Federal Register, Volume 73 Issue 154 (Friday, August 8, 2008)

[Federal Register Volume 73, Number 154 (Friday, August 8, 2008)]
[Rules and Regulations]
[Pages 46370-46414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17797]

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Part II

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 2009; Final Rule

Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1554-F]
RIN 0938-AP19

Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for Federal Fiscal Year 2009

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

ACTION: Final rule.

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SUMMARY: This final rule updates the prospective payment rates for
inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY)
2009 (for discharges occurring on or after October 1, 2008 and on or
before September 30, 2009) 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 revising existing policies regarding the PPS within the
authority granted under section 1886(j) of the Act.

DATES: These regulations are effective October 1, 2008. The updated IRF
prospective payment rates are applicable for discharges on or after
October 1, 2008 and on or before September 30, 2009 (FY 2009).

FOR FURTHER INFORMATION CONTACT: Susanne Seagrave, (410) 786-0044, for
information regarding the payment policies.
Jeanette Kranacs, (410) 786-9385, for information regarding the
wage index.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS)
B. Operational Overview of the Current IRF PPS
II. Provisions of the Proposed Rule
III. Analysis of and Responses to Public Comments
IV. Update to the Case-Mix Group (CMG) Relative Weights and Average
Length of Stay Values for FY 2009
V. FY 2009 IRF PPS Federal Prospective Payment Rates
A. Increase Factor and Labor-Related Share for FY 2009
B. Area Wage Adjustment
C. Description of the IRF Standard Payment Conversion Factor and
Payment Rates for FY 2009
D. Example of the Methodology for Adjusting the Federal
Prospective Payment Rates
VI. Update to Payments for High-Cost Outliers Under the IRF PPS
A. Update to the Outlier Threshold Amount for FY 2009
B. Update to the IRF Cost-to-Charge Ratio Ceilings
VII. Revisions to the Regulation Text in Response to the Medicare,
Medicaid, and SCHIP Extension Act of 2007
VIII. Post Acute Care Payment Reform
IX. Miscellaneous Comments
X. Provisions of the Final Rule
XI. Collection of Information Requirements
XII. Regulatory Impact Statement
Regulation Text
Addendum

Acronyms

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

ASCA Administrative Simplification Compliance Act, Public Law 107-
105
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Public
Law 106-113
BIPA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Benefits Improvement and Protection Act of 2000,
Public Law 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, Public Law 109-171
DSH Disproportionate Share Hospital
ECI Employment Cost Index
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, Public
Law 104-191
IFMC Iowa Foundation for Medical Care
IPF Inpatient Psychiatric Facility
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
LTCH Long-Term Care Hospital
MAC Medicare Administrative Contractor
MEDPAR Medicare Provider Analysis and Review
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public
Law 110-173
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, Public Law 96-354
RIA Regulatory 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, Public Law
97-248

I. Background

A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS)

Section 4421 of the Balanced Budget Act of 1997 (BBA), Public Law
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), Public Law 106-113, and by section 305 of the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA), Public Law 106-554, provides for the implementation of
a per discharge prospective payment system (PPS) under 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 direct graduate medical
education costs, costs of approved nursing and allied health education
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 original FY 2002 IRF PPS final rule (66 FR 41316) and
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
2008.
Under the IRF PPS from FY 2002 through FY 2005, as described in the
FY 2002 IRF PPS final rule (66 FR 41316), the Federal prospective
payment rates were computed across 100 distinct case-mix groups (CMGs).
We constructed 95 CMGs using rehabilitation impairment

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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 FY 2004 IRF PPS final rule (68
FR 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. Within the
structure of the payment system, we then made adjustments to account
for interrupted stays, transfers, short stays, and deaths. Finally, we
applied the applicable adjustments to account for geographic variations
in wages (wage index), the percentage of low-income patients, location
in a rural area (if applicable), and outlier payments (if applicable)
to the IRF's unadjusted Federal prospective payment rates.
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 upon
the Secretary to propose refinements to the IRF PPS. In the FY 2006 IRF
PPS final rule (70 FR 47880) and in correcting amendments to the FY
2006 IRF PPS final rule (70 FR 57166) that we published on September
30, 2005, 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
included the adoption of OMB's Core-Based Statistical Area (CBSA)
market definitions, modifications to the CMGs, tier comorbidities, and
CMG relative weights, implementation of a new teaching status
adjustment for IRFs, revision and rebasing of the IRF market basket,
and updates to the rural, low-income percentage (LIP), and high-cost
outlier adjustments. Any reference to the FY 2006 IRF PPS final rule in
this final rule also includes the provisions effective in the
correcting amendments. For a detailed discussion of the final key
policy changes for FY 2006, please refer to the FY 2006 IRF PPS final
rule (70 FR 47880 and 70 FR 57166).
In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined
the IRF PPS case-mix classification system (the CMG relative weights)
and the case-level adjustments, to ensure that IRF PPS payments
continue to reflect as accurately as possible the costs of care. For a
detailed discussion of the FY 2007 policy revisions, please refer to
the FY 2007 IRF PPS final rule (71 FR 48354).
In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the
Federal prospective payment rates and the outlier threshold, revised
the IRF wage index policy, and clarified how we determine high-cost
outlier payments for transfer cases. For more information on the policy
changes implemented for FY 2008, please refer to the FY 2008 IRF PPS
final rule (72 FR 44284), in which we published the final FY 2008 IRF
Federal prospective payment rates.
After publication of the FY 2008 IRF PPS final rule (72 FR 44284),
section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007,
Public Law 110-173 (MMSEA), amended section 1886(j)(3)(C) of the Act to
apply a zero percent increase factor for FYs 2008 and 2009, effective
for IRF discharges occurring on or after April 1, 2008. Section
1886(j)(3)(C) of the Act requires the Secretary to develop an increase
factor to update the IRF Federal prospective payment rates for each FY.
Based on the legislative change to the increase factor, we revised the
FY 2008 Federal prospective payment rates for IRF discharges occurring
on or after April 1, 2008. Thus, the final FY 2008 IRF Federal
prospective payment rates that were published in the FY 2008 IRF PPS
final rule (72 FR 44284) were effective for discharges occurring on or
after October 1, 2007 and on or before March 31, 2008; and the revised
FY 2008 IRF Federal prospective payment rates are effective for
discharges occurring on or after April 1, 2008 and on or before
September 30, 2008. The revised FY 2008 Federal prospective payment
rates are available on the CMS Web site at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage.

B. Operational Overview of the Current IRF PPS

As described in the FY 2002 IRF PPS 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 classification programming called the GROUPER
software. The GROUPER software uses specific IRF-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 submits a Medicare claim as a
Health Insurance Portability and Accountability Act (HIPAA), Public Law
104-191, compliant electronic claim or, if the Administrative
Compliance Act (ASCA), Public Law 107-105, permits, a paper claim, a
UB-04 or a CMS-1450, (as appropriate) using the five-digit CMG number
and sends it to the

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appropriate Medicare fiscal intermediary (FI) or Medicare
Administrative Contractor (MAC). Claims submitted to Medicare must
comply with both ASCA and HIPAA. 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 situations in which there is no
method available for the submission of claims in an electronic form or
the entity submitting the claim is a small provider.
In addition, the Secretary also has the authority to waive such
denial ``in such unusual cases as the Secretary finds appropriate.'' We
refer the reader to the final rule, ``Medicare Program; 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 in 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 healthcare 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. CMS
instructions for the limited number of Medicare claims submitted on
paper are available at: http://www.cms.hhs.gov/manuals/downloads/clm104c25.pdf.)
The Medicare FI or MAC 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).

II. Provisions of the Proposed Rule

As discussed in the FY 2009 IRF PPS proposed rule (73 FR 22674), we
proposed to make revisions to the regulation text in response to
section 115 of the MMSEA. Specifically, we proposed to revise 42 CFR
part 412. We discuss these proposed revisions and others in detail
below.

A. Section 412.23 Excluded Hospitals: Classifications

We proposed to revise the regulation text in paragraph (b)(2)(i)
and remove paragraph (b)(2)(ii) in response to section 115 of the
MMSEA. To summarize, for cost reporting periods--
(1) Beginning on or after July 1, 2005, the hospital has served an
inpatient population of whom at least 60 percent require intensive
rehabilitation services for treatment of one or more of the conditions
specified at paragraph (b)(2)(ii) of this section (as amended by
removing former (b)(2)(ii) and redesignating former (b)(2)(iii) as the
new (b)(2)(ii)).
(2) A comorbidity that meets the criteria as specified in Sec.
412.23(b)(2)(i) may continue to be used to determine the compliance
threshold.

B. Additional Proposed Changes

Update the FY 2009 IRF PPS relative weights and average
length of stay values using the most current and complete Medicare
claims and cost report data, as discussed in section II of the FY 2009
IRF PPS proposed rule (73 FR 22674, 22676 through 22680).
Update the FY 2009 IRF PPS payment rates by the proposed
wage index and labor related share in a budget neutral manner, as
discussed in sections III.A and B of the FY 2009 IRF PPS proposed rule
(73 FR 22674, 22680 through 22686).
Update the outlier threshold amount for FY 2009, as
discussed in section IV.A of the FY 2009 IRF PPS proposed rule (73 FR
22674, 22686 through 22687).
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
IV.B of the FY 2009 IRF PPS proposed rule (73 FR 22674 at 22687).

III. Analysis of and Responses to Public Comments

We received approximately 17 timely items of correspondence
containing multiple comments on the FY 2009 IRF PPS proposed rule (73
FR 22674) from the public. We received comments from various trade
associations, inpatient rehabilitation facilities, health care industry
organizations, and health care consulting firms. The following
discussion, arranged by subject area, includes a summary of the public
comments that we received, and our responses to the comments appear
under the appropriate subject heading.

IV. Update to the CMG Relative Weights and Average Length of Stay
Values for FY 2009

As specified in 42 CFR 412.620(b)(1), we calculate a relative
weight for each CMG that is proportional to the resources needed by an
average inpatient rehabilitation case in that CMG. For example, cases
in a CMG with a relative weight of 2, on average, will cost twice as
much as cases in a CMG with a relative weight of 1. Relative weights
account for the variance in cost per discharge due to the variance in
resource utilization among the payment groups, and their use helps to
ensure that IRF PPS payments support beneficiary access to care as well
as provider efficiency.
In the FY 2009 IRF PPS proposed rule (73 FR 22674, 22676 through
22680), we proposed updates to the CMG relative weights and average
length of stay values using the most recent available data (FY 2006 IRF
claims, FY 2006 IRF-PAI, and FY 2006 IRF cost report data) to ensure
that IRF PPS payments continue to reflect as accurately as possible the
costs of care in IRFs. We proposed to do this using the same
methodology, with one change, that was described in the original, FY
2002 IRF PPS final rule (66 FR 41316) and the FY 2006 IRF PPS final
rule (70 FR 47880, 47887 through 47888). The proposed change to the
methodology involves using new, more detailed cost-to-charge ratio
(CCR) data from the cost reports of IRF subprovider units of primary
acute care hospitals, instead of CCR data from the associated primary
acute care hospitals, to calculate IRFs' average costs per case. In
general, we proposed to make this change in the methodology because the
more detailed CCR data from the IRF subprovider cost reports are now
available in sufficient detail, and the relationship between costs and
charge in the primary acute care hospital could differ from the
relationship between costs and charges in the IRF subprovider units,
making the data from the IRF subprovider units potentially more
accurate for estimating the average costs per case in these units. For
freestanding IRFs, we proposed to continue using CCR data from the

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freestanding IRF's cost report. We also noted that in future years we
would continue to estimate the CMG relative weights using both the
primary acute care hospital CCRs and the IRF subprovider unit CCRs to
ensure that we continue to use the most appropriate data in updating
the CMG relative weights.
In addition, we proposed to make changes to the CMG relative
weights for FY 2009 in such a way that total estimated aggregate
payments to IRFs for FY 2009 would be the same with or without the
proposed changes (that is, in a budget neutral manner) by applying a
budget neutrality factor to the standard payment amount, as described
in section II of the FY 2009 IRF PPS proposed rule (73 FR 22674 at
22677). To compute the budget neutrality factor used to update the CMG
relative weights, we proposed to use the following steps:
Step 1. Calculate the estimated total amount of IRF PPS payments
for FY 2009 (with no proposed changes to the CMG relative weights).
Step 2. Apply the proposed changes to the CMG relative weights (as
discussed above) to calculate the estimated total amount of IRF PPS
payments for FY 2009.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2 to determine the budget neutrality factor that
would maintain the same total estimated aggregate payments in FY 2009
with and without the proposed changes to the CMG relative weights.
Step 4. Apply the proposed budget neutrality factor to the FY 2008
IRF PPS standard payment amount after the application of the budget-
neutral wage adjustment factor.
Note that the budget neutrality factor that we use to update the
CMG relative weights for FY 2009 changed from 0.9969 in the proposed
rule to 0.9939 in this final rule due to the use of updated FY 2007 IRF
claims data in this final rule.
We received five comments on the proposed updates to the CMG
relative weights and average length of stay values, which are
summarized below.
Comment: Several commenters supported the proposed update to the
CMG relative weights for FY 2009, with one commenter referring to the
proposed update as a ``step in the right direction.'' However, several
commenters specifically suggested that we analyze the FY 2007 IRF
claims and cost report data in computing the CMG relative weights for
FY 2009, as these data would reflect more of the impact of recent
changes in the 75 percent rule and the IRF medical necessity reviews
than the FY 2006 IRF claims and cost report data. Further, one
commenter recommended that we seek additional cost information to use
to compute the CMG relative weights, including nursing staff time data,
ancillary cost data, and other alternatives to the IRF claims and cost
report data that we currently use to compute the CMG relative weights.
Finally, a couple of commenters recommended that we recalibrate the CMG
relative weights more frequently, with one commenter specifically
asking that we recalibrate the CMG relative weights again next year
(for FY 2010) using the most recent available data.
Response: We agree with the commenters that we should analyze the
most recent available IRF data to compute the CMG relative weights for
FY 2009 in order to ensure that IRF PPS payments continue to reflect as
accurately as possible the costs of care in IRFs. For the proposed
rule, we used data from FY 2006 IRF claims, FY 2006 IRF-PAI, and FY
2006 IRF cost reports because that was the best available data at the
time. For this final rule, we have updated the IRF claims data used in
our analysis of the CMG relative weights and average length of stay
values from FY 2006 to FY 2007.
We note that we used FY 2006 IRF-PAI data for analyzing the CMG
relative weights in the proposed rule because we implemented some minor
adjustments to the classification system for FY 2007 in the FY 2007 IRF
PPS final rule (71 FR 48354, 48360 through 48370). Accordingly, some of
the CMGs that appeared on the FY 2006 IRF claims data would not be the
same CMGs that would be assigned under the current, post-FY 2007 IRF
classification system. We therefore used the FY 2006 IRF-PAI data for
the proposed rule to ensure that the appropriate current CMG was
assigned for all of the FY 2006 claims. However, use of the IRF-PAI
data was no longer necessary when we used the FY 2007 IRF claims data
for this final rule because the CMG information on the FY 2007 IRF
claims data incorporated all of the changes to the IRF classification
system that were implemented in the FY 2007 IRF PPS final rule (71 FR
48354, 48360 through 48370). We did not implement any changes to the
IRF classification system in the FY 2008 IRF PPS final rule (72 FR
44284). The results of our analysis of the FY 2007 IRF claims data are
reflected in the CMG relative weights and average length of stay values
presented in Table 1 in this final rule.
We further note that we have not updated the IRF cost report data
used in this final rule. Although we agree with the commenter that it
is important to analyze the most recent available cost report data to
reflect as fully as possible the changes in IRF patient populations
that may have occurred as a result of changes in the 75 percent rule
and the IRF medical necessity reviews, only a small portion of the FY
2007 IRF cost reports are available for analysis at this time.
Accordingly, we have continued to use the FY 2006 cost report data for
analyzing IRFs' costs per case in this final rule because these are the
most complete IRF cost report data available at this time. However, we
will continue to evaluate the need for further updates and refinements
to the CMG relative weights and average length of stay values in future
years and would update the cost report data, as appropriate, when the
data become available.
We appreciate the commenter's suggestions regarding alternative
data to use in analyzing the costs of caring for IRF patients, and we
will carefully consider the commenter's suggestions for future
refinements to the methodology for computing the CMG relative weights.
Finally, we agree with the commenters that we may need to update
the CMG relative weight and average length of stay analysis frequently
to ensure that IRF payments continue to reflect the costs of caring for
IRF patients, especially in light of recent changes resulting from
changes to the 75 percent rule and the IRF medical necessity reviews.
We intend to continue analyzing the most recent available data, and
will propose future refinements to the IRF classification and weighting
system based on that analysis, as appropriate.
Comment: One commenter stated a concern that the methodology used
to revise the IRF classification system in the FY 2006 IRF PPS final
rule (70 FR 47880) may have reduced the overall IRF case mix weights.
This commenter asked CMS to re-examine this issue.
Response: As discussed in the FY 2006 IRF PPS final rule (70 FR
47880, 47886 through 47904), the FY 2007 IRF PPS final rule (71 FR
48354, 48373 through 48374), and the FY 2008 IRF PPS final rule (72 FR
44284 at 44293), we have analyzed the data and it continues to show
that the FY 2006 refinements to the IRF classification system did not
cause a reduction in the overall IRF case mix weights or in aggregate
IRF payments. We have met with industry representatives several times
in order to understand their concerns. We have also discussed the
results of our analysis with them, which continues to show that we
implemented the FY 2006 refinements to the IRF

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classification system in a budget neutral manner, so that estimated
aggregate payments to providers would not increase or decrease as a
result of these refinements.
Comment: One commenter questioned why only 141 (40 percent) of the
proposed FY 2009 CMG relative weight values increased compared with the
FY 2008 CMG relative weight values, while 212 (60 percent) of the
proposed FY 2009 CMG relative weight values decreased compared with the
FY 2008 CMG relative weight values. This commenter generally expressed
surprise at the proposed FY 2009 CMG relative weights values, but
indicated that certain changes appeared to be correct, particularly the
increases in the CMG relative weights for some of the orthopedic
conditions. However, the commenter questioned why the CMG relative
weight values for other types of cases decreased.
Response: As we discussed in the proposed rule (73 FR 22674 at
22680), updates to the CMG relative weights will result in some
increases and some decreases to the CMG relative weight values. This is
due to the distributional nature of CMG relative weight changes.
However, our updated analysis of the CMG relative weight values
presented in Table 1 of this final rule (which is based on more recent
data than that used in the proposed rule, as explained previously in
this section) now shows that more than half of the CMG relative weights
will increase and, further, that more than half of beneficiaries are in
payment groups for which the CMG relative weight will increase between
FY 2008 and FY 2009. Specifically, our analysis shows that 57 percent
of patients are classified into one of the 177 payment groups (that is,
the combination of CMG and tier) that will experience an increase in
the CMG relative weight value between FYs 2008 and 2009, and 43 percent
of patients are classified into one of the 176 classification groups
that will experience a decrease in the CMG relative weight value
between FYs 2008 and 2009.
Final Decision: We received only positive comments in support of
the proposal to change the methodology for determining IRFs' average
costs per case by using more detailed cost-to-charge ratio (CCR) data
from the cost reports of IRF subprovider units of primary acute care
hospitals to calculate the IRF subprovider units' average costs per
case. Thus, after carefully considering all of the comments that we
received on the proposed updates to the CMG relative weights and
average length of stay values, we are finalizing this change to the
methodology for the reasons explained previously and as described in
more detail in the proposed rule (73 FR 22674, 22676 through 22677).
For freestanding IRFs, we will continue to use the CCR data from the
freestanding IRFs' cost reports. Consistent with the methodology that
we used to compute the CMG relative weights for FYs 2002 through 2008,
with the one change described above, we are implementing the updates to
the CMG relative weights and average length of stay values presented in
Table 1 below. As recommended by the commenters, we have updated the
CMG relative weights and average length of stay values in Table 1 using
FY 2007 IRF claims data for this final rule. Further, as noted
previously, we have continued to use FY 2006 IRF cost report data for
this final rule because it is the best available cost report data at
this time.

Table 1--Relative Weights and Average Lengths of Stay for Case-Mix Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
CMG description Relative weight Average length of stay
CMG (M=motor, C=cognitive, ---------------------------------------------------------------------------------------
A=age) Tier 1 Tier 2 Tier 3 None Tier 1 Tier 2 Tier 3 None
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101.................................. Stroke: M>51.05......... 0.7712 0.7108 0.6381 0.6059 9 10 9 8
0102.................................. Stroke: M>44.45 and 0.9694 0.8936 0.8021 0.7617 11 11 11 10
M<51.05 and C>18.5.
0103.................................. Stroke: M>44.45 and 1.1478 1.0580 0.9496 0.9018 14 14 12 12
M<51.05 and C<18.5.
0104.................................. Stroke: M>38.85 and 1.2192 1.1238 1.0087 0.9579 13 14 13 13
M<44.45.
0105.................................. Stroke: M>34.25 and 1.4320 1.3199 1.1848 1.1251 16 18 15 15
M<38.85.
0106.................................. Stroke: M>30.05 and 1.6632 1.5330 1.3761 1.3067 19 19 17 17
M<34.25.
0107.................................. Stroke: M>26.15 and 1.8970 1.7485 1.5695 1.4904 20 21 19 19
M<30.05.
0108.................................. Stroke: M<26.15 and 2.2795 2.1011 1.8860 1.7910 27 26 23 22
A>84.5.
0109.................................. Stroke: M>22.35 and 2.1786 2.0081 1.8025 1.7117 22 23 21 22
M<26.15 and A<84.5.
0110.................................. Stroke: M<22.35 and 2.7217 2.5087 2.2518 2.1384 30 30 27 26
A<84.5.
0201.................................. Traumatic brain injury: 0.7556 0.6464 0.5818 0.5295 10 10 8 8
M>53.35 and C>23.5.
0202.................................. Traumatic brain injury: 1.0305 0.8817 0.7935 0.7222 13 11 10 10
M>44.25 and M<53.35 and
C>23.5.
0203.................................. Traumatic brain injury: 1.1487 0.9828 0.8846 0.8051 12 13 12 11
M>44.25 and C<23.5.
0204.................................. Traumatic brain injury: 1.2934 1.1066 0.9959 0.9064 15 14 13 12
M>40.65 and M<44.25.
0205.................................. Traumatic brain injury: 1.5739 1.3466 1.2119 1.1030 17 17 16 14
M>28.75 and M<40.65.
0206.................................. Traumatic brain injury: 1.9530 1.6709 1.5039 1.3687 21 21 18 18
M>22.05 and M<28.75.
0207.................................. Traumatic brain injury: 2.6307 2.2508 2.0257 1.8437 36 28 24 22
M<22.05.

[[Page 46375]]

0301.................................. Non-traumatic brain 1.1084 0.9308 0.8358 0.7650 12 12 11 10
injury: M>41.05.
0302.................................. Non-traumatic brain 1.4120 1.1857 1.0647 0.9746 14 15 13 13
injury: M>35.05 and
M<41.05.
0303.................................. Non-traumatic brain 1.6938 1.4224 1.2772 1.1691 17 17 16 15
injury: M>26.15 and
M<35.05.
0304.................................. Non-traumatic brain 2.3130 1.9424 1.7441 1.5966 27 23 21 20
injury: M<26.15.
0401.................................. Traumatic spinal cord 0.9255 0.7883 0.7732 0.6566 12 12 11 9
injury: M>48.45.
0402.................................. Traumatic spinal cord 1.3933 1.1868 1.1640 0.9886 17 15 16 13
injury: M>30.35 and
M<48.45.
0403.................................. Traumatic spinal cord 2.2823 1.9440 1.9067 1.6194 28 23 23 21
injury: M>16.05 and
M<30.35.
0404.................................. Traumatic spinal cord 3.9766 3.3872 3.3222 2.8215 53 40 37 34
injury: M<16.05 and
A>63.5.
0405.................................. Traumatic spinal cord .0347 2.5850 2.5354 2.1532 42 30 29 27
injury: M<16.05 and
A<63.5.
0501.................................. Non-traumatic spinal 0.8107 0.6397 0.5945 0.5245 9 9 8 8
cord injury: M>51.35.
0502.................................. Non-traumatic spinal 1.0994 0.8675 0.8062 0.7113 13 11 11 10
cord injury: M>40.15
and M<51.35.
0503.................................. Non-traumatic spinal 1.4315 1.1296 1.0497 0.9261 16 14 13 13
cord injury: M>31.25
and M<40.15.
0504.................................. Non-traumatic spinal 1.7229 1.3596 1.2634 1.1147 21 17 16 15
cord injury: M>29.25
and M<31.25.
0505.................................. Non-traumatic spinal 2.0360 1.6066 1.4930 1.3173 23 21 19 17
cord injury: M>23.75
and M<29.25.
0506.................................. Non-traumatic spinal 2.8325 2.2351 2.0770 1.8325 32 27 25 23
cord injury: M<23.75.
0601.................................. Neurological: M>47.75... 0.9245 0.7546 0.7174 0.6542 11 9 10 9
0602.................................. Neurological: M>37.35 1.2366 1.0094 0.9596 0.8750 12 13 12 12
and M<47.75.
0603.................................. Neurological: M>25.85 1.5763 1.2866 1.2232 1.1154 16 16 15 14
and M<37.35.
0604.................................. Neurological: M<25.85... 2.0887 1.7049 1.6208 1.4780 24 21 20 18
0701.................................. Fracture of lower 0.9187 0.7742 0.7300 0.6563 11 10 10 9
extremity: M>42.15.
0702.................................. Fracture of lower 1.2116 1.0209 0.9627 0.8655 14 14 12 12
extremity: M>34.15 and
M<42.15.
0703.................................. Fracture of lower 1.4846 1.2510 1.1797 1.0606 16 16 15 14
extremity: M>28.15 and
M<34.15.
0704.................................. Fracture of lower 1.8994 1.6005 1.5093 1.3569 20 20 19 17
extremity: M<28.15.
0801.................................. Replacement of lower 0.7000 0.5704 0.5172 0.4714 8 7 8 7
extremity joint:
M>49.55.
0802.................................. Replacement of lower 0.9380 0.7643 0.6931 0.6317 10 10 9 9
extremity joint:
M>37.05 and M<49.55.
0803.................................. Replacement of lower 1.3383 1.0905 0.9889 0.9013 14 13 13 12
extremity joint:
M>28.65 and M<37.05 and
A>83.5.
0804.................................. Replacement of lower 1.1745 0.9571 0.8679 0.7910 13 12 11 10
extremity joint:
M>28.65 and M<37.05 and
A<83.5.
0805.................................. Replacement of lower 1.4661 1.1947 1.0833 0.9874 16 16 13 13
extremity joint:
M>22.05 and M<28.65.
0806.................................. Replacement of lower 1.8139 1.4780 1.3403 1.2215 18 18 17 15
extremity joint:
M<22.05.
0901.................................. Other orthopedic: 0.8584 0.7574 0.6829 0.6041 10 10 9 9
M>44.75.
0902.................................. Other orthopedic: 1.1473 1.0122 0.9127 0.8074 13 13 12 11
M>34.35 and M<44.75.

[[Page 46376]]

0903.................................. Other orthopedic: 1.4840 1.3093 1.1806 1.0443 16 16 15 14
M>24.15 and M<34.35.
0904.................................. Other orthopedic: 1.9620 1.7310 1.5608 1.3807 22 22 19 18
M<24.15.
1001.................................. Amputation, lower 0.9356 0.9061 0.7797 0.7137 11 12 11 10
extremity: M>47.65.
1002.................................. Amputation, lower 1.2522 1.2127 1.0435 0.9552 14 15 13 12
extremity: M>36.25 and
M<47.65.
1003.................................. Amputation, lower 1.8193 1.7619 1.5161 1.3877 19 21 19 17
extremity: M<36.25.
1101.................................. Amputation, non-lower 1.1846 0.9851 0.9851 0.8558 12 12 13 11
extremity: M>36.35.
1102.................................. Amputation, non-lower 1.7288 1.4377 1.4377 1.2490 17 18 17 15
extremity: M<36.35.
1201.................................. Osteoarthritis: M>37.65. 1.0319 0.9668 0.8483 0.7541 11 12 11 10
1202.................................. Osteoarthritis: M>30.75 1.3034 1.2212 1.0715 0.9525 14 15 13 13
and M<37.65.
1203.................................. Osteoarthritis: M<30.75. 1.6379 1.5346 1.3465 1.1969 16 18 17 15
1301.................................. Rheumatoid, other 1.0983 0.9874 0.8499 0.7648 12 12 11 10
arthritis: M>36.35.
1302.................................. Rheumatoid, other 1.4790 1.3296 1.1445 1.0299 15 16 14 13
arthritis: M>26.15 and
M<36.35.
1303.................................. Rheumatoid, other 1.9140 1.7208 1.4812 1.3329 24 22 18 17
arthritis: M<26.15.
1401.................................. Cardiac: M>48.85........ 0.8003 0.7221 0.6388 0.5667 10 11 9 8
1402.................................. Cardiac: M>38.55 and 1.1095 1.0010 0.8856 0.7856 13 13 12 11
M<48.85.
1403.................................. Cardiac: M>31.15 and 1.3578 1.2251 1.0838 0.9615 15 15 13 13
M<38.55.
1404.................................. Cardiac: M<31.15........ 1.7628 1.5905 1.4071 1.2483 20 20 17 16
1501.................................. Pulmonary: M>49.25...... 0.9603 0.8386 0.7413 0.7038 11 12 10 9
1502.................................. Pulmonary: M>39.05 and 1.2297 1.0739 0.9494 0.9013 13 13 12 11
M<49.25.
1503.................................. Pulmonary: M>29.15 and 1.5640 1.3658 1.2074 1.1463 16 17 14 14
M<39.05.
1504.................................. Pulmonary: M<29.15...... 1.9525 1.7051 1.5073 1.4310 22 19 17 17
1601.................................. Pain syndrome: M>37.15.. 1.1094 0.8968 0.7667 0.7068 13 13 10 10
1602.................................. Pain syndrome: M>26.75 1.4978 1.2108 1.0351 0.9543 16 16 13 13
and M<37.15.
1603.................................. Pain syndrome: M<26.75.. 1.9287 1.5590 1.3328 1.2287 22 19 17 16
1701.................................. Major multiple trauma 1.0454 0.9189 0.8461 0.7419 11 12 11 10
without brain or spinal
cord injury: M>39.25.
1702.................................. Major multiple trauma 1.3777 1.2110 1.1151 0.9778 14 15 14 13
without brain or spinal
cord injury: M>31.05
and M<39.25.
1703.................................. Major multiple trauma 1.6566 1.4561 1.3408 1.1757 18 17 16 15
without brain or spinal
cord injury: M>25.55
and M<31.05.
1704.................................. Major multiple trauma 2.0776 1.8261 1.6815 1.4744 23 24 21 19
without brain or spinal
cord injury: M<25.55.
1801.................................. Major multiple trauma 1.2189 0.9629 0.9044 0.7757 15 13 13 10
with brain or spinal
cord injury: M>40.85.
1802.................................. Major multiple trauma 1.8398 1.4533 1.3651 1.1708 19 17 16 15
with brain or spinal
cord injury: M>23.05
and M<40.85.
1803.................................. Major multiple trauma 3.1442 2.4838 2.3329 2.0009 37 31 26 24
with brain or spinal
cord injury: M<23.05.
1901.................................. Guillian Barre: M>35.95. 1.1582 0.9288 0.9288 0.8782 15 11 11 12
1902.................................. Guillian Barre: M>18.05 2.3408 1.8772 1.8772 1.7749 26 22 25 22
and M<35.95.
1903.................................. Guillian Barre: M<18.05. 3.5944 2.8825 2.8825 2.7254 33 35 41 31
2001.................................. Miscellaneous: M>49.15.. 0.8820 0.7282 0.6614 0.5928 11 9 9 8

[[Page 46377]]

2002.................................. Miscellaneous: M>38.75 1.1873 0.9803 0.8904 0.7980 12 13 11 11
and M<49.15.
2003.................................. Miscellaneous: M>27.85 1.5231 1.2575 1.1422 1.0237 16 16 14 13
and M<38.75.
2004.................................. Miscellaneous: M<27.85.. 2.0363 1.6812 1.5271 1.3686 22 20 19 17
2101.................................. Burns: M>0.............. 2.3666 2.3666 2.1481 1.7454 25 25 25 17
5001.................................. Short-stay cases, length ......... ......... ......... 0.1476 ......... ......... ......... 3
of stay is 3 days or
fewer.
5101.................................. Expired, orthopedic, ......... ......... ......... 0.6783 ......... ......... ......... 8
length of stay is 13
days or fewer.
5102.................................. Expired, orthopedic, ......... ......... ......... 1.5432 ......... ......... ......... 19
length of stay is 14
days or more.
5103.................................. Expired, not orthopedic, ......... ......... ......... 0.7086 ......... ......... ......... 9
length of stay is 15
days or fewer.
5104.................................. Expired, not orthopedic, ......... ......... ......... 1.9586 ......... ......... ......... 23
length of stay is 16
days or more.
--------------------------------------------------------------------------------------------------------------------------------------------------------

V. FY 2009 IRF PPS Federal Prospective Payment Rates

A. Increase Factor and Labor-Related Share for FY 2009

Section 1886(j)(3)(C) of the Act requires the Secretary to
establish an increase factor that reflects changes over time in the
prices of an appropriate mix of goods and services included in the
covered IRF services, which is referred to as a market basket index.
According to section 1886(j)(3)(A)(i) of the Act, the increase factor
shall be used to update the IRF Federal prospective payment rates for
each FY. However, section 115 of the MMSEA, amended section
1886(j)(3)(C) of the Act to apply a zero percent increase factor for
FYs 2008 and 2009, effective for IRF discharges occurring on or after
April 1, 2008. Thus, we are applying an increase factor of zero percent
to update the IRF Federal prospective payment rates for FY 2009 in this
final rule.
We continue to use the methodology described in the FY 2006 IRF PPS
final rule to update the IRF labor-related share for FY 2009 (70 FR
47880, 47908 through 47917). The IRF labor-related share for FY 2009 is
the sum of the FY 2009 relative importance of each labor-related cost
category, and reflects the different rates of price change for these
cost categories between the base year (FY 2002) and FY 2009. Consistent
with our proposal to update the labor-related share with the most
recent available data, the labor-related share for this final rule
reflects Global Insight's second quarter 2008 forecast. (Global Insight
is a nationally recognized economic and financial forecasting firm that
contracts with CMS to forecast the components of providers' market
baskets.) As shown in Table 2, the total FY 2009 Rehabilitation,
Psychiatric, and Long-Term Care Hospital Market Basket (RPL) labor-
related share in this final rule is 75.464 percent.

Table 2--FY 2009 IRF RPL Labor-Related Share Relative Importance
------------------------------------------------------------------------
FY 2009 IRF
labor-related
Cost category share relative
importance
------------------------------------------------------------------------
Wages and salaries.................................... 52.552
Employee benefits..................................... 13.982
Professional fees..................................... 2.890
All other labor intensive services.................... 2.120
-----------------
Subtotal.......................................... 71.544
Labor-related share of capital costs (.46)............ 3.920
=================
Total......................................... 75.464
------------------------------------------------------------------------
SOURCE: GLOBAL INSIGHT, INC, 2nd QTR, 2008; @USMACRO/CONTROL0508 @CISSIM/
TL0508.SIM Historical Data through 1st QTR, 2008.

We received five comments on the increase factor and labor-related
share for FY 2009, which are summarized below.
Comment: Two commenters expressed concern that the zero percent
increase factor that we are applying to the IRF Federal prospective
payment rates for FY 2009, would impose a financial burden on IRFs.
These commenters noted that the zero percent increase factor for FY
2009 was required by section 115 of the MMSEA, which also made
revisions to the 60 percent rule. The commenters requested that any
future legislative changes to the 60 percent rule also be considered in
combination with updates to the IRF Federal prospective payment rates.
Response: As we discussed in the FY 2009 IRF PPS proposed rule (73
FR 22674, 22680 through 22681), section 115 of the MMSEA amended
section 1886(j)(3)(C) of the Act to apply a zero percent increase
factor for FYs 2008 and 2009, effective for IRF discharges occurring on
or after April 1, 2008. While we understand that the effect of the zero
percent increase factor is to maintain FY 2009 IRF PPS payment rates at
FY 2008 levels, the statute does not give CMS the discretion to
implement an increase factor other than zero percent for FY 2009. We
will respond to any future legislative changes to the 60 percent rule
accordingly.
Comment: One commenter requested that CMS calculate the IRF PPS
market basket estimates using more current market basket data. This
commenter stated that the FY 2009 market basket estimate is based on
data from FY 2002, and that the FY 2002 data underestimate the increase
in costs, especially labor costs, that IRFs have experienced. The
commenter suggested that CMS use Medicare cost report data to compute
the market basket estimate, rather than data from the Bureau of Labor
Statistics, in order to make the estimate more current.
Response: The IRF PPS market basket, which is a fixed weight,
Laspeyres-type price index, is constructed in three

[[Page 46378]]

steps. First, a base period is selected (FY 2002 in the current market
basket) and total base period expenditures are estimated for a set of
mutually exclusive and exhaustive spending categories based upon type
of expenditure. The proportion of total operating costs that each
category represents is called a cost or expenditure weight.
Medicare Cost Report (MCR) data are used to derive the primary cost
weights for the market basket. We monitor the stability of these cost
weights and have determined that they do not tend to fluctuate over
short periods of time (such as a period of less than 5 years). In
general, we have typically rebased (recalculated market basket cost
weights) approximately every 5 years. We note that we last revised and
rebased the market basket in the FY 2006 IRF PPS final rule (70 FR
47880, 47915 through 47917).
Second, the FY 2002 expenditure weight for each cost category is
matched to an appropriate price or wage variable, referred to as a
price proxy. These price proxies are selected to reflect the rate-of-
price change for each expenditure category and are primarily obtained
from the Bureau of Labor Statistics (BLS).
Finally, each FY 2002 cost weight is multiplied by the level of its
respective price proxy. The sum of these products (that is, the
expenditure weights multiplied by their price levels) for all cost
categories yields the composite index level of the market basket in a
given period. Repeating this step for other periods produces a series
of market basket levels over time.
The final IRF market basket update for FY 2009 is calculated using
the market basket levels from the second quarter of 2008 (2008Q2)
forecast prepared by Global Insight, Inc. (GII). These levels reflect
the most recent price data available (historical price data through
2008Q1 and forecasted price data for 2008Q2 and beyond).
Given the methodology described above, the current market basket
estimate is not based solely on FY 2002 data, but rather is calculated
by applying the most recent available price data for each quarter to
the FY 2002 cost weights. Thus, the current FY 2009 market basket
estimate does in fact reflect recent price increases experienced by
IRFs.
Comment: Several commenters expressed concern about the methodology
for computing the labor-related share. One commenter requested that we
begin updating the labor-related share more frequently using the most
recent available data. The commenter stated that the current
calculation of the labor-related share is based on 2002 data. Another
commenter said that the methodology does not adequately reflect the
difficulty IRFs have in recruiting a skilled labor force.
Response: The FY 2009 labor-related share is intended to reflect
those costs that are related to, influenced by, or vary with the local
labor market. Accordingly, the share is calculated as the sum of the
relative importance of the appropriate categories which include wages
and salaries, fringe benefits, professional fees, labor-intensive
services, and a portion of capital costs. We calculate this share based
on the RPL market basket, which we believe adequately captures the
current cost structures of Medicare-participating IRFs.
By following a four-step process to estimate the labor-related
relative importance for FY 2009, we are making use of up-to-date data
that reflect current trends. As a result, the labor-related share
appropriately reflects current labor market price pressures experienced
by IRFs. The process is as follows: First, we compute the FY 2009 price
index level for the total market basket and each cost category of the
market basket. Second, we calculate a ratio for each cost category by
dividing the FY 2009 price index level for that cost category by the
total market basket price index level. Third, we determine the FY 2009
relative importance for each cost category by multiplying this ratio by
the base year (FY 2002) weight. Finally, we sum the FY 2009 relative
importance for each of the labor-related categories to produce the FY
2009 labor-related relative importance.
The price proxies that move the different cost categories in the
market basket do not necessarily change at the same rate, and the
relative importance captures these potential differential growth rates.
Accordingly, the relative importance figure more closely reflects the
cost share weights for FY 2009 when compared to the base year weights
from the 2002-based RPL market basket. We revised and rebased the
market basket and labor-related share in FY 2006 and expect to conduct
additional updates on a regular basis.
Final Decision: We will continue to apply a zero percent increase
factor to the IRF Federal prospective payment rates for FY 2009, in
accordance with section 115 of the MMSEA. Further, we will continue to
update the IRF labor-related share using our current methodology, which
reflects the most recent available data. Thus, for this final rule, the
labor-related share is 75.464 percent. This is based on the GII's
forecast for the second quarter of 2008 (2008Q2) with historical data
through the first quarter of 2008 (2008Q1).

B. 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 IRF PPS 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 2008 IRF PPS final rule (72 FR 44284 at 44299), 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 the FY 2006
IRF PPS final rule (70 FR 47880, 47917 through 47933).
For FY 2009, we proposed to and will maintain the policies and
methodologies described in the FY 2008 IRF PPS final rule relating to
the labor market area definitions and the wage index methodology for
areas with wage data. Therefore, this final rule continues to use the
Core-Based Statistical Area (CBSA) labor market area definitions and
the pre-reclassification and pre-floor hospital wage index data based
on 2004 cost report data.
When adopting new labor market designations made by the Office of
Management and Budget (OMB), 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. We continue to use
the same methodology discussed in the FY 2008 IRF PPS final rule (72 FR
44284 at 44299) to address those geographic areas where there are no
hospitals and, thus, no hospital wage index data on which to base the
calculation of the FY 2009 IRF PPS wage index.
Additionally, this final rule incorporates 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 changes
were nomenclature and did not represent substantive changes to the
CBSA-based designations. Specifically, OMB added or deleted certain
CBSA numbers and revised certain titles. The OMB bulletins

[[Page 46379]]

are available online at http://www.whitehouse.gov/omb/bulletins/index.html.
1. Clarification of New England Deemed Counties
We are taking this opportunity to address the change in the
treatment of ``New England deemed counties'' (that is, those counties
in New England listed in Sec. 412.64(b)(1)(ii)(B) of the regulations
that were deemed to be parts of urban areas under section 601(g) of the
Social Security Amendments of 1983) that was made in the FY 2008
Inpatient Prospective Payment System (IPPS) final rule with comment
period (72 FR 47337). These counties include the following: Litchfield
County, CT; York County, ME; Sagadahoc County, ME; Merrimack County,
NH; and Newport County, RI. Of these five ``New England deemed
counties,'' three (York County, ME, Sagadahoc County, ME, and Newport
County, RI) are also included in metropolitan statistical areas (MSAs)
defined by OMB and are considered urban under both the current IPPS and
IRF PPS labor market area definitions in Sec. 412.64(b)(1)(ii)(A). The
remaining two, Litchfield County, CT and Merrimack County, NH, are
geographically located in areas that are considered rural under the
current IPPS (and IRF PPS) labor market area definitions, but have been
previously deemed urban under the IPPS in certain circumstances, as
discussed below.
In the FY 2008 IPPS final rule with comment period, (72 FR 47337
through 47338), Sec. 412.64(b)(1)(ii)(B) was revised that the two
``New England deemed counties'' that are still considered rural under
the OMB definitions (Litchfield County, CT and Merrimack County, NH),
are no longer considered urban, effective for discharges occurring on
or after October 1, 2007, and, therefore, are considered rural in
accordance with Sec. 412.64(b)(1)(ii)(C). However, for purposes of
payment under the IPPS, acute care hospitals located within those areas
are treated as being reclassified to their deemed urban area effective
for discharges occurring on or after October 1, 2007 (see 72 FR 47337
through 47338). We note that the IRF PPS does not provide for
geographic reclassification. Also, in the FY 2008 IPPS final rule with
comment period (72 FR 47338), we explained that we limited this policy
change for the ``New England deemed counties'' only to IPPS hospitals,
and any change to non-IPPS provider wage indexes would be addressed in
the respective payment system rules.
Accordingly, as stated above, we are taking this opportunity to
clarify the treatment of ``New England deemed counties'' under the IRF
PPS in this final rule.
As discussed above, the IRF PPS has consistently used the IPPS
definition of ``urban'' and ``rural'' with regard to the wage index
used in the IRF PPS. Under existing Sec. 412.602, an IRF's wage index
is determined based on the location of the IRF in an urban or rural
area as defined in Sec. Sec. 412.64(b)(1)(ii)(A) through (C).
Historical changes to the labor market area/geographic
classifications and annual updates to the wage index values under the
IRF PPS are made effective October 1 each year. When we established the
most recent IRF PPS payment rate update, effective for discharges
occurring on or after October 1, 2007 through September 30, 2008, we
considered the ``New England deemed counties'' (including Litchfield
County, CT and Merrimack County, NH) as urban for FY 2008, as evidenced
by the inclusion of Litchfield County, CT as one of the constituent
counties of urban CBSA 25540 (Hartford-West Hartford-East Hartford,
CT), and the inclusion of Merrimack County, NH as one of the
constituent counties of urban CBSA 31700 (Manchester-Nashua, NH).
As noted above, Sec. 412.602 indicates that the terms ``rural''
and ``urban'' are defined according to the definitions of those terms
in Sec. Sec. 412.64(b)(1)(ii)(A) through (C). Applying the IPPS
definitions, Litchfield County, CT and Merrimack County, NH are not
considered ``urban'' under Sec. Sec. 412.64(b)(1)(ii)(A) and (B) as
revised under the FY 2008 IPPS final rule and, therefore, are
considered ``rural'' under Sec. 412.64(b)(1)(ii)(C). Accordingly,
reflecting our policy to use the IPPS definitions of ``urban'' and
``rural'', these two counties would be considered ``rural'' under the
IRF PPS effective with the next update of the IRF PPS payment rates,
October 1, 2008, and would no longer be included in urban CBSA 25540
(Hartford-West Hartford-East Hartford, CT) and urban CBSA 31700
(Manchester-Nashua, NH), respectively. We note that this policy is
consistent with our policy of not taking into account IPPS geographic
reclassifications in determining payments under the IRF PPS. We do not
need to make any changes to our regulations to effectuate this change.
There is one IRF (in Merrimack County, NH) that greatly benefits
from treating these counties as rural. This IRF would begin to receive
a higher wage index value and the 21.3 percent adjustment that is
applied to IRF PPS payments for rural facilities. Currently, there are
no IRFs in the following areas: Litchfield County, CT; rural
Connecticut; or rural New Hampshire.
2. Multi-Campus Hospital Wage Index Data
In the FY 2008 IRF PPS final rule (72 FR 44284, August 7, 2007), we
established IRF PPS wage index values for FY 2008 calculated from the
same data (collected from cost reports submitted by hospitals for cost
reporting periods beginning during FY 2003) used to compute the FY 2007
acute care hospital inpatient wage index, without taking into account
geographic reclassification under sections 1886(d)(8) and (d)(10) of
the Act. The IRF PPS wage index values applicable for discharges
occurring on or after October 1, 2007 through September 30, 2008 are
shown in Table 1 (for urban areas) and Table 2 (for rural areas) in the
addendum to the FY 2008 IRF PPS final rule (72 FR 44284, 44312 through
44335).
We are continuing to use IPPS wage data for the FY 2009 IRF PPS
Wage Index, because we believe that using the hospital inpatient wage
data is appropriate and reasonable for the IRF PPS. We note that the
IPPS wage data used to determine the FY 2009 IRF wage index values
reflect our policy that was adopted under the IPPS beginning in FY
2008. The wage data for multi-campus hospitals located in different
labor market areas (CBSAs) are apportioned to each CBSA where the
campuses are located (see the FY 2008 IPPS final rule with comment
period (72 FR 47317 through 47320)). We computed the FY 2009 IRF PPS
wage index values presented in this final rule consistent with our pre-
reclassified IPPS wage index policy (that is, our historical policy of
not taking into account IPPS geographic reclassifications in
determining payments under the IRF PPS).
For the FY 2009 IRF PPS, we computed the wage index from IPPS wage
data (submitted by hospitals for cost reporting periods beginning in FY
2004 and used in the FY 2008 IPPS wage index), which allocated salaries
and hours to the campuses of two multi-campus hospitals with campuses
that are located in different labor areas, one in Massachusetts and
another in Illinois. Thus, the FY 2009 IRF PPS wage index values for
the following CBSAs are affected by this policy: Boston-Quincy, MA
(CBSA 14484), Providence-New Bedford-Falls River, RI-MA (CBSA 39300),
Chicago-Naperville-Joliet, IL (CBSA 16974) and Lake County-Kenosha
County, IL-WI (CBSA 29404) (please refer to Table 1 in the addendum of
this final rule).

[[Page 46380]]

3. Methodology for Applying the Revisions to the Area Wage Adjustment
for FY 2009 in a Budget-Neutral Manner
To calculate the wage-adjusted facility payment for the payment
rates set forth in this final rule, we multiply the unadjusted Federal
prospective payment by the FY 2009 RPL labor-related share (75.464
percent) to determine the labor-related portion of the Federal
prospective payments. We then multiply this labor-related portion by
the applicable 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 FY 2004 IRF PPS final rule (68 FR 45674 at 45689),
codified at Sec. 412.624(e)(1), and described in the steps below. We
proposed to use (and have used for this final rule) the following steps
to ensure that the FY 2009 IRF standard payment conversion factor
reflects the update to the proposed wage indexes (based on the FY 2004
pre-reclassified and pre-floor hospital wage data) and the labor-
related share in a budget neutral manner:
Step 1. Determine the total amount of the estimated FY 2008 IRF PPS
rates, using the FY 2008 standard payment conversion factor and the
labor-related share and the wage indexes from FY 2008 (as published in
the FY 2008 IRF PPS final rule (72 FR 44284 at 44301, 44298, and 44312
through 44335, respectively)).
Step 2. Calculate the total amount of estimated IRF PPS payments,
using the FY 2008 standard payment conversion factor and the FY 2009
labor-related share and 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 final FY 2009 budget neutral
wage adjustment factor of 1.0003. (Note that this final budget neutral
wage adjustment factor differs from the one we proposed in the proposed
rule (1.0004) because of the use of updated data to calculate the
labor-related share for this final rule and the use of updated FY 2007
IRF claims data for this final rule.)
Step 4. Apply the FY 2009 budget neutral wage adjustment factor
from step 3 to the FY 2008 IRF PPS standard payment conversion factor
after the application of the estimated market basket update to
determine the FY 2009 standard payment conversion factor.
We received 4 comments on the proposed FY 2009 IRF PPS wage index,
which are summarized below.
Comment: Several commenters recommended that we consider wage index
policies under the acute IPPS because IRFs compete in a similar labor
pool as acute care hospitals. The IPPS wage index policies would allow
IRFs to benefit from the IPPS reclassification and/or floor policies.
Several commenters also recommended that CMS conduct further analysis
of the wage index methodology to ensure that fluctuations in the annual
wage index for hospitals are minimized, that all future updates match
the costs of labor in the market, that IRF's occupational mix is
appropriately recognized, and that payments are ``smoothed'' across
geography and across time. Further, one provider requested that the
same wage index policies be used for all healthcare providers, to
maintain consistency.
Response: We do not believe IPPS wage index policies should be
applied to IRFs. We note the IRF PPS does not account for geographic
reclassification under sections 1886(d)(8) and (d)(10) of the Act and
does not apply the ``rural floor'' under section 4410 of Public Law
105-33(BBA). Because we do not have an IRF specific wage index we are
unable to determine at this time the degree, if any, to which a
geographic reclassification adjustment under the IRF PPS is
appropriate. Furthermore, we believe the ``rural floor'' is applicable
only to the acute care hospital payment system. The rationale for our
current wage index policies is fully described in the FY 2006 final
rule (70 FR 47880, 47926 through 47928).
In addition, we reviewed the Medicare Payment Advisory Commission's
(MedPAC) wage index recommendations as discussed in MedPAC's June 2007
report titled, ``Report to Congress: Promoting Greater Efficiency in
Medicare.'' Although some commenters recommended that we adopt the IPPS
wage index policies such as reclassification and floor policies, we
note that MedPAC's June 2007 report to Congress recommends that
Congress ``repeal the existing hospital wage index statute, including
reclassification and exceptions, and give the Secretary authority to
establish new wage index systems.'' We believe that adopting the IPPS
wage index policies, such as reclassification or floor, would not be
prudent at this time because MedPAC suggests that the reclassification
and exception policies in the IPPS wage index alters the wage index
values for one-third of IPPS hospitals. In addition, MedPAC found that
the exceptions may lead to anomalies in the wage index. By adopting the
IPPS reclassification and exceptions at this time, the IRF PPS wage
index may be vulnerable to similar issues that MedPAC identified in
their June 2007 Report to Congress. However, we will continue to review
and consider MedPAC's recommendations on a refined or an alternative
wage index methodology for the IRF PPS in future years.
We would also like to inform the commenter about our current
research with respect to wage index methodology, including the issues
the commenter mentioned about ensuring that the wage index minimizes
fluctuations, matches the costs of labor in the market, and provides
for a single wage index policy. Section 106(b)(2) of the MIEA-TRHCA
instructed the Secretary of Health and Human Services, to take into
account MedPAC's recommendations on the Medicare wage index
classification system, to include in the FY 2009 IPPS proposed rule one
or more proposals to revise the wage index adjustment applied under
section 1886(d)(3)(E) of the Act for purposes of the IPPS. The proposal
(or proposals) must consider each of the following:
Problems associated with the definition of labor markets
for the wage index adjustment.
The modification or elimination of geographic
reclassifications and other adjustments.
The use of Bureau of Labor of Statistics data or other
data or methodologies to calculate relative wages for each geographic
area.
Minimizing variations in wage index adjustments between
and within MSAs and statewide rural areas.
The feasibility of applying all components of CMS's
proposal to other settings.
Methods to minimize the volatility of wage index
adjustments while maintaining the principle of budget neutrality.
The effect that the implementation of the proposal would
have on health care providers on each region of the country.
Methods for implementing the proposal(s) including methods
to phase in such implementations.
Issues relating to occupational mix such as staffing
practices and any evidence on quality of care and patient safety
including any recommendation for alternative calculations to the
occupational mix.
To assist us in meeting the requirements of section 106(b)(2) of
Public Law 109-432, in February 2008, we awarded a Task Order under its
Expedited Research and Demonstration Contract, to Acumen, LLC. A

[[Page 46381]]

comparison of the current IPPS wage index and MedPAC's recommendations
will be presented in the FY 2009 IPPS final rule. We plan to monitor
these efforts and the impact or influence they may have to the IRF PPS
wage index.
Comment: One commenter requested that the IRF wage index values for
FY 2009 be capped at plus or minus 2 percent of the IRF wage index
values for FY 2008 to provide for more stable, and thus more
predictable, changes in the IRF wage index between FY 2008 and FY 2009.
Response: We will take the commenter's suggestion into account for
the future. However, we do not believe that the IRF wage index would
accurately reflect geographic variations in the costs of labor, which
is the purpose of the IRF wage index, if we were to constrain changes
in the wage index adjustment from year to year. Thus, we believe it is
best at this point to continue the analysis of the wage index
methodology, as described above, and to consider developing wage index
policies that are consistent across settings as noted in the previous
response.
Final Decision: We will continue to use the policies and
methodologies described in the FY 2008 IRF PPS final rule relating to
the labor market area definitions and the wage index methodology for
areas with wage data. Therefore, this final rule continues to use the
Core-Based Statistical Area (CBSA) labor market area definitions and
the pre-reclassification and pre-floor hospital wage index data based
on 2004 cost report data. We discuss the final standard payment
conversion factor for FY 2009 in the next section below.

C. Description of the IRF Standard Payment Conversion Factor and
Payment Rates for FY 2009

To calculate the standard payment conversion factor for FY 2009, as
illustrated in Table 4 below, we begin with the standard payment
conversion factor for FY 2008. To explain how we determined the
standard payment conversion factor for FY 2008, we include Table 3
below. The final FY 2008 IRF standard payment conversion factor that we
show in Tables 3 and 4 below is different than the IRF standard payment
conversion factor that we published in the FY 2008 IRF PPS final rule
(72 FR 44284 at 44301) due to a legislative change. We adjusted the IRF
standard payment conversion factor for IRF discharges occurring on or
after April 1, 2008 to reflect the changes codified in section 115 of
the MMSEA that require the Secretary to apply a zero percent increase
factor for FYs 2008 and 2009, effective for discharges occurring on or
after April 1, 2008.
In the FY 2008 IRF PPS final rule (72 FR 44284, 44300 through
44301), we used the RPL market basket estimate described in that final
rule (3.2 percent) to update the IRF standard payment conversion
factor. As shown in Table 3 of the FY 2008 IRF PPS final rule (72 FR
44284 at 44301), applying this market basket estimate to the standard
payment amount resulted in a final standard payment conversion factor
for FY 2008 of $13,451.
However, section 115 of the MMSEA had the effect of changing the
increase factor for FY 2008 from 3.2 percent to zero percent for
discharges occurring on or after April 1, 2008. This, in turn, had the
effect of decreasing the IRF standard payment conversion factor for
discharges occurring on or after April 1, 2008.
As shown in Table 3 below, to develop the FY 2008 standard payment
conversion factor for discharges beginning on or after April 1, 2008,
we started with the FY 2007 standard payment conversion factor that was
finalized in the FY 2007 IRF PPS final rule (71 FR 48354 at 48378). We
then multiplied this by the zero percent increase factor, as described
above. Then, we applied the same FY 2008 budget neutrality factor
(1.0041) for the Wage Index, Labor-Related Share, and the Hold Harmless
Provision that was published in the FY 2008 IRF PPS Final Rule (72 FR
44284 at 44301). This resulted in the final FY 2008 standard payment
conversion factor, effective for discharges occurring on or after April
1, 2008, of $13,034.

Table 3--Calculations To Determine the FY 2008 IRF Standard Payment
Conversion Factor for Discharges Beginning on or After April 1, 2008
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
FY 2007 Standard Payment Conversion Factor (published in $12,981
the FY 2007 IRF PPS Final Rule (71 FR 48354))..........
Zero Percent Increase Factor for Discharges Occurring on x 1.0000
or after April 1, 2008.................................
Budget Neutrality Factor for the Wage Index, Labor- x 1.0041
Related Share, and the Hold Harmless Provision that was
published in the FY 2008 IRF PPS Final Rule (72 FR
44284).................................................
---------------
Standard Payment Conversion Factor for Discharges = $13,034
Occurring on or after April 1, 2008....................
------------------------------------------------------------------------

As a result, the IRF standard payment conversion factor changed
from $13,451 for discharges occurring on or after October 1, 2007 to
$13,034 for discharges occurring on or after April 1, 2008.
Further, as required by section 115 of the MMSEA, we apply an
increase factor of zero percent to the standard payment conversion
factor for FY 2009, meaning that it does not change from the current
value of $13,034. Next, we apply the combined final budget neutrality
factor for the FY 2009 wage index and labor related share of 1.0003,
which results in a standard payment amount of $13,038. Finally, we
apply the final budget neutrality factor for the revised CMG relative
weights of 0.9939, which results in the final FY 2009 standard payment
conversion factor of $12,958.
As stated previously, we note that the budget neutrality factor for
the FY 2009 wage index and labor related share changed from 1.0004 in
the proposed rule to 1.0003 in this final rule due to the use of
updated FY 2007 IRF claims data in this final rule and the update to
the FY 2009 labor-related share for this final rule using the most
recent available data. Similarly, the budget neutrality factor used to
update the CMG relative weights and average length of stay values
changed from 0.9969 in the proposed rule to 0.9939 in this final rule
due to the use of updated FY 2007 IRF claims data in this final rule.
Furthermore, the methodology that we used to compute the final budget
neutrality factors for this final rule is the same methodology (as
discussed above and in section IV of this final rule) that we used to
compute the proposed budget neutrality factors in the proposed rule (73
FR 22674 at 22677 and 22683).

[[Page 46382]]

Table 4--Calculations To Determine the FY 2009 Standard Payment
Conversion Factor
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for Discharges $13,034
Occurring on or after April 1, 2008....................
Zero Percent Increase Factor for FY 2009................ x 1.0000
Budget Neutrality Factor for the Wage Index and Labor- x 1.0003
Related Share..........................................
Budget Neutrality Factor for the Revisions to the CMG x 0.9939
Relative Weights.......................................
---------------
FY 2009 Standard Payment Conversion Factor.............. = $12,958
------------------------------------------------------------------------

After the application of the CMG relative weights described in
section IV of this final rule, the resulting unadjusted IRF prospective
payment rates for FY 2009 are shown below in Table 5, ``FY 2009 Payment
Rates.''

Table 5--FY 2009 Payment Rates
----------------------------------------------------------------------------------------------------------------
Payment rate Payment rate Payment rate Payment rate
CMG tier 1 tier 2 tier 3 no comorbidity
----------------------------------------------------------------------------------------------------------------
0101............................................ $9,993.21 $9,210.55 $8,268.50 $7,851.25
0102............................................ 12,561.49 11,579.27 10,393.61 9,870.11
0103............................................ 14,873.19 13,709.56 12,304.92 11,685.52
0104............................................ 15,798.39 14,562.20 13,070.73 12,412.47
0105............................................ 18,555.86 17,103.26 15,352.64 14,579.05
0106............................................ 21,551.75 19,864.61 17,831.50 16,932.22
0107............................................ 24,581.33 22,657.06 20,337.58 19,312.60
0108............................................ 29,537.76 27,226.05 24,438.79 23,207.78
0109............................................ 28,230.30 26,020.96 23,356.80 22,180.21
0110............................................ 35,267.79 32,507.73 29,178.82 27,709.39
0201............................................ 9,791.06 8,376.05 7,538.96 6,861.26
0202............................................ 13,353.22 11,425.07 10,282.17 9,358.27
0203............................................ 14,884.85 12,735.12 11,462.65 10,432.49
0204............................................ 16,759.88 14,339.32 12,904.87 11,745.13
0205............................................ 20,394.60 17,449.24 15,703.80 14,292.67
0206............................................ 25,306.97 21,651.52 19,487.54 17,735.61
0207............................................ 34,088.61 29,165.87 26,249.02 23,890.66
0301............................................ 14,362.65 12,061.31 10,830.30 9,912.87
0302............................................ 18,296.70 15,364.30 13,796.38 12,628.87
0303............................................ 21,948.26 18,431.46 16,549.96 15,149.20
0304............................................ 29,971.85 25,169.62 22,600.05 20,688.74
0401............................................ 11,992.63 10,214.79 10,019.13 8,508.22
0402............................................ 18,054.38 15,378.55 15,083.11 12,810.28
0403............................................ 29,574.04 25,190.35 24,707.02 20,984.19
0404............................................ 51,528.78 43,891.34 43,049.07 36,561.00
0405............................................ 39,323.64 33,496.43 32,853.71 27,901.17
0501............................................ 10,505.05 8,289.23 7,703.53 6,796.47
0502............................................ 14,246.03 11,241.07 10,446.74 9,217.03
0503............................................ 18,549.38 14,637.36 13,602.01 12,000.40
0504............................................ 22,325.34 17,617.70 16,371.14 14,444.28
0505............................................ 26,382.49 20,818.32 19,346.29 17,069.57
0506............................................ 36,703.54 28,962.43 26,913.77 23,745.54
0601............................................ 11,979.67 9,778.11 9,296.07 8,477.12
0602............................................ 16,023.86 13,079.81 12,434.50 11,338.25
0603............................................ 20,425.70 16,671.76 15,850.23 14,453.35
0604............................................ 27,065.37 22,092.09 21,002.33 19,151.92
0701............................................ 11,904.51 10,032.08 9,459.34 8,504.34
0702............................................ 15,699.91 13,228.82 12,474.67 11,215.15
0703............................................ 19,237.45 16,210.46 15,286.55 13,743.25
0704............................................ 24,612.43 20,739.28 19,557.51 17,582.71
0801............................................ 9,070.60 7,391.24 6,701.88 6,108.40
0802............................................ 12,154.60 9,903.80 8,981.19 8,185.57
0803............................................ 17,341.69 14,130.70 12,814.17 11,679.05
0804............................................ 15,219.17 12,402.10 11,246.25 10,249.78
0805............................................ 18,997.72 15,480.92 14,037.40 12,794.73
0806............................................ 23,504.52 19,151.92 17,367.61 15,828.20
0901............................................ 11,123.15 9,814.39 8,849.02 7,827.93
0902............................................ 14,866.71 13,116.09 11,826.77 10,462.29
0903............................................ 19,229.67 16,965.91 15,298.21 13,532.04
0904............................................ 25,423.60 22,430.30 20,224.85 17,891.11
1001............................................ 12,123.50 11,741.24 10,103.35 9,248.12
1002............................................ 16,226.01 15,714.17 13,521.67 12,377.48
1003............................................ 23,574.49 22,830.70 19,645.62 17,981.82
1101............................................ 15,350.05 12,764.93 12,764.93 11,089.46
1102............................................ 22,401.79 18,629.72 18,629.72 16,184.54

[[Page 46383]]

1201............................................ 13,371.36 12,527.79 10,992.27 9,771.63
1202............................................ 16,889.46 15,824.31 13,884.50 12,342.50
1203............................................ 21,223.91 19,885.35 17,447.95 15,509.43
1301............................................ 14,231.77 12,794.73 11,013.00 9,910.28
1302............................................ 19,164.88 17,228.96 14,830.43 13,345.44
1303............................................ 24,801.61 22,298.13 19,193.39 17,271.72
1401............................................ 10,370.29 9,356.97 8,277.57 7,343.30
1402............................................ 14,376.90 12,970.96 11,475.60 10,179.80
1403............................................ 17,594.37 15,874.85 14,043.88 12,459.12
1404............................................ 22,842.36 20,609.70 18,233.20 16,175.47
1501............................................ 12,443.57 10,866.58 9,605.77 9,119.84
1502............................................ 15,934.45 13,915.60 12,302.33 11,679.05
1503............................................ 20,266.31 17,698.04 15,645.49 14,853.76
1504............................................ 25,300.50 22,094.69 19,531.59 18,542.90
1601............................................ 14,375.61 11,620.73 9,934.90 9,158.71
1602............................................ 19,408.49 15,689.55 13,412.83 12,365.82
1603............................................ 24,992.09 20,201.52 17,270.42 15,921.49
1701............................................ 13,546.29 11,907.11 10,963.76 9,613.54
1702............................................ 17,852.24 15,692.14 14,449.47 12,670.33
1703............................................ 21,466.22 18,868.14 17,374.09 15,234.72
1704............................................ 26,921.54 23,662.60 21,788.88 19,105.28
1801............................................ 15,794.51 12,477.26 11,719.22 10,051.52
1802............................................ 23,840.13 18,831.86 17,688.97 15,171.23
1803............................................ 40,742.54 32,185.08 30,229.72 25,927.66
1901............................................ 15,007.96 12,035.39 12,035.39 11,379.72
1902............................................ 30,332.09 24,324.76 24,324.76 22,999.15
1903............................................ 46,576.24 37,351.44 37,351.44 35,315.73
2001............................................ 11,428.96 9,436.02 8,570.42 7,681.50
2002............................................ 15,385.03 12,702.73 11,537.80 10,340.48
2003............................................ 19,736.33 16,294.69 14,800.63 13,265.10
2004............................................ 26,386.38 21,784.99 19,788.16 17,734.32
2101............................................ 30,666.40 30,666.40 27,835.08 22,616.89
5001............................................ 0.00 0.00 0.00 1,912.60
5101............................................ 0.00 0.00 0.00 8,789.41
5102............................................ 0.00 0.00 0.00 19,996.79
5103............................................ 0.00 0.00 0.00 9,182.04
5104............................................ 0.00 0.00 0.00 25,379.54
----------------------------------------------------------------------------------------------------------------

We received 3 comments on the proposed standard payment conversion
factor and the proposed unadjusted IRF prospective payment rates for FY
2009, which are summarized below.
Comment: One commenter recommended that CMS use the most recent
available data in computing the FY 2009 CMG relative weights, because
these have an impact on the FY 2009 IRF prospective payment rates and
the budget neutrality factors used in computing the FY 2009 standard
payment conversion factor.
Response: We agree that we should use the most recent available
data in computing the FY 2009 CMG relative weights. We typically update
the data we use in our analysis each year between the proposed and
final rules in order to ensure that we are using the most current
available data. Specifically, in the proposed rule (73 FR 22674 at
22677), we proposed to update our analysis for this final rule using
more current data. Thus, we updated our data analysis using FY 2007 IRF
claims data for the final rule, whereas we had used FY 2006 IRF claims
data in conducting the analysis for the FY 2009 IRF PPS proposed rule
(73 FR 22674 at 22677). As discussed in detail in section IV of this
final rule, we did not use IRF-PAI data for this final rule because the
CMG information on the FY 2007 IRF claims data incorporated all of the
most recent changes to the IRF classification system that were
implemented in the FY 2007 IRF PPS final rule (71 FR 48354). Moreover,
we did not implement any changes to the IRF classification system in
the FY 2008 IRF PPS final rule (72 FR 44284).
The revised final budget neutrality factors for FY 2009 reflect the
updated FY 2009 IRF labor-related share and the revised CMG relative
weights and average length of stay values described above.
Comment: Several commenters requested that we keep the same
standard payment conversion factor of $13,034 for FY 2009 that was used
for determining IRF PPS payments in FY 2008, for discharges occurring
on or after April 1, 2008. In effect, we believe that these commenters
were asking us not to apply the combined budget neutrality factor for
the wage index and labor-related share or the budget neutrality factor
for the revisions to the CMG relative weights to the FY 2008 standard
payment conversion factor in determining the FY 2009 standard payment
conversion factor. Another commenter asked us to provide a more
extensive explanation of the methodology that we use to compute the
budget neutrality factors, including any background studies on the
methodology and calculations for the budget neutrality factors.
Response: Section 1886(j)(6) of the Act requires CMS to make any
adjustments or updates to the IRF wage index in a budget neutral
manner. To do this, we ensure that estimated aggregate payments to IRFs
in the FY are not greater or less than estimated aggregate payments
would have been without such adjustments or updates to the wage index.
Thus, in accordance with the statute and using the same general
methodology that was described and

[[Page 46384]]

finalized in the FY 2004 IRF PPS final rule (68 FR 45674 at 45689), we
are required to adjust the FY 2008 standard payment conversion factor
of $13,034 by the combined final budget neutrality factor for the FY
2009 wage index and labor related share of 1.0003, which results in a
standard payment amount of $13,038.
Further, in accordance with the regulations at Sec. 412.624(d)(4),
as discussed in the FY 2006 IRF PPS final rule (70 FR 47880 at 47937),
we apply an additional budget neutrality factor to make the updates to
the CMG relative weights and average length of stay values budget
neutral. The final budget neutrality factor used to update the CMG
relative weights and average length of stay values for this final rule
is 0.9939, which results in a standard payment amount of $12,958. As
discussed above, the budget neutrality factor used to update the CMG
relative weights and average length of stay values changed from 0.9969
in the proposed rule to 0.9939 in this final rule due to the use of
updated FY 2007 IRF claims data in this final rule. Although the
standard payment conversion factor for FY 2009 of $12,958 is lower than
the standard payment conversion factor applicable for discharges
occurring on or after April 1, 2008, of $13,034, estimated aggregate
IRF payments for FY 2009, excluding outlier payments, are the same.
This is because we estimate that aggregate IRF payments would have
increased by about $37 million, due to the update to the CMG relative
weights for FY 2009, if we had not applied the budget-neutrality factor
used to update the CMG relative weights and average length of stay
values.
We have consistently implemented any revisions to the IRF
classification and weighting factors in a budget-neutral manner, such
that estimated aggregate payments to IRFs remain the same with and
without the revisions. The methodology for computing the budget
neutrality factor is the same general methodology that we have
consistently used to ensure that the changes to the classification and
weighting factors that we implemented in the FY 2006 IRF PPS final rule
(70 FR 47880) and in the FY 2007 IRF PPS final rule (71 FR 48354) were
done in a budget-neutral manner. (Note that we did not implement any
changes to the IRF classification or weighting factors in the FY 2008
IRF PPS final rule (72 FR 44284)). The methodology that we are using in
this final rule to compute the budget neutrality factor for the updates
to the CMG relative weights is the same general methodology that we
have used to ensure that updates to the IRF wage index are implemented
in a budget-neutral manner, as discussed above and as finalized in the
FY 2004 IRF PPS final rule (68 FR 45674 at 45689). The methodology, as
proposed in the FY 2009 IRF PPS proposed rule (73 FR 22674 at 22677)
and finalized in this final rule, applied to the update to the CMG
relative weights for FY 2009 involves the following steps:
Step 1. Calculate the estimated total amount of IRF PPS payments
for FY 2009 (with no changes to the CMG relative weights).
Step 2. Apply the changes to the CMG relative weights (as discussed
in section IV of this final rule) to calculate the estimated total
amount of IRF PPS payments for FY 2009 (with the changes).
Step 3. Divide the amount calculated in step 1 ($6,003,947,007) by
the amount calculated in step 2 ($6,040,824,839) to determine the
factor (0.9939) that maintains the same total estimated aggregate
payments in FY 2009 with and without the changes to the CMG relative
weights.
Step 4. Apply the final budget neutrality factor (0.9939) to the FY
2008 IRF PPS standard payment amount after the application of the
budget-neutral wage adjustment factor.
The FY 2004 IRF PPS final rule (68 FR 45674 at 45689) contains
additional information on the methodology for computing the budget
neutrality factor for the IRF wage index and labor-related share, and
the FY 2006 IRF PPS final rule (70 FR 47880, 47937 through 47938)
contains additional information on the methodology for computing the
budget neutrality factor for the updates to the CMG relative weights
and average length of stay values.
Final Decision: After reviewing the comments that we received on
the proposed methodology for calculating the budget neutrality factors
for the wage index and labor-related share and for the CMG relative
weights and average length of stay values, we are finalizing the
proposed methodology. We are also finalizing the FY 2009 standard
payment conversion factor at $12,958. This differs from the standard
payment conversion factor of $12,999 that we had proposed in the
proposed rule because of the use of updated FY 2007 IRF claims data for
analyzing the final CMG relative weights and average length of stay
values for this final rule, as discussed in section IV of this final
rule.

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

Table 6 illustrates the methodology for adjusting the Federal
prospective payments (as described in sections III.A through III.C of
the FY 2009 proposed rule (73 FR 22674, 22680 through 22685)). 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)
appears in Table 5 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 low-income percentage (LIP) adjustment of
1.0309), a wage index of 0.8576, 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 0.9065, 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 5 above. Then, we multiply the estimated labor-related share
(75.464) described in section V.A of this final rule 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
would 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.
Adjusting the Federal prospective payment by the facility-level
adjustments involves several steps. First, we take the wage-adjusted
Federal prospective payment and multiply it by the appropriate rural
and LIP adjustments (if applicable). Second, to determine the
appropriate amount of additional payment for the teaching

[[Page 46385]]

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 rates. Table 6 illustrates the
components of the adjusted payment calculation.

Table 6--Example of Computing an IRF FY 2009 Federal Prospective Payment
------------------------------------------------------------------------
Rural facility Urban Facility
Steps A (Spencer B (Harrison
Co., IN) Co., IN)
------------------------------------------------------------------------
1. Unadjusted Federal Prospective $27,709.39 $27,709.39
Payment................................
2. Labor Share.......................... x 0.75464 x 0.75464
-------------------------------
3. Labor Portion of Federal Payment..... = $20,910.61 = $20,910.61
4. CBSA Based Wage Index (shown in the x 0.8576 x 0.9065
Addendum, Tables 1 and 2)..............
-------------------------------
5. Wage-Adjusted Amount................. = $17,932.94 = $18,955.47
6. Non-labor Amount..................... + $6,798.78 + $6,798.78
-------------------------------
7. Wage-Adjusted Federal Payment........ = $24,731.72 = $25,754.25
8. Rural Adjustment..................... x 1.213 x 1.000
-------------------------------
9. Wage- and Rural-Adjusted Federal = $29,999.57 = $25,754.25
Payment................................
10. LIP Adjustment...................... x 1.0309 x 1.0910
-------------------------------
11. FY 2009 Wage-, Rural- and LIP- = $30,926.56 = $28,097.88
Adjusted Federal Prospective Payment
Rate...................................
12. FY 2009 Wage- and Rural-Adjusted $29,999.57 $25,754.25
Federal Prospective Payment............
13. Teaching Status Adjustment.......... x 0.000 x 0.109
-------------------------------
14. Teaching Status Adjustment Amount... = $0.00 = $2,807.21
15. FY 2009 Wage-, Rural-, and LIP- + $30,926.56 + $28,097.88
Adjusted Federal Prospective Payment
Rate...................................
-------------------------------
16. Total FY 2009 Adjusted Federal = $30,926.56 = $30,905.10
Prospective Payment....................
------------------------------------------------------------------------

Thus, the adjusted payment for Facility A would be $30,926.56 and
the adjusted payment for Facility B would be $30,905.10.

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

A. Update to the Outlier Threshold Amount for FY 2009

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 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 FY 2002 IRF PPS 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, 2007, and 2008 IRF PPS final
rules (70 FR 47880, 70 FR 57166, 71 FR 48354, and 72 FR 44284,
respectively) to maintain estimated outlier payments at 3 percent of
total estimated payments. 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.
As was proposed, for this final rule, we used updated data for
calculating the high-cost outlier threshold amount. Specifically, we
performed an updated analysis using FY 2007 claims data using the same
methodology that we used to set the initial outlier threshold amount in
the FY 2002 IRF PPS final rule (66 FR 41316, 41362 through 41363),
which is also the same methodology that we used to update the outlier
threshold amounts for FYs 2006, 2007, and 2008. (Note: the methodology
that we use to calculate the appropriate outlier threshold amount for
each FY requires us to simulate Medicare payments for that FY, using
the most recent available IRF claims data from a previous FY. If the
previous FY's data that we are using for the analysis does not contain
exactly the same CMGs as the future FY for which we are calculating the
update to the outlier threshold, then we cannot rely on the CMGs from
the previous FY's IRF claims data and must instead use IRF-PAI data to
assign the appropriate CMG for each IRF claim.) The CMGs and tiers in
effect for FY 2009 would be slightly different than those that were in
effect for FY 2006, due to revisions that were implemented in the FY
2007 IRF PPS final rule (71 FR 48354, 48360 through 48370). Use of the
IRF-PAI data was no longer necessary when we used the updated FY 2007
IRF claims data for this final rule because the CMG information on the
FY 2007 IRF claims data incorporated all of the changes to the IRF
classification system that were implemented in the FY 2007 IRF PPS
final rule (71 FR 48354, 48360 through 48370). We did not implement any
changes to the IRF classification system in the FY 2008 IRF PPS final
rule (72 FR 44284).
For FY 2009, based on an analysis of updated FY 2007 claims data,
we estimate that IRF outlier payments as a percentage of total
estimated payments would be 4.2 percent without the change to the
outlier threshold amount. The need to revise the high-cost outlier

[[Page 46386]]

threshold is discussed in detail in section IV.A of the FY 2009
proposed rule (73 FR 22674, 22686 through 22687). Generally, we note
that the zero percent IRF increase factor for FYs 2008 and 2009, for
discharges occurring on or after April 1, 2008, implemented by section
115 of the MMSEA resulted in lower IRF PPS payments for FYs 2008 and
2009 than would otherwise have been implemented. In addition, IRF
charges found in the FY 2007 IRF claims data were higher than those in
the FY 2006 IRF claims data, resulting in higher estimated outlier
payments for FY 2009.
Based on the updated analysis of FY 2007 claims data (for the
reasons discussed previously, IRF-PAI data was not needed in this
analysis), we are updating the outlier threshold amount to $10,250 to
maintain estimated outlier payments at 3 percent of total estimated
aggregate IRF payments for FY 2009.

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

In accordance with the methodology stated in the FY 2004 IRF PPS
final rule (68 FR 45674, 45692 through 45694), we apply a ceiling to
IRFs' CCRs. Using the methodology described in that final rule, as
discussed in more detail in section IV.B of the FY 2009 proposed rule
(73 FR 22674 at 22687), we are updating the national urban and rural
CCRs for IRFs. As was proposed, the national average rural and urban
CCRs and our estimate of the national CCR ceiling are changing in this
final rule based on the analysis of updated data. 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 the national CCR
ceiling for FY 2009, as discussed below.
Other IRFs for which accurate data to calculate an overall
CCR are not available.
Specifically, for FY 2009, we estimate a national average CCR of
0.619 for rural IRFs and 0.490 for urban IRFs based on the most recent
available IRF cost report data. For this final rule, we have used FY
2006 IRF cost report data, updated through March 31, 2008. If, for any
IRF, the FY 2006 cost report was missing or had an ``as submitted''
status, we use data from a previous fiscal year's report for that IRF.
However, we do not use cost report data from before FY 2003 for any
IRF. For new IRFs, we use these national CCRs until the facility's
actual CCR can be computed using the first settled cost report (either
tentative or final, whichever is earlier).
In addition, we estimate the national CCR ceiling at 1.60 for FY
2009. This means that, if an individual IRF's CCR exceeds this ceiling
of 1.60 for FY 2009, we would replace the IRF's CCR with the
appropriate national average CCR (either rural or urban, depending on
the geographic location of the IRF). For a complete description of the
methodology used to calculate the national CCR ceiling for this final
rule, see section IV.B of the FY 2009 proposed rule (73 FR 22674 at
22687).
We received seven comments on the proposed high-cost outlier
updates under the IRF PPS, which are summarized below.
Comment: Most commenters supported our proposal to increase the
outlier threshold amount to maintain estimated outlier payments at 3
percent of total estimated payments. However, several other commenters
expressed concerns that the change would mean that fewer cases would
qualify for outlier payments and that it would affect IRFs' ability to
provide care to Medicare beneficiaries. Several commenters asked that
we further explain the reasons behind the increase in the IRF outlier
threshold amount and provide proof that we would be paying more than 3
percent in outliers without the change. Finally, one commenter said
that the increases in the outlier threshold amount in recent years
appear excessive and recommended that CMS look more closely to
determine if there are anomalies in the IRF outlier data or
institutional practices that may be causing the changes.
Response: Based on our analysis of FY 2007 IRF claims and FY 2006
IRF cost report data (as previously discussed, we did not need to use
IRF-PAI data in conjunction with the FY 2007 IRF claims data), we need
to increase the IRF outlier threshold amount to maintain estimated
outlier payments at 3 percent of total estimated payments for FY 2009
for the following reasons. First, as discussed in detail in the FY 2009
IRF PPS proposed rule (73 FR 22674, 22686 through 22687), section 115
of the MMSEA, which amended section 1886(j)(3)(C) of the Social
Security Act, required the Secretary to apply a zero percent increase
factor for FYs 2008 and 2009, effective for discharges occurring on or
after April 1, 2008. The effect of this change was to decrease
projected IRF PPS payments. As a direct result of a zero percent
update, we would exceed our projected 3 percent target for the
proportion of estimated IRF outlier payment to estimated IRF total
payments.
Second, because the average charges per case in the FY 2007 data
are significantly higher than the average charges per case in the FY
2006 data, we believe that our increase to the outlier threshold amount
for FY 2009 is warranted. Specifically, higher charges directly result
in more cases being estimated to qualify for outlier payments and
higher estimated outlier payments, which in turn lead to higher
estimates of outlier payments as a percentage of total estimated
payments. In this case, higher charges result in estimated outlier
payments as a percentage of total estimated payments in FY 2009 of 4.2
percent, well above the 3 percent target. To decrease estimated outlier
payments as a percentage of total estimated payments from 4.2 percent
to 3 percent, we must increase the outlier threshold.
The higher charges in the FY 2007 may be due to several factors,
including the ``75 percent'' rule and the IRF medical review
activities, which have led to declines in the number of IRF discharges
and may have led to increases in the complexity of IRF cases. Thus,
based on our analysis of updated data (that is, FY 2007 IRF claims
data), we now project that estimated IRF outlier payments as a
percentage of total estimated payments for FY 2008 increased from 3.0
percent to 3.7 percent.
Thus, given the recent changes in IRF aggregate payments resulting
from section 115 of the MMSEA and recent increases in IRFs' charges
that are being reflected in the IRF claims data for FY 2007, we believe
that it is necessary to adjust the outlier threshold amount for FY 2009
to maintain estimated IRF outlier payments equal to 3 percent of
estimated total payments.
As several of the commenters suggested, increasing the outlier
threshold amount for FY 2009 would mean that fewer cases would qualify
for IRF outlier payments. As discussed above, this is necessary to
maintain estimated IRF outlier payments at 3 percent of estimated total
payments. However, we do not believe that this will affect IRFs'
ability to provide care to Medicare beneficiaries because the IRF
outlier policy is designed to reduce the financial risk to IRFs, which
could be substantial for many smaller IRFs, of admitting unusually
high-cost cases. The additional IRF outlier payments reduce the
financial losses caused by treating these patients and, therefore,
reduce the incentives to underserve these patients. As discussed at
length in the FY 2002 IRF PPS final rule (66 FR 41316 at 41362), we
considered various options for setting the target percentage of
estimated outlier payments as a percentage of total payments. In that

[[Page 46387]]

final rule, we finalized our proposal to set an outlier policy of 3
percent of total estimated payments because we believed (and continue
to believe) that this option optimizes the extent to which we protect
vulnerable IRFs for treating unusually high-cost cases, while still
providing adequate payment for all other IRF cases. If we were to
increase the percentage of total estimated IRF payments that we paid in
IRF outlier payments, then we would have to reduce IRF PPS payments for
all other IRF cases in order to implement this change in a budget
neutral manner. This could negatively affect the adequacy of IRF PPS
payments for other, non-outlier IRF cases. Thus, we continue to believe
that the 3 percent outlier policy ensures that all IRF cases, outlier
and non-outlier, continue to be reimbursed appropriately.
As one of the commenters suggested, we will continue to analyze IRF
outliers to determine if there are any anomalies in the IRF outlier
data or any institutional practices which may be affecting our analysis
of IRF outliers. To the extent that we find any such anomalies, we
would propose to implement future refinements to the IRF outlier
policies to ensure that IRF outlier payments continue to fulfill their
intended purpose of reducing the risks to IRFs of treating unusually
high-cost cases and ensuring access to care for all patients who
require and can benefit from an IRF level of care.
Comment: One commenter recommended that we continue to refine our
methodology for calculating the outlier threshold amount, and that we
use the most accurate CCR data available.
Response: The CCR data that we use in our analyses comes directly
from the Medicare cost reports submitted to Medicare by IRFs and is
continually updated each time a more recent cost report is tentatively
settled. Therefore, we believe that it is the most accurate and most
recent CCR data available. However, we agree with the commenter about
the need to continually examine our methodology and the CCR data to
ensure that we are setting the IRF outlier threshold at the appropriate
level to maintain estimated outlier payments at 3 percent of total
estimated payments.
Comment: One commenter requested that we conduct an analysis of IRF
outlier payments to ensure that we are not rewarding IRFs with outlier
payments for the ``wrong'' reasons, such as the cost effects of
declines in patient volume. This commenter suggested that we should
either ``hold back'' outlier payments from facilities if we find that
the outlier payments were paid for the ``wrong'' reasons, or that we
should reduce the outlier pool from 3 percent to 1.5 percent.
Response: We are continuing to analyze IRF outlier payments to
ensure that they continue to compensate IRFs for treating unusually
high-cost patients and promote access to care for patients who are
likely to require unusually high-cost care. At this time, we do not
have indications to suggest that any IRF outlier payments are being
paid for the ``wrong'' reasons. Further, we do not have indications to
suggest that the outlier pool would be better set at 1.5 percent than
at 3 percent. However, we will carefully consider this commenter's
suggestions, and will consider proposing additional refinements to the
IRF outlier policies in the future if we find that such refinements are
necessary.
Comment: Several commenters requested that CMS provide additional
data and information to the public to allow the IRF industry and
external researchers to conduct a more thorough review of CMS's
proposed updates to the outlier threshold amount and to verify our
estimates of outlier payments as a percentage of total payments for FY
2009. Specifically, one commenter asked that we provide information on
actual charge increases and CCR declines that have been utilized in the
outlier threshold calculation, a discussion of the data sources and
time periods used in computing the outlier threshold, an IRF Medpar
file (including total payments, outlier payments, and actual,
estimated, and proposed CMGs), historical information on IRF facility-
level payment factors (specifically CCRs), and actual levels and
percentages of outlier payments. The commenter also asked that we
provide data on actual outlier payments and the percentage of outlier
payments by FY.
Response: We will carefully consider all of the commenter's
suggestions in updating the IRF rate setting files that we post on the
IRF PPS Web site in conjunction with each IRF PPS proposed and final
rule. These files are available for download from the IRF PPS Web site
at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage. These files already contain much of the
facility-level payment data requested by the commenter, including the
CCRs used to compute the IRF outlier threshold amount. For this final
rule, we used FY 2007 IRF claims data to conduct patient-level payment
simulations to estimate the outlier threshold amount for FY 2009. This
data file contains information that can be used to identify individual
Medicare beneficiaries and is therefore not publicly available. We
obtained the provider-level CCR data used in this analysis from the
Provider-Specific Files, which contain historical CCR data and are
available for download from the CMS Web site at http://www.cms.hhs.gov/ProspMedicareFeeSvcPmtGen/03_psf.asp.
The modified Medpar data files that CMS provides to IPPS hospitals
already contain IRF stay data. However, we have recently discovered
that these files do not include the CMGs, and we recognize that there
may be other limitations to the usefulness of these files for analyzing
IRF payments. Based on the commenters' requests, we will carefully
consider the usefulness and feasibility of including additional
variables, such as actual IRF outlier payments and the percentage of
outlier payments, on the Medpar file in the future to facilitate IRF
analyses.
Comment: One commenter suggested that CMS utilize the same concepts
that the IPPS uses for modeling charge increases and cost-to-charge
ratio (CCR) changes in estimating the outlier threshold amount, as
noted in the methodology implemented for IPPS hospitals in the FY 2007
IPPS final rule (71 FR 47870, 48150 through 48151).
Response: We considered proposing the same methodology described in
the FY 2007 IPPS final rule (71 FR 47870, 48150 through 48151) for
projecting cost and charge growth in estimating the FY 2008 and FY 2009
IRF outlier threshold amount. However, we discovered that the accuracy
of the projections depends on the case mix of patients in the
facilities remaining similar from year to year, as it does in IPPS
hospitals. With the recent phase in of the enforcement of the 75
percent rule criteria and increases in IRF medical review activities,
we find evidence of relatively large changes in the case mix of
patients in IRFs, especially in recent years (FYs 2004 through 2007).
In performing our analysis, we noted that, if we based future
projections of cost and charge growth on data from years in which IRFs
were experiencing abnormal fluctuations in case mix, the results
appeared dramatically skewed. Rather than implementing an outlier
threshold amount for FY 2009 based on such skewed results, we thought a
better approach would be to wait until we could further analyze the
interactions between case mix changes and IRF cost and charge growth.
We are encouraged that IRF case mix may stabilize in the near
future now that the IRF compliance percentage is set at

[[Page 46388]]

60 percent for FY 2009. However, as recently as FY 2007, we are still
observing large shifts in IRFs' patient populations, and we believe it
is prudent at this time to defer adopting a methodology for projecting
cost and charge growth in IRFs until the patient populations have
stabilized.
Final Decision: Based on careful consideration of the comments that
we received on the proposed update to the outlier threshold amount for
FY 2009 and based on updated analysis of the FY 2007 data explained
previously in this section and for the reasons explained in the
proposed rule (73 FR 22674, 22686 through 22687), we are finalizing our
decision to update the outlier threshold amount for FY 2009. Based on
our proposed policy, the outlier threshold amount for FY 2009 is
$10,250. In addition, we did not receive any comments on the IRF cost-
to-charge ratio ceiling. Based on our proposed policy and the reasons
set forth in the proposed rule (73 FR 22674 at 22687), we are
finalizing the national average urban CCR at 0.490 and the national
average rural CCR at 0.619. We are also finalizing our estimate of the
IRF national CCR ceiling at 1.60 for FY 2009.

VII. Revisions to the Regulation Text in Response to the Medicare,
Medicaid, and SCHIP Extension Act of 2007

Section 115 of the MMSEA amended section 5005 of the Deficit
Reduction Act of 2005 (DRA, Pub. L. 109-171) to revise the following
elements of the 75 percent rule that are used to classify IRFs:
The compliance rate that IRFs must meet to be excluded
from the IPPS and to be paid under the IRF PPS shall be no greater than
the 60 percent compliance rate that became effective for cost reporting
periods beginning on or after July 1, 2006.
Patient comorbidities that satisfy the criteria specified
in 42 CFR 412.23(b)(2)(i) shall be included in the calculations used to
determine whether an IRF meets the 60 percent compliance percentage for
cost reporting periods beginning on or after July 1, 2007.
Although section 115 of the MMSEA grants the Secretary broad
discretion to implement compliance criteria up to 60 percent, we are
setting the compliance rate at 60 percent, the highest level possible
within current statutory authority, for the reasons discussed in detail
in the proposed rule (73 FR 22674, 22687 through 22688). Generally, we
are setting the compliance rate at 60 percent because we believe that
it implements the provisions of the statute with minimal disruption to
IRF operations, thus allowing us to more effectively analyze changes in
IRF operations and admissions patterns over time as well as helping us
to ensure that IRFs predominantly treat patients who benefit most from
this level of care.
Specifically, we proposed the following revisions to the regulation
text in Sec. 412.23(b). We proposed to remove the following phrases
from the first sentence of Sec. 412.23(b)(2)(i):
``and before July 1, 2007;'' and
``and for cost reporting periods beginning on or after
July 1, 2007 and before July 1, 2008, the hospital has served an
inpatient population of whom at least 65 percent,''
We also proposed to remove Sec. 412.23(b)(2)(ii) in its entirety,
redesignate the existing Sec. 412.23(b)(2)(iii) to Sec.
412.23(b)(2)(ii), and revise all references to the previously numbered
Sec. 412.23(b)(2)(iii) accordingly.
We received 3 comments on the proposed revisions to the regulation
text in response to section 115 of the MMSEA, which are summarized
below.
Comment: Although several commenters supported the revisions to the
regulation text in response to section 115 of the MMSEA, one commenter
was concerned that CMS was confusing the 75 percent rule policies,
hereinafter referred to as the 60 percent rule policies, and the IRF
medical necessity policies.
Response: We agree with the commenter that the IRF 60 percent rule
policies and the IRF medical necessity policies are different.
While both policies relate to ensuring that patients who need the
intensive rehabilitation services provided in IRFs have access to this
level of care, the two policies serve different functions and are
applied differently.
The Medicare statute excludes payment for services that ``* * * are
not reasonable and necessary'' (see section 1862(a) of the Social
Security Act). This applies to all Medicare settings of care, including
IRFs, and it applies to all Medicare beneficiaries receiving treatment
in those settings. Thus, all IRF discharges for which providers seek
payment from Medicare must meet the criteria for establishing the
medical necessity of the treatment, regardless of whether the patient's
condition is one of the conditions listed in Sec. 412.23(b)(2)(iii),
herein redesignated as Sec. 412.23(b)(2)(ii), or not. CMS has
specifically instructed its contractors to make medical review
determinations based on reviews of individual medical records by
qualified clinicians, not on the basis of diagnosis alone. In addition,
we do not believe that the 60 percent rule should be used to make
individual medical review claim determinations.
Conversely, the IRF 60 percent rule is intended to distinguish IRFs
from other inpatient hospital settings of care, including acute care
hospitals and traditional post-acute care settings (such as skilled
nursing facilities). The 60 percent rule specifies that an IRF's
patient population must consist of at least 60 percent of the patients
who need intensive rehabilitation services for one or more of 13
specified conditions. The remaining 40 percent of patients in an IRF
may be admitted for treatment of conditions not included on the list of
qualifying conditions. We recognize that the list of 13 conditions does
not identify all possible conditions for which it would generally be
considered reasonable and necessary for a patient to be treated in an
IRF, and thus we believe that it is appropriate to allow some
percentage of an IRF's patient population to be made up of patients
with other conditions. However, every patient must meet the medical
necessity criteria.
We believe that it is particularly important to ensure that all
patients being treated in IRFs meet the medical necessity criteria, so
that the data on which we base IRF PPS payments is as accurate as
possible.
Comment: One commenter expressed a number of concerns about
Medicare's policies concerning IRF medical necessity. This commenter
indicated that IRFs are confused about the interpretation of the
medical necessity policies. The commenter also expressed concerns that
the data that CMS uses to analyze and update IRF PPS payment rates may
not be as accurate as it could be because it may include patients who
do not meet medical necessity requirements for receiving care in IRFs.
The commenter suggested that this could lead to inaccuracies in CMS's
rate setting for IRFs.
Response: We note that we did not propose anything regarding the
IRF medical necessity policies in the proposed rule. However, we will
carefully consider the commenter's concerns and suggestions and will
consider refinements to the IRF medical necessity criteria in the
future.
Comment: Several commenters requested that CMS implement changes to
the operational policies used in determining IRFs' compliance with the
60 percent rule, to correspond with the statutory changes to the
compliance percentage and the continued use of comorbidites. For
example, several commenters asked CMS to revise its policies to include
Medicare Advantage patients in determining whether at least

[[Page 46389]]

50 percent of an IRF's patient population is made up of Medicare
patients. In addition, one commenter asked that CMS revise its policies
to allow individual IRFs to view the same IRF-PAI database information
that the fiscal intermediaries use in determining the IRFs' compliance
using the presumptive methodology.
Response: We appreciate the suggestions provided by the commenters
and are considering making future changes to some of the operational
policies for determining compliance with the 60 percent rule, including
changes to some of the policies mentioned by the commenters. We are
currently evaluating whether we could include Medicare Advantage
patients in determining whether 50 percent of an IRF's patient
population is made up of Medicare patients, including our statutory
authority for doing so. We are also currently evaluating whether
modifications to the current system for collecting and compiling IRF-
PAI data could be made to allow individual IRFs to view copies of the
reports that the Medicare contractors use in determining the individual
IRF's compliance using the presumptive methodology. Our goal is to
continue to ensure that the 60 percent rule compliance determinations
are as transparent and equitable as possible both for providers and for
Medicare contractors. We are continuing to work toward this end.
Comment: One commenter suggested that we remove the phrase
``(b)(2)(ii)'' from the end of the paragraph in the regulations at
Sec. 412.23(b)(2), as the original Sec. 412.23(b)(2)(ii) to which the
paragraph referred will no longer exist.
Response: We agree with the commenter's suggestion and will make
the suggested revision.
Final Decision: As all of the commenters supported the proposed
revisions to the regulation text, we are finalizing our revisions to
the regulation text at Sec. 412.23(b) by removing the following
phrases from the first sentence of Sec. 412.23(b)(2)(i):
``and before July 1, 2007;'' and
``and for cost reporting periods beginning on or after
July 1, 2007 and before July 1, 2008, the hospital has served an
inpatient population of whom at least 65 percent,''
We are also removing Sec. 412.23(b)(2)(ii) in its entirety,
redesignating the existing Sec. 412.23(b)(2)(iii) to Sec.
412.23(b)(2)(ii), and revising all references to the previously
numbered Sec. 412.23(b)(2)(iii) accordingly. In response to a comment,
we are also deleting the phrase ``or (b)(2)(ii)'' from the end of the
paragraph in section Sec. 412.23(b)(2).

VIII. Post Acute Care Payment Reform

In the proposed rule, we discussed our ongoing examination of
possible steps toward achieving a more seamless system for the delivery
and payment of post-acute care (PAC) services in various care settings.
These include the PAC Payment Reform Demonstration (PAC-PRD) and its
standardized patient assessment tool, the Continuity Assessment Record
and Evaluation (CARE) tool. In the related area of value-based
purchasing (VBP) initiatives, we described the IPPS preventable
hospital-acquired conditions (HAC) payment provision, which is designed
to ensure that the occurrence of selected, preventable conditions
during hospitalization does not have the unintended effect of
generating higher Medicare payments under the IPPS. We then discussed
the potential application of this same underlying principle to other
care settings in addition to IPPS hospitals. For a full and complete
discussion of this issue as it pertains to the IRF setting, please
refer to the FY 2009 IRF PPS proposed rule (73 FR 22674, 22688 through
22689).
We received 12 responses to our request for comments on the post
acute care payment reform.
Comment: We received several comments concerning the use of the
CARE tool. While most of these comments acknowledged that the CARE tool
holds long-term promise in terms of potentially facilitating the
efficient flow of secure electronic patient information, they also
cautioned that it would be far too premature at this point in time to
draw any definitive conclusions about its use, given the very early
stage of the research currently being conducted in this area.
Response: We agree with the commenters' observations about the CARE
tool, both in terms of its significant future potential and the need to
await the results of ongoing research before reaching any specific
conclusions about its use. We will continue to evaluate the CARE tool
closely during the remainder of the current demonstration, and we plan
to keep the commenters' concerns in mind as we proceed with our
research in this area.
Comment: A number of commenters stressed the need for external
research in the area of PAC payment reform, as well as the importance
of obtaining input from the stakeholder community.
Response: We agree with the commenters regarding the value of
obtaining stakeholder input, and believe that this is, in fact, crucial
to the success of our PAC payment reform efforts. We also recognize the
importance of obtaining the benefit of findings from research that is
currently underway. We note that our own activities in this regard
primarily involve applied research through our demonstration projects
and internal analysis of changes in program policy. However, while our
limited resources in this area preclude us from sponsoring any external
research projects on PAC payment reform, we strongly favor such
activity and encourage interested parties to engage in it.
Comment: We received a number of comments regarding the HAC payment
provision under the IPPS, and the possible adoption of a similar
approach in care settings other than IPPS hospitals. The commenters
urged us to conduct a thorough evaluation of the HAC policy's
implementation under the IPPS to determine its actual impact and
efficacy prior to considering whether to adopt this type of approach in
other care settings. Some also questioned the legal authority under
existing Medicare law to expand the HAC payment provision beyond the
IPPS hospital setting. Others raised concerns about the specific
implications of applying this type of policy to the IRF setting. They
cited ``falls'' as an example of something that might be less
appropriately characterized as ``never events'' in the IRF setting than
in the acute care hospital setting. They also argued that it would be
unfair to penalize an IRF financially for a condition that actually
developed during the preceding hospital stay but was not detected until
after transfer to the IRF. In addition, they indicated that it might be
difficult to differentiate a preventable healthcare-acquired
complication from a normal, unavoidable aspect of a terminal illness.
Response: We appreciate the commenters' thoughtful input about
application of the principal embodied in the IPPS HAC payment provision
to the IRF setting. While we acknowledge that ``falls'' are among the
selected HACs in the IPPS acute care setting that potentially have
significant implications for the IRF setting, we agree that these and
other conditions may have different implications in the IRF setting. We
agree with the commenters that it would be unfair to penalize an IRF
financially for a condition that developed in another care setting. We
note that the IPPS HAC payment provision uses Present on Admission
(POA) indicator data to exclude from payment consequences conditions
that develop outside of the IPPS acute care stay, and a similar
mechanism would be needed to apply this type of payment provision to
the IRF setting. Regarding the commenters' concerns about the
difficulty in

[[Page 46390]]

differentiating a preventable healthcare-acquired complication from a
normal, unavoidable aspect of a terminal illness, we would expect to
work closely with stakeholders to determine which conditions could
reasonably be prevented through the application of evidence-based
guidelines. Finally, with regard to the comments that questioned the
existing legal authority for expanding the HAC payment provision beyond
the IPPS hospital setting, we note that in this final rule, we are not
establishing any new Medicare policies in this area. However, we will
keep the commenters' concerns in mind as our implementation of value-
based purchasing for all Medicare payment systems proceeds, and we look
forward to working with stakeholders in continuing to explore possible
ways to reduce the occurrence of these preventable conditions in
various care settings.

IX. Miscellaneous Comments

Comment: One commenter recommended that CMS update the IRF
facility-level adjustments, including the rural adjustment, the low-
income percentage adjustment, and the teaching status adjustment, as
these adjustments were last updated in FY 2006 based on analysis of FY
2003 data. This commenter also suggested a number of methodological
changes to the way that CMS computes the facility-level adjustments,
including standardizing cost-per-case by outlier payments and computing
three-year moving averages of the adjustments to promote added
stability and predictability in the payment system.
Response: We note that we did not propose any refinements to the
IRF facility-level adjustment for FY 2009. However, we are in the
process of analyzing the data to determine whether future updates to
the IRF facility-level adjustments are needed. At the same time, we are
also analyzing the commenter's suggested revisions to the methodology
for computing these adjustments to determine whether these revisions
would improve the precision of our estimates of the appropriate
facility-level adjustment parameters. We will consider proposing to
update the IRF facility-level adjustments in future rules if our
analysis indicates that such updates are necessary to ensure that IRF
PPS payments continue to reflect the costs of caring for IRF patients
appropriately.
Comment: One commenter recommended that CMS re-examine the weights
used to compute the weighted motor score for classifying IRF patients.
The weights that are currently being used to compute patients' motor
scores were finalized in the FY 2006 IRF PPS final rule (70 FR 47880 at
47900) and were based on FY 2003 data. The commenter expressed concerns
that the appropriate weights may change over time and may need to be
updated using more recent data.
Response: We did not propose any changes to the weighted motor
score in the proposed rule. However, we will consider the commenter's
suggestions for future updates to the weighted motor score methodology.
Comment: Several commenters expressed interest in assisting CMS in
the development of the IRF Report to Congress that was mandated in
section 115 of the MMSEA.
Response: We appreciate the commenters' interest in this important
project and, as required by statute, we will consult with interested
parties and stakeholders in developing this report.
Comment: Several commenters noted that we reported IRF spending
estimates of $6.4 billion for FY 2008 in the proposed rule (73 FR 22674
at 22686) and IRF spending projections of $5.6 billion for FY 2009 in
the press release that was issued in conjunction with the proposed
rule. We believe that these commenters mistakenly interpreted these
spending estimates to mean that a 12.5 percent decrease in IRF PPS
payments is estimated to occur between FY 2008 and FY 2009.
Response: The IRF spending estimate of $6.4 billion for FY 2008
that was reported in the proposed rule (73 FR 22674 at 22686) did not
account for any changes in IRF utilization that might occur between FYs
2006 and 2008. It was based on an analysis of simulated IRF payments
using IRF claims data from FY 2006 (that is, the number and types of
patients that were being treated in IRFs in FY 2006) and the policies
that were being proposed for FY 2009 with IRF utilization held
constant. The $6.4 billion spending estimate should not be compared
with the $5.6 billion IRF spending projection developed by the Office
of the Actuary for FY 2008, which accounts for expected changes in IRF
utilization between FYs 2006 and 2008. The Office of the Actuary
projects that total IRF spending for both FY 2008 and FY 2009 will be
$5.6 billion under both the FY 2009 IRF PPS proposed and final rules.
Thus, for this final rule, we estimate only a $40 million decrease in
IRF PPS spending between FY 2008 and FY 2009, which is equal to only
0.7 percent of total estimated IRF PPS payments. We note that this is
different than the $20 million decrease in IRF PPS spending that we had
estimated for the proposed rule due to the use of updated data (that
is, FY 2007 IRF claims data). The estimated $40 million decrease for
this final rule is entirely due to the adjustment to the outlier
threshold amount for FY 2009 to set estimated IRF outlier payments at 3
percent of total estimated payments, as discussed in detail in section
XII of this final rule.

X. Provisions of the Final Rule

In this final rule, we are adopting the provisions as set forth in
the FY 2009 IRF PPS proposed rule (73 FR 22674), except as noted
elsewhere in the preamble. Specifically:
We will 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 V.B of this final
rule.
We will update the FY 2009 IRF PPS relative weights and
average length of stay values using the most current and complete
Medicare claims and cost report data, as discussed in section IV of
this final rule.
We will update the FY 2009 IRF PPS payment rates by the
wage index and labor related share in a budget neutral manner, as
discussed in section V.A and B of this final rule.
We will update the outlier threshold amount for FY 2009,
as discussed in section VI.A of this final rule.
We will 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
VI.B of this final rule.
With respect to Sec. 412.23, we will revise the
regulation text in paragraph (b)(2) and (b)(2)(i) and remove paragraph
(b)(2)(ii) to reflect section 115 of the MMSEA, as discussed in section
VII of this final rule.

XI. 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.

XII. Regulatory Impact Statement

We have examined the impact of this final rule as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA,

[[Page 46391]]

September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4),
Executive Order 13132 on Federalism, and the Congressional Review Act
(5 U.S.C. 804(2)).
Executive Order 12866, as amended, 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 final rule does not reach the $100 million economic
threshold and thus is not considered a major rule. We estimate that the
total impact of the changes in this final rule would be a decrease of
approximately $40 million or 0.7 percent of total IRF PPS payments
(this reflects a $40 million decrease due to the update to the outlier
threshold amount to decrease estimated outlier payments from
approximately 3.7 percent in FY 2008 to 3 percent in FY 2009).
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 small governmental
jurisdictions. Most IRFs and most other providers and suppliers are
small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 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 Services generally uses a
revenue impact of 3 to 5 percent as a significance threshold under the
RFA. 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. The Secretary has determined that this
final rule (which we estimate will result in a decrease in total
estimated payments to IRFs of 0.7 percent) would not have a significant
economic impact on a substantial number of small entities and therefore
an analysis as outlined by the RFA was not prepared.
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 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. The Secretary has
determined that this final rule would not have a significant impact on
the operations of a substantial number of small rural hospitals and
therefore an analysis for section 1102(b) of the Act was not prepared.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 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 dollars, updated annually for inflation. That
threshold level is currently approximately $130 million. This final
rule would not mandate any cost requirements on State, local, or tribal
governments in the aggregate, or by the private sector, of $130
million.
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 final rule would not have a
substantial effect on State and local governments.
We received one comment on the regulatory impact statement included
in the proposed rule, which is summarized below.
Comment: One commenter expressed concern that the regulatory impact
information provided in the proposed rule was not sufficient to
calculate the projected impact to individual providers, and that data
on FY 2007 actual payments, FY 2008 estimated payments, and FY 2009
proposed payments would be required to fully estimate the effects on
individual IRFs. The commenter requested that CMS make information
available to allow interested parties to recreate CMS's impact table
and to make projections on a facility-specific basis.
Response: As discussed above, we did not prepare a regulatory
impact analysis for this final rule (or for the proposed rule) because
this final rule does not reach the $100 million economic threshold and
thus is not considered a major rule. However, we provided an IRF rate
setting file in conjunction with the proposed rule to allow interested
parties to calculate the payment effects of the proposed policies for
individual IRFs. In addition, we will carefully consider all of the
commenter's suggestions in updating the final FY 2009 IRF rate setting
file that will be posted on the IRF PPS Web site in conjunction with
this final rule. This file will be available for download from the IRF
PPS Web site soon after publication of this final rule at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage. The
IRF rate setting files posted in conjunction with each proposed and
final rule already contain much of the facility-level payment data
needed to allow interested parties to recreate CMS's analysis and to
make projections on a facility-specific basis.
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.

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

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

Authority: Sections 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

Subpart B--Hospital Services Subject to and Excluded From the
Prospective Payment Systems for Inpatient Operating Costs and
Inpatient Capital--Related Costs

0
2. Section 412.23 is amended by--
0
A. Revising introductory text of paragraph (b)(2).
0
B. Revising introductory text of paragraph (b)(2)(i).
0
C. Revising paragraphs (b)(2)(i)(A) and (B).
0
D. Removing paragraph (b)(2)(ii).

[[Page 46392]]

0
E. Redesignating paragraph (b)(2)(iii) as (b)(2)(ii).
The revision reads as follows:

Sec. 412.23 Excluded hospitals: Classifications.

* * * * *
(b) * * *
(2) Except in the case of a newly participating hospital seeking
classification under this paragraph as a rehabilitation hospital for
its first 12-month cost reporting period, as described in paragraph
(b)(8) of this section, a hospital must show that during its most
recent, consecutive, and appropriate 12-month time period (as defined
by CMS or the fiscal intermediary), it served an inpatient population
that meets the criteria under paragraph (b)(2)(i) of this section.
(i) For cost reporting periods beginning on or after July 1, 2004
and before July 1, 2005, the hospital has served an inpatient
population of whom at least 50 percent, and for cost reporting periods
beginning on or after July 1, 2005, the hospital has served an
inpatient population of whom at least 60 percent required intensive
rehabilitation services for treatment of one or more of the conditions
specified at paragraph (b)(2)(ii) of this section. A patient with a
comorbidity, as defined at Sec. 412.602, may be included in the
inpatient population that counts toward the required applicable
percentage if--
(A) The patient is admitted for inpatient rehabilitation for a
condition that is not one of the conditions specified in paragraph
(b)(2)(ii) of this section;
(B) The patient has a comorbidity that falls in one of the
conditions specified in paragraph (b)(2)(ii) of this section; and
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplemental Medical Insurance Program).

Dated: July 18, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: July 25, 2008.
Michael O. Leavitt,
Secretary.
The following addendum will not appear in the Code of Federal
Regulations.

Addendum

This addendum contains the tables referred to throughout the
preamble of this final rule. The tables presented below are as
follows:
Table 1.--Inpatient Rehabilitation Facility Wage Index for Urban
Areas for Discharges Occurring from October 1, 2008 through
September 30, 2009
Table 2.--Inpatient Rehabilitation Facility Wage Index for Rural
Areas for Discharges Occurring from October 1, 2008 through
September 30, 2009

Table 1--Inpatient Rehabilitation Facility Wage Index for Urban Areas
for Discharges Occurring From October 1, 2008 Through September 30, 2009
------------------------------------------------------------------------
Urban area (constituent
CBSA code counties) Wage index
------------------------------------------------------------------------
10180.................... Abilene, TX..................... 0.7957
Callahan County, TX
Jones County, TX
Taylor County, TX
10380.................... Aguadilla-Isabela-San 0.3448
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....................... 0.8794
Portage County, OH
Summit County, OH
10500.................... Albany, GA...................... 0.8514
Baker County, GA
Dougherty County, GA
Lee County, GA
Terrell County, GA
Worth County, GA
10580.................... Albany-Schenectady-Troy, NY..... 0.8588
Albany County, NY
Rensselaer County, NY
Saratoga County, NY
Schenectady County, NY
Schoharie County, NY
10740.................... Albuquerque, NM................. 0.9554
Bernalillo County, NM
Sandoval County, NM
Torrance County, NM
Valencia County, NM
10780.................... Alexandria, LA.................. 0.7979
Grant Parish, LA
Rapides Parish, LA
10900.................... Allentown-Bethlehem-Easton, PA- 0.9865
NJ.
Warren County, NJ
Carbon County, PA
Lehigh County, PA
Northampton County, PA
11020.................... Altoona, PA..................... 0.8618

[[Page 46393]]

Blair County, PA
11100.................... Amarillo, TX.................... 0.9116
Armstrong County, TX
Carson County, TX
Potter County, TX
Randall County, TX
11180.................... Ames, IA........................ 1.0046
Story County, IA
11260.................... Anchorage, AK................... 1.1913
Anchorage Municipality, AK
Matanuska-Susitna Borough, AK
11300.................... Anderson, IN.................... 0.8827
Madison County, IN
11340.................... Anderson, SC.................... 0.9086
Anderson County, SC
11460.................... Ann Arbor, MI................... 1.0539
Washtenaw County, MI
11500.................... Anniston-Oxford, AL............. 0.7926
Calhoun County, AL
11540.................... Appleton, WI.................... 0.9598
Calumet County, WI
Outagamie County, WI
11700.................... Asheville, NC................... 0.9185
Buncombe County, NC
Haywood County, NC
Henderson County, NC
Madison County, NC
12020.................... Athens-Clarke County, GA........ 1.0517
Clarke County, GA
Madison County, GA
Oconee County, GA
Oglethorpe County, GA
12060.................... Atlanta-Sandy Springs-Marietta, 0.9828
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............... 1.2198
Atlantic County, NJ
12220.................... Auburn-Opelika, AL.............. 0.8090
Lee County, AL
12260.................... Augusta-Richmond County, GA-SC.. 0.9645
Burke County, GA
Columbia County, GA
McDuffie County, GA
Richmond County, GA
Aiken County, SC

[[Page 46394]]

Edgefield County, SC
12420.................... Austin-Round Rock, TX........... 0.9544
Bastrop County, TX
Caldwell County, TX
Hays County, TX
Travis County, TX
Williamson County, TX
12540.................... Bakersfield, CA................. 1.1051
Kern County, CA
12580.................... Baltimore-Towson, MD............ 1.0134
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...................... 0.9978
Penobscot County, ME
12700.................... Barnstable Town, MA............. 1.2603
Barnstable County, MA
12940.................... Baton Rouge, LA................. 0.8034
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................ 1.0179
Calhoun County, MI
13020.................... Bay City, MI.................... 0.8897
Bay County, MI
13140.................... Beaumont-Port Arthur, TX........ 0.8531
Hardin County, TX
Jefferson County, TX
Orange County, TX
13380.................... Bellingham, WA.................. 1.1474
Whatcom County, WA
13460.................... Bend, OR........................ 1.0942
Deschutes County, OR
13644.................... Bethesda-Gaithersburg-Frederick, 1.0511
MD.
Frederick County, MD
Montgomery County, MD
13740.................... Billings, MT.................... 0.8666
Carbon County, MT
Yellowstone County, MT
13780.................... Binghamton, NY.................. 0.8949
Broome County, NY
Tioga County, NY
13820.................... Birmingham-Hoover, AL........... 0.8898
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.................... 0.7225
Burleigh County, ND
Morton County, ND
13980.................... Blacksburg-Christiansburg- 0.8192
Radford, VA.
Giles County, VA
Montgomery County, VA
Pulaski County, VA
Radford City, VA
14020.................... Bloomington, IN................. 0.8915
Greene County, IN
Monroe County, IN

[[Page 46395]]

Owen County, IN
14060.................... Bloomington-Normal, IL.......... 0.9325
McLean County, IL
14260.................... Boise City-Nampa, ID............ 0.9465
Ada County, ID
Boise County, ID
Canyon County, ID
Gem County, ID
Owyhee County, ID
14484.................... Boston-Quincy, MA............... 1.1792
Norfolk County, MA
Plymouth County, MA
Suffolk County, MA
14500.................... Boulder, CO..................... 1.0426
Boulder County, CO
14540.................... Bowling Green, KY............... 0.8159
Edmonson County, KY
Warren County, KY
14740.................... Bremerton-Silverdale, WA........ 1.0904
Kitsap County, WA
14860.................... Bridgeport-Stamford-Norwalk, CT. 1.2735
Fairfield County, CT
15180.................... Brownsville-Harlingen, TX....... 0.8914
Cameron County, TX
15260.................... Brunswick, GA................... 0.9475
Brantley County, GA
Glynn County, GA
McIntosh County, GA
15380.................... Buffalo-Niagara Falls, NY....... 0.9568
Erie County, NY
Niagara County, NY
15500.................... Burlington, NC.................. 0.8747
Alamance County, NC
15540.................... Burlington-South Burlington, VT. 0.9660
Chittenden County, VT
Franklin County, VT
Grand Isle County, VT
15764.................... Cambridge-Newton-Framingham, MA. 1.1215
Middlesex County, MA
15804.................... Camden, NJ...................... 1.0411
Burlington County, NJ
Camden County, NJ
Gloucester County, NJ
15940.................... Canton-Massillon, OH............ 0.8935
Carroll County, OH
Stark County, OH
15980.................... Cape Coral-Fort Myers, FL....... 0.9396
Lee County, FL
16180.................... Carson City, NV................. 1.0003
Carson City, NV
16220.................... Casper, WY...................... 0.9385
Natrona County, WY
16300.................... Cedar Rapids, IA................ 0.8852
Benton County, IA
Jones County, IA
Linn County, IA
16580.................... Champaign-Urbana, IL............ 0.9392
Champaign County, IL
Ford County, IL
Piatt County, IL
16620.................... Charleston, WV.................. 0.8289
Boone County, WV
Clay County, WV
Kanawha County, WV
Lincoln County, WV
Putnam County, WV
16700.................... Charleston-North Charleston, SC. 0.9124
Berkeley County, SC
Charleston County, SC
Dorchester County, SC
16740.................... Charlotte-Gastonia-Concord, NC- 0.9520
SC.

[[Page 46396]]

Anson County, NC
Cabarrus County, NC
Gaston County, NC
Mecklenburg County, NC
Union County, NC
York County, SC
16820.................... Charlottesville, VA............. 0.9277
Albemarle County, VA
Fluvanna County, VA
Greene County, VA
Nelson County, VA
Charlottesville City, VA
16860.................... Chattanooga, TN-GA.............. 0.8994
Catoosa County, GA
Dade County, GA
Walker County, GA
Hamilton County, TN
Marion County, TN
Sequatchie County, TN
16940.................... Cheyenne, WY.................... 0.9308
Laramie County, WY
16974.................... Chicago-Naperville-Joliet, IL... 1.0715
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....................... 1.1290
Butte County, CA
17140.................... Cincinnati-Middletown, OH-KY-IN. 0.9784
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.............. 0.8251
Christian County, KY
Trigg County, KY
Montgomery County, TN
Stewart County, TN
17420.................... Cleveland, TN................... 0.8052
Bradley County, TN
Polk County, TN
17460.................... Cleveland-Elyria-Mentor, OH..... 0.9339
Cuyahoga County, OH
Geauga County, OH
Lake County, OH
Lorain County, OH
Medina County, OH
17660.................... Coeur d'Alene, ID............... 0.9532
Kootenai County, ID
17780.................... College Station-Bryan, TX....... 0.9358
Brazos County, TX
Burleson County, TX
Robertson County, TX
17820.................... Colorado Springs, CO............ 0.9719
El Paso County, CO
Teller County, CO

[[Page 46397]]

17860.................... Columbia, MO.................... 0.8658
Boone County, MO
Howard County, MO
17900.................... Columbia, SC.................... 0.8800
Calhoun County, SC
Fairfield County, SC
Kershaw County, SC
Lexington County, SC
Richland County, SC
Saluda County, SC
17980.................... Columbus, GA-AL................. 0.8729
Russell County, AL
Chattahoochee County, GA
Harris County, GA
Marion County, GA
Muscogee County, GA
18020.................... Columbus, IN.................... 0.9537
Bartholomew County, IN
18140.................... Columbus, OH.................... 1.0085
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.............. 0.8588
Aransas County, TX
Nueces County, TX
San Patricio County, TX
18700.................... Corvallis, OR................... 1.0959
Benton County, OR
19060.................... Cumberland, MD-WV............... 0.8294
Allegany County, MD
Mineral County, WV
19124.................... Dallas-Plano-Irving, TX......... 0.9915
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...................... 0.8760
Murray County, GA
Whitfield County, GA
19180.................... Danville, IL.................... 0.8957
Vermilion County, IL
19260.................... Danville, VA.................... 0.8240
Pittsylvania County, VA
Danville City, VA
19340.................... Davenport-Moline-Rock Island, IA- 0.8830
IL.
Henry County, IL
Mercer County, IL
Rock Island County, IL
Scott County, IA
19380.................... Dayton, OH...................... 0.9190
Greene County, OH
Miami County, OH
Montgomery County, OH
Preble County, OH
19460.................... Decatur, AL..................... 0.7885
Lawrence County, AL
Morgan County, AL
19500.................... Decatur, IL..................... 0.8074
Macon County, IL
19660.................... Deltona-Daytona Beach-Ormond 0.9031
Beach, FL.
Volusia County, FL
19740.................... Denver-Aurora, CO............... 1.0718

[[Page 46398]]

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.. 0.9226
Dallas County, IA
Guthrie County, IA
Madison County, IA
Polk County, IA
Warren County, IA
19804.................... Detroit-Livonia-Dearborn, MI.... 0.9999
Wayne County, MI
20020.................... Dothan, AL...................... 0.7270
Geneva County, AL
Henry County, AL
Houston County, AL
20100.................... Dover, DE....................... 1.0099
Kent County, DE
20220.................... Dubuque, IA..................... 0.9058
Dubuque County, IA
20260.................... Duluth, MN-WI................... 0.9975
Carlton County, MN
St. Louis County, MN
Douglas County, WI
20500.................... Durham, NC...................... 0.9816
Chatham County, NC
Durham County, NC
Orange County, NC
Person County, NC
20740.................... Eau Claire, WI.................. 0.9475
Chippewa County, WI
Eau Claire County, WI
20764.................... Edison, NJ...................... 1.1181
Middlesex County, NJ
Monmouth County, NJ
Ocean County, NJ
Somerset County, NJ
20940.................... El Centro, CA................... 0.8914
Imperial County, CA
21060.................... Elizabethtown, KY............... 0.8711
Hardin County, KY
Larue County, KY
21140.................... Elkhart-Goshen, IN.............. 0.9611
Elkhart County, IN
21300.................... Elmira, NY...................... 0.8264
Chemung County, NY
21340.................... El Paso, TX..................... 0.8989
El Paso County, TX
21500.................... Erie, PA........................ 0.8495
Erie County, PA
21660.................... Eugene-Springfield, OR.......... 1.0932
Lane County, OR
21780.................... Evansville, IN-KY............... 0.8662
Gibson County, IN
Posey County, IN
Vanderburgh County, IN
Warrick County, IN
Henderson County, KY
Webster County, KY
21820.................... Fairbanks, AK................... 1.1050
Fairbanks North Star Borough,
AK
21940.................... Fajardo, PR..................... 0.4375
Ceiba Municipio, PR
Fajardo Municipio, PR
Luquillo Municipio, PR

[[Page 46399]]

22020.................... Fargo, ND-MN.................... 0.8042
Cass County, ND
Clay County, MN
22140.................... Farmington, NM.................. 0.9587
San Juan County, NM
22180.................... Fayetteville, NC................ 0.9368
Cumberland County, NC
Hoke County, NC
22220.................... Fayetteville-Springdale-Rogers, 0.8742
AR-MO.
Benton County, AR
Madison County, AR
Washington County, AR
McDonald County, MO
22380.................... Flagstaff, AZ................... 1.1687
Coconino County, AZ
22420.................... Flint, MI....................... 1.1220
Genesee County, MI
22500.................... Florence, SC.................... 0.8249
Darlington County, SC
Florence County, SC
22520.................... Florence-Muscle Shoals, AL...... 0.7680
Colbert County, AL
Lauderdale County, AL
22540.................... Fond du Lac, WI................. 0.9667
Fond du Lac County, WI
22660.................... Fort Collins-Loveland, CO....... 0.9897
Larimer County, CO
22744.................... Fort Lauderdale-Pompano Beach- 1.0229
Deerfield Beach, FL.
Broward County, FL
22900.................... Fort Smith, AR-OK............... 0.7933
Crawford County, AR
Franklin County, AR
Sebastian County, AR
Le Flore County, OK
Sequoyah County, OK
23020.................... Fort Walton Beach-Crestview- 0.8743
Destin, FL.
Okaloosa County, FL
23060.................... Fort Wayne, IN.................. 0.9284
Allen County, IN
Wells County, IN
Whitley County, IN
23104.................... Fort Worth-Arlington, TX........ 0.9693
Johnson County, TX
Parker County, TX
Tarrant County, TX
Wise County, TX
23420.................... Fresno, CA...................... 1.0993
Fresno County, CA
23460.................... Gadsden, AL..................... 0.8159
Etowah County, AL
23540.................... Gainesville, FL................. 0.9196
Alachua County, FL
Gilchrist County, FL
23580.................... Gainesville, GA................. 0.9216
Hall County, GA
23844.................... Gary, IN........................ 0.9224
Jasper County, IN
Lake County, IN
Newton County, IN
Porter County, IN
24020.................... Glens Falls, NY................. 0.8256
Warren County, NY
Washington County, NY
24140.................... Goldsboro, NC................... 0.9288
Wayne County, NC
24220.................... Grand Forks, ND-MN.............. 0.7881
Polk County, MN
Grand Forks County, ND
24300.................... Grand Junction, CO.............. 0.9864
Mesa County, CO
24340.................... Grand Rapids-Wyoming, MI........ 0.9315

[[Page 46400]]

Barry County, MI
Ionia County, MI
Kent County, MI
Newaygo County, MI
24500.................... Great Falls, MT................. 0.8675
Cascade County, MT
24540.................... Greeley, CO..................... 0.9658
Weld County, CO
24580.................... Green Bay, WI................... 0.9727
Brown County, WI
Kewaunee County, WI
Oconto County, WI
24660.................... Greensboro-High Point, NC....... 0.9010
Guilford County, NC
Randolph County, NC
Rockingham County, NC
24780.................... Greenville, NC.................. 0.9402
Greene County, NC
Pitt County, NC
24860.................... Greenville-Mauldin-Easley, SC... 0.9860
Greenville County, SC
Laurens County, SC
Pickens County, SC
25020.................... Guayama, PR..................... 0.3064
Arroyo Municipio, PR
Guayama Municipio, PR
Patillas Municipio, PR
25060.................... Gulfport-Biloxi, MS............. 0.8773
Hancock County, MS
Harrison County, MS
Stone County, MS
25180.................... Hagerstown-Martinsburg, MD-WV... 0.9013
Washington County, MD
Berkeley County, WV
Morgan County, WV
25260.................... Hanford-Corcoran, CA............ 1.0499
Kings County, CA
25420.................... Harrisburg-Carlisle, PA......... 0.9280
Cumberland County, PA
Dauphin County, PA
Perry County, PA
25500.................... Harrisonburg, VA................ 0.8867
Rockingham County, VA
Harrisonburg City, VA
25540.................... Hartford-West Hartford-East 1.0959
Hartford, CT.
Hartford County, CT
Middlesex County, CT
Tolland County, CT
25620.................... Hattiesburg, MS................. 0.7366
Forrest County, MS
Lamar County, MS
Perry County, MS
25860.................... Hickory-Lenoir-Morganton, NC.... 0.9028
Alexander County, NC
Burke County, NC
Caldwell County, NC
Catawba County, NC
25980.................... Hinesville-Fort Stewart, GA \1\. 0.9187
Liberty County, GA
Long County, GA
26100.................... Holland-Grand Haven, MI......... 0.9006
Ottawa County, MI
26180.................... Honolulu, HI.................... 1.1556
Honolulu County, HI
26300.................... Hot Springs, AR................. 0.9109
Garland County, AR
26380.................... Houma-Bayou Cane-Thibodaux, LA.. 0.7892
Lafourche Parish, LA
Terrebonne Parish, LA
26420.................... Houston-Sugar Land-Baytown, TX.. 0.9939
Austin County, TX

[[Page 46401]]

Brazoria County, TX
Chambers County, TX
Fort Bend County, TX
Galveston County, TX
Harris County, TX
Liberty County, TX
Montgomery County, TX
San Jacinto County, TX
Waller County, TX
26580.................... Huntington-Ashland, WV-KY-OH.... 0.9041
Boyd County, KY
Greenup County, KY
Lawrence County, OH
Cabell County, WV
Wayne County, WV
26620.................... Huntsville, AL.................. 0.9146
Limestone County, AL
Madison County, AL
26820.................... Idaho Falls, ID................. 0.9264
Bonneville County, ID
Jefferson County, ID
26900.................... Indianapolis-Carmel, IN......... 0.9844
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................... 0.9568
Johnson County, IA
Washington County, IA
27060.................... Ithaca, NY...................... 0.9630
Tompkins County, NY
27100.................... Jackson, MI..................... 0.9329
Jackson County, MI
27140.................... Jackson, MS..................... 0.8011
Copiah County, MS
Hinds County, MS
Madison County, MS
Rankin County, MS
Simpson County, MS
27180.................... Jackson, TN..................... 0.8676
Chester County, TN
Madison County, TN
27260.................... Jacksonville, FL................ 0.9021
Baker County, FL
Clay County, FL
Duval County, FL
Nassau County, FL
St. Johns County, FL
27340.................... Jacksonville, NC................ 0.8079
Onslow County, NC
27500.................... Janesville, WI.................. 0.9702
Rock County, WI
27620.................... Jefferson City, MO.............. 0.8478
Callaway County, MO
Cole County, MO
Moniteau County, MO
Osage County, MO
27740.................... Johnson City, TN................ 0.7677
Carter County, TN
Unicoi County, TN
Washington County, TN
27780.................... Johnstown, PA................... 0.7543
Cambria County, PA
27860.................... Jonesboro, AR................... 0.7790
Craighead County, AR

[[Page 46402]]

Poinsett County, AR
27900.................... Joplin, MO...................... 0.8951
Jasper County, MO
Newton County, MO
28020.................... Kalamazoo-Portage, MI........... 1.0433
Kalamazoo County, MI
Van Buren County, MI
28100.................... Kankakee-Bradley, IL............ 1.0238
Kankakee County, IL
28140.................... Kansas City, MO-KS.............. 0.9504
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.... 1.0075
Benton County, WA
Franklin County, WA
28660.................... Killeen-Temple-Fort Hood, TX.... 0.8249
Bell County, TX
Coryell County, TX
Lampasas County, TX
28700.................... Kingsport-Bristol-Bristol, TN-VA 0.7658
Hawkins County, TN
Sullivan County, TN
Bristol City, VA
Scott County, VA
Washington County, VA
28740.................... Kingston, NY.................... 0.9556
Ulster County, NY
28940.................... Knoxville, TN................... 0.8036
Anderson County, TN
Blount County, TN
Knox County, TN
Loudon County, TN
Union County, TN
29020.................... Kokomo, IN...................... 0.9591
Howard County, IN
Tipton County, IN
29100.................... La Crosse, WI-MN................ 0.9685
Houston County, MN
La Crosse County, WI
29140.................... Lafayette, IN................... 0.8869
Benton County, IN
Carroll County, IN
Tippecanoe County, IN
29180.................... Lafayette, LA................... 0.8247
Lafayette Parish, LA
St. Martin Parish, LA
29340.................... Lake Charles, LA................ 0.7777
Calcasieu Parish, LA
Cameron Parish, LA
29404.................... Lake County-Kenosha County, IL- 1.0603
WI.
Lake County, IL
Kenosha County, WI
29420.................... Lake Havasu City-Kingman, AZ.... 0.9333
Mohave County, AZ
29460.................... Lakeland, FL.................... 0.8661
Polk County, FL
29540.................... Lancaster, PA................... 0.9252
Lancaster County, PA

[[Page 46403]]

29620.................... Lansing-East Lansing, MI........ 1.0119
Clinton County, MI
Eaton County, MI
Ingham County, MI
29700.................... Laredo, TX...................... 0.8093
Webb County, TX
29740.................... Las Cruces, NM.................. 0.8676
Dona Ana County, NM
29820.................... Las Vegas-Paradise, NV.......... 1.1799
Clark County, NV
29940.................... Lawrence, KS.................... 0.8227
Douglas County, KS
30020.................... Lawton, OK...................... 0.8025
Comanche County, OK
30140.................... Lebanon, PA..................... 0.8192
Lebanon County, PA
30300.................... Lewiston, ID-WA................. 0.9454
Nez Perce County, ID
Asotin County, WA
30340.................... Lewiston-Auburn, ME............. 0.9193
Androscoggin County, ME
30460.................... Lexington-Fayette, KY........... 0.9191
Bourbon County, KY
Clark County, KY
Fayette County, KY
Jessamine County, KY
Scott County, KY
Woodford County, KY
30620.................... Lima, OH........................ 0.9424
Allen County, OH
30700.................... Lincoln, NE..................... 1.0051
Lancaster County, NE
Seward County, NE
30780.................... Little Rock-North Little Rock- 0.8863
Conway, AR.
Faulkner County, AR
Grant County, AR
Lonoke County, AR
Perry County, AR
Pulaski County, AR
Saline County, AR
30860.................... Logan, UT-ID.................... 0.9183
Franklin County, ID
Cache County, UT
30980.................... Longview, TX.................... 0.8717
Gregg County, TX
Rusk County, TX
Upshur County, TX
31020.................... Longview, WA.................... 1.0827
Cowlitz County, WA
31084.................... Los Angeles-Long Beach-Santa 1.1771
Ana, CA.
Los Angeles County, CA
31140.................... Louisville-Jefferson County, KY- 0.9065
IN.
Clark County, IN
Floyd County, IN
Harrison County, IN
Washington County, IN
Bullitt County, KY
Henry County, KY
Meade County, KY
Nelson County, KY
Oldham County, KY
Shelby County, KY
Spencer County, KY
Trimble County, KY
31180.................... Lubbock, TX..................... 0.8680
Crosby County, TX
Lubbock County, TX
31340.................... Lynchburg, VA................... 0.8732
Amherst County, VA
Appomattox County, VA
Bedford County, VA

[[Page 46404]]

Campbell County, VA
Bedford City, VA
Lynchburg City, VA
31420.................... Macon, GA....................... 0.9541
Bibb County, GA
Crawford County, GA
Jones County, GA
Monroe County, GA
Twiggs County, GA
31460.................... Madera, CA...................... 0.8069
Madera County, CA
31540.................... Madison, WI..................... 1.0935
Columbia County, WI
Dane County, WI
Iowa County, WI
31700.................... Manchester-Nashua, NH........... 1.0273
Hillsborough County, NH
31900.................... Mansfield, OH \1\............... 0.9271
Richland County, OH
32420.................... Mayag[uuml]ez, PR............... 0.3711
Hormigueros Municipio, PR
Mayag[uuml]ez Municipio, PR
32580.................... McAllen-Edinburg-Mission, TX.... 0.9123
Hidalgo County, TX
32780.................... Medford, OR..................... 1.0318
Jackson County, OR
32820.................... Memphis, TN-MS-AR............... 0.9250
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...................... 1.2120
Merced County, CA
33124.................... Miami-Miami Beach-Kendall, FL... 1.0002
Miami-Dade County, FL
33140.................... Michigan City-La Porte, IN...... 0.8914
LaPorte County, IN
33260.................... Midland, TX..................... 1.0017
Midland County, TX
33340.................... Milwaukee-Waukesha-West Allis, 1.0214
WI.
Milwaukee County, WI
Ozaukee County, WI
Washington County, WI
Waukesha County, WI
33460.................... Minneapolis-St. Paul-- 1.1093
Bloomington, 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.................... 0.8953
Missoula County, MT
33660.................... Mobile, AL...................... 0.8033
Mobile County, AL
33700.................... Modesto, CA..................... 1.1962
Stanislaus County, CA
33740.................... Monroe, LA...................... 0.7832
Ouachita Parish, LA
Union Parish, LA

[[Page 46405]]

33780.................... Monroe, MI...................... 0.9414
Monroe County, MI
33860.................... Montgomery, AL.................. 0.8088
Autauga County, AL
Elmore County, AL
Lowndes County, AL
Montgomery County, AL
34060.................... Morgantown, WV.................. 0.8321
Monongalia County, WV
Preston County, WV
34100.................... Morristown, TN.................. 0.7388
Grainger County, TN
Hamblen County, TN
Jefferson County, TN
34580.................... Mount Vernon-Anacortes, WA...... 1.0529
Skagit County, WA
34620.................... Muncie, IN...................... 0.8214
Delaware County, IN
34740.................... Muskegon-Norton Shores, MI...... 0.9836
Muskegon County, MI
34820.................... Myrtle Beach-Conway-North Myrtle 0.8634
Beach, SC.
Horry County, SC
34900.................... Napa, CA........................ 1.4476
Napa County, CA
34940.................... Naples-Marco Island, FL......... 0.9487
Collier County, FL
34980.................... Nashville-Davidson-Murfreesboro- 0.9689
Franklin, 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.............. 1.2640
Nassau County, NY
Suffolk County, NY
35084.................... Newark-Union, NJ-PA............. 1.1862
Essex County, NJ
Hunterdon County, NJ
Morris County, NJ
Sussex County, NJ
Union County, NJ
Pike County, PA
35300.................... New Haven-Milford, CT........... 1.1871
New Haven County, CT
35380.................... New Orleans-Metairie-Kenner, LA. 0.8897
Jefferson Parish, LA
Orleans Parish, LA
Plaquemines Parish, LA
St. Bernard Parish, LA
St. Charles Parish, LA
St. John the Baptist Parish,
LA
St. Tammany Parish, LA
35644.................... New York-White Plains-Wayne, NY- 1.3115
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

[[Page 46406]]

Westchester County, NY
35660.................... Niles-Benton Harbor, MI......... 0.9141
Berrien County, MI
35980.................... Norwich-New London, CT.......... 1.1432
New London County, CT
36084.................... Oakland-Fremont-Hayward, CA..... 1.5685
Alameda County, CA
Contra Costa County, CA
36100.................... Ocala, FL....................... 0.8627
Marion County, FL
36140.................... Ocean City, NJ.................. 1.0988
Cape May County, NJ
36220.................... Odessa, TX...................... 1.0042
Ector County, TX
36260.................... Ogden-Clearfield, UT............ 0.9000
Davis County, UT
Morgan County, UT
Weber County, UT
36420.................... Oklahoma City, OK............... 0.8815
Canadian County, OK
Cleveland County, OK
Grady County, OK
Lincoln County, OK
Logan County, OK
McClain County, OK
Oklahoma County, OK
36500.................... Olympia, WA..................... 1.1512
Thurston County, WA
36540.................... Omaha-Council Bluffs, NE-IA..... 0.9561
Harrison County, IA
Mills County, IA
Pottawattamie County, IA
Cass County, NE
Douglas County, NE
Sarpy County, NE
Saunders County, NE
Washington County, NE
36740.................... Orlando-Kissimmee, FL........... 0.9226
Lake County, FL
Orange County, FL
Osceola County, FL
Seminole County, FL
36780.................... Oshkosh-Neenah, WI.............. 0.9551
Winnebago County, WI
36980.................... Owensboro, KY................... 0.8652
Daviess County, KY
Hancock County, KY
McLean County, KY
37100.................... Oxnard-Thousand Oaks-Ventura, CA 1.1852
Ventura County, CA
37340.................... Palm Bay-Melbourne-Titusville, 0.9325
FL.
Brevard County, FL
37380.................... Palm Coast, FL.................. 0.8945
Flagler County, FL
37460.................... Panama City-Lynn Haven, FL...... 0.8313
Bay County, FL
37620.................... Parkersburg-Marietta-Vienna, WV- 0.8105
OH.
Washington County, OH
Pleasants County, WV
Wirt County, WV
Wood County, WV
37700.................... Pascagoula, MS.................. 0.8647
George County, MS
Jackson County, MS
37764.................... Peabody, MA..................... 1.0650
Essex County, MA
37860.................... Pensacola-Ferry Pass-Brent, FL.. 0.8281
Escambia County, FL
Santa Rosa County, FL
37900.................... Peoria, IL...................... 0.9299
Marshall County, IL

[[Page 46407]]

Peoria County, IL
Stark County, IL
Tazewell County, IL
Woodford County, IL
37964.................... Philadelphia, PA................ 1.0925
Bucks County, PA
Chester County, PA
Delaware County, PA
Montgomery County, PA
Philadelphia County, PA
38060.................... Phoenix-Mesa-Scottsdale, AZ..... 1.0264
Maricopa County, AZ
Pinal County, AZ
38220.................... Pine Bluff, AR.................. 0.7839
Cleveland County, AR
Jefferson County, AR
Lincoln County, AR
38300.................... Pittsburgh, PA.................. 0.8525
Allegheny County, PA
Armstrong County, PA
Beaver County, PA
Butler County, PA
Fayette County, PA
Washington County, PA
Westmoreland County, PA
38340.................... Pittsfield, MA.................. 1.0091
Berkshire County, MA
38540.................... Pocatello, ID................... 0.9465
Bannock County, ID
Power County, ID
38660.................... Ponce, PR....................... 0.4450
Juana D[iacute]az Municipio,
PR
Ponce Municipio, PR
Villalba Municipio, PR
38860.................... Portland-South Portland- 1.0042
Biddeford, ME.
Cumberland County, ME
Sagadahoc County, ME
York County, ME
38900.................... Portland-Vancouver-Beaverton, OR- 1.1498
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, FL.............. 1.0016
Martin County, FL
St. Lucie County, FL
39100.................... Poughkeepsie-Newburgh- 1.0982
Middletown, NY.
Dutchess County, NY
Orange County, NY
39140.................... Prescott, AZ.................... 1.0020
Yavapai County, AZ
39300.................... Providence-New Bedford-Fall 1.0574
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.................. 0.9557
Juab County, UT
Utah County, UT
39380.................... Pueblo, CO...................... 0.8851
Pueblo County, CO
39460.................... Punta Gorda, FL................. 0.9254
Charlotte County, FL
39540.................... Racine, WI...................... 0.9498
Racine County, WI
39580.................... Raleigh-Cary, NC................ 0.9839

[[Page 46408]]

Franklin County, NC
Johnston County, NC
Wake County, NC
39660.................... Rapid City, SD.................. 0.8811
Meade County, SD
Pennington County, SD
39740.................... Reading, PA..................... 0.9356
Berks County, PA
39820.................... Redding, CA..................... 1.3541
Shasta County, CA
39900.................... Reno-Sparks, NV................. 1.0715
Storey County, NV
Washoe County, NV
40060.................... Richmond, VA.................... 0.9425
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- 1.1100
Ontario, CA.
Riverside County, CA
San Bernardino County, CA
40220.................... Roanoke, VA..................... 0.8691
Botetourt County, VA
Craig County, VA
Franklin County, VA
Roanoke County, VA
Roanoke City, VA
Salem City, VA
40340.................... Rochester, MN................... 1.0755
Dodge County, MN
Olmsted County, MN
Wabasha County, MN
40380.................... Rochester, NY................... 0.8858
Livingston County, NY
Monroe County, NY
Ontario County, NY
Orleans County, NY
Wayne County, NY
40420.................... Rockford, IL.................... 0.9814
Boone County, IL
Winnebago County, IL
40484.................... Rockingham County, NH........... 1.0111
Rockingham County, NH
Strafford County, NH
40580.................... Rocky Mount, NC................. 0.9001
Edgecombe County, NC
Nash County, NC
40660.................... Rome, GA........................ 0.9042
Floyd County, GA
40900.................... Sacramento--Arden-Arcade-- 1.3505
Roseville, CA.
El Dorado County, CA
Placer County, CA
Sacramento County, CA
Yolo County, CA
40980.................... Saginaw-Saginaw Township North, 0.8812
MI.

[[Page 46409]]

Saginaw County, MI
41060.................... St. Cloud, MN................... 1.0549
Benton County, MN
Stearns County, MN
41100.................... St. George, UT.................. 0.9358
Washington County, UT
41140.................... St. Joseph, MO-KS............... 0.8762
Doniphan County, KS
Andrew County, MO
Buchanan County, MO
DeKalb County, MO
41180.................... St. Louis, MO-IL................ 0.9024
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....................... 1.0572
Marion County, OR
Polk County, OR
41500.................... Salinas, CA..................... 1.4775
Monterey County, CA
41540.................... Salisbury, MD................... 0.8994
Somerset County, MD
Wicomico County, MD
41620.................... Salt Lake City, UT.............. 0.9399
Salt Lake County, UT
Summit County, UT
Tooele County, UT
41660.................... San Angelo, TX.................. 0.8579
Irion County, TX
Tom Green County, TX
41700.................... San Antonio, TX................. 0.8834
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, 1.1492
CA.
San Diego County, CA
41780.................... Sandusky, OH.................... 0.8822
Erie County, OH
41884.................... San Francisco-San Mateo-Redwood 1.5195
City, CA.
Marin County, CA
San Francisco County, CA
San Mateo County, CA
41900.................... San Germ[aacute]n-Cabo Rojo, PR. 0.4729
Cabo Rojo Municipio, PR
Lajas Municipio, PR
Sabana Grande Municipio, PR
San Germ[aacute]n Municipio,
PR
41940.................... San Jose-Sunnyvale-Santa Clara, 1.5735
CA.
San Benito County, CA
Santa Clara County, CA
41980.................... San Juan-Caguas-Guaynabo, PR.... 0.4528
Aguas Buenas Municipio, PR

[[Page 46410]]

Aibonito Municipio, PR
Arecibo Municipio, PR
Barceloneta Municipio, PR
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. 1.2488
San Luis Obispo County, CA
42044.................... Santa Ana-Anaheim-Irvine, CA.... 1.1766
Orange County, CA
42060.................... Santa Barbara-Santa Maria- 1.1714
Goleta, CA.
Santa Barbara County, CA
42100.................... Santa Cruz-Watsonville, CA...... 1.6122
Santa Cruz County, CA
42140.................... Santa Fe, NM.................... 1.0734
Santa Fe County, NM
42220.................... Santa Rosa-Petaluma, CA......... 1.4696
Sonoma County, CA
42260.................... Sarasota-Bradenton-Venice, FL... 0.9933
Manatee County, FL
Sarasota County, FL
42340.................... Savannah, GA.................... 0.9131
Bryan County, GA
Chatham County, GA
Effingham County, GA
42540.................... Scranton--Wilkes-Barre, PA...... 0.8457
Lackawanna County, PA
Luzerne County, PA
Wyoming County, PA
42644.................... Seattle-Bellevue-Everett, WA.... 1.1572
King County, WA
Snohomish County, WA
42680.................... Sebastian-Vero Beach, FL........ 0.9412
Indian River County, FL
43100.................... Sheboygan, WI................... 0.8975
Sheboygan County, WI
43300.................... Sherman-Denison, TX............. 0.8320

[[Page 46411]]

Grayson County, TX
43340.................... Shreveport-Bossier City, LA..... 0.8476
Bossier Parish, LA
Caddo Parish, LA
De Soto Parish, LA
43580.................... Sioux City, IA-NE-SD............ 0.9251
Woodbury County, IA
Dakota County, NE
Dixon County, NE
Union County, SD
43620.................... Sioux Falls, SD................. 0.9563
Lincoln County, SD
McCook County, SD
Minnehaha County, SD
Turner County, SD
43780.................... South Bend-Mishawaka, IN-MI..... 0.9617
St. Joseph County, IN
Cass County, MI
43900.................... Spartanburg, SC................. 0.9422
Spartanburg County, SC
44060.................... Spokane, WA..................... 1.0455
Spokane County, WA
44100.................... Springfield, IL................. 0.8944
Menard County, IL
Sangamon County, IL
44140.................... Springfield, MA................. 1.0366
Franklin County, MA
Hampden County, MA
Hampshire County, MA
44180.................... Springfield, MO................. 0.8695
Christian County, MO
Dallas County, MO
Greene County, MO
Polk County, MO
Webster County, MO
44220.................... Springfield, OH................. 0.8694
Clark County, OH
44300.................... State College, PA............... 0.8768
Centre County, PA
44700.................... Stockton, CA.................... 1.1855
San Joaquin County, CA
44940.................... Sumter, SC...................... 0.8599
Sumter County, SC
45060.................... Syracuse, NY.................... 0.9910
Madison County, NY
Onondaga County, NY
Oswego County, NY
45104.................... Tacoma, WA...................... 1.1055
Pierce County, WA
45220.................... Tallahassee, FL................. 0.9025
Gadsden County, FL
Jefferson County, FL
Leon County, FL
Wakulla County, FL
45300.................... Tampa-St. Petersburg-Clearwater, 0.9020
FL.
Hernando County, FL
Hillsborough County, FL
Pasco County, FL
Pinellas County, FL
45460.................... Terre Haute, IN................. 0.8805
Clay County, IN
Sullivan County, IN
Vermillion County, IN
Vigo County, IN
45500.................... Texarkana, TX-Texarkana, AR..... 0.7770
Miller County, AR
Bowie County, TX
45780.................... Toledo, OH...................... 0.9431
Fulton County, OH
Lucas County, OH
Ottawa County, OH

[[Page 46412]]

Wood County, OH
45820.................... Topeka, KS...................... 0.8538
Jackson County, KS
Jefferson County, KS
Osage County, KS
Shawnee County, KS
Wabaunsee County, KS
45940.................... Trenton-Ewing, NJ............... 1.0699
Mercer County, NJ
46060.................... Tucson, AZ...................... 0.9245
Pima County, AZ
46140.................... Tulsa, OK....................... 0.8340
Creek County, OK
Okmulgee County, OK
Osage County, OK
Pawnee County, OK
Rogers County, OK
Tulsa County, OK
Wagoner County, OK
46220.................... Tuscaloosa, AL.................. 0.8303
Greene County, AL
Hale County, AL
Tuscaloosa County, AL
46340.................... Tyler, TX....................... 0.9114
Smith County, TX
46540.................... Utica-Rome, NY.................. 0.8486
Herkimer County, NY
Oneida County, NY
46660.................... Valdosta, GA.................... 0.8098
Brooks County, GA
Echols County, GA
Lanier County, GA
Lowndes County, GA
46700.................... Vallejo-Fairfield, CA........... 1.4666
Solano County, CA
47020.................... Victoria, TX.................... 0.8302
Calhoun County, TX
Goliad County, TX
Victoria County, TX
47220.................... Vineland-Millville-Bridgeton, NJ 1.0133
Cumberland County, NJ
47260.................... Virginia Beach-Norfolk-Newport 0.8818
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......... 1.0091
Tulare County, CA
47380.................... Waco, TX........................ 0.8518
McLennan County, TX
47580.................... Warner Robins, GA............... 0.9128
Houston County, GA
47644.................... Warren-Troy-Farmington Hills, MI 1.0001
Lapeer County, MI
Livingston County, MI
Macomb County, MI
Oakland County, MI
St. Clair County, MI
47894.................... Washington-Arlington-Alexandria, 1.0855
DC-VA-MD-WV.

[[Page 46413]]

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........ 0.8519
Black Hawk County, IA
Bremer County, IA
Grundy County, IA
48140.................... Wausau, WI...................... 0.9679
Marathon County, WI
48260.................... Weirton-Steubenville, WV-OH..... 0.7924
Jefferson County, OH
Brooke County, WV
Hancock County, WV
48300.................... Wenatchee, WA................... 1.1469
Chelan County, WA
Douglas County, WA
48424.................... West Palm Beach-Boca Raton- 0.9728
Boynton Beach, FL.
Palm Beach County, FL
48540.................... Wheeling, WV-OH................. 0.6961
Belmont County, OH
Marshall County, WV
Ohio County, WV
48620.................... Wichita, KS..................... 0.9062
Butler County, KS
Harvey County, KS
Sedgwick County, KS
Sumner County, KS
48660.................... Wichita Falls, TX............... 0.7920
Archer County, TX
Clay County, TX
Wichita County, TX
48700.................... Williamsport, PA................ 0.8043
Lycoming County, PA
48864.................... Wilmington, DE-MD-NJ............ 1.0824
New Castle County, DE
Cecil County, MD
Salem County, NJ
48900.................... Wilmington, NC.................. 0.9410
Brunswick County, NC
New Hanover County, NC
Pender County, NC
49020.................... Winchester, VA-WV............... 0.9913
Frederick County, VA
Winchester City, VA
Hampshire County, WV
49180.................... Winston-Salem, NC............... 0.9118
Davie County, NC
Forsyth County, NC
Stokes County, NC
Yadkin County, NC
49340.................... Worcester, MA................... 1.1287
Worcester County, MA
49420.................... Yakima, WA...................... 1.0267
Yakima County, WA

[[Page 46414]]

49500.................... Yauco, PR....................... 0.3284
Gu[aacute]nica Municipio, PR
Guayanilla Municipio, PR
Pe[ntilde]uelas Municipio, PR
Yauco Municipio, PR
49620.................... York-Hanover, PA................ 0.9359
York County, PA
49660.................... Youngstown-Warren-Boardman, OH- 0.9002
PA.
Mahoning County, OH
Trumbull County, OH
Mercer County, PA
49700.................... Yuba City, CA................... 1.0756
Sutter County, CA
Yuba County, CA
49740.................... Yuma, AZ........................ 0.9488
Yuma County, AZ
------------------------------------------------------------------------
\1\ At this time, there are no hospitals located in this urban area on
which to base a wage index.

Table 2--Inpatient Rehabilitation Facility Wage Index for Rural Areas
for Discharges Occurring From October 1, 2008 Through September 30, 2009
------------------------------------------------------------------------
CBSA code Nonurban area Wage index
------------------------------------------------------------------------
1.................................. Alabama............... 0.7533
2.................................. Alaska................ 1.2109
3.................................. Arizona............... 0.8479
4.................................. Arkansas.............. 0.7371
5.................................. California............ 1.2023
6.................................. Colorado.............. 0.9704
7.................................. Connecticut........... 1.1119
8.................................. Delaware.............. 0.9727
10................................. Florida............... 0.8465
11................................. Georgia............... 0.7659
12................................. Hawaii................ 1.0612
13................................. Idaho................. 0.7920
14................................. Illinois.............. 0.8335
15................................. Indiana............... 0.8576
16................................. Iowa.................. 0.8566
17................................. Kansas................ 0.7981
18................................. Kentucky.............. 0.7793
19................................. Louisiana............. 0.7373
20................................. Maine................. 0.8476
21................................. Maryland.............. 0.9034
22................................. Massachusetts \1\..... 1.1589
23................................. Michigan.............. 0.8953
24................................. Minnesota............. 0.9079
25................................. Mississippi........... 0.7700
26................................. Missouri.............. 0.7930
27................................. Montana............... 0.8379
28................................. Nebraska.............. 0.8849
29................................. Nevada................ 0.9272
30................................. New Hampshire......... 0.0470
31................................. New Jersey \1\........ --
32................................. New Mexico............ 0.8940
33................................. New York.............. 0.8268
34................................. North Carolina........ 0.8603
35................................. North Dakota.......... 0.7182
36................................. Ohio.................. 0.8714
37................................. Oklahoma.............. 0.7492
38................................. Oregon................ 0.9906
39................................. Pennsylvania.......... 0.8385
40................................. Puerto Rico \1\....... 0.4047
41................................. Rhode Island \1\...... --
42................................. South Carolina........ 0.8656
43................................. South Dakota.......... 0.8549
44................................. Tennessee............. 0.7723
45................................. Texas................. 0.7968
46................................. Utah.................. 0.8116
47................................. Vermont............... 0.9919
48................................. Virgin Islands........ 0.6830
49................................. Virginia.............. 0.7896
50................................. Washington............ 1.0259
51................................. West Virginia......... 0.7454
52................................. Wisconsin............. 0.9667
53................................. Wyoming............... 0.9287
65................................. Guam.................. 0.9611
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban, with the
exception of Massachusetts and Puerto Rico. Massachusetts and Puerto
Rico have areas designated as rural; however, no short-term, acute
care hospitals are located in the area(s) for FY 2009. The rural
Massachusetts wage index is calculated as the average of all
contiguous CBSAs. The Puerto Rico wage index is the same as FY 2008.

[FR Doc. E8-17797 Filed 7-31-08; 4:15 pm]
BILLING CODE 4120-01-P