousdale County, TN......................................
                                   Williamson County, TN.....................................
                                   Wilson County, TN.........................................
35004...........................  Nassau-Suffolk, NY.........................................             1.2719
                                   Nassau County, NY.........................................
                                   Suffolk County, NY........................................
35084...........................  Newark-Union, NJ-PA........................................             1.1883
                                   Essex County, NJ..........................................
                                   Hunterdon County, NJ......................................
                                   Morris County, NJ.........................................
                                   Sussex County, NJ.........................................
                                   Union County, NJ..........................................
                                   Pike County, PA...........................................
35300...........................  New Haven-Milford, CT......................................             1.1887
                                   New Haven County, CT......................................
35380...........................  New Orleans-Metairie-Kenner, LA............................             0.8995
                                   Jefferson Parish, LA......................................
                                   Orleans Parish, LA........................................
                                   Plaquemines Parish, LA....................................
                                   St. Bernard Parish, LA....................................
                                   St. Charles Parish, LA....................................
                                   St. John the Baptist Parish, LA...........................
                                   St. Tammany Parish, LA....................................
35644...........................  New York-White Plains-Wayne, NY-NJ.........................             1.3188
                                   Bergen County, NJ.........................................
                                   Hudson County, NJ.........................................
                                   Passaic County, NJ........................................
                                   Bronx County, NY..........................................
                                   Kings County, NY..........................................
                                   New York County, NY.......................................
                                   Putnam County, NY.........................................
                                   Queens County, NY.........................................
                                   Richmond County, NY.......................................
                                   Rockland County, NY.......................................
                                   Westchester County, NY....................................
35660...........................  Niles-Benton Harbor, MI....................................             0.8879
                                   Berrien County, MI........................................
35980...........................  Norwich-New London, CT.....................................             1.1345
                                   New London County, CT.....................................
36084...........................  Oakland-Fremont-Hayward, CA................................             1.5346
                                   Alameda County, CA........................................
                                   Contra Costa County, CA...................................
36100...........................  Ocala, FL..................................................             0.8925
                                   Marion County, FL.........................................
36140...........................  Ocean City, NJ.............................................             1.1011
                                   Cape May County, NJ.......................................
36220...........................   Odessa, TX................................................             0.9884
                                   Ector County, TX..........................................
36260...........................  Ogden-Clearfield, UT.......................................             0.9029
                                   Davis County, UT..........................................
                                   Morgan County, UT.........................................
                                   Weber County, UT..........................................
36420...........................  Oklahoma City, OK..........................................             0.9031
                                   Canadian County, OK.......................................
                                   Cleveland County, OK......................................
                                   Grady County, OK..........................................

[[Page 28157]]

 
                                   Lincoln County, OK........................................
                                   Logan County, OK..........................................
                                   McClain County, OK........................................
                                   Oklahoma County, OK.......................................
36500...........................  Olympia, WA................................................             1.0927
                                   Thurston County, WA.......................................
36540...........................  Omaha-Council Bluffs, NE-IA................................             0.9560
                                   Harrison County, IA.......................................
                                   Mills County, IA..........................................
                                   Pottawattamie County, IA..................................
                                   Cass County, NE...........................................
                                   Douglas County, NE........................................
                                   Sarpy County, NE..........................................
                                   Saunders County, NE.......................................
                                   Washington County, NE.....................................
36740...........................  Orlando-Kissimmee, FL......................................             0.9464
                                   Lake County, FL...........................................
                                   Orange County, FL.........................................
                                   Osceola County, FL........................................
                                   Seminole County, FL.......................................
36780...........................  Oshkosh-Neenah, WI.........................................             0.9183
                                   Winnebago County, WI......................................
36980...........................  Owensboro, KY..............................................             0.8780
                                   Daviess County, KY........................................
                                   Hancock County, KY........................................
                                   McLean County, KY.........................................
37100...........................  Oxnard-Thousand Oaks-Ventura, CA...........................             1.1622
                                   Ventura County, CA........................................
37340...........................  Palm Bay-Melbourne-Titusville, FL..........................             0.9839
                                   Brevard County, FL........................................
37460...........................  Panama City-Lynn Haven, FL.................................             0.8005
                                   Bay County, FL............................................
37620...........................  Parkersburg-Marietta-Vienna, WV-OH.........................             0.8270
                                   Washington County, OH.....................................
                                   Pleasants County, WV......................................
                                   Wirt County, WV...........................................
                                   Wood County, WV...........................................
37700...........................  Pascagoula, MS.............................................             0.8156
                                   George County, MS.........................................
                                   Jackson County, MS........................................
37860...........................  Pensacola-Ferry Pass-Brent, FL.............................             0.8096
                                   Escambia County, FL.......................................
                                   Santa Rosa County, FL.....................................
37900...........................  Peoria, IL.................................................             0.8870
                                   Marshall County, IL.......................................
                                   Peoria County, IL.........................................
                                   Stark County, IL..........................................
                                   Tazewell County, IL.......................................
                                   Woodford County, IL.......................................
37964...........................  Philadelphia, PA...........................................             1.1038
                                   Bucks County, PA..........................................
                                   Chester County, PA........................................
                                   Delaware County, PA.......................................
                                   Montgomery County, PA.....................................
                                   Philadelphia County, PA...................................
38060...........................  Phoenix-Mesa-Scottsdale, AZ................................             1.0127
                                   Maricopa County, AZ.......................................
                                   Pinal County, AZ..........................................
38220...........................  Pine Bluff, AR.............................................             0.8680
                                   Cleveland County, AR......................................
                                   Jefferson County, AR......................................
                                   Lincoln County, AR........................................
38300...........................  Pittsburgh, PA.............................................             0.8845
                                   Allegheny County, PA......................................
                                   Armstrong County, PA......................................
                                   Beaver County, PA.........................................
                                   Butler County, PA.........................................
                                   Fayette County, PA........................................
                                   Washington County, PA.....................................

[[Page 28158]]

 
                                   Westmoreland County, PA...................................
38340...........................  Pittsfield, MA.............................................             1.0181
                                   Berkshire County, MA......................................
38540...........................  Pocatello, ID..............................................             0.9351
                                   Bannock County, ID........................................
                                   Power County, ID..........................................
38660...........................  Ponce, PR..................................................             0.4939
                                   Juana Diaz Municipio, PR..................................
                                   Ponce Municipio, PR.......................................
                                   Villalba Municipio, PR....................................
38860...........................  Portland-South Portland-Biddeford, ME......................             1.0382
                                   Cumberland County, ME.....................................
                                   Sagadahoc County, ME......................................
                                   York County, ME...........................................
38900...........................  Portland-Vancouver-Beaverton, OR-WA........................             1.1266
                                   Clackamas County, OR......................................
                                   Columbia County, OR.......................................
                                   Multnomah County, OR......................................
                                   Washington County, OR.....................................
                                   Yamhill County, OR........................................
                                   Clark County, WA..........................................
                                   Skamania County, WA.......................................
38940...........................  Port St. Lucie-Fort Pierce, FL.............................             1.0123
                                   Martin County, FL.........................................
                                   St. Lucie County, FL......................................
39100...........................  Poughkeepsie-Newburgh-Middletown, NY.......................             1.0891
                                   Dutchess County, NY.......................................
                                   Orange County, NY.........................................
39140...........................  Prescott, AZ...............................................             0.9869
                                   Yavapai County, AZ........................................
39300...........................  Providence-New Bedford-Fall River, RI-MA...................             1.0966
                                   Bristol County, MA........................................
                                   Bristol County, RI........................................
                                   Kent County, RI...........................................
                                   Newport County, RI........................................
                                   Providence County, RI.....................................
                                   Washington County, RI.....................................
39340...........................  Provo-Orem, UT.............................................             0.9500
                                   Juab County, UT...........................................
                                   Utah County, UT...........................................
39380...........................  Pueblo, CO.................................................             0.8623
                                   Pueblo County, CO.........................................
39460...........................  Punta Gorda, FL............................................             0.9255
                                   Charlotte County, FL......................................
39540...........................  Racine, WI.................................................             0.8997
                                   Racine County, WI.........................................
39580...........................  Raleigh-Cary, NC...........................................             0.9691
                                   Franklin County, NC.......................................
                                   Johnston County, NC.......................................
                                   Wake County, NC...........................................
39660...........................  Rapid City, SD.............................................             0.8987
                                   Meade County, SD..........................................
                                   Pennington County, SD.....................................
39740...........................  Reading, PA................................................             0.9686
                                   Berks County, PA..........................................
39820...........................  Redding, CA................................................             1.2203
                                   Shasta County, CA.........................................
39900...........................  Reno-Sparks, NV............................................             1.0982
                                   Storey County, NV.........................................
                                   Washoe County, NV.........................................
40060...........................  Richmond, VA...............................................             0.9328
                                   Amelia County, VA.........................................
                                   Caroline County, VA.......................................
                                   Charles City County, VA...................................
                                   Chesterfield County, VA...................................
                                   Cumberland County, VA.....................................
                                   Dinwiddie County, VA......................................
                                   Goochland County, VA......................................
                                   Hanover County, VA........................................

[[Page 28159]]

 
                                   Henrico County, VA........................................
                                   King and Queen County, VA.................................
                                   King William County, VA...................................
                                   Louisa County, VA.........................................
                                   New Kent County, VA.......................................
                                   Powhatan County, VA.......................................
                                   Prince George County, VA..................................
                                   Sussex County, VA.........................................
                                   Colonial Heights City, VA.................................
                                   Hopewell City, VA.........................................
                                   Petersburg City, VA.......................................
                                   Richmond City, VA.........................................
40140...........................  Riverside-San Bernardino-Ontario, CA.......................             1.1027
                                   Riverside County, CA......................................
                                   San Bernardino County, CA.................................
40220...........................  Roanoke, VA................................................             0.8374
                                   Botetourt County, VA......................................
                                   Craig County, VA..........................................
                                   Franklin County, VA.......................................
                                   Roanoke County, VA........................................
                                   Roanoke City, VA..........................................
                                   Salem City, VA............................................
40340...........................  Rochester, MN..............................................             1.1131
                                   Dodge County, MN..........................................
                                   Olmsted County, MN........................................
                                   Wabasha County, MN........................................
40380...........................  Rochester, NY..............................................             0.9121
                                   Livingston County, NY.....................................
                                   Monroe County, NY.........................................
                                   Ontario County, NY........................................
                                   Orleans County, NY........................................
                                   Wayne County, NY..........................................
40420...........................  Rockford, IL...............................................             0.9984
                                   Boone County, IL..........................................
                                   Winnebago County, IL......................................
40484...........................  Rockingham County-Strafford County, NH.....................             1.0374
                                   Rockingham County, NH.....................................
                                   Strafford County, NH......................................
40580...........................  Rocky Mount, NC............................................             0.8915
                                   Edgecombe County, NC......................................
                                   Nash County, NC...........................................
40660...........................  Rome, GA...................................................             0.9414
                                   Floyd County, GA..........................................
40900...........................  Sacramento--Arden-Arcade--Roseville, CA....................             1.2969
                                   El Dorado County, CA......................................
                                   Placer County, CA.........................................
                                   Sacramento County, CA.....................................
                                   Yolo County, CA...........................................
40980...........................  Saginaw-Saginaw Township North, MI.........................             0.9088
                                   Saginaw County, MI........................................
41060...........................  St. Cloud, MN..............................................             0.9965
                                   Benton County, MN.........................................
                                   Stearns County, MN........................................
41100...........................  St. George, UT.............................................             0.9392
                                   Washington County, UT.....................................
41140...........................  St. Joseph, MO-KS..........................................             0.9519
                                   Doniphan County, KS.......................................
                                   Andrew County, MO.........................................
                                   Buchanan County, MO.......................................
                                   DeKalb County, MO.........................................
41180...........................  St. Louis, MO-IL...........................................             0.8954
                                   Bond County, IL...........................................
                                   Calhoun County, IL........................................
                                   Clinton County, IL........................................
                                   Jersey County, IL.........................................
                                   Macoupin County, IL.......................................
                                   Madison County, IL........................................
                                   Monroe County, IL.........................................
                                   St. Clair County, IL......................................

[[Page 28160]]

 
                                   Crawford County, MO.......................................
                                   Franklin County, MO.......................................
                                   Jefferson County, MO......................................
                                   Lincoln County, MO........................................
                                   St. Charles County, MO....................................
                                   St. Louis County, MO......................................
                                   Warren County, MO.........................................
                                   Washington County, MO.....................................
                                   St. Louis City, MO........................................
41420...........................  Salem, OR..................................................             1.0442
                                   Marion County, OR.........................................
                                   Polk County, OR...........................................
41500...........................  Salinas, CA................................................             1.4128
                                   Monterey County, CA.......................................
41540...........................  Salisbury, MD..............................................             0.9064
                                   Somerset County, MD.......................................
                                   Wicomico County, MD.......................................
41620...........................  Salt Lake City, UT.........................................             0.9421
                                   Salt Lake County, UT......................................
                                   Summit County, UT.........................................
                                   Tooele County, UT.........................................
41660...........................  San Angelo, TX.............................................             0.8271
                                   Irion County, TX..........................................
                                   Tom Green County, TX......................................
41700...........................  San Antonio, TX............................................             0.8980
                                   Atascosa County, TX.......................................
                                   Bandera County, TX........................................
                                   Bexar County, TX..........................................
                                   Comal County, TX..........................................
                                   Guadalupe County, TX......................................
                                   Kendall County, TX........................................
                                   Medina County, TX.........................................
                                   Wilson County, TX.........................................
41740...........................  San Diego-Carlsbad-San Marcos, CA..........................             1.1413
                                   San Diego County, CA......................................
41780...........................  Sandusky, OH...............................................             0.9019
                                   Erie County, OH...........................................
41884...........................  San Francisco-San Mateo-Redwood City, CA...................             1.4994
                                   Marin County, CA..........................................
                                   San Francisco County, CA..................................
                                   San Mateo County, CA......................................
41900...........................  San German-Cabo Rojo, PR...................................             0.4650
                                   Cabo Rojo Municipio, PR...................................
                                   Lajas Municipio, PR.......................................
                                   Sabana Grande Municipio, PR...............................
                                   San German Municipio, PR..................................
41940...........................  San Jose-Sunnyvale-Santa Clara, CA.........................             1.5099
                                   San Benito County, CA.....................................
                                   Santa Clara County, CA....................................
41980...........................  San Juan-Caguas-Guaynabo, PR...............................             0.4621
                                   Aguas Buenas Municipio, PR................................
                                   Aibonito Municipio, PR....................................
                                   Arecibo Municipio, PR.....................................
                                   Barceloneta Municipio, PR.................................
                                   Barranquitas Municipio, PR................................
                                   Bayamon Municipio, PR.....................................
                                   Caguas Municipio, PR......................................
                                   Camuy Municipio, PR.......................................
                                   Canovanas Municipio, PR...................................
                                   Carolina Municipio, PR....................................
                                   Catano Municipio, PR......................................
                                   Cayey Municipio, PR.......................................
                                   Ciales Municipio, PR......................................
                                   Cidra Municipio, PR.......................................
                                   Comerio Municipio, PR.....................................
                                   Corozal Municipio, PR.....................................
                                   Dorado Municipio, PR......................................
                                   Florida Municipio, PR.....................................
                                   Guaynabo Municipio, PR....................................

[[Page 28161]]

 
                                   Gurabo Municipio, PR......................................
                                   Hatillo Municipio, PR.....................................
                                   Humacao Municipio, PR.....................................
                                   Juncos Municipio, PR......................................
                                   Las Piedras Municipio, PR.................................
                                   Loiza Municipio, PR.......................................
                                   Manati Municipio, PR......................................
                                   Maunabo Municipio, PR.....................................
                                   Morovis Municipio, PR.....................................
                                   Naguabo Municipio, PR.....................................
                                   Naranjito Municipio, PR...................................
                                   Orocovis Municipio, PR....................................
                                   Quebradillas Municipio, PR................................
                                   Rio Grande Municipio, PR..................................
                                   San Juan Municipio, PR....................................
                                   San Lorenzo Municipio, PR.................................
                                   Toa Alta Municipio, PR....................................
                                   Toa Baja Municipio, PR....................................
                                   Trujillo Alto Municipio, PR...............................
                                   Vega Alta Municipio, PR...................................
                                   Vega Baja Municipio, PR...................................
                                   Yabucoa Municipio, PR.....................................
42020...........................  San Luis Obispo-Paso Robles, CA............................             1.1349
                                   San Luis Obispo County, CA................................
42044...........................  Santa Ana-Anaheim-Irvine, CA...............................             1.1559
                                   Orange County, CA.........................................
42060...........................  Santa Barbara-Santa Maria, CA..............................             1.1694
                                   Santa Barbara County, CA..................................
42100...........................  Santa Cruz-Watsonville, CA.................................             1.5166
                                   Santa Cruz County, CA.....................................
42140...........................  Santa Fe, NM...............................................             1.0920
                                   Santa Fe County, NM.......................................
42220...........................  Santa Rosa-Petaluma, CA....................................             1.3493
                                   Sonoma County, CA.........................................
42260...........................  Sarasota-Bradenton-Venice, FL..............................             0.9639
                                   Manatee County, FL........................................
                                   Sarasota County, FL.......................................
42340...........................  Savannah, GA...............................................             0.9461
                                   Bryan County, GA..........................................
                                   Chatham County, GA........................................
                                   Effingham County, GA......................................
42540...........................  Scranton--Wilkes-Barre, PA.................................             0.8540
                                   Lackawanna County, PA.....................................
                                   Luzerne County, PA........................................
                                   Wyoming County, PA........................................
42644...........................  Seattle-Bellevue-Everett, WA...............................             1.1577
                                   King County, WA...........................................
                                   Snohomish County, WA......................................
43100...........................  Sheboygan, WI..............................................             0.8911
                                   Sheboygan County, WI......................................
43300...........................  Sherman-Denison, TX........................................             0.9507
                                   Grayson County, TX........................................
43340...........................  Shreveport-Bossier City, LA................................             0.8760
                                   Bossier Parish, LA........................................
                                   Caddo Parish, LA..........................................
                                   De Soto Parish, LA........................................
43580...........................  Sioux City, IA-NE-SD.......................................             0.9381
                                   Woodbury County, IA.......................................
                                   Dakota County, NE.........................................
                                   Dixon County, NE..........................................
                                   Union County, SD..........................................
43620...........................  Sioux Falls, SD............................................             0.9635
                                   Lincoln County, SD........................................
                                   McCook County, SD.........................................
                                   Minnehaha County, SD......................................
                                   Turner County, SD.........................................
43780...........................  South Bend-Mishawaka, IN-MI................................             0.9788
                                   St. Joseph County, IN.....................................
                                   Cass County, MI...........................................

[[Page 28162]]

 
43900...........................  Spartanburg, SC............................................             0.9172
                                   Spartanburg County, SC....................................
44060...........................  Spokane, WA................................................             1.0905
                                   Spokane County, WA........................................
44100...........................  Springfield, IL............................................             0.8792
                                   Menard County, IL.........................................
                                   Sangamon County, IL.......................................
44140...........................  Springfield, MA............................................             1.0248
                                   Franklin County, MA.......................................
                                   Hampden County, MA........................................
                                   Hampshire County, MA......................................
44180...........................  Springfield, MO............................................             0.8237
                                   Christian County, MO......................................
                                   Dallas County, MO.........................................
                                   Greene County, MO.........................................
                                   Polk County, MO...........................................
                                   Webster County, MO........................................
44220...........................  Springfield, OH............................................             0.8396
                                   Clark County, OH..........................................
44300...........................  State College, PA..........................................             0.8356
                                   Centre County, PA.........................................
44700...........................  Stockton, CA...............................................             1.1307
                                   San Joaquin County, CA....................................
44940...........................  Sumter, SC.................................................             0.8377
                                   Sumter County, SC.........................................
45060...........................  Syracuse, NY...............................................             0.9574
                                   Madison County, NY........................................
                                   Onondaga County, NY.......................................
                                   Oswego County, NY.........................................
45104...........................  Tacoma, WA.................................................             1.0742
                                   Pierce County, WA.........................................
45220...........................  Tallahassee, FL............................................             0.8688
                                   Gadsden County, FL........................................
                                   Jefferson County, FL......................................
                                   Leon County, FL...........................................
                                   Wakulla County, FL........................................
45300...........................  Tampa-St. Petersburg-Clearwater, FL........................             0.9233
                                   Hernando County, FL.......................................
                                   Hillsborough County, FL...................................
                                   Pasco County, FL..........................................
                                   Pinellas County, FL.......................................
45460...........................  Terre Haute, IN............................................             0.8304
                                   Clay County, IN...........................................
                                   Sullivan County, IN.......................................
                                   Vermillion County, IN.....................................
                                   Vigo County, IN...........................................
45500...........................  Texarkana, TX-Texarkana, AR................................             0.8283
                                   Miller County, AR.........................................
                                   Bowie County, TX..........................................
45780...........................  Toledo, OH.................................................             0.9574
                                   Fulton County, OH.........................................
                                   Lucas County, OH..........................................
                                   Ottawa County, OH.........................................
                                   Wood County, OH...........................................
45820...........................  Topeka, KS.................................................             0.8920
                                   Jackson County, KS........................................
                                   Jefferson County, KS......................................
                                   Osage County, KS..........................................
                                   Shawnee County, KS........................................
                                   Wabaunsee County, KS......................................
45940...........................  Trenton-Ewing, NJ..........................................             1.0834
                                   Mercer County, NJ.........................................
46060...........................  Tucson, AZ.................................................             0.9007
                                   Pima County, AZ...........................................
46140...........................  Tulsa, OK..................................................             0.8543
                                   Creek County, OK..........................................
                                   Okmulgee County, OK.......................................
                                   Osage County, OK..........................................
                                   Pawnee County, OK.........................................

[[Page 28163]]

 
                                   Rogers County, OK.........................................
                                   Tulsa County, OK..........................................
                                   Wagoner County, OK........................................
46220...........................  Tuscaloosa, AL.............................................             0.8645
                                   Greene County, AL.........................................
                                   Hale County, AL...........................................
                                   Tuscaloosa County, AL.....................................
46340...........................  Tyler, TX..................................................             0.9168
                                   Smith County, TX..........................................
46540...........................  Utica-Rome, NY.............................................             0.8358
                                   Herkimer County, NY.......................................
                                   Oneida County, NY.........................................
46660...........................  Valdosta, GA...............................................             0.8866
                                   Brooks County, GA.........................................
                                   Echols County, GA.........................................
                                   Lanier County, GA.........................................
                                   Lowndes County, GA........................................
46700...........................  Vallejo-Fairfield, CA......................................             1.4936
                                   Solano County, CA.........................................
46940...........................  Vero Beach, FL.............................................             0.9434
                                   Indian River County, FL...................................
47020...........................  Victoria, TX...............................................             0.8160
                                   Calhoun County, TX........................................
                                   Goliad County, TX.........................................
                                   Victoria County, TX.......................................
47220...........................  Vineland-Millville-Bridgeton, NJ...........................             0.9827
                                   Cumberland County, NJ.....................................
47260...........................  Virginia Beach-Norfolk-Newport News, VA-NC.................             0.8799
                                   Currituck County, NC......................................
                                   Gloucester County, VA.....................................
                                   Isle of Wight County, VA..................................
                                   James City County, VA.....................................
                                   Mathews County, VA........................................
                                   Surry County, VA..........................................
                                   York County, VA...........................................
                                   Chesapeake City, VA.......................................
                                   Hampton City, VA..........................................
                                   Newport News City, VA.....................................
                                   Norfolk City, VA..........................................
                                   Poquoson City, VA.........................................
                                   Portsmouth City, VA.......................................
                                   Suffolk City, VA..........................................
                                   Virginia Beach City, VA...................................
                                   Williamsburg City, VA.....................................
47300...........................  Visalia-Porterville, CA....................................             1.0123
                                   Tulare County, CA.........................................
47380...........................  Waco, TX...................................................             0.8518
                                   McLennan County, TX.......................................
47580...........................  Warner Robins, GA..........................................             0.8645
                                   Houston County, GA........................................
47644...........................  Warren-Farmington Hills-Troy, MI...........................             0.9871
                                   Lapeer County, MI.........................................
                                   Livingston County, MI.....................................
                                   Macomb County, MI.........................................
                                   Oakland County, MI........................................
                                   St. Clair County, MI......................................
47894...........................  Washington-Arlington-Alexandria, DC-VA-MD-WV...............             1.0926
                                   District of Columbia, DC..................................
                                   Calvert County, MD........................................
                                   Charles County, MD........................................
                                   Prince George's County, MD................................
                                   Arlington County, VA......................................
                                   Clarke County, VA.........................................
                                   Fairfax County, VA........................................
                                   Fauquier County, VA.......................................
                                   Loudoun County, VA........................................
                                   Prince William County, VA.................................
                                   Spotsylvania County, VA...................................
                                   Stafford County, VA.......................................

[[Page 28164]]

 
                                   Warren County, VA.........................................
                                   Alexandria City, VA.......................................
                                   Fairfax City, VA..........................................
                                   Falls Church City, VA.....................................
                                   Fredericksburg City, VA...................................
                                   Manassas City, VA.........................................
                                   Manassas Park City, VA....................................
                                   Jefferson County, WV......................................
47940...........................  Waterloo-Cedar Falls, IA...................................             0.8557
                                   Black Hawk County, IA.....................................
                                   Bremer County, IA.........................................
                                   Grundy County, IA.........................................
48140...........................  Wausau, WI.................................................             0.9590
                                   Marathon County, WI.......................................
48260...........................  Weirton-Steubenville, WV-OH................................             0.7819
                                   Jefferson County, OH......................................
                                   Brooke County, WV.........................................
                                   Hancock County, WV........................................
48300...........................  Wenatchee, WA..............................................             1.0070
                                   Chelan County, WA.........................................
                                   Douglas County, WA........................................
48424...........................  West Palm Beach-Boca Raton-Boynton Beach, FL...............             1.0067
                                   Palm Beach County, FL.....................................
48540...........................  Wheeling, WV-OH............................................             0.7161
                                   Belmont County, OH........................................
                                   Marshall County, WV.......................................
                                   Ohio County, WV...........................................
48620...........................  Wichita, KS................................................             0.9153
                                   Butler County, KS.........................................
                                   Harvey County, KS.........................................
                                   Sedgwick County, KS.......................................
                                   Sumner County, KS.........................................
48660...........................  Wichita Falls, TX..........................................             0.8285
                                   Archer County, TX.........................................
                                   Clay County, TX...........................................
                                   Wichita County, TX........................................
48700...........................  Williamsport, PA...........................................             0.8364
                                   Lycoming County, PA.......................................
48864...........................  Wilmington, DE-MD-NJ.......................................             1.0471
                                   New Castle County, DE.....................................
                                   Cecil County, MD..........................................
                                   Salem County, NJ..........................................
48900...........................  Wilmington, NC.............................................             0.9582
                                   Brunswick County, NC......................................
                                   New Hanover County, NC....................................
                                   Pender County, NC.........................................
49020...........................  Winchester, VA-WV..........................................             1.0214
                                   Frederick County, VA......................................
                                   Winchester City, VA.......................................
                                   Hampshire County, WV......................................
49180...........................  Winston-Salem, NC..........................................             0.8944
                                   Davie County, NC..........................................
                                   Forsyth County, NC........................................
                                   Stokes County, NC.........................................
                                   Yadkin County, NC.........................................
49340...........................  Worcester, MA..............................................             1.1028
                                   Worcester County, MA......................................
49420...........................  Yakima, WA.................................................             1.0155
                                   Yakima County, WA.........................................
49500...........................  Yauco, PR..................................................             0.4408
                                   Guanica Municipio, PR.....................................
                                   Guayanilla Municipio, PR..................................
                                   Penuelas Municipio, PR....................................
                                   Yauco Municipio, PR.......................................
49620...........................  York-Hanover, PA...........................................             0.9347
                                   York County, PA...........................................
49660...........................  Youngstown-Warren-Boardman, OH-PA..........................             0.8603
                                   Mahoning County, OH.......................................
                                   Trumbull County, OH.......................................

[[Page 28165]]

 
                                   Mercer County, PA.........................................
49700...........................  Yuba City, CA..............................................             1.0921
                                   Sutter County, CA.........................................
                                   Yuba County, CA...........................................
49740...........................  Yuma, AZ...................................................             0.9126
                                   Yuma County, AZ ..........................................
----------------------------------------------------------------------------------------------------------------
\1\ At this time, there are no hospitals located in this CBSA-based urban area on which to base a wage index.
  Therefore, the wage index value is based on the methodology described in the August 15, 2005 final rule (70 FR
  47880). The wage index value for this area is the average wage index for all urban areas within the state.


  Table 2.--Proposed Inpatient Rehabilitation Facility Rural Area Wage
  Index for Discharges Occurring From October 1, 2006 Through September
                                30, 2007
------------------------------------------------------------------------
                                                                   Full
          CBSA code                     Nonurban area              wage
                                                                  Index
------------------------------------------------------------------------
01..........................  Alabama..........................   0.7446
02..........................  Alaska...........................   1.1977
03..........................  Arizona..........................   0.8768
04..........................  Arkansas.........................   0.7466
05..........................  California.......................   1.1054
06..........................  Colorado.........................   0.9380
07..........................  Connecticut......................   1.1730
08..........................  Delaware.........................   0.9579
10..........................  Florida..........................   0.8568
11..........................  Georgia..........................   0.7662
12..........................  Hawaii...........................   1.0551
13..........................  Idaho............................   0.8037
14..........................  Illinois.........................   0.8271
15..........................  Indiana..........................   0.8624
16..........................  Iowa.............................   0.8509
17..........................  Kansas...........................   0.8035
18..........................  Kentucky.........................   0.7766
19..........................  Louisiana........................   0.7411
20..........................  Maine............................   0.8843
21..........................  Maryland.........................   0.9353
22..........................  Massachusetts \2\................   1.0216
23..........................  Michigan.........................   0.8895
24..........................  Minnesota........................   0.9132
25..........................  Mississippi......................   0.7674
26..........................  Missouri.........................   0.7900
27..........................  Montana..........................   0.8762
28..........................  Nebraska.........................   0.8657
29..........................  Nevada...........................   0.9065
30..........................  New Hampshire....................   1.0817
31..........................  New Jersey \1\...................  .......
32..........................  New Mexico.......................   0.8635
33..........................  New York.........................   0.8154
34..........................  North Carolina...................   0.8540
35..........................  North Dakota.....................   0.7261
36..........................  Ohio.............................   0.8826
37..........................  Oklahoma.........................   0.7581
38..........................  Oregon...........................   0.9826
39..........................  Pennsylvania.....................   0.8291
40..........................  Puerto Rico \2\..................   0.4047
41..........................  Rhode Island \1\.................  .......
42..........................  South Carolina...................   0.8638
43..........................  South Dakota.....................   0.8560
44..........................  Tennessee........................   0.7895
45..........................  Texas............................   0.8003
46..........................  Utah.............................   0.8118
47..........................  Vermont..........................   0.9830
48..........................  Virgin Islands...................   0.7615
49..........................  Virginia.........................   0.8013
50..........................  Washington.......................   1.0510
51..........................  West Virginia....................   0.7717
52..........................  Wisconsin........................   0.9509
53..........................  Wyoming..........................   0.9257
65..........................  Guam.............................  0.9611
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.
\2\ Massachusetts and Puerto Rico have areas designated as rural;
  however, no short-term, acute care hospitals are located in the
  area(s) for FY 2007. As discussed in the FY 2006 IRF PPS Final Rule
  (70 FR 47880), we use the previous year's wage index value.

[FR Doc. 06-4409 Filed 5-8-06; 4:00 pm]
BILLING CODE 4120-01-P