[Federal Register Volume 72, Number 88 (Tuesday, May 8, 2007)]
[Proposed Rules]
[Pages 26230-26279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-2241]



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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 2008; Proposed Rule

  Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed 
Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1551-P]
RIN 0938-AO63


Medicare Program; Inpatient Rehabilitation Facility Prospective 
Payment System for Federal Fiscal Year 2008

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) 2008 (for discharges occurring on or after October 1, 2007 and on 
or before September 30, 2008) 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 IRF prospective payment 
system's (PPS) 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 PPS 
within the authority granted under section 1886(j) of the Act.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on July 2, 2007.

ADDRESSES: In commenting, please refer to file code CMS-1551-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-1551-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-1551-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-8012.
    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 HHH Building is not 
readily available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for persons wishing to retain a proof of filing by stamping 
in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and 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 payment policies. 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-1551-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 2007
    B. Requirements for Updating the IRF PPS Rates
    C. Operational Overview of the Current IRF PPS
    D. Brief Summary of Proposed Revisions to the IRF PPS for FY 
2008
II. 75 Percent Rule Policy
III. Classification System for the Inpatient Rehabilitation Facility 
Prospective Payment System
IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates
    A. Proposed FY 2008 IRF Market Basket Increase Factor and Labor-
Related Share
    B. Proposed Area Wage Adjustment
    C. Description of the Proposed IRF Standard Payment Conversion 
Factor and Proposed Payment Rates for FY 2008
    D. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates
V. Update to Payments for High-Cost Outliers Under the IRF PPS
    A. Proposed Update to the Outlier Threshold Amount for FY 2008
    B. Update to the IRF Cost-to-Charge Ratio Ceilings
VI. Clarification to the Regulations Text for Special Payment 
Provisions for Patients That Are Transferred
VII. Provisions of a Proposed Regulation
VIII. Collection of Information Requirement
IX. Response to Public Comments
X. Regulatory Impact Analysis
    A. Overall Impact
    B. Anticipated Effects of the Proposed Rule
    C. Anticipated Effects of the 75 Percent Rule Policy
    D. Alternatives Considered
    E. Accounting Statement
    F. Conclusion
Regulation Text
Addendum

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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.

ASCA--Administrative 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
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
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
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 2007

    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 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.
    Section 1886(j) of the Act confers broad statutory authority to 
propose refinements to the IRF PPS. We finalized the refinements 
described in this section 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.

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    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 IRF PPS 
implementation. 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:
     Adopted the Office of Management and Budget's (OMB's) 
Core-Based Statistical Area (CBSA) market area definitions in a budget 
neutral manner.
     Implemented a budget-neutral three-year hold harmless 
policy for IRFs that had been classified as rural in FY 2005, but 
became urban in FY 2006.
     Implemented a payment adjustment to account for changes in 
coding that did not reflect real changes in case mix. We reduced the 
standard payment amount by 1.9 percent to account for such changes in 
coding following implementation of the IRF PPS.
     Modified the CMGs, tier comorbidities, and relative 
weights in a budget-neutral manner. The five special CMGs remained the 
same as they had been before FY 2006 and continued to account for very 
short stays and for patients who expire in the IRF.
     Implemented a teaching status adjustment in a budget 
neutral manner for IRFs, similar to the one adopted for inpatient 
psychiatric facilities.
     Revised and rebased the market basket and labor-related 
share to reflect the operating and capital cost structures for 
rehabilitation, psychiatric, and long-term care (RPL) hospitals to 
update IRF payment rates.
     Updated the rural adjustment from 19.14 percent to 21.3 
percent in a budget neutral manner.
     Updated the low-income percentage (LIP) adjustment from an 
exponent of 0.484 to an exponent of 0.6229 in a budget neutral manner.
     Updated the outlier threshold amount from $11,211 to 
$5,129.
    As noted above, a detailed discussion of the final key policy 
changes for FY 2006 appears in the FY 2006 IRF PPS final rule (70 FR 
47880 and 70 FR 57166).
    In the FY 2007 final rule (71 FR 48354) we made the following 
revisions and updates:
     Updated the relative weight and average length of stay 
tables based on re-analysis of the data by CMS and our contractor, the 
RAND Corporation.
     Reduced the standard payment amount by 2.6 percent to 
account more fully for coding changes that do not reflect real changes 
in case mix.
     Updated the IRF PPS payment rates by the FY 2007 estimates 
of the market basket and the labor-related share.
     Updated the IRF PPS payment rates by the FY 2007 wage 
indexes.
     Applied the second year of the hold harmless policy in a 
budget neutral manner.
     Updated the outlier threshold from $5,129 to $5,534.
     Updated the urban and rural national cost-to-charge ratio 
ceilings for the purposes of determining outlier payments under the IRF 
PPS and clarified the methodology described in the regulations text.
     Revised 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 
regulation text change prolongs the overall duration of the phased 
transition to the full 75 percent threshold established in Sec.  
412.23(b)(2)(i) and Sec.  412.23(b)(2)(ii), by extending the 
transition's 60 percent phase for an additional 12 months. In addition 
to the above DRA requirements pertaining to the applicable compliance 
percentage requirements under Sec.  412.23(b)(2), we also permitted a 
comorbidity that meets the criteria as specified in (b)(2)(i) to 
continue to be used before the 75 percent compliance threshold must be 
met.

B. Requirements for Updating the IRF PPS Rates

    On August 7, 2001, we published a final rule titled ``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, 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). 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 the final rule for FY 2007, we updated the IRF Federal 
prospective payment rates. In addition, we updated the cost-to-charge 
ratio ceilings and the outlier threshold. We implemented a 2.6

[[Page 26233]]

percent reduction to the FY 2007 standard payment amount to account 
more fully for changes in coding practices that do not reflect real 
changes in case mix. We revised 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. The final FY 2007 
Federal prospective payment rates were effective for discharges 
occurring on or after October 1, 2006 and on or before September 30, 
2007.

C. Operational Overview of the Current IRF PPS

    As described in the August 7, 2001 final rule, upon the admission 
and discharge of a Medicare Part A fee-for-service patient, the IRF is 
required to complete the appropriate sections of a patient assessment 
instrument, the Inpatient Rehabilitation Facility-Patient Assessment 
Instrument (IRF-PAI). All required data must be electronically encoded 
into the IRF-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 on 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 
final rule on Electronic Submission of Medicare Claims (70 FR 71008, 
November 25, 2005). 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 published by CMS at: http://www.cms.hhs.gov/manuals/downloads/clm104c25.pdf.
    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 as of FY 2006, as 
discussed in the FY 2006 IRF PPS final rule (70 FR 47880).

D. Brief Summary of Proposed Revisions to the IRF PPS for FY 2008

    In this proposed rule, we are proposing to make the following 
revisions, updates, and clarifications:
     Update the FY 2008 IRF PPS payment rates by the proposed 
market basket, as discussed in section IV.A.
     Update the FY 2008 IRF PPS payment rates by the proposed 
wage index and the labor related share in a budget neutral manner, as 
discussed in section IV.A and B.
     Update the pre-reclassified and pre-floor wage indexes 
based on the applicable Office of Management and Budget (OMB) bulletins 
that add or delete Core-Based Statistical Areas (CBSAs) numbers and 
title changes, as discussed in section IV.B.
     Implement the final year of the 3-year hold harmless 
policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 47923 
through 47926) in a budget neutral manner, as discussed in section 
IV.B.
     Update the outlier threshold amount for FY 2008 to $7,522, 
as discussed in section V.A.
     Update the cost-to-charge ratio ceiling and the national 
average urban and rural cost-to-charge ratios for purposes of 
determining outlier payments under the IRF PPS, as discussed in section 
V.B.
     Clarify the regulations text for the special payment 
provisions for patients that are transferred, as discussed in section 
VI.

II. 75 Percent Rule Policy

    [If you choose to comment on issues in this section, please include 
the caption ``75 Percent Rule Policy'' at the beginning of your 
comments.]
    In order to be excluded from the acute care inpatient hospital PPS 
specified in Sec.  412.1(a)(1) and instead be paid under the IRF PPS, a 
hospital or rehabilitation unit of an acute care hospital must meet the 
requirements for classification as an IRF stipulated in subpart B of 
part 412. 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), 70 FR 36640 (June 24, 2005), and 71 FR 48354 (August 18, 
2006)), Sec.  412.23(b)(2) specifies one criterion which Medicare uses 
for classifying a hospital or unit of a hospital as an IRF. The 
criterion is that a minimum percentage of a facility's total inpatient 
population must require intensive rehabilitative services for the 
treatment of at least one of 13 medical conditions listed in Sec.  
412.23(b)(2)(iii) in order for the facility to be classified as an IRF. 
In addition, for cost reporting periods beginning on or after July 1, 
2004, and before July 1, 2008, 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 certain 
requirements are met. The minimum percentage is known as the 
``compliance threshold.''
    Prior to the May 7, 2004 final rule (69 FR 25752), Sec.  
412.23(b)(2) stipulated that the compliance threshold was 75 percent. 
Therefore, the compliance threshold was commonly referred to as the 
``75 percent rule.'' In addition, prior to the May 7, 2004 final rule 
the regulation only specified 10 medical conditions. However, in the 
May 7, 2004 final rule we revised Sec.  412.23(b)(2), and

[[Page 26234]]

that revision increased the number of medical conditions to 13, as well 
as temporarily lowered the compliance threshold while at the same time 
specified a transition period at the end of which IRFs would once again 
have to meet a compliance threshold of 75 percent. Also, the revised 
regulation specified that during the compliance threshold transition 
period a patient's comorbidity may be used to determine if a provider 
met the compliance threshold provided certain applicable requirements 
were met.
    In Sec.  412.602 a comorbidity is defined as a specific patient 
condition that is secondary to the patient's principal diagnosis. A 
patient's principal diagnosis is the primary reason for the patient 
being admitted to an IRF, and this diagnosis is used to determine if 
the patient had a medical condition that can be counted towards meeting 
the compliance threshold. As specified in the May 7, 2004 final rule, 
in order for an inpatient with a certain comorbidity to be included in 
the inpatient population that counts toward the applicable percentage 
the following criteria must be met:
     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).
     The patient also has a comorbidity that falls in one of 
the conditions listed in Sec.  412.23(b)(2)(iii).
     The comorbidity has caused significant decline in 
functional ability in the individual such that, even in the absence of 
the admitting condition, the individual would require the intensive 
rehabilitation treatment that is unique to inpatient rehabilitation 
facilities paid under the IRF PPS and that cannot be appropriately 
performed in another care setting covered under this Title.
    In accordance with the May 7, 2004 final rule, IRFs would have to 
meet a compliance threshold of 75 percent for cost reporting periods 
starting on or after July 1, 2007. However, Section 5005 of the Deficit 
Reduction Act of 2005 (DRA) (Pub. L. 109-171 modified the applicable 
time periods when the various compliance thresholds, as originally 
specified in the May 7, 2004 final rule, must be met.) The net effect 
of the DRA was extension of the compliance threshold transition period. 
Due to the DRA, the transition period was extended to include cost 
reporting periods starting on or after July 1, 2004, and before July 1, 
2008. Therefore, in order to conform the regulations to the DRA, we 
revised Sec.  412.23(b)(2) and stipulated that an IRF with a cost 
reporting period starting on or after July 1, 2008, instead of July 1, 
2007, must meet the 75 percent compliance threshold. In addition, we 
also permitted a comorbidity that meets the criteria as specified in 
(b)(2)(i) to continue to be used to determine the compliance threshold 
for cost reporting periods beginning before July 1, 2008 instead of 
July 1, 2007. (For a complete description of all the changes made, see 
the FY 2007 IRF PPS final rule (71 FR 48354)).
    For cost reporting periods beginning on or after July 1, 2008, 
comorbidities will not be eligible for inclusion in the calculations 
used to determine if the provider meets the 75 percent compliance 
threshold specified in Sec.  412.23(b)(2)(ii). As the 75 percent rule 
is only partially phased in at this time and there are limitations to 
the policy conclusions that can be drawn from currently available claim 
and patient assessment data, this rule maintains existing policy. 
However, in the May 7, 2004 final rule (69 FR 25762), we encouraged 
research evaluating the continued use of comorbidities in determining 
compliance with the 75 percent rule. Therefore, we are soliciting 
comments supporting current policy or other options, including use of 
some or all of the existing comorbidities in calculating the compliance 
percentage for an additional fixed period of one or more years or to 
integrate the inclusion of some or all of the existing comorbidities on 
a permanent basis. In addition, we are soliciting comments that include 
clinical data based on scientifically sound research that provide 
evidence on these and other options.

III. Classification System for the Inpatient Rehabilitation Facility 
Prospective Payment System

    [If you choose to comment on issues in this section, please include 
the caption ``Classification System for the Inpatient Rehabilitation 
Facility Prospective Payment System'' at the beginning of your 
comments.]
    For the FY 2008 IRF PPS, we will use the same case-mix 
classification system that we used for FY 2007, as set forth in the FY 
2007 IRF PPS final rule (71 FR 48354). Table 1 below, ``Relative 
Weights and Average Lengths of Stay for Case-Mix Groups'', presents the 
CMGs, the comorbidity tiers, the corresponding relative weights, and 
the average length of stay value for each CMG and tier. The average 
length of stay for each CMG is used to determine when an IRF discharge 
meets the definition of a short-stay transfer, which results in a per 
diem case level adjustment. Because these data elements are not 
changing, Table 1 shown below is identical to Table 4 that was 
published in the FY 2007 IRF PPS final rule (71 FR 48354, 48364 through 
48370). The methodology we used to construct the data elements in Table 
1 is described in detail in the FY 2007 IRF PPS final rule (71 FR 
48354).
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BILLING CODE 4120-07-C

IV. Proposed FY 2008 IRF PPS Federal Prospective Payment Rates

    [If you choose to comment on issues in this section, please include 
the caption ``Proposed FY 2008 IRF PPS Federal Prospective Payment 
Rates'' at the beginning of your comments.]

A. Proposed FY 2008 IRF PPS 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

[[Page 26243]]

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. In updating the FY 2008 payment rates outlined in this proposed 
rule, CMS applied an appropriate increase factor to the FY 2007 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.
    As discussed in the FY 2007 IRF PPS proposed rule, beginning April 
2006 with the publication of March 2006 data, the BLS'' ECI has used a 
different classification system, the North American Industrial 
Classification System (NAICS), instead of the Standard Industrial Codes 
(SIC). 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 
did not make any changes. This proposed rule's estimated FY 2008 IRF 
market basket increase factor and labor-related share 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 2008 IRF market basket increase factor and 
labor-related share. For this proposed rule, the FY 2008 IRF market 
basket increase factor is 3.3 percent. This is based on Global Insight, 
Inc.'s forecast for the first quarter of 2007 (2007q1) with historical 
data through the fourth quarter of 2006 (2006q4). We propose to update 
the market basket with more recent data for the final rule to the 
extent it is available. However, we note that the President's budget 
includes a proposal for a zero percent update in the IRF market basket 
for FY 2008, and that the provisions outlined in this proposed rule 
would need to reflect any legislation that the Congress enacts to adopt 
this proposal.
    In addition, we have used the methodology described in the FY 2006 
IRF PPS final rule to update the labor-related share for FY 2008. In FY 
2004, 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 
used 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. For FY 2008, we continue to use the same methodology 
discussed in the FY 2006 IRF PPS final rule. As shown in Table 2, the 
total FY 2008 RPL labor-related share is 75.846 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 2.--Proposed FY 2008 IRF Labor-Related Share Relative Importance
------------------------------------------------------------------------
                                                            Proposed FY
                                                          2008 IRF labor-
                      Cost category                           related
                                                             relative
                                                            importance
------------------------------------------------------------------------
Wages and salaries......................................          52.640
Employee benefits.......................................          14.149
Professional fees.......................................           2.907
All other labor intensive services......................           2.147
                                                         ---------------
    Subtotal............................................          71.843
                                                         ---------------
Labor-related share of capital costs....................           4.003
                                                         ---------------
    Total...............................................         75.846
------------------------------------------------------------------------
SOURCE: Global Insight, Inc, 1st Qtr, 2007; @USMACRO/CONTROL0307 @CISSIM/
  TL0207.SIM Historical Data through 4th QTR, 2006

B. Proposed Area Wage Adjustment

    Section 1886(j)(6) of the Act requires the Secretary to adjust the 
proportion (as estimated by the Secretary from time to time) of 
rehabilitation facilities' costs 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 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 2007 IRF PPS final rule, we maintained 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 rationale outlined in that final rule (70 FR 47880, 
47917 through 47933). In the FY 2006 IRF PPS final rule, we adopted a 
3-year hold harmless policy specifically for rural IRFs whose labor 
market designations changed from rural to urban under the CBSA-based 
labor market area designations. This policy specifically applied to 
IRFs that had been previously designated rural and which, effective for 
discharges on or after October 1, 2005, would otherwise have become 
ineligible for the 19.14 percent rural adjustment. For FY 2008, the 
third and final year of the 3-year phase-out of the budget-neutral hold 
harmless policy, we will no longer apply an adjustment for IRFs that 
meet the criteria described in the FY 2006 final rule (70 FR 47880, 
47923 through 47926).
    For FY 2008, we propose to maintain the policies and methodologies 
described in the FY 2007 IRF PPS final rule relating to the labor 
market area definitions, the wage index methodology for areas with wage 
data, and hold harmless policy consistent with the rationale outlined 
in the FY 2006 IRF PPS final rule (70 FR 47880, 47917 through 47933). 
Therefore, this proposed rule continues to use the Core-Based 
Statistical Area (CBSA) labor market area definitions and the pre-
reclassification and pre-floor hospital wage index based on 2003 cost 
report data. In addition, the budget neutral hold harmless policy 
established in the FY 2006 final rule will expire for discharges 
occurring on or after October 1, 2007.
    In adopting the CBSA geographic designations in FY 2006, we 
provided a one-year transition with a blended wage index for all 
providers. For FY 2006, the wage index for each provider consisted of a 
blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent 
of the FY 2006 CBSA-based wage index (both using FY 2001 hospital 
data). We referred to the blended wage index as the FY 2006 IRF PPS 
transition wage index. As discussed in the FY 2006 IRF PPS final rule 
(70 FR 47880, 47926), subsequent to the expiration of this one-year 
transition on September 30, 2006, we used the full CBSA-based wage 
index values as published in the Addendum of the FY 2007 IRF PPS final 
rule (71 FR 48354) and in the Addendum of this proposed rule.

[[Page 26244]]

    When adopting OMB's new labor market designations, we identified 
some geographic areas where there were no hospitals and, thus, no 
hospital wage index data on which to base the calculation of the IRF 
PPS wage index (70 FR 47880).
    In this proposed rule, we are proposing to revise our methodology 
to determine a proxy for rural areas without hospital wage data. Under 
the CBSA labor market areas, there are no rural hospitals in rural 
Massachusetts and rural Puerto Rico. Because there was no rural proxy 
for more recent rural data within those areas, we used the FY 2006 wage 
index value in both FY 2006 and FY 2007 for rural Massachusetts and 
rural Puerto Rico.
    Due to the use of the same wage index value (from FY 2006) for 
these areas for two fiscal years, we believe it is appropriate at this 
point to consider alternatives in our methodology to update the wage 
index for rural areas without rural hospital wage index data. We 
believe that the best imputed proxy would 1) use pre-floor, pre-
reclassified hospital data, 2) be easy to evaluate, 3) use the most 
local data, and 4) be easily updateable from year-to-year. Since the 
implementation of the IRF PPS, we have used the pre-floor, pre-
reclassified hospital wage data that is easy to evaluate and is 
updateable from year-to-year. In addition, the IRF PPS wage index is 
based on hospitals' cost report data, which reflects local available 
data. Therefore, we believe the imputed proxy for a rural area without 
hospital wage data is consistent with our past methodology and other 
post-acute PPS wage index policy. Although our current methodology uses 
rural pre-floor, pre-reclassified hospital wage data, this method is 
not updateable from year-to-year.
    Therefore, in cases where there is a rural area without rural 
hospital wage data, we propose using the average wage index from all 
contiguous CBSAs to represent a reasonable proxy for the rural area 
within a State. While this approach does not use rural data, it does 
use pre-floor, pre-reclassified hospital wage data, it is easy to 
evaluate, it is updateable from year-to-year, and it uses the most 
local data available.
    In determining an imputed rural wage index, we interpret the term 
``contiguous'' to mean sharing a border. For example, in the case of 
Massachusetts, the entire rural area consists of Dukes and Nantucket 
counties. We have determined that the borders of Dukes and Nantucket 
counties are local and contiguous with Barnstable and Bristol counties. 
Under the proposed methodology, the wage indexes for the counties of 
Barnstable (CBSA 12700: 1.2539) and Bristol (CBSA 39300: 1.0783) are 
averaged, resulting in an imputed rural wage index of 1.1661 for rural 
Massachusetts for FY 2008. While we believe that this policy could be 
readily applied to other rural areas that lack hospital wage data 
(possibly due to hospitals converting to a different provider type, 
such as a CAH, that does not submit the appropriate wage data), we may 
re-examine this policy should a similar situation arise in the future.
    However, we do not believe that this policy is appropriate for 
Puerto Rico. There are sufficient economic differences between 
hospitals in the United States and those in Puerto Rico (including the 
payment of hospitals in Puerto Rico using blended Federal/Commonwealth-
specific rates) that a separate and distinct policy for Puerto Rico is 
necessary. Consequently, any alternative methodology for imputing a 
wage index for rural Puerto Rico would need to take into account these 
economic differences and the payment rates hospitals receive in Puerto 
Rico. Our policy of imputing a rural wage index based on the wage 
index(es) of CBSAs contiguous to the rural area in question does not 
recognize the unique circumstances of Puerto Rico. While we have not 
yet identified an alternative methodology for imputing a wage index for 
rural Puerto Rico, we will continue to evaluate the feasibility of 
using existing hospital wage data and, possibly, wage data from other 
sources. By maintaining our current policy for Puerto Rico, we will 
maintain consistency with other post-acute care PPS wage index 
policies. Accordingly, we propose to continue using the most recent 
wage index previously available for Puerto Rico; that is, a wage index 
of 0.4047. We solicit comments on our proposal to maintain the current 
wage index policy for rural Puerto Rico.
    In the FY 2006 IRF PPS final rule (70 FR 47880, 47920), we notified 
the public that the Office of Management and Budget (OMB) published a 
bulletin that changed the titles to certain CBSAs after the publication 
of our FY 2006 IRF PPS proposed rule (70 FR 30186). Since the 
publication of the FY 2006 IRF PPS final rule, OMB published additional 
bulletins that updated the CBSAs. Specifically, OMB added or deleted 
certain CBSA numbers and revised certain titles. Accordingly, in this 
proposed rule, we are proposing to clarify that this and all subsequent 
IRF PPS rules and notices are considered to incorporate the CBSA 
changes published in the most recent OMB bulletin that applies to the 
hospital wage data used to determine the current IRF PPS wage index. 
The OMB bulletins may be accessed online at http://www.whitehouse.gov/omb/bulletins/index.html.
    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 2008 RPL labor-related 
share (75.846 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.
    Adjustments or updates to the IRF wage index made under section 
1886(j)(6) of the Act must be made in a budget neutral manner; 
therefore, we 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 2008 IRF standard payment 
conversion factor reflects the update to the proposed wage indexes 
(based on the FY 2003 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 2007 IRF PPS 
rates, using the FY 2007 standard payment conversion factor and the 
labor-related share and the wage indexes from FY 2007 (as published in 
the FY 2007 IRF PPS final rule).
    Step 2 Calculate the total amount of estimated IRF PPS payments, 
using the FY 2007 standard payment conversion factor and the proposed 
FY 2008 labor-related share and proposed 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 2008 budget neutral wage 
adjustment factor of 1.0026.
    Step 4 Apply the FY 2008 budget neutral wage adjustment factor from 
step 3 to the FY 2007 IRF PPS standard payment conversion factor after 
the application of the estimated market basket update to determine the 
FY 2008 standard payment conversion factor.

C. Description of the Proposed IRF Standard Payment Conversion Factor 
and Proposed Payment Rates for FY 2008

    To calculate the proposed standard payment conversion factor for FY 
2008 and as illustrated in Table 3 below, we begin by applying the 
estimated market

[[Page 26245]]

basket increase factor (3.3 percent) to the standard payment conversion 
factor for FY 2007 ($12,981), which equals $13,409. We then apply the 
proposed combined budget neutrality factor for the wage index and labor 
related share and final year of the hold harmless policy of 1.0040 
(1.0026 * 1.0014 = 1.0040), which would result in a proposed standard 
payment conversion factor of $13,463.

    Table 3.--Calculations To Determine the Proposed FY 2008 Standard
                        Payment Conversion Factor
------------------------------------------------------------------------
               Explanation for adjustment                  Calculations
------------------------------------------------------------------------
FY 2007 Standard Payment Conversion Factor..............          12,981
Proposed FY 2008 Market Basket Increase Factor..........         x 1.033
    Subtotal............................................        = 13,409
Proposed Budget Neutrality Factor for the Wage Index,           x 1.0040
 Labor-Related Share, and the Hold Harmless Provision...
Proposed FY 2008 Standard Payment Conversion Factor.....       = $13,463
------------------------------------------------------------------------

    After the application of the relative weights, the resulting 
proposed unadjusted IRF prospective payment rates for FY 2008 are shown 
below in Table 4, ``Proposed FY 2008 Payment Rates.''
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BILLING CODE 4120-07-C

D. Example of the Methodology for Adjusting the Proposed Federal 
Prospective Payment Rates

    Table 5 illustrates the proposed methodology for adjusting the 
Federal prospective payments (as described in sections IV.A through C 
of this proposed rule). 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 4 
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 
0.8538, 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 0.9118, 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 4 above. Then, we multiply the estimated labor-related share 
(75.846) described in section IV.A 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 5 illustrates the components of the 
proposed adjusted payment calculation.
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BILLING CODE 4120-07-C
    Thus, the proposed adjusted payment for Facility A would be 
$32,405.16 and the proposed adjusted payment for Facility B would be 
$32,635.56.

V. 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 2008

    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 (CCR) by the Medicare allowable covered charge. If the 
estimated cost of the case is higher than the adjusted outlier 
threshold, we make 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. Subsequently, we updated the IRF 
outlier threshold amount in the FYs 2006 and 2007 IRF PPS final rules 
(70 FR 47880 and 71 FR 48354) to maintain estimated outlier payments at 
3 percent of total estimated payments,

[[Page 26250]]

and we also stated that we would continue to analyze the estimated 
outlier payments for subsequent years and adjust the outlier threshold 
amount as appropriate to maintain the 3 percent target.
    For this proposed rule, we performed an updated analysis of FY 2005 
claims and IRF-PAI data using the same methodology we used to set the 
initial outlier threshold amount when we first implemented the IRF PPS 
in the August 7, 2001 final rule (66 FR 41316), which is also the same 
methodology we used to update the outlier threshold amounts for FYs 
2006 and 2007. Using the updated FY 2005 claims and IRF-PAI data, we 
estimate that IRF outlier payments as a percentage of total estimated 
payments for FY 2007 increased from 3 percent using the FY 2004 data to 
approximately 3.8 percent using the updated FY 2005 data. We are still 
investigating the reasons for the change in estimated outlier payments 
between FY 2004 and FY 2005, and will carefully evaluate all possible 
reasons for this change.
    Based on the updated analysis using FY 2005 data, 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 $7,522 to decrease estimated 
outlier payments from approximately 3.8 to 3 percent of total estimated 
aggregate IRF payments for FY 2008.
    The outlier threshold amount for FY 2008 is subject to change in 
the final rule based on analysis of updated data.

B. Update to the IRF Cost-to-Charge Ratio Ceilings

    In accordance with the methodology stated in the August 1, 2003 
final rule (68 FR 45692 through 45694), we apply a ceiling to IRFs' 
cost-to-charge ratios (CCRs). Using the methodology described in that 
final rule, we propose to update the national urban and rural CCRs for 
IRFs. We 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 1.55 (based on the current estimate) for FY 2008.
     Other IRFs for whom accurate data with which to calculate 
an overall CCR are not available.
    Specifically, for FY 2008, we estimate a proposed national CCR of 
0.589 for rural IRFs and 0.475 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 will 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.

C. Adjustment of IRF Outlier Payments

    In the August 1, 2003 final rule (68 FR 45674, 45693 through 
45694), we finalized a proposal to make IRF outlier payments subject to 
reconciliation when IRFs' cost reports are settled, consistent with the 
policy adopted for IPPS hospitals in the June 9, 2003 IPPS final rule 
(68 FR 34494, 34501). The revised methodology provides for retroactive 
adjustments to IRF outlier payments to account for differences between 
the CCRs from the latest settled cost report and the actual CCRs 
computed at the time the cost report that coincides with the date of 
discharge is settled using the cost and charge data from that cost 
report. This revised methodology addresses vulnerabilities found in the 
IPPS and the IRF outlier payment policies, which may have resulted in 
outlier payments that were too high or too low. Along these lines, we 
are analyzing IRF outlier payments from the beginning of the IRF PPS 
through FY 2005, obtained from IRFs' cost report filings, to identify 
specific payment vulnerabilities in the IRF outlier payment policy.
    Under this policy, which is outlined in Sec.  412.624(e)(5), which 
in turn references Sec.  412.84(i) and Sec.  412.84(m) of the IPPS 
regulations, outlier payments will be processed on an interim basis 
throughout the year using IRFs' CCRs based on the best information 
available at the time. When an IRF's cost report is settled, any 
reconciliation of outlier payments by fiscal intermediaries will be 
based on the relationship between an IRF's costs and charges at the 
time a particular discharge actually occurred. This revised methodology 
ensures that the final outlier payments reflect an accurate assessment 
of the actual costs the IRF incurred for treating the case.
    We have not yet issued instructions to the fiscal intermediaries 
regarding IRF outlier reconciliation because we have been analyzing the 
data and assessing the systems changes necessary to conduct the 
reconciliation. Thus, we will soon issue instructions to fiscal 
intermediaries to begin reconciling IRF outlier payments upon 
settlement of IRF cost reports.

VI. Clarification to the Regulation Text for Special Payment Provisions 
for Patients That Are Transferred

    [If you choose to comment on issues in this section, please include 
the caption ``Clarification to the Regulation Text for Special Payment 
Provisions for Patients that are Transferred'' at the beginning of your 
comments.]
    Section 125(a)(3) of the BBRA amended Section 1886(j)(1) of the Act 
by adding a paragraph (E) that states ``Construction relating to 
transfer authority--Nothing in this subsection shall be construed as 
preventing the Secretary from providing for an adjustment to payments 
to take into account the early transfer of a patient from a 
rehabilitation facility to another site of care.'' In the FY 2002 
proposed and final IRF PPS rules, we proposed and adopted the transfer 
payment policy under Sec.  412.624(f). The transfer policy provides 
payments that more accurately reflect facility resources used and 
services delivered for patients that transfer to another site of care 
as discussed in the FY 2002 IRF PPS final rule (66 FR 41316, 41353 
through 41355). We are proposing to revise our regulations text to 
clarify our existing policy under Sec.  412.624(f).
    In the FY 2002 IRF PPS final rule (66 FR 41316, 41353 through 
41355), we discuss our rationale, criteria for defining a transfer 
case, and the methodology to determine the unadjusted Federal 
prospective payment for the transfer case. In addition, we discuss 
several adjustments that we apply to the unadjusted Federal prospective 
payment rate. The final adjustments described in the FY 2002 IRF PPS 
final rule (65 FR 66304, 66347 through 66357) include the area wage 
adjustment, rural adjustment, the LIP adjustment, and the high-cost 
outlier adjustment. In our FY 2006 IRF PPS final rule (70 FR 47880), we 
refined the facility level adjustments and also adopted a teaching 
status adjustment.
    We define a transfer under Sec.  412.602 to mean the release of a 
Medicare inpatient from an IRF to another IRF, a short-term, acute-care 
prospective payment hospital, a long-term care hospital as described in 
Sec.  412.23(e), or a nursing home that qualifies to receive Medicare 
or Medicaid payment. In order to receive a transfer payment under Sec.  
412.624(f), a patient must be transferred to another site of care as 
defined in Sec.  412.602 and had to have stayed in the IRF for less 
than the average length of stay for the case-mix

[[Page 26251]]

group (CMG). Table 1 in this proposed rule presents the CMGs, the 
comorbidity tiers, the corresponding relative weights, and the average 
length of stay value for each CMG and tier. We use the average length 
of stay for each CMG to determine when an IRF discharge meets the 
definition of a transfer, which results in a per diem case level 
adjustment.
    Since the implementation of the IRF PPS, we determine whether a 
claim meets the high-cost outlier policy under Sec.  412.624(e)(5), as 
revised in the FY 2007 IRF PPS final rule (71 FR 48354, 48382 through 
48383). A case qualifies for an outlier payment if the estimated cost 
of the case exceeds the adjusted outlier threshold, in which case we 
make an outlier payment equal to 80 percent of the difference between 
the estimated cost of the case and the outlier threshold. Since the 
implementation of the IRF PPS, we have provided an additional high-cost 
outlier payment to both transfer cases and full CMG cases when 
applicable. We propose to clarify the regulations text to articulate 
the transfer policy more clearly. Specifically, we propose to add the 
phrase ``subject to paragraph (e)(5)'' at the end of the paragraph 
under Sec.  412.624(f)(2)(v). The proposed revised Sec.  
412.624(f)(2)(v) will read, ``By applying the adjustment described in 
paragraphs (e)(1), (e)(2), (e)(3), (e)(4), and (e)(7) of this section 
to the unadjusted payment amount determined in paragraph (f)(2)(iv) of 
this section to equal the adjusted transfer payment amount, subject to 
paragraph (e)(5).''

VII. Provisions of the Proposed Regulation

    [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. We discuss these proposed 
revisions and others in detail below.

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

    In this section, we are proposing to revise the current regulations 
text in paragraph (f)(2)(v) to clarify that we determine whether a 
high-cost outlier payment would be applicable for transfer cases. We 
emphasize that this is not a change to our current methodology for 
determining whether a high-cost outlier payment applies to transfer 
cases.

B. Additional Proposed Changes

     Update the FY 2008 IRF PPS payment rates by the proposed 
market basket, as discussed in section IV.A.
     Update the FY 2008 IRF PPS payment rates by the proposed 
wage index and the labor related share in a budget neutral manner, as 
discussed in section IV.A and B.
     Update the pre-reclassified and pre-floor wage indexes 
based on the CBSA changes published in the most recent OMB bulletins 
that apply to the hospital wage data used to determine the current IRF 
PPS wage index, as discussed in section IV.B.
     Implement the final year of the three-year hold harmless 
policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 447923 
through 47926) in a budget neutral manner, as discussed in section 
IV.B.
     Update the outlier threshold amount for FY 2008 to $7,522, 
as discussed in section V.A.
     Update the cost-to-charge ratio ceiling and the national 
average urban and rural cost-to-charge ratios for purposes of 
determining outlier payments under the IRF PPS, as discussed in section 
V.B.

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 Public 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 one 
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 2008 payments compared to 
estimated FY 2007 payments would be an increase of approximately $150 
million (this reflects a $200 million increase from the update to the 
payment rates and a $50 million decrease due to the proposed update to 
the outlier threshold amount to decrease estimated outlier payments 
from approximately 3.8 percent in FY 2007 to 3 percent in FY 2008).
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government 
jurisdictions. 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 one year. (For details, 
see the Small Business Administration's final rule that set forth size 
standards for health care 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 or the proportion of 
IRFs' revenue that is derived from Medicare payments. 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 and that Medicare payment constitutes the majority of their 
revenues. The Department of Health and Human

[[Page 26252]]

Services generally uses a revenue impact of 3 to 5 percent as a 
significance threshold under the RFA. As shown in Table 6, we estimate 
that the net revenue impact of this proposed rule on all IRFs is to 
increase estimated payments by about 2.4 percent, with an estimated 
increase in payments of 3 percent or higher for some categories of IRFs 
(such as rural freestanding IRFs, urban IRFs in the East North Central 
and Mountain regions, and rural IRFs in the Middle Atlantic and East 
South Central regions). Thus, we anticipate that this proposed rule may 
have a significant impact on a substantial number of small entities. 
However, the estimated impact of this proposed rule is a net increase 
in revenues across all categories of IRFs, so we believe that this 
proposed rule would not impose a significant burden on 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 199 
rural units and 20 rural hospitals in our database of 1,234 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 
one year of $100 million in 1995, 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 2007 final rule, proposes an update to the outlier 
threshold for high-cost cases, and proposes an adjustment to the wage 
index methodology.
    Based on the above, we estimate that the FY 2008 impact would be a 
net increase of $150 million in payments to IRF providers (this 
reflects a $200 million estimated increase from the proposed update to 
the payment rates and a $50 million estimated decrease due to the 
proposed update to the outlier threshold amount to decrease the 
estimated outlier payments from approximately 3.8 percent in FY 2007 to 
3 percent in FY 2008). The impact analysis in Table 6 of this proposed 
rule represents the projected effects of the proposed policy changes in 
the IRF PPS for FY 2008 compared with estimated IRF PPS payments in FY 
2007 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, except where noted, and 
we do not make adjustments for future changes in such variables as 
number of discharges or case-mix, except where noted.
    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 because of other 
changes in the forecasted impact time period. Some examples could be 
legislative changes made by the Congress to the Medicare program that 
would impact program funding, 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 rates for FY 2008, we proposed 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). We estimate that these 
proposed revisions would increase payments to IRFs by approximately 
$200 million.
    The aggregate change in estimated payments associated with this 
proposed rule is estimated to be an increase in payments to IRFs of 
$150 million for FY 2008. The market basket increase of $200 million 
and the $50 million decrease due to the proposed update to the outlier 
threshold amount to decrease estimated outlier payments from 
approximately 3.8 percent in FY 2007 to 3.0 percent in FY 2008 would 
result in a net change in estimated payments from FY 2007 to FY 2008 of 
$150 million.
    The effects of the proposed changes that affect IRF PPS payment 
rates are shown in Table 6. The following proposed changes that affect 
the IRF PPS payment rates are discussed separately below:
     The effects of the proposed update to the outlier 
threshold amount to decrease total estimated outlier payments from 
approximately 3.8 to 3 percent of total estimated payments for FY 2008, 
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 applying the budget-neutral labor-related 
share and wage index adjustment, including a proposal to revise our 
methodology to determine a proxy for rural areas without hospital wage 
data (as described in section IV of this proposed rule), as required 
under section 1886(j)(6) of the Act.
     The effects of the final 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 beginning FY 2006 and 
lose the rural adjustment, resulting in a decrease in the estimated IRF 
PPS payments if not for the hold harmless policy.
     The total proposed change in estimated payments based on 
the FY 2008 proposed policies relative to estimated FY 2007 payments 
without the proposed policies.
2. Description of Table 6
    The table below categorizes IRFs by geographic location, including 
urban or rural location and location with respect to CMS's nine census 
divisions (as defined on the cost report) of the country. In addition, 
the table divides IRFs into those that are separate

[[Page 26253]]

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, 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 1,234 IRFs included in the analysis.
    The next 12 rows of Table 6 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 all rural, which 
is further divided into rural units of a hospital, rural freestanding 
hospitals, and by type of ownership. There are 1,015 IRFs located in 
urban areas included in our analysis. Among these, there are 816 IRF 
units of hospitals located in urban areas and 199 freestanding IRF 
hospitals located in urban areas. There are 219 IRFs located in rural 
areas included in our analysis. Among these, there are 199 IRF units of 
hospitals located in rural areas and 20 freestanding IRF hospitals 
located in rural areas. There are 419 for-profit IRFs. Among these, 
there are 340 IRFs in urban areas and 79 IRFs in rural areas. There are 
748 non-profit IRFs. Among these, there are 624 urban IRFs and 124 
rural IRFs. There are 67 government-owned IRFs. Among these, there are 
51 urban IRFs and 16 rural IRFs.
    The remaining three parts of Table 6 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 impacts of each proposed change to the facility 
categories listed above are shown in the columns of Table 6. 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 the proposed adjustment to 
the outlier threshold amount so that estimated outlier payments 
decrease from approximately 3.8 percent in FY 2007 to 3 percent of 
total estimated payments for FY 2008.
    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 the final year of the hold 
harmless policy, in a budget neutral manner.
    Column (7) compares our estimates of the payments per discharge, 
incorporating all of the proposed changes reflected in this proposed 
rule for FY 2008, to our estimates of payments per discharge in FY 2007 
(without these proposed changes). The average estimated increase for 
all IRFs is approximately 2.4 percent. This estimated increase includes 
the effects of the 3.3 percent market basket update. It also includes 
the 0.9 percent overall estimated decrease in estimated IRF outlier 
payments from the proposed update to the outlier threshold amount. 
Because we are making the remainder of the proposed 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 4120-07-P

[[Page 26254]]

[GRAPHIC] [TIFF OMITTED] TP08MY07.019


[[Page 26255]]


BILLING CODE 4120-07-C
3. Impact of the Proposed Update to the Outlier Threshold Amount 
(Column 4, Table 6)
    In the FY 2007 IRF PPS final rule (71 FR 48354), we used FY 2004 
patient-level claims data (the best, most complete data available at 
that time) to set the outlier threshold amount for FY 2007 so that 
estimated outlier payments would equal 3 percent of total estimated 
payments for FY 2007. For this proposed rule, we are proposing to 
update our analysis using FY 2005 data. Using the updated FY 2005 data, 
we now estimate that IRF outlier payments as a percentage of total 
estimated payments for FY 2007 increased from 3 percent using the FY 
2004 data to approximately 3.8 percent using the updated FY 2005 data. 
Thus, we are proposing to adjust the outlier threshold amount for FY 
2008 to $7,522 to set total estimated outlier payments equal to 3 
percent of total estimated payments in FY 2008. The proposed estimated 
change in total payments between FY 2007 and FY 2008, therefore, 
includes a 0.9 percent (rounded from 0.85 percent) overall estimated 
decrease in payments because the estimated outlier portion of total 
payments is estimated to decrease from approximately 3.8 percent to 3 
percent.
    The impact of this proposed update (as shown in column 4 of Table 
6) is to decrease estimated overall payments to IRFs by 0.9 percent. We 
do not estimate that any group of IRFs would experience an increase in 
payments from this proposed update. We estimate the largest decrease in 
payments to be a 1.7 percent decrease in estimated payments to rural 
IRFs in the Mountain region.
4. Impact of the Proposed Market Basket Update to the IRF PPS Payment 
Rates (Column 5, Table 6)
    In column 5 of Table 6, we present the estimated effects of the 
proposed market basket update to the IRF PPS payment rates. In the 
aggregate, and across all hospital groups, the proposed update would 
result in a 3.3 percent increase in overall estimated payments to IRFs.
5. Impact of the Proposed CBSA Wage Index, Labor-Related Share, and the 
Hold Harmless Policy for FY 2008 (Column 6, Table 6).
    In column 6 of Table 6, we present the effects of the proposed 
budget neutral update of the wage index, labor-related share, and the 
final year of 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 because of 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 the FY 2007 IRF PPS final rule (71 FR 48345), the 
blended wage index expired in FY 2007 and will not be applied for 
discharges occurring on or after October 1, 2006. In addition, FY 2008 
is the third and final year of the hold harmless policy, and we are 
continuing to apply this policy as described in the FY 2006 final rule 
in a budget neutral manner.
    As discussed in this proposed rule, we are proposing to revise our 
methodology to impute a rural wage index value for rural areas without 
hospital wage data and update the wage index based on the CBSA-based 
labor market area definitions in a budget neutral manner. We are also 
applying the third and final year of the hold harmless policy in a 
budget neutral manner. Thus, in the aggregate, the estimated impact of 
the proposed update to the wage index and labor-related share is zero 
percent.
    In the aggregate and for all urban IRFs, we do not estimate that 
these proposed changes would affect overall estimated payments to IRFs. 
However, we estimate that these proposed changes would have small 
distributional effects. We estimate a 0.2 percent increase in estimated 
payments to rural IRFs. We estimate the largest increase in payments to 
be a 0.7 percent increase for urban IRFs in the Mountain region and for 
rural IRFs in the Middle Atlantic region. We estimate the largest 
decrease in payments to be a 0.9 percent decrease for rural IRFs in the 
New England region.

C. Anticipated Effects of the 75 Percent Rule Policy

    The existing policy for classifying a facility as an IRF, which is 
described in Sec.  412.23(b)(2), allows the inclusion of comorbidities 
meeting certain requirements in the calculations used to determine the 
compliance percentage for cost reporting periods beginning on or after 
July 1, 2004, and before July 1, 2008. However, for cost reporting 
periods beginning on or after July 1, 2008, comorbidities will not be 
eligible for inclusion in the calculations used to determine if the 
provider meets the 75 percent compliance threshold. As discussed in 
section II of this proposed rule, we are not proposing to change 
existing policy. On or after July 1, 2008, we anticipate that IRFs 
would make adjustments to their admission and coding practices to 
continue to meet the compliance threshold. Data limitations and two 
important sources of uncertainty prevent a precise estimate of the 
effect of this policy at this time. One source of uncertainty is what 
proportion of patients who would no longer be treated in IRFs would 
instead be treated by other, lower-cost post-acute care settings such 
as skilled nursing facilities or home health agencies. Another source 
of uncertainty is determining how providers will make adjustments on or 
after July 1, 2008. While we cannot make a precise estimate at this 
time, we anticipate modest decreases in Medicare payments beginning on 
or after July 1, 2008.

D. Alternatives Considered

    Because we have determined that this proposed rule would have a 
significant economic impact on IRFs and on a substantial number of 
small entities, we will discuss the alternative changes to the IRF PPS 
that we considered.
    Section 1886(j)(3)(C) of the Act requires the Secretary to update 
the IRF PPS payment rates by 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. As discussed above, we estimate 
the RPL market basket increase factor for FY 2008 to be 3.3 percent. 
This increase factor represents the majority of the impact on IRF 
providers shown in Table 6. Thus, we believe this estimated net 
increase in payments across all categories of IRFs represents a benefit 
to IRF providers and, thus, to IRFs that are small entities.
    We considered maintaining the existing outlier threshold amount for 
FY 2008 because this proposed update would have a negative impact on 
IRF providers and, therefore, on small entities. If we maintain the FY 
2007 outlier threshold amount, more outlier cases would have qualified 
for the additional outlier payments in FY 2008. However, analysis of 
updated FY 2005 data indicates that estimated outlier payments would 
not equal 3 percent of estimated total payments for FY 2008 unless we 
proposed to update the outlier threshold amount. Also, we estimate that 
the effect of this proposal on estimated payments to IRFs is small 
(less than 1 percent).

E. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 8 below, we

[[Page 26256]]

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 1,234 IRFs in our database. All 
estimated expenditures are classified as transfers to Medicare 
providers (that is, IRFs).

       Table 8.--Accounting Statement: Classification of Estimated
 Expenditures, from the 2007 IRF PPS Rate Year to the 2008 IRF PPS Rate
                           Year (in Millions)
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $150 million.
From Whom To Whom?                          Federal Government to IRF
                                             Medicare Providers.
------------------------------------------------------------------------

F. Conclusion (Column 7, Table 6)

    Overall, the estimated payments per discharge for IRFs in FY 2008 
are projected to increase by 2.4 percent, compared with those in FY 
2007, as reflected in column 7 of Table 6. We estimate that IRFs in 
urban areas would experience a 2.4 percent increase in estimated 
payments per discharge compared with FY 2007. We estimate that IRFs in 
rural areas would experience a 2.7 percent increase in estimated 
payments per discharge compared with FY 2007. We estimate that 
rehabilitation units and freestanding rehabilitation hospitals in urban 
areas would both experience a 2.4 percent increase in estimated 
payments per discharge. We estimate that rehabilitation units in rural 
areas would experience a 2.6 percent increase in estimated payments per 
discharge, while freestanding rehabilitation hospitals in rural areas 
would experience a 3.1 percent increase in estimated payments per 
discharge.
    Overall, we estimate that the largest payment increase would be 3.4 
percent among rural IRFs in the Middle Atlantic region. We do not 
estimate that any group of IRFs would experience an overall decrease in 
payments from the proposed changes in this proposed rule.
    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 412.624 is amended by revising paragraph (f)(2)(v) to 
read as follows:


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

* * * * *
    (f) * * *
    (2) * * *
    (v) By applying the adjustment described in paragraphs (e)(1), 
(e)(2), (e)(3), (e)(4), and (e)(7) of this section to the unadjusted 
payment amount determined in paragraph (f)(2)(iv) of this section to 
equal the adjusted transfer payment amount, subject to paragraph (e)(5) 
of this section.


(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplemental Medical Insurance Program).
    Dated: March 22, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 3, 2007.
Michael O. Leavitt,
Secretary.

[[Page 26257]]

    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 Wage Index for 
Urban Areas for Discharges Occurring from October 1, 2007 through 
September 30, 2008
Table 2.--Proposed Inpatient Rehabilitation Facility Wage Index for 
Rural Areas for Discharges Occurring from October 1, 2007 through 
September 30, 2008

   Table 1.--Proposed Inpatient Rehabilitation Facility Wage Index for
    Urban Areas for Discharges Occurring From October 1, 2007 Through
                           September 30, 2008
------------------------------------------------------------------------
                                                                  Wage
         CBSA code          Urban area (constituent counties)    index
------------------------------------------------------------------------
10180.....................  Abilene, TX......................     0.8000
                             Callahan County, TX.............
                             Jones County, TX................
                             Taylor County, TX...............
10380.....................  Aguadilla-Isabela-San                 0.3915
                             Sebasti[aacute]n, PR.
                             Aguada Municipio, PR............
                             Aguadilla Municipio, PR.........
                             A[ntilde]asco Municipio, PR.....
                             Isabela Municipio, PR...........
                             Lares Municipio, PR.............
                             Moca Municipio, PR..............
                             Rinc[oacute]n Municipio, PR.....
                             San Sebasti[aacute]n Municipio,
                             PR.
10420.....................  Akron, OH........................     0.8654
                             Portage County, OH..............
                             Summit County, OH...............
10500.....................  Albany, GA.......................     0.8991
                             Baker County, GA................
                             Dougherty County, GA............
                             Lee County, GA..................
                             Terrell County, GA..............
                             Worth County, GA................
10580.....................  Albany-Schenectady-Troy, NY......     0.8720
                             Albany County, NY...............
                             Rensselaer County, NY...........
                             Saratoga County, NY.............
                             Schenectady County, NY..........
                             Schoharie County, NY............
10740.....................  Albuquerque, NM..................     0.9458
                             Bernalillo County, NM...........
                             Sandoval County, NM.............
                             Torrance County, NM.............
                             Valencia County, NM.............
10780.....................  Alexandria, LA...................     0.8006
                             Grant Parish, LA................
                             Rapides Parish, LA..............
10900.....................  Allentown-Bethlehem-Easton, PA-NJ     0.9947
                             Warren County, NJ...............
                             Carbon County, PA...............
                             Lehigh County, PA...............
                             Northampton County, PA..........
11020.....................  Altoona, PA......................     0.8812
                             Blair County, PA................
11100.....................  Amarillo, TX.....................     0.9169
                             Armstrong County, TX............
                             Carson County, TX...............
                             Potter County, TX...............
                             Randall County, TX..............
11180.....................  Ames, IA.........................     0.9760
                             Story County, IA................
11260.....................  Anchorage, AK....................     1.2023
                             Anchorage Municipality, AK......
                             Matanuska-Susitna Borough, AK...
11300.....................  Anderson, IN.....................     0.8681
                             Madison County, IN..............
11340.....................  Anderson, SC.....................     0.9017
                             Anderson County, SC.............
11460.....................  Ann Arbor, MI....................     1.0826
                             Washtenaw County, MI............
11500.....................  Anniston-Oxford, AL..............     0.7770
                             Calhoun County, AL..............

[[Page 26258]]

 
11540.....................  Appleton, WI.....................     0.9455
                             Calumet County, WI..............
                             Outagamie County, WI............
11700.....................  Asheville, NC....................     0.9216
                             Buncombe County, NC.............
                             Haywood County, NC..............
                             Henderson County, NC............
                             Madison County, NC..............
12020.....................  Athens-Clarke County, GA.........     0.9856
                             Clarke County, GA...............
                             Madison County, GA..............
                             Oconee County, GA...............
                             Oglethorpe County, GA...........
12060.....................  Atlanta-Sandy Springs-Marietta,       0.9762
                             GA.
                             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...............
                             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................     1.1831
                             Atlantic County, NJ.............
12220.....................  Auburn-Opelika, AL...............     0.8096
                             Lee County, AL..................
12260.....................  Augusta-Richmond County, GA-SC...     0.9667
                             Burke County, GA................
                             Columbia County, GA.............
                             McDuffie County, GA.............
                             Richmond County, GA.............
                             Aiken County, SC................
                             Edgefield County, SC............
12420.....................  Austin-Round Rock, TX............     0.9344
                             Bastrop County, TX..............
                             Caldwell County, TX.............
                             Hays County, TX.................
                             Travis County, TX...............
                             Williamson County, TX...........
12540.....................  Bakersfield, CA..................     1.0725
                             Kern County, CA.................
12580.....................  Baltimore-Towson, MD.............     1.0088
                             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.......................     0.9711

[[Page 26259]]

 
                             Penobscot County, ME............
12700.....................  Barnstable Town, MA..............     1.2539
                             Barnstable County, MA...........
12940.....................  Baton Rouge, LA..................     0.8084
                             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.................     0.9762
                             Calhoun County, MI..............
13020.....................  Bay City, MI.....................     0.9251
                             Bay County, MI..................
13140.....................  Beaumont-Port Arthur, TX.........     0.8595
                             Hardin County, TX...............
                             Jefferson County, TX............
                             Orange County, TX...............
13380.....................  Bellingham, WA...................     1.1104
                             Whatcom County, WA..............
13460.....................  Bend, OR.........................     1.0743
                             Deschutes County, OR............
13644.....................  Bethesda-Frederick-Gaithersburg,      1.0903
                             MD.
                             Frederick County, MD............
                             Montgomery County, MD...........
13740.....................  Billings, MT.....................     0.8712
                             Carbon County, MT...............
                             Yellowstone County, MT..........
13780.....................  Binghamton, NY...................     0.8786
                             Broome County, NY...............
                             Tioga County, NY................
13820.....................  Birmingham-Hoover, AL............     0.8894
                             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.....................     0.7240
                             Burleigh County, ND.............
                             Morton County, ND...............
13980.....................  Blacksburg-Christiansburg-            0.8213
                             Radford, VA.
                             Giles County, VA................
                             Montgomery County, VA...........
                             Pulaski County, VA..............
                             Radford City, VA................
14020.....................  Bloomington, IN..................     0.8533
                             Greene County, IN...............
                             Monroe County, IN...............
                             Owen County, IN.................
14060.....................  Bloomington-Normal, IL...........     0.8944
                             McLean County, IL...............
14260.....................  Boise City-Nampa, ID.............     0.9401
                             Ada County, ID..................
                             Boise County, ID................
                             Canyon County, ID...............
                             Gem County, ID..................
                             Owyhee County, ID...............
14484.....................  Boston-Quincy, MA................     1.1679
                             Norfolk County, MA..............
                             Plymouth County, MA.............
                             Suffolk County, MA..............
14500.....................  Boulder, CO......................     1.0350
                             Boulder County, CO..............
14540.....................  Bowling Green, KY................     0.8148
                             Edmonson County, KY.............

[[Page 26260]]

 
                             Warren County, KY...............
14740.....................  Bremerton-Silverdale, WA.........     1.0913
                             Kitsap County, WA...............
14860.....................  Bridgeport-Stamford-Norwalk, CT..     1.2659
                             Fairfield County, CT............
15180.....................  Brownsville-Harlingen, TX........     0.9430
                             Cameron County, TX..............
15260.....................  Brunswick, GA....................     1.0164
                             Brantley County, GA.............
                             Glynn County, GA................
                             McIntosh County, GA.............
15380.....................  Buffalo-Niagara Falls, NY........     0.9424
                             Erie County, NY.................
                             Niagara County, NY..............
15500.....................  Burlington, NC...................     0.8674
                             Alamance County, NC.............
15540.....................  Burlington-South Burlington, VT..     0.9474
                             Chittenden County, VT...........
                             Franklin County, VT.............
                             Grand Isle County, VT...........
15764.....................  Cambridge-Newton-Framingham, MA..     1.0970
                             Middlesex County, MA............
15804.....................  Camden, NJ.......................     1.0392
                             Burlington County, NJ...........
                             Camden County, NJ...............
                             Gloucester County, NJ...........
15940.....................  Canton-Massillon, OH.............     0.9031
                             Carroll County, OH..............
                             Stark County, OH................
15980.....................  Cape Coral-Fort Myers, FL........     0.9342
                             Lee County, FL..................
16180.....................  Carson City, NV..................     1.0025
                             Carson City, NV.................
16220.....................  Casper, WY.......................     0.9145
                             Natrona County, WY..............
16300.....................  Cedar Rapids, IA.................     0.8888
                             Benton County, IA...............
                             Jones County, IA................
                             Linn County, IA.................
16580.....................  Champaign-Urbana, IL.............     0.9644
                             Champaign County, IL............
                             Ford County, IL.................
                             Piatt County, IL................
16620.....................  Charleston, WV...................     0.8542
                             Boone County, WV................
                             Clay County, WV.................
                             Kanawha County, WV..............
                             Lincoln County, WV..............
                             Putnam County, WV...............
16700.....................  Charleston-North Charleston, SC..     0.9145
                             Berkeley County, SC.............
                             Charleston County, SC...........
                             Dorchester County, SC...........
16740.....................  Charlotte-Gastonia-Concord, NC-SC     0.9554
                             Anson County, NC................
                             Cabarrus County, NC.............
                             Gaston County, NC...............
                             Mecklenburg County, NC..........
                             Union County, NC................
                             York County, SC.................
16820.....................  Charlottesville, VA..............     1.0125
                             Albemarle County, VA............
                             Fluvanna County, VA.............
                             Greene County, VA...............
                             Nelson County, VA...............
                             Charlottesville City, VA........
16860.....................  Chattanooga, TN-GA...............     0.8948
                             Catoosa County, GA..............
                             Dade County, GA.................
                             Walker County, GA...............

[[Page 26261]]

 
                             Hamilton County, TN.............
                             Marion County, TN...............
                             Sequatchie County, TN...........
16940.....................  Cheyenne, WY.....................     0.9060
                             Laramie County, WY..............
16974.....................  Chicago-Naperville-Joliet, IL....     1.0751
                             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........................     1.1053
                             Butte County, CA................
17140.....................  Cincinnati-Middletown, OH-KY-IN..     0.9601
                             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.............
                             Hamilton County, OH.............
                             Warren County, OH...............
17300.....................  Clarksville, TN-KY...............     0.8436
                             Christian County, KY............
                             Trigg County, KY................
                             Montgomery County, TN...........
                             Stewart County, TN..............
17420.....................  Cleveland, TN....................     0.8109
                             Bradley County, TN..............
                             Polk County, TN.................
17460.....................  Cleveland-Elyria-Mentor, OH......     0.9400
                             Cuyahoga County, OH.............
                             Geauga County, OH...............
                             Lake County, OH.................
                             Lorain County, OH...............
                             Medina County, OH...............
17660.....................  Coeur d'Alene, ID................     0.9344
                             Kootenai County, ID.............
17780.....................  College Station-Bryan, TX........     0.9045
                             Brazos County, TX...............
                             Burleson County, TX.............
                             Robertson County, TX............
17820.....................  Colorado Springs, CO.............     0.9701
                             El Paso County, CO..............
                             Teller County, CO...............
17860.....................  Columbia, MO.....................     0.8542
                             Boone County, MO................
                             Howard County, MO...............
17900.....................  Columbia, SC.....................     0.8933
                             Calhoun County, SC..............
                             Fairfield County, SC............
                             Kershaw County, SC..............
                             Lexington County, SC............
                             Richland County, SC.............
                             Saluda County, SC...............
17980.....................  Columbus, GA-AL..................     0.8239
                             Russell County, AL..............
                             Chattahoochee County, GA........
                             Harris County, GA...............
                             Marion County, GA...............

[[Page 26262]]

 
                             Muscogee County, GA.............
18020.....................  Columbus, IN.....................     0.9318
                             Bartholomew County, IN..........
18140.....................  Columbus, OH.....................     1.0107
                             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...............     0.8564
                             Aransas County, TX..............
                             Nueces County, TX...............
                             San Patricio County, TX.........
18700.....................  Corvallis, OR....................     1.1546
                             Benton County, OR...............
19060.....................  Cumberland, MD-WV................     0.8446
                             Allegany County, MD.............
                             Mineral County, WV..............
19124.....................  Dallas-Plano-Irving, TX..........     1.0075
                             Collin County, TX...............
                             Dallas County, TX...............
                             Delta County, TX................
                             Denton County, TX...............
                             Ellis County, TX................
                             Hunt County, TX.................
                             Kaufman County, TX..............
                             Rockwall County, TX.............
19140.....................  Dalton, GA.......................     0.9093
                             Murray County, GA...............
                             Whitfield County, GA............
19180.....................  Danville, IL.....................     0.9266
                             Vermilion County, IL............
19260.....................  Danville, VA.....................     0.8451
                             Pittsylvania County, VA.........
                             Danville City, VA...............
19340.....................  Davenport-Moline-Rock Island, IA-     0.8846
                             IL.
                             Henry County, IL................
                             Mercer County, IL...............
                             Rock Island County, IL..........
                             Scott County, IA................
19380.....................  Dayton, OH.......................     0.9037
                             Greene County, OH...............
                             Miami County, OH................
                             Montgomery County, OH...........
                             Preble County, OH...............
19460.....................  Decatur, AL......................     0.8159
                             Lawrence County, AL.............
                             Morgan County, AL...............
19500.....................  Decatur, IL......................     0.8172
                             Macon County, IL................
19660.....................  Deltona-Daytona Beach-Ormond          0.9263
                             Beach, FL.
                             Volusia County, FL..............
19740.....................  Denver-Aurora, CO................     1.0930
                             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-West Des Moines, IA...     0.9214
                             Dallas County, IA...............
                             Guthrie County, IA..............
                             Madison County, IA..............

[[Page 26263]]

 
                             Polk County, IA.................
                             Warren County, IA...............
19804.....................  Detroit-Livonia-Dearborn, MI.....     1.0281
                             Wayne County, MI................
20020.....................  Dothan, AL.......................     0.7381
                             Geneva County, AL...............
                             Henry County, AL................
                             Houston County, AL..............
20100.....................  Dover, DE........................     0.9847
                             Kent County, DE.................
20220.....................  Dubuque, IA......................     0.9133
                             Dubuque County, IA..............
20260.....................  Duluth, MN-WI....................     1.0042
                             Carlton County, MN..............
                             St. Louis County, MN............
                             Douglas County, WI..............
20500.....................  Durham, NC.......................     0.9826
                             Chatham County, NC..............
                             Durham County, NC...............
                             Orange County, NC...............
                             Person County, NC...............
20740.....................  Eau Claire, WI...................     0.9630
                             Chippewa County, WI.............
                             Eau Claire County, WI...........
20764.....................  Edison, NJ.......................     1.1190
                             Middlesex County, NJ............
                             Monmouth County, NJ.............
                             Ocean County, NJ................
                             Somerset County, NJ.............
20940.....................  El Centro, CA....................     0.9076
                             Imperial County, CA.............
21060.....................  Elizabethtown, KY................     0.8697
                             Hardin County, KY...............
                             Larue County, KY................
21140.....................  Elkhart-Goshen, IN...............     0.9426
                             Elkhart County, IN..............
21300.....................  Elmira, NY.......................     0.8240
                             Chemung County, NY..............
21340.....................  El Paso, TX......................     0.9053
                             El Paso County, TX..............
21500.....................  Erie, PA.........................     0.8827
                             Erie County, PA.................
21604.....................  Essex County, MA.................     1.0418
                             Essex County, MA................
21660.....................  Eugene-Springfield, OR...........     1.0876
                             Lane County, OR.................
21780.....................  Evansville, IN-KY................     0.9071
                             Gibson County, IN...............
                             Posey County, IN................
                             Vanderburgh County, IN..........
                             Warrick County, IN..............
                             Henderson County, KY............
                             Webster County, KY..............
21820.....................  Fairbanks, AK....................     1.1059
                             Fairbanks North Star Borough, AK
21940.....................  Fajardo, PR......................     0.4036
                             Ceiba Municipio, PR.............
                             Fajardo Municipio, PR...........
                             Luquillo Municipio, PR..........
22020.....................  Fargo, ND-MN.....................     0.8250
                             Cass County, ND.................
                             Clay County, MN.................
22140.....................  Farmington, NM...................     0.8589
                             San Juan County, NM.............
22180.....................  Fayetteville, NC.................     0.8945
                             Cumberland County, NC...........
                             Hoke County, NC.................
22220.....................  Fayetteville-Springdale-Rogers,       0.8865
                             AR-MO.
                             Benton County, AR...............
                             Madison County, AR..............

[[Page 26264]]

 
                             Washington County, AR...........
                             McDonald County, MO.............
22380.....................  Flagstaff, AZ....................     1.1601
                             Coconino County, AZ.............
22420.....................  Flint, MI........................     1.0969
                             Genesee County, MI..............
22500.....................  Florence, SC.....................     0.8388
                             Darlington County, SC...........
                             Florence County, SC.............
22520.....................  Florence-Muscle Shoals, AL.......     0.7843
                             Colbert County, AL..............
                             Lauderdale County, AL...........
22540.....................  Fond du Lac, WI..................     1.0063
                             Fond du Lac County, WI..........
22660.....................  Fort Collins-Loveland, CO........     0.9544
                             Larimer County, CO..............
22744.....................  Fort Lauderdale-Pompano Beach-        1.0133
                             Deerfield Beach, FL.
                             Broward County, FL..............
22900.....................  Fort Smith, AR-OK................     0.7731
                             Crawford County, AR.............
                             Franklin County, AR.............
                             Sebastian County, AR............
                             Le Flore County, OK.............
                             Sequoyah County, OK.............
23020.....................  Fort Walton Beach-Crestview-          0.8643
                             Destin, FL.
                             Okaloosa County, FL.............
23060.....................  Fort Wayne, IN...................     0.9517
                             Allen County, IN................
                             Wells County, IN................
                             Whitley County, IN..............
23104.....................  Fort Worth-Arlington, TX.........     0.9569
                             Johnson County, TX..............
                             Parker County, TX...............
                             Tarrant County, TX..............
                             Wise County, TX.................
23420.....................  Fresno, CA.......................     1.0943
                             Fresno County, CA...............
23460.....................  Gadsden, AL......................     0.8066
                             Etowah County, AL...............
23540.....................  Gainesville, FL..................     0.9277
                             Alachua County, FL..............
                             Gilchrist County, FL............
23580.....................  Gainesville, GA..................     0.8958
                             Hall County, GA.................
23844.....................  Gary, IN.........................     0.9334
                             Jasper County, IN...............
                             Lake County, IN.................
                             Newton County, IN...............
                             Porter County, IN...............
24020.....................  Glens Falls, NY..................     0.8324
                             Warren County, NY...............
                             Washington County, NY...........
24140.....................  Goldsboro, NC....................     0.9171
                             Wayne County, NC................
24220.....................  Grand Forks, ND-MN...............     0.7949
                             Polk County, MN.................
                             Grand Forks County, ND..........
24300.....................  Grand Junction, CO...............     0.9668
                             Mesa County, CO.................
24340.....................  Grand Rapids-Wyoming, MI.........     0.9455
                             Barry County, MI................
                             Ionia County, MI................
                             Kent County, MI.................
                             Newaygo County, MI..............
24500.....................  Great Falls, MT..................     0.8598
                             Cascade County, MT..............
24540.....................  Greeley, CO......................     0.9602
                             Weld County, CO.................
24580.....................  Green Bay, WI....................     0.9787
                             Brown County, WI................

[[Page 26265]]

 
                             Kewaunee County, WI.............
                             Oconto County, WI...............
24660.....................  Greensboro-High Point, NC........     0.8866
                             Guilford County, NC.............
                             Randolph County, NC.............
                             Rockingham County, NC...........
24780.....................  Greenville, NC...................     0.9432
                             Greene County, NC...............
                             Pitt County, NC.................
24860.....................  Greenville, SC...................     0.9804
                             Greenville County, SC...........
                             Laurens County, SC..............
                             Pickens County, SC..............
25020.....................  Guayama, PR......................     0.3235
                             Arroyo Municipio, PR............
                             Guayama Municipio, PR...........
                             Patillas Municipio, PR..........
25060.....................  Gulfport-Biloxi, MS..............     0.8915
                             Hancock County, MS..............
                             Harrison County, MS.............
                             Stone County, MS................
25180.....................  Hagerstown-Martinsburg, MD-WV....     0.9038
                             Washington County, MD...........
                             Berkeley County, WV.............
                             Morgan County, WV...............
25260.....................  Hanford-Corcoran, CA.............     1.0282
                             Kings County, CA................
25420.....................  Harrisburg-Carlisle, PA..........     0.9402
                             Cumberland County, PA...........
                             Dauphin County, PA..............
                             Perry County, PA................
25500.....................  Harrisonburg, VA.................     0.9073
                             Rockingham County, VA...........
                             Harrisonburg City, VA...........
25540.....................  Hartford-West Hartford-East           1.0894
                             Hartford, CT.
                             Hartford County, CT.............
                             Litchfield County, CT...........
                             Middlesex County, CT............
                             Tolland County, CT..............
25620.....................  Hattiesburg, MS..................     0.7430
                             Forrest County, MS..............
                             Lamar County, MS................
                             Perry County, MS................
25860.....................  Hickory-Lenoir-Morganton, NC.....     0.9010
                             Alexander County, NC............
                             Burke County, NC................
                             Caldwell County, NC.............
                             Catawba County, NC..............
25980.....................  Hinesville-Fort Stewart, GA \1\..     0.9178
                             Liberty County, GA..............
                             Long County, GA.................
26100.....................  Holland-Grand Haven, MI..........     0.9163
                             Ottawa County, MI...............
26180.....................  Honolulu, HI.....................     1.1096
                             Honolulu County, HI.............
26300.....................  Hot Springs, AR..................     0.8782
                             Garland County, AR..............
26380.....................  Houma-Bayou Cane-Thibodaux, LA...     0.8082
                             Lafourche Parish, LA............
                             Terrebonne Parish, LA...........
26420.....................  Houston-Sugar Land-Baytown, TX...     1.0008
                             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..........

[[Page 26266]]

 
                             Waller County, TX...............
26580.....................  Huntington-Ashland, WV-KY-OH.....     0.8997
                             Boyd County, KY.................
                             Greenup County, KY..............
                             Lawrence County, OH.............
                             Cabell County, WV...............
                             Wayne County, WV................
26620.....................  Huntsville, AL...................     0.9007
                             Limestone County, AL............
                             Madison County, AL..............
26820.....................  Idaho Falls, ID..................     0.9088
                             Bonneville County, ID...........
                             Jefferson County, ID............
26900.....................  Indianapolis-Carmel, IN..........     0.9895
                             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...............
26980.....................  Iowa City, IA....................     0.9714
                             Johnson County, IA..............
                             Washington County, IA...........
27060.....................  Ithaca, NY.......................     0.9928
                             Tompkins County, NY.............
27100.....................  Jackson, MI......................     0.9560
                             Jackson County, MI..............
27140.....................  Jackson, MS......................     0.8271
                             Copiah County, MS...............
                             Hinds County, MS................
                             Madison County, MS..............
                             Rankin County, MS...............
                             Simpson County, MS..............
27180.....................  Jackson, TN......................     0.8853
                             Chester County, TN..............
                             Madison County, TN..............
27260.....................  Jacksonville, FL.................     0.9165
                             Baker County, FL................
                             Clay County, FL.................
                             Duval County, FL................
                             Nassau County, FL...............
                             St. Johns County, FL............
27340.....................  Jacksonville, NC.................     0.8231
                             Onslow County, NC...............
27500.....................  Janesville, WI...................     0.9655
                             Rock County, WI.................
27620.....................  Jefferson City, MO...............     0.8332
                             Callaway County, MO.............
                             Cole County, MO.................
                             Moniteau County, MO.............
                             Osage County, MO................
27740.....................  Johnson City, TN.................     0.8043
                             Carter County, TN...............
                             Unicoi County, TN...............
                             Washington County, TN...........
27780.....................  Johnstown, PA....................     0.8620
                             Cambria County, PA..............
27860.....................  Jonesboro, AR....................     0.7662
                             Craighead County, AR............
                             Poinsett County, AR.............
27900.....................  Joplin, MO.......................     0.8605
                             Jasper County, MO...............
                             Newton County, MO...............
28020.....................  Kalamazoo-Portage, MI............     1.0704
                             Kalamazoo County, MI............
                             Van Buren County, MI............

[[Page 26267]]

 
28100.....................  Kankakee-Bradley, IL.............     1.0083
                             Kankakee County, IL.............
28140.....................  Kansas City, MO-KS...............     0.9495
                             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.....     1.0343
                             Benton County, WA...............
                             Franklin County, WA.............
28660.....................  Killeen-Temple-Fort Hood, TX.....     0.8901
                             Bell County, TX.................
                             Coryell County, TX..............
                             Lampasas County, TX.............
28700.....................  Kingsport-Bristol-Bristol, TN-VA.     0.7985
                             Hawkins County, TN..............
                             Sullivan County, TN.............
                             Bristol City, VA................
                             Scott County, VA................
                             Washington County, VA...........
28740.....................  Kingston, NY.....................     0.9367
                             Ulster County, NY...............
28940.....................  Knoxville, TN....................     0.8249
                             Anderson County, TN.............
                             Blount County, TN...............
                             Knox County, TN.................
                             Loudon County, TN...............
                             Union County, TN................
29020.....................  Kokomo, IN.......................     0.9669
                             Howard County, IN...............
                             Tipton County, IN...............
29100.....................  La Crosse, WI-MN.................     0.9426
                             Houston County, MN..............
                             La Crosse County, WI............
29140.....................  Lafayette, IN....................     0.8931
                             Benton County, IN...............
                             Carroll County, IN..............
                             Tippecanoe County, IN...........
29180.....................  Lafayette, LA....................     0.8289
                             Lafayette Parish, LA............
                             St. Martin Parish, LA...........
29340.....................  Lake Charles, LA.................     0.7914
                             Calcasieu Parish, LA............
                             Cameron Parish, LA..............
29404.....................  Lake County-Kenosha County, IL-WI     1.0570
                             Lake County, IL.................
                             Kenosha County, WI..............
29460.....................  Lakeland, FL.....................     0.8879
                             Polk County, FL.................
29540.....................  Lancaster, PA....................     0.9589
                             Lancaster County, PA............
29620.....................  Lansing-East Lansing, MI.........     1.0088
                             Clinton County, MI..............
                             Eaton County, MI................
                             Ingham County, MI...............
29700.....................  Laredo, TX.......................     0.7811
                             Webb County, TX.................
29740.....................  Las Cruces, NM...................     0.9273
                             Dona Ana County, NM.............

[[Page 26268]]

 
29820.....................  Las Vegas-Paradise, NV...........     1.1430
                             Clark County, NV................
29940.....................  Lawrence, KS.....................     0.8365
                             Douglas County, KS..............
30020.....................  Lawton, OK.......................     0.8065
                             Comanche County, OK.............
30140.....................  Lebanon, PA......................     0.8679
                             Lebanon County, PA..............
30300.....................  Lewiston, ID-WA..................     0.9853
                             Nez Perce County, ID............
                             Asotin County, WA...............
30340.....................  Lewiston-Auburn, ME..............     0.9126
                             Androscoggin County, ME.........
30460.....................  Lexington-Fayette, KY............     0.9181
                             Bourbon County, KY..............
                             Clark County, KY................
                             Fayette County, KY..............
                             Jessamine County, KY............
                             Scott County, KY................
                             Woodford County, KY.............
30620.....................  Lima, OH.........................     0.9042
                             Allen County, OH................
30700.....................  Lincoln, NE......................     1.0092
                             Lancaster County, NE............
                             Seward County, NE...............
30780.....................  Little Rock-North Little Rock, AR     0.8890
                             Faulkner County, AR.............
                             Grant County, AR................
                             Lonoke County, AR...............
                             Perry County, AR................
                             Pulaski County, AR..............
                             Saline County, AR...............
30860.....................  Logan, UT-ID.....................     0.9022
                             Franklin County, ID.............
                             Cache County, UT................
30980.....................  Longview, TX.....................     0.8788
                             Gregg County, TX................
                             Rusk County, TX.................
                             Upshur County, TX...............
31020.....................  Longview, WA.....................     1.0011
                             Cowlitz County, WA..............
31084.....................  Los Angeles-Long Beach-Glendale,      1.1760
                             CA.
                             Los Angeles County, CA..........
31140.....................  Louisville, KY-IN................     0.9118
                             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......................     0.8613
                             Crosby County, TX...............
                             Lubbock County, TX..............
31340.....................  Lynchburg, VA....................     0.8694
                             Amherst County, VA..............
                             Appomattox County, VA...........
                             Bedford County, VA..............
                             Campbell County, VA.............
                             Bedford City, VA................
                             Lynchburg City, VA..............
31420.....................  Macon, GA........................     0.9519
                             Bibb County, GA.................
                             Crawford County, GA.............

[[Page 26269]]

 
                             Jones County, GA................
                             Monroe County, GA...............
                             Twiggs County, GA...............
31460.....................  Madera, CA.......................     0.8154
                             Madera County, CA...............
31540.....................  Madison, WI......................     1.0840
                             Columbia County, WI.............
                             Dane County, WI.................
                             Iowa County, WI.................
31700.....................  Manchester-Nashua, NH............     1.0243
                             Hillsborough County, NH.........
                             Merrimack County, NH............
31900.....................  Mansfield, OH....................     0.9271
                             Richland County, OH.............
32420.....................  Mayag[uuml]ez, PR................     0.3848
                             Hormigueros Municipio, PR.......
                             Mayag[uuml]ez Municipio, PR.....
32580.....................  McAllen-Edinburg-Pharr, TX.......     0.8773
                             Hidalgo County, TX..............
32780.....................  Medford, OR......................     1.0818
                             Jackson County, OR..............
32820.....................  Memphis, TN-MS-AR................     0.9373
                             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.......................     1.1471
                             Merced County, CA...............
33124.....................  Miami-Miami Beach-Kendall, FL....     0.9812
                             Miami-Dade County, FL...........
33140.....................  Michigan City-La Porte, IN.......     0.9118
                             LaPorte County, IN..............
33260.....................  Midland, TX......................     0.9786
                             Midland County, TX..............
33340.....................  Milwaukee-Waukesha-West Allis, WI     1.0218
                             Milwaukee County, WI............
                             Ozaukee County, WI..............
                             Washington County, WI...........
                             Waukesha County, WI.............
33460.....................  Minneapolis-St. Paul-Bloomington,     1.0946
                             MN-WI.
                             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.....................     0.8928
                             Missoula County, MT.............
33660.....................  Mobile, AL.......................     0.7913
                             Mobile County, AL...............
33700.....................  Modesto, CA......................     1.1729
                             Stanislaus County, CA...........
33740.....................  Monroe, LA.......................     0.7997
                             Ouachita Parish, LA.............
                             Union Parish, LA................
33780.....................  Monroe, MI.......................     0.9707
                             Monroe County, MI...............
33860.....................  Montgomery, AL...................     0.8009
                             Autauga County, AL..............

[[Page 26270]]

 
                             Elmore County, AL...............
                             Lowndes County, AL..............
                             Montgomery County, AL...........
34060.....................  Morgantown, WV...................     0.8423
                             Monongalia County, WV...........
                             Preston County, WV..............
34100.....................  Morristown, TN...................     0.7933
                             Grainger County, TN.............
                             Hamblen County, TN..............
                             Jefferson County, TN............
34580.....................  Mount Vernon-Anacortes, WA.......     1.0517
                             Skagit County, WA...............
34620.....................  Muncie, IN.......................     0.8562
                             Delaware County, IN.............
34740.....................  Muskegon-Norton Shores, MI.......     0.9941
                             Muskegon County, MI.............
34820.....................  Myrtle Beach-Conway-North Myrtle      0.8810
                             Beach, SC.
                             Horry County, SC................
34900.....................  Napa, CA.........................     1.3374
                             Napa County, CA.................
34940.....................  Naples-Marco Island, FL..........     0.9941
                             Collier County, FL..............
34980.....................  Nashville-Davidson--Murfreesboro,     0.9847
                             TN.
                             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...............     1.2662
                             Nassau County, NY...............
                             Suffolk County, NY..............
35084.....................  Newark-Union, NJ-PA..............     1.1892
                             Essex County, NJ................
                             Hunterdon County, NJ............
                             Morris County, NJ...............
                             Sussex County, NJ...............
                             Union County, NJ................
                             Pike County, PA.................
35300.....................  New Haven-Milford, CT............     1.1953
                             New Haven County, CT............
35380.....................  New Orleans-Metairie-Kenner, LA..     0.8831
                             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-Wayne-White Plains, NY-      1.3177
                             NJ.
                             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..........     0.8915
                             Berrien County, MI..............

[[Page 26271]]

 
35980.....................  Norwich-New London, CT...........     1.1932
                             New London County, CT...........
36084.....................  Oakland-Fremont-Hayward, CA......     1.5819
                             Alameda County, CA..............
                             Contra Costa County, CA.........
36100.....................  Ocala, FL........................     0.8867
                             Marion County, FL...............
36140.....................  Ocean City, NJ...................     1.0472
                             Cape May County, NJ.............
36220.....................  Odessa, TX.......................     1.0073
                             Ector County, TX................
36260.....................  Ogden-Clearfield, UT.............     0.8995
                             Davis County, UT................
                             Morgan County, UT...............
                             Weber County, UT................
36420.....................  Oklahoma City, OK................     0.8843
                             Canadian County, OK.............
                             Cleveland County, OK............
                             Grady County, OK................
                             Lincoln County, OK..............
                             Logan County, OK................
                             McClain County, OK..............
                             Oklahoma County, OK.............
36500.....................  Olympia, WA......................     1.1081
                             Thurston County, WA.............
36540.....................  Omaha-Council Bluffs, NE-IA......     0.9450
                             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, FL......................     0.9452
                             Lake County, FL.................
                             Orange County, FL...............
                             Osceola County, FL..............
                             Seminole County, FL.............
36780.....................  Oshkosh-Neenah, WI...............     0.9315
                             Winnebago County, WI............
36980.....................  Owensboro, KY....................     0.8748
                             Daviess County, KY..............
                             Hancock County, KY..............
                             McLean County, KY...............
37100.....................  Oxnard-Thousand Oaks-Ventura, CA.     1.1546
                             Ventura County, CA..............
37340.....................  Palm Bay-Melbourne-Titusville, FL     0.9443
                             Brevard County, FL..............
37460.....................  Panama City-Lynn Haven, FL.......     0.8027
                             Bay County, FL..................
37620.....................  Parkersburg-Marietta, WV-OH......     0.7977
                             Washington County, OH...........
                             Pleasants County, WV............
                             Wirt County, WV.................
                             Wood County, WV.................
37700.....................  Pascagoula, MS...................     0.8215
                             George County, MS...............
                             Jackson County, MS..............
37860.....................  Pensacola-Ferry Pass-Brent, FL...     0.8000
                             Escambia County, FL.............
                             Santa Rosa County, FL...........
37900.....................  Peoria, IL.......................     0.8982
                             Marshall County, IL.............
                             Peoria County, IL...............
                             Stark County, IL................
                             Tazewell County, IL.............
                             Woodford County, IL.............
37964.....................  Philadelphia, PA.................     1.0996
                             Bucks County, PA................

[[Page 26272]]

 
                             Chester County, PA..............
                             Delaware County, PA.............
                             Montgomery County, PA...........
                             Philadelphia County, PA.........
38060.....................  Phoenix-Mesa-Scottsdale, AZ......     1.0287
                             Maricopa County, AZ.............
                             Pinal County, AZ................
38220.....................  Pine Bluff, AR...................     0.8383
                             Cleveland County, AR............
                             Jefferson County, AR............
                             Lincoln County, AR..............
38300.....................  Pittsburgh, PA...................     0.8674
                             Allegheny County, PA............
                             Armstrong County, PA............
                             Beaver County, PA...............
                             Butler County, PA...............
                             Fayette County, PA..............
                             Washington County, PA...........
                             Westmoreland County, PA.........
38340.....................  Pittsfield, MA...................     1.0266
                             Berkshire County, MA............
38540.....................  Pocatello, ID....................     0.9400
                             Bannock County, ID..............
                             Power County, ID................
38660.....................  Ponce, PR........................     0.4842
                             Juana D[iacute]az Municipio, PR.
                             Ponce Municipio, PR.............
                             Villalba Municipio, PR..........
38860.....................  Portland-South Portland-              0.9908
                             Biddeford, ME.
                             Cumberland County, ME...........
                             Sagadahoc County, ME............
                             York County, ME.................
38900.....................  Portland-Vancouver-Beaverton, OR-     1.1416
                             WA.
                             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...     0.9833
                             Martin County, FL...............
                             St. Lucie County, FL............
39100.....................  Poughkeepsie-Newburgh-Middletown,     1.0911
                             NY.
                             Dutchess County, NY.............
                             Orange County, NY...............
39140.....................  Prescott, AZ.....................     0.9836
                             Yavapai County, AZ..............
39300.....................  Providence-New Bedford-Fall           1.0783
                             River, RI-MA.
                             Bristol County, MA..............
                             Bristol County, RI..............
                             Kent County, RI.................
                             Newport County, RI..............
                             Providence County, RI...........
                             Washington County, RI...........
39340.....................  Provo-Orem, UT...................     0.9537
                             Juab County, UT.................
                             Utah County, UT.................
39380.....................  Pueblo, CO.......................     0.8753
                             Pueblo County, CO...............
39460.....................  Punta Gorda, FL..................     0.9405
                             Charlotte County, FL............
39540.....................  Racine, WI.......................     0.9356
                             Racine County, WI...............
39580.....................  Raleigh-Cary, NC.................     0.9864
                             Franklin County, NC.............
                             Johnston County, NC.............
                             Wake County, NC.................
39660.....................  Rapid City, SD...................     0.8833
                             Meade County, SD................

[[Page 26273]]

 
                             Pennington County, SD...........
39740.....................  Reading, PA......................     0.9622
                             Berks County, PA................
39820.....................  Redding, CA......................     1.3198
                             Shasta County, CA...............
39900.....................  Reno-Sparks, NV..................     1.1963
                             Storey County, NV...............
                             Washoe County, NV...............
40060.....................  Richmond, VA.....................     0.9177
                             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..............
                             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,     1.0904
                             CA.
                             Riverside County, CA............
                             San Bernardino County, CA.......
40220.....................  Roanoke, VA......................     0.8647
                             Botetourt County, VA............
                             Craig County, VA................
                             Franklin County, VA.............
                             Roanoke County, VA..............
                             Roanoke City, VA................
                             Salem City, VA..................
40340.....................  Rochester, MN....................     1.1408
                             Dodge County, MN................
                             Olmsted County, MN..............
                             Wabasha County, MN..............
40380.....................  Rochester, NY....................     0.8994
                             Livingston County, NY...........
                             Monroe County, NY...............
                             Ontario County, NY..............
                             Orleans County, NY..............
                             Wayne County, NY................
40420.....................  Rockford, IL.....................     0.9989
                             Boone County, IL................
                             Winnebago County, IL............
40484.....................  Rockingham County-Strafford           1.0159
                             County, NH.
                             Rockingham County, NH...........
                             Strafford County, NH............
40580.....................  Rocky Mount, NC..................     0.8854
                             Edgecombe County, NC............
                             Nash County, NC.................
40660.....................  Rome, GA.........................     0.9193
                             Floyd County, GA................
40900.....................  Sacramento--Arden-Arcade--            1.3372
                             Roseville, CA.
                             El Dorado County, CA............
                             Placer County, CA...............
                             Sacramento County, CA...........
                             Yolo County, CA.................
40980.....................  Saginaw-Saginaw Township North,       0.8874
                             MI.
                             Saginaw County, MI..............
41060.....................  St. Cloud, MN....................     1.0362
                             Benton County, MN...............
                             Stearns County, MN..............

[[Page 26274]]

 
41100.....................  St. George, UT...................     0.9265
                             Washington County, UT...........
41140.....................  St. Joseph, MO-KS................     1.0118
                             Doniphan County, KS.............
                             Andrew County, MO...............
                             Buchanan County, MO.............
                             DeKalb County, MO...............
41180.....................  St. Louis, MO-IL.................     0.9005
                             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............
                             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........................     1.0438
                             Marion County, OR...............
                             Polk County, OR.................
41500.....................  Salinas, CA......................     1.4337
                             Monterey County, CA.............
41540.....................  Salisbury, MD....................     0.8953
                             Somerset County, MD.............
                             Wicomico County, MD.............
41620.....................  Salt Lake City, UT...............     0.9402
                             Salt Lake County, UT............
                             Summit County, UT...............
                             Tooele County, UT...............
41660.....................  San Angelo, TX...................     0.8362
                             Irion County, TX................
                             Tom Green County, TX............
41700.....................  San Antonio, TX..................     0.8844
                             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     1.1354
                             San Diego County, CA............
41780.....................  Sandusky, OH.....................     0.9302
                             Erie County, OH.................
41884.....................  San Francisco-San Mateo-Redwood       1.5165
                             City, CA.
                             Marin County, CA................
                             San Francisco County, CA........
                             San Mateo County, CA............
41900.....................  San Germ[aacute]n-Cabo Rojo, PR..     0.4885
                             Cabo Rojo Municipio, PR.........
                             Lajas Municipio, PR.............
                             Sabana Grande Municipio, PR.....
                             San Germ[aacute]n Municipio, PR.
41940.....................  San Jose-Sunnyvale-Santa Clara,       1.5543
                             CA.
                             San Benito County, CA...........
                             Santa Clara County, CA..........
41980.....................  San Juan-Caguas-Guaynabo, PR.....     0.4452
                             Aguas Buenas Municipio, PR......
                             Aibonito Municipio, PR..........
                             Arecibo Municipio, PR...........
                             Barceloneta Municipio, PR.......

[[Page 26275]]

 
                             Barranquitas Municipio, PR......
                             Bayam[oacute]n Municipio, PR....
                             Caguas Municipio, PR............
                             Camuy Municipio, PR.............
                             Can[oacute]vanas Municipio, PR..
                             Carolina Municipio, PR..........
                             Cata[ntilde]o Municipio, PR.....
                             Cayey Municipio, PR.............
                             Ciales Municipio, PR............
                             Cidra Municipio, PR.............
                             Comer[iacute]o Municipio, PR....
                             Corozal Municipio, PR...........
                             Dorado Municipio, PR............
                             Florida Municipio, PR...........
                             Guaynabo Municipio, PR..........
                             Gurabo Municipio, PR............
                             Hatillo Municipio, PR...........
                             Humacao Municipio, PR...........
                             Juncos Municipio, PR............
                             Las Piedras Municipio, PR.......
                             Lo[iacute]za Municipio, PR......
                             Manat[iacute] Municipio, PR.....
                             Maunabo Municipio, PR...........
                             Morovis Municipio, PR...........
                             Naguabo Municipio, PR...........
                             Naranjito Municipio, PR.........
                             Orocovis Municipio, PR..........
                             Quebradillas Municipio, PR......
                             R[iacute]o 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..     1.1598
                             San Luis Obispo County, CA......
42044.....................  Santa Ana-Anaheim-Irvine, CA.....     1.1473
                             Orange County, CA...............
42060.....................  Santa Barbara-Santa Maria-Goleta,     1.1091
                             CA.
                             Santa Barbara County, CA........
42100.....................  Santa Cruz-Watsonville, CA.......     1.5457
                             Santa Cruz County, CA...........
42140.....................  Santa Fe, NM.....................     1.0824
                             Santa Fe County, NM.............
42220.....................  Santa Rosa-Petaluma, CA..........     1.4464
                             Sonoma County, CA...............
42260.....................  Sarasota-Bradenton-Venice, FL....     0.9868
                             Manatee County, FL..............
                             Sarasota County, FL.............
42340.....................  Savannah, GA.....................     0.9351
                             Bryan County, GA................
                             Chatham County, GA..............
                             Effingham County, GA............
42540.....................  Scranton--Wilkes-Barre, PA.......     0.8347
                             Lackawanna County, PA...........
                             Luzerne County, PA..............
                             Wyoming County, PA..............
42644.....................  Seattle-Bellevue-Everett, WA.....     1.1434
                             King County, WA.................
                             Snohomish County, WA............
42680.....................  Sebastian-Vero Beach, FL.........     0.9573
                             Indian River County, FL.........
43100.....................  Sheboygan, WI....................     0.9026
                             Sheboygan County, WI............
43300.....................  Sherman-Denison, TX..............     0.8502
                             Grayson County, TX..............
43340.....................  Shreveport-Bossier City, LA......     0.8865

[[Page 26276]]

 
                             Bossier Parish, LA..............
                             Caddo Parish, LA................
                             De Soto Parish, LA..............
43580.....................  Sioux City, IA-NE-SD.............     0.9200
                             Woodbury County, IA.............
                             Dakota County, NE...............
                             Dixon County, NE................
                             Union County, SD................
43620.....................  Sioux Falls, SD..................     0.9559
                             Lincoln County, SD..............
                             McCook County, SD...............
                             Minnehaha County, SD............
                             Turner County, SD...............
43780.....................  South Bend-Mishawaka, IN-MI......     0.9842
                             St. Joseph County, IN...........
                             Cass County, MI.................
43900.....................  Spartanburg, SC..................     0.9174
                             Spartanburg County, SC..........
44060.....................  Spokane, WA......................     1.0447
                             Spokane County, WA..............
44100.....................  Springfield, IL..................     0.8890
                             Menard County, IL...............
                             Sangamon County, IL.............
44140.....................  Springfield, MA..................     1.0079
                             Franklin County, MA.............
                             Hampden County, MA..............
                             Hampshire County, MA............
44180.....................  Springfield, MO..................     0.8469
                             Christian County, MO............
                             Dallas County, MO...............
                             Greene County, MO...............
                             Polk County, MO.................
                             Webster County, MO..............
44220.....................  Springfield, OH..................     0.8593
                             Clark County, OH................
44300.....................  State College, PA................     0.8784
                             Centre County, PA...............
44700.....................  Stockton, CA.....................     1.1442
                             San Joaquin County, CA..........
44940.....................  Sumter, SC.......................     0.8083
                             Sumter County, SC...............
45060.....................  Syracuse, NY.....................     0.9691
                             Madison County, NY..............
                             Onondaga County, NY.............
                             Oswego County, NY...............
45104.....................  Tacoma, WA.......................     1.0789
                             Pierce County, WA...............
45220.....................  Tallahassee, FL..................     0.8942
                             Gadsden County, FL..............
                             Jefferson County, FL............
                             Leon County, FL.................
                             Wakulla County, FL..............
45300.....................  Tampa-St. Petersburg-Clearwater,      0.9144
                             FL.
                             Hernando County, FL.............
                             Hillsborough County, FL.........
                             Pasco County, FL................
                             Pinellas County, FL.............
45460.....................  Terre Haute, IN..................     0.8765
                             Clay County, IN.................
                             Sullivan County, IN.............
                             Vermillion County, IN...........
                             Vigo County, IN.................
45500.....................  Texarkana, TX-Texarkana, AR......     0.8104
                             Miller County, AR...............
                             Bowie County, TX................
45780.....................  Toledo, OH.......................     0.9586
                             Fulton County, OH...............
                             Lucas County, OH................
                             Ottawa County, OH...............
                             Wood County, OH.................

[[Page 26277]]

 
45820.....................  Topeka, KS.......................     0.8730
                             Jackson County, KS..............
                             Jefferson County, KS............
                             Osage County, KS................
                             Shawnee County, KS..............
                             Wabaunsee County, KS............
45940.....................  Trenton-Ewing, NJ................     1.0835
                             Mercer County, NJ...............
46060.....................  Tucson, AZ.......................     0.9202
                             Pima County, AZ.................
46140.....................  Tulsa, OK........................     0.8103
                             Creek County, OK................
                             Okmulgee County, OK.............
                             Osage County, OK................
                             Pawnee County, OK...............
                             Rogers County, OK...............
                             Tulsa County, OK................
                             Wagoner County, OK..............
46220.....................  Tuscaloosa, AL...................     0.8542
                             Greene County, AL...............
                             Hale County, AL.................
                             Tuscaloosa County, AL...........
46340.....................  Tyler, TX........................     0.8811
                             Smith County, TX................
46540.....................  Utica-Rome, NY...................     0.8396
                             Herkimer County, NY.............
                             Oneida County, NY...............
46660.....................  Valdosta, GA.....................     0.8369
                             Brooks County, GA...............
                             Echols County, GA...............
                             Lanier County, GA...............
                             Lowndes County, GA..............
46700.....................  Vallejo-Fairfield, CA............     1.5137
                             Solano County, CA...............
47020.....................  Victoria, TX.....................     0.8560
                             Calhoun County, TX..............
                             Goliad County, TX...............
                             Victoria County, TX.............
47220.....................  Vineland-Millville-Bridgeton, NJ.     0.9832
                             Cumberland County, NJ...........
47260.....................  Virginia Beach-Norfolk-Newport        0.8790
                             News, VA-NC.
                             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..........     0.9968
                             Tulare County, CA...............
47380.....................  Waco, TX.........................     0.8633
                             McLennan County, TX.............
47580.....................  Warner Robins, GA................     0.8380
                             Houston County, GA..............
47644.....................  Warren-Troy-Farmington Hills, MI.     1.0054
                             Lapeer County, MI...............
                             Livingston County, MI...........
                             Macomb County, MI...............
                             Oakland County, MI..............
                             St. Clair County, MI............
47894.....................  Washington-Arlington-Alexandria,      1.1054
                             DC-VA-MD-WV.

[[Page 26278]]

 
                             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.............
                             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.........     0.8408
                             Black Hawk County, IA...........
                             Bremer County, IA...............
                             Grundy County, IA...............
48140.....................  Wausau, WI.......................     0.9722
                             Marathon County, WI.............
48260.....................  Weirton-Steubenville, WV-OH......     0.8063
                             Jefferson County, OH............
                             Brooke County, WV...............
                             Hancock County, WV..............
48300.....................  Wenatchee, WA....................     1.0346
                             Chelan County, WA...............
                             Douglas County, WA..............
48424.....................  West Palm Beach-Boca Raton-           0.9649
                             Boynton Beach, FL.
                             Palm Beach County, FL...........
48540.....................  Wheeling, WV-OH..................     0.7010
                             Belmont County, OH..............
                             Marshall County, WV.............
                             Ohio County, WV.................
48620.....................  Wichita, KS......................     0.9063
                             Butler County, KS...............
                             Harvey County, KS...............
                             Sedgwick County, KS.............
                             Sumner County, KS...............
48660.....................  Wichita Falls, TX................     0.8311
                             Archer County, TX...............
                             Clay County, TX.................
                             Wichita County, TX..............
48700.....................  Williamsport, PA.................     0.8139
                             Lycoming County, PA.............
48864.....................  Wilmington, DE-MD-NJ.............     1.0684
                             New Castle County, DE...........
                             Cecil County, MD................
                             Salem County, NJ................
48900.....................  Wilmington, NC...................     0.9835
                             Brunswick County, NC............
                             New Hanover County, NC..........
                             Pender County, NC...............
49020.....................  Winchester, VA-WV................     1.0091
                             Frederick County, VA............
                             Winchester City, VA.............
                             Hampshire County, WV............
49180.....................  Winston-Salem, NC................     0.9276
                             Davie County, NC................
                             Forsyth County, NC..............
                             Stokes County, NC...............
                             Yadkin County, NC...............
49340.....................  Worcester, MA....................     1.0722
                             Worcester County, MA............
49420.....................  Yakima, WA.......................     0.9847

[[Page 26279]]

 
                             Yakima County, WA...............
49500.....................  Yauco, PR........................     0.3854
                             Gu[aacute]nica Municipio, PR....
                             Guayanilla Municipio, PR........
                             Pe[ntilde]uelas Municipio, PR...
                             Yauco Municipio, PR.............
49620.....................  York-Hanover, PA.................     0.9397
                             York County, PA.................
49660.....................  Youngstown-Warren-Boardman, OH-PA     0.8802
                             Mahoning County, OH.............
                             Trumbull County, OH.............
                             Mercer County, PA...............
49700.....................  Yuba City, CA....................     1.0730
                             Sutter County, CA...............
                             Yuba County, CA.................
49740.....................  Yuma, AZ.........................     0.9109
                             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 Wage Index for
    Rural Areas for Discharges Occurring From October 1, 2007 Through
                           September 30, 2008
------------------------------------------------------------------------
                                                                  Wage
          CBSA code                     Nonurban area            index
------------------------------------------------------------------------
01...........................  Alabama.......................     0.7591
02...........................  Alaska........................     1.0661
03...........................  Arizona.......................     0.8908
04...........................  Arkansas......................     0.7307
05...........................  California....................     1.1454
06...........................  Colorado......................     0.9325
07...........................  Connecticut...................     1.1709
08...........................  Delaware......................     0.9705
10...........................  Florida.......................     0.8594
11...........................  Georgia.......................     0.7593
12...........................  Hawaii........................     1.0448
13...........................  Idaho.........................     0.8120
14...........................  Illinois......................     0.8320
15...........................  Indiana.......................     0.8538
16...........................  Iowa..........................     0.8681
17...........................  Kansas........................     0.7998
18...........................  Kentucky......................     0.7768
19...........................  Louisiana.....................     0.7438
20...........................  Maine.........................     0.8443
21...........................  Maryland......................     0.8926
22...........................  Massachusetts \2\.............     1.1661
23...........................  Michigan......................     0.9062
24...........................  Minnesota.....................     0.9153
25...........................  Mississippi...................     0.7738
26...........................  Missouri......................     0.7927
27...........................  Montana.......................     0.8590
28...........................  Nebraska......................     0.8677
29...........................  Nevada........................     0.8944
30...........................  New Hampshire.................     1.0853
31...........................  New Jersey \1\................  .........
32...........................  New Mexico....................     0.8332
33...........................  New York......................     0.8232
34...........................  North Carolina................     0.8588
35...........................  North Dakota..................     0.7215
36...........................  Ohio..........................     0.8658
37...........................  Oklahoma......................     0.7629
38...........................  Oregon........................     0.9753
39...........................  Pennsylvania..................     0.8320
40...........................  Puerto Rico \3\...............     0.4047
41...........................  Rhode Island \1\..............  .........
42...........................  South Carolina................     0.8566
43...........................  South Dakota..................     0.8480
44...........................  Tennessee.....................     0.7827
45...........................  Texas.........................     0.7965
46...........................  Utah..........................     0.8140
47...........................  Vermont.......................     0.9744
48...........................  Virgin Islands................     0.8467
49...........................  Virginia......................     0.7940
50...........................  Washington....................     1.0263
51...........................  West Virginia.................     0.7607
52...........................  Wisconsin.....................     0.9553
53...........................  Wyoming.......................     0.9295
65...........................  Guam..........................    0.9611
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.
\2\ Massachusetts has areas designated as rural; however, no short-term,
  acute care hospitals are located in the area(s) for FY 2008. As
  discussed in the preamble in Section IV.B, we are proposing to impute
  a wage index value for rural Massachusettes based on the average wage
  index from all contiguous CBSAs.
\3\ Puerto Rico has areas designated as rural; however, no short-term,
  acute care hospitals are located in the area(s) for FY 2008. As
  discussed in the preamble in Section IV.B, we are proposing to
  continue to use the most recent wage index previously available for
  Puerto Rico as discussed in the FY 2006 IRF PPS final rule (70 FR
  47880).

[FR Doc. 07-2241 Filed 5-2-07; 8:45 am]
BILLING CODE 4120-01-P