[Federal Register Volume 73, Number 25 (Wednesday, February 6, 2008)]
[Notices]
[Pages 6971-6973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-511]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-5014-N]


Medicare Program; Rural Community Hospital Demonstration Program; 
Solicitation of Additional Participants

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

ACTION: Notice.

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SUMMARY: This notice announces a solicitation for up to six additional 
hospitals to participate in the Rural Community Hospital Demonstration 
Program for the remainder of the 5-year time period allowed by section 
410A of

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the MMA that is currently scheduled to end in 2010.

DATES: Application Submission Deadline: Applications must be received 
by 5 p.m., e.s.t. on or before March 24, 2008. Only applications that 
are considered ``timely'' will be reviewed and considered by the 
technical panel.

ADDRESSES: The applications should be MAILED or sent by an overnight 
delivery service to the following address: Centers for Medicare & 
Medicaid Services, ATTN: Sid Mazumdar, Rural Community Hospital 
Demonstration, Medicare Demonstrations Program Group, Mail Stop C4-17-
27, 7500 Security Boulevard, Baltimore, MD 21244.
    Please allow sufficient time for mailed information to be received 
in a timely manner in the event of delivery delays. Because of staffing 
and resources limitations, and because we require an application 
containing an original signature, we cannot accept applications by 
facsimile (Fax) transmission.

FOR FURTHER INFORMATION CONTACT: Sid Mazumdar at (410) 786-6673 or by 
e-mail at: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 410A(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Pub. L. 108-173) (MMA) requires the 
Secretary to establish a demonstration to test the feasibility and 
advisability of establishing ``rural community hospitals'' for Medicare 
payment purposes for covered hospital inpatient services furnished to 
Medicare beneficiaries. A rural community hospital, as defined in 
section 410A(f)(1) of the MMA, is a hospital that--
     Is located in a rural area (as defined in section 
1886(d)(2)(D) of the Social Security Act (the Act) (42 U.S.C. 
1395ww(d)(2)(D))) or treated as being so located pursuant to section 
1886(d)(8)(E) of the Act (42 U.S.C. 1395ww(d)(8)(E));
     Has fewer than 51 acute care inpatient beds, as reported 
in its most recent cost report;
     Makes available 24-hour emergency care services; and
     Is not eligible for critical access hospital (CAH) 
designation, or has not been designated a CAH under section 1820 of the 
Act.
    Section 410A(a)(4) of the MMA specifies that the Secretary is to 
select for participation no more than 15 rural community hospitals in 
rural areas of States that the Secretary identifies as having low 
population densities. Using 2002 data from the U.S. Census Bureau, we 
identified the 10 States with the lowest population densities in which 
rural community hospitals must be located to participate in the 
demonstration: Alaska, Idaho, Montana, Nebraska, Nevada, New Mexico, 
North Dakota, South Dakota, Utah, and Wyoming. (Source: U.S. Census 
Bureau, Statistical Abstract of the United States: 2003).
    The demonstration is designed to test the feasibility and 
advisability of reasonable cost reimbursement for inpatient services to 
small rural hospitals. The demonstration is aimed at increasing the 
capability of the selected rural hospitals to meet the needs of their 
service areas.
    Section 410A(a)(5) of the MMA states the Secretary shall conduct 
the demonstration program for a 5-year period. We originally solicited 
applicants for the demonstration in May 2004; 13 hospitals began 
participation with cost report years beginning on or after October 1, 
2004. Four of these 13 hospitals have withdrawn from the program and 
have become CAHs. For the remaining 9 participating hospitals, the 
demonstration will end in 2010 when each hospital has completed its 
fifth cost report year.

II. Provisions of the Notice

    This notice announces the solicitation for up to six additional 
hospitals to participate in the Rural Community Hospital Demonstration 
Program. Hospitals that enter the demonstration under this solicitation 
will be able to participate for no more than 2 years. We will adhere to 
the requirement under section 410A of the MMA to limit the 
demonstration to 5 years, that is, the program will end in 2010.

A. Demonstration Payment Methodology

    Section 410A of the MMA requires that ``in conducting the 
demonstration program under this section, the Secretary shall ensure 
that the aggregate payments made by the Secretary do not exceed the 
amount which the Secretary would have paid if the demonstration program 
under this section was not implemented.'' In order to achieve budget 
neutrality for this demonstration program for FYs 2005, 2006, 2007, and 
2008, we adjusted the national hospital inpatient prospective payment 
system (IPPS) rates by an amount sufficient to offset the added costs 
of this demonstration program. We will present an estimate of the 
amount needed to offset the additional costs incurred under the 
demonstration in FY 2009, including the cost of newly selected rural 
community hospitals, in the FY 2009 IPPS proposed rule.
    Hospitals selected for participation in the demonstration will 
receive payment for covered inpatient services, with the exclusion of 
services furnished in a psychiatric or rehabilitation unit that is a 
distinct part of the hospital, using the following rules. For 
discharges occurring--
     In the first cost reporting period on or after the 
implementation of the program, their reasonable costs for covered 
inpatient services; or
     During the second or subsequent cost reporting period, the 
lesser of their reasonable costs or a target amount. The target amount 
in the second cost reporting period is defined as the reasonable costs 
of providing covered inpatient hospital services in the first cost 
reporting period, increased by the IPPS update factor (as defined in 
section 1886(b)(3)(B) of the Act) for that particular cost reporting 
period. The target amount in subsequent cost reporting periods is 
defined as the preceding cost reporting period's target amount 
increased by the IPPS update factor for that particular cost reporting 
period.
    Covered inpatient hospital services means inpatient hospital 
services (defined in section 1861(b) of the Act) and including extended 
care services furnished under an agreement under section 1883 of the 
Act.

B. Participation in the Demonstration

    To participate in this demonstration, a hospital must be located in 
one of the identified States and meet the criteria for a rural 
community hospital. Eligible hospitals that desire to participate in 
the demonstration must submit an application to CMS. Information about 
the demonstration and details on how to apply can be found on the CMS 
Web site at http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/2004_Rural_Community_Hospital_Dem- onstration_Program.pdf.

III. Collection of Information Requirements

    The information collection requirements contained in this notice 
are subject to the Paperwork Reduction Act of 1995 (PRA). As discussed 
in section II.B. of this notice, a hospital must submit the required 
information on the cover sheet of the CMS Medicare Waiver Demonstration 
Application to receive consideration by the technical review panel. The 
burden associated with voluntary requirement is the time and effort 
necessary to complete the Medicare Waiver Demonstration Application and 
submit the information

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to CMS. The burden associated with this requirement is currently 
approved under OMB control number 0938-0880 with an expiration date of 
November 20, 2010.

    Authority: Section 410A of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003, Pub. L. No. 108-173. 
(Catalog of Federal Domestic Assistance Program No. 93.773 
Medicare--Hospital Insurance Program; and No. 93.774, Medicare--
Supplementary Medical Insurance Program).

    Dated: January 11, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 08-511 Filed 2-1-08; 10:00 am]
BILLING CODE 4120-01-P