[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Rules and Regulations]
[Pages 24735-24739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08889]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1762-IFC]
RIN 0938-AU56


Medicare Program; Modification of Limitations on Redesignation by 
the Medicare Geographic Classification Review Board (MGCRB)

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period (IFC) amends our 
current regulations to allow hospitals with a rural redesignation under 
the Social Security Act (the Act) to reclassify through the Medicare 
Geographic Classification Review Board (MGCRB) using the rural 
reclassified area as the geographic area in which the hospital is 
located. These regulatory changes align our policy with the decision in 
Bates County Memorial Hospital v. Azar, effective with 
reclassifications beginning with fiscal year (FY) 2023. We would also 
apply the policy in this IFC when deciding timely appeals before the 
Administrator of applications for reclassifications beginning with FY 
2022 that were denied by the MGCRB due to the current policy, which 
does not permit hospitals with rural redesignations to use the rural 
area's wage data for purposes of reclassifying under the MGCRB.

DATES: 
    Effective date: These regulations are effective on May 10, 2021.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below by June 28, 2021.

ADDRESSES: In commenting, please refer to file code CMS-1762-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may (and we encourage you to) submit 
electronic comments on this regulation to http://www.regulations.gov. 
Follow the instructions under the ``submit a comment'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1762-IFC, P.O. Box 8013, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments via 
express or overnight mail to the following address ONLY: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1762-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    For information on viewing public comments, we refer readers to the 
beginning of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Tehila Lipschutz, (410) 786-1344 or 
Dan Schroder, (410) 786-7452.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view 
public comments.
    Comments received timely will be also available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

A. Wage Index for Acute Care Hospitals Paid Under the Hospital 
Inpatient Prospective Payment System (IPPS)

    Under section 1886(d) of the Social Security Act (the Act), 
hospitals are paid based on prospectively set rates. To account for 
geographic area wage level differences, section 1886(d)(3)(E) of the 
Act requires that the Secretary of the Department of Health and Human 
Services (the Secretary) adjust the standardized amounts by a factor 
(established by the Secretary) reflecting the relative hospital wage 
level in the geographic area of the hospital, as compared to the 
national average hospital wage level. We currently define hospital 
labor market areas based on the delineations of statistical areas 
established by the Office of Management and Budget (OMB). The current 
statistical areas (which were implemented beginning with FY 2015) are 
based on revised OMB delineations issued on February 28, 2013, in OMB 
Bulletin No. 13-01, with updates as reflected in OMB Bulletins Nos. 15-
01, 17-01, and 18-04. We refer readers to the FY 2015 IPPS/LTCH PPS 
final rule (79 FR 49951 through 49963) for a full discussion of our 
implementation of the new OMB labor market area delineations beginning 
with the FY 2015 wage index, and to the FY 2021 IPPS/LTCH PPS final 
rule (85 FR 58743 through 58755) for a discussion of the latest updates 
to these delineations.
    Section 1886(d)(3)(E) of the Act requires the Secretary to update 
the wage index of hospitals annually, and to base the update on a 
survey of wages and wage-related costs of short-term, acute care 
hospitals. Under section 1886(d)(8)(D) of the Act, the Secretary is 
required to adjust the standardized amounts so as to ensure that 
aggregate payments under the IPPS, after

[[Page 24736]]

implementation of the provisions of sections 1886(d)(8)(B), 
1886(d)(8)(C), and 1886(d)(10) of the Act, regarding geographic 
reclassification of hospitals, are equal to the aggregate prospective 
payments that would have been made absent these provisions.

B. Hospital Reclassifications Under Sections 1886(d)(8)(E) and 
1886(d)(10) of the Act

    Hospitals may seek to have their geographic designation 
reclassified. Under section 1886(d)(8)(E) of the Act, a qualifying 
prospective payment hospital located in an urban area may apply for 
rural status. Specifically, section 1886(d)(8)(E) of the Act states 
that ``[f]or purposes of this subsection, not later than 60 days after 
the receipt of an application (in a form and manner determined by the 
Secretary) from a subsection (d) hospital described in clause (ii), the 
Secretary shall treat the hospital as being located in the rural area 
(as defined in paragraph (2)(D)) of the state in which the hospital is 
located.'' The regulations governing these geographic redesignations 
are codified in Sec.  412.103, and such hospitals are commonly referred 
to as ``Sec.  412.103 hospitals''.
    In a separate process, hospitals may also reclassify for purposes 
of the wage index under the IPPS under section 1886(d)(10) of the Act 
by applying to the Medicare Geographic Classification Review Board 
(MGCRB). Hospitals must apply to the MGCRB to reclassify not later than 
13 months prior to the start of the fiscal year for which 
reclassification is sought, generally by September 1. (However, we note 
that this deadline has been extended for applications for FY 2022 
reclassifications to 15 days after the public display date of the FY 
2021 IPPS/LTCH final rule at the Office of the Federal Register, using 
our authority under section 1135(b)(5) the Act due to the COVID-19 
Public Health Emergency.) Generally, hospitals must be proximate to the 
labor market area to which they are seeking reclassification and must 
demonstrate characteristics similar to hospitals located in that area. 
The MGCRB issues its decisions by the end of February for 
reclassifications that become effective for the following fiscal year 
(beginning October 1). The regulations applicable to reclassifications 
by the MGCRB are located in Sec. Sec.  412.230 through 412.280.
    Prior to a court decision in Geisinger Community Medical v. 
Secretary, United States Department of Health and Human Services, 794 
F.3d 383 (3d Cir. 2015) (``Geisinger''), hospitals were only able to 
hold one reclassification at a time: either under Sec.  412.103 or 
through the MGCRB under section 1886(d)(10) of the Act. The Court of 
Appeals in Geisinger ruled that CMS's prohibition of dual Sec.  412.103 
and MGCRB reclassifications was unlawful, since section 
1886(d)(8)(E)(i) of the Act requires that ``the Secretary shall treat 
the hospital as being located in the rural area,'' inclusive of MGCRB 
reclassification purposes. Therefore, on April 21, 2016, we published 
an interim final rule with comment period (the April 21, 2016 IFC) in 
the Federal Register (81 FR 23428 through 23438) that included 
provisions amending our regulations to allow hospitals nationwide to 
have simultaneous Sec.  412.103 and MGCRB reclassifications.

II. Provisions of the Interim Final Rule With Comment Period

    Pursuant to our April 21, 2016 IFC, for reclassifications effective 
beginning FY 2018, a hospital may acquire rural status under Sec.  
412.103 and subsequently apply for a reclassification under the MGCRB 
using the distance and average hourly wage criteria designated for 
rural hospitals. Hospitals with a Sec.  412.103 redesignation seeking 
additional reclassification under the MGCRB use the rural distance and 
average hourly wage criteria under Sec.  412.230(b)(1), (d)(1)(iii)(C), 
and (d)(1)(iv)(E). For example, under our current policy, a Sec.  
412.103 hospital geographically located in the urban CBSA of Buffalo-
Cheektowaga, NY seeking to reclassify under the MGCRB would demonstrate 
that their wages are at least 106 percent (and not 108 percent, as 
urban hospitals must demonstrate) of the average hourly wage of 
Buffalo-Cheektowaga, NY, to meet the criteria at Sec.  
412.230(d)(1)(iii)(C).
    However, our current policy compares the average hourly wage of a 
Sec.  412.103 hospital to its geographic urban location, rather than 
the rural reclassified area, for purposes of satisfying certain wage 
comparison criteria. In response to a comment on our April 21, 2016 IFC 
(81 FR 56925), we stated: ``The commenter is correct that the rural 
distance and average hourly wage criteria will be used for hospitals 
with a Sec.  412.103 redesignation. However, the commenter's statement 
that the average hourly wage of a hospital with a Sec.  412.103 
redesignation is compared to the average hourly wage of hospitals in 
the State's rural area under Sec.  412.230(d)(1)(iii)(C) is incorrect. 
Instead, the hospital's average hourly wage would be compared to the 
average hourly wage of all other hospitals in its urban geographic 
location using the rural distance and average hourly wage criteria.''
    On May 14, 2020, the United States District Court for the District 
of Columbia issued a decision in Bates County Memorial Hospital v. 
Azar, 464 F. Supp. 3d 43 (D.D.C. 2020) (Bates). Bates County Memorial 
Hospital and five other geographically urban hospitals were 
reclassified to rural under Sec.  412.103. They also applied for 
reclassification under the MGCRB, but were denied because their wages 
were not at least 106 percent of the geographic urban area in which the 
hospitals were located. Each of the hospitals' average hourly wages 
were at least 106 percent of the 3-year average hourly wage of all 
other hospitals in the rural area of the state in which the hospitals 
are located.
    The Court agreed with the Plaintiffs that the statute at section 
1886(d)(8)(E)(i) of Act requires that CMS treat qualifying hospitals as 
being located in the rural area for purposes of section 1886(d) of the 
Act, including MGCRB reclassification. The Bates decision requires that 
CMS consider the rural area to be the area in which the hospital is 
located for the wage comparisons required for MGCRB reclassifications. 
For example, pursuant to Bates, a Sec.  412.103 hospital geographically 
located in the urban CBSA of Buffalo-Cheektowaga, NY seeking to 
reclassify under the MGCRB would demonstrate that their wages are at 
least 106 percent of the average hourly wage of rural NY, rather than 
that of Buffalo-Cheektowaga.
    As a result of the Bates court's decision, we are revising our 
policy so that the redesignated rural area, and not the hospital's 
geographic urban area, will be considered the area a Sec.  412.103 
hospital is located in for purposes of meeting MGCRB reclassification 
criteria. Similarly, we are revising the regulations to consider the 
redesignated rural area, and not the geographic urban area, as the area 
a Sec.  412.103 hospital is located in for the prohibition at Sec.  
412.230(a)(5)(i) on reclassifying to an area with a pre-reclassified 
average hourly wage lower than the pre-reclassified average hourly wage 
for the area in which the hospital is located.
    Specifically, to align our policy with the court's decision in 
Bates, we are amending the regulations at Sec.  412.230(a)(1) by adding 
(a)(1)(iii) to state that an urban hospital that has been granted 
redesignation as rural under Sec.  412.103 is considered to be located 
in the rural area of the state for the purposes of this section. We are 
also making conforming changes to the regulation at Sec.  
412.230(a)(5)(i) because

[[Page 24737]]

Sec.  412.230(a)(1) except paragraph (a)(5). Because Sec.  
412.230(a)(1) excepts paragraph (a)(5), we believe it is necessary to 
make a specific conforming revision to Sec.  412.230(a)(5)(i), in 
addition to the general rule at Sec.  412.230(a)(1)(iii), to clarify 
that the general rule at Sec.  412.230(a)(1)(iii) applies to Sec.  
412.230(a)(5)(i) as well. That is, we are amending the regulation at 
Sec.  412.230(a)(5)(i) to add language stating that an urban hospital 
that has been granted redesignation as rural under Sec.  412.103 is 
considered to be located in the rural area of the state for the 
purposes of paragraph (a)(5)(i).
    These changes implement the Bates court's interpretation of the 
requirement at section 1886(d)(8)(E)(i) of the Act that ``the Secretary 
shall treat the hospital as being located in the rural area.'' That is, 
a Sec.  412.103 hospital would be considered to be located in the rural 
area of the state for all purposes of MGCRB reclassification, including 
the average hourly wage comparisons required by Sec.  412.230(a)(5)(i) 
and (d)(1)(iii)(C). For example, for purposes of Sec.  
412.230(d)(1)(iii)(C), the Sec.  412.103 hospital would compare its 
average hourly wage to the average hourly wage of all other hospitals 
in the state's rural area. In addition, for purposes of Sec.  
412.230(a)(5)(i), a Sec.  412.103 hospital may not be redesignated to 
another area if the pre-classified average hourly wage for that area is 
lower than the pre-reclassified average hourly wage of the rural area 
of the state in which the hospital is located (thus, a Sec.  412.103 
hospital could potentially reclassify to any area with a pre-
reclassified average hourly wage that is higher than the pre-
reclassified average hourly wage for the rural area of the state, if it 
meets all other applicable reclassification criteria).
    Therefore, effective for reclassification applications due to the 
MGCRB on September 1, 2021, for reclassification first effective for FY 
2023, a Sec.  412.103 hospital could apply for a reclassification under 
the MGCRB using the state's rural area as the area in which the 
hospital is located. We would also apply the policy in this IFC when 
deciding timely appeals before the Administrator under Sec.  412.278 
for reclassifications beginning in FY 2022 that were denied by the 
MGCRB due to existing policy, which did not permit Sec.  412.103 
hospitals to be considered located in the state's rural area.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule before 
the provisions of the rule are finalized, either as proposed or as 
amended, in response to public comments and take effect, in accordance 
with the Administrative Procedure Act (APA) (Pub. L. 79-404), 5 U.S.C. 
553 and, where applicable, section 1871 of the Act. Specifically, 5 
U.S.C. 553 requires the agency to publish a notice of proposed 
rulemaking in the Federal Register that includes a reference to the 
legal authority under which the rule is proposed, and the terms and 
substances of the proposed rule or a description of the subjects and 
issues involved. Section 553(c) of the APA further requires the agency 
to give interested parties the opportunity to participate in the 
rulemaking through public comment before the provisions of the rule 
take effect. Similarly, section 1871(b)(1) of the Act requires the 
Secretary to provide for notice of the proposed rule in the Federal 
Register and a period of not less than 60 days for public comment for 
rulemaking carrying out the administration of the insurance programs 
under Title XVIII of the Act. Section 553(b)(B) of the APA and section 
1871(b)(2)(C) of the Act authorize the agency to waive these 
procedures, however, if the agency finds good cause that notice and 
comment procedures are impracticable, unnecessary, or contrary to the 
public interest and incorporates a statement of the finding and its 
reasons in the rule issued.
    Section 553(d) of the APA ordinarily requires a 30-day delay in the 
effective date of a final rule from the date of its publication in the 
Federal Register. This 30-day delay in effective date can be waived, 
however, if an agency finds good cause to support an earlier effective 
date. Section 1871(e)(1)(B)(i) of the Act also prohibits a substantive 
rule from taking effect before the end of the 30-day period beginning 
on the date the rule is issued or published. However, section 
1871(e)(1)(B)(ii) of the Act permits a substantive rule to take effect 
before 30 days if the Secretary finds that a waiver of the 30-day 
period is necessary to comply with statutory requirements or that the 
30-day delay would be contrary to the public interest. Finally, the 
Congressional Review Act (CRA) (Pub. L. 104-121, Title II) requires a 
60-day delay in the effective date for major rules unless an agency 
finds good cause that notice and public procedure are impracticable, 
unnecessary, or contrary to the public interest, in which case the rule 
shall take effect at such time as the agency determines 5 U.S.C. 
801(a)(3) and 808(2).
    We find good cause for waiving notice-and comment rulemaking and a 
delay in effective date given the decision of the district court and 
the public interest in expeditious implementation of the court's 
interpretation of the statute. Revising the regulation text by adding 
Sec.  412.230(a)(1)(iii) and revising the regulation at Sec.  
412.230(a)(5)(i) through an IFC rather than through the normal notice-
and comment rulemaking cycle and waiving the delay of effective date 
will ensure an expeditious implementation of the court's interpretation 
by allowing this policy to be applied to FY 2023 MGCRB reclassification 
decisions and cases before the Administrator for reclassifications 
effective beginning FY 2022. Absent this IFC, the earliest effective 
date of this revision to the regulations would be October 1, 2021 (FY 
2022) following the normal IPPS/LTCH PPS notice-and comment rulemaking 
cycle. An effective date of FY 2022 would only allow the MGCRB to 
approve hospitals' applications qualifying under this policy for 
applications due September 1, 2022 for reclassifications effective 
beginning FY 2024 (applications are due to the MGCRB 13 months prior to 
the start of the fiscal year). Additionally, implementing the court's 
interpretation via an IFC allows this policy to be applied to cases 
before the Administrator for reclassifications effective beginning in 
FY 2022, which supports an expeditious implementation of this policy. 
Therefore, we find good cause to waive the notice of proposed 
rulemaking as well as the delay of effective date and to issue this 
final rule on an interim basis. Even though we are waiving notice of 
proposed rulemaking requirements and are issuing these provisions on an 
interim basis, we are providing a 60-day public comment period.

IV. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

V. Regulatory Impact Statement

    We have examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation

[[Page 24738]]

and Regulatory Review (January 18, 2011), the Regulatory Flexibility 
Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the 
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 effects, distributive impacts, and equity). A 
Regulatory Impact Analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This rule does not reach the economic threshold and thus is not 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
less than $8.0 million to $41.5 million in any 1 year. Individuals and 
states are not included in the definition of a small entity. We are not 
preparing an analysis for the RFA because we have determined, and the 
Secretary certifies, that this IFC would not have a significant 
economic impact on a substantial number of small entities. Also, our 
revision to the regulatory text is a consequence of a court decision. 
We are amending the regulations to align our policy with the court's 
decision in Bates and implement the Bates court's interpretation of the 
requirement at section 1886(d)(8)(E)(i) of the Act that ``the Secretary 
shall treat the hospital as being located in the rural area.''
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital for Medicare 
payment regulations as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined, and the Secretary certifies, that this IFC 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 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 2021, that 
threshold is approximately $158 million. This rule will have no 
consequential effect on state, local, or tribal governments or on the 
private sector.
    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. Since this regulation does not impose any costs on state 
or local governments, the requirements of Executive Order 13132 are not 
applicable.
    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 effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    We estimate that this rule is ``significant'' but not 
``economically significant,'' as measured by the $100 million 
threshold. However, we have prepared an impact analysis that presents 
our best estimate of the costs and benefits of this rule for FY 2022 
since section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as a rule that raises novel legal or policy issues 
arising out of legal mandates.
    With regard to our impact analysis, as a result of this IFC, for FY 
2022, there are approximately 22 hospitals that may qualify for a 
reclassification to a new or different urban area with a higher wage 
index than they might otherwise have received based on the information 
currently available to us (for example, applications submitted to the 
MGCRB.) For FY 2022, if these hospitals qualify for and accept 
reclassification to a new or different urban area with a higher wage 
index than they might otherwise have received, we estimate a total 
increase in payments to these hospitals of approximately $50 million in 
aggregate. However, wage index adjustments such as these are made in a 
manner that ensures that aggregate payments to hospitals are 
unaffected. This is accomplished through the application of a wage 
index budget neutrality adjustment as described more fully in the FY 
2022 IPPS/LTCH proposed rule. Therefore, as a consequence of the 
court's decision in Bates, even though an urban hospital may be able to 
qualify for a reclassification to a new or different urban area with a 
higher wage index, this would not increase aggregate hospital payments. 
We estimate that in FY 2022 the wage index budget neutrality adjustment 
could increase by one-half of a percentage point as a result of an 
increase in the wage index to these 22 hospitals.
    We do not know as a result of this IFC: (1) How many additional 
hospitals will elect to apply to the MGCRB by September 1, 2021 for 
reclassification beginning FY 2023 that would not otherwise have 
applied; (2) how many hospitals that apply will qualify for a wage 
index higher than they otherwise would have received; (3) for those 
that qualify for a higher wage index how much higher that wage index 
will be; and, (4) how many hospitals may elect to retain or acquire 
Sec.  412.103 urban-to rural reclassification that would not otherwise 
have done so. The MGCRB makes determinations on reclassification 
requests, and hospitals make final decisions whether to accept 
reclassifications approved by the MGCRB.
    We also note that OMB requested public comment on the 
recommendations it received from the Metropolitan and Micropolitan 
Statistical Area Standards Review Committee for changes to OMB's 
metropolitan and micropolitan statistical area standards (86 FR 5263). 
These standards determine the

[[Page 24739]]

procedures for delineating and updating the statistical areas as new 
data become available. If changes to the standards are adopted by OMB 
and if those changes would affect the OMB delineations used for the 
IPPS wage index, we would address any such changes and impacts in 
future rulemaking.
    In accordance with the provisions of Executive Order 12866, this 
IFC was reviewed by the Office of Management and Budget.

VI. 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.
    I, Elizabeth Richter, Acting Administrator of the Centers for 
Medicare & Medicaid Services, approved this document on April 16, 2021.

List of Subjects in 42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV, part 412, as follows:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

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

    Authority:  42 U.S.C. 1302 and 1395hh.


0
2. Section 412.230 is amended by adding paragraph (a)(1)(iii) and 
revising paragraph (a)(5)(i) to read as follows:


Sec.  412.230  Criteria for an individual hospital seeking 
redesignation to another rural area or an urban area.

    (a) * * *
    (1) * * *
    (iii) An urban hospital that has been granted redesignation as 
rural under Sec.  412.103 is considered to be located in the rural area 
of the state for the purposes of this section.
* * * * *
    (5) * * *
    (i) An individual hospital may not be redesignated to another area 
for purposes of the wage index if the pre-reclassified average hourly 
wage for that area is lower than the pre-reclassified average hourly 
wage for the area in which the hospital is located. An urban hospital 
that has been granted redesignation as rural under Sec.  412.103 is 
considered to be located in the rural area of the state for the 
purposes of this paragraph (a)(5)(i).
* * * * *

    Dated: April 23, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-08889 Filed 4-27-21; 4:45 pm]
BILLING CODE 4120-01-P