[Federal Register Volume 72, Number 128 (Thursday, July 5, 2007)]
[Notices]
[Pages 36710-36711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3265]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-5042-N2]
RIN 0938-ZB00


Medicare Program; Solicitation for Proposals From Rural Hospitals 
to Participate in the Medicare Hospital Gainsharing Demonstration 
Program Under Section 5007 of the Deficit Reduction Act

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

ACTION: Notice.

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SUMMARY: This notice is to inform rural inpatient hospitals of an 
opportunity to

[[Page 36711]]

apply to participate in the Medicare Hospital Gainsharing Demonstration 
being implemented by CMS. The Medicare Hospital Gainsharing 
Demonstration authorized under section 5007 of the Deficit Reduction 
Act (DRA) of 2005 was established to test and evaluate methodologies 
and arrangements between hospitals and physicians designed to govern 
the utilization of inpatient hospital resources and physician work. The 
purpose of this demonstration is to improve the quality and efficiency 
of care provided to Medicare beneficiaries and to develop improved 
operational and financial hospital performance with the sharing of 
remuneration payments between hospitals and physicians in six projects, 
each project consisting of one hospital. Two projects must be rural. 
Because we received a limited response from rural hospitals to our 
original solicitation in September 2006, we are re-issuing our 
solicitation for proposals from rural hospitals only. Rural hospitals 
that submitted proposals previously are eligible to reapply. The goals 
and objectives of the demonstration remain unaltered. This 
demonstration will be limited in scope: we intend to focus on the 
short-term impacts of gainsharing programs.

DATES: Applications will be considered timely if we receive them on or 
before 5 p.m., eastern standard time, on September 4, 2007.

ADDRESSES: Mail or deliver applications to the following address:
    Centers for Medicare & Medicaid Services, Attention: Lisa Waters 
(CMS-5042-N2), Mail Stop: C4-17-27, 7500 Security Boulevard, Baltimore, 
Maryland 21244.
    Because of staff and resource limitations, we cannot accept 
applications by facsimile (FAX) transmission or by e-mail.

FOR FURTHER INFORMATION CONTACT: Lisa Waters at (410) 786-6615 or 
[email protected]. Interested parties can obtain a complete 
solicitation, application, and supporting information on the following 
CMS Web site at http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/2006_DRA_5007_Medicare_Hospital_Gainsharing_Demonstration.pdf.
    Paper copies can be obtained by writing to Lisa Waters at the 
address listed in the ADDRESSES section of this notice.
    Eligible Organizations: CMS is seeking applications from rural 
inpatient hospitals that receive payment under section 1886(d) of the 
Social Security Act (the Act), which is the authority for the hospital 
inpatient prospective payment system. For purposes of this 
demonstration, a hospital will be considered rural if it is rural under 
the inpatient prospective payment system (see 42 CFR 412.64(b)(1)).
    For the purpose of this demonstration, section 5007(g)(4) of the 
DRA provides that hospitals may provide gainsharing payments to 
physicians (as defined in section 1861(r)(1) or (r)(3) of the Act) and 
practitioners (as ``described in section 1842(e)(18)(C) of the Act''). 
The latter reference to ``section 1842(e)(18)(C)'' of the Act, however, 
clearly is a typographical error, as there is no such section, and it 
is clear from the context and legislative history that the reference 
was intended to be to section 1842(b)(18)(C) of the Act. Section 
5007(g) of DRA explicitly provides that the reference to physicians who 
are permitted to participate in the demonstration is deemed to include 
certain ``practitioners.'' Conference Report language also specifically 
refers to the inclusion of practitioners as part of the gainsharing 
arrangement. Since section 1842(e)(18)(C) of the Act does not exist, 
and since section 1842(b)(18)(C) of the Act is, with the exception of 
substituting (b) for (e), identical to that section, and specifically 
defines practitioners, we believe that section 1842(b)(18)(C) of the 
Act is the intended reference. We do not believe this typographical 
error impedes any authority to otherwise implement this demonstration. 
Furthermore, a comprehensive list of all eligibility requirements can 
be found in the ``Eligible Organizations'' section of the solicitation.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 5007 of the Deficit Reduction Act of 2005 (DRA) requires 
the establishment of a qualified gainsharing demonstration program that 
will test and evaluate methodologies and arrangements between hospitals 
and physicians designed to govern the utilization of inpatient hospital 
resources and physician work to improve the quality and efficiency of 
care provided to beneficiaries and to develop improved operational and 
financial hospital performance with the sharing of remuneration as 
specified in the project. It will have a short-term focus given the 
limited size of the demonstration.

II. Provisions of the Notice

    This notice solicits applications to participate in the DRA section 
5007 Medicare Hospital Gainsharing Demonstration that will assist in 
determining if gainsharing can align incentives between hospitals and 
physicians to improve the quality and efficiency of care provided to 
beneficiaries, which will promote improved operational and financial 
performance of hospitals. The focus of each demonstration will be to 
link physician incentive payments to improvements in quality and 
efficiency. Each demonstration will provide measures to ensure that the 
quality and efficiency of care provided to beneficiaries is monitored 
and improved.
    Overall, we seek demonstration models that result in savings to 
Medicare. We will assure the demonstration is budget neutral.

III. Collection of Information Requirements

    This information collection requirement is subject to the Paperwork 
Reduction Act of 1995; however, the collection is currently approved 
under OMB control number 0938-0880 entitled ``Medicare Demonstration 
Waiver Application.''


    Authority: Section 5007 of the Deficit Reduction Act of 2005, 
Pub. L. 109-171.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program; 
and No. 93.774, Medicare--Supplementary Medical Insurance Program)

    Dated: April 4, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Editorial Note: This document was received at the Office of the 
Federal Register on June 29, 2007.
[FR Doc. 07-3265 Filed 6-29-07; 4:00 pm]
BILLING CODE 4120-01-P