Centers for Medicare & Medicaid Services (CMS), HHS.
Notice with comment period.
This notice with comment period sets forth an update to the 60-day national episode rates and the national per-visit amounts under the Medicare prospective payment system for home health agencies. It also responds to public comments received on the June 28, 2002 notice with comment period, which set forth the home health prospective payment system rate update for FY 2003.
Effective Date: The rate updates in this notice with comment period are effective on October 1, 2003.
Comment Period: We will consider comments if we receive them at the appropriate address, as provided below, no later than 5 p.m. on August 29, 2003.
In commenting, please refer to file code CMS-1473-NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. Mail written comments (one original and three copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1473-NC, P.O. Box 8016, Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be timely received in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written comments (one original and three copies) to one of the following addresses: Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, or Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Chester Robinson, (410) 786-6959 or Susan Levy, (410) 786-9364.End Further Info End Preamble Start Supplemental Information
Inspection of Public Comments: Comments received timely will be 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 (410) 786-7195.
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This Federal Register document is also available from the Federal Register online database through GPO access, a service of the U.S. Government Printing Office. The Web site address is http://www.access.gpo.gov/nara/index.html.
Legislation on Payment to Home Health Agencies
A. Balanced Budget Act of 1997
The Balanced Budget Act of 1997 (BBA), Pub. L. 105-33, enacted on August 5, 1997, significantly changed the way Medicare pays for Medicare home health services. Until the implementation of a home health prospective payment system (HH PPS) on October 1, 2000, home health agencies (HHAs) received payment under a cost-based reimbursement system. Section 4603 of the BBA governed the development of the HH PPS by adding section 1895 to the Social Security Act (the Act).
Section 1895(b)(3)(B) of the Act requires the standard prospective payment amounts to be increased by a factor equal to the applicable home health market basket increase for FY 2004.
B. System for Payment of Home Health Services
Generally, Medicare makes payment under the HH PPS on the basis of a national standardized 60-day episode payment, adjusted for case mix and wage index. For episodes with four or fewer visits, Medicare pays on the basis of a national per-visit amount by discipline, referred to as a low utilization payment adjustment (LUPA). Medicare also adjusts the 60-day episode payment for certain intervening events that give rise to a partial episode payment adjustment or a significant change in condition adjustment. For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available. For a complete and full description of the HH PPS as required by the BBA and as refined by the Omnibus Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for FY 1999, Pub. L. 105-277, enacted on October 21, 1998, and the Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999, Pub. L. 106-113, enacted on November 29, 1999, see the July 3, 2000 HH PPS final rule (65 FR 41128).
II. Analysis of and Responses To Comments on the Home Health Prospective Payment System June 28, 2002 Notice With Comment Period
On June 28, 2002, we published a notice with comment period in the Federal Register (67 FR 43616) that set forth an update to the 60-day national episode rates and the national per-visit amounts under the Medicare prospective payment system for HHA for FY 2003. In this section, we respond to the 10 public comments that we received on the FY 2003 HH PPS update notice:
Comment: Commenters disagreed with the statutory elimination of the 10 percent rural add-on set forth in section 508 of the Medicare, Medicaid, and SCHIP Benefits and Improvement Protection Act of 2000 (BIPA).
Response: Section 508 of BIPA explicitly prescribes the time period (home health services furnished in a rural area ending on or after April 1, 2001, and before April 1, 2003) governing the 10 percent rural add-on. To conform to the statutory timeframe governing the rural add-on, the FY 2003 update notice published on June 28, 2002 included the expiration of the 10 percent rural add-on mid FY 2003.
Comment: Commenters believe the actuarial assumptions of the behavior under the interim payment system (IPS) were flawed and inadequate data were Start Printed Page 39765provided to the public, thereby compromising the meaning of the public comments.
Response: We do not agree with the commenters. For FY 2003, we must comply with section 1895(b)(3)(A)(i)(III) of the Act (as re-designated by section 501 of BIPA) governing the payment amount under HH PPS. Section 1895(b)(3)(A)(i)(III) of the Act requires the Secretary to determine the payment amount for FY 2003 as if there were a 15 percent reduction to the limits under the IPS updated to FY 2003. The IPS ended with the implementation of home health PPS on October 1, 2000. Originally, the BBA 1997 required the base year PPS rates to be budget neutral to the IPS with the limits reduced by 15 percent. This requirement was delayed in subsequent legislation until section 501 of BIPA made it applicable to the home health PPS payment amount for FY 2003.
As we explained in the FY 2003 update notice, the level by which actual payments to HHAs would be reduced by lowering the limits is not the same percent by which the IPS limits would be lowered. Our actuaries have used the 7 percent reduction in the PPS rates in every estimate for legislation since BBA 1997. Since it was the intention of the Congress to delay the cut it had already specified, we have simply captured the reductions in payments and carried those assumptions forward to the present. If our actuaries had attempted to impute the continued operation of the IPS until October 2002 given the amount of money available under the IPS limits that had not been spent, the actuaries may have well identified a larger reduction in payments. We did not believe such a result was the intent of the Congress.
Comment: Some commenters urged us to postpone the FY 2003 reduction to the PPS rates until the Congress acts to repeal the reduction.
Response: The FY 2003 update notice reflected the statutory requirements governing the home health PPS payment amount. The statutory requirements included both the required annual update to the PPS rates, according to section 1895(b)(3)(B) of the Act and section 1895(b)(3)(A)(i)(III) of the Act reflecting the IPS estimation. Both sections of the statute were effective October 1, 2002 for FY 2003. As the statute was not revised as of October 1, 2002, the FY 2003 update notice appropriately reflected the statutory requirements as of that date.
Comment: Some commenters raised concerns about the assumptions used to determine the low utilization payment adjustment and corresponding impact on the episode rates. Commenters urged us to refine the methodology governing low utilization payment adjustments.
Response: We understand the commenter's concerns. At this time, we are continuing to gather HH PPS data. As we gather more data, we will continue to monitor this issue.
Comment: One commenter requested a detailed explanation of the market basket inflation update utilized in the FY 2003 PPS rate setting. The commenter points out that costs of home care services have increased recently due to new administrative responsibilities and reduced economies of scale due to lowered visit volume. As a result of staff shortages of nurses and home health aides, labor costs have increased. In addition, the HHAs have experienced rising premiums for liability insurance, workers compensation insurance, and employee health insurance. The commenter believes these factors should be incorporated in the market basket calculations and feels that the market basket update relies on too many proxies and surrogates for actual cost increases.
Response: We agree with the commenter that showing the detail of the market basket increase for each year's payment update would be helpful. Thus, in this year's rule, we have added a table detailing the FY 2004 market basket forecast, which we believe adequately reflects the price increases for home health services (see Table 1 in section III.B. of this notice).
Comment: Some commenters suggested that it is inappropriate and inequitable to use the previous fiscal year's pre-floor and pre-reclassified hospital wage index to adjust the current fiscal year's HH PPS rates.
Response: We believe that the hospital wage index data we use is the most current data appropriate for adjusting HHA payments. As we have stated in both the FY 2002 and FY 2003 update notices, we use the most recent available pre-floor and pre-reclassified hospital wage index data available at the time of publication.
Comment: A commenter requested clarification of our response to comments in the update notice published on June 28, 2002 in the Federal Register that states, “the statute does not contemplate a recalculation of the initial base year after the rates are established.” The commenter requested specific clarification of whether or not we were referring to the retrospective or prospective recalculation.
Response: In our response to the comments on the June 2002 notice with comment period, we were referring to the commenter's request for a retrospective recalculation of the initial base year rates.
Comment: A commenter is requesting specific data regarding the frequency of outlier payments, any Home Health Resource Group (HHRG) connections to outlier payments, and the range of discipline-specific visits occurring in outlier cases and a re-evaluation of the outlier methodology.
Response: We appreciate the comment. We are still developing the data requested by the commenter. We anticipate releasing and/or publishing the data upon their completion.
Comment: We received comments on the pre-floor and pre-reclassified hospital wage index. Specifically, commenters noted that a reduction in wage index occurred in their area.
Response: The HH PPS uses the pre-floor and pre-reclassified hospital wage index. Accordingly, we refer the commenters to the annual acute care hospital inpatient proposed and final rules, which provide detailed explanations of the costs that are included in the hospital wage index and how the hospital wage index is calculated. The hospital wage index is computed annually, using data collected annually from hospitals' Medicare cost reports. In addition, hospital data may differ from year-to-year, in part, because in labor market areas with few hospitals, annual variations in wage index values are typical.
Comment: A commenter urged us to develop a home health specific wage index.
Response: We have previously developed a home health specific wage index, which the industry did not support because it was viewed less favorably or less accurate than the pre-floor and pre-reclassified hospital wage index. Specifically, the home health industry had concerns with the methodology used to develop a home health specific wage index. These concerns coupled with our lack of applicable specific home health wage index led to our adoption of the hospital wage index in developing home health PPS. We will, however, continue to review the feasibility of this recommendation.
III. Provisions of this Notice With Comment Period
A. National Standardized 60-Day Episode Rate
Medicare HH PPS has been effective since October 1, 2000. As set forth in the final rule published July 3, 2000 in the Federal Register (65 FR 41128), the unit Start Printed Page 39766of payment under Medicare HH PPS is a national standardized 60-day episode rate. As set forth in 42 CFR 484.220, we adjust the national standardized 60-day episode rate by case mix and wage index based on the site of service for the beneficiary. The FY 2004 HH PPS rates use the same case-mix methodology and application of the wage index adjustment to the labor portion of the HH PPS rates as set forth in the July 3, 2000 final rule. We multiply the national 60-day episode rate by the patient's applicable case-mix weight. We divide the case-mix adjusted amount into a labor and non-labor portion. We multiply the labor portion by the applicable wage index based on the site of service of the beneficiary. The labor portion of the rate continues to be .77668 and the non-labor portion of the rate continues to be .22332. We add the wage-adjusted portion to the non-labor portion yielding the case-mix and wage-adjusted 60-day episode rate subject to applicable adjustments.
For FY 2004, we use again the design and case-mix methodology described in section III.G of the HH PPS July 3, 2000 final rule (65 FR 41192 through 41203). For FY 2004, we base the wage index adjustment to the labor portion of the PPS rates on the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice, which is discussed in section III.C of this notice with comment period.
As discussed in the July 3, 2000 HH PPS final rule, for episodes with four or fewer visits, Medicare pays the national per-visit amount by discipline, referred to as a LUPA. We update the national per-visit amounts by discipline annually by the applicable home health market basket. We adjust the national per-visit amount by the appropriate wage index based on the site of service for the beneficiary as set forth in § 484.230. We adjust the labor portion of the updated national per-visit amounts by discipline used to calculate the LUPA by the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice, as discussed in section III.C of this notice with comment period.
Medicare pays the 60-day case-mix and wage-adjusted episode payment on a split percentage payment approach. The split percentage payment approach includes an initial percentage payment and a final percentage payment as set forth in § 484.205(b)(1) and (b)(2). We may base the initial percentage payment on the submission of a request for anticipated payment and the final percentage payment on the submission of the claim for the episode, as discussed in regulations in § 409.43. The claim for the episode that the HHA submits for the final percentage payment determines the total payment amount for the episode and whether we make an applicable adjustment to the 60-day case-mix and wage-adjusted episode payment. The end date of the 60-day episode as reported on the claim determines the rate level at which Medicare will pay the claim for the fiscal period.
In summary, we may adjust the 60-day case-mix and wage adjusted episode payment based on the information submitted on the claim to reflect the following:
- A low utilization payment provided on a per-visit basis as set forth in § 484.205(c) and § 484.230.
- A partial episode payment adjustment as set forth in § 484.205(d) and § 484.235.
- A significant change in condition adjustment as set forth in § 484.205(e) and § 484.237.
- An outlier payment as set forth in § 484.205(f) and § 484.240.
This notice with comment period reflects the updated FY 2004 rates that are effective October 1, 2003.
B. Structure and Methodology for FY 2004 Market Basket
On July 1, 1996, we published a notice with comment period (61 FR 34349) in the Federal Register that fully explained the structure and methodology of the current home health market basket. The home health market basket captures the “pure price” change between payment years associated with providing home health services. In column 1 of Table 1, we have provided the 1993-based cost category components. In column 2 of Table 1, the weights in the home health market basket represent the average cost structure for freestanding HHAs for a base year, currently 1993. The weights are derived using Medicare Cost Reports for freestanding HHAs, augmented with additional information from the U.S. Department of Commerce, Bureau of Economic Analysis' Input-Output Tables. In column 3 of Table 1, the proxies used in the home health market basket are selected for their representativeness in tracking pure price changes and are generally publicly available price series from the U.S. Bureau of Labor Statistics. In column 4 of Table 1, the home health market basket percent change, or update, for FY 2004 is calculated as the weighted average of these specific price proxy changes. We feel that the home health market basket accurately reflects the price changes facing HHAs in providing an efficient level of care.
Market baskets are periodically rebased and revised to a more current base year. To this end, we have been monitoring the most recently available data (for proposes of this analysis, we used 1999 data) on the distribution of costs in providing home health services and the appropriateness of our price proxies. Though this work is still very preliminary, the distribution of costs through 1999 does not appear to be dramatically different than the distribution of costs in the 1993 base year. We will continue to monitor these data, particularly data for the periods after prospective payment began, to determine the most appropriate time to rebase and revise the home health market basket. In Table 1 below, we set forth the 1993-based cost categories, weights, price proxies, and FY 2004 updates for the market basket forecast. In Table 2 below, we have provided a comparison of the FY 2003 and FY 2004 updates to the home health market basket.
|Cost category||1993-based market basket weight||Price proxy||FY 2004 update (percent)|
|Compensation, including allocated Contract Services' labor||77.668||3.6|
|Wages and salaries, including allocated contract services' labor||64.226||HHA Occupational Wage Index||3.4|
|Employee benefits, including allocated contract services' labor||13.442||HHA Occupational Benefits Index||4.7|
|Operations & Maintenance||0.832||CPI-U Fuel & Other Utilities||0.5|
|Administrative & General, including allocated contract services' non-labor||9.569||2.7|
|Start Printed Page 39767|
|Paper & Printing||0.529||CPI-U Household Paper, Paper Products & Stationery Supplies||1.7|
|Other Administrative & General, including allocated contract services' non-labor||7.591||CPI-U Services||3.0|
|Transportation||3.405||CPI-U Private Transportation||−0.4|
|Insurance||0.560||CPI-U Household Insurance||3.6|
|Fixed Capital||1.764||CPI-U Owner's Equivalent Rent||3.3|
|Movable Capital||0.880||PPI Machinery & Equipment||0.1|
|Other Expenses, including allocated contract services' nonlabor||5.322||CPI-U All Items Less Food & Energy||2.7|
|Source: Global Insights Inc., 1st Qtr, 2003; @USMACRO/MODTREND @CISSIM/TL0203.SIM Historical data through 4TH Qtr, 2002|
|Cost category||1993-based market basket weight||FY03 update (as of 2001: 4th quarter forecast) (percent)||FY04 update (as of 2003: 1st quarter forecast) (percent)|
|Compensation, including allocated Contract Services' labor||77.668||3.4||3.6|
|Wages and salaries, including allocated contract services' labor||64.226||3.4||3.4|
|Employee benefits, including allocated contract services' labor||13.442||3.4||4.7|
|Operations & Maintenance||0.832||0.9||0.5|
|Administrative & General, including allocated contract services' non-labor||9.569||2.9||2.7|
|Paper & Printing||0.529||0.9||1.7|
|Other Administrative & General, including allocated contract services' non-labor||7.591||3.1||3.0|
|Other Expenses, including allocated contract services' nonlabor||5.322||2.7||2.7|
|Source: Global Insights Inc., 1st Qtr, 2003; @USMACRO/MODTREND @CISSIM/TL0203.SIM Historical data through 4th Qtr, 2002; and 4th Qtr, 2001, @USMACRO/MODTREND @CISSIM/TRENDLONG1101 Historical data through 3rd Qtr, 2001.|
C. FY 2004 Update to the Home Health Market Basket Index
Section 1895(b)(3)(B) of the Act requires the standard prospective payment amounts to be increased by a factor equal to the applicable home health market basket increase for FY 2004. This requirement has been codified in regulations in § 484.225.
- FY 2004 Adjustments
In calculating the annual update for the FY 2004 60-day episode rates, we first looked at the FY 2003 rates as a starting point. The FY 2003 national 60-day episode rate is $2,159.39.
In order to calculate the FY 2004 national 60-day episode rate, we multiplied the FY 2003 national 60-day episode rate (2,159.39) by the applicable home health market basket update for FY 2004. The home health market basket increase for FY 2004 is 3.3 percent. We increased the FY 2003 amount by the FY 2004 home health market basket increase ($2,159.39 + 3.3 percent) to yield the updated FY 2004 national 60-day episode rate ($2,230.65) (see Table 3 below).
|Total prospective payment amount per 60-day episode for FY 2003||Multiply by the applicable home health market basket increase||Final FY 2004 updated national 60-day episode rate|
- National Per-Visit Amounts Used To Pay LUPAs and Compute Imputed Costs Used in Outlier Calculations.
As discussed previously in this notice with comment period, the policies governing the LUPAs and outlier calculations set forth in the July 3, 2000 HH PPS final rule will continue during FY 2004. In calculating the annual update for the FY 2004 national per-visit amounts we use to pay LUPAs and to compute the imputed costs in outlier calculations, we again looked at the FY 2003 rates as a starting point. We then multiply those amounts by the applicable home health market basket increase for FY 2004 to yield the updated per-visit amounts for each home health discipline for FY 2004. (See Table 4 below.) Start Printed Page 39768
|Home health discipline types||Final per-visit amounts per 60-day episode for FY 2003 for LUPAs||Multiply by applicable home health market basket||Final per-visit payment amount per discipline for FY 2004 for LUPAs|
|Home Health Aide||$42.68||×1.033||$44.09|
|Medical Social Services||151.11||×1.033||156.10|
C. Hospital Wage Index
Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the Secretary to establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services and to provide appropriate adjustments to the episode payment amounts under HH PPS to account for area wage differences. We apply the appropriate wage index value to the labor portion of the HH PPS rates based on the geographic area in which the beneficiary received home health services. We determine each HHA's labor market area based on definitions of Metropolitan Statistical Areas (MSAs) issued by the Office of Management and Budget (OMB).
As discussed previously and set forth in the July 3, 2000 final rule, the statute provides that the wage adjustment factors may be the factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustment factors. Again, as discussed in the July 3, 2000 final rule, we used the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication of this notice to adjust the labor portion of the HH PPS rates based on the geographic area in which the beneficiary receives the home health services. We believe the use of the most recent available pre-floor and pre-reclassified hospital wage index data results in the appropriate adjustment to the labor portion of the costs as required by statute. (See addenda A and B of this notice with comment period, respectively, for the rural and urban hospital wage indexes. Furthermore, we have added an addendum C that shows a side-by-side comparison of the FY 2002 pre-floor and pre-reclassified hospital wage index and FY 2003 pre-floor and pre-reclassified hospital wage index for the FY 2004 HH PPS update notice. We believe that addendum C provides a clear illustration of changes in the wage index from FY 2002 and FY 2003.)
IV. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a notice such as this take effect. We can waive this procedure, however, if we find good cause that a notice-and-comment procedure is impracticable, unnecessary, or contrary to the public interest and incorporates a statement of finding and its reasons in the notice issued.
We believe it is unnecessary to undertake proposed notice and comment rulemaking as the statute requires annual updates to the HH PPS rates, the methodologies used to update the rate have been previously subject to public comment, and this notice reflects the application of previously established methodologies. This required annual update for the FY 2004 PPS rates is dictated by statute and does not require an exercise of discretion. Therefore, for good cause, we waive prior notice and comment procedures. As indicated previously, we are, however, providing a 60-day comment period for public comment.
V. Collection of Information Requirements
This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
VI. Response to Comments
Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, 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 the preamble, and, if we proceed with a subsequent document, we will respond to the major comments in the preamble to that document.
VII. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). The update set forth in this notice with comment period applies to Medicare payments under HH PPS in FY 2004. Accordingly, the following analysis describes the impact in FY 2004 only. We estimate that there will be an additional $340 million in FY 2004 expenditures attributable to the FY 2004 market basket increase of 3.3 percent.
The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and Start Printed Page 39769government agencies. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million or less annually (for details, see the Small Business Administration's regulation that set forth size standards for health care industries at 65 FR 69432). For purposes of the RFA, approximately 75 percent of HHAs are considered small businesses according to the Small Business Administration's size standards with total revenues of $11.5 million or less in 1 year. Individuals and States are not included in the definition of a small entity. As stated above, this notice with comment period provides an update to all HHAs for FY 2004 as required by statute. This notice will have a significant positive effect upon small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area (MSA) and has fewer than 100 beds. We have determined that this notice with comment period will not have a significant economic 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 that may result in expenditure in any 1 year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. We believe this notice will not mandate expenditures in that amount.
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. We have reviewed this notice under the threshold criteria of Executive Order 13132, Federalism. We have determined that this notice would not have substantial direct effects on the rights, roles, and responsibilities of States.
B. Anticipated Effects
In accordance with the requirements of section 1895(b)(3) of the Act, we publish an update for each subsequent fiscal year that will provide an update to the payment rates. Section 1895(b)(3) of the Act requires us, for FY 2004, to increase the prospective payment amounts by the applicable home health market basket increase. The home health market basket increase for FY 2004 is 3.3 percent. Taking into account the provisions of section 1895(b)(3) of the Act, the increase for FY 2004 is 3.3 percent.
1. Effects on the Medicare Program
This notice merely provides a percentage update to all Medicare HHAs. Therefore, we have not furnished any impact tables. We increase the payment to each Medicare HHA equally by the home health market basket update for FY 2004, as required by statute. There is no differential impact among provider types. The impact is in the aggregate. We estimate that there will be an additional $340 million in FY 2004 expenditures attributable to the FY 2004 market basket increase of 3.3 percent. Thus, the anticipated expenditures outlined in this notice exceed the $100 million annual threshold for a major rule as defined in Title 5, USC, section 804(2).
The applicable home health market basket increase of 3.3 percent for FY 2004 applies to all Medicare participating in HHAs. We do not believe there is a differential impact due to the aggregate nature of the update.
|FY 2004 update to home health PPS rates required by the act||Additional FY 2004 medicare home health estimated expenditures due to annual update required by law|
|Section 1895(b)(3)(B) of the Act requires HH PPS rates increased by applicable home health market basket increase (3.3 percent increase)||$340 million.|
|(Source: President's FY 2003 Budget)|
2. Effects on Providers
This notice will have a positive effect on providers of Medicare home health services by increasing their rate of Medicare payment. We do not anticipate specific effects on other providers. This notice reflects the statutorily required annual update to the HH PPS rates. We do not believe there is a differential impact due to the consistent and aggregate nature of the update.
C. Alternatives Considered
As discussed in section II, this notice with comment period reflects an annual update to the HH PPS rates as required by statute. Due to the lack of discretion provided in the statutory requirements governing this notice with comment period, we believe the statute provides no latitude for alternatives other than the approach set forth in this notice reflecting the FY 2004 annual update to the HH PPS rates. Other than the positive effect of the market basket increase, this notice with comment will not have a significant economic impact nor will it impose an additional burden on small entities. When a regulation or notice imposes additional burden on small entities, we are required under the RFA to examine alternatives for reducing burden.
Since this notice with comment period will not impose an additional burden, we have not examined alternatives.
We have examined the economic impact of this notice with comment period on small entities and have determined that the economic impact is positive, significant, and that all HHAs will be affected. To the extent that small rural hospitals are affiliated with HHAs, the impact on these facilities will also be positive. Finally, we have determined that the economic effects described above are largely the result of the specific statutory provisions, which this notice serves to announce.
In accordance with the provisions of notice with comment Executive Order 12866, this was reviewed by the Office of Management and Budget.Start Signature
(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)
Dated: February 21, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
Dated: March 26, 2003.
Tommy G. Thompson,
|MSA name||Wage index|
|Start Printed Page 39770|
|NEW JERSEY 1|
|RHODE ISLAND 1|
|1 All counties within State are classified as Urban.|
|MSA||Urban area (constituent counties)||Wage index|
|0320||Amarillo, TX, Potter, TX||.9034|
|0440||Ann Arbor, MI||1.1103|
|Start Printed Page 39771|
|0560||Atlantic-Cape May, NJ||1.1017|
|Cape May, NJ|
|0640||Austin-San Marcos, TX||.9637|
|Anne Arundel, MD|
|Baltimore City, MD|
|Queen Annes, MD|
|0760||Baton Rouge, LA||.8294|
|East Baton Rouge, LA|
|West Baton Rouge, LA|
|0840||Beaumont-Port Arthur, TX||.8324|
|Start Printed Page 39772|
|0870||Benton Harbor, MI||.9042|
|St. Clair, AL|
|1080||Boise City, ID||.9310|
|1240||Brownsville-Harlingen-San Benito, TX||.8880|
|1260||Bryan-College Station, TX||.8821|
|1280||Buffalo-Niagara Falls, NY||.9365|
|Grand Isle, VT|
|San Lorenzo, PR|
|Start Printed Page 39773|
|1360||Cedar Rapids, IA||.9056|
|1440||Charleston-North Charleston, SC||.9235|
|1520||Charlotte-Gastonia-Rock Hill, NC-SC||.9850|
|Charlottesville City, VA|
|Start Printed Page 39774|
|1720||Colorado Springs, CO||.9916|
|El Paso, CO|
|1880||Corpus Christi, TX||.8729|
|San Patricio, TX|
|Danville City, VA|
|1960||Davenport-Moline-Rock Island, IA-IL||.8835|
|Rock Island, IL|
|2020||Daytona Beach, FL||.9062|
|2120||Des Moines, IA||.8791|
|Start Printed Page 39775|
|St. Clair, MI|
|St. Louis, MN|
|2281||Dutchess County, NY||1.0684|
|2290||Eau Claire, WI||.8952|
|Eau Claire, WI|
|2320||El Paso, TX||.9265|
|El Paso, TX|
|2670||Fort Collins-Loveland, CO||1.0066|
|2680||Ft. Lauderdale, FL||1.0297|
|2700||Fort Myers-Cape Coral, FL||.9680|
|2710||Fort Pierce-Port St. Lucie, FL||.9823|
|St. Lucie, FL|
|2720||Fort Smith, AR-OK||.7895|
|2750||Fort Walton Beach, FL||.9693|
|Start Printed Page 39776|
|2760||Fort Wayne, IN||.9457|
|De Kalb, IN|
|2800||Forth Worth-Arlington, TX||.9446|
|2920||Galveston-Texas City, TX||.9465|
|2975||Glens Falls, NY||.8281|
|2985||Grand Forks, ND-MN||.8897|
|Grand Forks, ND|
|2995||Grand Junction, CO||.9456|
|3000||Grand Rapids-Muskegon-Holland, MI||.9525|
|3040||Great Falls, MT||.8950|
|3080||Green Bay, WI||.9502|
|3160||Greenville, Spartanburg-Anderson, SC||.9122|
|Start Printed Page 39777|
|Fort Bend, TX|
|3500||Iowa City, IA||.9587|
|St. Johns, FL|
|3640||Jersey City, NJ||1.1190|
|Start Printed Page 39778|
|3660||Johnson City-Kingsport-Bristol, TN-VA||.8268|
|Bristol City, VA|
|Van Buren, MI|
|3760||Kansas City, KS-MO||.9736|
|3870||La Crosse, WI-MN||.9400|
|La Crosse, WI|
|St. Landry, LA|
|St. Martin, LA|
|3960||Lake Charles, LA||.7965|
|3980||Lakeland-Winter Haven, FL||.9357|
|4040||Lansing-East Lansing, MI||.9726|
|Start Printed Page 39779|
|4100||Las Cruces, NM||.8745|
|Dona Ana, NM|
|4120||Las Vegas, NV-AZ||1.1521|
|4400||Little Rock-North Little Rock, AR||.9097|
|4480||Los Angeles-Long Beach, CA||1.2001|
|Los Angeles, CA|
|Bedford City, VA|
|Lynchburg City, VA|
|Cabo Rojo, PR|
|Start Printed Page 39780|
|Sabana Grande, PR|
|San German, PR|
|4900||Melbourne-Titusville-Palm Bay, FL||1.0253|
|5120||Minneapolis-St. Paul, MN-WI||1.0903|
|St. Croix, WI|
|5330||Myrtle Beach, SC||.8976|
|Start Printed Page 39781|
|5483||New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT||1.2408|
|New Haven, CT|
|5523||New London-Norwich, CT||1.1767|
|New London, CT|
|5560||New Orleans, LA||.9046|
|St. Bernard, LA|
|St. Charles, LA|
|St. James, LA|
|St. John The Baptist, LA|
|St. Tammany, LA|
|5600||New York, NY||1.4414|
|New York, NY|
|5720||Norfolk-Virginia Beach-Newport News, VA-NC||.8574|
|Chesapeake City, VA|
|Hampton City, VA|
|Isle of Wight, VA|
|James 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|
|Contra Costa, CA|
|5880||Oklahoma City, OK||.8900|
|Start Printed Page 39782|
|5945||Orange County, CA||1.1474|
|6015||Panama City, FL||.8865|
|Santa Rosa, FL|
|6240||Pine Bluff, AR||.7962|
|Juana Diaz, PR|
|Start Printed Page 39783|
|6580||Punta Gorda, FL||.9218|
|6640||Raleigh-Durham-Chapel Hill, NC||.9990|
|6660||Rapid City, SD||.8846|
|Charles City County, VA|
|Colonia Heights City, VA|
|Hopewell City, VA|
|New Kent, VA|
|Petersburg City, VA|
|Prince George, VA|
|Richmond City, VA|
|6780||Riverside-San Bernardino, CA||1.1365|
|San Bernardino, CA|
|Roanoke City, VA|
|Salem City, VA|
|Start Printed Page 39784|
|6895||Rocky Mount, NC||.9228|
|El Dorado, CA|
|6960||Saginaw-Bay City-Midland, MI||.9650|
|6980||St. Cloud, MN||.9700|
|7000||St. Joseph, MO||.8021|
|7040||St. Louis, MO-IL||.8855|
|St. Clair, IL|
|St. Charles, MO|
|St. Louis, MO|
|St. Louis City, MO|
|7160||Salt Lake City-Ogden, UT||.9945|
|Salt Lake, UT|
|7200||San Angelo, TX||.8374|
|Tom Green, TX|
|7240||San Antonio, TX||.8753|
|7320||San Diego, CA||1.1131|
|San Diego, CA|
|7360||San Francisco, CA||1.4142|
|San Francisco, CA|
|San Mateo, CA|
|7400||San Jose, CA||1.4145|
|Santa Clara, CA|
|7440||San Juan-Bayamon, PR||.4741|
|Aguas Buenas, PR|
|Start Printed Page 39785|
|Los Piedras, PR|
|Rio Grande, PR|
|San Juan, PR|
|Toa Alta, PR|
|Toa Baja, PR|
|Trujillo Alto, PR|
|Vega Alta, PR|
|Vega Baja, PR|
|7460||San Luis Obispo-Atascadero-Paso||1.1271|
|San Luis Obispo, CA|
|7480||Santa Barbara-Santa Maria-Lompoc, CA||1.0481|
|Santa Barbara, CA|
|7485||Santa Cruz-Watsonville, CA||1.3646|
|Santa Cruz, CA|
|7490||Santa Fe, NM||1.0712|
|Los Alamos, NM|
|Santa Fe, NM|
|7500||Santa Rosa, CA||1.3046|
|7680||Shreveport-Bossier City, LA||.8987|
|7720||Sioux City, IA-NE||.9046|
|7760||Sioux Falls, SD||.9257|
|7800||South Bend, IN||.9802|
|St. Joseph, IN|
|Start Printed Page 39786|
|8050||State College, PA||.8941|
|San Joaquin, CA|
|8280||Tampa-St. Petersburg-Clearwater, FL||.9065|
|8320||Terre Haute, IN||.8599|
|8360||Texarkana, AR-Texarkana, TX||.8088|
|Start Printed Page 39787|
|District of Columbia, DC|
|Prince Georges, MD|
|Alexandria City, VA|
|Fairfax City, VA|
|Falls Church City, VA|
|Fredericksburg City, VA|
|King George, VA|
|Manassas City, VA|
|Manassas Park City, VA|
|Prince William, VA|
|8920||Waterloo-Cedar Falls, IA||.8069|
|Black Hawk, IA|
|8960||West Palm Beach-Boca Raton, FL||.9939|
|Palm Beach, FL|
|9080||Wichita Falls, TX||.8498|
|New Castle, DE|
|New Hanover, NC|
|9340||Yuba City, CA||1.0276|
|Rural area||FY 2002 wage index||FY 2003 wage index||Percent change, FY 2002-FY 2003|
|Non-Urban area||FY 2002 wage index||FY 2003 wage index||Percent change, FY 2002-FY 2003 (percent)|
|Urban MSA||FY 2002 wage index||FY 2003 wage index||Percent change, FY 2002-FY 2003|
|Start Printed Page 39789|
|Start Printed Page 39790|
[FR Doc. 03-16397 Filed 6-27-03; 8:45 am]
BILLING CODE 4120-01-P