[Federal Register Volume 79, Number 87 (Tuesday, May 6, 2014)]
[Proposed Rules]
[Pages 26040-26090]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10306]



[[Page 26039]]

Vol. 79

Tuesday,

No. 87

May 6, 2014

Part III





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; Inpatient Psychiatric Facilities Prospective Payment 
System--Update for Fiscal Year Beginning October 1, 2014 (FY 2015); 
Proposed Rule

  Federal Register / Vol. 79 , No. 87 / Tuesday, May 6, 2014 / Proposed 
Rules  

[[Page 26040]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1606-P]
RIN 0938-AS08


Medicare Program; Inpatient Psychiatric Facilities Prospective 
Payment System--Update for Fiscal Year Beginning October 1, 2014 (FY 
2015)

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates 
for Medicare inpatient hospital services provided by inpatient 
psychiatric facilities (IPFs). These changes would be applicable to IPF 
discharges occurring during the fiscal year (FY) beginning October 1, 
2014 through September 30, 2015. This proposed rule would also address 
implementation of ICD-10-CM and ICD-10-PCS codes; propose a new 
methodology for updating the cost of living adjustment (COLA), and 
propose new quality measures and reporting requirements under the IPF 
quality reporting program.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on June 30, 2014.

FOR FURTHER INFORMATION CONTACT: Dorothy Myrick or Jana Lindquist, 
(410) 786-4533, for general information.
    Hudson Osgood, (410) 786-7897 or Bridget Dickensheets, (410) 786-
8670, for information regarding the market basket and labor-related 
share.
    Theresa Bean, (410) 786-2287, for information regarding the 
regulatory impact analysis.
    Rebecca Kliman, (410) 786-9723 or Jeffrey Buck, (410) 786-0407, for 
information regarding the inpatient psychiatric facility quality 
reporting program.

SUPPLEMENTARY INFORMATION:

Table of Contents

    To assist readers in referencing sections contained in this 
document, we are providing the following table of contents.

I. Executive Summary
    A. Purpose
    B. Summary of the Major Provisions
    C. Summary of Transfers
II. Background
    A. Annual Requirements for Updating the IPF PPS
    B. Overview of the Legislative Requirements of the IPF PPS
    C. General Overview of the IPF PPS
III. Changing the IPF PPS Payment Rate Update Period From a Rate 
Year to a Fiscal Year
IV. Proposed Market Basket for the IPF PPS
    A. Background
    B. Proposed Development of an IPF-Specific Market Basket
    C. Proposed FY 2015 Market Basket Update
    D. Proposed Labor-Related Share
V. Proposed Updates to the IPF PPS for FY Beginning October 1, 2014
    A. Determining the Standardized Budget-Neutral Federal Per Diem 
Base Rate
    B. Proposed Update of the Federal Per Diem Base Rate and 
Electroconvulsive Therapy Rate
VI. Proposed Update of the IPF PPS Adjustment Factors
    A. Overview of the IPF PPS Adjustment Factors
    B. Proposed Patient-Level Adjustments
    1. Proposed Adjustment for MS-DRG Assignment
    2. Proposed Payment for Comorbid Conditions
    3. Proposed Patient Age Adjustments
    4. Proposed Variable Per Diem Adjustments
    C. Facility-Level Adjustments
    1. Proposed Wage Index Adjustment
    a. Background
    b. Proposed Wage Index for FY 2015
    c. OMB Bulletins
    2. Proposed Adjustment for Rural Location
    3. Proposed Teaching Adjustment
    a. FTE Intern and Resident Cap Adjustment
    b. Temporary Adjustment to the FTE Cap To Reflect Residents 
Added Due to Hospital Closure
    c. Temporary Adjustment to FTE Cap To Reflect Residents Affected 
By Residency Program Closure
    i. Receiving IPF
    ii. IPF That Closed Its Program
    4. Proposed Cost of Living Adjustment for IPFs Located in Alaska 
and Hawaii
    5. Proposed Adjustment for IPFs With a Qualifying Emergency 
Department (ED)
    D. Other Payment Adjustments and Policies
    1. Proposed Outlier Payments
    a. Proposed Update to the Outlier Fixed Dollar Loss Threshold 
Amount
    b. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
    2. Future Refinements
VII. Secretary's Recommendations
VIII. Inpatient Psychiatric Facilities Quality Reporting Program
IX. Collection of Information Requirements
X. Response to Comments
XI. Regulatory Impact Analysis
Addenda

Acronyms

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

BBRA--Medicare, Medicaid and SCHIP [State Children's Health 
Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 
106-113)
CBSA--Core-Based Statistical Area
CCR--Cost-to-Charge Ratio
CAH--Critical Access Hospital
DSM-IV-TR Diagnostic and Statistical Manual of Mental Disorders 
Fourth Edition--Text Revision
DRGs--Diagnosis-Related Groups
FY--Federal Fiscal Year (October 1 through September 30)
ICD-9-CM--International Classification of Diseases, 9th Revision, 
Clinical Modification
ICD-10-CM--International Classification of Diseases, 10th Revision, 
Clinical Modification
ICD-10-PCS--International Classification of Diseases, 10th Revision, 
Procedure Coding System
IPFs--Inpatient Psychiatric Facilities
IPFQR--Inpatient Psychiatric Facilities Quality Reporting
IRFs--Inpatient Rehabilitation Facilities
LTCHs--Long-Term Care Hospitals
MAC--Medicare Administrative Contractor
MedPAR--Medicare Provider Analysis and Review File
RPL--Rehabilitation, Psychiatric, and Long-Term Care
RY--Rate Year (July 1 through June 30)
TEFRA--Tax Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-
248)

I. Executive Summary

A. Purpose

    This proposed rule would update the prospective payment rates for 
Medicare inpatient hospital services provided by inpatient psychiatric 
facilities for discharges occurring during the fiscal year (FY) 
beginning October 1, 2014 through September 30, 2015.

B. Summary of the Major Provisions

    In this proposed rule, we would update the IPF PPS, as specified in 
42 CFR 412.428. The updates include the following:
     The FY 2008-based Rehabilitation, Psychiatric, and Long 
Term Care (RPL) market basket update (currently estimated to be 2.7 
percent) would be adjusted by a 0.3 percentage point reduction as 
required by section 1886(s)(2)(A)(ii) of the Social Security Act (the 
Act) and a reduction for economy-wide productivity (currently estimated 
to be 0.4 percentage point) as required by 1886(s)(2)(A)(i) of the Act.
     The FY 2015 per diem rate would be updated from $713.19 to 
$727.67.
     The electroconvulsive therapy payment would be updated 
from $307.04 to $313.27.
     The fixed dollar loss threshold amount would be updated 
from $10,245 to $10,125 in order to maintain outlier payments that are 
2 percent of total IPF PPS payments.
     The national urban and rural cost-to-charge ratio (CCR) 
ceilings for FY

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2015 would be 1.7049 and 1.8823, respectively, and the national median 
CCR would be 0.6220 for rural IPFs and 0.4700 for urban IPFs. These 
amounts are used in the outlier calculation to determine if an IPF's 
CCR is statistically accurate and for new providers without an 
established CCR.
     The cost of living adjustment factors for IPFs located in 
Alaska and Hawaii would be updated using the approach finalized in the 
FY 2014 inpatient hospital prospective payment system (IPPS) final rule 
(78 FR 50985 through 50987).
    In addition:
     We are proposing the ICD-10-CM/PCS codes that would be 
eligible for the MS-DRG and comorbidity payment adjustments under the 
IPF PPS. The effective date of those changes would be the date when 
ICD-10-CM becomes the required medical data code set for use on 
Medicare claims.
     We are proposing the ICD-9-CM/PCS codes that would be 
eligible for the MS-DRG and comorbidity payment adjustments under the 
IPF PPS.
     We would use the best available hospital wage index and 
establish the wage index budget-neutrality adjustment of 1.0003.
     We would retain the 17 percent payment adjustment for IPFs 
located in rural areas, the 1.31 payment adjustment factor for IPFs 
with a qualifying emergency department, the coefficient value of 0.5150 
for the teaching adjustment, and the MS-DRG adjustment factors and 
comorbidity adjustment factors currently being paid to IPFs in FY 2014.

C. Summary of Impacts

------------------------------------------------------------------------
       Provision description                   Total transfers
------------------------------------------------------------------------
FY 2015 IPF PPS payment rate        The overall economic impact of this
 update.                             proposed rule is an estimated $100
                                     million in increased payments to
                                     IPFs during FY 2015.
------------------------------------------------------------------------


------------------------------------------------------------------------
       Provision description                        Costs
------------------------------------------------------------------------
New quality reporting program       The total costs in FY 2015 for IPFs
 requirements.                       as a result of the proposed new
                                     quality reporting requirements are
                                     estimated to be $33,372,508.
------------------------------------------------------------------------

II. Background

A. Annual Requirements for Updating the IPF PPS

    In November 2004, we implemented the inpatient psychiatric 
facilities (IPF) prospective payment system (PPS) in a final rule that 
appeared in the November 15, 2004 Federal Register (69 FR 66922). In 
developing the IPF PPS, in order to ensure that the IPF PPS is able to 
account adequately for each IPF's case-mix, we performed an extensive 
regression analysis of the relationship between the per diem costs and 
certain patient and facility characteristics to determine those 
characteristics associated with statistically significant cost 
differences on a per diem basis. For characteristics with statistically 
significant cost differences, we used the regression coefficients of 
those variables to determine the size of the corresponding payment 
adjustments.
    In that final rule, we explained that we believe it is important to 
delay updating the adjustment factors derived from the regression 
analysis until we have IPF PPS data that include as much information as 
possible regarding the patient-level characteristics of the population 
that each IPF serves. Therefore, we indicated that we did not intend to 
update the regression analysis and the patient- and facility-level 
adjustments until we complete that analysis. Until that analysis is 
complete, we stated our intention to publish a notice in the Federal 
Register each spring to update the IPF PPS (71 FR 27041). We have begun 
the necessary analysis to make refinements to the IPF PPS using more 
current data to set the adjustment factors, however, we are not 
proposing those refinements in this proposed rule. Rather, as explained 
in section V.D.3 of this proposed rule, we expect that in future 
rulemaking, possibly for FY 2017, we will be ready to propose potential 
refinements.
    In the May 6, 2011 IPF PPS final rule (76 FR 26432), we changed the 
payment rate update period to a rate year (RY) that coincides with a 
fiscal year (FY) update. Therefore, update notices are now published in 
the Federal Register in the summer to be effective on October 1. When 
proposing changes in IPF payment policy, a proposed rule would be 
issued in the spring and the final rule in the summer in order to be 
effective on October 1. For further discussion on changing the IPF PPS 
payment rate update period to a RY that coincides with a FY, see the 
IPF PPS final rule published in the Federal Register on May 6, 2011 (76 
FR 26434 through 26435). For a detailed list of updates to the IPF PPS, 
see 42 CFR 412.428.
    Our most recent IPF PPS annual update occurred in an August 1, 
2013, Federal Register notice (78 FR 46734) (hereinafter referred to as 
the August 2013 IPF PPS notice) that set forth updates to the IPF PPS 
payment rates for FY 2014. That notice updated the IPF PPS per diem 
payment rates that were published in the August 2012 IPF PPS notice (77 
FR 47224) in accordance with our established policies.

B. Overview of the Legislative Requirements for the IPF PPS

    Section 124 of the Medicare, Medicaid, and SCHIP (State Children's 
Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113) required the establishment and implementation of an 
IPF PPS. Specifically, section 124 of the BBRA mandated that the 
Secretary develop a per diem PPS for inpatient hospital services 
furnished in psychiatric hospitals and psychiatric units including an 
adequate patient classification system that reflects the differences in 
patient resource use and costs among psychiatric hospitals and 
psychiatric units.
    Section 405(g)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) extended the IPF 
PPS to distinct part psychiatric units of critical access hospitals 
(CAHs).
    Section 3401(f) of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148) as amended by section 10319(e) of that Act and by 
section 1105(d) of the Health Care and Education Reconciliation Act of 
2010 (Pub. L. 111-152) (hereafter referred to as ``the Affordable Care 
Act'') added subsection (s) to section 1886 of the Act.
    Section 1886(s)(1) of the Act titled ``Reference to Establishment 
and Implementation of System'' refers to section 124 of the BBRA, which 
relates to the establishment of the IPF PPS.
    Section 1886(s)(2)(A)(i) of the Act requires the application of the 
productivity adjustment described in

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section 1886(b)(3)(B)(xi)(II) of the Act to the IPF PPS for the RY 
beginning in 2012 (that is, a RY that coincides with a FY) and each 
subsequent RY. For the RY beginning in 2014 (that is, FY 2015), the 
current estimate of the productivity adjustment would be equal to 0.4 
percentage point, which we are proposing in this FY 2015 proposed rule.
    Section 1886(s)(2)(A)(ii) of the Act requires the application of an 
``other adjustment'' that reduces any update to an IPF PPS base rate by 
percentages specified in section 1886(s)(3) of the Act for the RY 
beginning in 2010 through the RY beginning in 2019. For the RY 
beginning in 2014 (that is, FY 2015), section 1886(s)(3)(C) of the Act 
requires the reduction to be 0.3 percentage point. We are proposing 
that reduction in this FY 2015 IPF PPS proposed rule.
    Section 1886(s)(4) of the Act requires the establishment of a 
quality data reporting program for the IPF PPS beginning in RY 2014. We 
proposed and finalized new requirements for quality reporting for IPFs 
in the ``Hospital Inpatient Prospective Payment System for Acute Care 
Hospitals and the Long Term Care Hospital Prospective Payment System 
and Fiscal Year 2014 Rates'' proposed rule published on May 10, 2013 
(78 FR 27486, 27734 through 27744) and final rule published on August 
19, 2013 (78 FR 50496, 50887 through 50903).
    To implement and periodically update these provisions, we have 
published various proposed and final rules in the Federal Register. For 
more information regarding these rules, see the CMS Web site at http://www.cms.hhs.gov/InpatientPsychFacilPPS/.

C. General Overview of the IPF PPS

    The November 2004 IPF PPS final rule (69 FR 66922) established the 
IPF PPS, as required by section 124 of the BBRA and codified at subpart 
N of part 412 of the Medicare regulations. The November 2004 IPF PPS 
final rule set forth the per diem Federal rates for the implementation 
year (the 18-month period from January 1, 2005 through June 30, 2006), 
and provided payment for the inpatient operating and capital costs to 
IPFs for covered psychiatric services they furnish (that is, routine, 
ancillary, and capital costs, but not costs of approved educational 
activities, bad debts, and other services or items that are outside the 
scope of the IPF PPS). Covered psychiatric services include services 
for which benefits are provided under the fee-for-service Part A 
(Hospital Insurance Program) of the Medicare program.
    The IPF PPS established the Federal per diem base rate for each 
patient day in an IPF derived from the national average daily routine 
operating, ancillary, and capital costs in IPFs in FY 2002. The average 
per diem cost was updated to the midpoint of the first year under the 
IPF PPS, standardized to account for the overall positive effects of 
the IPF PPS payment adjustments, and adjusted for budget-neutrality.
    The Federal per diem payment under the IPF PPS is comprised of the 
Federal per diem base rate described above and certain patient- and 
facility-level payment adjustments that were found in the regression 
analysis to be associated with statistically significant per diem cost 
differences.
    The patient-level adjustments include age, DRG assignment, 
comorbidities, and variable per diem adjustments to reflect higher per 
diem costs in the early days of an IPF stay. Facility-level adjustments 
include adjustments for the IPF's wage index, rural location, teaching 
status, a cost-of-living adjustment for IPFs located in Alaska and 
Hawaii, and the presence of a qualifying emergency department (ED).
    The IPF PPS provides additional payment policies for: Outlier 
cases; interrupted stays; and a per treatment adjustment for patients 
who undergo electroconvulsive therapy (ECT). During the IPF PPS 
mandatory 3-year transition period, stop-loss payments were also 
provided; however, since the transition ended in 2008, these payments 
are no longer available.
    A complete discussion of the regression analysis that established 
the IPF PPS adjustment factors appears in the November 2004 IPF PPS 
final rule (69 FR 66933 through 66936).
    Section 124 of the BBRA did not specify an annual rate update 
strategy for the IPF PPS and was broadly written to give the Secretary 
discretion in establishing an update methodology. Therefore, in the 
November 2004 IPF PPS final rule, we implemented the IPF PPS using the 
following update strategy:
     Calculate the final Federal per diem base rate to be 
budget-neutral for the 18-month period of January 1, 2005 through June 
30, 2006.
     Use a July 1 through June 30 annual update cycle.
     Allow the IPF PPS first update to be effective for 
discharges on or after July 1, 2006 through June 30, 2007.

III. Changing the IPF PPS Payment Rate Update Period From a Rate Year 
to a Fiscal Year

    Prior to RY 2012, the IPF PPS was updated on a July 1 through June 
30 annual update cycle. Effective with RY 2012, we switched the IPF PPS 
payment rate update from a rate year that begins on July 1 and ends on 
June 30 to a period that coincides with a fiscal year. In order to 
transition from a RY to a FY, the IPF PPS RY 2012 covered a 15-month 
period from July 1 through September 30. As proposed and finalized, 
after RY 2012, the rate year update period for the IPF PPS payment 
rates and other policy changes begin on October 1 through September 30. 
Therefore, the update cycle for FY 2015 will be October 1, 2014 through 
September 30, 2015.
    For further discussion of the 15-month market basket update for RY 
2012 and changing the payment rate update period from a RY to a FY, we 
refer readers to the RY 2012 IPF PPS proposed rule (76 FR 4998) and the 
RY 2012 IPF PPS final rule (76 FR 26432).

IV. Proposed Market Basket for the IPF PPS

A. Background

    The input price index (that is, the market basket) that was used to 
develop the IPF PPS was the Excluded Hospital with Capital market 
basket. This market basket was based on 1997 Medicare cost report data 
and included data for Medicare participating IPFs, inpatient 
rehabilitation facilities (IRFs), long-term care hospitals (LTCHs), 
cancer hospitals, and children's hospitals. Although ``market basket'' 
technically describes the mix of goods and services used in providing 
hospital care, this term is also commonly used to denote the input 
price index (that is, cost category weights and price proxies combined) 
derived from that market basket. Accordingly, the term ``market 
basket'' as used in this document refers to a hospital input price 
index.
    Beginning with the May 2006 IPF PPS final rule (71 FR 27046 through 
27054), IPF PPS payments were updated using a FY 2002-based market 
basket reflecting the operating and capital cost structures for IRFs, 
IPFs, and LTCHs (hereafter referred to as the Rehabilitation, 
Psychiatric, and Long-Term Care (RPL) market basket).
    We excluded cancer and children's hospitals from the RPL market 
basket because these hospitals are not reimbursed through a PPS; 
rather, their payments are based entirely on reasonable costs subject 
to rate-of-increase limits established under the authority of section 
1886(b) of the Act, which are implemented in regulations at Sec.  
413.40. Moreover, the FY 2002 cost structures for cancer and children's 
hospitals are noticeably different than the cost structures of the 
IRFs, IPFs, and

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LTCHs. A complete discussion of the FY 2002-based RPL market basket 
appears in the May 2006 IPF PPS final rule (71 FR 27046 through 27054).
    In the RY 2012 IPF PPS proposed rule (76 FR 4998) and final rule 
(76 FR 26432), we proposed and finalized the use of a rebased and 
revised FY 2008-based RPL market basket to update IPF payments.

B. Development of an IPF-Specific Market Basket

    In the May 1, 2009 IPF PPS notice (74 FR 20362), we expressed our 
interest in exploring the possibility of creating a stand-alone, or 
IPF-specific market basket that reflects the cost structures of only 
IPF providers. We noted that, of the available options, one would be to 
join the Medicare cost report data from freestanding IPF providers with 
data from hospital-based IPF providers. We indicated that an 
examination of the Medicare cost report data comparing freestanding and 
hospital-based IPFs revealed considerable differences between the two 
with respect to cost levels and cost structures. At that time, we 
stated that we were unable to fully explain the differences in costs 
between freestanding and hospital-based IPF providers. As a result, we 
felt that further research was required and we solicited public 
comments for additional information that might help explain the reasons 
for the variations in costs and cost structures, as indicated by the 
cost report data (74 FR 20376). We summarized the public comments we 
received and our responses in the April 2010 IPF PPS notice (75 FR 
23111 through 23113).
    Since the April 2010 IPF PPS notice was published, we have made 
significant progress on the development of a stand-alone, or IPF-
specific, market basket. Our research has focused on addressing several 
concerns regarding the use of the hospital-based IPF Medicare cost 
report data in the calculation of the major market basket cost weights. 
As discussed above, one concern is the cost level differences for 
hospital-based IPFs relative to freestanding IPFs that were not readily 
explained by the specific characteristics of the individual providers 
and the patients that they serve (for example, case mix, urban/rural 
status, teaching status). Furthermore, we are concerned about the 
variability in the cost report data among these hospital-based IPF 
providers and the potential impact on the market basket cost weights. 
These concerns led us to consider whether it is appropriate to use the 
universe of IPF providers to derive an IPF-specific market basket.
    Recently, we have investigated the use of regression analysis to 
evaluate the effect of including hospital-based IPF Medicare cost 
report data in the calculation of cost distributions. We created 
preliminary regression models to try to explain variations in costs per 
day across both freestanding and hospital-based IPFs. These models were 
intended to capture the effects of facility-level and patient-level 
characteristics (for example, wage index, urban/rural status, ownership 
status, length-of-stay, occupancy rate, case mix, and Medicare 
utilization) on IPF costs per day. Using the results from the 
preliminary regression analyses, we identified smaller subsets of 
hospital-based and freestanding IPF providers where the predicted costs 
per day using the regression model closely matched the actual costs per 
day for each IPF. We then derived different sets of cost distributions 
using (1) these subsets of IPF providers and (2) the entire universe of 
freestanding and hospital-based IPF providers (including those IPFs for 
which the variability in cost levels remains unexplained). After 
comparing these sets of cost distributions, the differences were not 
substantial enough for us to conclude that the inclusion of those IPF 
providers with unexplained variability in costs in the calculation of 
the cost distributions is a major cause for concern.
    Another concern with incorporating the hospital-based IPF data in 
the derivation of an IPF-specific market basket is the complexity of 
the Medicare cost report data for these providers. The freestanding 
IPFs independently submit a Medicare cost report for their facilities, 
making it relatively straightforward to obtain the cost categories 
necessary to determine the major market basket cost weights. However, 
cost report data submitted for a hospital-based IPF are embedded in the 
Medicare cost report submitted for the entire hospital facility in 
which the IPF is located. Therefore, adjustments would have to be made 
to obtain cost weights that represent just the hospital-based IPF (as 
opposed to the hospital as a whole). For example, ancillary costs for 
services such as clinic services, drugs charged to patients, and 
emergency services for the entire hospital would need to be 
appropriately converted to a value that only represents the hospital-
based IPF unit's cost. The preliminary method we have developed to 
allocate these costs is complex and still needs to be fully evaluated 
before we are ready to propose an IPF-specific market basket that would 
reflect both hospital-based and freestanding IPF data.
    We would also note that our current preliminary data show higher 
labor costs for IPFs than observed for the 2008-based RPL market 
basket. This increase is driven primarily by higher compensation cost 
as a percent of total costs for IPFs. In our ongoing research, we are 
also evaluating the differences in salary costs as a percent of total 
costs for both hospital-based and freestanding IPFs. Salary costs are 
historically the largest component of the market baskets. Based on our 
review of the data reported on the applicable Medicare cost reports, 
our initial findings (using the preliminary allocation method as 
discussed above) have shown that the hospital-based IPF salary costs as 
a percent of total costs tend to be lower than those of freestanding 
IPFs. We are still evaluating the methods for deriving salary costs as 
a percent of total costs and need to further investigate the percentage 
of ancillary costs that should be appropriately allocated to the IPF 
salary costs for the hospital-based IPF, as discussed above.
    Also, effective for cost reports beginning on or after May 1, 2010, 
we finalized a revised Hospital and Hospital Health Care Complex Cost 
Report, Form CMS 2552-10, (74 FR 31738). The report is available for 
download from the CMS Web site at http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/CostReports/Hospital-2010-form.html. The revised Hospital and Hospital Health Care Complex Cost 
Report includes a new worksheet (Worksheet S-3, part V) that identifies 
the contract labor costs and benefit costs for the hospital/hospital 
care complex and is applicable to sub-providers and units. Our analysis 
of Worksheet S-3, part V shows significant underreporting of this data 
with fewer than 20 freestanding IPF providers reporting it. We 
encourage providers to submit this data so we can use it to calculate 
benefits and contract labor cost weights for the market basket. In the 
absence of this data, we will likely use the 2008-based RPL market 
basket methodology (76 FR 5003) to calculate the IPF benefit cost 
weight. This methodology calculates the ratio of the IPPS benefit cost 
weight to the IPPS salary cost weight and applies this ratio to the IPF 
salary cost weight in order to estimate the IPF benefit cost weight. 
For contract labor, in the absence of IPF-specific data, we will use a 
similar methodology.
    For the reasons discussed above, while we believe we have made 
significant progress on the development of an IPF-specific market 
basket, we

[[Page 26044]]

believe that further research is required at this time. As a result, we 
are not proposing an IPF-specific market basket for FY 2015. We plan to 
complete our research during the remainder of this year and, provided 
that we are prepared to draw conclusions from our research, may propose 
an IPF-specific market basket for the FY 2016 rulemaking cycle. We 
welcome public comments on the preliminary findings discussed above.

C. Proposed FY 2015 Market Basket Update

    The proposed FY 2015 update for the IPF PPS using the FY 2008-based 
RPL market basket and IHS Global Insight's first quarter 2014 forecast 
of the market basket components is 2.7 percent (prior to the 
application of statutory adjustments). IHS Global Insight, Inc. (IGI) 
is a nationally recognized economic and financial forecasting firm that 
contracts with CMS to forecast the components of the market baskets.
    As previously described in section I.B, section 1886(s)(2)(A)(i) of 
the Act requires the application of the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act to the IPF PPS 
for the RY beginning in 2012 and each subsequent RY. The statute 
defines the productivity adjustment to be equal to the 10-year moving 
average of changes in annual economy-wide private nonfarm business 
multifactor productivity (MFP) (as projected by the Secretary for the 
10-year period ending with the applicable FY, year, cost reporting 
period, or other annual period) (the ``MFP adjustment'').
    The Bureau of Labor Statistics (BLS) publishes the official measure 
of private non-farm business MFP. We refer readers to the BLS Web site 
at http://www.bls.gov/mfp to obtain the BLS historical published MFP 
data. The MFP adjustment for FY 2015 applicable to the IPF PPS is 
derived using a projection of MFP that is currently produced by IGI. 
For a detailed description of the model currently used by IGI to 
project MFP, as well as a description of how the MFP adjustment is 
calculated, we refer readers to the FY 2012 IPPS/LTCH final rule (76 FR 
51690 through 51692). Based on IGI's first quarter 2014 forecast, the 
proposed productivity adjustment for FY 2015 is 0.4 percentage point. 
Section 1886(s)(2)(A)(ii) of the Act also requires the application of 
an ``other adjustment'' that reduces any update to an IPF PPS base rate 
by percentages specified in section 1886(s)(3) of the Act for rate 
years beginning in 2010 through the RY beginning in 2019. For the RY 
beginning in 2014 (that is, FY 2015), the reduction is 0.3 percentage 
point. We are proposing to implement the productivity adjustment and 
``other adjustment'' in this FY 2015 IPF PPS proposed rule.
    In summary, we propose to base the FY 2015 market basket update, 
which is used to determine the applicable percentage increase for the 
IPF payments, on the most recent estimate of the FY 2008-based RPL 
market basket (currently estimated to be 2.7 percent based on IGI's 
first quarter 2014 forecast). We propose to then reduce this percentage 
increase by the current estimate of the MFP adjustment for FY 2015 of 
0.4 percentage point (the 10-year moving average of MFP for the period 
ending FY 2015 based on IGI's first quarter 2014 forecast). Following 
application of the MFP, we propose to further reduce the applicable 
percentage increase by 0.3 percentage point, as required by section 
1886(s)(3) of the Act. The current estimate of the proposed FY 2015 IPF 
update is 2.0 percent (2.7 percent market basket update, less 0.4 
percentage point MFP adjustment, less 0.3 percentage point ``other'' 
adjustment). Furthermore, we also are proposing that if more recent 
data are subsequently available (for example, a more recent estimate of 
the market basket and MFP adjustment), we would use such data, if 
appropriate, to determine the FY 2015 market basket update and MFP 
adjustment in the final rule.

D. Proposed Labor-Related Share

    Due to variations in geographic wage levels and other labor-related 
costs, we believe that payment rates under the IPF PPS should continue 
to be adjusted by a geographic wage index, which would apply to the 
labor-related portion of the Federal per diem base rate (hereafter 
referred to as the labor-related share).
    The labor-related share is determined by identifying the national 
average proportion of total costs that are related to, influenced by, 
or vary with the local labor market. We classify a cost category as 
labor-related if the costs are labor-intensive and vary with the local 
labor market. Based on our definition of the labor-related share, we 
include in the labor-related share the sum of the relative importance 
of Wages and Salaries, Employee Benefits, Professional Fees: Labor-
related, Administrative and Business Support Services, All Other: 
Labor-related Services, and a portion of the Capital-Related cost 
weight.
    Therefore, to determine the proposed labor-related share for the 
IPF PPS for FY 2015, we used the FY 2008-based RPL market basket cost 
weights relative importance to determine the labor-related share for 
the IPF PPS. This estimate of the FY 2015 labor-related share is based 
on IGI's first quarter 2014 forecast, which is the same forecast used 
to derive the FY 2015 market basket update.
    Table 1 below shows the FY 2015 relative importance labor-related 
share using the FY 2008-based RPL market basket along with the FY 2014 
relative importance labor-related share.

  Table 1--Proposed FY 2015 Relative Importance Labor-Related Share and
the FY 2014 Relative Importance Labor-Related Share Based on the FY 2008-
                         Based RPL Market Basket
------------------------------------------------------------------------
                                                       Proposed FY 2015
                                   FY 2014 relative        relative
                                   importance labor-   importance labor-
                                   related share \1\   related share \2\
------------------------------------------------------------------------
Wages and Salaries..............              48.394              48.409
Employee Benefits...............              12.963              13.016
Professional Fees: Labor-Related               2.065               2.065
Administrative and Business                    0.415               0.417
 Support Services...............
All Other: Labor-Related                       2.080               2.070
 Services.......................
                                 ---------------------------------------
    Subtotal....................              65.917              65.977
Labor-Related Portion of Capital               3.577               3.561
 Costs (46%)....................
                                 ---------------------------------------

[[Page 26045]]

 
        Total Labor-Related                   69.494              69.538
         Share..................
------------------------------------------------------------------------
1. Published in the FY 2014 IPF PPS notice (78 FR 46738) and based on
  IHS Global Insight, Inc.'s second quarter 2013 forecast of the FY 2008-
  based RPL market basket.
2. Based on IHS Global Insight, Inc.'s first quarter 2014 forecast of
  the FY 2008-based RPL market basket.

    The proposed labor-related share for FY 2015 is the sum of the FY 
2015 relative importance of each labor-related cost category, and would 
reflect the different rates of price change for these cost categories 
between the base year (FY 2008) and FY 2015. The sum of the relative 
importance for FY 2015 for operating costs (Wages and Salaries, 
Employee Benefits, Professional Fees: Labor-Related, Administrative and 
Business Support Services, and All Other: Labor-related Services) is 
65.977 percent, as shown in Table 1 above. The portion of Capital-
related cost that is influenced by the local labor market is estimated 
to be 46 percent. Since the relative importance for Capital-Related 
Costs is 7.742 percent of the FY 2008-based RPL market basket in FY 
2015, we take 46 percent of 7.742 percent to determine the labor-
related share of Capital-related cost for FY 2015. The result is 3.561 
percent, which we add to 65.977 percent for the operating cost amount 
to determine the total labor-related share for FY 2015. Therefore, the 
proposed labor-related share for the IPF PPS in FY 2015 is 69.538 
percent. This labor-related share is determined using the same general 
methodology as employed in calculating all previous IPF labor-related 
shares (see, for example, 69 FR 66952 through 66953). Furthermore, we 
are also proposing that if more recent data are subsequently available 
(for example, a more recent estimate of the labor-related share), we 
would use such data, if appropriate, to determine the FY 2015 labor-
related share in the final rule. The wage index and the labor-related 
share are reflected in budget-neutrality adjustments.

V. Proposed Updates to the IPF PPS for FY 2015 (Beginning October 1, 
2014)

    The IPF PPS is based on a standardized Federal per diem base rate 
calculated from the IPF average per diem costs and adjusted for budget-
neutrality in the implementation year. The Federal per diem base rate 
is used as the standard payment per day under the IPF PPS and is 
adjusted by the patient-level and facility-level adjustments that are 
applicable to the IPF stay. A detailed explanation of how we calculated 
the average per diem cost appears in the November 2004 IPF PPS final 
rule (69 FR 66926).

A. Determining the Standardized Budget-Neutral Federal Per Diem Base 
Rate

    Section 124(a)(1) of the BBRA required that we implement the IPF 
PPS in a budget-neutral manner. In other words, the amount of total 
payments under the IPF PPS, including any payment adjustments, must be 
projected to be equal to the amount of total payments that would have 
been made if the IPF PPS were not implemented. Therefore, we calculated 
the budget-neutrality factor by setting the total estimated IPF PPS 
payments to be equal to the total estimated payments that would have 
been made under the Tax Equity and Fiscal Responsibility Act of 1982 
(TEFRA) (Pub. L. 97-248) methodology had the IPF PPS not been 
implemented. A step-by-step description of the methodology used to 
estimate payments under the TEFRA payment system appears in the 
November 2004 IPF PPS final rule (69 FR 66926).
    Under the IPF PPS methodology, we calculated the final Federal per 
diem base rate to be budget-neutral during the IPF PPS implementation 
period (that is, the 18-month period from January 1, 2005 through June 
30, 2006) using a July 1 update cycle. We updated the average cost per 
day to the midpoint of the IPF PPS implementation period (that is, 
October 1, 2005), and this amount was used in the payment model to 
establish the budget-neutrality adjustment.
    Next, we standardized the IPF PPS Federal per diem base rate to 
account for the overall positive effects of the IPF PPS payment 
adjustment factors by dividing total estimated payments under the TEFRA 
payment system by estimated payments under the IPF PPS. Additional 
information concerning this standardization can be found in the 
November 2004 IPF PPS final rule (69 FR 66932) and the RY 2006 IPF PPS 
final rule (71 FR 27045). We then reduced the standardized Federal per 
diem base rate to account for the outlier policy, the stop loss 
provision, and anticipated behavioral changes. A complete discussion of 
how we calculated each component of the budget-neutrality adjustment 
appears in the November 2004 IPF PPS final rule (69 FR 66932 through 
66933) and in the May 2006 IPF PPS final rule (71 FR 27044 through 
27046). The final standardized budget-neutral Federal per diem base 
rate established for cost reporting periods beginning on or after 
January 1, 2005 was calculated to be $575.95.
    The Federal per diem base rate has been updated in accordance with 
applicable statutory requirements and 42 CFR 412.428 through 
publication of annual notices or proposed and final rules. These 
documents are available on the CMS Web site at http://www.cms.hhs.gov/InpatientPsychFacilPPS/. A detailed discussion on the standardized 
budget-neutral Federal per diem base rate and the electroconvulsive 
therapy (ECT) rate appears in the August 2013 IPF PPS update notice (78 
FR 46738 through 46739).

B. Proposed FY 2015 Update of the Federal Per Diem Base Rate and 
Electroconvulsive Therapy (ECT) Rate

    In accordance with section 1886(s)(2)(A)(ii) of the Act, which 
requires the application of an ``other adjustment,'' described in 
section 1886(s)(3) of the Act (specifically, section 1886(s)(3)(C)) for 
RY 2014 that reduces the update to the IPF PPS base rate for the FY 
beginning in Calendar Year (CY) 2014, we are proposing to adjust the 
IPF PPS update by a 0.3 percentage point reduction for FY 2015. In 
addition, in accordance with section 1886(s)(2)(A)(i) of the Act, which 
requires the application of the productivity adjustment that reduces 
the update to the IPF PPS base rate for the FY beginning in CY 2014, we 
are proposing to adjust the IPF PPS update by a 0.4 percentage point 
reduction for FY 2015.

[[Page 26046]]

    The current (that is, FY 2014) Federal per diem base rate is 
$713.19 and the ECT base rate is $307.04. For FY 2015, we are proposing 
to apply an update of 2.0 percent (that is the proposed FY 2008-based 
RPL market basket increase for FY 2015 of 2.7 percent less the proposed 
productivity adjustment of 0.4 percentage point less the 0.3 percentage 
point required under section1886(s)(3)(C) of the Act), and the wage 
index budget-neutrality factor of 1.0003 (as discussed in section 
VI.C.1. of this proposed rule) to the FY 2014 Federal per diem base 
rate of $713.19, yielding a proposed Federal per diem base rate of 
$727.67 for FY 2015. Similarly, we are proposing to apply the 2.0 
percent payment update, and the 1.0003 wage index budget-neutrality 
factor to the FY 2014 ECT base rate, yielding a proposed ECT base rate 
of $313.27 for FY 2015.
    As noted above, section 1886(s)(4) of the Act requires the 
establishment of a quality data reporting program for the IPF PPS 
beginning in RY 2014. We finalized new requirements for quality 
reporting for IPFs in the ``Hospital Inpatient Prospective Payment 
Systems for Acute Care Hospitals and the Long Term Care Hospital 
Prospective Payment System and Fiscal Year 2014 Rates'' proposed rule 
published on May 10, 2013 (78 FR 27486, 27734 through 27744) and final 
rule published on August 19, 2013 (78 FR 50496, 50887 through 50903). 
Section 1886(s)(4)(A)(i) of the Act requires that, for RY 2014 and each 
subsequent rate year, the Secretary shall reduce any annual update to a 
standard Federal rate for discharges occurring during the rate year by 
2.0 percentage points for any IPF that does not comply with the quality 
data submission requirements with respect to an applicable year. 
Therefore, we are proposing to apply a 2.0 percentage point reduction 
to the Federal per diem base rate and the ECT base rate as follows:
    For IPFs that fail to submit quality reporting data under the IPFQR 
program, we are applying a 0 percent annual update (that is 2 percent 
reduced by 2 percentage points in accordance with section 
1886(s)(4)(A)(ii) of the Act) and the wage index budget-neutrality 
factor of 1.0003 to the FY 2014 Federal per diem base rate of $713.19, 
yielding a Federal per diem base rate of $713.40 for FY 2015.
    Similarly, we are applying the 0 percent annual update and the 
1.0003 wage index budget-neutrality factor to the FY 2014 ECT base rate 
of $307.04, yielding an ECT base rate of $307.13 for FY 2015.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR50496), we adopted 
two new measures for the FY 2016 payment determination and subsequent 
years for the IPFQR Program. We also finalized a request for voluntary 
information whereby IPFs will be asked to provide information on the 
patient experience of care survey. For the FY 2016 payment 
determination and subsequent years, we are proposing to add two new 
measures to those already adopted for the FY 2016 payment determination 
and subsequent years. For the FY 2017 payment determination and 
subsequent years, we are proposing to adopt four new measures.

VI. Proposed Update of the IPF PPS Adjustment Factors

A. Overview of the IPF PPS Adjustment Factors

    The IPF PPS payment adjustments were derived from a regression 
analysis of 100 percent of the FY 2002 MedPAR data file, which 
contained 483,038 cases. For a more detailed description of the data 
file used for the regression analysis, see the November 2004 IPF PPS 
final rule (69 FR 66935 through 66936). While we have since used more 
recent claims data to simulate payments to set the fixed dollar loss 
threshold amount for the outlier policy and to assess the impact of the 
IPF PPS updates, we continue to use the regression-derived adjustment 
factors established in 2005 for FY 2015.
    As we stated previously, we have begun an analysis of more current 
IPF claims and cost report data however; we are not proposing 
refinements to the IPF PPS in this proposed rule. Once our analysis is 
complete, we will propose to update the adjustment factors in a future 
notice of proposed rulemaking. However, we continue to monitor claims 
and payment data independently from cost report data to assess issues, 
to determine whether changes in case-mix or payment shifts have 
occurred among freestanding governmental, non-profit and private 
psychiatric hospitals, and psychiatric units of general hospitals, and 
CAHs and other issues of importance to IPFs.
    On April 1, 2014, the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93) was enacted. Section 212 of PAMA, titled 
``Delay in Transition from ICD-9 to ICD-10 Code Sets,'' provides that 
``[t]he Secretary of Health and Human Services may not, prior to 
October 1, 2015, adopt ICD-10 code sets as the standard for code sets 
under section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c)) 
and Sec.  162.1002 of title 45, Code of Federal Regulations.'' As of 
now, the Secretary has not implemented this provision under HIPAA. We 
are proposing the conversion of ICD-9-CM to ICD-10-CM/PCS codes for the 
IPF PPS in this proposed rule, but in light of PAMA, the effective date 
of those changes would be the date when ICD-10 becomes the required 
medical data code set for use on Medicare claims, whenever that date 
may be. Until that time, we will continue to require use of the ICD-9-
CM codes for reporting the MS-DRG and comorbidity adjustment factors 
for IPF services.

B. Proposed Patient-Level Adjustments

    The IPF PPS includes payment adjustments for the following patient-
level characteristics: Medicare Severity diagnosis related groups (MS-
DRGs) assignment of the patient's principal diagnosis, selected 
comorbidities, patient age, and the variable per diem adjustments.
1. Proposed Adjustment for MS-DRG Assignment
    We believe it is important to maintain the same diagnostic coding 
and DRG classification for IPFs that are used under the IPPS for 
providing psychiatric care. For this reason, when the IPF PPS was 
implemented for cost reporting periods beginning on or after January 1, 
2005, we adopted the same diagnostic code set (ICD-9-CM) and DRG 
patient classification system (that is, the CMS DRGs) that were 
utilized at the time under the IPPS. In the May 2008 IPF PPS notice (73 
FR 25709), we discussed CMS's effort to better recognize resource use 
and the severity of illness among patients. CMS adopted the new MS-DRGs 
for the IPPS in the FY 2008 IPPS final rule with comment period (72 FR 
47130). In the 2008 IPF PPS notice (73 FR 25716) we provided a 
crosswalk to reflect changes that were made under the IPF PPS to adopt 
the new MS-DRGs. For a detailed description of the mapping changes from 
the original DRG adjustment categories to the current MS-DRG adjustment 
categories, we refer readers to the May 2008 IPF PPS notice (73 FR 
25714).
    The IPF PPS includes payment adjustments for designated psychiatric 
DRGs assigned to the claim based on the patient's principal diagnosis. 
The DRG adjustment factors were expressed relative to the most 
frequently reported psychiatric DRG in FY 2002, that is, DRG 430 
(psychoses). The coefficient values and adjustment factors were derived 
from the regression analysis. Mapping the DRGs to the MS-DRGs resulted 
in the current 17 IPF-MS-DRGs, instead of the original 15 DRGs,

[[Page 26047]]

for which the IPF PPS provides an adjustment. For FY 2015, as we did in 
FY 2013 (77 FR 47231) and FY 2014 (78 FR 46741 through 46741), we 
propose to make a payment adjustment for psychiatric diagnoses that 
group to one of the 17 MS-IPF-DRGs listed in Table 2. Psychiatric 
principal diagnoses that do not group to one of the 17 designated DRGs 
would still receive the Federal per diem base rate and all other 
applicable adjustments, but the payment would not include a DRG 
adjustment.
    In the Standards for Electronic Transaction final rule, published 
in the Federal Register on August 17, 2000 (65 FR 50312), the 
Department adopted the International Classification of Diseases, 9th 
Revision, Clinical Modification (ICD-9-CM) as the HIPAA designated code 
set for reporting diseases, injuries, impairments, other health related 
problems, their manifestations, and causes of injury. Therefore, on 
January 1, 2005 when the IPF PPS began, we used ICD-9-CM as the 
designated code set for the IPF PPS. IPF claims with a principal 
diagnosis included in Chapter Five of the ICD-9-CM are paid the Federal 
per diem base rate and all other applicable adjustments, including any 
applicable DRG adjustment. However, as we indicated in the FY 2014 IPF 
PPS notice (78 FR 46741), in accordance with the requirements of the 
final rule published in the Federal Register on September 5, 2012 (77 
FR 54664), we will be discontinuing the use of ICD-9-CM codes. We are 
proposing the conversion of ICD-9-CM to ICD-10-CM/PCS codes for the IPF 
PPS in this proposed rule, but in light of PAMA, the effective date of 
those changes would be the date when ICD-10 becomes the required 
medical data code set for use on Medicare claims. Until that time, we 
will continue to require use of the ICD-9-CM codes for reporting the 
MS-DRGs for IPF services. The ICD-10-CM/PCS coding guidelines are 
available through the CMS Web site at:
    www.cms.gov/Medicare/Coding/ICD10/downloads/pcs_2012_guidelines.pdf and http://www.cms.gov/Medicare/Coding/ICD10/index.html?redirect=/ICD10 or on the CDC's Web site at www.cdc.gov/nchs/data/icd10/10cmguidelines2012.pdf.
    Every year, changes to the ICD-10-CM and the ICD-10-PCS coding 
system will be addressed in the IPPS proposed and final rules. The 
changes to the codes are effective October 1 of each year and must be 
used by acute care hospitals as well as other providers to report 
diagnostic and procedure information. The IPF PPS has always 
incorporated ICD-9-CM coding changes made in the annual IPPS update and 
will continue to do so for the ICD-10-CM and ICD-10-PCS coding changes. 
We will continue to publish coding changes in a Transmittal/Change 
Request, similar to how coding changes are announced by the IPPS and 
LTCH PPS. The coding changes relevant to the IPF PPS are also published 
in the IPF PPS proposed and final rules, or in IPF PPS update notices. 
In 42 CFR 412.428(e), we indicate that CMS will publish information 
pertaining to the annual update for the IPF PPS, which includes 
describing the ICD-9-CM coding changes and DRG classification changes 
discussed in the annual update to the hospital IPPS regulations. We are 
proposing to update 42 CFR 412.428(e) to indicate that we will describe 
the ICD-10-CM coding changes and DRG classification changes discussed 
in the annual update to the hospital IPPS regulations when ICD-10-CM/
PCS becomes the required medical data code set for use on Medicare 
claims.
    The ICD-9-CM/PCS coding changes are reflected in the FY 2015 
GROUPER, Version 32.0, effective for IPPS discharges occurring on or 
after October 1, 2014 through September 30, 2015. The GROUPER Version 
32.0 software package assigns each case to an MS-DRG on the basis of 
the diagnosis and procedure codes and demographic information (that is, 
age, sex, and discharge status). The Medicare Code Editor (MCE) version 
32.0 has also been converted to use ICD-9-CM/PCS codes for IPPS 
discharges on or after October 1, 2014. For additional information on 
the GROUPER version 32.0 and the MCE 32.0 see Transmittal-XXXX dated 
XXXX.
    The IPF PPS has always used the same GROUPER and MCE as the IPPS. 
We have posted a Definitions Manual of the ICD-10 MS-DRGs Version 31.0-
R (an updated ICD-10 MS-DRGs version 31.0) on the ICD-10 MS-DRG 
Conversion Project Web site at: http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html. We also prepared a 
document that describes changes made from Version 31.0 to Version 31.0-
R. We will continue to share ICD-10-MS-DRG conversion activities with 
the public through this Web site.
    The MS-DRGs were converted so that the MS-DRG assignment logic uses 
ICD-10-CM/PCS codes directly. When a provider submits a claim for 
discharges, the ICD-10-CM/PCS diagnosis and procedure codes will be 
assigned to the correct MS-DRG. The MS-DRGs were converted with a 
single overarching goal: that MS-DRG assignment for a given patient 
record is the same after ICD-10-CM implementation as it would be if the 
same record had been coded in ICD-9-CM and submitted prior to ICD-10-
CM/PCS implementation. This goal is referred to as replication, and 
every effort was made to achieve this goal.
    The General Equivalence Mappings (GEMs) were used to assist in 
converting the ICD-9-CM-based MS-DRGs to ICD-10-CM/PCS. The majority of 
ICD-9-CM codes (greater than 80 percent) have straightforward 
translation alternative(s) in ICD-10-CM/PCS, where the diagnoses or 
procedures classified to a given ICD-9-CM code are replaced by a number 
of (typically more specific) ICD-10-CM/PCS codes and assigned to the 
same MS-DRG as the ICD-9-CM code they are replacing. Further 
information on the assessment of ICD-10-CM/PCS MS-DRGs and financial 
impact can be found on the CMS ICD-10 Web site at: http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    Questions concerning the MS-DRGs should be directed to Patricia E. 
Brooks, Co-Chairperson, ICD-10-CM Coordination and Maintenance 
Committee, CMS, Center for Medicare Management, Hospital and Ambulatory 
Policy Group, Division of Acute Care, [email protected], 
Mailstop C4-08-06, 7500 Security Boulevard, Baltimore, Maryland 21244-
1850.

Use of the General Equivalence Mappings To Assist in Direct Conversion

    For the FY 2015 update, we are not making changes to the MS-IPF-DRG 
adjustment factors. That is, we do not intend to re-run the regression 
analysis to update the 17 IPF MS-DRG adjustment factors. The General 
Equivalence Mappings (GEMs) were used to assist in converting the ICD-
9-CM-based MS-DRGs to ICD-10-CM/PCS. For this update, we are proposing 
the ICD-10-CM/PCS codes that would be used for the MS-DRG payment 
adjustment. Further information for the ICD-10-CM/PCS MS-DRG conversion 
project can be found on the CMS ICD-10-CM Web site at http://www.cms.hhs.gov/Medicare/Coding/ICD10/ICD-10-MS-DRG-Conversion-Project.html.
    We are proposing that the MS-IPF-DRG adjustment factors (as shown 
in Table 2) would continue to be paid for discharges occurring in FY 
2015. The MS-IPF-DRG adjustment factors would be updated on October 1, 
2014, using the ICD-9-CM/PCS code set. We are also proposing the 
conversion of ICD-9-CM/PCS codes to ICD-10-CM/PCS codes for the IPF PPS 
in this proposed rule but in light of PAMA, the effective date of those 
changes would be the date

[[Page 26048]]

when ICD-10-CM/PCS becomes the required medical data code set for use 
on Medicare claims.

    Table 2--Proposed FY 2015 Current MS-IPF-DRGS Applicable for the
                     Principal Diagnosis Adjustment
------------------------------------------------------------------------
                                                            Adjustment
             MS-DRG                MS-DRG descriptions        factor
------------------------------------------------------------------------
056............................  Degenerative nervous               1.05
                                  system disorders w MCC.
057............................  Degenerative nervous               1.05
                                  system disorders w/o
                                  MCC.
080............................  Nontraumatic stupor &              1.07
                                  coma w MCC.
081............................  Nontraumatic stupor &              1.07
                                  coma w/o MCC.
876............................  O.R. Procedure w                   1.22
                                  principal diagnoses of
                                  mental illness.
880............................  Acute adjustment                   1.05
                                  reaction &
                                  psychosocial
                                  dysfunction.
881............................  Depressive neuroses....            0.99
882............................  Neuroses except                    1.02
                                  depressive.
883............................  Disorders of                       1.02
                                  personality & impulse
                                  control.
884............................  Organic disturbances &             1.03
                                  mental retardation.
885............................  Psychoses..............            1.00
886............................  Behavioral &                       0.99
                                  developmental
                                  disorders.
887............................  Other mental disorder              0.92
                                  diagnoses.
894............................  Alcohol/drug abuse or              0.97
                                  dependence, left AMA.
895............................  Alcohol/drug abuse or              1.02
                                  dependence w
                                  rehabilitation therapy.
896............................  Alcohol/drug abuse or              0.88
                                  dependence w/o
                                  rehabilitation therapy
                                  w MCC.
897............................  Alcohol/drug abuse or              0.88
                                  dependence w/o
                                  rehabilitation therapy
                                  w/o MCC.
------------------------------------------------------------------------

2. Proposed Payment for Comorbid Conditions
    The intent of the comorbidity adjustments is to recognize the 
increased costs associated with comorbid conditions by providing 
additional payments for certain concurrent medical or psychiatric 
conditions that are expensive to treat. In the May 2011 IPF PPS final 
rule (76 FR 26451 through 26452), we explained that the IPF PPS 
includes 17 comorbidity categories and identified the new, revised, and 
deleted ICD-9-CM diagnosis codes that generate a comorbid condition 
payment adjustment under the IPF PPS for RY 2012 (76 FR 26451).
    Comorbidities are specific patient conditions that are secondary to 
the patient's principal diagnosis and that require treatment during the 
stay. Diagnoses that relate to an earlier episode of care and have no 
bearing on the current hospital stay are excluded and must not be 
reported on IPF claims. Comorbid conditions must exist at the time of 
admission or develop subsequently, and affect the treatment received, 
length of stay (LOS), or both treatment and LOS.
    For each claim, an IPF may receive only one comorbidity adjustment 
within a comorbidity category, but it may receive an adjustment for 
more than one comorbidity category. Current billing instructions 
require IPFs to enter the full, that is, the complete ICD-9-CM codes 
for up to 24 additional diagnoses if they co-exist at the time of 
admission or develop subsequently and impact the treatment provided. 
Billing instructions will require that IPFs enter the full ICD-10-CM/
PCS codes. The effective date of this change would be the date when 
ICD-10-CM/PCS becomes the required medical data code set for use on 
Medicare claims.
    The comorbidity adjustments were determined based on the regression 
analysis using the diagnoses reported by IPFs in FY 2002. The principal 
diagnoses were used to establish the DRG adjustments and were not 
accounted for in establishing the comorbidity category adjustments, 
except where ICD-9-CM ``code first'' instructions apply. As we 
explained in the May 2011 IPF PPS final rule (76 FR 265451), the ``code 
first'' rule applies when a condition has both an underlying etiology 
and a manifestation due to the underlying etiology. For these 
conditions, ICD-9-CM has a coding convention that requires the 
underlying conditions to be sequenced first followed by the 
manifestation. Whenever a combination exists, there is a ``use 
additional code'' note at the etiology code and a ``code first'' note 
at the manifestation code.
    The same principle holds for ICD-10-CM as for ICD-9-CM. Whenever a 
combination exists, there is a ``use additional code'' note in the ICD-
10-CM codebook pertaining to the etiology code, and a ``code first'' 
code pertaining to the manifestation code. We provide a ``code first'' 
table in Addendum C of this proposed rule for reference that highlights 
the same or similar manifestation codes where the ``code first'' 
instructions apply in ICD-10-CM that were present in ICD-9-CM. In the 
``code first'' table, pertaining to ICD-10-CM codes F02.80, F02.81 and 
F05, where individual examples of possible etiologies are listed in the 
codebook, in the interest of inclusiveness, all ICD-10-CM examples are 
included in addition to the comparable ICD-10-CM translations of 
examples listed in the ICD-9-CM codebook for the same manifestations. 
Also, in the interest of inclusiveness, an ICD-10-CM manifestation code 
F45.42 ``Pain disorder with related psychological factors'', is 
included in the IPF PPS ``code first'' table even though it contains a 
``code also'' instruction rather than a ``code first'' instruction, but 
is included in this version of the table for information purposes only. 
The proposed list of ICD-10-CM codes that we identified as ``code 
first'' can be located in Addendum C in this proposed rule.
    As discussed in the MS-DRG section, it is our policy to maintain 
the same diagnostic coding set for IPFs that is used under the IPPS for 
providing the same psychiatric care. The 17 comorbidity categories 
formerly defined using ICD-9-CM codes have been converted to ICD-10-CM/
PCS. The goal for converting the comorbidity categories is referred to 
as replication, meaning that the payment adjustment for a given patient 
encounter is the same after ICD-10-CM implementation as it would be if 
the same record had been coded in ICD-9-CM and submitted prior to ICD-
10-CM/PCS implementation. All conversion efforts were made with the 
intent of achieving this goal. The effective date of this change would 
be the date when ICD-10-CM/PCS becomes the required

[[Page 26049]]

medical data code set for use on Medicare claims.
Direct Conversion of Comorbidity Categories
    We converted the ICD-9-CM codes for the IPF PPS Comorbidity Payment 
Adjustment Categories to ICD-10-CM/PCS codes. When an IPF submits a 
claim for discharges the ICD-10-CM/PCS codes would be assigned to the 
correct comorbidity categories. The same method of direct conversion to 
ICD-10-CM/PCS for replication of ICD-9-CM based payment applications 
has been implemented by policy groups throughout CMS to convert 
applications to ICD-10-CM/PCS, including the MS-DRGs.
Use of the General Equivalence Mappings To Assist in Direct Conversion
    As with the other policy groups mentioned above, the General 
Equivalence Mappings (GEMs) were used to assist in converting ICD-9-CM-
based applications to ICD-10-CM/PCS. Further information concerning the 
GEMs can be found on the CMS ICD-10 Web site at: http://www.cms.gov/Medicare/Coding/ICD10/2014-ICD-10-CM-and-GEMs.html.
    The majority of ICD-9-CM codes (greater than 80 percent) have 
straightforward translation alternative(s) in ICD-10-CM/PCS, where the 
diagnoses or procedures classified to a given ICD-9-CM code are 
replaced by a number of possibly more specific ICD-10-CM/PCS codes, and 
those ICD-10-CM/PCS codes capture the intent of the payment policy.
    In rare instances, ICD-10-CM has discontinued an area of detail in 
the classification. For example, this is the case with the concept of 
``malignant hypertension'' in the Cardiac Conditions comorbidity 
category. Malignant hypertension is no longer classified separately in 
codes that specify heart failure, such as ICD-9-CM code 404.03 
Hypertensive heart and chronic kidney disease, malignant, with heart 
failure and with chronic kidney disease stage V or end-stage renal 
disease. This code, in the Cardiac Conditions comorbidity category, has 
no corresponding code in the ICD-10-CM Cardiac Conditions comorbidity 
category. Instead, all sub-types of hypertension in the presence of 
heart disease or chronic kidney disease are classified to a single code 
in ICD-10-CM that specifies the level of heart and kidney function, 
such as I13.2 Hypertensive heart and chronic kidney disease with heart 
failure and with stage 5 chronic kidney disease, or end stage renal 
disease. Discussed below are the comorbidity categories where the 
crosswalk between ICD-9-CM and ICD-10-CM diagnosis codes is less than 
straightforward. For instance, in some cases, the use of combination 
codes in one code set is represented as two separate codes in the other 
code set.
Conversion of Gangrene and Uncontrolled Diabetes Mellitus With or 
Without Complications Comorbidity Categories
    In the Gangrene comorbidity category, there are new ICD-10-CM 
combination codes not present in ICD-9-CM. Therefore, we are proposing 
to include many more ICD-10-CM codes in the comorbidity definitions 
than were included using ICD-9-CM codes so that the comorbidity 
category using ICD-10-CM codes is a complete and accurate replication 
of the category using ICD-9-CM codes.
    The ICD-9-CM version of the comorbidity category Uncontrolled 
Diabetes Mellitus With or Without Complications contains combination 
codes with extra information that is not relevant to the clinical 
intent of the category. All patients with uncontrolled diabetes are 
eligible for the payment adjustment, regardless of whether they have 
additional diabetic complications. The diagnosis of uncontrolled 
diabetes is coded separately in ICD-10-CM. As a result, only two ICD-
10-CM codes are needed to achieve complete and accurate replication of 
the comorbidity category definition using ICD-9-CM codes.
Conversion of the Gangrene Comorbidity Category
    Currently, two ICD-9-CM codes are used for the Gangrene comorbidity 
category: 440.24 Atherosclerosis of native arteries of the extremities 
with gangrene and 785.4 Gangrene.
    The first code, 440.24, is a combination code and specifies 
patients with underlying peripheral vascular disease and a current 
acute manifestation of gangrene. This is the only ICD-9-CM combination 
code that specifies gangrene in addition to the underlying cause. Also, 
a number of ICD-10-CM codes exist for gangrene and they are all 
included in the ICD-10-CM comorbidity category. The ICD-10-CM codes 
specify anatomic site in more detail. An example is given below:

 I70.261 Atherosclerosis of native arteries of extremities with 
gangrene, right leg
 I70.262 Atherosclerosis of native arteries of extremities with 
gangrene, left leg
 I70.263 Atherosclerosis of native arteries of extremities with 
gangrene, bilateral legs
 I70.268 Atherosclerosis of native arteries of extremities with 
gangrene, other extremity

    In addition, many ICD-10-CM codes specify gangrene in combination 
with diabetes. We propose to include these codes in the comorbidity 
category to ensure that a patient with diabetes complicated by gangrene 
receives the same payment adjustment for the condition when it is coded 
in ICD-10 as if it had been coded in ICD-9-CM.
Conversion of the Uncontrolled Diabetes Mellitus With or Without 
Complications Comorbidity Category
    Where ICD-9-CM uses combination codes for uncontrolled diabetes, 
ICD-10-CM classifies diabetes that is out of control in a separate, 
standalone code. Unlike ICD-9-CM, ICD-10-CM does not have additional 
codes that specify out of control diabetes in combination with a 
complication such as, for example, diabetic chronic kidney disease. The 
result is that the comorbidity category Uncontrolled Diabetes Mellitus 
With or Without Complications is simpler to define using ICD-10-CM 
codes than ICD-9-CM codes.
    ICD-10-CM has changed the classification of a diagnosis of 
uncontrolled diabetes in two ways that affect conversion of the 
Uncontrolled Diabetes comorbidity category:
    1. ICD-10-CM no longer uses the term ``uncontrolled'' in reference 
to diabetes.
    2. ICD-10-CM classifies diabetes that is poorly controlled in a 
separate, standalone code.
    ICD-10-CM does not use the term ``uncontrolled'' in codes that 
classify diabetes patients. Instead, ICD-10-CM codes specify diabetes 
``with hyperglycemia'' as the new terminology for classifying patients 
whose diabetes is ``poorly controlled'' or ``inadequately controlled'' 
or ``out of control.'' We believe these are appropriate codes to 
capture the intent of the Uncontrolled Diabetes comorbidity category. 
Therefore, to ensure that all patients who qualified for the 
Uncontrolled Diabetes comorbidity payment adjustment using ICD-9-CM 
codes will also qualify for the payment adjustment using ICD-10-CM 
codes, we propose that two ICD-10-CM codes specifying diabetes with 
hyperglycemia will be used for the payment adjustment for Uncontrolled 
Diabetes Mellitus With or Without Complications: E10.65 Type 1 diabetes 
mellitus with hyperglycemia, and E11.65 Type 2 diabetes mellitus with 
hyperglycemia.

[[Page 26050]]

Other Differences Between ICD-9-CM and ICD-10-CM Affecting Conversion 
of Comorbidity Categories
    Two other comorbidity categories in the IPF PPS required careful 
review and additional formatting of the corresponding ICD-10-CM codes 
in order to replicate the clinical intent of the comorbidity category. 
In the Drug and/or Alcohol Induced Mental Disorders comorbidity 
category and the Poisoning comorbidity category, significant structural 
changes in the way that comparable codes are classified in ICD-10-CM 
made it more difficult to list the diagnoses in ICD-10-CM code ranges, 
as was possible in ICD-9-CM. Because comparable codes are not 
classified contiguously in the ICD-10-CM classification scheme, the 
resulting proposed list of codes for this comorbidity category is much 
longer than the comorbidity category using ICD-9-CM codes.
Conversion of the Drug and/or Alcohol Induced Mental Disorders 
Comorbidity Category
    ICD-10-CM has changed the classification of applicable conditions 
in two ways that affect conversion of the Drug and/or Alcohol Induced 
Mental Disorders comorbidity category:
    1. ICD-10-CM does not use the term ``pathological'' in reference to 
drug or alcohol intoxication, rather it only uses the phrase ``with 
intoxication.''
    2. ICD-10-CM contains separate, detailed codes for specific drug-
induced manifestations of mental disorder. ICD-10-CM codes specify the 
particular drug and whether the pattern of use is documented as use, 
abuse, or dependence.
    First, this comorbidity category currently contains ICD-9-CM code 
292.2 Pathological drug intoxication. To ensure that all patients who 
qualified for the comorbidity payment adjustment under ICD-9-CM code 
292.2 will also qualify under the ICD-10-CM version of the same 
comorbidity category, we propose that the 89 ICD-10-CM codes specifying 
``with intoxication'' qualify for the payment adjustment. An example of 
the ICD-10-CM codes for a diagnosis of cocaine abuse with current 
intoxication is provided below. All of these codes would be eligible 
for the payment adjustment.

 F14.120 Cocaine abuse with intoxication, uncomplicated
 F14.121 Cocaine abuse with intoxication with delirium
 F14.122 Cocaine abuse with intoxication with perceptual 
disturbance
 F14.129 Cocaine abuse with intoxication, unspecified

    Next, ICD-10-CM contains separate, detailed codes by drug for 
specific drug-induced manifestations of mental disorder, such as drug-
induced psychotic disorder with hallucinations. What was a single code 
in ICD-9-CM, 292.12 Drug-induced psychotic disorder with 
hallucinations, maps to 24 comparable codes in ICD-10-CM. We propose to 
include all of these more specific ICD-10-CM codes in the comorbidity 
category. We believe they are necessary for replication of the clinical 
intent of the comorbidity category so that all patients with a drug-
induced psychotic disorder with hallucinations coded on the claim are 
eligible for the payment adjustment. Because the ICD-10-CM codes are 
not listed contiguously in the classification, they cannot be formatted 
as a range of codes and therefore must be listed as single codes in the 
comorbidity category definition.
    The situation described above is similar for ICD-9-CM code 292.0 
Drug withdrawal. ICD-10-CM contains separate, detailed codes by drug 
specifying that the patient is in withdrawal. We propose to include all 
of these more specific ICD-10-CM codes in the comorbidity category. We 
believe they are necessary for replication of the clinical intent of 
the comorbidity category, so that all patients with a drug withdrawal 
code on the claim are eligible for the payment adjustment. Likewise, 
because the ICD-10-CM drug withdrawal codes are not listed contiguously 
in the classification, they cannot be formatted as a range of codes and 
so must be listed as single codes in the comorbidity category 
definition.
Conversion of the Poisoning Comorbidity Category
    In ICD-10-CM, the Injury and Poisoning chapter has added an axis of 
classification for every injury or poisoning diagnosis code, which 
specifies additional information about the current encounter. This 
creates three unique codes for each injury or poisoning diagnosis, 
marked by a different letter in the seventh character of the code:
    1. The seventh character ``A'' in the code indicates that the 
poisoning is a current diagnosis in its ``acute phase.''
    2. The seventh character ``D'' in the code indicates that the 
poisoning is no longer in its ``acute phase,'' but that the patient is 
receiving aftercare for the earlier poisoning.
    3. The seventh character ``S'' in the code indicates that the 
patient no longer requires care for any aspect of the poisoning itself, 
but that the patient is receiving care for a late effect of the 
poisoning.
    The intent of the Poisoning comorbidity category is to include only 
those patients with a current diagnosis of poisoning. If the intent had 
been to include patients requiring only aftercare for an earlier, 
resolved case of poisoning, or for care associated with late effects of 
poisoning that occurred sometime in the past, the comorbidity category 
would have included ICD-9-CM aftercare codes or late effect codes, but 
it does not. Only acute poisoning codes from the ICD-9-CM 
classification are included. Therefore, we propose that the Poisoning 
comorbidity category only includes ICD-10-CM poisoning codes with a 
seventh character extension ``A,'' to indicate that the poisoning is 
documented as a current diagnosis.
    In addition, ICD-10-CM poisoning codes specify the circumstances of 
the poisoning, whether documented as accidental, self-harm, assault, or 
undetermined, as shown in the heroin poisoning example below. We 
propose to include all of these more specific ICD-10-CM codes in the 
comorbidity category for replication of the clinical intent of the 
comorbidity category so that all patients with a current diagnosis of 
poisoning coded on the claim would be eligible for the payment 
adjustment, as shown in the heroin poisoning example below:

 T40.1X1A Poisoning by heroin, accidental (unintentional), 
initial encounter
 T40.1X2A Poisoning by heroin, intentional self-harm, initial 
encounter
 T40.1X3A Poisoning by heroin, assault, initial encounter
 T40.1X4A Poisoning by heroin, undetermined, initial encounter

    ICD-10-CM classifies poisoning by substance, alongside separate 
codes for adverse effect or underdosing of the same substance. Because 
the poisoning codes are not listed contiguously in the classification, 
they cannot be formatted as a range of codes and therefore must be 
listed as single codes in the comorbidity category definition.
Proposed Elimination of Codes for Nonspecific Conditions Based on Side 
of the Body (Laterality)
    We believe that highly descriptive coding provides the best and 
clearest way to document a patient's condition and the appropriateness 
of the admission and treatment in an IPF. Therefore, whenever possible, 
we believe that the most specific code that describes a medical 
disease, condition, or injury should be used to document

[[Page 26051]]

the patient's diagnoses. Generally, ``unspecified'' codes are used when 
they most accurately reflect what is known about the patient's 
condition at the time of that particular encounter (for example, there 
is a lack of information about a specific type of organism causing an 
illness). However, site of illness at the time of the medical encounter 
is an important determinant in assessing a patient's principal or 
secondary diagnosis. For this reason, we believe that specific 
diagnosis codes that narrowly identify anatomical sites where disease, 
injury, or condition exist should be used when coding patients' 
diagnoses whenever these codes are available. Furthermore, on the same 
note, we believe that one should also code to the highest specificity 
(use the full ICD-10-CM/PCS code).
    In accordance with these principles, we propose to remove site 
unspecified codes from the IPF PPS ICD-10-CM/PCS codes in instances in 
which more specific codes are available as the clinician should be able 
to identify a more specific diagnosis based on clinical assessment at 
the medical encounter. For example, the initial GEMS translation 
included non-specific codes such as ICD-10-CM code C44.111 ``Basal Cell 
carcinoma of skin of unspecified eyelid, including canthus.'' Under our 
proposal:
    C44.111 Basal Cell Carcinoma of skin of unspecified eyelid would 
not be accepted.
    C44.112 Basal Cell Carcinoma of skin right eyelid would be 
accepted.
    C44.119 Basal Cell Carcinoma of skin left eyelid would be accepted.
    We are proposing to remove these non-specific codes whenever a more 
specific diagnosis could be identified by the clinician performing the 
assessment. For the example code C44.111, we are proposing to delete 
this code because the clinician should be able to identify which eye 
had the basal cell carcinoma, and therefore would report the condition 
using the code that specifies the right or left eye.
    We are proposing to remove a total of 153 ICD-10-CM site 
unspecified codes involving the following comorbidity categories: 
Oncology -93 ICD-10-CM codes, Gangrene-6 ICD-10-CM codes and Severe 
Musculoskeletal and Connective Tissue--54 ICD-10-CM codes. The site 
unspecified IPF PPS ICD-10-CM codes that we are proposing to remove are 
listed below in Tables 3 through 5.

  Table 3--Proposed Site Unspecified ICD-10-CM Codes To Be Removed From
               the Oncology Treatment Comorbidity Category
------------------------------------------------------------------------
     ICD-10-CM Diagnosis                       Code title
------------------------------------------------------------------------
C40.00.......................  Malignant neoplasm of scapula and long
                                bones of unspecified upper limb.
C40.10.......................  Malignant neoplasm of short bones of
                                unspecified upper limb.
C40.20.......................  Malignant neoplasm of long bones of
                                unspecified lower limb.
C40.30.......................  Malignant neoplasm of short bones of
                                unspecified lower limb.
C40.80.......................  Malignant neoplasm of overlapping sites
                                of bone and articular cartilage of
                                unspecified limb.
C40.90.......................  Malignant neoplasm of unspecified bones
                                and articular cartilage of unspecified
                                limb.
C43.10.......................  Malignant melanoma of unspecified eyelid,
                                including canthus.
C43.20.......................  Malignant melanoma of unspecified ear and
                                external auricular canal.
C43.60.......................  Malignant melanoma of unspecified upper
                                limb, including shoulder.
C43.70.......................  Malignant melanoma of unspecified lower
                                limb, including hip.
C44.101......................  Unspecified malignant neoplasm of skin of
                                unspecified eyelid, including canthus.
C44.111......................  Basal cell carcinoma of skin of
                                unspecified eyelid, including canthus.
C44.121......................  Squamous cell carcinoma of skin of
                                unspecified eyelid, including canthus.
C44.191......................  Other specified malignant neoplasm of
                                skin of unspecified eyelid, including
                                canthus.
C44.201......................  Unspecified malignant neoplasm of skin of
                                unspecified ear and external auricular
                                canal.
C44.211......................  Basal cell carcinoma of skin of
                                unspecified ear and external auricular
                                canal.
C44.221......................  Squamous cell carcinoma of skin of
                                unspecified ear and external auricular
                                canal.
C44.601......................  Unspecified malignant neoplasm of skin of
                                unspecified upper limb, including
                                shoulder.
C44.611......................  Basal cell carcinoma of skin of
                                unspecified upper limb, including
                                shoulder.
C44.621......................  Squamous cell carcinoma of skin of
                                unspecified upper limb, including
                                shoulder.
C44.691......................  Other specified malignant neoplasm of
                                skin of unspecified upper limb,
                                including shoulder.
C44.701......................  Unspecified malignant neoplasm of skin of
                                unspecified lower limb, including hip.
C44.711......................  Basal cell carcinoma of skin of
                                unspecified lower limb, including hip.
C44.721......................  Squamous cell carcinoma of skin of
                                unspecified lower limb, including hip.
C44.791......................  Other specified malignant neoplasm of
                                skin of unspecified lower limb,
                                including hip.
C47.10.......................  Malignant neoplasm of peripheral nerves
                                of unspecified upper limb, including
                                shoulder.
C47.20.......................  Malignant neoplasm of peripheral nerves
                                of unspecified lower limb, including
                                hip.
C49.10.......................  Malignant neoplasm of connective and soft
                                tissue of unspecified upper limb,
                                including shoulder.
C49.20.......................  Malignant neoplasm of connective and soft
                                tissue of unspecified lower limb,
                                including hip.
C4A.10.......................  Merkel cell carcinoma of unspecified
                                eyelid, including canthus.
C4A.20.......................  Merkel cell carcinoma of unspecified ear
                                and external auricular canal.
C4A.60.......................  Merkel cell carcinoma of unspecified
                                upper limb, including shoulder.
C4A.70.......................  Merkel cell carcinoma of unspecified
                                lower limb, including hip.
C50.019......................  Malignant neoplasm of nipple and areola,
                                unspecified female breast.
C50.029......................  Malignant neoplasm of nipple and areola,
                                unspecified male breast.
C50.119......................  Malignant neoplasm of central portion of
                                unspecified female breast.
C50.129......................  Malignant neoplasm of central portion of
                                unspecified male breast.
C50.219......................  Malignant neoplasm of upper-inner
                                quadrant of unspecified female breast.
C50.229......................  Malignant neoplasm of upper-inner
                                quadrant of unspecified male breast.
C50.319......................  Malignant neoplasm of lower-inner
                                quadrant of unspecified female breast.
C50.329......................  Malignant neoplasm of lower-inner
                                quadrant of unspecified male breast.
C50.419......................  Malignant neoplasm of upper-outer
                                quadrant of unspecified female breast.
C50.429......................  Malignant neoplasm of upper-outer
                                quadrant of unspecified male breast.
C50.519......................  Malignant neoplasm of lower-outer
                                quadrant of unspecified female breast.
C50.529......................  Malignant neoplasm of lower-outer
                                quadrant of unspecified male breast.

[[Page 26052]]

 
C50.619......................  Malignant neoplasm of axillary tail of
                                unspecified female breast.
C50.629......................  Malignant neoplasm of axillary tail of
                                unspecified male breast.
C50.819......................  Malignant neoplasm of overlapping sites
                                of unspecified female breast.
C50.829......................  Malignant neoplasm of overlapping sites
                                of unspecified male breast.
C50.919......................  Malignant neoplasm of unspecified site of
                                unspecified female breast.
C50.929......................  Malignant neoplasm of unspecified site of
                                unspecified male breast.
C69.00.......................  Malignant neoplasm of unspecified
                                conjunctiva.
C69.10.......................  Malignant neoplasm of unspecified cornea.
C69.50.......................  Malignant neoplasm of unspecified
                                lacrimal gland and duct.
C69.60.......................  Malignant neoplasm of unspecified orbit.
C69.80.......................  Malignant neoplasm of overlapping sites
                                of unspecified eye and adnexa.
C69.90.......................  Malignant neoplasm of unspecified site of
                                unspecified eye.
C76.40.......................  Malignant neoplasm of unspecified upper
                                limb.
C76.50.......................  Malignant neoplasm of unspecified lower
                                limb.
D03.10.......................  Melanoma in situ of unspecified eyelid,
                                including canthus.
D03.20.......................  Melanoma in situ of unspecified ear and
                                external auricular canal.
D03.60.......................  Melanoma in situ of unspecified upper
                                limb, including shoulder.
D03.70.......................  Melanoma in situ of unspecified lower
                                limb, including hip.
D04.10.......................  Carcinoma in situ of skin of unspecified
                                eyelid, including canthus.
D04.20.......................  Carcinoma in situ of skin of unspecified
                                ear and external auricular canal.
D04.60.......................  Carcinoma in situ of skin of unspecified
                                upper limb, including shoulder.
D04.70.......................  Carcinoma in situ of skin of unspecified
                                lower limb, including hip.
D05.00.......................  Lobular carcinoma in situ of unspecified
                                breast.
D05.10.......................  Intraductal carcinoma in situ of
                                unspecified breast.
D05.80.......................  Other specified type of carcinoma in situ
                                of unspecified breast.
D05.90.......................  Unspecified type of carcinoma in situ of
                                unspecified breast.
D09.20.......................  Carcinoma in situ of unspecified eye.
D16.00.......................  Benign neoplasm of scapula and long bones
                                of unspecified upper limb.
D16.10.......................  Benign neoplasm of short bones of
                                unspecified upper limb.
D16.20.......................  Benign neoplasm of long bones of
                                unspecified lower limb.
D16.30.......................  Benign neoplasm of short bones of
                                unspecified lower limb.
D17.20.......................  Benign lipomatous neoplasm of skin and
                                subcutaneous tissue of unspecified limb.
D21.10.......................  Benign neoplasm of connective and other
                                soft tissue of unspecified upper limb,
                                including shoulder.
D21.20.......................  Benign neoplasm of connective and other
                                soft tissue of unspecified lower limb,
                                including hip.
D22.10.......................  Melanocytic nevi of unspecified eyelid,
                                including canthus.
D22.20.......................  Melanocytic nevi of unspecified ear and
                                external auricular canal.
D22.60.......................  Melanocytic nevi of unspecified upper
                                limb, including shoulder.
D22.70.......................  Melanocytic nevi of unspecified lower
                                limb, including hip.
D23.10.......................  Other benign neoplasm of skin of
                                unspecified eyelid, including canthus.
D23.20.......................  Other benign neoplasm of skin of
                                unspecified ear and external auricular
                                canal.
D23.60.......................  Other benign neoplasm of skin of
                                unspecified upper limb, including
                                shoulder.
D23.70.......................  Other benign neoplasm of skin of
                                unspecified lower limb, including hip.
D24.9........................  Benign neoplasm of unspecified breast.
D31.00.......................  Benign neoplasm of unspecified
                                conjunctiva.
D31.50.......................  Benign neoplasm of unspecified lacrimal
                                gland and duct.
D31.60.......................  Benign neoplasm of unspecified site of
                                unspecified orbit.
D31.90.......................  Benign neoplasm of unspecified part of
                                unspecified eye.
D48.60.......................  Neoplasm of uncertain behavior of
                                unspecified breast.
------------------------------------------------------------------------


  Table 4--Proposed Site Unspecified ICD-10-CM Codes To Be Removed From
                    the Gangrene Comorbidity Category
------------------------------------------------------------------------
            ICD10                          ICD10 Description
------------------------------------------------------------------------
I70269.......................  Atherosclerosis of native arteries of
                                extremities with gangrene, unspecified
                                extremity.
I70369.......................  Atherosclerosis of unspecified type of
                                bypass graft(s) of the extremities with
                                gangrene, unspecified extremity.
I70469.......................  Atherosclerosis of autologous vein bypass
                                graft(s) of the extremities with
                                gangrene, unspecified extremity.
I70569.......................  Atherosclerosis of nonautologous
                                biological bypass graft(s) of the
                                extremities with gangrene, unspecified
                                extremity.
I70669.......................  Atherosclerosis of nonbiological bypass
                                graft(s) of the extremities with
                                gangrene, unspecified extremity.
I70769.......................  Atherosclerosis of other type of bypass
                                graft(s) of the extremities with
                                gangrene, unspecified extremity.
------------------------------------------------------------------------


  Table 5--Proposed Site Unspecified ICD-10-CM Codes To Be Removed From
   the Severe Musculoskeletal and Connective Tissue Diseases Category
------------------------------------------------------------------------
            ICD10                          ICD10 Description
------------------------------------------------------------------------
M8600........................  Acute hematogenous osteomyelitis,
                                unspecified site.
M86019.......................  Acute hematogenous osteomyelitis,
                                unspecified shoulder.

[[Page 26053]]

 
M86029.......................  Acute hematogenous osteomyelitis,
                                unspecified humerus.
M86039.......................  Acute hematogenous osteomyelitis,
                                unspecified radius and ulna.
M86049.......................  Acute hematogenous osteomyelitis,
                                unspecified hand.
M86059.......................  Acute hematogenous osteomyelitis,
                                unspecified femur.
M86069.......................  Acute hematogenous osteomyelitis,
                                unspecified tibia and fibula.
M86079.......................  Acute hematogenous osteomyelitis,
                                unspecified ankle and foot.
M8610........................  Other acute osteomyelitis, unspecified
                                site.
M86119.......................  Other acute osteomyelitis, unspecified
                                shoulder.
M86129.......................  Other acute osteomyelitis, unspecified
                                humerus.
M86139.......................  Other acute osteomyelitis, unspecified
                                radius and ulna.
M86149.......................  Other acute osteomyelitis, unspecified
                                hand.
M86159.......................  Other acute osteomyelitis, unspecified
                                femur.
M86169.......................  Other acute osteomyelitis, unspecified
                                tibia and fibula.
M86179.......................  Other acute osteomyelitis, unspecified
                                ankle and foot.
M8620........................  Subacute osteomyelitis, unspecified site.
M86219.......................  Subacute osteomyelitis, unspecified
                                shoulder.
M86229.......................  Subacute osteomyelitis, unspecified
                                humerus.
M86239.......................  Subacute osteomyelitis, unspecified
                                radius and ulna.
M86249.......................  Subacute osteomyelitis, unspecified hand.
M86259.......................  Subacute osteomyelitis, unspecified
                                femur.
M86269.......................  Subacute osteomyelitis, unspecified tibia
                                and fibula.
M86279.......................  Subacute osteomyelitis, unspecified ankle
                                and foot.
M8630........................  Chronic multifocal osteomyelitis,
                                unspecified site.
M86319.......................  Chronic multifocal osteomyelitis,
                                unspecified shoulder.
M86329.......................  Chronic multifocal osteomyelitis,
                                unspecified humerus.
M86339.......................  Chronic multifocal osteomyelitis,
                                unspecified radius and ulna.
M86349.......................  Chronic multifocal osteomyelitis,
                                unspecified hand.
M86359.......................  Chronic multifocal osteomyelitis,
                                unspecified femur.
M86369.......................  Chronic multifocal osteomyelitis,
                                unspecified tibia and fibula.
M86379.......................  Chronic multifocal osteomyelitis,
                                unspecified ankle and foot.
M8640........................  Chronic osteomyelitis with draining
                                sinus, unspecified site.
M86419.......................  Chronic osteomyelitis with draining
                                sinus, unspecified shoulder.
M86429.......................  Chronic osteomyelitis with draining
                                sinus, unspecified humerus.
M86439.......................  Chronic osteomyelitis with draining
                                sinus, unspecified forearm.
M86449.......................  Chronic osteomyelitis with draining
                                sinus, unspecified hand.
M86459.......................  Chronic osteomyelitis with draining
                                sinus, unspecified femur.
M86469.......................  Chronic osteomyelitis with draining
                                sinus, unspecified lower leg.
M86479.......................  Chronic osteomyelitis with draining
                                sinus, unspecified ankle and foot.
M8650........................  Other chronic hematogenous osteomyelitis,
                                unspecified site.
M86519.......................  Other chronic hematogenous osteomyelitis,
                                unspecified shoulder.
M86529.......................  Other chronic hematogenous osteomyelitis,
                                unspecified humerus.
M86539.......................  Other chronic hematogenous osteomyelitis,
                                unspecified forearm.
M86549.......................  Other chronic hematogenous osteomyelitis,
                                unspecified hand.
M86559.......................  Other chronic hematogenous osteomyelitis,
                                unspecified femur.
M86569.......................  Other chronic hematogenous osteomyelitis,
                                unspecified lower leg.
M8660........................  Other chronic osteomyelitis, unspecified
                                site.
M86619.......................  Other chronic osteomyelitis, unspecified
                                shoulder.
M86629.......................  Other chronic osteomyelitis, unspecified
                                upper arm.
M86639.......................  Other chronic osteomyelitis, unspecified
                                forearm.
M86649.......................  Other chronic osteomyelitis, unspecified
                                hand.
M86679.......................  Other chronic osteomyelitis, unspecified
                                ankle and foot.
M868x9.......................  Other osteomyelitis, unspecified sites.
------------------------------------------------------------------------

    There are some site unspecified ICD-10-CM codes that we are not 
proposing to remove. In the case where the site unspecified code is the 
only available ICD-10-CM code, that is when a laterality code (site 
specific code) is not available, the site unspecified code will not be 
removed and it would be appropriate to submit that code.
    Currently, IPFs are receiving the comorbidity adjustment using the 
ICD-9-CM diagnosis codes for the comorbidity categories shown in Table 
6 below.

   Table 6--FY 2014 Current Diagnosis Codes and Adjustment Factors for
                         Comorbidity Categories
------------------------------------------------------------------------
                                                              Adjustment
    Description of comorbidity     ICD-9-CM Diagnoses codes     factor
------------------------------------------------------------------------
Developmental Disabilities.......  317, 3180, 3181, 3182,           1.04
                                    and 319.
Coagulation Factor Deficits......  2860 through 2864.......         1.13
Tracheostomy.....................  51900 through 51909 and          1.06
                                    V440.

[[Page 26054]]

 
Renal Failure, Acute.............  5845 through 5849,               1.11
                                    63630, 63631, 63632,
                                    63730, 63731, 63732,
                                    6383, 6393, 66932,
                                    66934, 9585.
Renal Failure, Chronic...........  40301, 40311, 40391,             1.11
                                    40402, 40412, 40413,
                                    40492, 40493, 5853,
                                    5854, 5855, 5856,
                                    5859,586, V4511, V4512,
                                    V560, V561, and V562.
Oncology Treatment...............  1400 through 2399 with a         1.07
                                    radiation therapy code
                                    92.21-92.29 or
                                    chemotherapy code 99.25.
Uncontrolled Diabetes-Mellitus     25002, 25003, 25012,             1.05
 with or without complications.     25013, 25022, 25023,
                                    25032, 25033, 25042,
                                    25043, 25052, 25053,
                                    25062, 25063, 25072,
                                    25073, 25082, 25083,
                                    25092, and 25093.
Severe Protein Calorie             260 through 262.........         1.13
 Malnutrition.
Eating and Conduct Disorders.....  3071, 30750, 31203,              1.12
                                    31233, and 31234.
Infectious Disease...............  01000 through 04110,             1.07
                                    042, 04500 through
                                    05319, 05440 through
                                    05449, 0550 through
                                    0770, 0782 through
                                    07889, and 07950
                                    through 07959.
Drug and/or Alcohol Induced        2910, 2920, 29212, 2922,         1.03
 Mental Disorders.                  30300, and 30400.
Cardiac Conditions...............  3910, 3911, 3912, 40201,         1.11
                                    40403, 4160, 4210,
                                    4211, and 4219.
Gangrene.........................  44024 and 7854..........         1.10
Chronic Obstructive Pulmonary      49121, 4941, 5100,               1.12
 Disease.                           51883, 51884, V4611,
                                    V4612, V4613 and V4614.
Artificial Openings--Digestive     56960 through 56969,             1.08
 and Urinary.                       9975, and V441 through
                                    V446.
Severe Musculoskeletal and         6960, 7100, 73000                1.09
 Connective Tissue Diseases.        through 73009, 73010
                                    through 73019, and
                                    73020 through 73029.
Poisoning........................  96500 through 96509,             1.11
                                    9654, 9670 through
                                    9699, 9770, 9800
                                    through 9809, 9830
                                    through 9839, 986, 9890
                                    through 9897.
------------------------------------------------------------------------

    For FY 2015, we are proposing to apply the 17 comorbidity 
categories for which we provide an adjustment as shown in Table 6 
above. We are also proposing the ICD-10-CM/PCS codes and adjustment 
factors shown in Table 7 below, as well as, the removal of 153 site 
unspecified ICD-10-CM codes in Tables 3 through 5 above. However, the 
effective date of those changes would be the date when ICD-10-CM/PCS 
becomes the required medical data code set for use on Medicare claims.

 Table 7--FY 2015 Diagnosis Codes and Adjustment Factors for Comorbidity
                               Categories
------------------------------------------------------------------------
                                      ICD-10-CM Diagnoses     Adjustment
    Description of comorbidity               codes              factor
------------------------------------------------------------------------
Developmental Disabilities.......  F70 through F79.........         1.04
Coagulation Factor Deficits......  D66 through D682........         1.13
Tracheostomy.....................  J9500 through J9509, and         1.06
                                    Z930.
Renal Failure, Acute.............  N170 through N179,               1.11
                                    O0482, O0732, O084
                                    O904, and T795XXA.
Renal Failure, Chronic...........  I120, I1311 through              1.11
                                    I132, N183 through N19,
                                    Z4901 through Z4931,
                                    Z9115, and Z992.
Oncology Treatment...............  C000 through C866, C882          1.07
                                    through C964, C96A,
                                    C96Z, C969 through
                                    D471, D473, D47Z1
                                    through D47Z9, D479
                                    through D499, K317,
                                    K635, Q8500, and Q8501
                                    through Q8509, with a
                                    radiation therapy code
                                    from ICD-10-PCS tables
                                    08H through 0YH with a
                                    sixth character device
                                    value 1 Radioactive
                                    Element, ICD-10-PCS
                                    table CW7, ICD-10-PCS
                                    tables D00 through DW0,
                                    ICD-10-PCS tables D01
                                    through DW1, tables D0Y
                                    through DWY, or a
                                    chemotherapy code from
                                    ICD-10-PCS table 3E0
                                    with a sixth character
                                    substance value 0
                                    Antineoplastic and a
                                    seventh character
                                    qualifier 5 Other
                                    Antineoplastic.
Uncontrolled Diabetes-Mellitus     E1065 and E1165.........         1.05
 with or without complications.
Severe Protein Calorie             E40 through E43.........         1.13
 Malnutrition.
Eating and Conduct Disorders.....  F5000 through F5002,             1.12
                                    F509, F631, F6381, and
                                    F911.
Infectious Disease...............  A150 through A269, A280          1.07
                                    through A329, A35
                                    through A439, A46
                                    through A480, A482
                                    through A488, A491, A70
                                    through A740, A7489,
                                    A800 through A99, B0050
                                    through B0059, B010
                                    through B0229, B03
                                    through B069, B08010
                                    through B0809, B0820
                                    through B2799, B330
                                    through B333, B338,
                                    B341, B471 through
                                    B479, B950 through
                                    B955, B958, B9730
                                    through B9739, G032,
                                    I673, J020, J0300,
                                    J0301, J202, K9081,
                                    L081, L444, M60009, and
                                    R1111.

[[Page 26055]]

 
Drug and/or Alcohol Induced        Alcohol dependence with          1.03
 Mental Disorders.                  intoxication and/or
                                    withdrawal F10121,
                                    F10220 through F10229,
                                    F10231, and F10921.
                                    Drug withdrawal F1193,
                                    F1123, F13230 through
                                    F13239, F13930 through
                                    F13939, F1423, F1523,
                                    F1593, F17203, F17213,
                                    F17223, F17293, F19230
                                    through F19239, and
                                    F19930 through F19939.
                                    Drug-induced psychotic
                                    disorder with
                                    hallucinations F11251,
                                    F11151, F11951, F12151,
                                    F12251, F13151, F12951,
                                    F13251, F13951, F14151,
                                    F14251, F14951, F15151,
                                    F15251, F15951, F16151,
                                    F16251, F16951, F18151,
                                    F18251, F18951, F19151,
                                    F19251, and F19951.
                                    Drug intoxication
                                    F11220 through F11229,
                                    F11920 through F11929,
                                    F12120 through F12129,
                                    F12220 through F12229,
                                    F12920 through F12929,
                                    F13120 through F13129,
                                    F13220 through F13229,
                                    F13920 through F13929,
                                    F14120 through F14129,
                                    F14220 through F14229,
                                    F14920 through F14929,
                                    F15120 through F15129,
                                    F15220 through F15229,
                                    F15920 through F15929,
                                    F16120 through F16129,
                                    F16220 through F16229,
                                    F16920 through F16929,
                                    F18120 through F18129,
                                    F18220 through F18229,
                                    F18920 through F18929,
                                    F19120 through F19129,
                                    F19220 through F19229,
                                    F19230 through F19239,
                                    and F19920 through
                                    F19929. Opioid
                                    dependence not listed
                                    above F1120, F1124,
                                    F11250, F11259, F11281
                                    through F11288, F1129.
Cardiac Conditions...............  I010 through I012, I110,         1.11
                                    I270, I330 through
                                    I339, and I39.
Gangrene.........................  E0852, E0952, E1052,             1.10
                                    E1152, E1352, I70261
                                    through I70269, I70361
                                    through I70369, I70461
                                    through I70469, I70561
                                    through I70569, I70661
                                    through I70669, I70761
                                    through I70769, I7301,
                                    and I96.
Chronic Obstructive Pulmonary      J441, J470 through J471,         1.12
 Disease.                           J860, J95850, J9610
                                    through J9622, and
                                    Z9911 through Z9912.
Artificial Openings--Digestive     K9400 through K9419,             1.08
 and Urinary.                       N990, N99520 through
                                    N99538, N9981, N9989,
                                    and Z931 through Z936.
Severe Musculoskeletal and         L4050 through L4059,             1.09
 Connective Tissue Diseases.        M320 through M329,
                                    M4620 through M4628,
                                    and M8600 through M869.
Poisoning........................  Note: Only includes the          1.11
                                    codes below with
                                    seventh character A
                                    specifying initial
                                    encounter. T391X1
                                    through T391X4, T400X1
                                    through T400X4, T401X1
                                    through T401X4, T402X1
                                    through T402X4, T403X1
                                    through T403X4, T404X1
                                    through T404X4, T40601
                                    through T40604, T40691
                                    through T40694, T407X1
                                    through T407X4, T408X1
                                    through T408X4, T40901
                                    through T40904, T40991
                                    through T40994, T410X1
                                    through T410X4, T411X1
                                    through T411X4, T41201
                                    through T41204, T41291
                                    through T41294, T413X1
                                    through T413X4, T4141X
                                    through T4144X, T423X1
                                    through T423X4, T424X1
                                    through T424X4, T426X1
                                    through T426X4, T4271X
                                    through T4274X, T428X1
                                    through T428X4, T43011
                                    through T43014, T43021
                                    through T43024, T431X1
                                    through T431X4, T43201
                                    through T43204, T43211
                                    through T43214, T43221
                                    through T43224, T43291
                                    through T43294, T433X1
                                    through T433X4, T434X1
                                    through T434X4, T43501
                                    through T43504, T43591
                                    through T43594, T43601
                                    through T43604, T43611
                                    through T43614, T43621
                                    through T43624, T43631
                                    through T43634, T43691
                                    through T43694, T438X1
                                    through T438X4, T4391X
                                    through T4394X, T505X1
                                    through T505X4, T510X1
                                    through T5194X, T510X1
                                    through T510X4, T5391X
                                    through T5394X, T540X1
                                    through T5494X, T550X1
                                    through T551X4, T560X1
                                    through T560X4, T571X1
                                    through T571X4, T5801X
                                    through T5804X, T5811X
                                    through T5814X, T582X1
                                    through T582X4, T588X1
                                    through T588X4, T5891X
                                    through T5894X, T600X1
                                    through T600X4, T601X1
                                    through T601X4, T602X1
                                    through T602X4, T6041X
                                    through T6094X, T63001
                                    through T6394X, T6401X
                                    through T6484X, T650X1
                                    through T650X4, T651X1
                                    through T651X4.
------------------------------------------------------------------------

3. Proposed Patient Age Adjustments
    As explained in the November 2004 IPF PPS final rule (69 FR 66922), 
we analyzed the impact of age on per diem cost by examining the age 
variable (that is, the range of ages) for payment adjustments.
    In general, we found that the cost per day increases with age. The 
older age groups are more costly than the under 45 age group, the 
differences in per diem cost increase for each successive age group, 
and the differences are statistically significant.
    For FY 2015, we are proposing to continue to use the patient age 
adjustments currently in effect as shown in Table 8 below.

              Table 8--Age Groupings and Adjustment Factors
------------------------------------------------------------------------
                                                              Adjustment
                            Age                                 factor
------------------------------------------------------------------------
Under 45...................................................         1.00
45 and under 50............................................         1.01
50 and under 55............................................         1.02
55 and under 60............................................         1.04
60 and under 65............................................         1.07
65 and under 70............................................         1.10
70 and under 75............................................         1.13
75 and under 80............................................         1.15
80 and over................................................         1.17
------------------------------------------------------------------------

4. Proposed Variable Per Diem Adjustments
    We explained in the November 2004 IPF PPS final rule (69 FR 66946) 
that the regression analysis indicated that per diem cost declines as 
the LOS increases. The variable per diem adjustments to the Federal per 
diem base rate account for ancillary and administrative costs that 
occur disproportionately in the first days after admission to an IPF.
    We used a regression analysis to estimate the average differences 
in per diem cost among stays of different lengths. As a result of this 
analysis, we established variable per diem adjustments that begin on 
day 1 and

[[Page 26056]]

decline gradually until day 21 of a patient's stay. For day 22 and 
thereafter, the variable per diem adjustment remains the same each day 
for the remainder of the stay. However, the adjustment applied to day 1 
depends upon whether the IPF has a qualifying emergency department 
(ED). If an IPF has a qualifying ED, it receives a 1.31 adjustment 
factor for day 1 of each stay. If an IPF does not have a qualifying ED, 
it receives a 1.19 adjustment factor for day 1 of the stay. The ED 
adjustment is explained in more detail in section VII.C.5 of this 
proposed rule.
    For FY 2015, we are proposing to continue to use the variable per 
diem adjustment factors currently in effect as shown in Table 9 below. 
A complete discussion of the variable per diem adjustments appears in 
the November 2004 IPF PPS final rule (69 FR 66946).

                 Table 9--Variable Per Diem Adjustments
------------------------------------------------------------------------
                                                              Adjustment
                        Day-of-stay                             factor
------------------------------------------------------------------------
Day 1--IPF Without a Qualifying ED.........................         1.19
Day 1--IPF With a Qualifying ED............................         1.31
Day 2......................................................         1.12
Day 3......................................................         1.08
Day 4......................................................         1.05
Day 5......................................................         1.04
Day 6......................................................         1.02
Day 7......................................................         1.01
Day 8......................................................         1.01
Day 9......................................................         1.00
Day 10.....................................................         1.00
Day 11.....................................................         0.99
Day 12.....................................................         0.99
Day 13.....................................................         0.99
Day 14.....................................................         0.99
Day 15.....................................................         0.98
Day 16.....................................................         0.97
Day 17.....................................................         0.97
Day 18.....................................................         0.96
Day 19.....................................................         0.95
Day 20.....................................................         0.95
Day 21.....................................................         0.95
After Day 21...............................................         0.92
------------------------------------------------------------------------

C. Facility-Level Adjustments

    The IPF PPS includes facility-level adjustments for the wage index, 
IPFs located in rural areas, teaching IPFs, cost of living adjustments 
for IPFs located in Alaska and Hawaii, and IPFs with a qualifying ED.
1. Proposed Wage Index Adjustment
a. Background
    As discussed in the May 2006 IPF PPS final rule (71 FR 27061) and 
in the May 2008 (73 FR 25719) and May 2009 IPF PPS notices (74 FR 
20373), in order to provide an adjustment for geographic wage levels, 
the labor-related portion of an IPF's payment is adjusted using an 
appropriate wage index. Currently, an IPF's geographic wage index value 
is determined based on the actual location of the IPF in an urban or 
rural area as defined in Sec.  412.64(b)(1)(ii)(A) and (C).
b. Proposed Wage Index for FY 2015
    Since the inception of the IPF PPS, we have used the pre-
reclassified, pre-floor hospital wage index in developing a wage index 
to be applied to IPFs because there is not an IPF-specific wage index 
available and we believe that IPFs generally compete in the same labor 
market as acute care hospitals so the pre-reclassified, pre-floor 
inpatient acute care hospital wage index should be reflective of labor 
costs of IPFs. As discussed in the May 2006 IPF PPS final rule for FY 
2007 (71 FR 27061 through 27067), under the IPF PPS, the wage index is 
calculated using the IPPS wage index for the labor market area in which 
the IPF is located, without taking into account geographic 
reclassifications, floors, and other adjustments made to the wage index 
under the IPPS. For a complete description of these IPPS wage index 
adjustments, please see the CY 2013 IPPS/LTCH PPS final rule (77 FR 
53365 through 53374). We are proposing to continue that practice for FY 
2015.
    We apply the wage index adjustment to the labor-related portion of 
the Federal rate, which is currently estimated to be 69.538 percent. 
This percentage reflects the labor-related relative importance of the 
FY 2008-based RPL market basket for FY 2015 (see section V.C. of this 
proposed rule).
    Changes to the wage index are made in a budget-neutral manner so 
that updates do not increase expenditures. For FY 2015, we are 
proposing to apply the most recent hospital wage index (that is, the FY 
2014 pre-floor, pre-reclassified hospital wage index which is the most 
appropriate index as it best reflects the variation in local labor 
costs of IPFs in the various geographic areas) using the most recent 
hospital wage data (that is, data from hospital cost reports for the 
cost reporting period beginning during FY 2010), and applying an 
adjustment in accordance with our budget-neutrality policy. This policy 
requires us to estimate the total amount of IPF PPS payments for FY 
2014 using the labor-related share and the wage indices from FY 2014 
divided by the total estimated IPF PPS payments for FY 2015 using the 
labor-related share and wage indices from FY 2015. The estimated 
payments are based on FY 2013 IPF claims, inflated to the appropriate 
FY. This quotient is the wage index budget-neutrality factor, and it is 
applied in the update of the Federal per diem base rate for FY 2015 in 
addition to the market basket described in section VI.B. of this 
proposed rule. The wage index budget-neutrality factor for FY 2015 is 
1.0003. The wage index applicable for FY 2015 appears in Table 1 and 
Table 2 in Addendum B of this proposed rule.
    In the May 2006 IPF PPS final rule for RY 2007 (71 FR 27061-27067), 
we adopted the changes discussed in the Office of Management and Budget 
(OMB) Bulletin No. 03-04 (June 6, 2003), which announced revised 
definitions for Metropolitan Statistical Areas (MSAs), and the creation 
of Micropolitan Statistical Areas and Combined Statistical Areas. In 
adopting the OMB Core-Based Statistical Area (CBSA) geographic 
designations, we did not provide a separate transition for the CBSA-
based wage index since the IPF PPS was already in a transition period 
from TEFRA payments to PPS payments.
    As was the case in FY 2014, for FY 2015, we will continue to use 
the CBSA geographic designations. The updated FY 2015 CBSA-based wage 
index values are presented in Tables 1 and 2 in Addendum B of this 
proposed rule. A complete discussion of the CBSA labor market 
definitions appears in the May 2006 IPF PPS final rule (71 FR 27061 
through 27067).
    In keeping with established IPF PPS wage index policy, we propose 
to use the FY 2014 pre-floor, pre-reclassified hospital wage index 
(which is based on data collected from hospital cost reports submitted 
by hospitals for cost reporting periods beginning during FY 2010) to 
adjust IPF PPS payments beginning October 1, 2014.
c. OMB Bulletins
    OMB publishes bulletins regarding CBSA changes, including changes 
to CBSA numbers and titles. In the May 2008 IPF PPS notice, we 
incorporated the CBSA nomenclature changes published in the most recent 
OMB bulletin that applies to the hospital wage index used to determine 
the current IPF PPS wage index and stated that we expect to continue to 
do the same for all the OMB CBSA nomenclature changes in future IPF PPS 
rules and notices, as necessary (73 FR 25721). The OMB bulletins may be 
accessed online at http://www.whitehouse.gov/omb/bullentins/index.html.
    In accordance with our established methodology, we have 
historically adopted any CBSA changes that are published in the OMB 
bulletin that corresponds with the hospital wage index used to 
determine the IPF PPS

[[Page 26057]]

wage index. For FY 2015, we use the FY 2014 pre-floor, pre-reclassified 
hospital wage index to adjust the IPF PPS payments. On February 28, 
2013, OMB issued OMB Bulletin No. 13-01, which establishes revised 
delineations of statistical areas based on OMB standards published in 
the Federal Register on June 28, 2010 and 2010 Census Bureau data. 
Because the FY 2014 pre-floor, pre-reclassified hospital wage index was 
finalized prior to the issuance of this Bulletin, the FY 2014 pre-
floor, pre-reclassified hospital wage index does not reflect OMB's new 
area delineations based on the 2010 Census and, thus, the FY 2015 IPF 
PPS wage index will not reflect the OMB changes.
    CMS intends to propose changes to the hospital wage index based on 
this OMB Bulletin in the FY 2015 IPPS/LTCH PPS proposed rule, as stated 
in the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27552 through 27553). 
Therefore, we anticipate that the OMB Bulletin changes will be 
reflected in the FY 2015 hospital wage index. Because we base the IPF 
PPS wage index on the hospital wage index from the prior year, we 
anticipate that the OMB Bulletin changes would be reflected in the FY 
2016 IPPS PPS wage index.
2. Proposed Adjustment for Rural Location
    In the November 2004 IPF PPS final rule, we provided a 17 percent 
payment adjustment for IPFs located in a rural area. This adjustment 
was based on the regression analysis, which indicated that the per diem 
cost of rural facilities was 17 percent higher than that of urban 
facilities after accounting for the influence of the other variables 
included in the regression. For FY 2015, we are proposing to apply a 17 
percent payment adjustment for IPFs located in a rural area as defined 
at Sec.  412.64(b)(1)(ii)(C). A complete discussion of the adjustment 
for rural locations appears in the November 2004 IPF PPS final rule (69 
FR 66954).
3. Proposed Teaching Adjustment
    In the November 2004 IPF PPS final rule, we implemented regulations 
at Sec.  412.424(d)(1)(iii) to establish a facility-level adjustment 
for IPFs that are, or are part of, teaching hospitals. The teaching 
adjustment accounts for the higher indirect operating costs experienced 
by hospitals that participate in graduate medical education (GME) 
programs. The payment adjustments are made based on the ratio of the 
number of full-time equivalent (FTE) interns and residents training in 
the IPF and the IPF's average daily census.
    Medicare makes direct GME payments (for direct costs such as 
resident and teaching physician salaries, and other direct teaching 
costs) to all teaching hospitals including those paid under a PPS, and 
those paid under the TEFRA rate-of-increase limits. These direct GME 
payments are made separately from payments for hospital operating costs 
and are not part of the IPF PPS. The direct GME payments do not address 
the estimated higher indirect operating costs teaching hospitals may 
face.
    The results of the regression analysis of FY 2002 IPF data 
established the basis for the payment adjustments included in the 
November 2004 IPF PPS final rule. The results showed that the indirect 
teaching cost variable is significant in explaining the higher costs of 
IPFs that have teaching programs. We calculated the teaching adjustment 
based on the IPF's ``teaching variable,'' which is one plus the ratio 
of the number of FTE residents training in the IPF (subject to 
limitations described below) to the IPF's average daily census (ADC).
    We established the teaching adjustment in a manner that limited the 
incentives for IPFs to add FTE residents for the purpose of increasing 
their teaching adjustment. We imposed a cap on the number of FTE 
residents that may be counted for purposes of calculating the teaching 
adjustment. The cap limits the number of FTE residents that teaching 
IPFs may count for the purpose of calculating the IPF PPS teaching 
adjustment, not the number of residents teaching institutions can hire 
or train. We calculated the number of FTE residents that trained in the 
IPF during a ``base year'' and used that FTE resident number as the 
cap. An IPF's FTE resident cap is ultimately determined based on the 
final settlement of the IPF's most recent cost report filed before 
November 15, 2004 (that is, the publication date of the IPF PPS final 
rule).
    In the regression analysis, the logarithm of the teaching variable 
had a coefficient value of 0.5150. We converted this cost effect to a 
teaching payment adjustment by treating the regression coefficient as 
an exponent and raising the teaching variable to a power equal to the 
coefficient value. We note that the coefficient value of 0.5150 was 
based on the regression analysis holding all other components of the 
payment system constant. A complete discussion of how the teaching 
adjustment was calculated appears in the November 2004 IPF PPS final 
rule (69 FR 66954 through 66957) and the May 2008 IPF PPS notice (73 FR 
25721).
    As with other adjustment factors derived through the regression 
analysis, we do not plan to rerun the regression analysis until we 
analyze IPF PPS data. Therefore, in this proposed rule, for FY 2015, we 
are proposing to retain the coefficient value of 0.5150 for the 
teaching adjustment to the Federal per diem base rate.
a. FTE Intern and Resident Cap Adjustment
    CMS had been asked by the IPF industry to reconsider the original 
IPF teaching policy and permit a temporary increase in the FTE resident 
cap when an IPF increases the number of FTE residents it trains due to 
the acceptance of displaced residents (residents that are training in 
an IPF or a program before the IPF or program closed) when another IPF 
closes or closes its medical residency training program.
    To help us assess how many IPFs had been, or were expected to be 
adversely affected by their inability to adjust their caps under Sec.  
412.424(d)(1)(iii) and under these situations, we specifically 
requested public comment from IPFs in the May 1, 2009 IPF PPS notice 
(74 FR 20376 through 20377). A summary of the comments and our 
responses can be reviewed in the April 30, 2010 IPF PPS notice (75 FR 
23106 through 23117). All of the commenters recommended that CMS modify 
the IPF PPS teaching adjustment policy, supporting a policy change that 
would permit the IPF PPS residency cap to be temporarily adjusted when 
that IPF trains displaced residents due to closure of an IPF or closure 
of an IPF's medical residency training program(s). The commenters 
recommended a temporary resident cap adjustment policy similar to the 
policies applied in similar contexts for acute care hospitals.
    We agreed with the commenters so, in the May 6, 2011 IPF PPS final 
rule (76 FR 26455), we adopted the temporary resident cap adjustment 
policies described below, similar to the temporary adjustments to the 
FTE cap used for acute care hospitals.
b. Temporary Adjustment to the FTE Cap To Reflect Residents Added Due 
to Hospital Closure
    In the May 6, 2011 IPF PPS final rule (76 FR 26455), we added a new 
Sec.  412.424(d)(1)(iii)(F)(1) to allow a temporary adjustment to an 
IPF's FTE cap to reflect residents added because of another IPF's 
closure on or after July 1, 2011, to be effective for cost reporting 
periods beginning on or after July 1, 2011. For purposes of this 
policy, we adopted the IPPS definition of ``closure of a hospital'' in 
42 CFR 413.79(h) to

[[Page 26058]]

mean the IPF terminates its Medicare provider agreement as specified in 
42 CFR 489.52. The regulations permit an adjustment to an IPF's FTE cap 
if the IPF meets the following criteria: (1) The IPF is training 
displaced residents from another IPF that closed on or after July 1, 
2011; and (2) no later than 60 days after the hospital first begins 
training the displaced residents, the IPF that is training the 
displaced residents from the closed IPF submits a request for a 
temporary adjustment to its FTE cap to its Medicare Administrative 
Contractor (MAC), and documents that the IPF is eligible for this 
temporary adjustment to its FTE cap by identifying the residents who 
have come from the closed IPF and have caused the requesting IPF to 
exceed its cap, (or the IPF may already be over its cap) and specifies 
the length of time that the adjustment is needed.
    After the displaced residents leave the IPF's training program or 
complete their residency program, the IPF's cap would revert to its 
original level. Further, the total amount of temporary cap adjustments 
that can be distributed to all receiving hospitals cannot exceed the 
cap amount of the IPF that closed.
c. Temporary Adjustment to FTE To Cap Reflect Residents Affected by 
Residency Program Closure
    In the May 6, 2011 final rule (76 FR 26455), we added a new Sec.  
412.424(d)(1)(iii)(F)(2) providing that if an IPF that ceases training 
residents in a residency training program(s) agrees to temporarily 
reduce its FTE cap, we would allow another IPF to receive a temporary 
adjustment to its FTE cap to reflect residents added because of the 
closure of another IPF's residency training program. For purposes of 
this policy on closed residency programs, we apply the IPPS definition 
of ``closure of a hospital residency training program'' to mean that 
the hospital ceases to offer training for residents in a particular 
approved medical residency training program as specified in Sec.  
413.79(h). The methodology for adjusting the caps for the ``receiving 
IPF'' and the ``IPF that closed its program'' is described below.
i. Receiving IPF
    The regulations at Sec.  412.424(d)(1)(iii)(F)(2)(i) allow an IPF 
to receive a temporary adjustment to its FTE cap to reflect residents 
added because of the closure of another IPF's residency training 
program for cost reporting periods beginning on or after July 1, 2011 
if--
     The IPF is training additional residents from the 
residency training program of an IPF that closed its program on or 
after July 1, 2011.
     No later than 60 days after the IPF begins to train the 
residents, the IPF submits to its MAC a request for a temporary 
adjustment to its FTE cap, documents that the IPF is eligible for this 
temporary adjustment by identifying the residents who have come from 
another IPF's closed program and have caused the IPF to exceed its cap, 
(or the IPF may already be in excess of its cap), specifies the length 
of time the adjustment is needed, and submits to its MAC a copy of the 
FTE cap reduction statement by the IPF closing the residency training 
program.
ii. IPF That Closed Its Program
    The regulations at Sec.  412.424(d)(1)(iii)(F)(2)(ii) provide that 
an IPF that agrees to train residents who have been displaced by the 
closure of another IPF's resident teaching program may receive a 
temporary FTE cap adjustment only if the IPF that closed a program:
     Temporarily reduces its FTE cap based on the number of FTE 
residents in each program year, training in the program at the time of 
the program's closure.
     No later than 60 days after the residents who were in the 
closed program begin training at another IPF, submits to its MAC a 
statement signed and dated by its representative that specifies that it 
agrees to the temporary reduction in its FTE cap to allow the IPF 
training the displaced residents to obtain a temporary adjustment to 
its cap; identifies the residents who were training at the time of the 
program's closure; identifies the IPFs to which the residents are 
transferring once the program closes; and specifies the reduction for 
the applicable program years.
    A complete discussion on the temporary adjustment to the FTE cap to 
reflect residents added due to hospital closure and by residency 
program appears in the January 27, 2011 IPF PPS proposed rule (76 FR 
5018 through 5020) and the May 6, 2011 IPF PPS final rule (76 FR 26453 
through 26456).
4. Proposed Cost of Living Adjustment for IPFs Located in Alaska and 
Hawaii
    The IPF PPS includes a payment adjustment for IPFs located in 
Alaska and Hawaii based upon the county in which the IPF is located. As 
we explained in the November 2004 IPF PPS final rule, the FY 2002 data 
demonstrated that IPFs in Alaska and Hawaii had per diem costs that 
were disproportionately higher than other IPFs. Other Medicare PPSs 
(for example, the IPPS and LTCH PPS) adopted a cost of living 
adjustment (COLA) to account for the cost differential of care 
furnished in Alaska and Hawaii.
    We analyzed the effect of applying a COLA to payments for IPFs 
located in Alaska and Hawaii. The results of our analysis demonstrated 
that a COLA for IPFs located in Alaska and Hawaii would improve payment 
equity for these facilities. As a result of this analysis, we provided 
a COLA in the November 2004 IPF PPS final rule.
    A COLA for IPFs located in Alaska and Hawaii is made by multiplying 
the nonlabor-related portion of the Federal per diem base rate by the 
applicable COLA factor based on the COLA area in which the IPF is 
located.
    The COLA factors are published on the Office of Personnel 
Management (OPM) Web site (http://www.opm.gov/oca/cola/rates.asp).
    We note that the COLA areas for Alaska are not defined by county as 
are the COLA areas for Hawaii. In 5 CFR 591.207, the OPM established 
the following COLA areas:
     City of Anchorage, and 80-kilometer (50-mile) radius by 
road, as measured from the Federal courthouse;
     City of Fairbanks, and 80-kilometer (50-mile) radius by 
road, as measured from the Federal courthouse;
     City of Juneau, and 80-kilometer (50-mile) radius by road, 
as measured from the Federal courthouse;
     Rest of the State of Alaska.
    As stated in the November 2004 IPF PPS final rule, we update the 
COLA factors according to updates established by the OPM. However, 
sections 1911 through 1919 of the Nonforeign Area Retirement Equity 
Assurance Act, as contained in subtitle B of title XIX of the National 
Defense Authorization Act (NDAA) for Fiscal Year 2010 (Pub. L. 111-84, 
October 28, 2009), transitions the Alaska and Hawaii COLAs to locality 
pay. Under section 1914 of Public Law 111-84, locality pay is being 
phased in over a 3-year period beginning in January 2010, with COLA 
rates frozen as of the date of enactment, October 28, 2009, and then 
proportionately reduced to reflect the phase-in of locality pay.
    When we published the proposed COLA factors in the January 2011 IPF 
PPS proposed rule (76 FR 4998), we inadvertently selected the FY 2010 
COLA rates which had been reduced to account for the phase-in of 
locality pay. We did not intend to propose the reduced COLA rates 
because that would have understated the adjustment. Since the 2009 COLA 
rates did not reflect the phase-in of locality pay, we finalized the FY 
2009 COLA rates for RY 2010

[[Page 26059]]

through RY 2014 and indicated our intent to address the COLA in FY 
2015. Currently, IPFs located in Alaska and Hawaii receive the updated 
COLA factors based on the COLA area in which the IPF is located as 
shown in Table 10 below.

            TABLE 10--COLA Factors for Alaska and Hawaii IPFs
------------------------------------------------------------------------
                                                         Cost of living
                         Area                          adjustment factor
------------------------------------------------------------------------
Alaska:
    City of Anchorage and 80-kilometer (50-mile)                    1.23
     radius by road..................................
    City of Fairbanks and 80-kilometer (50-mile)                    1.23
     radius by road..................................
    City of Juneau and 80-kilometer (50-mile) radius                1.23
     by road.........................................
    Rest of Alaska...................................               1.25
Hawaii:
    City and County of Honolulu......................               1.25
    County of Hawaii.................................               1.18
    County of Kauai..................................               1.25
    County of Maui and County of Kalawao.............               1.25
------------------------------------------------------------------------
 (The above factors are based on data obtained from the U.S. Office of
  Personnel Management Web site at: http://www.opm.gov/oca/cola/rates.asp.)

    In the FY 2013 IPPS/LTCH final rule (77 FR 53700 through 53701), 
CMS established a methodology for FY 2014 to update the COLA factors 
for Alaska and Hawaii. Under that methodology, we use a comparison of 
the growth in the Consumer Price Indices (CPIs) in Anchorage, Alaska 
and Honolulu, Hawaii relative to the growth in the overall CPI as 
published by the Bureau of Labor Statistics (BLS) to update the COLA 
factors for all areas in Alaska and Hawaii, respectively. As discussed 
in the FY 2013 IPPS/LTCH proposed rule (77 FR 28145), because BLS 
publishes CPI data for only Anchorage, Alaska and Honolulu, Hawaii, our 
methodology for updating the COLA factors uses a comparison of the 
growth in the CPIs for those cities relative to the growth in the 
overall CPI to update the COLA factors for all areas in Alaska and 
Hawaii, respectively. We believe that the relative price differences 
between these cities and the United States (as measured by the CPIs 
mentioned above) are generally appropriate proxies for the relative 
price differences between the ``other areas'' of Alaska and Hawaii and 
the United States.
    The CPIs for ``All Items'' that BLS publishes for Anchorage, 
Alaska, Honolulu, Hawaii, and for the average U.S. city are based on a 
different mix of commodities and services than is reflected in the 
nonlabor-related share of the IPPS market basket. As such, under the 
methodology we established to update the COLA factors, we calculated a 
``reweighted CPI'' using the CPI for commodities and the CPI for 
services for each of the geographic areas to mirror the composition of 
the IPPS market basket nonlabor-related share. The current composition 
of BLS' CPI for ``All Items'' for all of the respective areas is 
approximately 40 percent commodities and 60 percent services. However, 
the nonlabor-related share of the IPPS market basket is comprised of 60 
percent commodities and 40 percent services. Therefore, under the 
methodology established for FY 2014 in the FY 2013 IPPS/LTCH PPS final 
rule, we created reweighted indexes for Anchorage, Alaska, Honolulu, 
Hawaii, and the average U.S. city using the respective CPI commodities 
index and CPI services index and applying the approximate 60/40 weights 
from the IPPS market basket. This approach is appropriate because we 
would continue to make a COLA for hospitals located in Alaska and 
Hawaii by multiplying the nonlabor-related portion of the standardized 
amount by a COLA factor.
    Under the COLA factor update methodology established in the FY 2014 
IPPS/LTCH final rule, we adjust payments made to hospitals located in 
Alaska and Hawaii by incorporating a 25-percent cap on the CPI-updated 
COLA factors. We note that OPM's COLA factors were calculated with a 
statutorily mandated cap of 25 percent, and since at least 1984, we 
have exercised our discretionary authority to adjust Alaska and Hawaii 
payments by incorporating this cap. In keeping with this historical 
policy, we would continue to use such a cap, as our proposal is based 
on OPM's COLA factors. We believe this approach is appropriate because 
our CPI-updated COLA factors use the 2009 OPM COLA factors as a basis.
    We believe it is appropriate to adopt the same methodology for the 
COLA factors applied under the IPPS because IPFs are hospitals with a 
similar mix of commodities and services. In addition, we think it is 
appropriate to have a consistent policy approach with that of other 
hospitals in Alaska and Hawaii. Therefore, we are proposing to adopt 
the cost of living adjustment factors shown in Table 11 below for IPFs 
located in Alaska and Hawaii.

Table 11--Cost-of-Living Adjustment Factors: Alaska and Hawaii Hospitals
                            Area COLA Factor
------------------------------------------------------------------------
                                                         Cost of living
                         Area                          adjustment factor
------------------------------------------------------------------------
Alaska:
    City of Anchorage and 80-kilometer (50-mile)                    1.23
     radius by road..................................
    City of Fairbanks and 80-kilometer (50-mile)                    1.23
     radius by road..................................
    City of Juneau and 80-kilometer (50-mile) radius                1.23
     by road.........................................
    Rest of Alaska...................................               1.25
Hawaii:
    City and County of Honolulu......................               1.25
    County of Hawaii.................................               1.19

[[Page 26060]]

 
    County of Kauai..................................               1.25
    County of Maui and County of Kalawao.............               1.25
------------------------------------------------------------------------

5. Proposed Adjustment for IPFs With a Qualifying Emergency Department 
(ED)
    The IPF PPS includes a facility-level adjustment for IPFs with 
qualifying EDs. We provide an adjustment to the Federal per diem base 
rate to account for the costs associated with maintaining a full-
service ED. The adjustment is intended to account for ED costs incurred 
by a freestanding psychiatric hospital with a qualifying ED or a 
distinct part psychiatric unit of an acute care hospital or a CAH for 
preadmission services otherwise payable under the Medicare Outpatient 
Prospective Payment System (OPPS) furnished to a beneficiary on the 
date of the beneficiary's admission to the hospital and during the day 
immediately preceding the date of admission to the IPF (see Sec.  
413.40(c)(2)) and the overhead cost of maintaining the ED. This payment 
is a facility-level adjustment that applies to all IPF admissions (with 
one exception described below), regardless of whether a particular 
patient receives preadmission services in the hospital's ED.
    The ED adjustment is incorporated into the variable per diem 
adjustment for the first day of each stay for IPFs with a qualifying 
ED. That is, IPFs with a qualifying ED receive an adjustment factor of 
1.31 as the variable per diem adjustment for day 1 of each stay. If an 
IPF does not have a qualifying ED, it receives an adjustment factor of 
1.19 as the variable per diem adjustment for day 1 of each patient 
stay.
    The ED adjustment is made on every qualifying claim except as 
described below. As specified in Sec.  412.424(d)(1)(v)(B), the ED 
adjustment is not made when a patient is discharged from an acute care 
hospital or CAH and admitted to the same hospital's or CAH's 
psychiatric unit. We clarified in the November 2004 IPF PPS final rule 
(69 FR 66960) that an ED adjustment is not made in this case because 
the costs associated with ED services are reflected in the DRG payment 
to the acute care hospital or through the reasonable cost payment made 
to the CAH.
    Therefore, when patients are discharged from an acute care hospital 
or CAH and admitted to the same hospital or CAH's psychiatric unit, the 
IPF receives the 1.19 adjustment factor as the variable per diem 
adjustment for the first day of the patient's stay in the IPF.
    For FY 2015, we are proposing to retain the 1.31 adjustment factor 
for IPFs with qualifying EDs. A complete discussion of the steps 
involved in the calculation of the ED adjustment factor appears in the 
November 2004 IPF PPS final rule (69 FR 66959 through 66960) and the 
May 2006 IPF PPS final rule (71 FR 27070 through 27072).

D. Other Payment Adjustments and Policies

1. Outlier Payments
    The IPF PPS includes an outlier adjustment to promote access to IPF 
care for those patients who require expensive care and to limit the 
financial risk of IPFs treating unusually costly patients. In the 
November 2004 IPF PPS final rule, we implemented regulations at Sec.  
412.424(d)(3)(i) to provide a per-case payment for IPF stays that are 
extraordinarily costly. Providing additional payments to IPFs for 
extremely costly cases strongly improves the accuracy of the IPF PPS in 
determining resource costs at the patient and facility level. These 
additional payments reduce the financial losses that would otherwise be 
incurred in treating patients who require more costly care and, 
therefore, reduce the incentives for IPFs to under-serve these 
patients.
    We make outlier payments for discharges in which an IPF's estimated 
total cost for a case exceeds a fixed dollar loss threshold amount 
(multiplied by the IPF's facility-level adjustments) plus the Federal 
per diem payment amount for the case.
    In instances when the case qualifies for an outlier payment, we pay 
80 percent of the difference between the estimated cost for the case 
and the adjusted threshold amount for days 1 through 9 of the stay 
(consistent with the median LOS for IPFs in FY 2002), and 60 percent of 
the difference for day 10 and thereafter. We established the 80 percent 
and 60 percent loss sharing ratios because we were concerned that a 
single ratio established at 80 percent (like other Medicare PPSs) might 
provide an incentive under the IPF per diem payment system to increase 
LOS in order to receive additional payments.
    After establishing the loss sharing ratios, we determined the 
current fixed dollar loss threshold amount of $10,245 through payment 
simulations designed to compute a dollar loss beyond which payments are 
estimated to meet the 2 percent outlier spending target. Each year when 
we update the IPF PPS, we simulate payments using the latest available 
data to compute the fixed dollar loss threshold so that outlier 
payments represent 2 percent of total projected IPF PPS payments.
a. Proposed Update to the Outlier Fixed Dollar Loss Threshold Amount
    In accordance with the update methodology described in Sec.  
412.428(d), we propose to update the fixed dollar loss threshold amount 
used under the IPF PPS outlier policy. Based on the regression analysis 
and payment simulations used to develop the IPF PPS, we established a 2 
percent outlier policy which strikes an appropriate balance between 
protecting IPFs from extraordinarily costly cases while ensuring the 
adequacy of the Federal per diem base rate for all other cases that are 
not outlier cases.
    Based on an analysis of the latest available data (that is, FY 2013 
IPF claims) and rate increases, we believe it is necessary to update 
the fixed dollar loss threshold amount in order to maintain an outlier 
percentage that equals 2 percent of total estimated IPF PPS payments.
    In the May 2006 IPF PPS final rule (71 FR 27072), we describe the 
process by which we calculate the outlier fixed dollar loss threshold 
amount. We are not proposing changes to this process for FY 2015. We 
begin by simulating aggregate payments with and without an outlier 
policy, and applying an iterative process to determine an outlier fixed 
dollar loss threshold amount that will result in estimated outlier 
payments being equal to 2 percent of total estimated payments under the 
simulation. Based on this process, using the FY 2013 claims data, we 
estimate that IPF outlier payments as a percentage of total estimated 
payments are approximately 1.9 percent in FY

[[Page 26061]]

2014. Thus, we propose to update the FY 2015 IPF outlier threshold 
amount to ensure that estimated FY 2015 outlier payments are 
approximately 2 percent of total estimated IPF payments. The outlier 
fixed dollar loss threshold amount of $10,245 for FY 2014 would be 
changed to $10,125 for FY 2015 to increase estimated outlier payments 
and thereby maintain estimated outlier payments at 2 percent of total 
estimated aggregate IPF payments for FY 2015.
b. Proposed Update to IPF Cost-to-Charge Ratio Ceilings
    Under the IPF PPS, an outlier payment is made if an IPF's cost for 
a stay exceeds a fixed dollar loss threshold amount plus the IPF PPS 
amount. In order to establish an IPF's cost for a particular case, we 
multiply the IPF's reported charges on the discharge bill by its 
overall cost-to-charge ratio (CCR). This approach to determining an 
IPF's cost is consistent with the approach used under the IPPS and 
other PPSs. In the June 2003 IPPS final rule (68 FR 34494), we 
implemented changes to the IPPS policy used to determine CCRs for acute 
care hospitals because we became aware that payment vulnerabilities 
resulted in inappropriate outlier payments. Under the IPPS, we 
established a statistical measure of accuracy for CCRs in order to 
ensure that aberrant CCR data did not result in inappropriate outlier 
payments.
    As we indicated in the November 2004 IPF PPS final rule (69 FR 
66961), because we believe that the IPF outlier policy is susceptible 
to the same payment vulnerabilities as the IPPS, we adopted a method to 
ensure the statistical accuracy of CCRs under the IPF PPS. 
Specifically, we adopted the following procedure in the November 2004 
IPF PPS final rule: We calculated two national ceilings, one for IPFs 
located in rural areas and one for IPFs located in urban areas. We 
computed the ceilings by first calculating the national average and the 
standard deviation of the CCR for both urban and rural IPFs using the 
most recent CCRs entered in the CY 2014 Provider Specific File.
    To determine the rural and urban ceilings, we multiplied each of 
the standard deviations by 3 and added the result to the appropriate 
national CCR average (either rural or urban). The upper threshold CCR 
for IPFs in FY 2015 is 1.8823 for rural IPFs, and 1.7049 for urban 
IPFs, based on CBSA-based geographic designations. If an IPF's CCR is 
above the applicable ceiling, the ratio is considered statistically 
inaccurate and we assign the appropriate national (either rural or 
urban) median CCR to the IPF.
    We apply the national CCRs to the following situations:
    ++ New IPFs that have not yet submitted their first Medicare cost 
report. We continue to use these national CCRs until the facility's 
actual CCR can be computed using the first tentatively or final settled 
cost report.
    ++ IPFs whose overall CCR is in excess of 3 standard deviations 
above the corresponding national geometric mean (that is, above the 
ceiling).
    ++ Other IPFs for which the MAC obtains inaccurate or incomplete 
data with which to calculate a CCR.
    We are not proposing to make any changes to the application of the 
national CCRs or to the procedures for updating the CCR ceilings in FY 
2015. However, we are proposing to update the FY 2015 national median 
and ceiling CCRs for urban and rural IPFs based on the CCRs entered in 
the latest available IPF PPS Provider Specific File. Specifically, for 
FY 2015, and to be used in each of the three situations listed above, 
using the most recent CCRs entered in the CY 2014 Provider Specific 
File we estimate the national median CCR of 0.6220 for rural IPFs and 
the national median CCR of 0.4700 for urban IPFs. These calculations 
are based on the IPF's location (either urban or rural) using the CBSA-
based geographic designations.
    A complete discussion regarding the national median CCRs appears in 
the November 2004 IPF PPS final rule (69 FR 66961 through 66964).
2. Future Refinements
    For RY 2012, we identified several areas of concern for future 
refinement and we invited comments on these issues in our RY 2012 
proposed and final rules. For further discussion of these issues and to 
review the public comments, we refer readers to the RY 2012 IPF PPS 
proposed rule (76 FR 4998) and final rule (76 FR 26432).
    As we have indicated throughout this proposed rule, we have delayed 
making refinements to the IPF PPS until we have completed a thorough 
analysis of IPF PPS data on which to base those refinements. 
Specifically, we explained that we will delay updating the adjustment 
factors derived from the regression analysis until we have IPF PPS data 
that include as much information as possible regarding the patient-
level characteristics of the population that each IPF serves. We have 
begun the necessary analysis to better understand IPF industry 
practices so that we may refine the IPF PPS as appropriate. Using more 
recent data, we plan to re-run the regression analyses and the patient-
and facility-level adjustments. While we are not proposing refinements 
in this proposed rule, we expect that in the rulemaking for FY 2017 we 
will be ready to present the results of our analysis.

VII. Secretary's Recommendations

    Section 1886(e)(4)(A) of the Act requires the Secretary, taking 
into consideration the recommendations of the Medicare Payment Advisory 
Committee (MedPAC), to recommend update factors for inpatient hospital 
services (including IPFs) for each FY that take into account the 
amounts necessary for the efficient and effective delivery of medically 
appropriate and necessary care of high quality. Section 1886(e)(5) of 
the Act requires the Secretary to publish the recommended and final 
update factors in the Federal Register.
    In the past, the Secretary's recommendations and a discussion about 
the MedPAC recommendations for the IPF PPS were included in the IPPS 
proposed and final rules. The market basket update for the IPF PPS was 
also included in the IPPS proposed and final rules, as well as in the 
IPF PPS annual update.
    Beginning in FY 2013, however, we have only published the market 
basket update for the IPF PPS in the annual IPF PPS FY update and not 
in the IPPS proposed and final rules. In addition, for any years in 
which MedPAC makes recommendations for the IPF PPS, those 
recommendations will be addressed in the IPF PPS update.
    MedPAC did not make any recommendations for the IPF PPS for FY 
2015. For the update to the IPF PPS standard Federal rate for FY 2015, 
see section IV B. of this proposed rule.

VIII. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) 
Program

1. Statutory Authority
    Section 1886(s)(4) of the Act, as added and amended by sections 
3401(f) and 10322(a) of the Affordable Care Act, requires the Secretary 
to implement a quality reporting program for inpatient psychiatric 
hospitals and psychiatric units. Section 1886(s)(4)(A)(i) of the Act 
requires that, for rate year (RY) 2014 and each subsequent rate year, 
the Secretary shall reduce any annual update to a standard Federal rate 
for discharges occurring during the rate year by 2.0 percentage points 
for any inpatient psychiatric hospital or psychiatric unit that does 
not comply with quality data submission requirements with respect to an 
applicable rate year.

[[Page 26062]]

    As noted above, section 1886(s)(4)(A)(i) of the Act uses the term 
``rate year.'' Beginning with the annual update of the inpatient 
psychiatric facility prospective payment system (IPF PPS) that took 
effect on July 1, 2011 (RY 2012), we aligned the IPF PPS update with 
the annual update of the ICD-9-CM codes, which are effective on October 
1 of each year. The change allows for annual payment updates and the 
ICD-9-CM coding update to occur on the same schedule and appear in the 
same Federal Register document, thus making updating rules more 
administratively efficient. To reflect the change to the annual payment 
rate update cycle, we revised the regulations at 42 CFR 412.402 to 
specify that, beginning October 1, 2012, the rate year update period 
would be the 12-month period of October 1 through September 30, which 
we refer to as a fiscal year (FY) (76 FR 26435). For more information 
regarding this terminology change, we refer readers to section III. of 
the RY 2012 IPF PPS final rule (76 FR 26434 through 26435).
    As provided in section 1886(s)(4)(A)(ii) of the Act, the 
application of the reduction for failure to report under section 
1886(s)(4)(A)(i) of the Act may result in an annual update of less than 
0.0 percent for a fiscal year, and may result in payment rates under 
section 1886(s)(1) of the Act being less than the payment rates for the 
preceding year. In addition, section 1886(s)(4)(B) of the Act requires 
that the application of the reduction to a standard Federal rate update 
be noncumulative across fiscal years. Thus, any reduction applied under 
section 1886(s)(4)(A) of the Act will apply only with respect to the 
fiscal year rate involved and the Secretary shall not take into account 
the reduction in computing the payment amount under the system 
described in section 1886(s)(1) of the Act for subsequent years.
    Section 1886(s)(4)(C) of the Act requires that, for FY 2014 
(October 1, 2013, through September 30, 2014) and each subsequent year, 
each psychiatric hospital and psychiatric unit shall submit to the 
Secretary data on quality measures as specified by the Secretary. The 
data shall be submitted in a form and manner, and at a time, specified 
by the Secretary. Under section 1886(s)(4)(D)(i) of the Act, measures 
selected for the quality reporting program must have been endorsed by 
the entity with a contract under section 1890(a) of the Act. The 
National Quality Forum (NQF) currently holds this contract.
    Section 1886(s)(4)(D)(ii) of the Act provides that, in the case of 
a specified area or medical topic determined appropriate by the 
Secretary for which a feasible and practical measure has not been 
endorsed by the entity with a contract under section 1890(a) of the 
Act, the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. 
Pursuant to section 1886(s)(4)(D)(iii) of the Act, the Secretary shall 
publish the measures applicable to the FY 2014 IPFQR Program no later 
than October 1, 2012.
    Section 1886(s)(4)(E) of the Act requires the Secretary to 
establish procedures for making public the data submitted by inpatient 
psychiatric hospitals and psychiatric units under the IPFQR Program. 
These procedures must ensure that a facility has the opportunity to 
review its data prior to the data being made public. The Secretary must 
report quality measures that relate to services furnished by the 
psychiatric hospitals and units on the CMS Web site.
2. Application of the Payment Update Reduction for Failure To Report 
for the FY 2015 Payment Determination and Subsequent Years
    Beginning in FY 2014, section 1886(s)(4)(A)(i) of the Act requires 
the application of a 2.0 percentage point reduction to the applicable 
annual update to a Federal standard rate for those psychiatric 
hospitals and psychiatric units that fail to comply with the quality 
reporting requirements implemented in accordance with section 
1886(s)(4)(C) of the Act, as detailed below. The application of the 
reduction may result in an annual update for a fiscal year that is less 
than 0.0 percent and in payment rates for a fiscal year being less than 
the payment rates for the preceding fiscal year. Pursuant to section 
1886(s)(4)(B) of the Act, any such reduction is not cumulative and will 
apply only to the fiscal year involved. In the FY 2013 IPPS/LTCH PPS 
final rule (77 FR 53678), we adopted requirements regarding the 
application of the payment reduction to the annual update of the 
standard Federal rate for failure to report data on measures selected 
for the FY 2014 payment determination and subsequent years and added 
new regulatory text at 42 CFR 412.424 to codify these requirements.
3. Covered Entities
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53645), we 
established that the IPFQR Program's quality reporting requirements 
cover those psychiatric hospitals and psychiatric units paid under 
Medicare's IPF PPS (42 CFR 412.404(b)). Generally, psychiatric 
hospitals and psychiatric units within acute care and critical access 
hospitals that treat Medicare patients are paid under the IPF PPS. For 
more information on the application of, and exceptions to, payments 
under the IPF PPS, we refer readers to section IV. of the November 15, 
2004 IPF PPS final rule (69 FR 66926). As we noted in the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53645), we use the term ``inpatient 
psychiatric facility'' (IPF) to refer to both inpatient psychiatric 
hospitals and psychiatric units. This usage follows the terminology 
that we have used in the past in our IPF PPS regulations (42 CFR 
412.402).
4. Considerations in Selecting Quality Measures
    In implementing the IPFQR Program, our overarching objective is to 
support the HHS National Quality Strategy (NQS) and CMS Quality 
Strategy's goal for better health care for individuals, better health 
for populations, and lower costs for health care services. More 
information on the CMS Quality Strategy can be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html. 
Implementation of the IPFQR Program works to achieve the goals of the 
CMS Quality Strategy by promoting transparency around the quality of 
care provided at IPFs to support patient decision-making and drive 
quality improvement, as well as to further the alignment of quality 
measurement and improvement goals at IPFs with those of other health 
care providers.
    For purposes of the IPFQR Program, section 1886(s)(4)(D)(i) of the 
Act requires that any measure specified by the Secretary must have been 
endorsed by the entity with a contract under section 1890(a) of the 
Act. However, the statutory requirements under section 
1886(s)(4)(D)(ii) of the Act provide an exception that, in the case of 
a specified area or medical topic determined appropriate by the 
Secretary for which a feasible and practical measure has not been 
endorsed by the entity with a contract under section 1890(a) of the 
Act, the Secretary may specify a measure that is not so endorsed 
provided due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary.

[[Page 26063]]

    We seek to collect data in a manner that balances the need for 
information related to the full spectrum of quality performance and the 
need to minimize the burden of data collection and reporting. We have 
focused on measures that have high impact and support CMS and HHS 
priorities for improved quality and efficiency of care provided by 
IPFs. We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 
53645 through 53646) for a detailed discussion of the considerations 
taken into account for measure development and selection.
    Measures proposed for the program were included in a publicly 
available document entitled ``List of Measures under Consideration for 
December 1, 2013'' in compliance with section 1890A(a)(2) of the Act, 
and they were reviewed by the MAP in its ``MAP Pre-Rulemaking Report: 
2014 Recommendations on Measures for More than 20 Federal Programs,'' 
which is available on the NQF Web site a http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx. We considered the input and recommendations provided 
by the MAP in selecting measures to propose for the IPFQR Program at 
this time.
5. Quality Measures
a. Proposed Quality Measures for the FY 2016 Payment Determination and 
Subsequent Years
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53646 through 
53652), we adopted six chart-abstracted IPF quality measures for the FY 
2014 payment determination and subsequent program years.
    We note that, at the time that we adopted the measures in the FY 
2013 IPPS/LTCH PPS final rule (77 FR 53258), providers were using ICD-
9-CM codes. We are proposing the conversion of ICD-9-CM to ICD-10-CM/
PCS codes for the IPF PPS in this proposed rule, but in light of PAMA, 
the effective date of those changes would be the date when ICD-10 
becomes the required medical data code set for use on Medicare claims. 
We do not anticipate that this change will have substantive effects on 
any measures at this time. CMS will update the user manual, discussed 
further in section V below to reflect any necessary measure updates. 
Generally, measures adopted for the IPFQR Program will remain in the 
Program for all subsequent years, unless and until specifically stated 
otherwise (such as, for example, through removal or replacement).
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50890 through 
50895), we added one new chart-abstracted measure for the IPFQR 
Program: Alcohol Use Screening (SUB-1) (NQF 1661). We also 
added one new claims-based measure: Follow-Up After Hospitalization for 
Mental Illness (FUH) (NQF 0576). Both measures apply to the FY 
2016 payment determination and subsequent years, unless and until we 
change them through future rulemaking.
    The table below sets out the previously adopted measures.

                       Table 12--Previously Adopted Quality Measures for the IPFQR Program
----------------------------------------------------------------------------------------------------------------
      National quality strategy priority           NQF No.       Measure ID           Measure description
----------------------------------------------------------------------------------------------------------------
Patient Safety...............................            0640         HBIPS-2  Hours of Physical Restraint Use *
                                                         0641         HBIPS-3  Hours of Seclusion Use *
Clinical Quality of Care.....................            0552         HBIPS-4  Patients Discharged on Multiple
                                                                                Antipsychotic Medications *
                                                         0560         HBIPS-5  Patients Discharged on Multiple
                                                                                Antipsychotic Medications with
                                                                                Appropriate Justification *
                                                         1661           SUB-1  Alcohol Use Screening **
                                                         0576             FUH  Follow-Up After Hospitalization
                                                                                for Mental Illness **
Care Coordination............................            0557         HBIPS-6  Post-Discharge Continuing Care
                                                                                Plan Created *
                                                         0558         HBIPS-7  Post-Discharge Continuing Care
                                                                                Plan Transmitted to Next Level
                                                                                of Care Provider Upon Discharge
                                                                                *
----------------------------------------------------------------------------------------------------------------
* Quality measures adopted in the FY 2013 IPPS/LTCH PPS final rule for the FY 2014 payment determination and
  subsequent years.
** Quality measures adopted in the FY 2014 IPPS/LTCH PPS final rule for the FY 2016 payment determination and
  subsequent years.

    We note that in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50896 
through 50897 and 50900), we also adopted for the FY 2016 payment 
determination and subsequent years a voluntary collection of 
information--IPF Assessment of Patient Experience of Care (now renamed 
Assessment of Patient Experience of Care), which was to be collected 
using a Web-Based Measures Tool, and which would not affect an IPF's FY 
2016 payment determination. We also noted that we intend to propose to 
make this a mandatory measure in future rulemaking (78 FR 50897), which 
we do in this proposed rule.

b. Proposed Quality Measures for the FY 2016 Payment Determination and 
Subsequent Years

    We are proposing to add two new measures to the IPFQR Program to 
those already adopted for the FY 2016 payment determination and 
subsequent years: (1) Assessment of Patient Experience of Care; and (2) 
Use of an Electronic Health Record. We are not proposing to remove or 
replace any of the previously adopted measures from the IPFQR Program 
for FY 2016. These two measures will be captured in the IPF Web-based 
Measure Tool, which can be accessed through the QualityNet home page 
at: http://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic/Page/QnetHomepage. The Tool will be updated so when IPFs submit their 
data for FY 2016 (between July 1, 2015 and August 15, 2015) there will 
be a place to provide responses to these two structural measures.
1. Assessment of Patient Experience of Care
    Improvement of experience of care for patients, families, and 
caregivers is one of our objectives within the CMS Quality Strategy and 
is not currently addressed in the IPFQR Program. Surveys of individuals 
about their experience in all health care settings provide important 
information as to whether or not high-quality, person-centered care is 
actually provided and address elements of service delivery that matter 
most to recipients of care.
    We included the measure ``Inpatient Consumer Survey (ICS) Consumer 
Evaluation of Inpatient Behavioral Healthcare Services'' (NQF 
0726) in our ``List of Measures under Consideration for 
December 1, 2102.'' The measure would have gathered clients' evaluation 
of their inpatient care based on six domains--outcome, dignity, rights, 
treatment, environment, and empowerment. The MAP provided input on the 
measure and supported its inclusion in the IPFQR Program. However, we 
did not propose to adopt

[[Page 26064]]

the measure in the FY 2014 IPPS/LTCH PPS proposed rule for several 
reasons, including potential reporting and information collection 
burdens in a new program, and compatibility with the content and format 
of other similar CMS beneficiary surveys (78 FR 27740 and 78 FR 50896). 
We also recognized the challenges of measuring patient experience of 
care, particularly for involuntary cases and geriatric psychiatric 
patients suffering from dementia. In addition, we recognized that IPFs 
may have developed their own survey instruments, which we wanted to 
learn more about prior to requiring collection of a patient experience 
of care survey for the IPFQR (78 FR 50897). Instead, we indicated our 
intention to pursue the adoption of a standardized measure of patient 
experience of care for the IPFQR program in the near future.
    In the final rule, in an effort to proceed cautiously with the 
selection of an assessment instrument and collection protocol, and as 
an intermediate measure, we implemented a voluntary collection of 
information on whether IPFs administer a detailed assessment of patient 
experience of care using a standardized collection protocol and a 
structured instrument. If the IPFs answered ``Yes,'' we also asked them 
to indicate the name of the survey that they administer. We indicated 
our intention to propose to change this request for voluntary 
information into a mandatory measure in future rulemaking. We are now 
proposing to make this request a required structural measure for the FY 
2016 payment determination.
    The measure ``Inpatient Psychiatric Facility Routinely Assesses 
Patient Experience of Care'' (now, ``Assessment of Patient Experience 
of Care'') was included on our ``List of Measures under Consideration 
for December 1, 2013.'' The measure asks IPFs whether they routinely 
assess patient experience of care using a standardized collection 
protocol and a structured instrument. The MAP supported this measure, 
but encouraged its eventual replacement with a robust survey of patient 
experience and a measure based on consumer-reported information, such 
as a CAHPS tool. We believe the reporting of this measure will begin to 
provide information on a priority area of the HHS National Quality 
Strategy that is currently unaddressed in the IPFQR program, that of 
patient and family engagement and experience of care. Further, the 
information gathered through the collection of this measure will be 
helpful in the development of a standardized survey of patient 
assessment of care that we intend to develop as a successor to this 
measure.
    Because this is a structural measure that does not depend on 
systems for collecting and abstracting individual patient information, 
only requires simple attestation, and does not require extended time to 
prepare to report, we believe that it will not be burdensome to IPFs. 
Accordingly, we are proposing to include it as a mandatory measure for 
the FY 2016 payment determination, a year earlier than for other 
measures proposed in this rule that are dependent on these systems.
    The proposed measure is currently not NQF-endorsed. Section 
1886(s)(4)(D)(ii) of the Act authorizes the Secretary to specify a 
measure that is not endorsed by the NQF as long as due consideration is 
given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We attempted to find 
available measures that have been endorsed or adopted by a consensus 
organization and found no other feasible and practical measures on the 
topic of patient experience of care for the IPF setting. Therefore, we 
believe that the Assessment of Patient Experience of Care proposed 
measure meets the measure selection exception requirement under section 
1886(s)(4)(D)(ii) of the Act.
2. Use of an Electronic Health Record (EHR)
    In 2009, as part of the Health Information Technology for Economic 
and Clinical Health (HITECH) Act, incentives were provided to encourage 
eligible hospitals and eligible professionals to adopt EHR systems. The 
widespread adoption of these systems holds the potential to support 
multiple goals of CMS' quality strategy, including making care safer 
and more affordable, and promoting coordination of care. One review of 
over a hundred studies of the effects of EHRs showed that nearly all 
demonstrated positive overall results.\1\ These results were most 
frequently demonstrated in the areas of efficiency and effectiveness of 
care, patient safety and satisfaction, and process of care.\2\
---------------------------------------------------------------------------

    \1\ M.B. Buntin, M.F. Burke, M.C. Hoaglin et al., ``The Benefits 
of Health Information Technology: A Review of the Recent Literature 
Shows Predominantly Positive Results,'' Health Affairs, March 2011 
30(3):464-71.
    \2\ Ibid.
---------------------------------------------------------------------------

    Positive results such as these depend in part on the ways in which 
an EHR system is used. EHRs can facilitate the use of clinical decision 
support tools, physician order entry systems, and health information 
exchange. The concept of ``meaningful use'' of EHRs captures the goals 
for which incentive payments are made. These goals include: Quality 
improvement, safety, and efficiency; health disparities reduction; 
patient and family engagement; care coordination improvement and 
population health; and maintenance of the privacy and security of 
patient health information.\3\
---------------------------------------------------------------------------

    \3\ HealthIT.gov, ``EHR Incentives & Certification: Meaningful 
Use Definition & Objectives.'' [Internet Cited 2014 February 11]. 
Available from http://www.healthit.gov/providers-professionals/meaningful-use-definition-objectives.
---------------------------------------------------------------------------

    We believe that a measure of the degree of EHR implementation 
provides important information about an element of IPF service delivery 
shown to be associated with the delivery of quality care. Further, we 
believe that it provides useful information to consumers and others in 
choosing among different facilities.
    A key issue in EHR adoption and implementation is the use of this 
technology to support health information exchange. HHS has a number of 
initiatives designed to encourage and support the adoption of health 
information technology and promote nationwide health information 
exchange to improve health care. The Office of the National Coordinator 
for Health Information Technology (ONC) and CMS work to promote the 
adoption of health information technology. Through a number of 
activities, HHS is promoting the adoption of ONC-certified electronic 
health records (EHRs) developed to support secure, interoperable health 
information exchange. While ONC-certified EHRs are not yet available 
for IPFQRs and other providers who are not eligible for the Medicare 
and Medicaid EHR Incentive Programs, ONC has requested that the HIT 
Policy Committee (a Federal Advisory Committee) explore the expansion 
of EHR certification under the ONC HIT Certification Program, focusing 
on EHR certification criteria needed for long-term and post-acute care 
(including LTCHs), and behavioral health care providers. ONC has also 
proposed a Voluntary 2015 Edition EHR Certification rule (79 FR 10880) 
that would increase the flexibility in ONC's regulatory structure to 
more easily accommodate health IT certification for other types of 
health care settings where individual or institutional health care 
providers are not typically eligible to qualify for the Medicare and 
Medicaid EHR Incentive Programs.
    We believe that the use of certified EHRs by IPFs (and other 
providers ineligible for the Medicare and

[[Page 26065]]

Medicaid EHR Incentive programs) can effectively and efficiently help 
providers improve internal care delivery practices, support the 
exchange of important information across care partners and during 
transitions of care, and could enable the reporting of electronically 
specified clinical quality measures (eCQMs) (as described elsewhere in 
this rule). More information on the proposed rule on voluntary 2015 
Edition EHR Certification, identification of EHR certification criteria 
and development of standards applicable to IPFQRs can be found at:
     http://www.healthit.gov/policy-researchers-implementers/standards-and-certification-regulations
     http://www.healthit.gov/facas/FACAS/health-it-policy-committee/hitpc-workgroups/certificationadoption
     http://wiki.siframework.org/LCC+LTPAC+Care+Transition+SWG
     http://wiki.siframework.org/Longitudinal+Coordination+of+Care
    We included the measure, ``IPF Use of an Electronic Health Record 
Meeting Stage 1 or Stage 2 Meaningful Use Criteria'' (now, ``Use of an 
Electronic Health Record'') in the ``List of Measures under 
Consideration for December 1, 2013.'' The measure would assess the 
degree to which facilities employ EHR systems in their service program 
and use such systems to support health information exchange at times of 
transitions in care. It is a structural measure that only requires the 
facility to attest to which one of the following statements best 
describes the facility's highest level typical use of an EHR system 
(excluding the billing system) during the reporting period, and whether 
this use includes the exchange of interoperable health information with 
a health information service provider:
    a. The facility most commonly used paper documents or other forms 
of information exchange (e.g., email) NOT involving transfer of health 
information using EHR technology at times of transitions in care.
    b. The facility most commonly exchanged health information using 
non-certified EHR technology (i.e., not certified under the ONC HIT 
Certification Program) at times of transitions in care.
    c. The facility most commonly exchanged health information using 
certified EHR technology (certified under the ONC HIT Certification 
Program) at times of transitions in care.
    We would also ask IPFs to indicate whether transfers of health 
information at times of transitions in care included the exchange of 
interoperable health information with a health information service 
provider (HISP).
    In its 2014 report:
    (https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=74634), the MAP concluded that it 
does not support this measure because it does not adequately address 
any current needs of the program. The MAP noted that psychiatric 
hospitals were excluded from the EHR Incentive Programs and imposing 
the measure criteria is not realistic. The MAP also expressed concerns 
about using quality reporting programs to collect data on systems and 
infrastructure and suggested that the American Hospital Association's 
survey of hospitals may be a better source for this type of data.
    We disagree with the MAP's contention that the purpose of this 
measure is to collect data on systems and infrastructure. The purpose 
of the measure is to assess the use of processes for the collection, 
use, and transmission of medical information that have been 
demonstrated to impact the quality of care, rather than to collect data 
on systems and infrastructure. As we have described above, many studies 
document the benefits of EHR use on multiple dimensions related to 
health care quality, and to multiple goals of CMS' quality strategy. 
Additionally, this is a structural measure that does not depend on 
systems for collecting and abstracting individual patient information 
and, therefore, is not burdensome on IPFs. Accordingly, we are 
proposing to adopt it as a measure for FY 2016 payment determination, a 
year earlier than for other measures proposed in this rule that are 
dependent on such systems.
    The Use of an Electronic Health Record proposed measure is not NQF-
endorsed. Section 1886(s)(4)(D)(ii) of the Act authorizes the Secretary 
to specify a measure that is not endorsed by the NQF as long as due 
consideration is given to measures that have been endorsed or adopted 
by a consensus organization identified by the Secretary. We attempted 
to find available measures that have been endorsed or adopted by a 
consensus organization and found no other feasible and practical 
measures on the topic of the degree to which facilities employ an EHR 
system in their program. Therefore, we believe that the Use of an 
Electronic Health Record proposed measure meets the measure selection 
exception requirement under section 1886(s)(4)(D)(ii) of the Act.
c. Proposed Quality Measures for the FY 2017 Payment Determination and 
Subsequent Years
    We are proposing to add four quality measures to the IPFQR Program 
for the FY 2017 payment determination and subsequent years: (1) 
Influenza Immunization (IMM-2); (2) Influenza Vaccination Coverage 
Among Healthcare Personnel; (3) Tobacco Use Screening (TOB-1); and (4) 
Tobacco Use Treatment Provided or Offered (TOB-2) and Tobacco Use 
Treatment (TOB-2a).
1. Influenza Immunization (IMM-2) (NQF 1659)
    Increasing influenza (flu) vaccination can reduce unnecessary 
hospitalizations and secondary complications, particularly among high 
risk populations such as the elderly.\4\ Each year, approximately 
226,000 people in the U.S. are hospitalized with complications from 
influenza, and between 3,000 and 49,000 die from the disease and its 
complications.\5\
---------------------------------------------------------------------------

    \4\ Centers for Disease Control and Prevention. ``People at High 
Risk of Developing Flu-Related Complications.'' [Internet Cited 2014 
February 11]. Available from http://www.cdc.gov/flu/about/disease/high_risk.htm.
    \5\ Thompson W.W., Shay D.K., Weintraub E., Brammer L, Cox N, 
Anderson L.J., Fukuda. ``Mortality associated with influenza and 
respiratory syncytial virus in the United States.'' JAMA. 2003 
January 8; 289 (2): 179-186.
---------------------------------------------------------------------------

    Vaccination is the most effective method for preventing influenza 
virus infection and its potentially severe complications, and 
vaccination is associated with reductions in influenza among all age 
groups.\6\ The Advisory Committee on Immunization Practices (ACIP) 
recommends seasonal influenza vaccination for all persons six months of 
age and older, thereby stressing the importance of influenza 
prevention. Evidence from a Veteran's Affairs locked behavioral 
psychiatric unit with 26 patients and 40 staff during an influenza 
outbreak demonstrates significant room for improvement in vaccination 
rates among IPFs.\7\ In this study, 54 percent of the patients had not 
been vaccinated, and 36 percent of nonvaccinated patients manifested 
symptoms as compared with 25 percent of vaccinated patients.\8\ We 
believe that the adoption of a measure that assesses influenza 
immunization in the IPF

[[Page 26066]]

setting not only works toward reducing the rate of influenza infection, 
but also affords consumers and others useful information in choosing 
among different facilities.
---------------------------------------------------------------------------

    \6\ Centers for Disease Control and Prevention. Newsroom press 
release February 24, 2010. ``CDC's Advisory Committee on 
Immunization Practices (ACIP) Recommends Universal Annual Influenza 
Vaccination.'' [Internet Cited 2010 March 3]. Available from http://www.cdc/media/pressrel/2010/r100224.htm.
    \7\ Risa K.J., et al. ``Influenza outbreak management on a 
locked behavioral health unit.'' Am J Infect Control 2009;37:76-8.
    \8\ Ibid.
---------------------------------------------------------------------------

    We included the Influenza Immunization (NQF 1659) measure 
in the ``List of Measures under Consideration for December 1, 2013.'' 
The Influenza Immunization (IMM-2) chart-abstracted measure assesses 
inpatients, age 6 months and older, discharged during October, 
November, December, January, February, or March, who are screened for 
influenza vaccination status and vaccinated prior to discharge, if 
indicated. The numerator includes discharges that were screened for 
influenza vaccine status and were vaccinated prior to discharge, if 
indicated. The denominator includes inpatients, age 6 months and older, 
discharged during October, November, December, January, February, or 
March. The measure excludes patients who: Expire prior to hospital 
discharge or have an organ transplant during the current 
hospitalization; have a length of stay greater than 120 days; are 
transferred or discharged to another acute care hospital; or leave 
Against Medical Advice (AMA). We refer readers to https://www.qualityforum.org/QPS/1659 for further technical specifications.
    The MAP gave conditional support for the measure, concluding that 
it is not ready for implementation because it needs more experience or 
testing. In its 2014 final report, the MAP recognized that influenza 
immunization is important for healthcare personnel and patients, but 
cautioned that CDC and CMS need to collaborate on adjusting 
specifications for reporting from psychiatric units before the measure 
can be included in the IPFQR Program. CMS does not agree with this 
recommendation. Given previous experience with the use of this measure 
in inpatient settings and the clarity of specifications for it, CMS 
does not believe that additional experience or testing is needed before 
implementing this measure in IPFs, or that specifications need to be 
further adjusted for these facilities. We also believe that comments 
concerning collaboration with CDC largely apply to the following 
measure for influenza vaccination among healthcare personnel, which is 
explained in the discussion for that measure.
    We believe that the IMM-2 proposed measure meets the measure 
selection criterion under section 1886(s)(4)(D)(ii) of the Act. This 
section provides that, in the case of a specified area or medical topic 
determined appropriate by the Secretary for which a feasible and 
practical measure has not been endorsed by the entity with a contract 
under section 1890(a) of the Act, the Secretary may specify a measure 
that is not so endorsed as long as due consideration is given to 
measures that have been endorsed or adopted by a consensus organization 
identified by the Secretary.
    This measure is not NQF-endorsed in the IPF setting and we could 
not find any other comparable measure that is specifically endorsed for 
the IPF setting. However, we believe that this measure is appropriate 
for the assessment of the quality of care furnished by IPFs for the 
reasons discussed above. Further, this measure has been endorsed by NQF 
for the ``Hospital/Acute care facility'' setting. Although not 
explicitly endorsed for use in IPF settings, we believe that the 
characteristics of IPFs as distinct part units of hospitals or 
freestanding hospitals are similar enough to hospitals/acute care 
facilities that this measure may be appropriately used in such 
facilities. Finally, the adoption of this measure in the IPFQR Program 
aligns with the Hospital Inpatient Quality Reporting (HIQR) Program, 
which also includes this measure in its measure set.
2. Influenza Vaccination Coverage Among HealthCare Personnel (NQF 
0431)
    Healthcare personnel (HCP) can serve as vectors for influenza 
transmission because they are at risk for both acquiring influenza from 
patients and transmitting it to patients, and HCP often come to work 
when ill.\9\ An early report of HCP influenza infections during the 
2009 H1N1 influenza pandemic estimated that 50 percent of infected HCP 
had contracted the influenza virus from patients or coworkers in the 
health care setting.\10\ Influenza virus infection is common among HCP, 
with evidence suggesting that nearly one-quarter of HCP were infected 
during influenza season, but few recalled having influenza.\11\ While 
it is difficult to precisely assess HCP influenza vaccination rates 
among IPFs because of varying state policies requiring hospitals to 
collect and report HCP vaccination coverage rates, evidence from a 
Veterans Affairs locked behavioral psychiatric unit with 26 patients 
and 40 staff during an influenza outbreak demonstrates significant room 
for improvement.\12\ In this study, only 55 percent of all staff had 
been vaccinated, and 22 percent of nonvaccinated staff manifested 
symptoms as compared with 18 percent of vaccinated staff.\13\ We 
believe that the adoption of a measure that assesses influenza 
vaccination among HCP in the IPF setting not only works toward 
improving the rate at which nonvaccinated HCPs manifest symptoms as 
compared with vaccinated HCPs, but also affords consumers and others 
useful information in choosing among different facilities.
---------------------------------------------------------------------------

    \9\ Wilde J.A., McMillan J.A., Serwint J, et al. ``Effectiveness 
of influenza vaccine in healthcare professionals: A randomized 
trial.'' JAMA 1999; 281: 908-913.
    \10\ Harriman K, Rosenberg J, Robinson S, et al. ``Novel 
influenza A (H1N1) virus infections among health-care personnel--
United States, April-May 2009.'' Morb Mortal Wkly Rep. 2009; 58(23): 
641-645.
    \11\ Elder AG, O[acute]Donnell B, McCruden EA, et al. 
``Incidence and recall of influenza in a cohort of Glasgow health-
care workers during the 1993-4 epidemic: Results of serum testing 
and questionnaire.'' BMJ. 1996; 313:1241-1242.
    \12\ Risa K.J., et al. ``Influenza outbreak management on a 
locked behavioral health unit.'' Am J Infect Control 2009;37:76-8.
    \13\ Ibid.
---------------------------------------------------------------------------

    We included the Influenza Vaccination Coverage Among Healthcare 
Personnel (NQF 0431) measure in the ``List of Measures under 
Consideration for December 1, 2013.'' The proposed measure assesses the 
percentage of HCP who receive the influenza vaccination. The measure is 
designed to ensure that reported HCP influenza vaccination percentages 
are consistent over time within a single healthcare facility, as well 
as comparable across facilities. The numerator includes HCP in the 
denominator population who, during the time from October 1 (or when the 
vaccine became available) through March 31 of the following year:
    a. Received an influenza vaccination administered at the healthcare 
facility, or reported in writing (paper or electronic) or provided 
documentation that influenza vaccination was received elsewhere; or
    b. Were determined to have a medical contraindication/condition of 
severe allergic reaction to eggs or to other component(s) of the 
vaccine, or history of Guillain-Barre Syndrome within 6 weeks after a 
previous influenza vaccination; or
    c. Declined influenza vaccination; or
    d. Had an unknown vaccination status or did not otherwise fall 
under any of the abovementioned numerator categories.
    The denominator includes the number of HCP working in the 
healthcare facility for at least one working day between October 1 and 
March 31 of the following year, regardless of clinical responsibility 
or patient contact, and is calculated

[[Page 26067]]

separately for employees, licensed independent practitioners, and adult 
students/trainees and volunteers. The measure has no exclusions. We 
refer readers to https://www.qualityforum.org/QPS/0431 and the Centers 
for Disease Control and Prevention's (CDC) Web site (http://www.cdc.gov/nhsn/PDFs/HPS-manual/vaccination/HPS-flu-vaccine-protocol.pdf) for further technical specifications.
    The MAP gave conditional support for the measure, concluding that 
it is not ready for implementation because it needs more experience or 
testing. In its 2014 report, the MAP recognized that influenza 
immunization is important for healthcare personnel and patients, but 
cautioned that CDC and CMS need to collaborate on adjusting 
specifications for reporting from psychiatric units before the measure 
can be included in the IPFQR Program. CMS does not agree with this 
recommendation. As explained for the IMM-2 measure, given previous 
experience with the use of this measure and the clarity of its 
specifications, CMS does not believe that additional experience or 
testing is needed before implementing this measure in IPFs, or that 
specifications need to be further adjusted for these facilities. In 
response to comments concerning collaboration with CDC, CDC and CMS 
have conferred on this issue and language has been added to the 
description of this measure below that clarifies that IPFs will use the 
CDC National Healthcare Safety Network (NHSN) infrastructure and 
protocol to report the measure for IPFQR Program purposes. Neither CMS 
nor CDC believes that there are any coordination issues remaining for 
the implementation of this measure.
    We believe that the Influenza Vaccination Coverage Among HealthCare 
Personnel proposed measure meets the measure selection criterion under 
section 1886(s)(4)(D)(ii) of the Act. This section provides that, in 
the case of a specified area or medical topic determined appropriate by 
the Secretary for which a feasible and practical measure has not been 
endorsed by the entity with a contract under section 1890(a) of the 
Act, the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary.
    This measure is not NQF-endorsed in the IPF setting and we could 
not find any other comparable measure that is specifically endorsed for 
the IPF setting. However, we believe that this measure is appropriate 
for the assessment of the quality of care furnished by IPFs for the 
reasons discussed above. Further, this measure has been endorsed by NQF 
for the ``Hospital/Acute care facility'' setting. Although not 
explicitly endorsed for use in IPF settings, we believe that the 
characteristics of IPFs as distinct part units of hospitals or 
freestanding hospitals mean that this measure may be appropriately used 
in such facilities.
    We propose that IPFs use the CDC National Healthcare Safety Network 
(NHSN) infrastructure and protocol to report the measure for IPFQR 
Program purposes. We propose that IPF reporting of HCP influenza 
vaccination summary data to NHSN would begin for the 2015-2016 
influenza season, from October 1, 2015, to March 31, 2016, with a 
reporting deadline of May 15, 2016. Although the collection period for 
this measure extends into the first quarter of the following calendar 
year, this measure data would be included with other measures that 
would be required for FY 2017 payment determination. Similarly, 
reporting for subsequent years would include results for the influenza 
season that begins in the last quarter of the applicable calendar 
year's reporting.
    The adoption of this measure in IPFQR will align with both the HIQR 
and HOQR Programs. The Influenza Vaccination Coverage Among Healthcare 
Personnel (HCP) (NQF 0431) measure was finalized for the 
Hospital IQR program in the FY 2012 IPPS/LTCH PPS final rule (76 FR 
51636), and the Hospital Outpatient Quality Reporting (HOQR) in the CY 
2014 OPPS/ASC final rule (78 FR 75099), and the Ambulatory Surgical 
Center Quality Reporting (ASCQR) Program in the CY 2013 Hospital 
Outpatient Prospective Payment final rule (77 FR 68495).
    We are aware of public concerns about the burden of separately 
collecting healthcare personnel (HCP) influenza vaccination status 
across inpatient and outpatient settings, in particular, distinguishing 
between the inpatient and outpatient setting personnel for reporting 
purposes. We also understand that some are unclear about how the 
measure would be reported to CDC's NHSN.
    We believe reporting a single vaccination count for each healthcare 
facility by each individual facility's CMS Certification Number (CCN) 
would be less burdensome to IPFs than requiring them to distinguish 
between their inpatient and outpatient personnel. Therefore, we propose 
that, beginning with the 2015-2016 influenza season, IPFs would collect 
and report all HCP under each individual IPF's CCN and submit this 
single number to CDC's NHSN. Using the CCN would simplify data 
collection for healthcare facilities with multiple care settings. For 
each CMS CCN, a percentage of the HCP who received an influenza 
vaccination would be calculated and publically reported, so the public 
would know what percentage of the HCP have been vaccinated in each IPF. 
We believe this proposal would provide meaningful data that would help 
inform the public and healthcare facilities while improving the quality 
of care. Specific details on data submission for this measure can be 
found in an Operational Guidance available at: http://www.cdc.gov/nhsn/acute-care-hospital/hcp-vaccination/ and at http://www.cdc.gov/nhsn/acute-care-hospital/index.html.
3. Tobacco Use Screening (TOB-1) (NQF 1651)
    Tobacco use is currently the single greatest cause of disease in 
the U.S., accounting for more than 435,000 deaths annually.\14\ Smoking 
is a known cause of multiple cancers, heart disease, stroke, 
complications of pregnancy, chronic obstructive pulmonary disease, 
other respiratory problems, poorer wound healing, and many other 
diseases.\15\ This health issue is especially important for persons 
with mental illness and substance use disorders. One study has 
estimated that these individuals are twice as likely to smoke as the 
rest of the population, and account for nearly half of the total 
cigarette consumption in the U.S.\16\ Tobacco use also creates a heavy 
cost to both individuals and society. Smoking-attributable health care 
expenditures are estimated at $96 billion per year in direct medical 
expenses and $97 billion in lost productivity.\17\
---------------------------------------------------------------------------

    \14\ Centers for Disease Control and Prevention. Annual Smoking-
Attributable Mortality, Years of Potential Life Lost, and 
Productivity Losses--United States, 2000-2004.'' Morb Mortal Wkly 
Rep. 2008. 57(45): 1226-1228. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a3.htm.
    \15\ U.S. Department of Health and Human Services. ``The health 
consequences of smoking: A report of the Surgeon General.'' Atlanta, 
GA, U.S. Department of Health and Human Services, Centers for 
Disease Control and Prevention, National Center for Chronic Disease 
Prevention and Health Promotion, Office on Smoking and Health, 2004.
    \16\ Lasser K, Boyd JW, Woolhandler S, Himmelstein, D.U., 
McCormick D, Bor D.H. Smoking and mental illness: A population-based 
prevalence study. JAMA. 2000;284(20):2606-2610.
    \17\ Centers for Disease Control and Prevention. ``Best 
Practices for Comprehensive Tobacco Control Programs--2007.'' 
Atlanta, GA, Department of Health and Human Services, Centers for 
Disease Control and Prevention, National Center for Chronic Disease 
Prevention and Health Promotion, Office on Smoking and Health, 2007.

---------------------------------------------------------------------------

[[Page 26068]]

    Strong and consistent evidence demonstrates that timely tobacco 
dependence interventions for patients using tobacco can significantly 
reduce the risk of suffering from tobacco-related disease, as well as 
provide improved health outcomes for those already suffering from a 
tobacco-related disease.\18\ Research demonstrates that tobacco users 
hospitalized with psychiatric illnesses who enter into treatment can 
successfully overcome their tobacco dependence.\19\ Evidence also 
suggests that tobacco cessation treatment does not increase, and may 
even decrease, the risk of rehospitalization for tobacco users 
hospitalized with psychiatric illnesses.\20\ Research further 
demonstrates that effective tobacco cessation support across the care 
continuum can be provided with only a minimal additional effort and 
without harm to the mental health recovery process.\21\ We believe that 
the adoption of a measure that assesses tobacco use screening among 
patients of IPFs encourages the uptake of tobacco cessation treatment 
and its attendant benefits. We further believe that the reporting of 
this measure would afford consumers and others useful information in 
choosing among different facilities.
---------------------------------------------------------------------------

    \18\ U.S. Department of Health and Human Services. ``The health 
consequences of smoking: A report of the Surgeon General.'' Atlanta, 
GA, U.S. Department of Health and Human Services, Centers for 
Disease Control and Prevention, National Center for Chronic Disease 
Prevention and Health Promotion, Office on Smoking and Health, 2004.
    \19\ Prochaska, J.J., et al. ``Efficacy of Initiating Tobacco 
Dependence Treatment in Inpatient Psychiatry: A Randomized 
Controlled Trial.'' Am. J. Pub. Health. 2013 August 15; e1-e9.
    \20\ Ibid.
    \21\ Ibid.
---------------------------------------------------------------------------

    The Tobacco Use Screening (TOB-1) chart-abstracted proposed measure 
assesses hospitalized patients who are screened within the first three 
days of admission for tobacco use (cigarettes, smokeless tobacco, pipe, 
and cigar) within the previous 30 days. The numerator includes the 
number of patients who were screened for tobacco use status within the 
first 3 days of admission. The denominator includes the number of 
hospitalized inpatients 18 years of age and older. The measure excludes 
patients who: Are less than 18 years of age; are cognitively impaired; 
have a duration of stay less than or equal to 3 days, or greater than 
120 days; or have Comfort Measures Only documented.
    We refer readers to: http://www.jointcommission.org/specifications_manual_for_national_hospital_inpatient_quality_measures.aspx for further details on measure specifications.
    In the ``List of Measure under Consideration for December 1, 
2013,'' we originally proposed a similar measure to that proposed here, 
which was ``Preventive Care & Screening: Tobacco Use: Screening & 
Cessation Intervention (NQF 0028).'' However, the MAP determined that 
this measure did not meet the needs of the program and instead 
recommended we adopt an alternate measure from the Joint Commissions 
suite of measures for inpatient settings, which we are now proposing. 
This measure, and the following one (TOB-2 and 2a), best reflect the 
activities encompassed by the original NQF 0028 measure.
    The proposed measure was NQF-endorsed on March 7, 2014, and meets 
the measure selection criterion under section 1886(s)(4)(D)(i) of the 
Act.
4. Tobacco Use Treatment Provided or Offered (TOB-2) and Tobacco Use 
Treatment (TOB-2a) (NQF 1654)
    As stated in our discussion of the proposed TOB-1 measure, tobacco 
use is currently the single greatest cause of disease in the U.S. We 
also indicated that research demonstrates that timely tobacco cessation 
treatment for hospitalized tobacco users with psychiatric illnesses may 
decrease the risk of rehospitalization, have only a minimal additional 
effort, and not harm the mental health recovery process. We believe 
that the adoption of a measure that assesses tobacco use screening 
treatment among IPFs encourages the uptake of tobacco cessation 
treatment and its attendant benefits. We further believe that the 
reporting of this measure would afford consumers and others useful 
information in choosing among different facilities.
    The Tobacco Use Treatment Provided or Offered (TOB-2) and Tobacco 
Use Treatment (TOB-2a) chart-abstracted proposed measure is reported as 
an overall rate that includes all patients to whom tobacco use 
treatment was provided, or offered and refused, and a second rate, a 
subset of the first, which includes only those patients who received 
tobacco use treatment. The overall rate, TOB-2, assesses patients 
identified as tobacco product users within the past 30 days who receive 
or refuse practical counseling to quit, and receive or refuse Food and 
Drug Administration (FDA)-approved cessation medications during the 
first 3 days following admission. The numerator includes the number of 
patients who received or refused practical counseling to quit, and 
received or refused FDA-approved cessation medications during the first 
3 days after admission.
    The second rate, TOB-2a, assesses patients who received counseling 
and medication, as well as those who received counseling and had reason 
for not receiving the medication during the first 3 days following 
admission. The numerator includes the number of patients who received 
practical counseling to quit and received FDA-approved cessation 
medications during the first 3 days after admission.
    The denominator for both TOB-2 and TOB-2a includes the number of 
hospitalized inpatients 18 years of age and older identified as current 
tobacco users. The measure excludes patients who: Are less than 18 
years of age; are cognitively impaired; are not current tobacco users; 
refused or were not screened for tobacco use during the hospital stay; 
have a duration of stay less than or equal to 3 days, or greater than 
120 days; or have Comfort Measures Only documented.
    We refer readers to:http://www.jointcommission.org/specifications_manual_for_national_hospital_inpatient_quality_measures.aspx for 
further details on measure specifications.
    As with the proposed TOB-1 measure, and for the same reasons, we 
are proposing this measure on the recommendation of the MAP.
    The proposed measure was NQF-endorsed on March 7, 2014, and meets 
the measure selection criteria under section 1886(s)(4)(D)(i) of the 
Act. We also note that we are not proposing to adopt at this time two 
other tobacco treatment measures that are part of the set from which 
TOB-1, TOB-2 and TOB2a are taken. This is because the two measures we 
are proposing best encompass the activities that we originally proposed 
to measure through the use of the NQF 0028 measure, and best assess 
activities demonstrated to produce positive results in tobacco use 
reduction. Additionally, we believe that the other measures represent a 
significantly greater collection and reporting burden. We welcome 
comments on this choice as well as any other alternatives for 
measurement of this area.
d. Summary of Proposed Measures
    In addition to the eight measures that we previously finalized for 
the IPFQR Program, we are proposing two additional new measures for 
reporting for the FY 2016 payment determination and subsequent years. 
We are also proposing four additional new measures

[[Page 26069]]

for the FY 2017 payment determination and subsequent years. The tables 
below list the proposed new measures for the FY 2016 and FY 2017 
payment determinations and subsequent years.

 Table 13--Proposed New Quality Measures for the IPFQR Program for FY 2016 Payment Determination and Subsequent
                                                      Years
----------------------------------------------------------------------------------------------------------------
 National quality strategy priority            NQF No.                 Measure ID           Measure description
----------------------------------------------------------------------------------------------------------------
Patient- and Caregiver-Centered       N/A.....................  N/A.....................  Assessment of Patient
 Experience of Care.                                                                       Experience of Care.
Effective Communication and           N/A.....................  N/A.....................  Use of an Electronic
 Coordination of Care.                                                                     Health Record.
----------------------------------------------------------------------------------------------------------------


 Table 14--Proposed New Quality Measures for the IPFQR Program for FY 2017 Payment Determination and Subsequent
                                                      Years
----------------------------------------------------------------------------------------------------------------
 National quality strategy priority            NQF No.                 Measure ID           Measure description
----------------------------------------------------------------------------------------------------------------
Population/Community Health.........  1659....................  IMM-2...................  Influenza
                                                                                           Immunization.
Population/Community Health.........  0431....................  N/A.....................  Influenza Vaccination
                                                                                           Coverage Among
                                                                                           Healthcare Personnel.
Clinical Quality of Care............  1651....................  TOB-1...................  Tobacco Use Screening.
Clinical Quality of Care............  1654....................  TOB-2...................  Tobacco Use Treatment
                                                                TOB-2a..................   Provided or Offered
                                                                                           and Tobacco Use
                                                                                           Treatment.
----------------------------------------------------------------------------------------------------------------

    We welcome public comments on the Assessment of Patient Experience 
of Care, Use of an Electronic Health Record, IMM-2, Influenza 
Vaccination Coverage Among Healthcare Personnel, TOB-1, and TOB-2 
proposed measures.
e. Additional Proposed Procedural Requirements for the FY 2017 Payment 
Determination and Subsequent Years
    In addition to the quality measures that we have described above, 
we are proposing that IPFs must, beginning with reporting for the FY 
2017 payment determination, submit to CMS aggregate population counts 
for Medicare and non-Medicare discharges by age group, diagnostic 
group, and quarter, and sample size counts for measures for which 
sampling is performed (as is allowed for in HBIPS-4-7, and SUB-1). 
These requirements are separate from those described under subsection c 
of the section entitled ``Form, Manner, and Timing of Quality Data 
Submission.'' That subsection describes the population, sample size, 
and minimum reporting case threshold requirements for individual 
measures, while this section describes the collection of general 
population and sampling data that will assist in determining compliance 
with those requirements. We believe that it is vital for IPFs to 
accurately determine and submit to CMS their population and sampling 
size data in order for CMS to assess IPFs' data reporting completeness 
for their total population, both Medicare and non-Medicare. In addition 
to helping us better assess the quality and completeness of measure 
data, we expect that this information will improve our ability to 
assess the relevance and impact of potential future measures. For 
example, understanding that the size of subgroups of patients addressed 
by a particular measure varies greatly over time could be helpful in 
assessing the stability of reported measure values, and subsequent 
decisions concerning measure retention. Similarly, better understanding 
of the size of particular subgroups in the overall population will 
assist us in making choices among potential future measures specific to 
a particular subgroup (e.g., those with depression).
    We further propose that the form, manner, and timing of this 
submission would follow the policies discussed at section VIII. of this 
preamble, and that failure to provide this information would be subject 
to the 2.0 percentage point reduction in the annual update for any IPF 
that does not comply with quality data submission requirements, 
pursuant to section 1886(s)(4)(A)(i) of the Act.
f. Maintenance of Technical Specifications for Quality Measures
    We will provide a user manual that will contain links to measure 
specifications, data abstraction information, data submission 
information, a data submission mechanism known as the Web-based 
Measures Tool, and other information necessary for IPFs to participate 
in the IPFQR Program. This manual will be posted on the QualityNet Web 
site at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier2&cid=1228772250192. We will maintain the technical specifications for the quality 
measures by updating this manual periodically and including detailed 
instructions for IPFs to use when collecting and submitting data on the 
required measures. These updates will be accompanied by notifications 
to IPFQR Program participants, providing sufficient time between the 
change and effective dates in order to allow users to incorporate 
changes and updates to the measure specifications into data collection 
systems.
    Many of the quality measures used in different Medicare and 
Medicaid reporting programs are endorsed by the National Quality Forum 
(NQF). As part of its regular maintenance process for endorsed 
performance measures, the NQF requires measure stewards to submit 
annual measure maintenance updates and undergo maintenance of 
endorsement review every 3 years. In the measure maintenance process, 
the measure steward (owner/developer) is responsible for updating and 
maintaining the currency and relevance of the measure and will confirm 
existing or minor specification changes with NQF on an annual basis. 
NQF solicits information from measure stewards for annual reviews, and 
it reviews measures for continued endorsement in a specific 3-year 
cycle.
    We note that NQF's annual or triennial maintenance processes for 
endorsed measures may result in the NQF requiring updates to the 
measures in order to maintain endorsement status. We believe that it is 
important to have in place a subregulatory process to incorporate 
nonsubstantive updates required by the NQF into the measure 
specifications we have adopted for the HAC Reduction Program, so that 
these measures remain up-to-date.

[[Page 26070]]

    The NQF regularly maintains its endorsed measures through annual 
and triennial reviews, which may result in the NQF making updates to 
the measures. We believe that it is important to have in place a 
subregulatory process to incorporate non-substantive updates required 
by the NQF into the measure specifications we have adopted for the 
IPFQR Program so that these measures remain up-to-date. We also 
recognize that some changes the NQF might require to its endorsed 
measures are substantive in nature and might not be appropriate for 
adoption using a subregulatory process. Therefore, in the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53503 through 53505), we finalized a policy 
under which we will use a subregulatory process to make only non-
substantive updates to measures used for the IPFQR Program (77 FR 
53653). With respect to what constitutes substantive versus non-
substantive changes, we expect to make this determination on a case-by-
case basis. Examples of non-substantive changes to measures might 
include updated diagnosis or procedure codes, medication updates for 
categories of medications, broadening of age ranges, and exclusions for 
a measure (such as the addition of a hospice exclusion to the 30-day 
mortality measures). We believe that non-substantive changes may 
include updates to NQF-endorsed measures based upon changes to 
guidelines upon which the measures are based. As stated in the FY 2013 
IPPS/LTCH PPS final rule, we will revise the manual so that it clearly 
identifies the updates and provides links to where additional 
information on the updates can be found. We will also post the updates 
on the QualityNet Web site at https://www.QualityNet.org. We will 
provide 6 months for facilities to implement changes where changes to 
the data collection systems would be necessary.
    We will continue to use rulemaking to adopt substantive updates 
required by the NQF to the endorsed measures we have adopted for the 
IPFQR Program. Examples of changes that we might consider to be 
substantive would be those in which the changes are so significant that 
the measure is no longer the same measure, or when a standard of 
performance assessed by a measure becomes more stringent (for example: 
Changes in acceptable timing of medication, procedure/process, or test 
administration). Another example of a substantive change would be where 
the NQF has extended its endorsement of a previously endorsed measure 
to a new setting, such as extending a measure from the inpatient 
setting to hospice. These policies regarding what is considered 
substantive versus non-substantive would apply to all measures in the 
IPFQR Program. We also note that the NQF process incorporates an 
opportunity for public comment and engagement in the measure 
maintenance process.
    We believe this policy adequately balances our need to incorporate 
technical updates to all IPFQR Program measures in the most expeditious 
manner possible while preserving the public's ability to comment on 
updates that so fundamentally change an endorsed measure that it is no 
longer the same measure that we originally adopted. We invite public 
comments on this proposal.
6. New Quality Measures for Future Years
    As we have previously indicated, we seek to develop a comprehensive 
set of quality measures to be available for widespread use for informed 
decision-making and quality improvement in the inpatient psychiatric 
facilities setting. Therefore, through future rulemaking, we intend to 
propose new measures that will help further our goal of achieving 
better health care and improved health for Medicare beneficiaries who 
obtain inpatient psychiatric services through the widespread 
dissemination and use of quality information.
    As part of the 2013 Measures under Consideration (http://www.qualityforum.org/Setting_Priorities/Partnership/Measures_Under_Consideration_List.aspx), we identified ten possible measures for the 
IPFQR Program. We have proposed four of these measures for adoption in 
this proposed rule. Five of the measures are currently undergoing 
testing, and we anticipate that one or more would be proposed for 
adoption in the near future. These measures are:

 Suicide Risk Screening completed within one day of admission
 Violence Risk Screening completed within one day of admission
 Drug Use Screening completed within one day of admission
 Alcohol Use Screening completed within one day of admission
 Metabolic Screening

    We also are currently planning to develop a 30-day psychiatric 
readmission measure. Similar to readmission measures currently in use 
for other CMS quality reporting programs such as the Hospital Inpatient 
Quality Reporting Program, we envision that this measure would 
encompass all 30-day readmissions for discharges from IPFs, including 
readmissions for non-psychiatric diagnoses. Additionally, we intend to 
develop a standardized survey of patient experience of care tailored 
for use in inpatient psychiatric settings, but also sharing elements 
with similar surveys in use in other CMS reporting programs.
    We further anticipate that we will recommend additional measures 
for development or adoption in the future. We intend to develop a 
measure set that effectively assesses IPF quality across the range of 
services and diagnoses, encompasses all of the goals of the CMS quality 
strategy, addresses measure gaps identified by the MAP and others, and 
minimizes collection and reporting burden. Finally, we may propose the 
removal of some measures in the future, should one or more no longer 
reflect significant variation in quality among IPFs, or prove to be 
less effective than alternative measures in measuring the intended 
focus area.
    We welcome public comments on any aspect of these plans for measure 
development, recommendations for adoption of other measures for the 
IPFQR Program, particularly related to measures of access, or 
suggestions for domains or topics for future measure development.
7. Proposed Public Display and Review Requirements
    Section 1886(s)(4)(E) of the Act requires the Secretary to 
establish procedures for making the data submitted under the IPFQR 
Program available to the public. The statute also requires that these 
procedures shall ensure that an IPF has the opportunity to review the 
data that is to be made public with respect to the IPF prior to the 
data being made public.
    In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50897 through 
50898), we adopted our proposal to change our policies to better align 
the IPFQR Program preview and display periods with those under the 
Hospital IQR Program. For the FY 2014 payment determination and 
subsequent years, we adopted our proposed policy to publicly display 
the submitted data on a CMS Web site in April of each calendar year 
following the start of the respective payment determination year. In 
other words, the public display period for the FY 2014 payment 
determination would be April 2014; the public display periods for the 
FY 2015 and FY 2016 payment determinations would be April 2015 and 
April 2016 respectively, and so forth. We also adopted our proposed 
policy that the preview period for the FY 2014 payment determination 
and subsequent years be modified from

[[Page 26071]]

September 20 through October 19 (78 FR 50898) to 30 days, approximately 
twelve weeks prior to the public display of the data. The table below 
sets out the public display timeline.

                                        Table 15--Public Display Timeline
----------------------------------------------------------------------------------------------------------------
  Payment determination (fiscal year)       Reporting period (calendar year)      Public display (calendar year)
----------------------------------------------------------------------------------------------------------------
2015..................................  Q2 2013 (April 1, 2013-June 30, 2013)...  April 2015.
                                        Q3 2013 (July 1, 2013-September 30,
                                         2013)..
                                        Q4 2013 (October 1, 2013-December 31,
                                         2013)..
2016..................................  Q1 2014 (January 1, 2014-March 31, 2014)  April 2016.
                                        Q2 2014 (April 1, 2014-June 30, 2014)...
                                        Q3 2014 (July 1, 2014-September 30,
                                         2014)..
                                        Q4 2014 (October 1, 2014-December 31,
                                         2014)..
2017..................................  Q1 2015 (January 1, 2015-March 31, 2015)  April 2017.
                                        Q2 2015 (April 1, 2015-June 30, 2015)...
                                        Q3 2015 (July 1, 2015-September 30,
                                         2015)..
                                        Q4 2015 (October 1, 2015-December 31,
                                         2015)..
----------------------------------------------------------------------------------------------------------------

Although we have listed the public display timeline only for the FY 
2015 through FY 2017 payment determinations, we wish to clarify that 
this policy applies to the FY 2015 payment determination and subsequent 
years. We are not proposing any changes to these policies.
8. Form, Manner, and Timing of Quality Data Submission
a. Procedural and Submission Requirements
    Section 1886(s)(4)(C) of the Act requires that, for the FY 2014 
payment determination and subsequent years, each IPF shall submit to 
the Secretary data on quality measures as specified by the Secretary. 
Such data shall be submitted in a form and manner, and at a time, 
specified by the Secretary. As required by section 1886(s)(4)(A) of the 
Act, for any IPF that fails to submit quality data in accordance with 
section 1886(s)(4)(C) of the Act, the Secretary will reduce the annual 
update to a standard Federal rate for discharges occurring in such 
fiscal year by 2.0 percentage points. In the FY 2013 IPPS/LTCH PPS 
final rule (77 FR 53655 through 53656), we finalized a policy requiring 
that IPFs submit aggregate data on measures on an annual basis via the 
Web-Based Measures Tool found in the IPF section on the QualityNet Web 
site. The complete data submission requirements, submission deadlines, 
and data submission mechanism, known as the Web-Based Measures Tool, 
are posted on the QualityNet Web site at: http://www.qualitynet.org/. 
The data input forms on the QualityNet Web site for submission require 
aggregate data for each separate quarter. Therefore, IPFs need to track 
and maintain quarterly records for their data. In that final rule, we 
also clarified that this policy applies to all subsequent years, unless 
and until we change our policy through future rulemaking.
    In order to participate in the IPFQR Program, in the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53654 through 53655) and in the FY 2014 
IPPS/LTCH PPS final rule (77 FR 50898 through 50899), we required IPFs 
to comply with certain procedural requirements. We refer readers to the 
FY 2014 IPPS/LTCH PPS final rule (77 FR 50898 through 50899) for 
further details on specific procedural requirements.
    We are not proposing any changes to this policy.
b. Reporting Periods and Submission Timeframes
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53655 through 
53657), we established reporting periods and submission timeframes for 
the FY 2014, FY 2015, and FY 2016 payment determinations, but we did 
not require any data validation approach. However, as we stated in that 
final rule, we encourage IPFs to use a validation method and conduct 
their own analysis. In that final rule, we also explained that the 
reporting periods for the FY 2014 and FY 2015 payment determinations 
were 6 and 9 months, respectively, to allow us to achieve a 12-month 
(calendar year) reporting period for the FY 2016 payment determination. 
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50901), we clarified 
that the policy we adopted for the FY 2016 payment determination also 
applies to the FY 2017 payment determination and subsequent years 
unless we change it through rulemaking. We also indicated that the 
submission timeframe is between July 1 and August 15 of the calendar 
year in which the applicable payment determination year begins.
    We are not proposing any changes to this submission timeframe, 
which we finalized in the FY 2014 IPPS/LTCH PPS final rule for all 
future payment determinations. IPFs will have the opportunity to review 
and correct data that they have submitted during the entirety of July 
1-August 15. We have summarized this information in the table below.

     Table 16--Quality Reporting Periods and Submission Timeframes for the FY 2015 Payment Determination and
                                                Subsequent Years
----------------------------------------------------------------------------------------------------------------
 Payment determination  (fiscal      Reporting period for services
              year)                    provided (calendar year)                Data submission timeframe
----------------------------------------------------------------------------------------------------------------
 Quality Reporting Periods and Submission Timeframes for the FY 2015 Payment Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
FY 2015.........................  Q2 2013 (April 1, 2013-June 30,     July 1, 2014-August 15, 2014.
                                   2013).
                                  Q3 2013 (July 1, 2013-September
                                   30, 2013)..
                                  Q4 2013 (October 1, 2013-December
                                   31, 2013)..

[[Page 26072]]

 
FY 2016.........................  Q1 2014 (January 1, 2014-March 31,  July 1, 2015-August 15, 2015.
                                   2014).
                                  Q2 2014 (April 1, 2014-June 30,
                                   2014)..
                                  Q3 2014 (July 1, 2014-September
                                   30, 2014)..
                                  Q4 2014 (October 1, 2014-December
                                   31, 2014)..
FY 2017.........................  Q1 2015 (January 1, 2015-March 31,  July 1, 2016-August 15, 2016.
                                   2015).
                                  Q2 2015 (April 1, 2015-June 30,
                                   2015)..
                                  Q3 2015 (July 1, 2015-September
                                   30, 2015)..
                                  Q4 2015 (October 1, 2015-December
                                   31, 2015)..
----------------------------------------------------------------------------------------------------------------

    We have adopted the timeframes discussed above for all future 
payment years of the program, and these timeframes will remain in place 
unless and until we change them through future rulemaking. Therefore, 
our policy with respect to reporting timeframes is that the reporting 
period is the calendar year preceding the calendar year in which the 
payment determination year begins. The data submission timeframe is 
between July 1 and August 15 of the calendar year in which the 
applicable payment determination year begins. We will continue to 
provide charts with the specific reporting and data submission 
timeframes for future years as we approach those years.
c. Population, Sampling, and Minimum Case Threshold
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53657 through 
53658), for the FY 2014 payment determination and subsequent years, we 
finalized our proposed policy that participating IPFs must meet 
specific population, sample size, and minimum reporting case threshold 
requirements as specified in TJC's Specifications Manual. We refer 
readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 58901 through 
58902). We are not proposing any changes to this policy. We refer 
participating IPFs to TJC's Specifications Manual (https://manual.jointcommission.org/bin/view/Manual/WebHome) for measure-
specific population, sampling, and minimum case threshold requirements.
d. Data Accuracy and Completeness Acknowledgement (DACA) Requirements
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53658), we finalized 
our proposed DACA policy for the FY 2014 payment determination and 
subsequent years. We refer readers to that final rule for further 
details on DACA policies.
    We are not proposing any changes to the quarterly reporting periods 
and DACA deadline. Therefore, we will continue our adopted policy that 
the deadline for submission of the DACA form is no later than August 15 
prior to the applicable IPFQR Program payment determination year. The 
table below summarizes these policies and timeframes.

                                       Table 17--DACA Submission Deadline
----------------------------------------------------------------------------------------------------------------
                           Reporting period for
  Payment determination      services provided        Submission          DACA  deadline       Public  display
      (fiscal year)           (calendar year)          timeframe
----------------------------------------------------------------------------------------------------------------
2015.....................  Q2 2013 (April 1,     July 1, 2014-August   August 15, 2014.....  April 2015.
                            2013-June 30, 2013).  15, 2014.
                           Q3 2013 (July 1,
                            2013-September 30,
                            2013)..
                           Q4 2013 (October 1,
                            2013-December 31,
                            2013)..
2016.....................  Q1 2014 (January 1,   July 1, 2015-August   August 15, 2015.....  April 2016.
                            2014-March 31,        15, 2015.
                            2014).
                           Q2 2014 (April 1,
                            2014-June 30,
                            2014)..
                           Q3 2014 (July 1,
                            2014-September 30,
                            2014)..
                           Q4 2014 (October 1,
                            2014-December 31,
                            2014)..
2017.....................  Q1 2015 (January 1,   July 1, 2016-August   August 15, 2016.....  April 2017.
                            2015-March 31,        15, 2016.
                            2015).
                           Q2 2015 (April 1,
                            2015-June 30,
                            2015)..
                           Q3 2015 (July 1,
                            2015-September 30,
                            2015)..
                           Q4 2015 (October 1,
                            2015-December 31,
                            2015)..
----------------------------------------------------------------------------------------------------------------

    We would like to clarify that the DACA policies adopted in the FY 
2013 IPPS/LTCH PPS final rule will continue to apply for the FY 2014 
payment determination and subsequent years unless and until we change 
these policies through our rulemaking process.
9. Reconsideration and Appeals Procedures
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53658 through 
53659), we adopted a reconsideration process, later codified at 42 CFR 
412.434, whereby IPFs can request a reconsideration of their payment 
update reduction in the event that an IPF believes that its annual 
payment update has been incorrectly reduced for failure to report 
quality data under the IPFQR Program. We refer readers to that final 
rule, as well as the FY 2014 IPPS/LTCH PPS final rule (78 FR 50903), 
for further details on the reconsideration process.
10. Exceptions to Quality Reporting Requirements
    In our experience with other quality reporting and/or performance 
programs, we have noted occasions where participants have been unable 
to submit required quality data due to extraordinary circumstances that 
are not within their control (for example, natural disasters). It is 
our goal to avoid penalizing IPFs in these circumstances or unduly 
increasing their burden during these times. Therefore, in the FY 2013 
IPPS/LTCH PPS final rule (77 FR

[[Page 26073]]

53659 through 53660), we adopted a policy that, for the FY 2014 payment 
determination and subsequent years, IPFs may request, and we may grant, 
an exception with respect to the reporting of required quality data 
where extraordinary circumstances beyond the control of the IPF may 
warrant. We wish to clarify that use of the term ``exception'' in this 
proposed rule is synonymous with the term ``waiver'' as used in 
previous rules. We are in the process of revising the Extraordinary 
Circumstances/Disaster Extension or Waiver Request form (CMS-10432), 
approved under OMB control number 0938-1171. Revisions to the form are 
being addressed in the FY 2015 Inpatient Prospective Payment System 
(IPPS) rule (RIN 0938-AS11; CMS-1607-P) in the section entitled 
``Hospital IQR Program Extraordinary Circumstances Extensions or 
Exemptions''. These efforts will work to facilitate alignment across 
CMS quality reporting programs.
    When an exception is granted, IPFs will not incur payment 
reductions for failure to comply with IPFQR Program requirements. This 
process does not preclude us from granting exceptions, including 
extensions, to IPFs that have not requested them, should we determine 
that an extraordinary circumstance affects an entire region or locale. 
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53659 
through 53660), as well as the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50903), for further details on this process. We are not proposing any 
changes to this process.
    For the FY 2016 payment determination and subsequent years, we are 
proposing to add an Extraordinary Circumstances Exception to the IPFQR 
Program in order to align with similar exceptions provided for in other 
CMS quality reporting programs. Under this exception, we are proposing 
that we may grant a waiver or extension to IPFs if we determine that a 
systemic problem with one of our data collection systems directly 
affects the ability of the IPFs to submit data. Because we do not 
anticipate that these types of systemic errors will occur often, we do 
not anticipate granting a waiver or extension on this basis frequently. 
If we make the determination to grant a waiver or extension, we are 
proposing to communicate this decision through routine communication 
channels to IPFs, vendors, and quality improvement organizations (QIOs) 
by means of, for example, memoranda, emails, and notices on the 
QualityNet Web site.
    We welcome public comment on this proposal.

IX. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of the section 
3506(c)(2)(A)-required issues for the following information collection 
requirements (ICRs):

A. ICRs Regarding the Inpatient Psychiatric Facilities Quality 
Reporting (IPFQR) Program

    This section IX.A sets out the estimated burden (hours and cost) 
for inpatient psychiatric facilities (IPFs) to comply with the 
reporting requirements proposed in this NPRM. It also restates the 
burden estimated in the FY 2013 and FY 2014 IPPS/LTCH PPS final rules.
    In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53644), we finalized 
policies to implement the IPFQR Program. The Program implements the 
statutory requirements of section 1886(s)(4) of the Social Security 
Act, as added by sections 3401(f) and 10322(a) of the Affordable Care 
Act. One program priority is to help achieve better health and better 
health care for individuals through the collection of valid, reliable, 
and relevant measures of quality health care data. The data will be 
publicly posted and, therefore, available for use in improving health 
care quality which, in turn, works to further program goals. IPFs can 
use this quality data for many purposes, including in their risk 
management programs, patient safety and quality improvement 
initiatives, and research and development of mental health programs, 
among others.
    As clarified throughout the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50887), policies finalized in prior rules will apply to FY 2015 unless 
and until we change them through future rulemaking. The burden on IPFs 
includes the time used for chart abstraction and for personnel training 
on the collection of chart-abstracted data, the aggregation of data, as 
well as training for the submission of aggregate-level data through 
QualityNet. We note that, beginning in the FY 2016 payment 
determination, as set out in this proposed rule, we have proposed to 
adopt the Assessment of Patient Experience of Care measure, thereby 
removing the request for voluntary information adopted in the FY 2014 
IPPS/LTCH PPS final rule.
    Based on current participation rates, we estimate that there will 
be approximately 574 fewer IPF facilities (or 1,626 facilities) 
nationwide eligible to participate in the IPFQR Program. Based on 
previous measure data submission, we further estimate that the average 
facility submits measure data on 556 cases per year. In total, this 
calculates to 904,056 cases (aggregate) per year.
    In section V of this preamble, we are proposing that, for the FY 
2016 payment determination and subsequent years, IPFs must submit data 
on the following proposed new measures: Assessment of Patient 
Experience of Care, and Use of an Electronic Health Record. Because 
both of these measures require only an annual acknowledgement, we 
anticipate a negligible additional burden on IPFs.
    In the same section of this preamble, we are proposing that, for 
the FY 2017 payment determination and subsequent years, IPFs must 
submit aggregate data on the following proposed new measures: Influenza 
Immunization (IMM-2), Influenza Vaccination Coverage Among Healthcare 
Personnel, Tobacco Use Screening (TOB-1), and Tobacco Use Treatment 
Provided or Offered (TOB-2) and Tobacco Use Treatment (TOB-2a).
    We estimate that the average time spent for chart abstraction per 
patient for each of these proposed measures is approximately 15 
minutes. Assuming an approximately uniform sampling methodology, we 
estimate (based on prior Program data) that the annual burden for 
reporting the IMM-2 measure would be 139 hours per year of annual 
effort per facility (556 x 0.25). This same calculation also applies to 
the TOB-1, and TOB-2 and TOB-2a proposed measures. The Influenza 
Vaccination Coverage Among Healthcare Personnel proposed measure does 
not allow sampling; therefore, we anticipate that the average facility 
would be required to abstract approximately 40 healthcare personnel,

[[Page 26074]]

totaling an annual effort per facility of 10 hours (40 x 0.25). We 
anticipate no measurable burden for the Inpatient Psychiatric Facility 
Routinely Assesses Patient Experience of Care measure and the Use of an 
Electronic Health Record measure because both require only attestation.
    In total, for proposed measures, we estimate an additional 427 
hours of annual effort per facility for the FY 2017 payment 
determination and subsequent years. The following table summarizes the 
estimated hours (per facility) for each measure.

                                 Table 18--Estimated Annual Effort per Facility
----------------------------------------------------------------------------------------------------------------
                                                                Estimated cases     Effort (per    Annual effort
                           Measure                               (per facility)        case)      (per facility)
----------------------------------------------------------------------------------------------------------------
Assessment of Patient Experience of Care.....................                * 0           * n/a             * 0
Use of an Electronic Health Record...........................                * 0           * n/a             * 0
IMM-2........................................................                556        ** \1/4\             139
Influenza Vaccination Coverage Among Healthcare Personnel....                 40        ** \1/4\              10
TOB-1........................................................                556        ** \1/4\             139
TOB-2, TOB-2a................................................                556        ** \1/4\             139
                                                              --------------------------------------------------
    Total....................................................  .................  ..............             427
----------------------------------------------------------------------------------------------------------------
* New non-measurable attestation burden.
** Hour.

    The Bureau of Labor Statistics wage estimate for health care 
workers that are known to engage in chart abstraction is $31.71/hour. 
To account for overhead and fringe benefits we have doubled this 
estimate to $63.42/hour. Considering the 427 hours of annual effort 
(per facility) for the FY 2017 payment determination and subsequent 
years, the annual cost is approximately $27,080.34 (63.42 x 427). 
Across all 1,626 IPFs, the aggregate total is $44,032,632.84 (1,626 x 
27,080.34).
    The estimated burden for training personnel for data collection and 
submission for current and future measures is 2 hours per facility. The 
cost for this training, based on an hourly rate of $63.42, is $126.84 
training costs for each IPF (63.42 x 2), which totals $206,241.84 for 
all facilities (1,626 x 126.84).
    Using an estimated 1,626 IPFs nationwide that are eligible for 
participation in the IPFQR Program, we estimate that the annual hourly 
burden for the collection, submission, and training of personnel for 
submitting all quality measures is approximately 429 hours (per IPF) or 
697,554 (aggregate) per year. The all-inclusive measure cost for each 
facility is approximately $27,207.18 (27,080.34 + 126.84) and for all 
facilities we estimate a cost of $44,238,874.68 (44,032,632.84 + 
206,241.84).
    In section V of this preamble, for the FY 2017 payment 
determination, we are proposing that IPFs submit to CMS aggregate 
population counts for Medicare and non-Medicare discharges by age 
group, diagnostic group, and quarter, and sample size counts for 
measures for which sampling is performed (as is allowed for in HBIPS-4 
through-7, and SUB-1). We estimate that it will take each facility 
approximately 2.5 hours to comply with this requirement. The burden 
across all 1,626 IPFs calculates to 4,065 hours annually (2.5 x 1,626) 
at a total of $257,802.30 (4,065 x 63.42) or $158.55 per IPF (2.5 x 
63.42).
    The following tables set out the total estimated burden that IPFs 
would incur to comply with the proposed reporting requirements for both 
measure and non-measure data for the FY 2016 and FY 2017 payment 
determinations.

    Table 19--Summary of Burden Estimates (Office of Management and Budget Control Number 0938-1171, CMS-10432) for the FY 2016 Payment Determination
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Labor cost
                                                                                                  Facility    Total annual        of
               Fiscal year 2016                       Number of measures          Respondents      burden    burden (hours)   reporting   Total cost ($)
                                                                                                  (hours)                       ($/hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
From this FY 2015 proposed rule..............  2 (attestation only)...........           1,626            0               0            0               0
                                               training.......................           1,626            0               0            0               0
                                                                               -------------------------------------------------------------------------
    Total....................................  ...............................           1,626            0               0            0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Table 20--Summary of Burden Estimates (Office of Management and Budget Control Number 0938-1171, CMS-10432) for the FY 2017 Payment Determination
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Labor cost
                                                                                                              Total annual        of
            Fiscal year 2017                 Number of measures       Respondents   Facility burden (hours)  burden (hours)   reporting   Total cost ($)
                                                                                                                                ($/hr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
From this FY 2015 proposed rule........  4........................           1,626       427 (139 x 3 + 10)         694,302        63.42   44,032,632.84
                                         2 (attestation only).....  ..............  .......................               0  ...........  ..............
 
                                         training.................  ..............                        2           3,252  ...........      206,241.84
                                                                   -------------------------------------------------------------------------------------

[[Page 26075]]

 
    Subtotal...........................  .........................           1,626                      429         697,554        63.42   44,238,874.68
From this FY 2015 proposed rule........  Non-measure data.........           1,626                     2.50           4,065        63.42      257,802.30
                                                                   -------------------------------------------------------------------------------------
        Total..........................  .........................           1,626                   431.50         701,619        63.42   44,496,676.98
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We are not proposing any changes to the administrative, reporting, 
or submission requirements for the measures previously finalized in the 
FY 2013 IPPS/LTCH PPS final rule (77 FR 53654 through 53657) and the FY 
2014 IPPS/LTCH PPS final rule (78 FR 50898 through 50903), except that 
we are removing the Request for Voluntary Information--IPF Assessment 
of Patient Experience of Care section because of the Assessment of 
Patient Experience of Care proposed measure.

B. Summary of Proposed Burden Adjustments (OCN 0938-1171, CMS-10432)

    In the FY 2014 final rule (78 FR 50964), we estimated that the 
annual hourly burden per IPF for the collection, submission, and 
training of personnel for submitting all quality measures was 
approximately 761 hours. This figure represented an estimate for all 
measures, both previously and newly finalized, in the Program. We 
further stated that because we were unable to estimate how many IPFs 
will participate, we could not estimate the aggregate impact.
    Because the estimates we present herein, including the estimated 
annual burden of 431.5 hours per IPF, represent estimates only for 
proposed measures and non-measure data collection and submission 
requirements, an accurate comparison with estimates presented in the FY 
2014 final rule is not possible.

C. ICRs Regarding the Hospital and Health Care Complex Cost Report 
(CMS-2552-10)

    This proposed rule would not impose any new or revised collection 
of information requirements associated with CMS-2552-10 (as discussed 
under preamble section IV.B.). Consequently, the cost report does not 
require additional OMB review under the authority of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The report's 
information collection requirements and burden estimates have been 
approved by OMB under OCN 0938-0052.

D. ICRs Regarding Exceptions to Quality Reporting Requirements

    As discussed in section VIII.10 of this preamble, we are in the 
process of revising the Extraordinary Circumstances/Disaster Extension 
or Waiver Request form, currently approved under OMB control number 
0938-1171. Revisions to the form are being addressed in the FY 2015 
Inpatient Prospective Payment System rule (RIN 0938-AS11, CMS-1607-P). 
In that rule we propose to update the form's instructions and simplify 
the form so that a hospital or facility may apply for an extension for 
all applicable quality reporting programs at the same time.

E. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. These requirements are not effective until they have been 
approved by the OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed paperwork collections referenced above, access CMS' 
Web site at http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/index.html, 
or call the Reports Clearance Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you comment on these information collection and 
recordkeeping requirements, please submit your comments electronically 
as specified in the ADDRESSES section of this proposed rule.
    PRA-related comments must be received on/by July 7, 2014.

X. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

XI. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule would update the prospective payment rates for 
Medicare inpatient hospital services provided by IPFs for discharges 
occurring during the FY beginning October 1, 2014, through September 
30, 2015. We are applying the FY 2008-based RPL market basket increase 
of 2.7 percent, less the productivity adjustment of 0.4 percentage 
point as required by 1886(s)(2)(A)(i) of the Act, and less the 0.3 
percentage point required by sections 1886(s)(2)(A)(ii) and 
1886(s)(3)(C) of the Act. In this proposed rule, we also address the 
implementation of the International Classification of Diseases, 10th 
Revision, Clinical Modification (ICD-10-CM/PCS) for the IPF prospective 
payment system, and describe new quality reporting requirements for the 
IPFQR Program.

B. Overall Impact

    We have examined the impact of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct 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

[[Page 26076]]

effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for a major rules with economically 
significant effects ($100 million or more in any 1 year). This proposed 
rule is designated as economically ``significant'' under section 
3(f)(1) of Executive Order 12866.
    We estimate that the total impact of these changes for FY 2015 
payments compared to FY 2014 payments will be a net increase of 
approximately $100 million. This reflects a $95 million increase from 
the update to the payment rates, as well as a $5 million increase as a 
result of the update to the outlier threshold amount. Outlier payments 
are estimated to increase from 1.9 percent in FY 2014 to 2.0 percent in 
FY 2015.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most IPFs and most other providers and 
suppliers are small entities, either by nonprofit status or having 
revenues of $7 million to $35.5 million or less in any 1 year, 
depending on industry classification (for details, refer to the SBA 
Small Business Size Standards found at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf), or being nonprofit 
organizations that are not dominant in their markets.
    Because we lack data on individual hospital receipts, we cannot 
determine the number of small proprietary IPFs or the proportion of 
IPFs' revenue derived from Medicare payments. Therefore, we assume that 
all IPFs are considered small entities. The Department of Health and 
Human Services generally uses a revenue impact of 3 to 5 percent as a 
significance threshold under the RFA.
    As shown in Table 21, we estimate that the overall revenue impact 
of this proposed rule on all IPFs is to increase Medicare payments by 
approximately 2.1 percent. As a result, since the estimated impact of 
this proposed rule is a net increase in revenue across all categories 
of IPFs, the Secretary has determined that this proposed rule would 
have a positive revenue impact on a substantial number of small 
entities. MACs are not considered to be small entities. Individuals and 
States are not included in the definition of a small entity.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a metropolitan statistical area and has fewer than 100 beds. As 
discussed in detail below, the rates and policies set forth in this 
proposed rule would not have an adverse impact on the rural hospitals 
based on the data of the 310 rural units and 74 rural hospitals in our 
database of 1,626 IPFs for which data were available. Therefore, the 
Secretary has determined that this proposed rule would not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    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 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2014, that 
threshold is approximately $141 million. This proposed rule will not 
impose spending costs on state, local, or tribal governments in the 
aggregate, or by the private sector, of $141 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 proposed rule would not have a 
substantial effect on state and local governments.

C. Anticipated Effects

    We discuss the historical background of the IPF PPS and the impact 
of this proposed rule on the Federal Medicare budget and on IPFs.
1. Budgetary Impact
    As discussed in the November 2004 and May 2006 IPF PPS final rules, 
we applied a budget neutrality factor to the Federal per diem and ECT 
base rates to ensure that total estimated payments under the IPF PPS in 
the implementation period would equal the amount that would have been 
paid if the IPF PPS had not been implemented. The budget neutrality 
factor includes the following components: outlier adjustment, stop-loss 
adjustment, and the behavioral offset. As discussed in the May 2008 IPF 
PPS notice (73 FR 25711), the stop-loss adjustment is no longer 
applicable under the IPF PPS.
    In accordance with Sec.  412.424(c)(3)(ii), we indicated that we 
will evaluate the accuracy of the budget neutrality adjustment within 
the first 5 years after implementation of the payment system. We may 
make a one-time prospective adjustment to the Federal per diem and ECT 
base rates to account for differences between the historical data on 
cost-based TEFRA payments (the basis of the budget neutrality 
adjustment) and estimates of TEFRA payments based on actual data from 
the first year of the IPF PPS. As part of that process, we will 
reassess the accuracy of all of the factors impacting budget 
neutrality. In addition, as discussed in section VII.C.1 of this 
proposed rule, we are using the wage index and labor-related share in a 
budget neutral manner by applying a wage index budget neutrality factor 
to the Federal per diem and ECT base rates.
    Therefore, the budgetary impact to the Medicare program of this 
proposed rule will be due to the market basket update for FY 2015 of 
2.7 percent (see section V.B. of this proposed rule) less the 
productivity adjustment of 0.4 percentage point required by section 
1886(s)(2)(A)(i) of the Act, less the ``other adjustment'' of 0.3 
percentage point under sections 1886(s)(2)(A)(ii) and 1886(s)(3)(C) of 
the Act, and the update to the outlier fixed dollar loss threshold 
amount.
    We estimate that the FY 2015 impact will be a net increase of $100 
million in payments to IPF providers. This reflects an estimated $95 
million increase from the update to the payment rates and a $5 million 
increase due to the update to the outlier threshold amount to increase 
outlier payments from approximately 1.9 percent in FY 2014 to 2.0 
percent in FY 2015. This estimate does not include the implementation 
of the required 2 percentage point reduction of the market basket 
increase factor for any IPF that fails to meet the IPF quality 
reporting requirements (as discussed in section 4 below).
2. Impact on Providers
    To understand the impact of the changes to the IPF PPS on 
providers, discussed in this proposed rule, it is necessary to compare 
estimated payments under the IPF PPS rates and factors for FY 2015 
versus those under FY 2014. The estimated payments for FY 2014 and FY 
2015 will be 100 percent of the IPF PPS payment, since the transition 
period has ended and stop-loss payments are no longer paid. We 
determined the percent change of estimated FY 2015 IPF PPS payments to 
FY 2014 IPF PPS payments for each category of IPFs. In addition, for 
each category of IPFs, we have included the estimated percent change in 
payments resulting from the update to the outlier

[[Page 26077]]

fixed dollar loss threshold amount, the labor-related share and wage 
index changes for the FY 2015 IPF PPS, and the market basket update for 
FY 2015, as adjusted by the productivity adjustment according to 
section 1886(s)(2)(A)(i), and the ``other adjustment'' according to 
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(C) of the Act.
    To illustrate the impacts of the FY 2015 changes in this proposed 
rule, our analysis begins with a FY 2014 baseline simulation model 
based on FY 2013 IPF payments inflated to the midpoint of FY 2014 using 
IHS Global Insight Inc.'s most recent forecast of the market basket 
update (see section IV.C. of this proposed rule); the estimated outlier 
payments in FY 2014; the CBSA designations for IPFs based on OMB's MSA 
definitions after June 2003; the FY 2013 pre-floor, pre-reclassified 
hospital wage index; the FY 2014 labor-related share; and the FY 2014 
percentage amount of the rural adjustment. During the simulation, the 
total estimated outlier payments are maintained at 2 percent of total 
IPF PPS payments.
    Each of the following changes is added incrementally to this 
baseline model in order for us to isolate the effects of each change:
     The update to the outlier fixed dollar loss threshold 
amount.
     The FY 2014 pre-floor, pre-reclassified hospital wage 
index and FY 2015 labor-related share.
     The market basket update for FY 2015 of 2.7 percent less 
the productivity adjustment of 0.4 percentage point reduction in 
accordance with section 1886(s)(2)(A)(i) of the Act and less the 
``other adjustment'' of 0.3 percentage point in accordance with 
sections 1886(s)(2)(A)(ii) and 1886(s)(3)(C) of the Act.
    Our final comparison illustrates the percent change in payments 
from FY 2014 (that is, October 1, 2013, to September 30, 2014) to FY 
2015 (that is, October 1, 2014, to September 30, 2015) including all 
the changes in this proposed rule.

                                     Table 21--IPF Impact Table for FY 2015
                                  [Projected impacts (% Change in columns 3-6]
----------------------------------------------------------------------------------------------------------------
                                                                     CBSA wage       Adjusted
        Facility by type             Number of        Outlier     index &  labor  market  basket  Total  percent
                                    facilities                         share         update \1\      change \2\
(1)                                          (2)             (3)             (4)             (5)             (6)
----------------------------------------------------------------------------------------------------------------
All Facilities..................           1,626             0.1             0.0             2.0             2.1
Total Urban.....................           1,242             0.1             0.0             2.0             2.1
Total Rural.....................             384             0.1            -0.2             2.0             1.9
Urban unit......................             829             0.1             0.1             2.0             2.2
Urban hospital..................             413             0.0             0.0             2.0             2.0
Rural unit......................             310             0.1            -0.1             2.0             2.0
Rural hospital..................              74             0.0            -0.3             2.0             1.7
By Type of Ownership:
Freestanding IPFs
    Urban Psychiatric Hospitals
        Government..............             129             0.1             0.0             2.0             2.0
        Non-Profit..............              99             0.1             0.2             2.0             2.3
        For-Profit..............             185             0.0            -0.2             2.0             1.8
    Rural Psychiatric Hospitals
        Government..............              36             0.1             0.3             2.0             2.4
        Non-Profit..............              13             0.1            -0.1             2.0             1.9
        For-Profit..............              25             0.0            -0.8             2.0             1.2
IPF Units
    Urban
        Government..............             129             0.2             0.1             2.0             2.3
        Non-Profit..............             543             0.1             0.1             2.0             2.2
        For-Profit..............             157             0.1            -0.1             2.0             1.9
    Rural                         ..............  ..............  ..............  ..............  ..............
        Government..............              75             0.1            -0.1             2.0             1.9
        Non-Profit..............             169             0.1            -0.1             2.0             1.9
        For-Profit..............              66             0.1            -0.1             2.0             2.0
By Teaching Status:
    Non-teaching................           1,427             0.1             0.0             2.0             2.0
    Less than 10% interns and                108             0.1             0.2             2.0             2.3
     residents to beds..........
    10% to 30% interns and                    68             0.1             0.0             2.0             2.2
     residents to beds..........
    More than 30% interns and                 23             0.2             0.5             2.0             2.7
     residents to beds..........
By Region:
    New England.................             109             0.1             0.1             2.0             2.2
    Mid-Atlantic................             251             0.1             0.6             2.0             2.7
    South Atlantic..............             234             0.1            -0.3             2.0             1.7
    East North Central..........             260             0.1            -0.2             2.0             1.9
    East South Central..........             166             0.1            -0.3             2.0             1.8
    West North Central..........             143             0.1            -0.3             2.0             1.8
    West South Central..........             238             0.0            -0.5             2.0             1.6
    Mountain....................             103             0.1            -0.3             2.0             1.7
    Pacific.....................             122             0.1             1.0             2.0             3.1
By Bed Size:
    Psychiatric Hospitals         ..............  ..............  ..............  ..............  ..............
        Beds: 0-24..............              88             0.0            -0.3             2.0             1.7
        Beds: 25-49.............              67             0.0            -0.1             2.0             1.9

[[Page 26078]]

 
        Beds: 50-75.............              88             0.0            -0.1             2.0             2.0
        Beds: 76 +..............             244             0.0             0.0             2.0             2.0
    Psychiatric Units             ..............  ..............  ..............  ..............  ..............
        Beds: 0-24..............             680             0.1             0.0             2.0             2.1
        Beds: 25-49.............             298             0.1            -0.1             2.0             2.0
        Beds: 50-75.............             102             0.1             0.1             2.0             2.1
        Beds: 76 +..............              59             0.1             0.4             2.0             2.6
----------------------------------------------------------------------------------------------------------------
\1\ This column reflects the payment update impact of the RPL market basket update for FY 2015 of 2.7 percent, a
  0.4 percentage point reduction for the productivity adjustment as required by section 1886(s)(2)(A)(i) of the
  Act, and a 0.3 percentage point reduction in accordance with sections 1886(s)(2)(A)(ii) and 1886(s)(3)(C) of
  the Act.
\2\ Percent changes in estimated payments from FY 2014 to FY 2015 include all of the changes presented in this
  proposed rule. Note, the products of these impacts may be different from the percentage changes shown here due
  to rounding effects.

3. Results
    Table 21 above displays the results of our analysis. The table 
groups IPFs into the categories listed below based on characteristics 
provided in the Provider of Services (POS) file, the IPF provider 
specific file, and cost report data from HCRIS:
 Facility Type
 Location
 Teaching Status Adjustment
 Census Region
 Size

The top row of the table shows the overall impact on the 1,626 IPFs 
included in this analysis.
    In column 3, we present the effects of the update to the outlier 
fixed dollar loss threshold amount. We estimate that IPF outlier 
payments as a percentage of total IPF payments are 1.9 percent in FY 
2014. Thus, we are adjusting the outlier threshold amount in this 
proposed rule to set total estimated outlier payments equal to 2 
percent of total payments in FY 2015. The estimated change in total IPF 
payments for FY 2015, therefore, includes an approximate 0.1 percent 
increase in payments because the outlier portion of total payments is 
expected to increase from approximately 1.9 percent to 2 percent.
    The overall impact of this outlier adjustment update (as shown in 
column 3 of table 21), across all hospital groups, is to increase total 
estimated payments to IPFs by 0.1 percent. We do not estimate that any 
group of IPFs will experience a decrease in payments from this update. 
The largest increase in payments is estimated to reflect a 0.2 percent 
increase in payments for urban government IPF units and IPFs located in 
teaching hospitals with an intern and resident ADC ratio greater than 
30 percent.
    In column 4, we present the effects of the budget-neutral update to 
the labor-related share and the wage index adjustment under the CBSA 
geographic area definitions announced by OMB in June 2003. This is a 
comparison of the simulated FY 2015 payments under the FY 2014 hospital 
wage index under CBSA classification and associated labor-related share 
to the simulated FY 2014 payments under the FY 2013 hospital wage index 
under CBSA classifications and associated labor-related share. We note 
that there is no projected change in aggregate payments to IPFs, as 
indicated in the first row of column 4. However, there will be small 
distributional effects among different categories of IPFs. For example, 
we estimate the largest increase in payments to be a 1.0 percent 
increase for IPFs in the Pacific region and the largest decrease in 
payments to be a 0.8 percent decrease for rural for-profit IPFs.
    Column 5 shows the estimated effect of the update to the IPF PPS 
payment rates, which includes a 2.7 percent market basket update less 
the productivity adjustment of 0.4 percentage point in accordance with 
section 1886(s)(2)(A)(i), and less the 0.3 percentage point in 
accordance with section 1886(s)(2)(A)(ii) and 1886(s)(3)(C).
    Column 6 compares our estimates of the total changes reflected in 
this proposed rule for FY 2015, to our payments for FY 2014 (without 
these changes). This column reflects all FY 2015 changes relative to FY 
2014. The average estimated increase for all IPFs is approximately 2.1 
percent. This estimated net increase includes the effects of the 2.7 
percent market basket update adjusted by the productivity adjustment of 
minus 0.4 percentage point, as required by section 1886(s)(2)(A)(i) of 
the Act and the ``other adjustment'' of minus 0.3 percentage point, as 
required by sections 1886(s)(2)(A)(ii) and 1886(s)(3)(C) of the Act. It 
also includes the overall estimated 0.1 percent increase in estimated 
IPF outlier payments from the update to the outlier fixed dollar loss 
threshold amount. Since we are making the updates to the IPF labor-
related share and wage index in a budget-neutral manner, they will not 
affect total estimated IPF payments in the aggregate. However, they 
will affect the estimated distribution of payments among providers.
    Overall, no IPFs are estimated to experience a net decrease in 
payments as a result of the updates in this proposed rule. IPFs in 
urban areas will experience a 2.1 percent increase and IPFs in rural 
areas will experience a 1.9 percent increase. The largest payment 
increase is estimated at 3.1 percent for IPFs in the Pacific region. 
This is due to the larger than average positive effect of the CBSA wage 
index and labor-related share update for IPFs in this category.
4. Effects of Updates to the IPF QRP
    As discussed in section V.B. of this proposed rule and in 
accordance with section 1886(s)(4)(A)(ii) of the Act, we will implement 
a 2 percentage point reduction in the FY 2015 increase factor for IPFs 
that have failed to report the required quality reporting data to us 
during the most recent IPF quality reporting period. In section V.B. of 
this proposed rule, we discuss how the 2 percentage point reduction 
will be applied. Only a few IPFs received the 2 percentage point 
reduction in the FY 2014 increase factor for failure to meet

[[Page 26079]]

program requirements, and we would anticipate that even fewer IPFs 
would receive the reduction for FY 2015 as IPFs become more familiar 
with the requirements. Thus, we estimate that this policy will have a 
negligible impact on overall IPF payments for FY 2015.
    For the FY 2016 payment determination, we estimate no additional 
burden on IPFs as a result of proposed changes in reporting 
requirements. For the FY 2017 payment determination, we estimate an 
additional annual burden across all 1,626 IPFs of 701,619 hours, with a 
total Program cost of $44,496,677. This estimate includes an estimated 
3,252 hours annually for training, at an estimated annual cost of 
$206,241. It also includes an estimated 4,065 hours annually, at an 
estimated annual cost of $257,802, for IPFs to submit to CMS aggregate 
population counts for Medicare and non-Medicare discharges by age 
group, diagnostic group, and quarter, and sample size counts for 
measures for which sampling is performed. Further discussion of these 
figures can be found in section IX.
    For the FY 2017 payment determination, the applicable reporting 
period is calendar year (CY) 2015. Assuming that reporting costs are 
uniformly distributed across the year, three-quarters of those costs 
would have been incurred in FY 2015, which ends on September 30, 2015. 
Therefore, the estimated FY 2015 burden for IPFs would be three-
quarters of $44,496,677, or approximately $33,372,508.
    We intend to closely monitor the effects of this new quality 
reporting program on IPF providers and help facilitate successful 
reporting outcomes through ongoing stakeholder education, national 
trainings, and a technical help desk.
5. Effect on Beneficiaries
    Under the IPF PPS, IPFs will receive payment based on the average 
resources consumed by patients for each day. We do not expect changes 
in the quality of care or access to services for Medicare beneficiaries 
under the FY 2015 IPF PPS but we continue to expect that paying 
prospectively for IPF services would enhance the efficiency of the 
Medicare program.

D. Alternatives Considered

    The statute does not specify an update strategy for the IPF PPS and 
is broadly written to give the Secretary discretion in establishing an 
update methodology. Therefore, we are updating the IPF PPS using the 
methodology published in the November 2004 IPF PPS final rule. No 
alternative policy options were considered in this proposed rule since 
this proposed rule simply provides an update to the rates for FY 2015 
and transition ICD-9-CM codes to ICD-10-CM codes. Additionally, for the 
IPFQR Program, alternatives were not considered because the Program, as 
designed, best achieves quality reporting goals for the inpatient 
psychiatric care setting, while minimizing associated reporting burdens 
on IPFs. Lastly, sections VIII.1. and VIII.4. discuss other benefits 
and objectives of the Program.

E. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 22 below, we 
have prepared an accounting statement showing the classification of the 
expenditures associated with the provisions of this proposed rule. The 
costs for data submission presented in Table 22 are calculated in 
section IX, which also discusses the benefits of data collection. This 
table provides our best estimate of the increase in Medicare payments 
under the IPF PPS as a result of the changes presented in this proposed 
rule and based on the data for 1,626 IPFs in our database. Furthermore, 
we present the estimated costs associated with updating the IPFQR 
program. The increases in Medicare payments are classified as Federal 
transfers to IPF Medicare providers.

Table 22--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
 Change in Estimated Transfers from FY 2014 IPF PPS to FY 2015 IPF PPS:
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $100 million.
From Whom to Whom?.....................  Federal Government to IPF
                                          Medicare Providers
------------------------------------------------------------------------
    FY 2015 Costs to updating the Quality Reporting Program for IPFs:
------------------------------------------------------------------------
                Category                              Costs
------------------------------------------------------------------------
Annualized Monetized Costs for IPFs to   33,372,508
 Submit Data (Quality Reporting
 Program).
------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

    Dated: April 17, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 24, 2014.
Kathleen Sebelius,
Secretary.

    Note:  The following Addenda will not appear in the Code of 
Federal Regulations.

Addendum A--Rate and Adjustment Factors

                              Per Diem Rate
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Federal Per Diem Base Rate.....................                  $727.67
Labor Share (0.69538)..........................                   506.01
Non-Labor Share (0.30462)......................                   221.66
------------------------------------------------------------------------


[[Page 26080]]


         Per Diem Rate Applying the 2 Percentage Point Reduction
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Federal Per Diem Base Rate.....................                  $713.40
Labor Share (0.69538)..........................                   496.08
Non-Labor Share (0.30462)......................                   217.32
------------------------------------------------------------------------


    Fixed Dollar Loss Threshold Amount: $10,125.
    Wage Index Budget-Neutrality Factor: 1.0003.


                          Facility Adjustments
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Rural Adjustment Factor................  1.17
Teaching Adjustment Factor.............  0.5150
Wage Index.............................  Pre-reclass Hospital Wage Index
                                          (FY2014)
------------------------------------------------------------------------


                   Cost of Living Adjustments (COLAs)
------------------------------------------------------------------------
                                                          Cost of living
                          Area                              adjustment
                                                              factor
------------------------------------------------------------------------
Alaska:.................................................  ..............
    City of Anchorage and 80-kilometer (50-mile) radius             1.23
     by road............................................
    City of Fairbanks and 80-kilometer (50-mile) radius             1.23
     by road............................................
    City of Juneau and 80-kilometer (50-mile) radius by             1.23
     road...............................................
    Rest of Alaska......................................            1.25
Hawaii:.................................................
    City and County of Honolulu.........................            1.25
    County of Hawaii....................................            1.19
    County of Kauai.....................................            1.25
    County of Maui and County of Kalawao................            1.25
------------------------------------------------------------------------


                           Patient Adjustments
------------------------------------------------------------------------
 
------------------------------------------------------------------------
ECT--Per Treatment......................................         $313.27
ECT--Per Treatment Applying the 2 Percentage Point               $307.13
 Reduction..............................................
------------------------------------------------------------------------


                      Variable Per Diem Adjustments
------------------------------------------------------------------------
                                                            Adjustment
                                                              factor
------------------------------------------------------------------------
Day 1--Facility Without a Qualifying Emergency                      1.19
 Department.............................................
Day 1--Facility With a Qualifying Emergency Department..            1.31
Day 2...................................................            1.12
Day 3...................................................            1.08
Day 4...................................................            1.05
Day 5...................................................            1.04
Day 6...................................................            1.02
Day 7...................................................            1.01
Day 8...................................................            1.01
Day 9...................................................            1.00
Day 10..................................................            1.00
Day 11..................................................            0.99
Day 12..................................................            0.99
Day 13..................................................            0.99
Day 14..................................................            0.99
Day 15..................................................            0.98
Day 16..................................................            0.97
Day 17..................................................            0.97
Day 18..................................................            0.96
Day 19..................................................            0.95
Day 20..................................................            0.95
Day 21..................................................            0.95
After Day 21............................................            0.92
------------------------------------------------------------------------


[[Page 26081]]


                             Age Adjustments
------------------------------------------------------------------------
                                                            Adjustment
                     Age (in years)                           factor
------------------------------------------------------------------------
Under 45................................................            1.00
45 and under 50.........................................            1.01
50 and under 55.........................................            1.02
55 and under 60.........................................            1.04
60 and under 65.........................................            1.07
65 and under 70.........................................            1.10
70 and under 75.........................................            1.13
75 and under 80.........................................            1.15
80 and over.............................................            1.17
------------------------------------------------------------------------


                             DRG Adjustments
------------------------------------------------------------------------
                                                            Adjustment
        MS-DRG                 MS-DRG Descriptions            factor
------------------------------------------------------------------------
056...................  Degenerative nervous system                 1.05
057...................   disorders w MCC.
                        Degenerative nervous system
                         disorders w/o MCC.
080...................  Nontraumatic stupor & coma w MCC            1.07
081...................  Nontraumatic stupor & coma w/o
                         MCC.
876...................  O.R. procedure w principal                  1.22
                         diagnoses of mental illness.
880...................  Acute adjustment reaction &                 1.05
                         psychosocial dysfunction.
881...................  Depressive neuroses.............            0.99
882...................  Neuroses except depressive......            1.02
883...................  Disorders of personality &                  1.02
                         impulse control.
884...................  Organic disturbances & mental               1.03
                         retardation.
885...................  Psychoses.......................            1.00
886...................  Behavioral & developmental                  0.99
                         disorders.
887...................  Other mental disorder diagnoses.            0.92
894...................  Alcohol/drug abuse or                       0.97
                         dependence, left AMA.
895...................  Alcohol/drug abuse or dependence            1.02
                         w rehabilitation therapy.
896...................  Alcohol/drug abuse or dependence            0.88
897...................   w/o rehabilitation therapy w
                         MCC.
                        Alcohol/drug abuse or dependence
                         w/o rehabilitation therapy w/o
                         MCC.
------------------------------------------------------------------------


                         Comorbidity Adjustments
------------------------------------------------------------------------
                                                            Adjustment
                       Comorbidity                            factor
------------------------------------------------------------------------
Developmental Disabilities..............................            1.04
Coagulation Factor Deficit..............................            1.13
Tracheostomy............................................            1.06
Eating and Conduct Disorders............................            1.12
Infectious Diseases.....................................            1.07
Renal Failure, Acute....................................            1.11
Renal Failure, Chronic..................................            1.11
Oncology Treatment......................................            1.07
Uncontrolled Diabetes Mellitus..........................            1.05
Severe Protein Malnutrition.............................            1.13
Drug/Alcohol Induced Mental Disorders...................            1.03
Cardiac Conditions......................................            1.11
Gangrene................................................            1.10
Chronic Obstructive Pulmonary Disease...................            1.12
Artificial Openings--Digestive & Urinary................            1.08
Severe Musculoskeletal & Connective Tissue Diseases.....            1.09
Poisoning...............................................            1.11
------------------------------------------------------------------------


Addendum B--FY 2015 CBSA Wage Index Tables

    In this addendum, we provide the wage index tables referred to 
in the preamble to this proposed rule. The tables presented below 
are as follows:
    Table1-FY 2015 Wage Index For Urban Areas Based on CBSA Labor 
Market Areas.
    Table 2-FY 2015 Wage Index Based On CBSA Labor Market Areas For 
Rural Areas.

[[Page 26082]]



 Table 1--FY 2015 Wage Index for Urban Areas Based on CBSA Labor Market
                                  Areas
------------------------------------------------------------------------
                               Urban area (constituent
         CBSA Code                    counties)             Wage index
------------------------------------------------------------------------
10180......................  Abilene, TX, Callahan                0.8225
                              County, TX, Jones County,
                              TX, Taylor County, TX.
10380......................  Aguadilla-Isabela-San                0.3647
                              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, Portage County,           0.8521
                              OH, Summit County, OH.
10500......................  Albany, GA, Baker County,            0.8713
                              GA, Dougherty County, GA,
                              Lee County, GA, Terrell
                              County, GA, Worth County,
                              GA.
10580......................  Albany-Schenectady-Troy,             0.8600
                              NY, Albany County, NY,
                              Rensselaer County, NY,
                              Saratoga County, NY,
                              Schenectady County, NY,
                              Schoharie County, NY.
10740......................  Albuquerque, NM, Bernalillo          0.9663
                              County, NM, Sandoval
                              County, NM, Torrance
                              County, NM, Valencia
                              County, NM.
10780......................  Alexandria, LA, Grant                0.7788
                              Parish, LA, Rapides
                              Parish, LA.
10900......................  Allentown-Bethlehem-Easton,          0.9215
                              PA-NJ, Warren County, NJ,
                              Carbon County, PA, Lehigh
                              County, PA, Northampton
                              County, PA.
11020......................  Altoona, PA, Blair County,           0.9101
                              PA.
11100......................  Amarillo, TX, Armstrong              0.8302
                              County, TX, Carson County,
                              TX, Potter County, TX,
                              Randall County, TX.
11180......................  Ames, IA, Story County, IA.          0.9425
11260......................  Anchorage, AK, Anchorage             1.2221
                              Municipality, AK,
                              Matanuska-Susitna Borough,
                              AK.
11300......................  Anderson, IN, Madison                0.9654
                              County, IN.
11340......................  Anderson, SC, Anderson               0.8766
                              County, SC.
11460......................  Arbor, MI, Washtenaw                 1.0086
                              County, MI.
11500......................  Anniston-Oxford, AL,                 0.7402
                              Calhoun County, AL.
11540......................  Appleton, WI, Calumet                0.9445
                              County, WI, Outagamie
                              County, WI.
11700......................  Asheville, NC, Buncombe              0.8511
                              County, NC, Haywood
                              County, NC, Henderson
                              County, NC, Madison
                              County, NC.
12020......................  Athens-Clarke County, GA,            0.9244
                              Clarke County, GA, Madison
                              County, GA, Oconee County,
                              GA, Oglethorpe County, GA.
12060......................  Atlanta-Sandy Springs-               0.9452
                              Marietta, 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-Hammonton,             1.2258
                              NJ, Atlantic County, NJ.
12220......................  Auburn-Opelika, AL, Lee              0.7771
                              County, AL.
12260......................  Augusta-Richmond County, GA-         0.9150
                              SC, Burke County, GA,
                              Columbia County, GA,
                              McDuffie County, GA,
                              Richmond County, GA, Aiken
                              County, SC, Edgefield
                              County, SC.
12420......................  Austin-Round Rock-San                0.9576
                              Marcos, TX, Bastrop
                              County, TX, Caldwell
                              County, TX, Hays County,
                              TX, Travis County, TX,
                              Williamson County, TX.
12540......................  Bakersfield-Delano, CA,              1.1579
                              Kern County, CA.
12580......................  Baltimore-Towson, MD, Anne           0.9873
                              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, Penobscot                0.9710
                              County, ME.
12700......................  Barnstable Town, MA,                 1.3007
                              Barnstable County, MA.
12940......................  Baton Rouge, LA, Ascension           0.8078
                              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, Calhoun            0.9915
                              County, MI.
13020......................  Bay City, MI, Bay County,            0.9486
                              MI.
13140......................  Beaumont-Port Arthur, TX,            0.8598
                              Hardin County, TX,
                              Jefferson County, TX,
                              Orange County, TX.
13380......................  Bellingham, WA, Whatcom              1.1890
                              County, WA.
13460......................  Bend, OR, Deschutes County,          1.1807
                              OR.
13644......................  Bethesda-Rockville-                  1.0319
                              Frederick, MD, Frederick
                              County, MD, Montgomery
                              County, MD.
13740......................  Billings, MT, Carbon                 0.8691
                              County, MT, Yellowstone
                              County, MT.
13780......................  Binghamton, NY, Broome               0.8602
                              County, NY, Tioga County,
                              NY.
13820......................  Birmingham-Hoover, AL, Bibb          0.8367
                              County, AL, Blount County,
                              AL, Chilton County, AL,
                              Jefferson County, AL, St.
                              Clair County, AL, Shelby
                              County, AL, Walker County,
                              AL.
13900......................  Bismarck, ND, Burleigh               0.7282
                              County, ND, Morton County,
                              ND.
13980......................  Blacksburg-Christiansburg-           0.8319
                              Radford, VA, Giles County,
                              VA, Montgomery County, VA,
                              Pulaski County, VA,
                              Radford City, VA.
14020......................  Bloomington, IN, Greene              0.9304
                              County, IN, Monroe County,
                              IN, Owen County, IN.
14060......................  Bloomington-Normal, IL,              0.9310
                              McLean County, IL.
14260......................  Boise City-Nampa, ID, Ada            0.9259
                              County, ID, Boise County,
                              ID, Canyon County, ID, Gem
                              County, ID, Owyhee County,
                              ID.
14484......................  Boston-Quincy, MA, Norfolk           1.2453
                              County, MA, Plymouth
                              County, MA, Suffolk
                              County, MA.
14500......................  Boulder, CO, Boulder                 0.9850
                              County, CO.
14540......................  Bowling Green, KY, Edmonson          0.8573
                              County, KY, Warren County,
                              KY.
14740......................  Bremerton-Silverdale, WA,            1.0268
                              Kitsap County, WA.
14860......................  Bridgeport-Stamford-                 1.3252
                              Norwalk, CT, Fairfield
                              County, CT.
15180......................  Brownsville-Harlingen, TX,           0.8179
                              Cameron County, TX.
15260......................  Brunswick, GA, Brantley              0.8457
                              County, GA, Glynn County,
                              GA, McIntosh County, GA.
15380......................  Buffalo-Niagara Falls, NY,           1.0045
                              Erie County, NY, Niagara
                              County, NY.
15500......................  Burlington, NC, Alamance             0.8529
                              County, NC.

[[Page 26083]]

 
15540......................  Burlington-South                     1.0130
                              Burlington, VT, Chittenden
                              County, VT, Franklin
                              County, VT, Grand Isle
                              County, VT.
15764......................  Cambridge-Newton-                    1.1146
                              Framingham, MA, Middlesex
                              County, MA.
15804......................  Camden, NJ, Burlington               1.0254
                              County, NJ, Camden County,
                              NJ, Gloucester County, NJ.
15940......................  Canton-Massillon, OH,                0.8730
                              Carroll County, OH, Stark
                              County, OH.
15980......................  Cape Coral-Fort Myers, FL,           0.8683
                              Lee County, FL.
16020......................  Cape Girardeau-Jackson, MO-          0.9174
                              IL, Alexander County, IL,
                              Bollinger County, MO, Cape
                              Girardeau County, MO.
16180......................  Carson City, NV, Carson              1.0721
                              City, NV.
16220......................  Casper, WY, Natrona County,          1.0111
                              WY.
16300......................  Cedar Rapids, IA, Benton             0.8964
                              County, IA, Jones County,
                              IA, Linn County, IA.
16580......................  Champaign-Urbana, IL,                0.9416
                              Champaign County, IL, Ford
                              County, IL, Piatt County,
                              IL.
16620......................  Charleston, WV, Boone                0.8119
                              County, WV, Clay County,
                              WV, Kanawha County, WV,
                              Lincoln County, WV, Putnam
                              County, WV.
16700......................  Charleston-North Charleston-         0.8972
                              Summerville, SC, Berkeley
                              County, SC, Charleston
                              County, SC, Dorchester
                              County, SC.
16740......................  Charlotte-Gastonia-Rock              0.9447
                              Hill, NC[dash]SC, Anson
                              County, NC, Cabarrus
                              County, NC, Gaston County,
                              NC, Mecklenburg County,
                              NC, Union County, NC, York
                              County, SC.
16820......................  Charlottesville, VA,                 0.9209
                              Albemarle County, VA,
                              Fluvanna County, VA,
                              Greene County, VA, Nelson
                              County, VA,
                              Charlottesville City, VA.
16860......................  Chattanooga, TN-GA, Catoosa          0.8783
                              County, GA, Dade County,
                              GA, Walker County, GA,
                              Hamilton County, TN,
                              Marion County, TN,
                              Sequatchie County, TN.
16940......................  Cheyenne, WY, Laramie                0.9494
                              County, WY.
16974......................  Chicago-Naperville-Joliet,           1.0418
                              IL, 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, Butte County, CA          1.1616
17140......................  Cincinnati-Middletown, OH-           0.9470
                              KY-IN, 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,                  0.7802
                              Christian County, KY,
                              Trigg County, KY,
                              Montgomery County, TN,
                              Stewart County, TN.
17420......................  Cleveland, TN, Bradley               0.7496
                              County, TN, Polk County,
                              TN.
17460......................  Cleveland-Elyria-Mentor,             0.9303
                              OH, Cuyahoga County, OH,
                              Geauga County, OH, Lake
                              County, OH, Lorain County,
                              OH, Medina County, OH.
17660......................  Coeur d'Alene, ID, Kootenai          0.9064
                              County, ID.
17780......................  College Station-Bryan, TX,           0.9497
                              Brazos County, TX,
                              Burleson County, TX,
                              Robertson County, TX.
17820......................  Colorado Springs, CO, El             0.9282
                              Paso County, CO, Teller
                              County, CO.
17860......................  Columbia, MO, Boone County,          0.8196
                              MO, Howard County, MO.
17900......................  Columbia, SC, Calhoun                0.8601
                              County, SC, Fairfield
                              County, SC, Kershaw
                              County, SC, Lexington
                              County, SC, Richland
                              County, SC, Saluda County,
                              SC.
17980......................  Columbus, GA-AL, Russell             0.8170
                              County, AL, Chattahoochee
                              County, GA, Harris County,
                              GA, Marion County, GA,
                              Muscogee County, GA.
18020......................  Columbus, IN, Bartholomew            0.9818
                              County, IN.
18140......................  Columbus, OH, Delaware               0.9803
                              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, Aransas          0.8433
                              County, TX, Nueces County,
                              TX, San Patricio County,
                              TX.
18700......................  Corvallis, OR, Benton                1.0596
                              County, OR.
18880......................  Crestview-Fort Walton Beach-         0.8911
                              Destin, FL, Okaloosa
                              County, FL.
19060......................  Cumberland, MD-WV, Allegany          0.8054
                              County, MD, Mineral
                              County, WV.
19124......................  Dallas-Plano-Irving, TX,             0.9831
                              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, Murray County,           0.8625
                              GA, Whitfield County, GA.
19180......................  Danville, IL, Vermilion              0.9460
                              County, IL.
19260......................  Danville, VA, Pittsylvania           0.7888
                              County, VA, Danville City,
                              VA.
19340......................  Davenport-Moline-Rock                0.9306
                              Island, IA-IL, Henry
                              County, IL, Mercer County,
                              IL, Rock Island County,
                              IL, Scott County, IA.
19380......................  Dayton, OH, Greene County,           0.9034
                              OH, Miami County, OH,
                              Montgomery County, OH,
                              Preble County, OH.
19460......................  Decatur, AL, Lawrence                0.7165
                              County, AL, Morgan County,
                              AL.
19500......................  Decatur, IL, Macon County,           0.8151
                              IL.
19660......................  Deltona-Daytona Beach-               0.8560
                              Ormond Beach, FL, Volusia
                              County, FL.
19740......................  Denver-Aurora-Broomfield,            1.0395
                              CO, 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,          0.9393
                              IA, Dallas County, IA,
                              Guthrie County, IA,
                              Madison County, IA, Polk
                              County, IA, Warren County,
                              IA.
19804......................  Detroit-Livonia-Dearborn,            0.9237
                              MI, Wayne County, MI.
20020......................  Dothan, AL, Geneva County,           0.7108
                              AL, Henry County, AL,
                              Houston County, AL.
20100......................  Dover, DE, Kent County, DE.          0.9939
20220......................  Dubuque, IA, Dubuque                 0.8790
                              County, IA.
20260......................  Duluth, MN-WI, Carlton               1.0123
                              County, MN, St. Louis
                              County, MN, Douglas
                              County, WI.
20500......................  Durham-Chapel Hill, NC,              0.9669
                              Chatham County, NC, Durham
                              County, NC, Orange County,
                              NC, Person County, NC.
20740......................  Eau Claire, WI, Chippewa             1.0103
                              County, WI, Eau Claire
                              County, WI.

[[Page 26084]]

 
20764......................  Edison-New Brunswick, NJ,            1.0985
                              Middlesex County, NJ,
                              Monmouth County, NJ, Ocean
                              County, NJ, Somerset
                              County, NJ.
20940......................  El Centro, CA, Imperial              0.8848
                              County, CA.
21060......................  Elizabethtown, KY, Hardin            0.7894
                              County, KY, Larue County,
                              KY.
21140......................  Elkhart-Goshen, IN, Elkhart          0.9337
                              County, IN.
21300......................  Elmira, NY, Chemung County,          0.8725
                              NY.
21340......................  El Paso, TX, El Paso                 0.8404
                              County, TX.
21500......................  Erie, PA, Erie County, PA..          0.7940
21660......................  Eugene-Springfield, OR,              1.1723
                              Lane County, OR.
21780......................  Evansville, IN-KY, Gibson            0.8381
                              County, IN, Posey County,
                              IN, Vanderburgh County,
                              IN, Warrick County, IN,
                              Henderson County, KY,
                              Webster County, KY.
21820......................  Fairbanks, AK, Fairbanks             1.0997
                              North Star Borough, AK.
21940......................  Fajardo, PR, Ceiba                   0.3728
                              Municipio, PR, Fajardo
                              Municipio, PR, Luquillo
                              Municipio, PR.
22020......................  Fargo, ND-MN, Cass County,           0.7802
                              ND, Clay County, MN.
22140......................  Farmington, NM, San Juan             0.9735
                              County, NM.
22180......................  Fayetteville, NC,                    0.8601
                              Cumberland County, NC,
                              Hoke County, NC.
22220......................  Fayetteville-Springdale-             0.8955
                              Rogers, AR-MO, Benton
                              County, AR, Madison
                              County, AR, Washington
                              County, AR, McDonald
                              County, MO.
22380......................  Flagstaff, AZ, Coconino              1.2786
                              County, AZ.
22420......................  Flint, MI, Genesee County,           1.1238
                              MI.
22500......................  Florence, SC, Darlington             0.7999
                              County, SC, Florence
                              County, SC.
22520......................  Florence-Muscle Shoals, AL,          0.7684
                              Colbert County, AL,
                              Lauderdale County, AL.
22540......................  Fond du Lac, WI, Fond du             0.9477
                              Lac County, WI.
22660......................  Fort Collins-Loveland, CO,           0.9704
                              Larimer County, CO.
22744......................  Fort Lauderdale-Pompano              1.0378
                              Beach-Deerfield, FL,
                              Broward County, FL.
22900......................  Fort Smith, AR-OK, Crawford          0.7561
                              County, AR, Franklin
                              County, AR, Sebastian
                              County, AR, Le Flore
                              County, OK, Sequoyah
                              County, OK.
23060......................  Fort Wayne, IN, Allen                0.9010
                              County, IN, Wells County,
                              IN, Whitley County, IN.
23104......................  Fort Worth-Arlington, TX,            0.9535
                              Johnson County, TX, Parker
                              County, TX, Tarrant
                              County, TX, Wise County,
                              TX.
23420......................  Fresno, CA, Fresno County,           1.1768
                              CA.
23460......................  Gadsden, AL, Etowah County,          0.7983
                              AL.
23540......................  Gainesville, FL, Alachua             0.9710
                              County, FL, Gilchrist
                              County, FL.
23580......................  Gainesville, GA, Hall                0.9253
                              County, GA.
23844......................  Gary, IN, Jasper County,             0.9418
                              IN, Lake County, IN,
                              Newton County, IN, Porter
                              County, IN.
24020......................  Glens Falls, NY, Warren              0.8367
                              County, NY, Washington
                              County, NY.
24140......................  Goldsboro, NC, Wayne                 0.8550
                              County, NC.
24220......................  Grand Forks, ND-MN, Polk             0.7290
                              County, MN, Grand Forks
                              County, ND.
24300......................  Grand Junction, CO, Mesa             0.9270
                              County, CO.
24340......................  Grand Rapids-Wyoming, MI,            0.9091
                              Barry County, MI, Ionia
                              County, MI, Kent County,
                              MI, Newaygo County, MI.
24500......................  Great Falls, MT, Cascade             0.9235
                              County, MT.
24540......................  Greeley, CO, Weld County,            0.9653
                              CO.
24580......................  Green Bay, WI, Brown                 0.9587
                              County, WI, Kewaunee
                              County, WI, Oconto County,
                              WI.
24660......................  Greensboro-High Point, NC,           0.8320
                              Guilford County, NC,
                              Randolph County, NC,
                              Rockingham County, NC.
24780......................  Greenville, NC, Greene               0.9343
                              County, NC, Pitt County,
                              NC.
24860......................  Greenville-Mauldin-Easley,           0.9604
                              SC, Greenville County, SC,
                              Laurens County, SC,
                              Pickens County, SC.
25020......................  Guayama, PR, Arroyo                  0.3707
                              Municipio, PR, Guayama
                              Municipio, PR, Patillas
                              Municipio, PR.
25060......................  Gulfport-Biloxi, MS,                 0.8575
                              Hancock County, MS,
                              Harrison County, MS, Stone
                              County, MS.
25180......................  Hagerstown-Martinsburg, MD-          0.9234
                              WV, Washington County, MD,
                              Berkeley County, WV,
                              Morgan County, WV.
25260......................  Hanford-Corcoran, CA, Kings          1.1124
                              County, CA.
25420......................  Harrisburg-Carlisle, PA,             0.9533
                              Cumberland County, PA,
                              Dauphin County, PA, Perry
                              County, PA.
25500......................  Harrisonburg, VA,                    0.9090
                              Rockingham County, VA,
                              Harrisonburg City, VA.
25540......................  Hartford-West Hartford-East          1.1050
                              Hartford, CT, Hartford
                              County, CT, Middlesex
                              County, CT, Tolland
                              County, CT.
25620......................  Hattiesburg, MS, Forrest             0.7938
                              County, MS, Lamar County,
                              MS, Perry County, MS.
25860......................  Hickory-Lenoir-Morganton,            0.8492
                              NC, Alexander County, NC,
                              Burke County, NC, Caldwell
                              County, NC, Catawba
                              County, NC.
25980......................  Hinesville-Fort Stewart,             0.8700
                              GA\1\, Liberty County, GA,
                              Long County, GA.
26100......................  Holland-Grand Haven, MI,             0.8016
                              Ottawa County, MI.
26180......................  Honolulu, HI, Honolulu               1.2321
                              County, HI.
26300......................  Hot Springs, AR, Garland             0.8474
                              County, AR.
26380......................  Houma-Bayou Cane-Thibodaux,          0.7525
                              LA, Lafourche Parish, LA,
                              Terrebonne Parish, LA.
26420......................  Houston-Sugar Land-Baytown,          0.9915
                              TX, Austin County, TX,
                              Brazoria County, TX,
                              Chambers County, TX, Fort
                              Bend County, TX, Galveston
                              County, TX, Harris County,
                              TX, Liberty County, TX,
                              Montgomery County, TX, San
                              Jacinto County, TX, Waller
                              County, TX.
26580......................  Huntington-Ashland, WV-KY-           0.8944
                              OH, Boyd County, KY,
                              Greenup County, KY,
                              Lawrence County, OH,
                              Cabell County, WV, Wayne
                              County, WV.
26620......................  Huntsville, AL, Limestone            0.8455
                              County, AL, Madison
                              County, AL.
26820......................  Idaho Falls, ID, Bonneville          0.9312
                              County, ID, Jefferson
                              County, ID.
26900......................  Indianapolis-Carmel, IN,             1.0108
                              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, Johnson               0.9854
                              County, IA, Washington
                              County, IA.
27060......................  Ithaca, NY, Tompkins                 0.9326
                              County, NY.

[[Page 26085]]

 
27100......................  Jackson, MI, Jackson                 0.8944
                              County, MI.
27140......................  Jackson, MS, Copiah County,          0.8162
                              MS, Hinds County, MS,
                              Madison County, MS, Rankin
                              County, MS, Simpson
                              County, MS.
27180......................  Jackson, TN, Chester                 0.7729
                              County, TN, Madison
                              County, TN.
27260......................  Jacksonville, FL, Baker              0.8956
                              County, FL, Clay County,
                              FL, Duval County, FL,
                              Nassau County, FL, St.
                              Johns County, FL.
27340......................  Jacksonville, NC, Onslow             0.7861
                              County, NC.
27500......................  Janesville, WI, Rock                 0.9071
                              County, WI.
27620......................  Jefferson City, MO,                  0.8465
                              Callaway County, MO, Cole
                              County, MO, Moniteau
                              County, MO, Osage County,
                              MO.
27740......................  Johnson City, TN, Carter             0.7226
                              County, TN, Unicoi County,
                              TN, Washington County, TN.
27780......................  Johnstown, PA, Cambria               0.8450
                              County, PA.
27860......................  Jonesboro, AR, Craighead             0.7983
                              County, AR, Poinsett
                              County, AR.
27900......................  Joplin, MO, Jasper County,           0.7983
                              MO, Newton County, MO.
28020......................  Kalamazoo-Portage, MI,               0.9959
                              Kalamazoo County, MI, Van
                              Buren County, MI.
28100......................  Kankakee-Bradley, IL,                0.9657
                              Kankakee County, IL.
28140......................  Kansas City, MO-KS,                  0.9447
                              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-Pasco-Richland,            0.9459
                              WA, Benton County, WA,
                              Franklin County, WA.
28660......................  Killeen-Temple-Fort Hood,            0.8925
                              TX, Bell County, TX,
                              Coryell County, TX,
                              Lampasas County, TX.
28700......................  Kingsport-Bristol-Bristol,           0.7192
                              TN-VA, Hawkins County, TN,
                              Sullivan County, TN,
                              Bristol City, VA, Scott
                              County, VA, Washington
                              County, VA.
28740......................  Kingston, NY, Ulster                 0.9066
                              County, NY.
28940......................  Knoxville, TN, Anderson              0.7432
                              County, TN, Blount County,
                              TN, Knox County, TN,
                              Loudon County, TN, Union
                              County, TN.
29020......................  Kokomo, IN, Howard County,           0.9061
                              IN, Tipton County, IN.
29100......................  La Crosse, WI-MN, Houston            1.0205
                              County, MN, La Crosse
                              County, WI.
29140......................  Lafayette, IN, Benton                0.9954
                              County, IN, Carroll
                              County, IN, Tippecanoe
                              County, IN.
29180......................  Lafayette, LA, Lafayette             0.8231
                              Parish, LA, St. Martin
                              Parish, LA.
29340......................  Lake Charles, LA, Calcasieu          0.7765
                              Parish, LA, Cameron
                              Parish, LA.
29404......................  Lake County-Kenosha County,          1.0658
                              IL-WI, Lake County, IL,
                              Kenosha County, WI.
29420......................  Lake Havasu City-Kingman,            0.9912
                              AZ, Mohave County, AZ.
29460......................  Lakeland-Winter Haven, FL,           0.8283
                              Polk County, FL.
29540......................  Lancaster, PA, Lancaster             0.9695
                              County, PA.
29620......................  Lansing-East Lansing, MI,            1.0618
                              Clinton County, MI, Eaton
                              County, MI, Ingham County,
                              MI.
29700......................  Laredo, TX, Webb County, TX          0.7586
29740......................  Las Cruces, NM, Dona Ana             0.9265
                              County, NM.
29820......................  Las Vegas-Paradise, NV,              1.1627
                              Clark County, NV.
29940......................  Lawrence, KS, Douglas                0.8664
                              County, KS.
30020......................  Lawton, OK, Comanche                 0.7893
                              County, OK.
30140......................  Lebanon, PA, Lebanon                 0.8157
                              County, PA.
30300......................  Lewiston, ID-WA, Nez Perce           0.9215
                              County, ID, Asotin County,
                              WA.
30340......................  Lewiston-Auburn, ME,                 0.9048
                              Androscoggin County, ME.
30460......................  Lexington-Fayette, KY,               0.8902
                              Bourbon County, KY, Clark
                              County, KY, Fayette
                              County, KY, Jessamine
                              County, KY, Scott County,
                              KY, Woodford County, KY.
30620......................  Lima, OH, Allen County, OH.          0.9158
30700......................  Lincoln, NE, Lancaster               0.9465
                              County, NE, Seward County,
                              NE.
30780......................  Little Rock-North Little             0.8632
                              Rock-Conway, AR, Faulkner
                              County, AR, Grant County,
                              AR, Lonoke County, AR,
                              Perry County, AR, Pulaski
                              County, AR, Saline County,
                              AR.
30860......................  Logan, UT-ID, Franklin               0.8754
                              County, ID, Cache County,
                              UT.
30980......................  Longview, TX, Gregg County,          0.8933
                              TX, Rusk County, TX,
                              Upshur County, TX.
31020......................  Longview, WA, Cowlitz                1.0460
                              County, WA.
31084......................  Los Angeles-Long Beach-              1.2417
                              Glendale, CA, Los Angeles
                              County, CA.
31140......................  Louisville-Jefferson                 0.8852
                              County, KY-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, Crosby County,          0.8956
                              TX, Lubbock County, TX.
31340......................  Lynchburg, VA, Amherst               0.8771
                              County, VA, Appomattox
                              County, VA, Bedford
                              County, VA, Campbell
                              County, VA, Bedford City,
                              VA, Lynchburg City, VA.
31420......................  Macon, GA, Bibb County, GA,          0.9014
                              Crawford County, GA, Jones
                              County, GA, Monroe County,
                              GA, Twiggs County, GA.
31460......................  Madera-Chowchilla, CA,               0.8317
                              Madera County, CA.
31540......................  Madison, WI, Columbia                1.1414
                              County, WI, Dane County,
                              WI, Iowa County, WI.
31700......................  Manchester-Nashua, NH,               1.0057
                              Hillsborough County, NH.
31740......................  Manhattan, KS, Geary                 0.7843
                              County, KS, Pottawatomie
                              County, KS, Riley County,
                              KS.
31860......................  Mankato-North Mankato, MN,           0.9277
                              Blue Earth County, MN,
                              Nicollet County, MN.
31900......................  Mansfield, OH, Richland              0.8509
                              County, OH.
32420......................  Mayag[uuml]ez, PR,                   0.3762
                              Hormigueros Municipio, PR,
                              Mayag[uuml]ez Municipio,
                              PR.
32580......................  McAllen-Edinburg-Mission,            0.8393
                              TX, Hidalgo County, TX.
32780......................  Medford, OR, Jackson                 1.0690
                              County, OR.

[[Page 26086]]

 
32820......................  Memphis, TN-MS-AR,                   0.9038
                              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, Merced County,           1.2734
                              CA.
33124......................  Miami-Miami Beach-Kendall,           0.9870
                              FL, Miami-Dade County, FL.
33140......................  Michigan City-La Porte, IN,          0.9216
                              LaPorte County, IN.
33260......................  Midland, TX, Midland                 1.0049
                              County, TX.
33340......................  Milwaukee-Waukesha-West              0.9856
                              Allis, WI, Milwaukee
                              County, WI, Ozaukee
                              County, WI, Washington
                              County, WI, Waukesha
                              County, WI.
33460......................  Minneapolis-St. Paul-                1.1213
                              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, Missoula               0.9142
                              County, MT.
33660......................  Mobile, AL, Mobile County,           0.7507
                              AL.
33700......................  Modesto, CA, Stanislaus              1.3629
                              County, CA.
33740......................  Monroe, LA, Ouachita                 0.7530
                              Parish, LA, Union Parish,
                              LA.
33780......................  Monroe, MI, Monroe County,           0.8718
                              MI.
33860......................  Montgomery, AL, Autauga              0.7475
                              County, AL, Elmore County,
                              AL, Lowndes County, AL,
                              Montgomery County, AL.
34060......................  Morgantown, WV, Monongalia           0.8339
                              County, WV, Preston
                              County, WV.
34100......................  Morristown, TN, Grainger             0.6861
                              County, TN, Hamblen
                              County, TN, Jefferson
                              County, TN.
34580......................  Mount Vernon-Anacortes, WA,          1.0652
                              Skagit County, WA.
34620......................  Muncie, IN, Delaware                 0.8743
                              County, IN.
34740......................  Muskegon-Norton Shores, MI,          1.1076
                              Muskegon County, MI.
34820......................  Myrtle Beach-North Myrtle            0.8700
                              Beach-Conway, SC, Horry
                              County, SC.
34900......................  Napa, CA, Napa County, CA..          1.5375
34940......................  Naples-Marco Island, FL,             0.9108
                              Collier County, FL.
34980......................  Nashville-Davidson--                 0.9141
                              Murfreesboro-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, Nassau           1.2755
                              County, NY, Suffolk
                              County, NY.
35084......................  Newark-Union, NJ-PA, Essex           1.1268
                              County, NJ, Hunterdon
                              County, NJ, Morris County,
                              NJ, Sussex County, NJ,
                              Union County, NJ, Pike
                              County, PA.
35300......................  New Haven-Milford, CT, New           1.1883
                              Haven County, CT.
35380......................  New Orleans-Metairie-                0.8752
                              Kenner, LA, 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-               1.3089
                              Wayne, NY-NJ, Bergen
                              County, NJ, Hudson County,
                              NJ, Passaic County, NJ,
                              Bronx County, NY, Kings
                              County, NY, New York
                              County, NY, Putnam County,
                              NY, Queens County, NY,
                              Richmond County, NY,
                              Rockland County, NY,
                              Westchester County, NY.
35660......................  Niles-Benton Harbor, MI,             0.8444
                              Berrien County, MI.
35840......................  North Port-Bradenton-                0.9428
                              Sarasota-Venice, FL,
                              Manatee County, FL,
                              Sarasota County, FL.
35980......................  Norwich-New London, CT, New          1.1821
                              London County, CT.
36084......................  Oakland-Fremont-Hayward,             1.7048
                              CA, Alameda County, CA,
                              Contra Costa County, CA.
36100......................  Ocala, FL, Marion County,            0.8425
                              FL.
36140......................  Ocean City, NJ, Cape May             1.0584
                              County, NJ.
36220......................  Odessa, TX, Ector County,            0.9661
                              TX.
36260......................  Ogden-Clearfield, UT, Davis          0.9170
                              County, UT, Morgan County,
                              UT, Weber County, UT.
36420......................  Oklahoma City, OK, Canadian          0.8879
                              County, OK, Cleveland
                              County, OK, Grady County,
                              OK, Lincoln County, OK,
                              Logan County, OK, McClain
                              County, OK, Oklahoma
                              County, OK.
36500......................  Olympia, WA, Thurston                1.1601
                              County, WA.
36540......................  Omaha-Council Bluffs, NE-            0.9756
                              IA, 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-Sanford,           0.9063
                              FL, Lake County, FL,
                              Orange County, FL, Osceola
                              County, FL, Seminole
                              County, FL.
36780......................  Oshkosh-Neenah, WI,                  0.9398
                              Winnebago County, WI.
36980......................  Owensboro, KY, Daviess               0.7790
                              County, KY, Hancock
                              County, KY, McLean County,
                              KY.
37100......................  Oxnard-Thousand Oaks-                1.3113
                              Ventura, CA, Ventura
                              County, CA.
37340......................  Palm Bay-Melbourne-                  0.8790
                              Titusville, FL, Brevard
                              County, FL.
37380......................  Palm Coast, FL, Flagler              0.8174
                              County, FL.
37460......................  Panama City-Lynn Haven-              0.7876
                              Panama City Beach, FL, Bay
                              County, FL.
37620......................  Parkersburg-Marietta-                0.7569
                              Vienna, WV-OH, Washington
                              County, OH, Pleasants
                              County, WV, Wirt County,
                              WV, Wood County, WV.
37700......................  Pascagoula, MS, George               0.7542
                              County, MS, Jackson
                              County, MS.
37764......................  Peabody, MA, Essex County,           1.0553
                              MA.
37860......................  Pensacola-Ferry Pass-Brent,          0.7767
                              FL, Escambia County, FL,
                              Santa Rosa County, FL.
37900......................  Peoria, IL, Marshall                 0.8434
                              County, IL, Peoria County,
                              IL, Stark County, IL,
                              Tazewell County, IL,
                              Woodford County, IL.
37964......................  Philadelphia, PA, Bucks              1.0849
                              County, PA, Chester
                              County, PA, Delaware
                              County, PA, Montgomery
                              County, PA, Philadelphia
                              County, PA.
38060......................  Phoenix-Mesa-Scottsdale,             1.0465
                              AZ, Maricopa County, AZ,
                              Pinal County, AZ.
38220......................  Pine Bluff, AR, Cleveland            0.8069
                              County, AR, Jefferson
                              County, AR, Lincoln
                              County, AR.

[[Page 26087]]

 
38300......................  Pittsburgh, PA, Allegheny            0.8669
                              County, PA, Armstrong
                              County, PA, Beaver County,
                              PA, Butler County, PA,
                              Fayette County, PA,
                              Washington County, PA,
                              Westmoreland County, PA.
38340......................  Pittsfield, MA, Berkshire            1.0920
                              County, MA.
38540......................  Pocatello, ID, Bannock               0.9754
                              County, ID, Power County,
                              ID.
38660......................  Ponce, PR, Juana                     0.4594
                              D[iacute]az Municipio, PR,
                              Ponce Municipio, PR,
                              Villalba Municipio, PR.
38860......................  Portland-South Portland-             0.9981
                              Biddeford, ME, Cumberland
                              County, ME, Sagadahoc
                              County, ME, York County,
                              ME.
38900......................  Portland-Vancouver-                  1.1766
                              Hillsboro, OR-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, Martin           0.9352
                              County, FL, St. Lucie
                              County, FL.
39100......................  Poughkeepsie-Newburgh-               1.1544
                              Middletown, NY, Dutchess
                              County, NY, Orange County,
                              NY.
39140......................  Prescott, AZ, Yavapai                1.0161
                              County, AZ.
39300......................  Providence-New Bedford-Fall          1.0539
                              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, Juab                 0.9461
                              County, UT, Utah County,
                              UT.
39380......................  Pueblo, CO, Pueblo County,           0.8215
                              CO.
39460......................  Punta Gorda, FL, Charlotte           0.8734
                              County, FL.
39540......................  Racine, WI, Racine County,           0.8903
                              WI.
39580......................  Raleigh-Cary, NC, Franklin           0.9304
                              County, NC, Johnston
                              County, NC, Wake County,
                              NC.
39660......................  Rapid City, SD, Meade                0.9568
                              County, SD, Pennington
                              County, SD.
39740......................  Reading, PA, Berks County,           0.9220
                              PA.
39820......................  Redding, CA, Shasta County,          1.4990
                              CA.
39900......................  Reno-Sparks, NV, Storey              1.0326
                              County, NV, Washoe County,
                              NV.
40060......................  Richmond, VA, Amelia                 0.9723
                              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-            1.1497
                              Ontario, CA, Riverside
                              County, CA, San Bernardino
                              County, CA.
40220......................  Roanoke, VA, Botetourt               0.9195
                              County, VA, Craig County,
                              VA, Franklin County, VA,
                              Roanoke County, VA,
                              Roanoke City, VA, Salem
                              City, VA.
40340......................  Rochester, MN, Dodge                 1.1662
                              County, MN, Olmsted
                              County, MN, Wabasha
                              County, MN.
40380......................  Rochester, NY, Livingston            0.8749
                              County, NY, Monroe County,
                              NY, Ontario County, NY,
                              Orleans County, NY, Wayne
                              County, NY.
40420......................  Rockford, IL, Boone County,          0.9751
                              IL, Winnebago County, IL.
40484......................  Rockingham County-Strafford          1.0172
                              County, NH, Rockingham
                              County, NH, Strafford
                              County, NH.
40580......................  Rocky Mount, NC, Edgecombe           0.8750
                              County, NC, Nash County,
                              NC.
40660......................  Rome, GA, Floyd County, GA.          0.8924
40900......................  Sacramento-Arden-Arcade-             1.5498
                              Roseville, CA, El Dorado
                              County, CA, Placer County,
                              CA, Sacramento County, CA,
                              Yolo County, CA.
40980......................  Saginaw-Saginaw Township             0.8849
                              North, MI, Saginaw County,
                              MI.
41060......................  St. Cloud, MN, Benton                1.0658
                              County, MN, Stearns
                              County, MN.
41100......................  St. George, UT, Washington           0.9345
                              County, UT.
41140......................  St. Joseph, MO-KS, Doniphan          0.9834
                              County, KS, Andrew County,
                              MO, Buchanan County, MO,
                              DeKalb County, MO.
41180......................  St. Louis, MO-IL, Bond               0.9336
                              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, Marion County,            1.1148
                              OR, Polk County, OR.
41500......................  Salinas, CA, Monterey                1.5820
                              County, CA.
41540......................  Salisbury, MD, Somerset              0.8948
                              County, MD, Wicomico
                              County, MD.
41620......................  Salt Lake City, UT, Salt             0.9350
                              Lake County, UT, Summit
                              County, UT, Tooele County,
                              UT.
41660......................  San Angelo, TX, Irion                0.8169
                              County, TX, Tom Green
                              County, TX.
41700......................  San Antonio-New Braunfels,           0.8911
                              TX, 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               1.2213
                              Marcos, CA, San Diego
                              County, CA.
41780......................  Sandusky, OH, Erie County,           0.7788
                              OH.
41884......................  San Francisco-San Mateo-             1.6743
                              Redwood City, CA, Marin
                              County, CA, San Francisco
                              County, CA, San Mateo
                              County, CA.
41900......................  San Germ[aacute]n-Cabo               0.4550
                              Rojo, PR, Cabo Rojo
                              Municipio, PR, Lajas
                              Municipio, PR, Sabana
                              Grande Municipio, PR, San
                              Germ[aacute]n Municipio,
                              PR.
41940......................  San Jose-Sunnyvale-Santa             1.7086
                              Clara, CA, San Benito
                              County, CA, Santa Clara
                              County, CA.

[[Page 26088]]

 
41980......................  San Juan-Caguas-Guaynabo,            0.4356
                              PR, Aguas Buenas
                              Municipio, PR, 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                 1.3036
                              Robles, CA, San Luis
                              Obispo County, CA.
42044......................  Santa Ana-Anaheim-Irvine,            1.2111
                              CA, Orange County, CA.
42060......................  Santa Barbara-Santa Maria-           1.2825
                              Goleta, CA, Santa Barbara
                              County, CA.
42100......................  Santa Cruz-Watsonville, CA,          1.7937
                              Santa Cruz County, CA.
42140......................  Santa Fe, NM, Santa Fe               1.0136
                              County, NM.
42220......................  Santa Rosa-Petaluma, CA,             1.6679
                              Sonoma County, CA.
42340......................  Savannah, GA, Bryan County,          0.8757
                              GA, Chatham County, GA,
                              Effingham County, GA.
42540......................  Scranton--Wilkes-Barre, PA,          0.8331
                              Lackawanna County, PA,
                              Luzerne County, PA,
                              Wyoming County, PA.
42644......................  Seattle-Bellevue-Everett,            1.1733
                              WA, King County, WA,
                              Snohomish County, WA.
42680......................  Sebastian-Vero Beach, FL,            0.8760
                              Indian River County, FL.
43100......................  Sheboygan, WI, Sheboygan             0.9203
                              County, WI.
43300......................  Sherman-Denison, TX,                 0.8723
                              Grayson County, TX.
43340......................  Shreveport-Bossier City,             0.8262
                              LA, Bossier Parish, LA,
                              Caddo Parish, LA, De Soto
                              Parish, LA.
43580......................  Sioux City, IA-NE-SD,                0.9163
                              Woodbury County, IA,
                              Dakota County, NE, Dixon
                              County, NE, Union County,
                              SD.
43620......................  Sioux Falls, SD, Lincoln             0.8275
                              County, SD, McCook County,
                              SD, Minnehaha County, SD,
                              Turner County, SD.
43780......................  South Bend-Mishawaka, IN-            0.9425
                              MI, St. Joseph County, IN,
                              Cass County, MI.
43900......................  Spartanburg, SC,                     0.8782
                              Spartanburg County, SC.
44060......................  Spokane, WA, Spokane                 1.1174
                              County, WA.
44100......................  Springfield, IL, Menard              0.9165
                              County, IL, Sangamon
                              County, IL.
44140......................  Springfield, MA, Franklin            1.0383
                              County, MA, Hampden
                              County, MA, Hampshire
                              County, MA.
44180......................  Springfield, MO, Christian           0.8440
                              County, MO, Dallas County,
                              MO, Greene County, MO,
                              Polk County, MO, Webster
                              County, MO.
44220......................  Springfield, OH, Clark               0.8447
                              County, OH.
44300......................  State College, PA, Centre            0.9575
                              County, PA.
44600......................  Steubenville-Weirton, OH-            0.7598
                              WV, Jefferson County, OH,
                              Brooke County, WV, Hancock
                              County, WV.
44700......................  Stockton, CA, San Joaquin            1.3734
                              County, CA.
44940......................  Sumter, SC, Sumter County,           0.7594
                              SC.
45060......................  Syracuse, NY, Madison                0.9897
                              County, NY, Onondaga
                              County, NY, Oswego County,
                              NY.
45104......................  Tacoma, WA, Pierce County,           1.1574
                              WA.
45220......................  Tallahassee, FL, Gadsden             0.8391
                              County, FL, Jefferson
                              County, FL, Leon County,
                              FL, Wakulla County, FL.
45300......................  Tampa-St. Petersburg-                0.9075
                              Clearwater, FL, Hernando
                              County, FL, Hillsborough
                              County, FL, Pasco County,
                              FL, Pinellas County, FL.
45460......................  Terre Haute, IN, Clay                0.9706
                              County, IN, Sullivan
                              County, IN, Vermillion
                              County, IN, Vigo County,
                              IN.
45500......................  Texarkana, TX-Texarkana,             0.7428
                              AR, Miller County, AR,
                              Bowie County, TX.
45780......................  Toledo, OH, Fulton County,           0.9013
                              OH, Lucas County, OH,
                              Ottawa County, OH, Wood
                              County, OH.
45820......................  Topeka, KS, Jackson County,          0.8974
                              KS, Jefferson County, KS,
                              Osage County, KS, Shawnee
                              County, KS, Wabaunsee
                              County, KS.
45940......................  Trenton-Ewing, NJ, Mercer            1.0648
                              County, NJ.
46060......................  Tucson, AZ, Pima County, AZ          0.8953
46140......................  Tulsa, OK, Creek County,             0.8145
                              OK, Okmulgee County, OK,
                              Osage County, OK, Pawnee
                              County, OK, Rogers County,
                              OK, Tulsa County, OK,
                              Wagoner County, OK.
46220......................  Tuscaloosa, AL, Greene               0.8500
                              County, AL, Hale County,
                              AL, Tuscaloosa County, AL.
46340......................  Tyler, TX, Smith County, TX          0.8526
46540......................  Utica-Rome, NY, Herkimer             0.8769
                              County, NY, Oneida County,
                              NY.
46660......................  Valdosta, GA, Brooks                 0.7527
                              County, GA, Echols County,
                              GA, Lanier County, GA,
                              Lowndes County, GA.
46700......................  Vallejo-Fairfield, CA,               1.6286
                              Solano County, CA.
47020......................  Victoria, TX, Calhoun                0.8949
                              County, TX, Goliad County,
                              TX, Victoria County, TX.
47220......................  Vineland-Millville-                  1.0759
                              Bridgeton, NJ, Cumberland
                              County, NJ.
47260......................  Virginia Beach-Norfolk-              0.9121
                              Newport News, VA-NC,
                              Currituck County, NC,
                              Gloucester County, VA,
                              Isle of Wight County, VA,
                              James City County, VA,
                              Mathews County, VA, Surry
                              County, VA, York County,
                              VA, Chesapeake City, VA,
                              Hampton City, VA, Newport
                              News City, VA, Norfolk
                              City, VA, Poquoson City,
                              VA, Portsmouth City, VA,
                              Suffolk City, VA, Virginia
                              Beach City, VA,
                              Williamsburg City, VA.
47300......................  Visalia-Porterville, CA,             0.9947
                              Tulare County, CA.
47380......................  Waco, TX, McLennan County,           0.8213
                              TX.
47580......................  Warner Robins, GA, Houston           0.7732
                              County, GA.
47644......................  Warren-Troy-Farmington               0.9432
                              Hills, MI, Lapeer County,
                              MI, Livingston County, MI,
                              Macomb County, MI, Oakland
                              County, MI, St. Clair
                              County, MI.

[[Page 26089]]

 
47894......................  Washington-Arlington-                1.0533
                              Alexandria, DC-VA-MD-WV,
                              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,            0.8331
                              Black Hawk County, IA,
                              Bremer County, IA, Grundy
                              County, IA.
48140......................  Wausau, WI, Marathon                 0.8802
                              County, WI.
48300......................  Wenatchee-East Wenatchee,            1.0109
                              WA, Chelan County, WA,
                              Douglas County, WA.
48424......................  West Palm Beach-Boca Raton-          0.9597
                              Boynton Beach, FL, Palm
                              Beach County, FL.
48540......................  Wheeling, WV-OH, Belmont             0.6673
                              County, OH, Marshall
                              County, WV, Ohio County,
                              WV.
48620......................  Wichita, KS, Butler County,          0.8674
                              KS, Harvey County, KS,
                              Sedgwick County, KS,
                              Sumner County, KS.
48660......................  Wichita Falls, TX, Archer            0.9537
                              County, TX, Clay County,
                              TX, Wichita County, TX.
48700......................  Williamsport, PA, Lycoming           0.8268
                              County, PA.
48864......................  Wilmington, DE-MD-NJ, New            1.0593
                              Castle County, DE, Cecil
                              County, MD, Salem County,
                              NJ.
48900......................  Wilmington, NC, Brunswick            0.8862
                              County, NC, New Hanover
                              County, NC, Pender County,
                              NC.
49020......................  Winchester, VA-WV,                   0.9034
                              Frederick County, VA,
                              Winchester City, VA,
                              Hampshire County, WV.
49180......................  Winston-Salem, NC, Davie             0.8560
                              County, NC, Forsyth
                              County, NC, Stokes County,
                              NC, Yadkin County, NC.
49340......................  Worcester, MA, Worcester             1.1584
                              County, MA.
49420......................  Yakima, WA, Yakima County,           1.0355
                              WA.
49500......................  Yauco, PR, Gu[aacute]nica            0.3782
                              Municipio, PR, Guayanilla
                              Municipio, PR,
                              Pe[ntilde]uelas Municipio,
                              PR, Yauco Municipio, PR.
49620......................  York-Hanover, PA, York               0.9540
                              County, PA.
49660......................  Youngstown-Warren-Boardman,          0.8262
                              OH-PA, Mahoning County,
                              OH, Trumbull County, OH,
                              Mercer County, PA.
49700......................  Yuba City, CA, Sutter                1.1759
                              County, CA, Yuba County,
                              CA.
49740......................  Yuma, AZ, Yuma County, AZ..          0.9674
------------------------------------------------------------------------

    \1\ At this time, there are no hospitals located in this urban 
area on which to base a wage index.

 Table 2--FY 2015 Wage Index Based on CBSA Labor Market Areas for Rural
                                  Areas
------------------------------------------------------------------------
                                                                  Wage
         State code                    Nonurban area             index
------------------------------------------------------------------------
1..........................  Alabama.........................     0.7147
2..........................  Alaska..........................     1.3662
3..........................  Arizona.........................     0.9166
4..........................  Arkansas........................     0.7343
5..........................  California......................     1.2788
6..........................  Colorado........................     0.9802
7..........................  Connecticut.....................     1.1311
8..........................  Delaware........................     1.0092
10.........................  Florida.........................     0.7985
11.........................  Georgia.........................     0.7459
12.........................  Hawaii..........................     1.0739
13.........................  Idaho...........................     0.7605
14.........................  Illinois........................     0.8434
15.........................  Indiana.........................     0.8513
16.........................  Iowa............................     0.8434
17.........................  Kansas..........................     0.7929
18.........................  Kentucky........................     0.7784
19.........................  Louisiana.......................     0.7585
20.........................  Maine...........................     0.8238
21.........................  Maryland........................     0.8696
22.........................  Massachusetts...................     1.3614
23.........................  Michigan........................     0.8270
24.........................  Minnesota.......................     0.9133
25.........................  Mississippi.....................     0.7568
26.........................  Missouri........................     0.7775
27.........................  Montana.........................     0.9098
28.........................  Nebraska........................     0.8855
29.........................  Nevada..........................     0.9781
30.........................  New Hampshire...................     1.0339
31.........................  New Jersey \1\..................  .........
32.........................  New Mexico......................     0.8922
33.........................  New York........................     0.8220
34.........................  North Carolina..................     0.8100
35.........................  North Dakota....................     0.6785
36.........................  Ohio............................     0.8377
37.........................  Oklahoma........................     0.7704
38.........................  Oregon..........................     0.9435
39.........................  Pennsylvania....................     0.8430
40.........................  Puerto Rico \1\.................     0.4047
41.........................  Rhode Island \1\................  .........
42.........................  South Carolina..................     0.8329
43.........................  South Dakota....................     0.8164
44.........................  Tennessee.......................     0.7444
45.........................  Texas...........................     0.7874
46.........................  Utah............................     0.8732
47.........................  Vermont.........................     0.9740
48.........................  Virgin Islands..................     0.7060
49.........................  Virginia........................     0.7758
50.........................  Washington......................     1.0529
51.........................  West Virginia...................     0.7407
52.........................  Wisconsin.......................     0.8904
53.........................  Wyoming.........................     0.9243
65.........................  Guam............................     0.9611
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban, with the
  exception of Puerto Rico. Puerto Rico has areas designated as rural;
  however, no short-term, acute care hospitals are located in the
  area(s) for FY 2015. The Puerto Rico wage index is the same as FY
  2014.

Addendum C

                          IPF Code First Table
------------------------------------------------------------------------
                            Code First Instructions ICD-10-CM (effective
           Code                           October 1, 2014)
------------------------------------------------------------------------
F01.50...................  Code first the underlying physiological
                            condition or sequelae of cerebrovascular
                            disease
F01.51...................  Code first the underlying physiological
                            condition or sequelae of cerebrovascular
                            disease
F02.80...................  Code first the underlying physiological
                            condition, such as: A52.17, A81.0-A81.9,
                            E75.00-E75.09, E75.10-E75.19, E75.4, E83.00-
                            E83.09, G10, G30.0-G30.9, G31.01, G31.09,
                            G31.83, G35, G40.001-G40.319, G40.401-
                            G40.919, G40.A01-G40.B19, M30.8 This list is
                            a translation of the ICD-9 codes rather than
                            a list of the conditions in the ICD-10
                            codebook code first note for category F02.

[[Page 26090]]

 
F02.81...................  Code first the underlying physiological
                            condition, such as: A52.17, A81.0-A81.9,
                            E75.00-E75.09, E75.10-E75.19, E75.4, E83.00-
                            E83.09, G10, G30.0-G30.9, G31.01, G31.09,
                            G31.83, G35, G40.001-G40.319, G40.401-
                            G40.919, G40.A01-G40.B19, M30.8
F04......................  Code first the underlying physiological
                            condition
F05......................  Code first the underlying physiological
                            condition, such as: A52.17, A81.0-A81.9,
                            E75.00-E75.09, E75.10-E75.19, E75.4, E83.00-
                            E83.09, G10, G30.0-G30.9, G31.01, G31.09,
                            G31.83, G35, G40.001-G40.319, G40.401-
                            G40.919, G40.A01-G40.B19, M30.8
F06.0....................  Code first the underlying physiological
                            condition
F06.1....................  Code first the underlying physiological
                            condition
F06.2....................  Code first the underlying physiological
                            condition
F06.30...................  Code first the underlying physiological
                            condition
F06.31...................  Code first the underlying physiological
                            condition
F06.32...................  Code first the underlying physiological
                            condition
F06.33...................  Code first the underlying physiological
                            condition
F06.34...................  Code first the underlying physiological
                            condition
F06.4....................  Code first the underlying physiological
                            condition
F06.8....................  Code first the underlying physiological
                            condition
F45.42...................  Code also associated acute or chronic pain
------------------------------------------------------------------------


[FR Doc. 2014-10306 Filed 5-1-14; 4:15 pm]
BILLING CODE 4120-01-P