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Medicare Program; Inpatient Psychiatric Facilities Prospective Payment System Payment Update for Rate Year Beginning July 1, 2006 (RY 2007)

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Start Preamble Start Printed Page 27040

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This final rule updates the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs). These changes are applicable to IPF discharges occurring during the rate year beginning July 1, 2006 through June 30, 2007. In addition, we are adopting the new Office of Management and Budget (OMB) labor market area definitions for the purpose of geographic classification and the wage index. We are also making revisions to existing policies and implementing new polices.

DATES:

Effective Date: These regulations are effective on July 1, 2006.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Dorothy Colbert, (410) 786-4533 for general information. Mary Lee Seifert, (410) 786-0030 for information regarding the market basket and labor-related share. Theresa Bean, (410) 786-2287 for information regarding the regulatory impact analysis. Matthew Quarrick, (410) 786-9867 for information on the wage index.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Table of Contents

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

I. Background

A. General and Legislative History

B. Overview of the Establishment of the IPF PPS

C. Applicability of the IPF PPS

II. Overview for Updating the IPF PPS

A. Requirements for Updating the IPF PPS

B. Transition Period for Implementation of the IPF PPS

III. Provisions of the Proposed Regulation

IV. Analysis of and Responses to Public Comments

V. Updates to the IPF PPS for RY Beginning July 1, 2006

A. Calculation of the Average Per Diem Cost

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

1. Standardization of the Federal Per Diem Base Rate

2. Calculation of the Budget Neutrality Adjustment

a. Outlier Adjustment

b. Stop-Loss Provision Adjustment

c. Behavioral Offset

3. Revision of Standardization Factor

C. Update of the Federal Per Diem Base Rate

1. Market Basket for IPFs Reimbursed Under the IPF PPS

a. Market Basket Index for IPF PPS

b. Overview of the RPL Market Basket

2. Methodology for Operating Portion of the RPL Market Basket

3. Methodology for Capital Portion of the RPL Market Basket

4. Labor-Related Share

VI. Update of the IPF PPS Adjustment Factors

A. Overview of the IPF PPS Adjustment Factors

B. Patient-Level Adjustments

1. Adjustment for DRG Assignment

2. Payment for Comorbid Conditions

3. Patient Age Adjustments

4. Variable Per Diem Adjustments

C. Facility-Level Adjustments

1. Wage Index Adjustment

a. Revisions of IPF PPS Geographic Classifications

b. Current IPF PPS Labor Market Areas Based on MSAs

c. Core-Based Statistical Areas

d. Revision of the IPF PPS Labor Market Areas

i. New England MSAs

ii. Metropolitan Divisions

iii. Micropolitan Areas

e. Implementation of the Revised Labor Market Areas Under the IPF PPS

f. Wage Index Budget Neutrality

2. Adjustment for Rural Location

3. Teaching Adjustment

4. Cost of Living Adjustment for IPFs Located in Alaska and Hawaii

5. Adjustment for IPFs With a Qualifying Emergency Department (ED)

a. New Source of Admission Code To Implement the ED Adjustment

b. Applicability of the ED Adjustment to IPFs in Critical Access Hospitals

D. Other Payment Adjustments and Policies

1. Outlier Payments

a. Update to the Outlier Fixed Dollar Loss Threshold Amount

b. Statistical Accuracy of Cost-to-Charge Ratios

2. Stop-Loss Provision

3. Patients Who Receive Electroconvulsive Therapy (ECT)

4. Physician Certification and Recertification Requirements

5. Provision of Therapeutic Recreation in IPFs

6. Same Day Transfers

VII. Miscellaneous Public Comments Within the Scope of the Proposed Rule

VIII. Provisions of the Final Rule

IX. Collection of Information Requirements

X. Regulatory Impact Analysis

Acronyms

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

BBA Balanced Budget Act of 1997, (Pub. L. 105-33)

BBRA Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, (Pub. L. 106-113)

BIPA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Benefits Improvement and Protection Act of 2000, (Pub. L. 106-554)

CBSA Core-Based Statistical Area

CCR Cost-to-charge ratio

CMS Centers for Medicare & Medicaid Services

CMSA Consolidated Metropolitan Statistical Area

DSM-IV-TR Diagnostic and Statistical Manual of Mental Disorders Fourth Edition—Text Revision

DRGs Diagnosis-related groups

FY Federal fiscal year

HCRIS Hospital Cost Report Information System

ICD-9-CM International Classification of Diseases, 9th Revision, Clinical Modification

IPFs Inpatient psychiatric facilities

IRFs Inpatient rehabilitation facilities

LTCHs Long-term care hospitals

MedPAR Medicare provider analysis and review file

MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003, (Pub. L. 108-173)

MSA Metropolitan Statistical Area

NECMA New England County Metropolitan Area

OMB Office of Management and Budget

PIP Periodic Interim Payments

RY Rate Year (July 1 through June 30)

TEFRA Tax Equity and Fiscal Responsibility Act of 1982, (Pub. L. 97-248)

I. Background

A. General and Legislative History

The Congress directed implementation of a prospective payment system (PPS) for acute care hospitals with the enactment of Pub. L. 98-21. Section 601 of the Social Security Amendments of 1983 (Pub. L. 98-21) added a new section 1886(d) to the Social Security Act (the Act) that replaced the reasonable cost-based payment system for most hospital inpatient services with a PPS.

Although most hospital inpatient services became subject to the PPS, certain hospitals, including IPFs, inpatient rehabilitation facilities (IRFs), long term care hospitals (LTCHs), and children's hospitals were excluded from the PPS for acute care hospitals. These hospitals and units were paid their reasonable costs for inpatient services, Start Printed Page 27041subject to a per discharge limitation or target amount under the authority of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248. The regulations implementing the TEFRA (reasonable cost-based) payment provisions are located at 42 CFR part 413. Cancer hospitals were added to the list of excluded hospitals by section 6004(a) of the Omnibus Budget Reconciliation Act of 1989, (Pub. L. 101-239).

The Congress enacted various provisions in the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), the Medicare, Medicaid, and SCHIP (State Children's Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) to replace the reasonable cost-based method of reimbursement with a PPS for IRFs, LTCHs, and IPFs. Section 124 of the BBRA required implementation of the IPF PPS.

Section 124 of the BBRA mandated that the Secretary—(1) Develop a per diem PPS for inpatient hospital services furnished in psychiatric hospitals and psychiatric units; (2) include in the PPS an adequate patient classification system that reflects the differences in patient resource use and costs among psychiatric hospitals and psychiatric units; (3) maintain budget neutrality; (4) permit the Secretary to require psychiatric hospitals and psychiatric units to submit information necessary for the development of the PPS; and (5) submit a report to the Congress describing the development of the PPS. Section 124 of the BBRA also required that the IPF PPS be implemented for cost reporting periods beginning on or after October 1, 2002.

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).

To implement these provisions, the following were published: a proposed rule in the Federal Register on November 28, 2003 (68 FR 66920); a final rule on November 15, 2004 (69 FR 66922); and a correction notice to the final rule on April 1, 2005 (70 FR 16724). For more detail, see the program memorandum Web site, http://www.cms.hhs.gov/​transmittals/​01_​overview.asp.

B. Overview of the Establishment of the IPF PPS

The November 2004 IPF PPS final rule established regulations for the IPF PPS under 42 CFR 412, subpart N.

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 payment adjustments that were found in the regression analysis to be associated with statistically significant per diem cost differences (see 69 FR 66933 through 66936 for a description of the regression analysis). The patient-level adjustments include age, DRG assignment, comorbidities, and variable per diem adjustments to reflect the higher cost incurred in the early days of a psychiatric 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 presence of a qualifying emergency department (ED). The IPF PPS provides additional payments for outlier cases, stop-loss protection which is applicable only during the IPF PPS transition period, includes special payment provisions for interrupted stays, and a per treatment adjustment for patients who undergo electroconvulsive therapy (ECT). We refer readers to the November 2004 IPF PPS final rule for a comprehensive discussion of the research and data that supported the establishment of the IPF PPS.

We established a CMS Web site that contains useful information regarding the IPF PPS including the proposed rules, final rules, and the correction notices. The Web site URL is http://www.cms.hhs.gov/​InpatientPsychFacilPPS/​ and may be accessed to download or view publications and other information pertinent to the IPF PPS.

C. Applicability of the IPF PPS

The IPF PPS is applicable to freestanding psychiatric hospitals, including government-operated psychiatric hospitals, and distinct part psychiatric units of acute care hospitals and CAHs.

The regulations at § 412.402 define an IPF as a hospital that meets the requirements specified in § 412.22, § 412.23(a), § 482.60, § 482.61, and § 482.62, and units that meet the requirements specified in § 412.22, § 412.25, and § 412.27.

However, the following hospitals are paid under a special payment provision, as described in § 412.22(c) and, therefore, are not subject to the IPF PPS rules:

  • Veterans Administration hospitals.
  • Hospitals that are reimbursed under State cost control systems approved under 42 CFR part 403.
  • Hospitals that are reimbursed in accordance with demonstration projects specified in section 402(a) of Pub. L. 90-248 (42 U.S.C. 1395b-1) or section 222(a) of Pub. L. 92-603 (42 U.S.C. 1395b-1(note)).
  • Non-participating hospitals furnishing emergency services to Medicare beneficiaries.

II. Overview for Updating the IPF PPS

A. Requirements for Updating the IPF PPS

Section 124 of the BBRA 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 reviewed the update approach used in other hospital PPSs (specifically, the IRF and LTCH PPS update methodologies). As a result of this analysis, we stated in the November 2004 IPF PPS final rule (69 FR 66966) that we would implement the IPF PPS using the following update strategy—(1) Calculate the final Federal per diem base rate to be budget neutral for the 18-month period (that is, January 1, 2005 through June 30, 2006); (2) use a July 1 through June 30 annual update cycle; and (3) allow the IPF PPS first update to be effective for discharges July 1, 2006 through June 30, 2007.

As explained in the November 2004 IPF PPS final rule, 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. For this reason, we do not intend to update the regression analysis and recalculate the Federal per diem base rate until we analyze IPF PPS data (that is, no earlier than FY 2008). Until that analysis is complete, we stated our intention to publish a notice in the Federal Register each spring to update the IPF PPS as specified in § 412.428. Start Printed Page 27042

However, since the implementation of the IPF PPS, a new market basket index was announced in the August 2005 IPPS final rule. We believe that this new market basket should be implemented in the IPF PPS as well in order to update the system using the best data available. Therefore, rather than publish a notice to update the IPF PPS in 2006, we published a proposed rule in the Federal Register on January 23, 2006 (71 FR 3616) to allow interested parties an opportunity to comment on the proposed changes.

Updates to the IPF PPS as specified in § 412.428 include:

  • A description of the methodology and data used to calculate the updated Federal per diem base payment amount.
  • The rate of increase factor as described in § 412.424(a)(2)(iii), which is based on the excluded hospital with capital market basket under the update methodology of 1886(b)(3)(B)(ii) of the Act for each year.
  • The best available hospital wage index and information regarding whether an adjustment to the Federal per diem base rate is needed to maintain budget neutrality.
  • Updates to the fixed dollar loss amount in order to maintain the appropriate outlier percentage.
  • Describe the ICD-9-CM coding and DRG classification changes discussed in the annual update to the hospital IPPS regulations.
  • Update the ECT adjustment by a factor specified by CMS.

B. Transition Period for Implementation of the IPF PPS

In the November 2004 IPF PPS final rule, we established § 412.426 to provide for a 3-year transition period from reasonable cost-based reimbursement to full prospective payment for IPFs. New IPFs, as defined in § 412.426(c), are paid 100 percent of the Federal per diem rate. However, for those IPFs that are transitioning to the new system, during the 3-year period as specified in the November 2004 IPF PPS final rule, payment is based on an increasing percentage of the PPS payment and a decreasing percentage of each IPF's facility-specific TEFRA reimbursement rate. The blend percentages are as follows:

Table 1.—IPF PPS Final Rule Transition Blend Factors

Transition yearCost reporting periods beginning on or afterTEFRA rate percentageIPF PPS Federal rate percentage
1January 1, 20057525
2January 1, 20065050
3January 1, 20072575
January 1, 20080100

Changes to the blend percentages occur at the beginning of an IPF's cost reporting period. We note that we are currently in year two of the transition period. As a result, for discharges occurring during IPF cost reporting periods beginning in calendar year (CY) 2006, IPFs would receive a blended payment consisting of 50 percent of the facility-specific TEFRA payment and 50 percent of the IPF PPS payment amount. However, regardless of when an IPF's cost reporting year begins, the payment update will be effective for discharges occurring on or after July 1, 2006 through June 30, 2007. We note that we are not making any changes to the transition approach established in the November 2004 IPF PPS final rule.

III. Provisions of the Proposed Regulation

In January 2006, we published a proposed rule that appeared in the Federal Register at (71 FR 3616), and on February 24, 2006, a correction notice appeared in the Federal Register (71 FR 9505) to correct technical errors in the proposed rule and to extend the comment period for our policy concerning Electroconvulsive Therapy (ECT). The January 2006 proposed rule (hereinafter referred to as the Rate Year (RY) 2007 proposed rule) set forth the proposed annual update to the proposed prospective payment for IPFs for discharges occurring during the RY beginning July 1, 2006. As part of the update, we proposed to incorporate OMB's revised definitions for MSAs and its new definitions of Micropolitan Statistical Areas and Core-Based Statistical Areas (CBSAs). In addition, we proposed the following——

  • Update payments for IPFs using a market basket reflecting the operating and capital cost structures of IRFs, IPFs, and LTCHs.
  • Develop cost weights for benefits, contract labor, and blood and blood products using the FY 2002-based IPPS market basket.
  • Provide weights and proxies for the FY 2002-based RPL market basket.
  • Indicate the methodology for the capital portion of the FY 2002-based RPL market basket.
  • Update the outlier threshold amount to maintain total estimated outlier payments at 2 percent of total estimated payments.
  • Use source code “D” to identify IPF patients who have been transferred to the IPF from the same hospital or CAH.
  • Retain the 17 percent adjustment for IPFs located in rural areas, the 1.31 adjustment for IPFs with a qualifying ED, the 0.5150 teaching adjustment to the Federal per diem base rate, and the DRG adjustment factors currently being paid to IPFs for discharges occurring during RY 2007.
  • Update the payment rate for ECT.
  • Update the DRG listing and comorbidity categories to reflect the ICD-9-CM revisions effective October 1, 2005.

In addition to addressing these issues in the proposed rule for RY 2007, we also proposed making the following specific revisions to the existing text of the regulations. We proposed to make conforming changes in 42 CFR parts 412 and 424, as discussed throughout this preamble.

In § 412.27, we proposed to revise paragraph (b) to remove the reference to recreational therapy.

In § 412.402, we proposed to revise the heading of “Fixed dollar loss-threshold” to “Fixed dollar loss threshold amount” and revise the definitions of “Fixed dollar loss threshold amount”, “Qualifying emergency department”, “Rural area” and “Urban area.” For consistency, we proposed to make conforming changes to these terminologies wherever they appear in the regulations text.

In § 412.424, we proposed to add paragraph (d)(1)(iii)(E) to clarify that the teaching adjustment is made on a claim basis as an interim payment and the final payment in full is made during the final settlement of the cost report. For clarity, we also proposed to revise paragraph (d)(2) introductory text. The current language in (d)(2)(iii) would become the introductory text for paragraph (d)(2) and paragraph Start Printed Page 27043(d)(2)(iii) would be removed. In addition, we proposed to revise § 412.424(d)(3)(i)(A) to clarify that an outlier payment is made if an IPF's estimated total cost for a case exceeds a fixed dollar loss threshold amount plus the Federal payment amount for the case.

In § 412.426(a), we proposed to correct the cross reference to the Federal per diem payment amount. We incorrectly referenced the Federal per diem base rate as § 412.424(c). The correct cross reference to the Federal per diem payment amount is § 412.424(d).

In § 412.428, we proposed to revise paragraph (b) to specify that for discharges occurring on or after January 1, 2005 but before July 1, 2006 the rate of increase factor for the Federal portion of the payment is based on the FY 1997-based excluded hospital with capital market basket and for discharges occurring on or after July 1, 2006, the rate of increase factor for the Federal portion of the payment is based on the FY 2002-based Rehabilitation, Psychiatric, and Long-Term Care (RPL) market basket.

In addition, we proposed to add a new paragraph (g) to state that we would update the national urban and rural cost to charge ratio medians and ceilings. Paragraph (1) through (3) would specify the types of IPFs in which to apply the national cost to charge ratio. Furthermore, we proposed to add a new paragraph (h) to update the cost of living adjustment factors, if appropriate.

In § 424.14, we proposed to revise the title to read, “Requirements for inpatient services of inpatient psychiatric facilities,” to ensure consistency in compliance with the requirements among all IPFs. We also proposed to add a new paragraph (c)(3) to clarify for purposes of payment under the IPF PPS, that the physician would also recertify that the patient continues to need, on a daily basis, active inpatient psychiatric care (furnished directly by or requiring the supervision of inpatient psychiatric facility personnel) or other professional services that can only be provided on an inpatient basis.

In addition, we proposed to revise paragraph (d)(2) to state that the first recertification is required as of the 12th day of hospitalization. Subsequent recertifications would be required at intervals established by the hospital's utilization review committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.

IV. Analysis of and Responses to Public Comments

We provided for a 60 day comment period on the RY 2007 proposed rule. The correction notice to correct technical errors that appeared in the RY 2007 proposed rule appeared in the Federal Register on February 24, 2006. The correction notice extended the public comment period on the ECT policy, to allow the public an opportunity to comment on the corrected policy.

We received approximately 32 public comments from hospital associations, psychiatric hospitals and units, and acute care hospitals. In general, commenters expressed some concern about a few of our proposals and suggested that we wait to implement specific updates to the IPF PPS until we can analyze 2005 claims data. A few commenters requested that we provide the provider impact files that are comparable to the files prepared for the Inpatient Prospective Payment System (IPPS). In addition, several commenters requested that we retain the rural adjustment or provide a 3-year hold harmless provision for IPFs that would lose their rural adjustment if we adopted the proposed CBSA definitions. Several commenters supported the proposed changes to the IPF PPS.

Summaries of the public comments received and our responses to those comments are provided in the appropriate sections in the preamble of this final rule.

V. Updates to the IPF PPS for RY Beginning July 1, 2006

The IPF PPS is based on a standardized Federal per diem base rate calculated from 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 applicable wage index factor and the patient-level and facility-level adjustments that are applicable to the IPF stay.

The following is an explanation of how we calculated the Federal per diem base rate and the standardization and budget neutrality factors as described in the November 2004 IPF PPS final rule.

A. Calculation of the Average Per Diem Cost

As indicated in the November 2004 IPF PPS final rule, to calculate the Federal per diem base rate, we estimated the average cost per day for— (1) routine services from FY 2002 cost reports (supplemented with FY 2001 cost reports if the FY 2002 cost report was missing); and (2) ancillary services using data from the FY 2002 Medicare claims and corresponding data from facility cost reports.

For routine services, the per diem operating and capital costs were used to develop the average per diem cost amount. The per diem routine costs were obtained from each facility's Medicare cost report. To estimate the costs for routine services included in the Federal per diem base rate calculation, we added the total routine costs (including costs for capital) submitted on the cost report for each provider and divided it by the total Medicare days.

Some average routine costs per day were determined to be aberrant, that is, the costs were extraordinarily high or low and most likely contained data errors. We provided a detailed discussion in the November 2004 IPF PPS final rule (69 FR 66926 through 66927) of the method used to trim extraordinarily high or low cost values from the per diem rate development file in order to improve the accuracy of our results. For ancillary services, we calculated the costs by converting charges from the FY 2002 Medicare claims into costs using facility-specific, cost-center specific cost-to-charge ratios obtained from each provider's applicable cost reports. We matched each provider's departmental cost-to-charge ratios from their Medicare cost report to each charge on their claims reported in the MedPAR file. Multiplying the total charges for each type of ancillary service by the corresponding cost-to-charge ratio provided an estimate of the costs for all ancillary services received by the patient during the stay. We determined the average ancillary amount per day by dividing the total ancillary costs for all stays by the total number of covered Medicare days.

Adding the average ancillary costs per day and the average routine costs per day including capital costs provided the estimated average per diem cost for each patient day of inpatient psychiatric care in FY 2002.

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

Section 124(a)(1) of the BBRA requires that the implementing IPF PPS be budget neutral. 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, in the November 2004 IPF PPS final Start Printed Page 27044rule, 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 TEFRA methodology had the IPF PPS not been implemented.

The November 2004 IPF PPS final rule includes a step-by-step description of the methodology we used to estimate payments under the TEFRA payment system (69 FR 66930). For the IPF PPS methodology, we calculated the final Federal per diem base rate to be budget neutral during the implementation period under the IPF PPS using a July 1 update cycle. Thus, the implementation period for the IPF PPS is the 18-month period January 1, 2005 through June 30, 2006.

We updated the average cost per day to the midpoint of the IPF PPS implementation period (that is, October 1, 2005). We used the most recent projection of the full percentage increase in the 1997-based excluded hospital with capital market basket index for FY 2003 and later in accordance with § 413.40(c)(3)(viii). The updated average cost per day was used in the payment model to establish the budget neutrality adjustment.

Public comments and our responses on changes for determining the standardized budget neutral federal per diem base rate are summarized below.

Comment: We received several comments regarding the determination of the target amount and the temporary caps on the facility-specific TEFRA payments which expired in FY 2002. Specifically, the commenters stated that even though the temporary caps on the facility-specific (TEFRA) payments expired in FY 2002, the capped payment amounts which were used to establish the baseline for budget neutrality purposes, were inflated by the market basket rate for each year until the PPS began in 2005.

The commenters believe that CMS should have used what would have been spent, absent the expired temporary caps inflated using the market basket rate, to establish the baseline rather than capped payments. The commenters stated that using the capped payments could have inappropriately reduced the allowed aggregate spending under the PPS each year.

Response: We are aware that there have been concerns over the method we used for calculating the target amount for cost reporting periods beginning after FY 2002 for those hospitals and units that were subject to the “payment caps” in accordance with section 1886(b)(3)(H) of the Act and regulations at § 413.40(c)(4)(iii). We have addressed this issue several times, but most recently in the FY 2006 IPPS final rule (70 FR 47278 and 70 FR 47464). Specifically, we addressed the issue of whether § 413.40(c)(4)(iii) (specifically paragraph (c)(4)(iii)(A)) continues to apply beyond FY 2002. In that rule, we stated that § 413.40(c)(4)(iii) applies only to cost reporting periods beginning on or after October 1, 1997 through September 30, 2002, for IPFs, IRFs, and LTCHs. In addition, we clarify that once the 75th percentile cap provision in paragraph (c)(4)(iii) of § 413.40 expired, the target amount is then determined based on § 413.40(c)(4)(ii) which states that, “Subject to the provisions of [§ 413.40] paragraph (c)(4)(iii) of this section, for subsequent cost reporting periods, the target amount equals the hospital's target amount for the previous cost reporting period increased by the update factor for the subject cost reporting period” unless the provisions of paragraph (c)(5)(ii) of this section apply. Thus, under the requirements of § 413.40 (c)(4)(ii), in this instance, the previous cost reporting period's target amount would be increased by the applicable update factor to arrive at the target amount for FY 2003. Similarly, for cost reporting periods beginning in years subsequent to FY 2003, we calculate a hospital's target amount by taking its previous year's target amount and updating it by the updated factor for the subject cost reporting period unless the provision of paragraph (c)(5)(ii) of this section apply. We followed the methodology in § 413.40(c)(4)(ii) and therefore our projections of what would have been spent under TEFRA and the budget neutrality adjustment are correct.

Final Rule Action: To clarify, in order to calculate the target amounts for cost reporting periods beginning in FY 2003, our policy is that the target amounts for cost reporting periods beginning in FY 2002 are updated as described in § 413.40(c)(4)(ii). Similarly, for cost reporting periods beginning in years subsequent to FY 2003, we calculate target amounts by taking the previous year's target amount and updating it, consistent with § 413.40(c)(4)(ii).

1. Standardization of the Federal Per Diem Base Rate

In the November 2004 IPF PPS final rule, we standardized the IPF PPS Federal per diem base rate in order to account for the overall positive effects of the IPF PPS payment adjustment factors. To standardize the IPF PPS payments, we compared the IPF PPS payment amounts calculated from the FY 2002 MedPAR file to the projected TEFRA payments from the FY 2002 cost report file updated to the midpoint of the IPF PPS implementation period (that is, October 2005). The standardization factor was calculated by dividing total estimated payments under the TEFRA payment system by estimated payments under the IPF PPS. The standardization factor was calculated to be 0.8367. As a result, in the November 2004 IPF PPS final rule, the $724.43 average cost per day was reduced by 16.33 percent (100 percent minus 83.67 percent).

2. Calculation of the Budget Neutrality Adjustment

To compute the budget neutrality adjustment for the IPF PPS, we separately identified each component of the adjustment, that is, the outlier adjustment, stop-loss adjustment, and behavioral offset.

a. Outlier Adjustment

Since the IPF PPS payment amount for each IPF includes applicable outlier amounts, we reduced the standardized Federal per diem base rate to account for aggregate IPF PPS payments estimated to be made as outlier payments. The appropriate outlier amount was determined by comparing the adjusted prospective payment for the entire stay to the computed cost per case. If costs were above the prospective payment plus the adjusted fixed dollar loss threshold amount, an outlier payment was computed using the applicable risk-sharing percentages (see section VI.D.1 of this final rule). The outlier amount was computed for all stays, and the total outlier amount was added to the final IPF PPS payment. The outlier adjustment was calculated to be 2 percent. As a result, the standardized Federal per diem base rate was reduced by 2 percent to account for projected outlier payments.

b. Stop-Loss Provision Adjustment

As explained in the November 2004 IPF PPS final rule, we provide a stop-loss payment to ensure that an IPF's total PPS payments are no less than a minimum percentage of their TEFRA payment, had the IPF PPS not been implemented. We reduced the standardized Federal per diem base rate by the percentage of aggregate IPF PPS payments estimated to be made for stop-loss payments.

The stop-loss payment amount was determined by comparing aggregate prospective payments that the provider would receive under the IPF PPS to aggregate TEFRA payments that the provider would have otherwise received without implementation of the IPF PPS. If an IPF's aggregate IPF PPS payments are less than 70 percent of its aggregate Start Printed Page 27045payments under TEFRA, a stop-loss payment was computed for that IPF. The stop-loss payment amounts were computed for those IPFs that were projected to receive the payments, and the total amount was added to the final IPF PPS payment amount. As a result, the standardized Federal per diem base rate was reduced by 0.39 percent to account for stop-loss payments.

c. Behavioral Offset

As explained in the November 2004 IPF PPS final rule, implementation of the IPF PPS may result in certain changes in IPF practices especially with respect to coding for comorbid medical conditions. As a result, Medicare may incur higher payments than assumed in our calculations. Accounting for these effects through an adjustment is commonly known as a behavioral offset.

Based on accepted actuarial practices and consistent with the assumptions made in other prospective payment systems, we assumed in determining the behavioral offset that IPFs would regain 15 percent of potential “losses” and augment payment increases by 5 percent. We applied this actuarial assumption, which is based on our historical experience with new payment systems, to the estimated “losses” and “gains” among the IPFs. The behavioral offset for the IPF PPS was calculated to be 2.66 percent. As a result, we reduced the standardized Federal per diem base rate by 2.66 percent to account for behavioral changes.

To summarize, the $724.43 updated average per diem cost was reduced by 16.33 percent to account for standardization to projected TEFRA payments for the implementation period, by 2 percent to account for outlier payments, by 0.39 percent to account for stop-loss payments, and by 2.66 percent reduction to account for the behavioral offset. The final standardized budget-neutral Federal per diem base rate for the IPF PPS implementation year was calculated to be $575.95. We discuss the Federal per diem base rate for RY 2007 below.

Public comments and our responses on the behavioral offset are summarized below.

Comment: Several commenters expressed concern that CMS continues to maintain the behavioral offset which is intended to account for changes in provider practice patterns as a result of movement to prospective payment which could result in higher Medicare payments. A few commenters stated that accurate coding is already a high priority in distinct part units and freestanding facilities. Therefore, coding practices in these facilities should not undergo major changes. The commenters suggested that because the PPS is being phased in, and only 50 percent of the payment in the second year would be based on the IPF PPS, the incentive for behavior change is diminished.

Several commenters recommended that CMS analyze the preliminary 2005 claims data and adjust the calculations for the behavioral offset to maintain IPF spending at appropriate levels. A few commenters expressed concern that CMS did not indicate whether an analysis was conducted to determine if continuing the adjustment for behavioral offset is warranted. They believe the assumptions made for both the proposed RY and the implementation year of the IPF PPS overestimated the likely impact of changes in hospital behavior.

Response: We explained in the November 2004 IPF PPS final rule and the RY 2007 proposed rule that we believe it is reasonable to expect changes in IPFs' practices especially with respect to coding for comorbid medical conditions and changes in length of stay (LOS), as a result of the implementation of the IPF PPS.

In addition, based on accepted actuarial practices and consistent with the assumptions made in implementing other prospective payment systems, we assumed in determining the behavioral offset, that IPFs would regain 15 percent of potential “losses” and augment payment increases by 5 percent. We applied this actuarial assumption, which is based on our historical experience with new payment systems, to the estimated “losses” and “gains” among the IPFs.

As indicated in the RY 2007 proposed rule, we do not plan to change adjustment factors or projections, including the behavioral offset, until we analyze IPF PPS data. At that time, we will re-assess the accuracy of the behavioral offset along with the other factors impacting budget neutrality. We anticipate analyzing 2005 IPF PPS claims and cost report data in the future.

Comment: Several commenters inquired why CMS is continuing to include budget neutrality factors in the Federal per diem base rate (behavioral offset, stop-loss adjustment, and outlier adjustment), effectively lowering the base rate. Since the PPS is only budget neutral for the implementation year, the commenters believe the base rate should not reflect budget neutrality factors that effectively lower the amount.

Response: We acknowledge that the PPS is only budget neutral for the implementation year. The standardization factor, behavioral offset, stop-loss adjustment, and outlier adjustment were included in the 2005 Federal per diem base rate of $575.95. In implementing the RY 2007 final rule, we adjust the standardization factor (see section V.B.3 of this final rule), and apply the market basket update and the wage index budget neutrality factor to the base rate. As indicated above, we do not plan to change any adjustment factors or projections, including the budget neutrality factors (behavioral offset, stop-loss adjustment, and outlier adjustment), until we analyze IPF PPS data. We will revisit all assumptions used to calculate the budget neutrality adjustment and make any necessary prospective changes to the Federal per diem base rate. In section VI.D.3 of this final rule, we address these comments with respect to the calculation of the ECT rate.

Final Rule Action: In summary, for future RYs, we will reassess the appropriateness of the behavior offset along with the other factors impacting budget neutrality. For the RY 2007 IPF PPS, we will continue to adjust the standardization factor and apply the market basket updates and the wage index budget neutrality factors.

3. Revision of the Standardization Factor

In reviewing the methodology used to simulate the IPF PPS payments used for the November 2004 IPF PPS final rule, we discovered that the computer code incorrectly assigned non-teaching status to most teaching facilities. As a result, total IPF PPS payments were underestimated by about 1.36 percent. The underestimated IPF PPS payment total was used in calculating the IPF PPS standardization factor. The standardization factor represents the amount by which the IPF PPS per diem payment rate and the ECT rate must be reduced in order to make total IPF PPS payments equal to estimated total TEFRA payments assuming IPFs continued to be paid solely under TEFRA for the first PPS payment year.

The standardization factor is calculated as the ratio of estimated total TEFRA payments to estimated total IPF PPS payments assuming no reduction to the per diem and ECT payment rates. Since the IPF PPS payment total should have been larger than the estimated figure, the standardization factor should have been smaller (0.8254 vs. 0.8367). In turn, the Federal per diem base rate and the ECT rate should have been reduced by 0.8254 instead of 0.8367.

To resolve this issue, we proposed to amend the Federal per diem base rate and the ECT payment rate prospectively. Using the standardization Start Printed Page 27046factor of 0.8254, the base rate should have been $568.17 for the implementation year of the IPF PPS. It is this base rate that we proposed to update using the market basket rate of increase of 4.3 percent and the budget-neutral wage index factor of 1.0042 (see section VI.C.1.f of this final rule). Applying these factors yields a proposed Federal per diem base rate of $595.09 for the RY beginning July 1, 2006 through June 30, 2007.

Public comments and our responses on the revision of the standardization factor are summarized below.

Comment: One commenter asked whether the overall increase in the base rate is appropriately calculated and sufficient.

Response: As explained above and in the RY 2007 proposed rule, the correction of the standardization factor reveals that last year's per diem rate should have been $568.17, and not $575.95. To correct this error prospectively, we apply the market basket increase of 4.3 percent to $568.17, and then apply the wage index budget neutrality factor to compute the Federal per diem base rate.

Final Rule Action: In summary, we are finalizing our decision to revise the standardization factor prospectively, and the Federal per diem base rate for RY 2007 is $595.09.

C. Update of the Federal Per Diem Base Rate

1. Market Basket for IPFs Reimbursed Under the IPF PPS

a. Market Basket Index for IPF PPS

The market basket index used to develop the IPF PPS is the excluded hospital with capital market basket. This market basket was based on 1997 Medicare cost report data and includes data for Medicare participating IPFs, IRFs, LTCHs, cancer, and children's hospitals.

We are presently unable to create a separate market basket specifically for psychiatric hospitals due to the small number of facilities and the limited data that are provided (for instance, approximately 4 percent of psychiatric facilities reported contract labor cost data for FY 2002). However, since all IRFs, LTCHs, and IPFs are now paid under a PPS, we are updating PPS payments made under the IRF PPS, the LTCH PPS, and the IPF PPS using a market basket reflecting the operating and capital cost structures for IRFs, IPFs, and LTCHs (hereafter referred to as the rehabilitation, psychiatric, long-term care (RPL) market basket). We have excluded children's and cancer hospitals from the RPL market basket because 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 is implemented in regulations at § 413.40. They are not reimbursed under a PPS. Also, the FY 2002 cost structures for children's and cancer hospitals are noticeably different than the cost structures of the IRFs, IPFs, and LTCHs.

The services offered in IRFs, IPFs, and LTCHs are typically more labor-intensive than those offered in cancer and children's hospitals. Therefore, the compensation cost weights for IRFs, IPFs, and LTCHs are larger than those in cancer and children's hospitals. In addition, the depreciation cost weights for IRFs, IPFs, and LTCHs are noticeably smaller than those for children's and cancer hospitals.

In the following discussion, we provide an overview on the market basket and describe the methodologies we are using for purposes of determining the operating and capital portions of the FY 2002-based RPL market basket.

b. Overview of the RPL Market Basket

The RPL market basket is a fixed weight, Laspeyres-type price index that was constructed in three steps. First, a base period was selected (in this case, FY 2002) and total base period expenditures were estimated for a set of mutually exclusive and exhaustive spending categories based upon type of expenditure. Then the proportion of total costs that each category represents was determined. These proportions are called cost or expenditure weights. Second, each expenditure category was matched to an appropriate price or wage variable, referred to as a price proxy. In nearly every instance, these price proxies are price levels derived from publicly available statistical series that are published on a consistent schedule, preferably at least on a quarterly basis.

Finally, the expenditure weight for each cost category was multiplied by the level of its respective price proxy for a given period. The sum of these products (that is, the expenditure weights multiplied by their price levels) for all cost categories yields the composite index level of the market basket in a given period. Repeating this step for other periods produces a series of market basket levels over time. Dividing an index level for a given period by an index level for an earlier period produces a rate of growth in the input price index over that time period.

A market basket is described as a fixed-weight index because it answers the question of how much it would cost, at another time, to purchase the same mix of goods and services purchased to provide hospital services in a base period. The effects on total expenditures resulting from changes in the quantity or mix of goods and services (intensity) purchased subsequent to the base period are not measured. In this manner, the market basket measures only pure price change. Only when the index is rebased would the quantity and intensity effects be captured in the cost weights. Therefore, we rebase the market basket periodically so that cost weights reflect changes in the mix of goods and services that hospitals purchase (hospital inputs) to furnish patient care between base periods.

The terms rebasing and revising, while often used interchangeably, actually denote different activities. Rebasing means moving the base year for the structure of costs of an input price index (for example, shifting the base year cost structure from FY 1997 to FY 2002). Revising means changing data sources, methodology, or price proxies used in the input price index. We have rebased and revised the market basket used to update the IPF PPS.

2. Methodology for Operating Portion of the RPL Market Basket

The operating portion of the FY 2002-based RPL market basket consists of several major cost categories derived from the FY 2002 Medicare cost reports for IRFs, IPFs, and LTCHs: wages, drugs, professional liability insurance, and a residual. We chose to use FY 2002 as the base year because we believe this is the most recent, complete year of Medicare cost reports. Due to insufficient Medicare cost report data for IRFs, IPFs, and LTCHs, we have developed cost weights for benefits, contract labor, and blood and blood products using the FY 2002-based IPPS market basket (70 FR 23384), which we explain in more detail later in this section. For example, less than 30 percent of IRFs, IPFs, and LTCHs reported benefit cost data in FY 2002. We have noticed an increase in cost data for these expense categories over the last 4 years. The next time we rebase the RPL market basket there may be sufficient IRF, IPF, and LTCH cost report data to develop the weights for these expenditure categories.

Since the cost weights for the RPL market basket are based on facility costs, as proposed and for this final rule, we are limiting our sample to hospitals with a Medicare average LOS within a comparable range of the total facility average LOS. We believe this provides a more accurate reflection of the structure of costs for Medicare covered Start Printed Page 27047days. Our goal is to measure cost shares that are reflective of case mix and practice patterns associated with providing services to Medicare beneficiaries.

As proposed and for this final rule, we are using those cost reports for IRFs and LTCHs whose Medicare average LOS is within 15 percent (that is, 15 percent higher or lower) of the total facility average LOS for the hospital. This is the same edit applied to the FY 1992-based and FY 1997-based excluded hospital with capital market basket. We are using 15 percent because it includes those LTCHs and IRFs whose Medicare LOS is within approximately 5 days of the facility LOS.

As proposed and for this final rule, we use a less stringent measure of Medicare LOS for IPFs whose average LOS is within 30 or 50 percent (depending on the total facility average LOS) of the total facility average LOS. Using this less stringent edit allows us to increase our sample size by over 150 cost reports and produce a cost weight more consistent with the overall facility. The edit we applied to IPFs when developing the FY 1997-based excluded hospital with capital market basket was based on the best available data at the time.

Public comments and our responses on the proposed changes for implementing the methodology for the operating portion of the RPL market basket are summarized below.

Comment: One commenter disagreed with our proposed LOS methodology, which included those cost reports for IRFs and LTCHs whose Medicare average LOS is within 15 percent (that is, 15 percent higher or lower) of the total facility average LOS and those cost reports for IPFs whose average LOS is within 30 or 50 percent (depending on the total facility average LOS) of the total facility average LOS.

A commenter stated that the LOS methodology appears to factor into the calculation a disproportionate share of psychiatric facilities with a longer LOS. In addition, the commenter indicated that the RY 2007 proposed rule stated that costs decrease further into a patient's stay and that CMS assumes that IPFs have an incompatible cost per discharge when grouped with the lower LOS in the IRFs and LTCHs.

Response: As stated previously, since the cost weights for the RPL market basket are based on facility costs, we limited our sample to hospitals with a Medicare average LOS within a comparable range of the total facility average LOS. We believe this provides a more accurate reflection of the structure of costs for Medicare treatments.

We disagree with the commenter that the IPF LOS edit includes a disproportionate share of IPFs with a longer LOS. For clarity, we are providing below a table that compares the distribution of the Medicare and facility LOSs for IPFs using no edit and the proposed 30/50 edit.

Table 2.—IPFs FY 2002 Medicare and Facility LOS Distributions

Medicare length of stayFacility length of stay
No trim30/50 trimNo trim30/50 trim
100% Max9370533475
99%865482263
95%593633339
90%492322726
75% Q328155715
50% Median13111310
25% Q110988
10%8766
5%7765
1%4555
0% Min1313

The Medicare and facility LOS distributions are consistent when the proposed edit is applied. However, not applying the edit would include in the market basket those IPFs whose facility LOS are dramatically different from their Medicare LOS. In addition, the Medicare LOS distribution with the 30/50 edit is similar to the Medicare LOS distribution with no edit. Therefore, we believe that the proposed edit does not include a disproportionate share of IPFs with a longer LOS in the market basket.

Applying these LOS edits left us with a sample of hospitals whose average Medicare utilization was approximately 50 percent, while those excluded from the market basket had a Medicare utilization of approximately 10 percent. Given this, we firmly believe that these LOS edits help us meet our goal to measure cost shares that are reflective of case mix and practice patterns associated with providing services to Medicare beneficiaries.

The detailed cost categories under the residual (that is, the remaining portion of the market basket after excluding wages and salaries, drugs, and professional liability cost weights) are derived from the FY 2002-based IPPS market basket and the 1997 Benchmark Input-Output (I-O) Tables published by the Bureau of Economic Analysis, U.S. Department of Commerce. The FY 2002-based IPPS market basket was developed using FY 2002 Medicare hospital cost reports with the most recent and detailed cost data (see the August 12, 2005 IPPS final rule (70 FR 47388)). The 1997 Benchmark I-O is the most recent, comprehensive source of cost data for all hospitals. The RPL cost weights for benefits, contract labor, and blood and blood products were derived using the FY 2002-based IPPS market basket. For example, the ratio of the benefit cost weight to the wages and salaries cost weight in the FY 2002-based IPPS market basket was applied to the RPL wages and salaries cost weight to derive a benefit cost weight for the RPL market basket. As proposed and for this final rule, the remaining RPL operating cost categories were derived using the 1997 Benchmark I-O Tables, aged to 2002 using relative price changes. (The methodology we used to age the data involves applying the annual price changes from the price proxies to the appropriate cost categories. We repeated this practice for each year.) Therefore, using this methodology, roughly 59 percent of the RPL market basket was accounted for by wages, drugs, and professional liability insurance data from FY 2002 Medicare cost report data for IRFs, LTCHs, and IPFs.

Additional comments and our responses on the methodology for Start Printed Page 27048operating portion of the RPL market basket are summarized below.

Comment: Several commenters proposed that CMS regularly re-analyze the RPL cost report data, which are the basis of the RPL market basket. The commenters indicated that the methodology used for the RPL market basket includes data from the IPPS hospital market basket rather than relying solely on IPF, IRF, and LTCH data.

The commenters recommended that CMS work with providers to improve the cost reports from rehabilitation, psychiatric, and LTCHs in order to ensure that the data used for the market basket represent only the types of excluded hospitals for which the RPL market basket was developed. The commenters believe that improving the data reported on the RPL cost reports would not only refine the RPL market basket but also improve the accuracy of the labor-related share to which the wage index is applied.

Response: We rely on the IPPS cost report data to supplement the IRF, IPF, and LTCH Medicare cost report data for benefits, contract labor, and blood and blood products. For example, the ratio of the benefit cost weight to the wages and salaries cost weight in the FY 2002-based IPPS market basket was applied to the RPL wages and salaries cost weight to derive a benefit cost weight for the RPL market basket. We did not use expenditure levels from the IPPS data directly but, as explained, we developed and used the ratios from IPPS data to determine these RPL cost weights.

The wages and salaries cost weight was derived using the IRF, IPF, and LTCH Medicare cost reports and accounts for 50 percent of the RPL market basket. Due to data limitations, this was the best methodology for developing the latter cost weights.

We agree with the commenters that improving the data reported on the RPL cost reports could improve the RPL market basket and labor-related share. We have noticed this data improvement on other provider-type cost reports and encourage IRF, IPF, and LTCH providers to fully complete their cost reports. We believe that this would help us develop the most complete and accurate market basket possible. We will analyze RPL cost report data on a regular basis and continue to consider the possibility of provider-specific market basket indices.

Comment: One commenter requested that CMS explain how it computes cost category weights based on Medicare cost report data. The commenter stated that if they understood which data elements were used and how they were used, CMS could develop educational programs to improve their member hospitals' reporting.

Response: The RPL market basket cost weights are based on freestanding Medicare cost report data for IRFs, IPFs, and LTCHs. We mainly rely on data from worksheets A through G to derive the cost weights. Worksheet S-3, part II is the only worksheet which allows for the reporting of benefits and contract labor data; however, it is not a required worksheet for IRFs, IPFs, and LTCHs. As stated previously, we relied on the IPPS Medicare cost report worksheet S-3, part II data to derive the relationships for benefits and contract labor to wages and salaries.

Additionally, capital cost weights are derived using worksheet A-7. The estimates generated using this worksheet, as well as worksheet G, could be enhanced with higher reporting rates. Again, we encourage IRF, IPF, and LTCH providers to fully complete their cost reports to help us in developing the most complete and accurate market basket.

Table 3 below sets forth the complete 2002-based RPL market basket including cost categories, weights, and price proxies. For comparison purposes, the corresponding FY 1997-based excluded hospital with capital market basket is listed as well.

As proposed and for this final rule, wages and salaries are 52.895 percent of total costs in the FY 2002-based RPL market basket compared to 47.335 percent for the FY 1997-based excluded hospital with capital market basket. Employee benefits are 12.982 percent in the FY 2002-based RPL market basket compared to 10.244 percent for the FY 1997-based excluded hospital with capital market basket. As a result, compensation costs (wages and salaries plus employee benefits) for the FY 2002-based RPL market basket are 65.877 percent of costs compared to 57.579 percent for the FY 1997-based excluded hospital with capital market basket. Of the 8 percentage-point difference between the compensation shares, approximately 3 percentage points were due to the new base year (FY 2002 instead of FY 1997), 3 percentage points were due to the revised LOS edit, and the remaining 2 percentage points were due to the exclusion of other hospitals (that is, only including IPFs, IRFs, and LTCHs in the market basket).

Following the table is a summary outlining the choice of the proxies we chose to use for the operating portion of the market basket. The price proxies for the capital portion are described in more detail in the capital methodology section (see section V.C.3 of this final rule).

Table 3.—FY 2002-Based RPL Market Basket Cost Categories, Weights, and Proxies With FY 1997-Based Excluded Hospital With Capital Market Basket Used for Comparison

Expense categoriesFY 1997-based excluded hospital with capital market basketFY 2002-based RPL market basketFY 2002 market basket price proxies
Total100.000100.000
Compensation57.57965.877
Wages and Salaries *47.33552.895ECI—Wages and Salaries, Civilian Hospital Workers.
Employee Benefits *10.24412.982ECI—Benefits, Civilian Hospital Workers.
Professional Fees, Non-Medical4.4232.892ECI—Compensation for Professional, Specialty & Technical Workers.
Utilities1.1800.656
Electricity0.7260.351PPI—Commercial Electric Power.
Fuel Oil, Coal, etc0.2480.108PPI—Commercial Natural Gas.
Water and Sewage0.2060.197CPI-U—Water & Sewage Maintenance.
Professional Liability Insurance0.7331.161CMS Professional Liability Premium Index.
All Other Products and Services27.11719.265
All Other Products17.91413.323
Pharmaceuticals6.3185.103PPI Prescription Drugs.
Food: Direct Purchase1.1220.873PPI Processed Foods & Feeds.
Food: Contract Service1.0430.620CPI U Food Away From Home.
Start Printed Page 27049
Chemicals2.1331.100PPI Industrial Chemicals.
Blood and Blood Products **0.748
Medical Instruments1.7951.014PPI Medical Instruments & Equipment.
Photographic Supplies0.1670.096PPI Photographic Supplies.
Rubber and Plastics1.3661.052PPI Rubber & Plastic Products.
Paper Products1.1101.000PPI Converted Paper & Paperboard Products.
Apparel0.4780.207PPI Apparel.
Machinery and Equipment0.8520.297PPI Machinery & Equipment.
Miscellaneous Products0.7831.963PPI Finished Goods less Food & Energy.
All Other Services9.2035.942
Telephone0.3480.240CPI-U Telephone Services.
Postage0.7020.682CPI-U Postage.
All Other: Labor Intensive4.4532.219ECI-Compensation for Private Service Occupations.
All Other: Non-labor Intensive3.7002.800CPI-U All Items.
Capital-Related Costs8.96810.149
Depreciation5.5866.186
Fixed Assets3.5034.250Boeckh Institutional Construction 23-year useful life.
Movable Equipment2.0831.937WPI Machinery & Equipment 11-year useful life.
Interest Costs2.6822.775
Nonprofit2.2802.081Average yield on domestic municipal bonds (Bond Buyer 20 bonds) vintage-weighted (23 years).
For Profit0.4020.694Average yield on Moody's Aaa bonds vintage weighted (23 years).
Other Capital-Related Costs0.6991.187CPI-U Residential Rent.
* Labor-related
** Blood and blood-related products is included in miscellaneous products
Note: Due to rounding, weights may not sum to total.

Below we provide the proxies that we are using for the FY 2002-based RPL market basket. With the exception of the Professional Liability proxy, all the price proxies for the operating portion of the RPL market basket are based on Bureau of Labor Statistics (BLS) data and are grouped into one of the following BLS categories:

  • Producer Price Indexes—Producer Price Indexes (PPIs) measure price changes for goods sold in other than retail markets. PPIs are preferable price proxies for goods that hospitals purchase as inputs in producing their outputs because the PPIs would better reflect the prices faced by hospitals. For example, we use a special PPI for prescription drugs, rather than the Consumer Price Index (CPI) for prescription drugs because hospitals generally purchase drugs directly from the wholesaler. The PPIs that we use measure price change at the final stage of production.
  • Consumer Price Indexes—Consumer Price Indexes (CPIs) measure change in the prices of final goods and services bought by the typical consumer. Because they may not represent the price faced by a producer, we use CPIs only if an appropriate PPI were not available, or if the expenditures were more similar to those of retail consumers in general rather than purchases at the wholesale level. For example, the CPI for food purchases away from home is used as a proxy for contracted food services.
  • Employment Cost Indexes—Employment Cost Indexes (ECIs) measure the rate of change in employee wage rates and employer costs for employee benefits per hour worked. These indexes are fixed-weight indexes and strictly measure the change in wage rates and employee benefits per hour. Appropriately, they are not affected by shifts in employment mix.

We evaluated the price proxies using the criteria of reliability, timeliness, availability, and relevance. Reliability indicates that the index is based on valid statistical methods and has low sampling variability. Timeliness implies that the proxy is published regularly, preferably at least once a quarter. Availability means that the proxy is publicly available. Finally, relevance means that the proxy is applicable and representative of the cost category weight to which it is applied. The CPIs, PPIs, and ECIs in this regulation meet these criteria.

We note that the proxies are the same as those used for the FY 1997-based excluded hospital with capital market basket. Because these proxies meet our criteria of reliability, timeliness, availability, and relevance, we believe they continue to be the best measure of price changes for the cost categories. For further discussion on the FY 1997-based excluded hospital with capital market basket, see the August 1, 2002 IPPS final rule (67 FR at 50042).

Wages and Salaries

For measuring the price growth of wages in the FY 2002-based RPL market basket, we are using the ECI for wages and salaries for civilian hospital workers as the proxy for wages in the RPL market basket.

The rehabilitation, psychiatric, and long-term care hospital (RPL) market basket uses the Bureau of Labor Statistics' Employment Cost Indexes (ECIs) as proxies for wages and salaries, and benefits for civilian industry workers classified in the Standard Industrial Code (SIC) 806, Hospitals. However, beginning April 28, 2006 with the publication of March 2006 data, the ECIs will be converted from the SIC system to the North American Industrial Classification System (NAICS). The NAICS-based ECI for hospitals (NAICS 622) is similar (at least 90 percent identical) to the SIC-based ECI for hospitals. Therefore, when they are available, we will use the NAICS-based ECIs for hospitals as proxies to reflect the rate-of-price change for the wages Start Printed Page 27050and salaries and employee benefits cost categories in the 2002-based RPL market basket.

The RPL market basket and labor-related share in this final rule will use the most recent data available from the Bureau of Labor Statistics. We do not expect the RPL market basket and labor-related share to change significantly when the conversion from the SIC system to the NAICS system takes place.

Employee Benefits

The FY 2002-based RPL market basket uses the ECI for employee benefits for civilian hospital workers.

Nonmedical Professional Fees

The ECI for compensation for professional and technical workers in private industry is applied to this category since it includes occupations such as management and consulting, legal, accounting, and engineering services.

Fuel, Oil, and Gasoline

The percentage change in the price of gas fuels as measured by the PPI (Commodity Code #0552) is applied to this component.

Electricity

The percentage change in the price of commercial electric power as measured by the PPI (Commodity Code #0542) is applied to this component.

Water and Sewerage

The percentage change in the price of water and sewage maintenance as measured by the Consumer Price Index (CPI) for all urban consumers (CPI Code #CUUR0000SEHG01) is applied to this component.

Professional Liability Insurance

The FY 2002-based RPL market basket uses the percentage change in hospital professional liability insurance (PLI) premiums as estimated by the CMS Hospital Professional Liability Index for the proxy of this category. In the FY 1997-based excluded hospital with capital market basket, the same proxy was used.

We continue to research options for improving our proxy for professional liability insurance. This research includes exploring various options for expanding our current survey, including the identification of another entity that would be willing to work with us to collect more complete and comprehensive data. We are also exploring other options such as third party or industry data that might assist us in creating a more precise measure of PLI premiums. At this time we have not identified a preferred option, therefore no change is made for the proxy in this final rule.

Pharmaceuticals

The percentage change in the price of prescription drugs as measured by the PPI (PPI Code #PPI32541DRX) is used as a proxy for this cost category. This is a special index produced by BLS as a proxy in the 1997-based excluded hospital with capital market basket.

Food, Direct Purchases

The percentage change in the price of processed foods and feeds as measured by the PPI (Commodity Code #02) is applied to this component.

Food, Contract Service

The percentage change in the price of food purchased away from home as measured by the CPI for all urban consumers (CPI Code #CUUR0000SEFV) is applied to this component.

Chemicals

The percentage change in the price of industrial chemical products as measured by the PPI (Commodity Code #061) is applied to this component. While the chemicals hospitals purchase include industrial as well as other types of chemicals, the industrial chemicals component constitutes the largest proportion by far. Thus we believe that Commodity Code #061 is the appropriate proxy.

Medical Instruments

The percentage change in the price of medical and surgical instruments as measured by the PPI (Commodity Code #1562) is applied to this component.

Photographic Supplies

The percentage change in the price of photographic supplies as measured by the PPI Commodity Code #1542) is applied to this component.

Rubber and Plastics

The percentage change in the price of rubber and plastic products as measured by the PPI (Commodity Code #07) is applied to this component.

Paper Products

The percentage change in the price of converted paper and paperboard products as measured by the PPI (Commodity Code #0915) is applied to this component.

Apparel

The percentage change in the price of apparel as measured by the PPI (Commodity Code #381) is applied to this component.

Machinery and Equipment

The percentage change in the price of machinery and equipment as measured by the PPI (Commodity Code #11) is applied to this component.

Miscellaneous Products

The percentage change in the price of all finished goods less food and energy as measured by the PPI (Commodity Code #SOP3500) is applied to this component. Using this index removes the double-counting of food and energy prices, which are captured elsewhere in the market basket. The weight for this cost category is higher, in part, than in the 1997-based index because the weight for blood and blood products (1.188) is added to it. In the 1997-based excluded hospital with capital market basket, we included a separate cost category for blood and blood products, using the BLS PPI for blood and derivatives as a price proxy. A review of recent trends in the PPI for blood and derivatives suggests that its movements may not be consistent with the trends in blood costs faced by hospitals. While this proxy did not match exactly with the product hospitals are buying, its trend over time appears to be reflective of the historical price changes of blood purchased by hospitals. However, an apparent divergence over recent years led us to reevaluate whether the PPI for blood and derivatives was an appropriate measure of the changing price of blood. We ran test market baskets classifying blood in three separate cost categories: Blood and blood products, contained within chemicals as was done for the 1992-based excluded hospital with capital market basket, and within miscellaneous products. These categories use as proxies the following PPIs: The PPI for blood and blood products, the PPI for chemicals, and the PPI for finished goods less food and energy, respectively. Of these three proxies, the PPI for finished goods less food and energy moved most like the recent blood cost and price trends. In addition, the impact on the overall market basket by using different proxies for blood was negligible, mostly due to the relatively small weight for blood in the market basket.

Therefore, as proposed and for this final rule, we are using the PPI for finished goods less food and energy for the blood proxy because we believe it more appropriately proxies the price changes (not quantities or required tests) associated with blood purchased by hospitals. We will continue to evaluate this proxy for its appropriateness and will explore the development of Start Printed Page 27051alternative price indexes to proxy the price changes associated with this cost.

Telephone

The percentage change in the price of telephone services as measured by the CPI for all urban consumers (CPI Code #CUUR0000SEED) is applied to this component.

Postage

The percentage change in the price of postage as measured by the CPI for all urban consumers (CPI Code # CUUR0000SEEC01) is applied to this component.

All Other Services, Labor Intensive

The percentage change in the ECI for compensation paid to service workers employed in private industry is applied to this component.

All Other Services, Nonlabor Intensive

The percentage change in the all items component of the CPI for all urban consumers (CPI Code # CUUR0000SA0) is applied to this component.

3. Methodology for Capital Portion of the RPL Market Basket

Unlike for the operating costs of the FY 2002-based RPL market basket, we did not have IRF, IPF, and LTCH FY 2002 Medicare cost report data for the capital cost weights, due to a change in the FY 2002 reporting requirements. Rather, as proposed and for this final rule, we are using these hospitals' expenditure data for the capital cost categories of depreciation, interest, and other capital expenses for FY 2001, and aged the data to a FY 2002 base year using relevant price proxies.

We calculated weights for the RPL market basket capital costs using the same set of Medicare cost reports used to develop the operating share for IRFs, IPFS, and LTCHs. The resulting capital weight for the FY 2002 base year is 10.149 percent. This is based on FY 2001 Medicare cost report data for IRFs, IPFs, and LTCHs, aged to FY 2002 using relevant price proxies.

Lease expenses are not a separate cost category in the market basket, but are distributed among the cost categories of depreciation, interest, and other, reflecting the assumption that the underlying cost structure of leases is similar to capital costs in general. We assumed 10 percent of lease expenses were overhead and assigned them to the other capital expenses cost category as overhead. We base this assignment of 10 percent of lease expenses to overhead on the common assumption that overhead is 10 percent of costs. The remaining lease expenses were distributed to the three cost categories based on the weights of depreciation, interest, and other capital expenses not including lease expenses.

Depreciation contains two subcategories: Building and fixed equipment and movable equipment. As proposed and for this final rule, the split between building and fixed equipment and movable equipment was determined using the FY 2001 Medicare cost reports for IRFs, IPFs, and LTCHs. This methodology was also used to compute the 1997-based index (67 FR at 50044).

As proposed and for this final rule, the total interest expense cost category is split between the government/nonprofit and for-profit hospitals. The 1997-based excluded hospital with capital market basket allocated 85 percent of the total interest cost weight to the government nonprofit interest, proxies by average yield on domestic municipal bonds, and 15 percent to for-profit interest, proxies by average yield on Moody's Aaa bonds.

We derived the split using the relative FY 2001 Medicare cost report data for PPS hospitals on interest expenses for the government/nonprofit and for-profit hospitals. Due to insufficient Medicare cost report data for IPFs, IRFs, and LTCHs, as proposed and for this final rule, we use the same split used in the IPPS capital input price index. We believe it is important that this split reflect the latest relative cost structure of interest expenses for hospitals and, therefore, we have used a 75-25 split to allocate interest expenses to government/nonprofit and for-profit (70 FR at 47408).

Since capital is acquired and paid for over time, capital expenses in any given year are determined by both past and present purchases of physical and financial capital. The vintage-weighted capital index is intended to capture the long-term consumption of capital, using vintage weights for depreciation (physical capital) and interest (financial capital). These vintage weights reflect the purchase patterns of building and fixed equipment and movable equipment over time. Depreciation and interest expenses were determined by the amount of past and current capital purchases. Therefore, as proposed and for this final rule, we are using the vintage weights to compute vintage-weighted price changes associated with depreciation and interest expense.

Vintage weights are an integral part of the FY 2002-based RPL market basket. Capital costs are inherently complicated and are determined by complex capital purchasing decisions, over time, based on such factors as interest rates and debt financing. In addition, capital is depreciated over time instead of being consumed in the same period it is purchased. The capital portion of the FY 2002-based RPL market basket reflects the annual price changes associated with capital costs, and is a useful simplification of the actual capital investment process. By accounting for the vintage nature of capital, we have provided an accurate, stable annual measure of price changes. Annual non-vintage price changes for capital are unstable due to the volatility of interest rate changes and, therefore, do not reflect the actual annual price changes for Medicare capital-related costs. The capital component of the FY 2002-based RPL market basket reflects the underlying stability of the capital acquisition process and provides hospitals with the ability to plan for changes in capital payments.

To calculate the vintage weights for depreciation and interest expenses, we needed a time series of capital purchases for building and fixed equipment and movable equipment. We found no single source that provides the best time series of capital purchases by hospitals for all of the above components of capital purchases. The early Medicare Cost Reports did not have sufficient capital data to meet this need. While the American Hospital Association (AHA) Panel Survey provided a consistent database back to 1963, it did not provide annual capital purchases. However, the AHA Panel Survey provided a time series of depreciation expenses through 1997 which could be used to infer capital purchases over time. From 1998 to 2001, hospital depreciation expenses were calculated by multiplying the AHA Annual Survey total hospital expenses by the ratio of depreciation to total hospital expenses from the Medicare cost reports. Beginning in 2001, the AHA Annual Survey began collecting depreciation expenses. We hope to be able to use these data in future rebasings.

In order to estimate capital purchases from AHA data on depreciation and interest expenses, the expected life for each cost category (building and fixed equipment, movable equipment, and debt instruments) is needed. Due to insufficient Medicare cost report data for IPFs, IRFs, and LTCHs, as proposed and for this final rule, we are using FY 2001 Medicare Cost Reports for IPPS hospitals to determine the expected life of building and fixed equipment and movable equipment. We believe this data source reflects the latest relative cost structure of depreciation expenses for hospitals and is analogous to IPFs, Start Printed Page 27052IRFs, and LTCHs. The expected life of any piece of equipment was determined by dividing the value of the asset (excluding fully depreciated assets) by its current year depreciation amount. This calculation yields the estimated useful life of an asset if depreciation were to continue at current year levels, assuming straight-line depreciation. From the FY 2001 Medicare cost reports for IPPS hospitals the expected life of building and fixed equipment was determined to be 23 years, and the expected life of movable equipment was determined to be 11 years.

As proposed and for this final rule, we are also using the fixed and movable weights derived from FY 2001 Medicare cost reports for IPFs, IRFs, and LTCHs to separate the depreciation expenses into annual amounts of building and fixed equipment depreciation and movable equipment depreciation. By multiplying the annual depreciation amounts by the expected life calculations from the FY 2001 Medicare cost reports, year-end asset costs for building and fixed equipment and movable equipment were determined. We then calculated a time series back to 1963 of annual capital purchases by subtracting the previous year asset costs from the current year asset costs. From this capital purchase time series we were able to calculate the vintage weights for building and fixed equipment, movable equipment, and debt instruments. An explanation of each of these sets of vintage weights follows.

As proposed and for this final rule, for building and fixed equipment vintage weights, the real annual capital purchase amounts for building and fixed equipment derived from the AHA Panel Survey were used. The real annual purchase amount was used to capture the actual amount of the physical acquisition, net of the effect of price inflation. This real annual purchase amount for building and fixed equipment was produced by deflating the nominal annual purchase amount by the building and fixed equipment price proxy, the Boeckh Institutional Construction Index. This is the same proxy used for the FY 1997-based excluded hospital with capital market basket. We believe this proxy continues to meet our criteria of reliability, timeliness, availability, and relevance. Since building and fixed equipment has an expected life of 23 years, the vintage weights for building and fixed equipment are deemed to represent the average purchase pattern of building and fixed equipment over 23-year periods. With real building and fixed equipment purchase estimates back to 1963, sixteen 23-year periods were averaged to determine the average vintage weights for building and fixed equipment that are representative of average building and fixed equipment purchase patterns over time. Vintage weights for each 23-year period were calculated by dividing the real building and fixed capital purchase amount in any given year by the total amount of purchases in the 23-year period. This calculation was done for each year in the 23-year period, and for each of the sixteen 23-year periods. The average of each year across the sixteen 23-year periods was used to determine the 2002 average building and fixed equipment vintage weights.

As proposed and for this final rule, for movable equipment vintage weights, the real annual capital purchase amounts for movable equipment derived from the AHA Panel Survey were used to capture the actual amount of the physical acquisition, net of price inflation. This real annual purchase amount for movable equipment was calculated by deflating the nominal annual purchase amount by the movable equipment price proxy, the PPI for Machinery and Equipment. This was the same proxy used for the FY 1997-based excluded hospital with capital market basket. We believe this proxy, which meets our criteria, is the best measure of price changes for this cost category. Since movable equipment has an expected life of 11 years, the vintage weights for movable equipment were deemed to represent the average purchase pattern of movable equipment over an 11-year period. With real movable equipment purchase estimates available back to 1963, twenty-eight 11-year periods could be averaged to determine the average vintage weights for movable equipment that are representative of average movable equipment purchase patterns over time. Vintage weights for each 11-year period were calculated by dividing the real movable capital purchase amount for any given year by the total amount of purchases in the 11-year period. This calculation was done for each year in the 11-year period, and for each of the twenty-eight 11-year periods. The average of the twenty-eight 11-year periods were used to determine the FY 2002 average movable equipment vintage weights.

As proposed and for this final rule, for interest vintage weights, the nominal annual capital purchase amounts for total equipment (building and fixed and movable) derived from the AHA Panel and Annual Surveys were used. Nominal annual purchase amounts were used to capture the value of the debt instrument. Since hospital debt instruments have an expected life of 23 years, the vintage weights for interest were deemed to represent the average purchase pattern of total equipment over 23-year periods. With nominal total equipment purchase estimates available back to 1963, sixteen 23-year periods were averaged to determine the average vintage weights for interest that are representative of average capital purchase patterns over time. Vintage weights for each 23-year period were calculated by dividing the nominal total capital purchase amount for any given year by the total amount of purchases in the 23-year period. This calculation was done for each year in the 23-year period and for each of the sixteen 23-year periods. The average of the sixteen 23-year periods were used to determine the FY 2002 average interest vintage weights. The vintage weights for the index are presented in Table 4 below.

In addition to the price proxies for depreciation and interest costs described above in the vintage weighted capital section, as proposed and for this final rule, we used the CPI-U for Residential Rent as a price proxy for other capital-related costs. The price proxies for each of the capital cost categories are the same as those used for the IPPS final rule (67 FR at 50044) capital input price index.

Table 4.—CMS FY 2002-Based RPL market basket capital vintage weights

YearFixed assets (23 year weights)Movable assets (11 year weights)Interest: capital- related (23 year weights)
10.0210.0650.010
20.0220.0710.012
30.0250.0770.014
40.0270.0820.016
Start Printed Page 27053
50.0290.0860.019
60.0310.0910.023
70.0330.0950.026
80.0350.1000.029
90.0380.1060.033
100.0400.1120.036
110.0420.1170.039
120.0450.043
130.0470.048
140.0490.053
150.0510.056
160.0530.059
170.0560.062
180.0570.064
190.0580.066
200.0600.070
210.0600.071
220.0610.074
230.0610.076
Total1.0001.0001.000

The RY (that is, beginning July 1, 2006) update for the IPF PPS using the FY 2002-based RPL market basket and Global Insight's 1st quarter 2006 forecast is 4.3 percent. This includes increases in both the operating section and the capital section for the 18-month period (that is, January 1, 2005 through June 30, 2006). Global Insight, Inc. is a nationally recognized economic and financial forecasting firm that contracts with CMS to forecast the components of the market baskets. Using the current FY 1997-based excluded hospital with capital market basket (66 FR 41427), Global Insight's 1st quarter 2006 forecast for the RY beginning July 1, 2006 is 3.4 percent. Table 5 below compares the RY 2002-based RPL market basket and the FY 1997-based excluded hospital with capital market basket percent changes. For both the historical and forecasted periods between RY 2000 and RY 2008, the difference between the two market baskets is minor with the exception of RY 2002, where the FY-2002-based RPL market basket increased three tenths of a percentage point higher than the FY 1997-based excluded hospital with capital market basket. This is primarily due to the FY 2002-based RPL having a larger compensation (that is, the sum of wages and salaries and benefits) cost weight than the FY 1997-based index and the price changes associated with compensation costs increasing much faster than the prices of other market basket components. Also contributing is the “all other nonlabor intensive” cost weight, which is smaller in the FY 2002-based RPL market basket than in the FY 1997-based index, as well as the slower price changes associated with these costs.

Table 5.—FY 2002-Based RPL market basket and FY 1997-Based excluded hospital with capital market basket, percent changes

Rate year (RY)FY 2002-based RPL market basketFY 1997-based excluded hospital market basket with capital
Historical data:
RY 20002.82.7
RY 20013.83.9
RY 20024.13.8
RY 20033.83.7
RY 20043.63.6
RY 20053.84.0
Average RY 2000-20053.73.5
Forecast:
RY 20063.63.8
RY 20073.43.4
RY 20083.23.1
Average RY 2006-20083.43.4
Source: Global Insight, Inc. 1stQtr 2006, @USMACRO/CONTROL0306 @CISSIM/CNTL08R3.SIM.
Note: The RY forecasts are based on the standard 12-month period of July 1 to June 30. For this rule, we are moving from an 18-month period to a 12-month period.
Start Printed Page 27054

4. Labor-Related Share

As described below in this file rule, due to the variations in costs and geographic wage levels, we believe that payment rates under the IPF PPS should continue to be adjusted by a geographic wage index. This wage index applies to the labor-related portion of the proposed 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 operating costs that are related to, influenced by, or vary with the local labor market. Using our current definition of labor-related, the labor-related share is the sum of the relative importance of wages and salaries, fringe benefits, professional fees, labor-intensive services, and a portion of the capital share from an appropriate market basket. We used the FY 2002-based RPL market basket costs to determine the labor-related share for the IPF PPS. The labor-related share for RY 2007 is the sum of the RY 2007 relative importance of each labor-related cost category, and reflects the different rates of price change for these cost categories between the base year (FY 2002) and RY 2007. The sum of the relative importance for RY 2007 for operating costs (wages and salaries, employee benefits, professional fees, and labor-intensive services) is 71.586, as shown in Table 6 below. The portion of capital that is influenced by the local labor market is estimated to be 46 percent, which is the same percentage used in the FY 1997-based IRF and IPF payment systems. Since the relative importance for capital is 8.867 percent of the FY 2002-based RPL market basket in RY 2007, we are taking 46 percent of 8.867 percent to determine the labor-related share of capital for RY 2007. The result is 4.079 percent, which we added to 71.586 percent for the operating cost amount to determine the total labor-related share for RY 2007. Thus, the labor-related share that we are using for IPF PPS in RY 2007 is 75.665 percent. This labor-related share is determined using the same methodology as employed in calculating all previous IPF labor-related shares (69 FR 66952).

Comment: One commenter noted that the proposed labor-related share based on the RPL market basket would benefit hospitals with a wage index greater than or equal to 1.000. The commenter also recommended that CMS ensure that the labor-related share is calculated appropriately, based on recent and comprehensive data for the facilities in the market basket.

Response: We recognize that the labor-related share would benefit hospitals with a wage index greater than 1.000. However, the wage index is estimated independently from the labor-related share. We do not take into consideration which hospitals would benefit from the revised and rebased labor-related share. We calculated the labor-related share using the same methodology used for the IPF implementation year and reflected the most recent and comprehensive data available. The labor-related share represents the national average while the wage index reflects geographical cost differences.

The proposed change in the labor-related share is primarily attributable to the exclusion of children's and cancer hospitals (which are less labor intensive than IRFs, IPFs, and LTCHs) and the update of the base year to reflect FY 2002 data. The FY 2002 data, the most recent and comprehensive data available, reflects that labor-related costs are increasing faster than aggregate non-labor-related costs. We will continue to analyze RPL cost report data on a regular basis to ensure it accurately reflects the cost structures facing IRFs, IPFs, and LTCHs serving Medicare beneficiaries.

Table 6 below shows the RY 2007 relative importance of labor-related shares using the FY 2002-based RPL market basket and the FY 1997-based excluded hospital with capital market basket.

Table 6.—Total Labor-Related Share—Relative Importance for RY 2007

Cost categoryFY 2002-based RPL market basket relative importance (percent) RY 2007FY 1997 excluded hospital with capital market basket relative importance (percent) RY 2007
Wages and salaries52.50648.021
Employee benefits14.04211.534
Professional fees2.8864.495
All other labor-intensive services2.1524.411
Subtotal71.58668.461
Labor-related share of capital costs4.0793.222
Total75.66571.683

IPFs Paid Based on a Blend of the Reasonable Cost-Based Payments

Under the broad authority of sections 1886(b)(3)(A) and (b)(3)(B) of the Act and as stated in the FY 2006 IPPS final rule (70 FR 47399), for IPFs that are transitioning to the fully Federal prospective payment rate, we are now using the rebased and revised FY 2002-based excluded hospital market basket to update the reasonable cost-based portion of their payments. We rebase the market basket periodically so that the cost weights reflect changes in the mix of goods and services that hospitals purchase to furnish inpatient care between base periods. We chose FY 2002 as the base year for the excluded hospital market basket because we believe this is the most recent, complete year of Medicare cost report data.

The reasonable cost-based payments, subject to TEFRA limits, are determined on a FY basis. The FY 2007 update factor for the portion of the IPF PPS transitional blend payment based on reasonable costs will be published in the FY 2007 IPPS proposed and final rules.

VI. Update of the IPF PPS Adjustment Factors

A. Overview of the IPF PPS Adjustment Factors

In developing the IPF PPS, in order to ensure that the IPF PPS would be 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 Start Printed Page 27055characteristics with statistically significant cost differences, we used the regression coefficients of those variables to determine the size of the corresponding payment adjustments.

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. We are using the same results of this regression analysis to implement the RY 2007 IPF PPS final rule (See 69 FR 66935 through 66936 for a more detailed description of the data file used for the regression analysis.)

We computed a per diem cost for each Medicare inpatient psychiatric stay, including routine operating, ancillary, and capital components using information from the FY 2002 MedPAR file and data from the FY 2002 Medicare cost reports. To calculate the cost per day for each inpatient psychiatric stay, routine costs were estimated by multiplying the routine cost per day from the IPF's FY 2002 Medicare cost report by the number of Medicare covered days on the FY 2002 MedPAR stay record. Ancillary costs were estimated by multiplying each departmental cost-to-charge ratio by the corresponding ancillary charges on the MedPAR stay record. The total cost per day was calculated by summing routine and ancillary costs for the stay and dividing it by the number of Medicare covered days for each day of the stay.

The IPF PPS includes a payment adjustment for IPFs with qualifying Emergency Departments (EDs), and IPFs that are part of acute care hospitals and CAHs with qualifying EDs. As a result, ED costs were excluded from the dependent variable used in the cost regression in order to remove the effects of ED costs from other payment adjustment factors with which ED costs may be correlated and thus avoid overpaying ED costs.

The log of per diem cost, like most health care cost measures, appeared to be normally distributed. Therefore, the natural logarithm of the per diem cost was the dependent variable in the regression analysis. We included variables in the regression to control for psychiatric hospitals that do not bill ancillary costs and for ECT costs that we pay separately. The per diem cost was adjusted for differences in labor cost across geographic areas using the FY 2005 hospital wage index unadjusted for geographic reclassifications, in order to be consistent with our use of the market basket labor share in applying the wage index adjustment.

As discussed in the November 2004 IPF PPS final rule (69 FR 66936), we computed a wage adjustment factor for each case by multiplying the Medicare 2005 hospital wage index based on MSA definitions defined by OMB in 1993 for each facility by the labor-related share and adding the non-labor share. We used the 1997-based excluded hospital with capital market basket to determine the labor-related share. The per diem cost for each case was divided by this factor before taking the natural logarithm. The payment adjustment for the wage index was computed consistently with the wage adjustment factor, which is equivalent to separating the per diem cost into a labor portion and a non-labor portion and adjusting the labor portion by the wage index.

With the exception of the teaching adjustment, the independent variables were specified as one or more categorical variables. Once the regression model was finalized based on the log normal variables, the regression coefficients for these variables were converted to payment adjustment factors by treating each coefficient as an exponent of the base “e” for natural logarithms, which is approximately equal to 2.718. The payment adjustment factors represent the proportional effect of each variable relative to a reference variable. As a result of the regression analysis, we established patient-level payment adjustments for age, DRG assignment based on patients' principal diagnoses, selected comorbidities, and a day of stay adjustment (the variable per diem adjustments) to reflect higher resource use in the early days of an IPF stay. We also established facility-level payment adjustments for wage area, rural location, teaching status, cost of living adjustment for IPFs located in Alaska and Hawaii, and an adjustment for IPFs with a qualifying ED. We do not plan to update the regression analysis until we analyze IPF PPS data (that is, no earlier than RY 2008). CMS plans to monitor claims and payment data independently from cost report data to assess issues, or whether changes in case-mix or payment shifts have occurred between free standing governmental, non-profit, and private psychiatric hospitals, and/or psychiatric units of general hospital, and other impact issues of importance to psychiatric facilities.

B. Patient-Level Adjustments

In the November 2004 IPF PPS final rule, we provided payment adjustments for the following payment-level characteristics: DRG assignment of the patient's principal diagnosis, selected comorbidities, patient age, and the variable per diem adjustments.

1. Adjustment for DRG Assignment

The IPF PPS includes payment adjustments for the psychiatric DRG assigned to the claim based on each patient's principal diagnosis. In the November 2004 IPF PPS final rule, we explained that the IPF PPS includes 15 diagnosis-related group (DRG) adjustment factors (69 FR 66936). The adjustment factors were expressed relative to the most frequently reported DRG in FY 2002, that is, DRG 430. The coefficient values and adjustment factors were derived from the regression analysis.

In accordance with § 412.27, payment under the IPF PPS is made for claims with a principal diagnosis included in the Diagnostic and Statistical Manual of Mental Disorder—Fourth Edition—Text Revision (DSM-IV-TR) or Chapter Five of the International Classification of Diseases—9th Revision—Clinical Modifications (ICD-9-CM). The Standards for Electronic Transaction final rule published in the Federal Register on August 17, 2000 (65 FR 50312), adopted the ICD-9-CM as the designated code set for reporting diseases, injuries, impairments, other health related problems, their manifestations, and causes of injury, disease, impairment, or other health-related problems. As a result, the DSM-IV-TR, while essential for the diagnosis and treatment of mentally ill patients, may not be reported on Medicare claims. However, in order to recognize the importance of the DSM-IV-TR in mental health treatment, we updated the reference to the DSM in § 412.27 from DSM-III-TR to DSM-IV-TR in the November 2004 IPF PPS final rule. As a result, under the revised § 412.27, IPFs that are distinct part psychiatric units of acute care hospitals and CAHs may only admit patients who have a principal diagnosis in the DSM-IV-TR or Chapter Five of the ICD-9-CM although DSM codes may not be reported on medical claims.

IPF claims with a principal diagnosis included in Chapter Five of the ICD-9-CM or the DSM-IV-TR will be paid the Federal per diem base rate under the IPF PPS. Psychiatric principal diagnoses that do not group to one of the 15 designated DRGs receive the Federal per diem base rate and all other applicable adjustments, but the payment would not include a DRG adjustment. Only those claims with diagnoses that group to one of these psychiatric DRGs would receive a DRG adjustment.

We believe it is vital to maintain the same diagnostic coding and DRG classification for IPFs that is used under the IPPS for providing the same Start Printed Page 27056psychiatric care. As we explained in the IPF PPS proposed rule (68 FR 66924), all changes to the ICD-9-CM coding system that would impact the IPF PPS are addressed annually in the IPPS proposed and final rules published each year. The updated codes are effective October 1 of each year and must be used to report diagnostic or procedure information. The official version of the ICD-9-CM is available on CD-ROM from the U.S. Government Printing Office. The FY 2006 version can be ordered by contacting the Superintendent of Documents, U.S. Government Printing Office, Department 50, Washington, DC 20402-9329, telephone number (202) 512-1800. The stock number is 017-022-01544-7, and the price is $25.00. In addition, private vendors publish the ICD-9-CM. Questions concerning the ICD-9-CM should be directed to Patricia E. Brooks, Co-Chairperson, ICD-9-CM Coordination and Maintenance Committee, CMS, Center for Medicare Management, Hospital and Ambulatory Policy Group, Division of Acute Care, Mailstop C4-08-06, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. Questions and comments may be sent via e-mail to: Patricia.Brooks1@cms.hhs.gov.

Further information concerning the Official Version of the ICD-9-CM can be found in the IPPS final regulation, “Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2006 Rates; Final Rule,” in the August 12, 2005 Federal Register (70 FR 47278) and at http://www.cms.hhs.gov/​QuarterlyProviderUpdates/​downloads/​cms1500f.pdf.

The following two tables below list the FY 2006 new ICD diagnosis codes and FY 2006 revised diagnosis code titles, respectively. These tables are only a listing of FY 2006 changes and do not reflect all of the currently valid and applicable ICD codes classified in the DRGs. Table 7 below lists the new FY 2006 ICD diagnosis codes that are classified to one of the 15 DRGs that are provided a DRG adjustment in the IPF PPS. When coded as a principal code or diagnosis, these codes receive the correlating DRG adjustment.

Table 7.—FY 2006 New Diagnosis Codes

Diagnosis codeDescriptionDRG
291.82Alcohol induced sleep disorders521, 522, 523
292.85Drug induced sleep disorders521, 522, 523
327.00Organic insomnia, unspecified432
327.01Insomnia due to medical condition classified elsewhere432
327.02Insomnia due to mental disorder432
327.09Other organic insomnia432
327.10Organic hypersomnia, unspecified432
327.11Idiopathic hypersomnia with long sleep time432
327.12Idiopathic hypersomnia without long sleep time432
327.13Recurrent hypersomnia432
327.14Hypersomnia due to medical condition classified elsewhere432
327.15Hypersomnia due to mental disorder432
327.19Other organic hypersomnia432

Table 8 below lists ICD diagnosis codes whose titles have been modified in FY 2006. Title changes do not impact the DRG adjustment. When used as a principal diagnosis, these codes still receive the correlating DRG adjustment.

Table 8.—Revised Diagnosis Code Titles

Diagnosis codeDescriptionDRG
307.45Circadian rhythm sleep disorder of nonorganic origin432
780.52Insomnia, unspecified432
780.54Hypersomnia, unspecified432
780.55Disruption of 24 hour sleep wake cycle, unspecified432
780.58Sleep related movement disorder, unspecified432

In addition to the aforementioned, in the August 2005 IPPS final rule, we finalized ICD code 305.1, Tobacco Use Disorder, in order to designate this code as a noncovered Medicare service when reported as the principal diagnosis. Below we have republished the explanation that was included in the IPPS final rule (70 FR 47312) and published on the CMS Web site at http://www.cms.hhs.gov/​QuarterlyProviderUpdates/​downloads/​cms1500f.pdf.

“We have become aware of the possible need to add code 305.1 (Tobacco use disorder) to the MCE in order to make admissions for tobacco use disorder a noncovered Medicare service when code 305.1 is reported as the principal diagnosis. On March 22, 2005, CMS published a final decision memorandum and related national coverage determination (NCD) on smoking cessation counseling services on its Web site: (http://www.cms.hhs.gov/​coverage/​). Among other things, this NCD provides that: ‘Inpatient hospital stays with the principal diagnosis of 305.1, Tobacco Use Disorder, are not reasonable and necessary for the effective delivery of tobacco cessation counseling services. Therefore, we will not cover tobacco cessation services if tobacco cessation is the primary reason for the patient's hospital stay.’ Therefore, in order to maintain internal consistency with CMS programs and decisions, we proposed to add code 305.1 to the MCE edit ‘Questionable Admission—Principal Diagnosis Only’ in order to make tobacco use disorder a noncovered admission.” (70 FR 47312).

In order to maintain consistency with the IPPS, for discharges on or after October 1, 2005, ICD code 305.1, Tobacco Use Disorder, will not be a covered principal diagnosis under the IPF PPS.

Although we are updating the IPF PPS to reflect ICD-9-CM coding changes and DRG classification changes discussed in the annual update to the IPPS, in the RY 2007 IPF PPS final rule, the DRG adjustment factors currently being paid to IPFs will remain the same (that is, for discharges occurring during the RY July Start Printed Page 270571, 2006 through June 30, 2007). As indicated in the November 2004 IPF PPS final rule, we do not plan to update the regression analysis until we analyze IPF PPS data.

As a result, we are adopting the DRG adjustments factors, the ICD-9-CM coding changes and the DRG classification changes that are currently being paid as indicated in Table 9 below.

Table 9.—FY 2006 DRGs and Adjustment Factor

DRGDRG definitionAdjustment factor
DRG 424O.R. Procedure with Principal Diagnosis of Mental Illness1.22
DRG 425Acute Adjustment Reaction & Psychosocial Dysfunction1.05
DRG 426Depressive Neurosis0.99
DRG 427Neurosis, Except Depressive1.02
DRG 428Disorders of Personality & Impulse Control1.02
DRG 429Organic Disturbances & Mental Retardation1.03
DRG 430Psychoses1.00
DRG 431Childhood Mental Disorders0.99
DRG 432Other Mental Disorder Diagnoses0.92
DRG 433Alcohol/Drug Abuse or Dependence, Leave Against Medical Advice (LAMA)0.97
DRG 521Alcohol/Drug Abuse or Dependence with CC1.02
DRG 522Alcohol/Drug Abuse or Dependence with RehabilitationTherapy without CC0.98
DRG 523Alcohol/Drug Abuse or Dependence without Rehabilitation Therapy without CC0.88
DRG 12Degenerative Nervous System Disorders1.05
DRG 23Non-traumatic Stupor & Coma1.07

Section 412.424(d) separately identifies both “Diagnosis-related group assignment” and “Principal diagnosis” as patient level adjustments. Since publication of the November 2004 IPF PPS final rule, we have received inquiries related to whether the IPF PPS includes two patient-level payment adjustments for principal diagnosis, an adjustment for the diagnosis-related group assignment, and a separate adjustment for providing a principal diagnosis in general. We intended that the IPF PPS provide one patient-level adjustment for principal diagnosis, which is “Diagnosis-related group assignment.”

In order to clarify our policy, we proposed to modify the language in section 412.424(d) by deleting sub-paragraph § 412.424(d)(2)(iii). We received no public comments on the proposed amendment. We are adopting this change in our final rule.

Public comments and our responses on the proposed changes on the adjustment for DRG assignment are summarized below.

Comment: We received several comments concerning the update to the DRG adjustment factors. Overall, the commenters supported our decision to delay updating the patient-level adjustment factors, stating that a delay in running the regression analysis would allow CMS to use more comprehensive and accurate patient-level coding data.

However, one commenter recommended that CMS update the DRGs and adjustment factors on an on-going basis.

Response: We do not plan to update the regression analysis until we analyze IPF PPS data. We believe that this will provide the best indication of current IPF practices. Therefore, the DRG adjustment factors currently being paid to IPFs will remain the same for the RY 2007 (that is, for discharges occurring during the RY July 1, 2006 through June 30, 2007).

Comment: Several commenters requested clarification on the “code first” instructions, believing them to be contrary to regulations at § 412.27. The commenters stated that § 412.27 requires that psychiatric units only admit those patients who have a psychiatric principal diagnosis listed in the DSM or the Chapter Five of the ICD.

Response: Section 412.27 and the “code first” instructions are not contrary to each other. As explained in the November 2004 final rule (69 FR 66922) and in three subsequent Change Requests (CR) (that is, CR 3541, published December 1, 2004; CR 3678, published January 21, 2005; and CR 3752, published March 4, 2005), correct coding conventions should always be followed, including “code first” situations. According to the ICD-9-CM Official Guidelines for Coding and Reporting, when a primary diagnosis code has a code first notation, the provider follows the applicable ICD-9-CM coding convention which requires the underlying condition (etiology) to be sequenced first, followed by the manifestation due to the underlying condition. Therefore, we consider “code first” diagnoses to be the primary diagnosis. The submitted claim goes through the IPF PPS claims processing system which identifies the primary diagnosis code as non-psychiatric and searches the secondary codes for a psychiatric code to assign the DRG in order to pay “code first” claims properly.

For more coding guidance, please refer to the ICD-9-CM Official Guidelines for Coding and Reporting which can be located on the CMS Web site at http://new.cms.hhs.gov/​ICD9ProviderDiagnosticCodes/​.

Comment: Commenters requested that CMS include the ICD-9-CM obstetrical series of codes 648.30 to 648.34 and 648.40 to 648.44, since they are subject to sequencing priority guidelines, in our code first logic.

Response: At this point in time, we do not intend to update the regression analysis until we have analyzed one year of IPF PPS claims and cost report data. However, when we update the regression analysis, we will review the obstetric codes noted above and consider the appropriateness of including them in our code first logic. For RY 2007, no DRG Adjustment will be made to these codes.

Final Rule Action: In summary, we received no public comments concerning the proposal to amend § 412.424(d). In order to clarify our policy that the IPF PPS provides one patient level adjustment for principal diagnoses, we are modifying the language in section § 412.424(d) by deleting sub-paragraph § 412.424(d)(2)(iii). In addition, we are adopting the DRG adjustment currently in effect and as shown in Table 9. Start Printed Page 27058

2. Payment for Comorbid Conditions

In the November 2004 IPF PPS final rule, we established 17 comorbidity categories and identified the ICD-9-CM diagnosis codes that generate a payment adjustment under the IPF PPS.

Comorbidities are specific patient conditions that are secondary to the patient's primary 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 not reported on IPF claims. Comorbid conditions must co-exist at the time of admission, develop subsequently, affect the treatment received, affect the length of stay or affect both treatment and LOS.

The intent of the comorbidity adjustment was to recognize the increased cost associated with comorbid conditions by providing additional payments for certain concurrent medical or psychiatric conditions that are expensive to treat. For each claim, an IPF may receive only one comorbidity adjustment per comorbidity category, but it may receive an adjustment for more than one comorbidity category. Billing instructions require that IPFs must enter the full ICD-9-CM codes for up to 8 additional diagnoses if they co-exist at the time of admission or developed subsequently.

The comorbidity adjustments were determined based on regression analysis using the diagnoses reported by hospitals in FY 2002. The principal diagnoses were used to establish the DRG adjustment 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 November 2004 IPF PPS final rule (69 FR 66922), the code first rule applies when a condition has both an underlying etiology and a manifestation due to the underlying etiology. For these conditions, the 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.

Although we are updating the IPF PPS to reflect updates to the ICD-9-CM codes, the comorbidity adjustment factors currently in effect will remain in effect for the RY beginning July 1, 2006. As we indicated in the November 2004 IPF PPS final rule, we do not plan to update the regression analysis until we analyze IPF PPS data. The comorbidity adjustments are shown in Table 12 below.

As previously discussed in the DRG section, we believe it is essential to maintain the same diagnostic coding set for IPFs that is used under the IPPS for providing the same psychiatric care. Therefore, as proposed and in this final rule, we are using the most current FY 2006 ICD codes. They are reflected in the FY 2006 GROUPER, version 23.0 and are effective for discharges occurring on or after October 1, 2005.

Table 10 lists the updated FY 2006 new ICD diagnosis codes that impact the comorbidity adjustment under the IPF PPS and Table 11 lists the invalid ICD codes no longer applicable for the comorbidity adjustment. Table 10 only lists the FY 2006 new codes and does not reflect all of the currently valid ICD codes applicable for the IPF PPS comorbidity adjustment.

We note that ICD diagnosis code 585 Chronic Renal Failure was modified in two ways—(1) By expanding the level of specificity to include seven new codes; and (2) by changing the original code of 585 to invalid, thereby leaving the remaining more specific codes reportable. Since diagnosis code 585 is no longer valid, we are eliminating this code from the comorbidity category “Renal Failure, Chronic.”

ICD diagnosis code 585 “Chronic Renal Failure” is defined in the ICD-9-CM as “Progressive, persistent inadequate kidney function characterized by anuria, accumulation of urea and other nitrogenous bodies in the blood, nausea, vomiting, gastrointestinal bleeding, and yellowish-brown discoloration of the skin.” This code included the various stages of chronic kidney disease, but it is no longer valid. The new codes listed below reflect the various stages of chronic kidney failure.

In this final rule, we are adopting as proposed comorbidity adjustments for 585.3, “Chronic kidney disease, Stage III (moderate),” 585.4, “Chronic kidney disease, Stage IV (severe),” 585.5, “Chronic kidney disease, Stage V,” 585.6, “End Stage renal disease,” and 585.9, “Chronic kidney disease, unspecified.” However, since the purpose of the comorbidity adjustment is to account for the higher resource costs associated with comorbid conditions that are expensive to treat on a per diem basis, we are not providing a comorbidity adjustment for 585.1, “Chronic kidney disease, Stage I” and 585.2, “Chronic kidney disease, Stage II (mild).”

We believe that these conditions (585.1 and 585.2) are less costly to treat on a per diem basis because patients with these conditions are either asymptomatic or may have only mild symptoms. These conditions represent a minimal to mild decrease in kidney function that is almost completely compensated such that the only finding is typically an abnormal laboratory test. Unlike patients with more significant kidney dysfunction, these patients do not usually require more costly patient care interventions such as additional laboratory tests to monitor renal function, special pharmacy attention to reduced dosages or kidney-sparing medications, or fluid and electrolyte precautions with special diets, frequent weights, input/output balance, and fluid restriction. The resources and costs that these patients require for staff time, medications and supplies, and administrative services are expected to be similar to other patients without these conditions.

Table 10.—FY 2006 New ICD Codes Applicable for the Comorbidity Adjustment

Diagnosis codeDescriptionDRGComorbidity category
585.3Chronic kidney disease, Stage III (moderate)315-316Renal Failure, Chronic.
585.4Chronic kidney disease, Stage IV(severe)315-316Renal Failure, Chronic.
585.5Chronic kidney disease, Stage V315-316Renal Failure,Chronic.
585.6End stage renal disease315-316Renal Failure,Chronic.
585.9Chronic kidney disease, unspecified315-316Renal Failure, Chronic.
V46.13Encounter for weaning from respirator [ventilator]467Chronic Obstructive Pulmonary Disease.
V46.14Mechanical complication of respirator [ventilator]467Chronic Obstructive Pulmonary Disease.
Start Printed Page 27059

In Table 11 below, we list the FY 2006 invalid ICD diagnosis code 585 that we will be removing from the comorbidity adjustment under the IPF PPS. This table does not reflect all of the currently valid ICD codes applicable for the IPF PPS comorbidity adjustment.

Table 11.—FY 2006 Invalid ICD Codes No Longer Applicable for the Comorbidity Adjustment

Diagnosis codeDescriptionDRComorbidity category
585Chronic renal failure315-36Renal Failure, Chronic.

The seventeen comorbidity categories for which we are providing an adjustment, their respective codes, including the new FY 2006 ICD codes, and their respective adjustment factors, are listed below in Table 12.

Table 12.—FY 2006 Diagnosis Codes and Adjustment Factors for Comorbidity Categories

Description of comorbidityICD-9CM codeAdjustment factor
Developmental Disabilities317, 3180, 3181, 3182, and 3191.04
Coagulation Factor Deficits2860 through 28641.13
Tracheostomy51900—through 51909 and V4401.06
Renal Failure, Acute5845 through 5849, 63630, 63631, 63632, 63730, 63731, 63732, 6383, 6393, 66932, 66934, 95851.11
Renal Failure, Chronic40301, 40311, 40391, 40402, 40412, 40413, 40492, 40493, 5853, 5854, 5855, 5856, 5859, 586, V451, V560, V561, and V5621.11
Oncology Treatment1400 through 2390 with a radiation therapy code 92.21-92.29 or chemotherapy code 99.251.07
Uncontrolled Diabetes-Mellitus with or without complications25002, 25003, 25012, 25013, 25022, 25023, 25032, 25033, 25042, 25043, 25052, 25053, 25062, 25063, 25072, 25073, 25082, 25083, 25092, and 250931.05
Severe Protein Calorie Malnutrition260 through 2621.13
Eating and Conduct Disorders3071, 30750, 31203, 31233, and 312341.12
Infectious Disease01000 through 04110, 042, 04500 through 05319, 05440 through 05449, 0550 through 0770, 0782 through 07889, and 07950 through 079591.07
Drug and/or Alcohol Induced Mental Disorders2910, 2920, 29212, 2922, 30300, and 304001.03
Cardiac Conditions3910, 3911, 3912, 40201, 40403, 4160, 4210, 4211, and 42191.11
Gangrene44024 and 78541.10
Chronic Obstructive Pulmonary Disease49121, 4941, 5100, 51883, 51884, V4611 and V4612, V4613 and V46141.12
Artificial Openings—Digestive and Urinary56960 through 56969, 9975, and V441 through V4461.08
Severe Musculoskeletal and Connective Tissue Diseases6960, 7100, 73000 through 73009, 73010 through 73019, and 73020 through 730291.09
Poisoning96500 through 96509, 9654, 9670 through 9699, 9770, 9800 through 9809,9830 through 9839, 986, 9890 through 98971.11

We received several comments offering suggestions on how we could improve the comorbidity adjustment category list. The suggestions ranged from requests for the addition of a single ICD-9-CM code to a request for expanding the comorbidity categories to account for every ICD-9-CM code.

Public comments and our responses to the proposed changes to payment for comorbid conditions are summarized below.

Comment: We received a comment expressing concern that the comorbidity adjustment list does not include the more common conditions seen in psychiatric patients. This commenter indicated that most psychiatric patients are treated for multiple common conditions and illnesses (for example, heart conditions, and stroke), none of which would trigger a payment adjustment under the IPF PPS.

Response: We explained in the November 2004 IPF PPS final rule (69 FR 66922), that the data used in calculating the Federal per diem base rate included all the costs for comorbid diagnoses submitted in the FY 2002 claims. Therefore, the cost for providing patient care (for example, medications, routine nursing care) required for common conditions seen in the psychiatric population, and recommended for comorbidity adjustment by commenters (that is, heart conditions or strokes) are already included in the Federal per diem base rate and a comorbidity adjustment for their presence was duplicative and unnecessary.

Further, the design of the IPF PPS with its Federal per diem base rate, provides numerous adjustments for complex cases and the availability of outlier payments, and stop loss payments during the 3-year transition.

Comment: A few commenters stated that the range of diagnostic codes proposed for adjustment did not include all the ICD-9-CM codes within a diagnostic category. A particular commenter indicated that the list of codes under diabetes did not include all the diabetes codes. In addition, other commenters provided a list of ICD-9-CM codes and comorbidity adjustments that they believe should be included in the comorbidity adjustment category list.

Response: The intent of the comorbidity adjustment is to provide Start Printed Page 27060additional payments for concurrent medical or psychiatric conditions that are expensive to treat and require comparatively more costly treatment during an IPF stay than other comorbid conditions.

Although we are updating the IPF PPS to reflect updates to the ICD-9-CM codes, the comorbidity adjustment categories and factors currently in effect will remain in effect for the RY beginning July 1, 2006. As indicated in the November 2004 IPF PPS final rule, we do not plan to update the regression analysis until we analyze IPF PPS data.

Comment: A commenter recommended that code 404.03 hypertensive heart and renal disease, malignant, with heart failure and renal failure continue to qualify for both Cardiac Conditions and Chronic Renal Failure comorbidity adjustments.

Response: We are aware that ICD code 404.03, hypertensive heart and renal disease, malignant, with heart failure and renal failure, has caused confusion since this ICD code is currently used to code an adjustment in two separate IPF comorbidity categories, (that is, both “Renal Failure, Chronic” and “Cardiac Conditions”). We believe that it more appropriately corresponds to the “Cardiac Conditions” comorbidity than to the “Renal Failure, Chronic” comorbidity. Therefore, to be more clinically cohesive and to eliminate confusion, we are removing ICD code 404.03 from the comorbidity adjustment category “Renal Failure, Chronic,” but retaining it in the “Cardiac Conditions” comorbidity category. Since both comorbidity categories have the same adjustment factor of 1.11, we believe no negative payment consequence will result from this change.

Final Rule Action: We are adopting the comorbidity adjustments currently in effect and as shown in Table 12 above for RY 2007 beginning July 1, 2006.

3. Patient Age Adjustments

As explained in the November 2004 IPF PPS final rule, 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 increasing age. The older age groups are more costly than the under 45 years of age group; the differences in per diem cost increase for each successive age group, and the differences are statistically significant.

Based on the results of the regression analysis, we established 8 adjustment factors for age beginning with age groupings 45 and under 50, 50 and under 55, 55 and under 60, 60 and under 65, 65 and under 70, 70 and under 75, 75 and under 80, and 80 years of age and over. Patients under 45 years of age are assigned an age adjustment factor of 1.00. As we indicated in the November 2004 IPF PPS final rule, we do not plan to update the regression analysis until we analyze IPF PPS data. As a result, we are adopting the patient age adjustments currently in effect and shown in Table 13 below.

Table 13.—Age Groupings and Adjustment Factors

AgeAdjustment factor
Under 451.00
45 and under 501.01
50 and under 551.02
55 and under 601.04
60 and under 651.07
65 and under 701.10
70 and under 751.13
75 and under 801.15
80 and over1.17

Final Rule Action: In response to the RY 2007 proposed rule, we received no comments concerning the age adjustment. We are adopting the age adjustments currently in effect and as shown in Table 13 above, for RY 2007.

4. Variable Per Diem Adjustments

We explained in the November 2004 IPF PPS final rule that cost regressions indicated that per diem cost declines as the LOS increases (69 FR 66947). 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 regression analysis to estimate the average differences in per diem cost among stays of different length. Regression analysis simultaneously controls for cost differences associated with the other variables (for example, age, DRG, and presence of specific comorbidities). The regression coefficients measure the relative average cost per day for stays of differing lengths compared to a reference group's LOS. We analyzed through cost regression the relative cost per day for day 1 through day 30. We determined that the average per diem cost declined smoothly until the 22nd day. As a result of this analysis, we established variable per diem adjustments that begin on day 1 and 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 for day 1 of each patient stay. If an IPF does not have a qualifying ED, it receives a 1.19 adjustment for day 1 of the stay. The ED adjustment is explained in more detail in section VI.C.5 of this final rule.

As we indicated in the November 2004 IPF PPS final rule, we do not plan to make changes to the regression analysis until we analyze IPF PPS data. As a result, for the RY beginning July 1, 2006, we are adopting the variable per diem adjustment factors currently in effect. Table 14 below shows the variable per diem adjustments that we will be using for updating the IPF PPS.

Table 14.—Variable Per Diem Adjustments

Day-of-stayAdjustment factor
Day 1—IPF Without a Qualified ED1.19
Day 1—IPF With a Qualified ED1.31
Day 21.12
Day 31.08
Day 41.05
Day 51.04
Day 61.02
Day 71.01
Day 81.01
Day 91.00
Day 101.00
Day 110.99
Day 120.99
Day 130.99
Day 140.99
Day 150.98
Day 160.97
Day 170.97
Day 180.96
Day 190.95
Day 200.95
Day 210.95
After Day 210.92

Final Rule Action: In response to the RY 2007 proposed rule, we received no comments concerning the proposed variable per diem adjustments. We are adopting the variable per diem adjustment factors currently in effect, and as shown in Table 14 above for RY 2007.

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. Start Printed Page 27061

1. Wage Index Adjustment

a. Revisions of IPF PPS Geographic Classifications

In the November 2004 IPF PPS final rule, we explained that in establishing an adjustment for area wage levels, the labor-related portion of an IPF's Federal prospective payment is adjusted by using an appropriate wage index. We also explained that an IPF's wage index is determined based on the location of the IPF in an urban or rural area as defined in § 412.62(f)(1)(ii) and (f)(1)(iii), respectively.

An urban area under the IPF PPS is defined at § 412.62(f)(1)(ii)(A) and (B). In general, an urban area is defined as a Metropolitan Statistical Area (MSA) or New England County Metropolitan Area (NECMA) as defined by the Office of Management and Budget (OMB). In addition, a few counties located outside of MSAs are considered urban as specified at § 412.62(f)(1)(ii)(B). Under § 412.62(f)(1)(iii), a rural area is defined as any area outside of an urban area. The geographic classifications defined in § 412.62(f)(1)(ii) and (f)(1)(iii), were used under the IPPS from FYs 1984 through 2004 (§ 412.62(f) and § 412.63(b)), and have been used under the IPF PPS since it was implemented for cost reporting periods beginning on or after January 1, 2005.

Under the IPPS, the wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located or geographically reclassified to in accordance with sections 1886(d)(8) and (d)(10) of the Act. Under the IPF PPS, the wage index is calculated using IPPS wage index data (as discussed below in section VI.C.1.d of this preamble) on the basis of the labor market area in which the IPF is located, without taking into account geographic reclassification under sections 1886(d)(8) and (d)(10) of the Act and without applying the “rural floor” established under section 4410 of the BBA. (Section 4410 of the BBA provides that for the purposes of section 1886(d)(3)(E) of the Act, the area wage index applicable to hospitals located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in the State. This provision is commonly referred to as the “rural floor” under the IPPS.) However, when we established the IPF PPS, we did not apply the rural floor to IPFs. For this reason, the hospital wage index used for IPFs is commonly referred to as the “pre-floor” hospital wage index indicating that the “rural floor” provision of the BBA is not applied. As a result, the applicable IPF wage index value is assigned to the IPF on the basis of the labor market area in which the IPF is geographically located.

As noted above, the current IPF PPS labor market areas are defined based on the definitions of MSAs, Primary MSAs (PMSAs), and NECMAs issued by the OMB (commonly referred to collectively as “MSAs”). The MSA definitions, which are discussed in greater detail below, are currently used under the IPF PPS and other PPSs (that is, the IRF PPS, the LTCH PPS, and the PPSs for home health agencies (HHA PPS) and skilled nursing facilities (SNF PPS)). In the FY 2005 IPPS final rule (69 FR 49026 through 49034), revised labor market area definitions were adopted under the IPPS (§ 412.64(b)), which were effective October 1, 2004. These new standards, called Core-Based Statistical Areas (CBSAs), were announced by the OMB late in CY 2000 and are discussed in greater detail below.

b. Current IPF PPS Labor Market Areas Based on MSAs

When we published the November 2004 IPF PPS final rule, we explained that we were not adopting the new statistical area definitions defined by OMB for the following reasons. First, the change in labor market areas under the IPPS had not changed at the time we published the IPF PPS proposed rule on November 28, 2003. As a result, IPFs and other interested parties were not afforded an opportunity to comment on the use of the new labor market area definitions under the IPF PPS. Second, we wanted to conduct a thorough analysis of the impact of the new labor market area definitions on payments under the IPF PPS. Finally, in the November 2004 IPF PPS final rule, we indicated our intent to publish in a proposed rule any changes we were considering for new labor market definitions.

The analysis of the impact of the new labor market definitions has been completed. In the RY 2007 proposed rule, we proposed to adopt the new CBSA-based labor market area definitions. In this final rule, we are adopting these labor market area definitions for the IPF PPS. We believe it is helpful to provide a detailed description of the current IPF PPS labor market areas to help explain the changes to the IPF PPS labor market areas.

As mentioned earlier, since the implementation of the IPF PPS, we have used labor market areas to further characterize urban and rural areas as determined under § 412.62(f)(1)(ii) and (iii). To this end, we have defined labor market areas under the IPF PPS based on the definitions of MSAs, PMSAs, and NECMAs issued by the OMB in 1993, which is consistent with the IPPS approach prior to FY 2005. We note that OMB also defines Consolidated MSAs (CMSAs). A CMSA is a metropolitan area with a population of 1 million or more, comprising two or more PMSAs (identified by their separate economic and social character). However, for purposes of the wage index, we use the PMSAs rather than CMSAs because they allow a more precise breakdown of labor costs. If a metropolitan area is not designated as part of a PMSA, we use the applicable MSA.

These different designations use counties as the building blocks upon which they are based. Therefore, under the IPF PPS, hospitals are assigned to either an MSA, PMSA, or NECMA based on whether the county in which the IPF is located is part of that area. All of the counties in a State outside a designated MSA, PMSA, or NECMA are designated as rural.

c. Core-Based Statistical Areas

The OMB reviews its Metropolitan Area definitions preceding each decennial census. As discussed in the FY 2005 IPPS final rule (69 FR 49026), in the fall of 1998, OMB chartered the Metropolitan Area Standards Review Committee to examine the Metropolitan Area standards and develop recommendations for possible changes to those standards. Three notices related to the review of the standards, providing an opportunity for public comment on the recommendations of the Committee, were published in the Federal Register on the following dates: December 21, 1998 (63 FR 70526); October 20, 1999 (64 FR 56628); and August 22, 2000 (65 FR 51060).

In the December 27, 2000 Federal Register (65 FR 82228 through 82238), OMB announced its new standards. In that notice, OMB defines a Core-Based Statistical Area (CBSA), beginning in 2003, as “a geographic entity associated with at least one core of 10,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. The standards designate and define two categories of CBSAs: Metropolitan Statistical Areas and Micropolitan Statistical Areas.” (65 FR 82236 through 82238).

According to the OMB, MSAs are based on urbanized areas of 50,000 or more population, and Micropolitan Statistical Areas (referred to in this discussion as Micropolitan Areas) are based on urban clusters of at least 10,000 population, but less than 50,000 population. Counties that do not fall Start Printed Page 27062within CBSAs (either MSAs or Micropolitan Areas) are deemed “Outside CBSAs.” In the past, OMB defined MSAs around areas with a minimum core population of 50,000, and smaller areas were “Outside MSAs.” On June 6, 2003, the OMB announced the new CBSAs, comprised of MSAs and the new Micropolitan Areas based on Census 2000 data. (A copy of the announcement may be obtained at the following Internet address: http://www.whitehouse.gov/​omb/​bulletins/​fy04/​b04-03.html.)

The new CBSA designations recognize 49 new MSAs and 565 new Micropolitan Areas, and extensively revise the composition of many of the existing MSAs. There are 1,090 counties in MSAs under the new CBSA designations (previously, there were 848 counties in MSAs). Of these 1,090 counties, 737 are in the same MSA as they were prior to the change in designations, 65 are in a different MSA, and 288 were not previously designated to any MSA. There are 674 counties in Micropolitan Areas. Of these, 41 were previously in an MSA, while 633 were not previously designated to an MSA. There are five counties that previously were designated to an MSA but are no longer designated to either an MSA or a new Micropolitan Area: Carter County, KY; St. James Parish, LA; Kane County, UT; Culpepper County, VA; and King George County, VA. For a more detailed discussion of the conceptual basis of the new CBSAs, refer to the FY 2005 IPPS final rule (67 FR 49026 through 49034).

d. Revision of the IPF PPS Labor Market Areas

In its June 6, 2003 announcement, OMB cautioned that these new definitions “should not be used to develop and implement Federal, State, and local nonstatistical programs and policies without full consideration of the effects of using these definitions for such purposes. These areas should not serve as a general-purpose geographic framework for nonstatistical activities, and they may or may not be suitable for use in program funding formulas.”

We currently use MSAs to define labor market areas for purposes of Medicare wage indices in the IPF PPS since its implementation for cost reporting periods beginning on or after January 1, 2005. Until recently, MSAs were used to define labor market areas for purposes of the wage index for many of the other Medicare payment systems (for example, IRF PPS, SNF PPS, HHA PPS, and Outpatient PPS). While we recognize MSAs are not designed specifically to define labor market areas, we believe they represent a useful proxy for this purpose, because they are based upon characteristics we believe also generally reflect the characteristics of unified labor market areas. For example, CBSAs consist of a core population plus an adjacent territory that reflects a high degree of social and economic integration. This integration is measured by commuting ties, thus demonstrating that these areas may draw workers from the same general areas. In addition, the most recent CBSAs reflect the most up-to-date information. Our analysis and discussion here are focused on issues related to adopting the new CBSA designations to define labor market areas for the purposes of the IPF PPS.

Historically, Medicare PPSs have utilized Metropolitan Area definitions developed by the OMB. As noted above, the labor market areas currently used under the IPF PPS are based on the Metropolitan Area definitions issued by the OMB and the OMB reviews its Metropolitan Area definitions preceding each decennial census to reflect more recent population changes. The CBSAs are OMB's latest Metropolitan Area definitions based on the Census 2000 data. Because we believe that the OMB's latest Metropolitan Area designations more accurately reflect the local economies and wage levels of the areas in which hospitals are currently located, we adopted the revised labor market area designations based on the OMB's CBSA designations under the IPPS effective October 1, 2004. When we implemented the wage index adjustment at § 412.424(d)(1)(i) under the November 2004 IPF PPS final rule (69 FR 66952 through 66954), we explained that the IPF PPS wage index adjustment was intended to reflect the relative hospital wage levels in the geographic area of the hospital as compared to the national average hospital wage level. The OMB's CBSA designations based on Census 2000 data reflect the most recent available geographic classifications (Metropolitan Area definitions). Therefore, we are revising the labor market area definitions used under the IPF PPS based on the OMB's CBSA designations. This change ensures that the IPF PPS wage index adjustment most appropriately accounts for and reflects the relative hospital wage levels in the geographic area of the hospital as compared to the national average hospital wage level.

Specifically, we are revising the IPF PPS labor market definitions based on the OMB's new CBSA designations (as discussed in greater detail below) effective for IPF PPS discharges occurring on or after July 1, 2006. Accordingly, we are revising § 412.402, definitions for rural and urban areas. Effective for discharges occurring on or after July 1, 2006, “rural” and “urban” areas will be defined in § 412.64(b)(1)(ii)(A) through (C). These definitions are the labor market definitions based on OMB's CBSA designations. For clarity, we are also revising the regulation text to include the urban and rural definitions applicable to discharges occurring during cost reporting periods beginning on or after January 1, 2005, but before July 1, 2006, under § 412.62(f)(1)(ii) and § 412.62(f)(1)(iii).

We note that these are the same labor market area definitions (based on the OMB's new CBSA designations) implemented for acute care hospitals under the IPPS at § 412.64(b), which were effective for those hospitals beginning October 1, 2004 as discussed in the FY 2005 IPPS final rule (69 FR 49026-49034). The IPF PPS uses the acute care inpatient hospitals' wage data in calculating the IPF PPS wage index. However, unlike the IPPS, and similar to other Medicare payment systems (for example, SNF PPS and IRF PPS), the IPF PPS uses the pre-floor, pre-reclassified hospital wage index.

Below, we discuss the composition of the RY 2007 IPF PPS labor market areas based on OMB's new CBSA designations. It should be noted that OMB's new CBSA designations are comprised of several county-based area definitions as explained above, which include Metropolitan Areas, Micropolitan Areas, and areas “outside CBSAs.” We implemented the IPF PPS using two types of labor market areas, that is, urban and rural. In this final rule, we are adopting the revised labor market areas based on OMB's new CBSA-based designations. As proposed in the RY 2007 proposed rule, we will continue to have 2 types of labor market areas (urban and rural). In the discussion that follows, we explain how we are recognizing Metropolitan Areas, which include New England MSAs and Metropolitan Divisions, as urban. We also explain how we are recognizing Micropolitan Areas and areas “outside CBSAs” as rural. As discussed below in this final rule and as described in the RY 2007 proposed rule, we describe the methodology for mapping OMB's CBSA-based designations into the IPF PPS (urban area or rural area) format.

i. New England MSAs

As stated above, we currently use NECMAs to define labor market areas in New England, because these are county-based designations, rather than the 1990 MSA definitions for New England, which used minor civil divisions such Start Printed Page 27063as cities and towns. Under the current MSA definitions, NECMAs provided more consistency in labor market definitions for New England compared with the rest of the country, where MSAs are county-based. Under the new CBSAs, the OMB has now defined the MSAs and Micropolitan Areas in New England on the basis of counties. The OMB also established New England City and Town Areas, which are similar to the previous New England MSAs.

In order to create consistency across all IPF labor market areas, as proposed and in this final rule, we are using the county-based areas for all MSAs in the nation, including those in New England. The OMB has now defined the New England area based on counties, creating a city- and town-based system as an alternative. We believe that adopting county-based labor market areas for the entire country except those in New England will lead to inconsistencies in our designations. Adopting county-based labor market areas for the entire country provides consistency and stability in Medicare program payment because all of the labor market areas throughout the country, including New England, will be defined using the same system (that is, counties) rather than different systems in different areas of the county, and minimizes programmatic complexity.

In addition, we have consistently employed a county-based system for New England for precisely that reason: To maintain consistency with the labor market definitions used throughout the country. Since we have never used cities and towns for defining IPF labor market areas, employing a county-based system in New England maintains that consistent practice. We note that this is consistent with the implementation of the CBSA-based designations under the IPPS for New England (69 FR 49028). Accordingly, for the IPF PPS, we are using the New England MSAs as determined under the new CBSA-based labor market area definitions in defining the revised IPF PPS labor market areas.

ii. Metropolitan Divisions

Under OMB's new CBSA designations, a Metropolitan Division is a county or group of counties within a CBSA that contains a core population of at least 2.5 million, representing an employment center, plus adjacent counties associated with the main county or counties through commuting ties. A county qualifies as a main county if 65 percent or more of its employed residents work within the county and the ratio of the number of jobs located in the county to the number of employed residents is at least 0.75. A county qualifies as a secondary county if 50 percent or more, but less than 65 percent, of its employed residents work within the county and the ratio of the number of jobs located in the county to the number of employed residents is at least 0.75. After all the main and secondary counties are identified and grouped, each additional county that already has qualified for inclusion in the MSA falls within the Metropolitan Division associated with the main/secondary county or counties with which the county at issue has the highest employment interchange measure. Counties in a Metropolitan Division must be contiguous (65 FR 82236).

The construct of relatively large MSAs being comprised of Metropolitan Divisions is similar to the current construct of CMSAs comprised of PMSAs. As noted above, in the past, the OMB designated CMSAs as Metropolitan Areas with a population of 1 million or more and comprised of two or more PMSAs. Under the IPF PPS, we currently use the PMSAs rather than CMSAs to define labor market areas because they comprise a smaller geographic area with potentially varying labor costs due to different local economies. We believe that CMSAs may be too large of an area with a relatively large number of hospitals, to accurately reflect the local labor costs of all of the individual hospitals included in that relatively “large” area. A large market area designation increases the likelihood of including many hospitals located in areas with very different labor market conditions within the same market area designation. This variation could increase the difficulty in calculating a single wage index that will be relevant for all hospitals within the market area designation. Similarly, we believe that MSAs with a population of 2.5 million or greater may be too large of an area to accurately reflect the local labor costs of all of the individual hospitals included in that relatively “large” area. Furthermore, as indicated above, Metropolitan Divisions represent the closest approximation to PMSAs, the building block of the current IPF PPS labor market area definitions, and therefore, will most accurately maintain our current structuring of the IPF PPS labor market areas. As implemented under the IPPS (69 FR 49029), we proposed and for this final rule, we are using the Metropolitan Divisions where applicable (as described below) under the new CBSA-based labor market area definitions.

In addition to being comparable to the organization of the labor market areas under current MSA designations (that is, the use of PMSAs rather than CMSAs), we believe that using Metropolitan Divisions where applicable (as described below) under the IPF PPS will result in a more accurate adjustment for the variation in local labor market areas for IPFs. Specifically, if we recognize the relatively “larger” CBSA that comprises two or more Metropolitan Divisions as an independent labor market area for purposes of the wage index, it will be too large and include data from too many hospitals to compute a wage index that will accurately reflect the various local labor costs of all of the individual hospitals included in that relatively “large” CBSA. As mentioned earlier, a large market area designation increases the likelihood of including many hospitals located in areas with very different labor market conditions within the same market area designation. This variation could increase the difficulty in calculating a single wage index that will be relevant for all hospitals within the market area designation. Rather, by recognizing the Metropolitan Divisions where applicable (as described below) under the proposed new CBSA-based labor market area definitions under the IPF PPS, we believe that in addition to more accurately maintaining the current structuring of the IPF PPS labor market areas, the local labor costs will be more accurately reflected, thereby resulting in a wage index adjustment that better reflects the variation in the local labor costs of the local economies of the IPFs located in these relatively “smaller” areas.

Below we describe where Metropolitan Divisions will be applicable under the new CBSA-based labor market area definitions under the IPF PPS.

Under OMB's new CBSA-based designations, there are 11 MSAs containing Metropolitan Divisions: Boston; Chicago; Dallas; Detroit; Los Angeles; Miami; New York; Philadelphia; San Francisco; Seattle; and Washington, D.C. Although these MSAs were also CMSAs under the prior definitions, in some cases these areas have been significantly altered. Under the current IPF PPS MSA designations, Boston is a single NECMA. Under the CBSA-based labor market area designations, it is comprised of four Metropolitan Divisions. Los Angeles will go from four PMSAs under the current IPF PPS MSA designations to two Metropolitan Divisions under the CBSA-based labor market area designations because two MSAs became separate MSAs. The New York CMSA will go from 15 PMSAs under the Start Printed Page 27064current IPF PPS MSA designations to only four Metropolitan Divisions under the CBSA-based labor market area designations. The five PMSAs in Connecticut under the current IPF PPS MSA designations will become separate MSAs under the CBSA-based labor market area designations, and the number of PMSAs in New Jersey under the current IPF PPS MSA designations will go from five to two, with the consolidation of two New Jersey PMSAs (Bergen-Passaic and Jersey City) into the New York-Wayne-White Plains, NY-NJ Division, under the CBSA-based labor market area designations. In San Francisco, under the CBSA-based labor market area designations, there are only two Metropolitan Divisions. Currently, there are six PMSAs, some of which are now separate MSAs under the current IPF PPS labor market area designations.

Under the current IPF PPS labor market area designations, Cincinnati, Cleveland, Denver, Houston, Milwaukee, Portland, Sacramento, and San Juan are all designated as CMSAs, but will no longer be designated as CMSAs under the CBSA-based labor market area designations. As noted previously, the population threshold to be designated as a CMSA under the current IPF PPS labor market area designations is 1 million. In most of these cases, counties currently in a PMSA under the current IPF PPS labor market area designations will become separate, independent MSAs under the CBSA-based labor market area designations.

We note that subsequent to the publication of the RY 2007 IPF PPS proposed rule, titles to certain CBSAs were changed based on OMB Bulletin No. 06-01 (December 2005). The title changes listed below are nomenclatures that do not result in substantive changes to the CBSA-based designations. Thus, these changes are listed below and will be incorporated into the FY 2007 CBSA-based urban wage index tables.

  • CBSA 26900: Indianapolis-Carmel, IN
  • CBSA 42680: Sebastian-Vero Beach, FL
  • CBSA 19780: Des Moines-West Des Moines, IA
  • CBSA 47644: Warren-Troy-Farmington Hills, MI
  • CBSA 31140: Louisville-Jefferson County, KY-IN

iii. Micropolitan Areas

Under OMB's new CBSA-based designations, Micropolitan Areas are essentially a third area definition consisting primarily of currently rural areas, but also include some or all of areas that are currently designated as an urban MSA. As discussed in greater detail in the FY 2005 IPPS final rule (69 FR 49029 through 49032), how these areas are treated will have significant impacts on the calculation and application of the wage index. Specifically, whether or not Micropolitan Areas are included as part of the respective statewide rural wage indices will impact the value of statewide rural wage index of any State that contains a Micropolitan Area because a hospital's classification as urban or rural affects which hospitals' wage data are included in the statewide rural wage index. We combine all of the counties in a State outside a designated urban area together to calculate the statewide rural wage index for each State.

Including Micropolitan Areas as part of the statewide rural labor market area would result in an increase to the statewide rural wage index because hospitals located in those Micropolitan Areas typically have higher labor costs than other rural hospitals in the State. Alternatively, if Micropolitan Areas were to be recognized as independent labor market areas, because there would be so few hospitals in each labor market area, the wage indices for IPFs in those areas could become relatively unstable as they might change considerably from year to year.

We currently use MSAs to define urban labor market areas and group all the hospitals in counties within each State that are not assigned to an MSA together into a statewide rural labor market area. We have used the terms “urban” and “rural” wage indexes in the past for ease of reference. However, the introduction of Micropolitan Areas by the OMB potentially complicates this terminology because these areas include many hospitals that are currently included in the statewide rural labor market areas.

We proposed to treat Micropolitan Areas as rural labor market areas under the IPF PPS for the reasons outlined below. That is, counties that are assigned to a Micropolitan Area under the CBSA-based designations would be treated the same as other “rural” counties that are not assigned to either an MSA (Metropolitan Statistical Area) or a Micropolitan Area. Therefore, in determining an IPF's applicable wage index (based on IPPS hospital wage index data), an IPF in a Micropolitan Area under OMB's CBSA-based designations would be classified as “rural” and would be assigned the statewide rural wage index for the State in which it resides.

In the FY 2005 IPPS final rule (69 FR 49029 through 49032), we discuss our evaluation of the impact of treating Micropolitan Areas as part of the statewide rural labor market area instead of treating Micropolitan Areas as independent labor market areas for hospitals paid under the IPPS. As discussed in that same final rule, one of the reasons Micropolitan Areas have such a dramatic impact on the wage index is because Micropolitan Areas encompass smaller populations than MSAs. In addition, they tend to include fewer hospitals per Micropolitan Area. Currently, there are only 25 MSAs with one hospital in the MSA. However, under the new CBSA-based definitions, there are 373 Micropolitan Areas with one hospital, and 49 MSAs with only one hospital.

Since Micropolitan Areas encompass smaller populations than MSAs, they tend to include fewer hospitals per Micropolitan Area, recognizing Micropolitan Areas as independent labor market areas will generally increase the potential for dramatic shifts in those areas' wage indices from 1 year to the next because a single hospital (or group of hospitals) could have a disproportionate effect on the wage index of the area. The large number of labor market areas with only one hospital and the increased potential for dramatic shifts in the wage indexes from 1 year to the next is a problem for several reasons. First, it creates instability in the wage index from year to year for a large number of hospitals. Second, it reduces the averaging effect (averaging effect allows for more data points to be used to calculate a representative standard of measured labor costs within a market area.) lessening some of the incentive for hospitals to operate efficiently. This incentive is inherent in a system based on the average hourly wages for a large number of hospitals, as hospitals could profit more by operating below that average. In labor market areas with a single hospital, high wage costs are passed directly into the wage index with no counterbalancing averaging with lower wages paid at nearby competing hospitals. Third, it creates an arguably inequitable system when so many hospitals have wage indexes based solely on their own wages, while other hospitals' wage indexes are based on an average hourly wage across many hospitals.

For the reasons noted above, and consistent with the treatment of these areas under the IPPS, as proposed and consist with this final rule, we are not adopting Micropolitan Areas as independent labor market areas under the IPF PPS. Under the CBSA-based labor market area definitions, Start Printed Page 27065Micropolitan Areas are considered a part of the statewide rural labor market area. Accordingly, we will determine an IPF PPS statewide rural wage index using the acute-care IPPS hospital wage data from hospitals located in non-MSA areas (for example, rural areas, including Micropolitan Areas) and that statewide rural wage index will be assigned to IPFs located in those non-MSA areas.

e. Implementation of the Revised Labor Market Areas Under the IPF PPS

Section 124 of the BBRA is broadly written and gives the Secretary discretion in developing and making adjustments to the IPF PPS.

When the revised labor market areas based on the OMB's new CBSA-based designations were adopted under the acute care hospital IPPS beginning on October 1, 2004, a transition to the new labor market area designations was established due to the scope and substantial implications of these new boundaries and to buffer the subsequent significant impacts it may have on payments to numerous hospitals. As discussed in the FY 2005 IPPS final rule (69 FR 49032), during FY 2005, a blend of wage indexes is calculated for those acute care IPPS hospitals experiencing a drop in their wage indexes because of the adoption of the new labor market areas.

While we recognize that, just like IPPS hospitals, some IPFs may experience decreases in their wage index as a result of the labor market area changes, our analysis shows that a majority of IPFs either expect no change in wage index or an increase in wage index based on CBSA definitions. In addition, a very small number of IPFs (fewer than 3 percent) will experience a decline of 5 percent or more in the wage index based on CBSA designations. We also found that a very small number of IPFs (approximately 5 percent) will experience a change in either rural or urban designation under the CBSA-based definitions. Since a majority of IPFs will not be significantly impacted by the labor market areas, we believe it is not necessary for a transition to the new CBSA-based labor market area for the purposes of the IPF PPS wage index.

We received several comments on our proposed changes for implementing the area wage adjustments. Public comments and our responses on the proposed changes for implementing the area wage adjustments are summarized below:

Comment: Several commenters requested that CMS provide a transition period to phase in the CBSA-based labor market definitions. One commenter requested that IPFs should be allowed to choose whether or not they wanted a phase-in of the CBSA wage indices.

Response: For cost reporting periods beginning in 2006, IPFs are paid based on a blend of 50 percent reasonable cost payments and 50 percent PPS payments. The wage index adjustment is being phased in on the PPS portion of the payment. Since we are already in the middle of a transition to a full wage-index adjustment under the IPF PPS, we believe that the effects on the IPF PPS wage index from the changes to the IPF PPS labor market areas definitions will be mitigated. Specifically, most IPFs will be in their FY 2006 cost reporting period and therefore will be in the second year of the 3-year phase-in of the IPF PPS wage index adjustment when the revised labor market area designations will be applied. During the second year of the transition to the IPF PPS, the applicable wage index value is one-half (50 percent) of the applicable full IPF PPS wage index adjustment. Since most IPFs will be in the second year of the 3-year phase-in of the wage index adjustment, for most IPFs, the labor-related portion of the Federal rate is only adjusted by 50 percent of the applicable full wage index (that is, one-half wage index value). As noted above, the IPF PPS wage index adjustment is made by multiplying the labor-related share of the IPF PPS Federal per diem base rate (75.66 percent) by the applicable wage index value.

Consequently, for most IPFs, only approximately 38 percent of the Federal per diem base rate is affected by the wage index adjustment (75.665 percent × 0.50 = 37.8325 percent), and the revision to the labor market area definitions based on OMB's new CBSA-based designations will only have a minimal impact on IPF PPS payments.

For the reasons discussed above, and also addressed in the RY 2007 proposed rule (71 FR 3633), we are not providing a transition under the IPF PPS from the current MSA-based labor market areas designations to the new CBSA-based labor market area designations. Rather, we are adopting the current CBSA-based labor market area definitions beginning July 1, 2006 without a transition period.

Comment: Several commenters do not believe that because the IPF PPS is in the second year of the transition blend, the effects of the wage index changes would be mitigated. The commenters stated that similar wage transitions have been applied in HHA and IRF, and therefore inconsistencies exist between payment systems.

Response: We do not believe a need exists to implement a separate transition for the wage index changes. We acknowledge that similar wage transitions exist in other PPSs. However, unlike the IPF PPS, in those instances, the payment systems were not already in a transition period (as described above).

Comment: Several commenters agreed with CMS's approach to wait 1 full year until IPF PPS claims and cost report data could be analyzed before changing the wage index definitions. Other commenters indicated that if CMS were to implement this change now, it would be inconsistent with the approach to wait a year before analyzing IPF PPS data.

The same commenters expressed concern that if CMS changes urban and rural classifications without any recourse (such as the Medicare Geographic Classification Review Board (MGCRB)) when CMS analyzes the PPS data and compares urban and rural IPFs, rural IPF data under MSA definitions would not be comparable to rural IPF data under CBSA definitions.

Response: In the November 2004 IPF PPS rule, we stated that we would use the best available hospital wage index data, and that we would propose any changes to the wage index in a proposed rule. We note that all of the other PPSs have adopted, or begun to adopt, the CBSA definitions. Consistent with other Medicare PPSs, and in order to utilize the best available data, as we indicated we would do, the IPF PPS will adopt the CBSA definitions. We want to ensure that the IPF PPS wage index adjustment most appropriately accounts for and reflects the relative hospital wage levels in the geographic area of the hospital as compared to the national average hospital wage level, and we believe that OMB's CBSA designations based on Census 2000 data reflect the most recent available geographic classifications.

With respect to the last comment, the meaning is not completely clear. If the commenters are concerned that changes to the area wage definitions will limit our ability to analyze the impact of the IPF PPS, CMS does not believe this is an issue. When we analyze the first year of IPF PPS claims and cost report data, the urban and rural designations will be under MSA definitions. We are now adopting the latest OMB definitions of urban and rural under CBSAs and we will view rural IPFs under these definitions. Finally, we want to note that, since the IPF PPS Provider Specific File is cumulative, CMS will have a record of which IPFs changed designations.

Comment: One commenter expressed support for the proposed change to the CBSA-based labor market definitions. The commenter believes that the CBSAs Start Printed Page 27066provide an accurate measure of the labor market areas in the United States.

Response: We agree with the commenter that the CBSAs represent the best available wage data.

Comment: The IPPS adopted a hold-harmless policy and an “out-commuting adjustment.” Several commenters believe that since the majority of IPFs are distinct part units, there is an inconsistency when the acute care hospitals are paid the out-commuting or out-migration adjustment and the IPFs are not paid the adjustment. The commenters stated that CMS should assume that IPF employees follow the same commuting patterns as those who work in the acute care hospital.

In addition, the commenters indicated that distinct part units would be at a disadvantage in recruiting and retaining workers for the IPF unless CMS adopted an out-commuting or out-migration adjustment.

Response: We are not providing a hold harmless policy or an “out-commuting” adjustment under the IPF PPS from the current MSA-based labor market areas designations to the new CBSA-based labor market area designations. Nor do we believe that we are required to provide an out-commuting adjustment. We note that section 505 of the MMA established new section 1886(d)(13) of the Act. Section 1886(d)(13) of the Act requires that the Secretary establish a process to make adjustments to the hospital wage index based on commuting patterns of hospital employees. We believe that this requirement for an “out-commuting” or “out-migration” adjustment applies specifically to the IPPS and not to other PPS. Therefore, consistent with other PPS (for example, IRF and LTCH PPS), we did not propose out-commuting or out-migration adjustment under the IPF PPS, nor are we establishing such an adjustment under the IPF PPS in this final rule.

We believe that our decisions not to adopt a transition or an out-commuting adjustment are appropriate for IPFs because, despite some similarities between the IPF PPS and the IPPS, there are clear distinctions between the payment systems, particularly regarding wage index issues.

For example, a wage index adjustment has been a stable feature of the acute care hospital IPPS since its 1983 implementation and the IPPS had utilized the prior MSA-based labor market area designation for over 10 years. The IPF PPS has only been implemented since January 1, 2005.

The most significant distinction between acute care hospitals under the IPPS and IPFs is that acute care hospitals have been paid using full wage index adjusted payments since 1983 and had used the previous IPPS MSA-based labor market area designations for over 10 years, whereas under the IPF PPS, a wage index adjustment is being phased-in over a 3-year period. As previously explained, the impact that the wage index can have on IPF PPS payments is limited at this point, since only a small percentage of the IPF PPS Federal per diem base rate is affected by the wage index (approximately 38 percent in most cases) because of the 3-year phase-in of the wage index adjustment.

In contrast, a transition policy to the revised IPPS labor market area definitions under the IPPS was appropriate because there is no phase-in of a wage index adjustment under the IPPS and the full labor-related share of the IPPS standardized amount (that is, Federal rate) is affected by the IPPS wage index adjustment, which resulted in a more significant projected impact for acute care hospitals under the IPPS.

Comment: Several commenters indicated that IPFs that are distinct part units should be allowed to be reclassified to the same geographic area as the acute care hospital. The commenters also stated that wage issues between acute care hospitals and IPFs are similar, and that it is not logical for IPFs that are distinct part units to receive a different area wage index value than the acute care hospital. Commenters requested that CMS implement a rural floor like that of IPPS.

Response: As stated above, the IPF PPS wage index is calculated using IPPS wage index data on the basis of the labor market area in which the IPF is located, without taking into account geographic reclassification under sections 1886(d)(8) and (d)(10) of the Act and without applying the “rural floor” established under section 4410 of the BBA. We believe that the actual location of an IPF (as opposed to the location of affiliated providers) is most appropriate for determining the wage adjustment because the prevailing wages in the area in which the IPF is located influence the cost of a case. In addition, we are using the latest OMB labor market area definitions based on 2000 Census data. Since these data are more recent than the data used for the wage index in the IPF PPS implementation year (2000 versus 1993 data), we do not see a need for a reclassification policy. Finally, as discussed above, by recognizing the Metropolitan Divisions where applicable under the new CBSA-based labor market area definitions under the IPF PPS, we believe that the local labor costs will be more accurately reflected, thereby resulting in a wage index adjustment that better reflects the variation in the local labor costs of the local economies of the IPFs located in these relatively “smaller” areas when compared with CMSAs.

Although some commenters request CMS to develop a “rural floor” like the IPPS, we believe the “rural floor” is required only for the acute care hospital payment system because, as stated in section VI.B.2, section 4410 of the Balanced Budget Act of 1997 (Pub. L. 105-33) applies specifically to acute care hospitals and not excluded hospitals and excluded units. We believe that the “pre-reclassification and pre-floor” wage data is the best proxy and most appropriate wage index for IPFs.

Comment: Many commenters expressed concern regarding those IPFs who would lose the rural adjustment if they are redefined as urban under the CBSA-based labor market definitions. Specifically, the commenters stated that IPFs' reimbursement would decrease over the next several years due to the wage index changes. The commenters also indicated that the loss of the rural adjustment would increase the financial vulnerability of IPFs that are necessary to provide continued access to care in previously rural areas. As a result, the commenters requested that CMS provide a grandfathering provision to allow IPFs to continue to receive the rural adjustment or a hold harmless provision that would prevent payments from dropping below what the IPF would have received had they remained designated as a rural IPF.

Response: We are finalizing our proposal to transition IPFs to CBSA-based labor market definitions. We recognize that IPFs that were previously considered rural will lose the 17 percent rural facility-level adjustment when they are redesignated as urban. However, as discussed above, since we are currently in the middle of a transition period from reasonable-cost based payments to PPS payments, the effects of changing to CBSA-based definitions are mitigated, since currently the wage index affects approximately 38 percent of an IPF's payment, and the rural adjustment affects 50 percent of an IPF's payment.

In addition, the IPF PPS has a stop-loss policy in place to protect IPFs that receive less than 70 percent of what they would have received under TEFRA. In general, the group of providers that stands to lose the rural adjustment did well under TERFA, and the purpose of the transition from TERFA to PPS is to allow IPFs to control and reduce their costs. Start Printed Page 27067

As discussed in the August 11, 2004 IPPS final rule (69 FR 49032), during FY 2005, a hold harmless policy was implemented to minimize the overall impact of hospitals that were designated in FY 2004 as urban under the MSA designations, but would become rural under the CBSA designations. In the same final rule, hospitals were afforded a 3-year hold harmless policy because the IPPS determined that acute-care hospitals that changed designations from urban to rural would be substantially impacted by the significant change in wage index. Currently, under the IPF PPS, urban facilities that become rural would receive the rural facility adjustment (that is, 17 percent). As discussed in section VI.C.2 of this final rule, we are adopting the 17 percent rural adjustment. The rural facility adjustment will be applied in the same way to urban facilities that will become rural under the CBSA-based definitions. Thus, we believe that the impact of the wage index changes on any urban facilities that become rural under the new definitions will be mitigated by the rural adjustment. Finally, as discussed above, the IPF PPS has a stop-loss policy in effect during the transition from TEFRA to PPS payments. Therefore, we do not believe it is appropriate or necessary to adopt a hold harmless policy for facilities that would experience a change in designation under the CBSA-based definitions.

We note that for the CBSA designations, we identified some geographic areas where there were no hospitals, and thus no hospital wage index data on which to base the calculation of the RY 2007 IPF PPS wage index. In addressing this situation, we proposed approaches that we believe would serve as proxies for hospital wage data and provide an appropriate standard that accounts for geographic variation in labor costs.

The first situation involves rural locations in Massachusetts and Puerto Rico. We have determined that there are no rural hospitals in those locations. Since there is no reasonable proxy for more recent rural data within those areas, we are using last year's wage index value for rural Massachusetts and rural Puerto Rico. This approach is consistent with other Medicare PPSs (for example, SNF PPS and IRF PPS).

The second situation has to do with the urban area of Hinesville, GA (CBSA 25980). Under the new labor market areas there are no urban hospitals within this area. Therefore, we are using the urban areas within the State to serve as a reasonable proxy for the urban areas without specific hospital wage index data in determining the IPF PPS wage index. In this final rule, we are calculating the urban wage index value for purposes of the wage index for these areas without urban hospital data as the average wage index for all urban areas within the State. This approach is consistent with other Medicare PPSs (for example, SNF PPS and IRF PPS).

We could not apply a similar averaging in rural areas because in the rural areas there are no State rural hospital wage data available for averaging on a State-wide basis. We did not receive comments on these approaches for calculating the wage index values for areas without hospitals for RY 2007 and subsequent years. We are adopting the proposed approach in this final rule.

To facilitate an understanding of the policies related to the changes to the IPF PPS labor market areas discussed above, in the MSA/CBSA Crosswalk included as Addendum B of this final rule, we are providing a listing of each Social Security Administration (SSA) State and county location code; State and county name; existing MSA-based labor market area designation; MSA-based wage index value; CBSA-based labor market area; and the new CBSA-based wage index value. We are also providing in Addenda C the wage index for urban and rural areas based on CBSA labor market areas.

Final Rule Action: In summary, we are finalizing our proposal to adopt the CBSA labor market area definitions without a transition, without a hold-harmless policy, and without an out-commuting or out-migration adjustment.

f. Wage Index Budget Neutrality

Any adjustment or update to the IPF wage index will be made in a budget neutral manner that assures that the estimated aggregated payments under this subsection in the RY beginning July 1, 2006 are not greater or less than those that would have been made in the year without such an adjustment. Therefore, as proposed and in this final rule, we calculate a budget-neutral wage index adjustment factor using the following steps:

Steps 1: Determine the total amount of the estimated IPF PPS payments for the implementation year using the labor-related share and wage indices from FY 2005 (based on MSAs).

Step 2: Calculate the total amount of estimated IPF PPS payments for RY 2007 using the labor-related share and wage indices from FY 2006 (based on CBSAs).

Step 3: Divide the amount calculated in Step 1 by the amount calculated in Step 2 which yields a RY 2007 budget-neutral wage adjustment of 1.0042.

This factor is applied in the update of the Federal per diem base rate for RY 2007.

2. 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. Many rural IPFs are small psychiatric units within small general acute care hospitals. We also stated in the November 2004 IPF PPS final rule that small-scale facilities are more costly on a per diem basis because there are minimum levels of fixed costs that cannot be avoided, and they do not have the economies of size advantage.

Based on the results of our regression analysis, we provided a payment adjustment for IPFs located in rural areas of 17 percent. In this final rule, we are not changing this adjustment factor. In addition, we stated in the November 2004 IPF PPS final rule that we do not plan to conduct another regression analysis until we analyze IPF PPS data. At that time, we can compare rural and urban IPFs to determine how much more costly rural facilities are on a per diem basis under the IPF PPS. In the meantime, we are applying a 17 percent payment adjustment for IPFs located in a rural area as defined at § 412.64(b)(1)(ii)(C).

Final Rule Action: In summary, we are adopting the 17 percent rural adjustment currently in effect for RY 2007.

3. Teaching Adjustment

In the November 2004 IPF PPS final rule, we established a facility-level adjustment for IPFs that are, or are part of, teaching institutions. The teaching status adjustment accounts for the higher indirect operating costs experienced by facilities that participate in graduate medical education (GME) programs. We have received numerous requests for clarification of the IPF PPS teaching adjustment, especially with regard to comparisons with the IPPS IME adjustment that were included in the November 2004 IPF PPS final rule. As a result, we are including an expanded explanation of the IPF PPS teaching status adjustment and are clarifying the changes to § 412.424(d)(1)(iii) regarding the teaching adjustment.

Medicare makes direct GME payments (for direct costs such as resident and teaching physician salaries, and other Start Printed Page 27068direct teaching costs) to all teaching hospitals including those paid under the IPPS, and those that were once paid under the TEFRA rate-of-increase limits but are now paid under other PPSs. These direct GME payments are made separately from payments for hospital operating costs and are not part of the PPSs. However, the direct GME payments do not address the higher indirect operating costs experienced by teaching hospitals. For teaching hospitals paid under the TEFRA rate-of-increase limits, Medicare did not make separate medical education payments because payments to these hospitals were based on the hospitals' reasonable costs. Since payments under TEFRA were based on hospitals' reasonable costs, the higher indirect costs that might be associated with teaching programs would automatically have been factored into the TEFRA payments.

As previously mentioned, we conducted regression analysis of FY 2002 IPF data as the basis for the payment adjustments included in the November 2004 IPF PPS final rule. In conducting the analysis, we used the resident counts reported on hospital cost reports (worksheet S-3, Part 1, line 12, column 7 for freestanding psychiatric hospitals and worksheet S-3, Part 1, line 14 (or line 14.01 for subprovider 2), column 7 for psychiatric units of acute care hospitals). That is, for the freestanding psychiatric hospitals, we used the number of residents and interns reported for the entire hospital. For the psychiatric units of acute care hospitals, we used the number of residents and interns reported for the psychiatric unit, which are reported separately on the cost report from the number reported for the rest of the hospital.

The regression analysis (with the logarithm of costs as the dependent variable) 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 full-time equivalent (FTE) residents training in the IPF (subject to limitations described below) to the IPF's average daily census (ADC).

In the cost regressions conducted for the November 2004 IPF PPS final rule, 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. In other words, the teaching adjustment is calculated by raising the teaching variable (1 + FTE residents/ADC) to the 0.5150 power. To compute the percentage increase in the IPF PPS payment attributable to the teaching adjustment (that is, the amount to be reconciled at cost report settlement), raise the teaching variable (1 + FTE residents/ADC) to the 0.5150 power. For example, for an IPF with a teaching variable of 0.10 and using a coefficient value of 0.5150, the per diem payment would increase by 5.03 percent; for an IPF with a teaching variable of 0.05, the per diem payment would increase by 2.54 percent. We note that the coefficient value of 0.5150 was based on regression analysis holding all other components of the payment system constant.

In addition, 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, similar to that established by sections 4621 (IME FTE cap for IPPS hospitals) and 4623 (direct GME FTE cap for all hospitals) of the BBA. We emphasize that the cap limits the number of FTE residents that teaching IPFs may count for the purposes of calculating the IPF PPS teaching adjustment, not the number of residents teaching institutions can hire or train.

The FTE resident cap is applied the same way in freestanding teaching psychiatric hospitals and in distinct part psychiatric units with GME programs. Similar to the regulations for counting FTE residents under the IPPS as described in § 412.105(f), we calculated the number of FTE residents that trained in the IPF during a “base year” and use that FTE resident number as the cap. An IPF's FTE resident cap would ultimately be 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).

Similar to teaching hospitals under the IPPS, IPFs that first begin training residents after November 15, 2004 initially receive an FTE cap of “0”. The FTE caps for teaching IPFs (whether they are new or existing IPFs) that start training residents in a new GME program may be subsequently adjusted in accordance with the IPPS policies described in § 412.105(f)(1)(vii) and GME policies described in § 413.79(e)(1)(i) and (ii). For purposes of the teaching status adjustment for IPFs, a new graduate medical education program means a medical education program that receives initial accreditation by the appropriate accrediting body or begins training residents on or after November 15, 2004. However, contrary to the policy for IME FTE resident caps under the IPPS, we do not allow IPFs to aggregate the FTE resident caps used to compute the IPF PPS teaching adjustment through affiliation agreements. We included these policies because we believe it is important to limit the total pool of resident FTE cap positions within the IPF community and avoid incentives for IPFs to add FTE residents in order to increase their payments.

Residents with less than full-time status and residents rotating through the psychiatric hospital or unit for less than the entire cost reporting period are counted in proportion to the time they spend in their assignment with the IPF. For example, a 3-month rotation by a full-time resident to the IPF during a 12-month cost reporting period will be counted as 0.25 FTE for purposes of counting residents to calculate the ratio. No FTE resident time counted for purposes of the IPPS IME adjustment is permitted to be counted for purposes of the teaching status adjustment for the IPF PPS.

As noted previously, the denominator used to calculate the teaching adjustment under the IPF PPS is the IPF's ADC from the current cost reporting period. We chose to use the ADC because it is closely related to the IPF's patient load, which affects the number of interns and residents the IPF can train. We also believe the ADC is a measure that can be defined precisely and is difficult to manipulate. Although the IPPS IME adjustment uses the hospital's number of beds as the denominator, the capital PPS (as specified at § 412.322) and the IRF PPS (as specified at § 412.624(e)(4) both use the ADC as the denominator for the indirect medical education and teaching adjustments, respectively.

If a psychiatric hospital's or unit's FTE count of residents in a given year is higher than the FTE count in the base year (the base year being used to establish the cap), we base payments in that year on the lower number (the cap amount). This approach is consistent with the IME adjustment under the IPPS and the teaching adjustment under the IRF PPS. The IPF remains free to add FTE residents above the cap amount, but it cannot count the number of FTE residents above the cap for purposes of calculating the teaching adjustment. This means that the cap serves as an upper limit on the number of FTE residents that may be counted for purposes of calculating the teaching Start Printed Page 27069status adjustment. IPFs can adjust their number of FTE residents counted for purposes of calculating the teaching adjustment as long as they remain under the cap. On the other hand, if a psychiatric hospital or unit were to have fewer FTE residents in a given year than in the base year (that is, fewer residents than its FTE resident cap), teaching adjustment payments in that year would be based on the lower number (that is, the current year's FTE count of resident).

In response to inquiries about how the teaching adjustment is applied under the IPF PPS, we proposed to add a new paragraph § 412.424(d)(1)(iii)(E) to clarify that the teaching adjustment is made on a claim basis as an interim payment and the final payment for the claim would be made in full during the final settlement of the cost report. The difference between those interim payments and the actual teaching adjustment amount computed in the cost report would be adjusted through lump sum payments/recoupments when the cost report is filed and later settled.

As noted in section VI.D.1.a of this final rule, in reviewing the methodology used to simulate the IPF PPS payments used for the November 2004 IPF PPS final rule, we discovered that the computer code incorrectly assigned non-teaching status to most teaching facilities. As a result, total IPF PPS payments were underestimated by about 1.36 percent. To resolve the issue, as discussed in section V.B.3 of this final rule, we are amending the Federal per diem base rate prospectively for all IPFs.

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. Until then, as proposed, we are retaining the 0.5150 teaching adjustment to the Federal per diem base rate.

Public comments and our responses on the proposed changes for implementing the teaching adjustment are summarized below:

Comment: A commenter stated that the use of “final settled” cost reports may allow hospitals to report accurate counts during the audit process. However, the commenter indicated that if this is not correct, or if certain hospitals' 2004 cost reports have already gone through final settlement, CMS should take action to ensure that accurate resident counts for purposes of determining the IPF teaching adjustment resident cap.

The commenter indicated that for the regression analysis, CMS used the resident count reported on Worksheet S-3, Part 1, lines 14 and 14.01, column 7 for psychiatric units of acute care hospitals. The commenter expressed concern regarding the data used for the regression analysis due to the ambiguity of the cost reporting instructions. The commenter believes that this count may not accurately reflect the resident count in the hospital's psychiatric unit. Specifically, since the cost reporting instructions state that one should “enter the number of interns and full time equivalents in an approved program determined in accordance with 42 CFR 412.105(g) for the indirect medical education adjustment.” The commenter further stated that for cost reports before November 15, 2004, psychiatric unit resident counts were not eligible to be counted for purposes of the acute inpatient IME adjustment.

Response: As explained in the November 2004 IPF PPS final rule and the RY 2007 proposed rule, similar to the regulations for counting FTE residents under the IPPS as described in § 412.105(f), we calculate the number of FTE residents that trained in the IPF during a “base year” and use that FTE resident number as the cap. An IPF's FTE resident cap would ultimately be determined based on the final settlement of the IPF's most recent cost report filed before November 15, 2004.

Although we are concerned about the accuracy of the information reported in the cost report, including the number of FTE residents reported on Wkst. S-3, Part 1, Column 7, it is, foremost, the hospital's responsibility to report this data accurately. An official of the hospital certifies that the information on all the worksheets in the cost report is correct to the best of his or her knowledge and belief.

Although the instructions for Column 7 of Wkst. S-3, Part I contain an outdated reference to § 412.105(g) (that is, this reference was changed in the Code of Federal Regulations to § 412.105(f) in 1997 but the Wkst. S-3, Part I instructions were not updated accordingly), these instructions specify that the FTE resident count to be reported in Column 7 is determined in accordance with the policies for IME adjustment. We do not believe the redesignation of the relevant regulation should have caused confusion.

If the hospitals believe that the FTE resident counts on the base year cost report are incorrect, they have an option of submitting an amended cost report or requesting a reopening.

Comment: One commenter indicated a discrepancy between the reference to the regulation regarding the base period for determining the IPF's FTE resident in the RY 2007 IPF PPS proposed rule (71 FR 3653) and the reference to that regulation in the current Code of Federal Regulations (CFR). The commenter stated that the RY 2007 IPF PPS proposed rule cited § 412.424(d)(1)(iii)(C) as the relevant regulation, while the current CFR reference can be found at § 412.424(d)(1)(iii)(B)(1).

Response: The existing regulation at § 412.424(d)(1)(iii)(C) implements the FTE resident cap for purposes of the IPF teaching status adjustment. The FTE resident cap is established in the base period as specified in the November 2004 IPF PPS final rule (69 FR 66979), and codified in regulations at § 412.424(d)(1)(iii)(B)(1). The reference in the RY 2007 IPF PPS proposed rule (71 FR 3653) reflects the proposal to redesignate portions of the reference to the teaching status adjustment. In this final rule, we will finalize the reference (and all other changes as proposed) to the base period to be § 412.424(d)(1)(iii)(C) and will replace § 412.424(d)(1)(iii)(B)(1) currently in the CFR.

Comment: One commenter requested clarification about application of the FTE resident cap for those IPFs that begin training residents after November 15, 2004.

Response: As we indicated in the RY 2007 proposed rule, IPFs that did not train interns and residents during the time period of the IPF's most recent cost report filed before November 15, 2005 would receive an FTE cap of “zero”. As a result, we would not apply a teaching adjustment to claims submitted by the IPF. However, if the IPF (whether it is new or existing) begins training residents in a new medical residency training program after that date, the IPF will begin to receive the teaching adjustment under the IPF PPS in the next cost reporting period based on the FTE intern and resident count in accordance with the policies applicable under the IPPS.

In this case, the FTE resident cap would not be revised until the beginning of the fourth year of the new training program. The cap is set based on a review of the number of interns and residents in each of the first three program years. Before the completion of the third year of the new training program, the actual intern and resident count is reported on the cost report and used for the calculation of the teaching adjustment for the first three years of the new teaching program. After the third year of the new program, we revise the IPF's FTE resident cap to reflect the new training program. The revised cap is calculated by multiplying the highest number of interns and residents in any program year by the number of years in Start Printed Page 27070which residents are expected to complete the program.

For subsequent years, we compare the actual number of interns and residents trained in the IPF that year to the revised FTE resident cap and base the teaching adjustment on the lower number.

Final Rule Action: In summary, we are retaining the coefficient value of 0.5150 for the teaching adjustment. In § 412.402, we are providing a definition for “new graduate medical education program” to mean a medical education program that receives initial accreditation by the appropriate accrediting body or begins training residents on or after November 15, 2004.

We are also clarifying at § 412.424(d)(1)(iii)(E) that the teaching adjustment is made on a claim basis as an interim payment, and the final payment in full for the claim is made during the final settlement of the cost report.

4. 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, IPPS and IRF PPS) have 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 adjustment in the November 2004 IPF PPS final rule. We are also adopting the same COLA adjustment in this final rule.

In general, the COLA accounts for the higher costs in the IPF and eliminates the projected loss that IPFs in Alaska and Hawaii would experience absent the COLA. A COLA factor for IPFs located in Alaska and Hawaii is made by multiplying the non-labor share of the Federal per diem base rate by the applicable COLA factor based on the county in which the IPF is located.

Table 15 below lists the specific COLA for Alaska and Hawaii IPFs. The COLA factors were obtained from the U.S. Office of Personnel Management (OPM). The COLA factors are published on the U.S. Office of Personnel Management (OPM) Web site (http://www.opm.gov/​oca/​cola/​rates.asp). As proposed and in this final rule, we are adopting the COLA adjustments obtained from OPM. We will update the COLA factors if OPM updates them and as updated by OPM. Any change in the COLA factors will be made in one of our IPF PPS RY update documents. We are also amending § 412.428 to enable us to update the COLA factors if appropriate.

Table 15.—Proposed COLA Factors for Alaska and Hawaii IPFs

LocationCOLA
AlaskaAll areas1.25
HawaiiHonolulu County1.25
Hawaii County1.165
Kauai County1.2325
Maui County1.2375
Kalawao County1.2375

Final Rule Action: In summary, we did not receive any public comments on the proposed COLA for IPFs located in Alaska and Hawaii. We are adopting the COLA adjustments obtained from OPM currently in effect, and as shown in Table 15 above. We will update the COLA factors as updated by OPM. In addition, we are amending § 412.428 to enable us to update the COLA factors, if appropriate.

5. Adjustment for IPFs With a Qualifying Emergency Department (ED)

Currently, the IPF PPS includes a facility-level adjustment for IPFs with qualifying EDs. As explained in the November 2004 IPF PPS final rule, we provide an adjustment to the standardized 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 allocated to the hospital's distinct part psychiatric unit for preadmission services otherwise payable under Medicare Part B furnished to a beneficiary during the day immediately preceding the date of admission to the IPF (see § 413.40(c)) and the overhead cost of maintaining the ED. This payment is a facility-level adjustment that applies to all IPF admissions (with the one exception as 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 a 31 percent adjustment as the variable per diem adjustment for day 1 of each stay. If an IPF does not have a qualifying ED, it receives a 19 percent adjustment as the variable per diem adjustment for day 1 of each patient stay.

While any IPF with a qualifying ED receives the adjustment, the adjustment is paid most often to IPFs that are psychiatric units of acute care hospitals or critical access hospitals because these providers are more likely to have an ED that meets the definition of a qualified ED in § 412.424(d)(1)(v). We defined a qualifying ED in order to avoid providing the ED adjustment to an intake unit that is not comparable to a full-service ED with respect to the array of emergency services available or cost. We defined a qualifying ED as one that is staffed and equipped to furnish a comprehensive array of emergency services and that meets the definition of a “dedicated emergency department” as specified in § 489.24(b) and the definition of “provider-based status” as specified in § 413.65. We intended that a qualifying ED provide a comprehensive array of medical and psychiatric services. In order to clarify that a comprehensive array of emergency services includes medical as well as psychiatric services, we proposed to amend § 412.424(d)(1)(v)(A).

As specified in § 489.24, a dedicated ED means “any department or facility of the hospital, regardless of whether it is located on or off the main hospital campus, that meets at least one of the following requirements:

  • It is licensed by the State in which it is located under applicable State law as an emergency room or emergency department;
  • It is held out to the public (by name, posted signs, advertising, or other means) as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment; or
  • During the calendar year immediately preceding the calendar year in which a determination under this section is being made, based on a representative sample of patient visits that occurred during the calendar year, it provides at least one-third of all its outpatient visits for the treatment of emergency medical conditions on an urgent basis without requiring a previously scheduled appointment.”

As specified in § 413.65, provider-based status means “the relationship between a main provider and a provider-based entity or a department of a provider, remote location of a hospital, or satellite facility that complies with the provisions.” Including provider-based status in the definition of a qualifying ED reflects the common Start Printed Page 27071ownership of the hospital and the distinct part psychiatric unit.

As discussed in the November 2004 IPF PPS final rule, three steps were involved in the calculation of the ED adjustment factor.

Step 1: We estimated the proportion by which the ED costs of a case would increase the cost of the first day of the stay. Using the IPFs with ED admissions in FY 2002, we divided their average ED cost per stay admitted through the ED ($198) by their average cost per day ($715), which equals 0.28.

Step 2: We adjusted the factor estimated in step 1 to account for the fact that we would pay the higher first day adjustment for all cases in the qualifying IPFs, not just the cases admitted through the ED. Since on average, 44 percent of the cases in IPFs with ED admissions are admitted through the ED, we multiplied 0.28 by 0.44, which equals 0.12.

Step 3: We added the adjusted factor calculated in the previous 2 steps to the variable per diem adjustment derived from the regression equation that we used to derive our other payment adjustment factors. The first day payment factor from this regression is 1.19. Adding the 0.12, we obtained a first day variable per diem adjustment for IPFs with a qualifying ED equal to 1.31.

The ED adjustment is made on every qualifying claim except as described below. As specified in § 412.424(d)(1)(v)(B), the ED adjustment is not made where a patient is discharged from an acute care hospital or CAH and admitted to the same hospital's or CAH's psychiatric unit. 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. As we explained in the November 2004 IPF PPS final rule, if we provided the ED adjustment in these cases, the hospital would be paid twice for the overhead costs of the ED (69 FR 66960).

Therefore, when patients are discharged from an acute care hospital or CAH and admitted to the same hospital's 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. We do not intend to conduct a new regression analysis for this IPF PPS update. Rather, we plan to wait until we analyze IPF PPS data. Therefore, we are retaining the 1.31 adjustment factor for IPFs with qualifying EDs for the RY beginning July 1, 2006.

As we indicated in the November 2004 IPF PPS final rule, in FY 2002, one third of the IPFs admissions were through the ED. In the November 2003 IPF proposed rule (68 FR 66920) the percentage of admissions through the ED were understated. We plan to monitor claims data to determine the number of IPF admissions admitted through the ED.

Public comments and our responses on the proposed adjustment for IPFs with qualifying EDs are summarized below:

Comment: A few commenters questioned whether IPFs would have to reapply for the ED adjustment annually. Specifically, commenters asked whether it is necessary to re-submit verification of a qualifying ED each year.

Other commenters asked for clarification as to whether the ED adjustment can still be applied based on the date the attestation letter is received or would the IPFs lose the adjustment for the entire cost reporting year.

Response: We indicated in instructions ( Transmittal 384, CR 3541 dated December 1, 2004 and Transmittal 444, CR 3678 dated January 21, 2005) that IPFs should notify their FIs 30 days before the beginning of their cost reporting period regarding if they have a qualifying ED. FIs have the discretion as to how they wish to be notified and as to the type of documentation they require. Once the FI is satisfied that the IPF has a qualifying ED, the FI should enter the information in the provider-specific file within a reasonable timeframe so that the IPF can begin to receive the ED adjustment. This is a one-time verification. Application of the ED adjustment is prospective.

FIs may also use the date the documentation was received from the IPF to implement the ED adjustment. The provider-specific file can be updated from the date of the attestation and claims processed from that date will receive the ED adjustment. We do not intend that IPFs would have to wait until the beginning of their next cost report period to receive the ED adjustment.

However, if an IPF no longer meets the definition of a qualified ED, the IPF must notify their FI. The FI would immediately remove the flag from the provider-specific file and the provider will not receive the ED adjustment. If the provider should once again meet the definition of a qualified ED, they should contact their FI immediately in order to update their file.

Comment: One commenter asked what criteria CMS would use to determine what constitutes a “comprehensive” array of medical as well as psychiatric services. In addition, the commenter asked if the criteria are appropriate and would ensure high-quality care for psychiatric patients.

Response: In most cases, the FI would be familiar enough with the providers they service to know if the hospital has a qualifying ED. In those rare cases where the FI does not know whether the hospital's ED meets our definition of a qualifying ED (for example, new IPFs), the FI will establish that the IPF's ED is staffed and equipped to furnish a comprehensive array of emergency services. In response to the comment, we are clarifying in § 412.424(d)(1)(v)(A) that a qualifying ED is staffed and equipped to furnish both medical as well as psychiatric emergency services.

Final Rule Action: We are retaining the 1.31 percent adjustment factor for IPFs with qualifying EDs for the RY 2007.

a. New Source of Admission Code to Implement the ED Adjustment

In order to ensure that the ED adjustment is not paid for patients who are discharged from an acute care hospital or CAH and admitted to the same hospital's or CAH's psychiatric unit, we directed IPFs to enter source of admission code “4” (transfers from hospital inpatient) on those claims. The source of admission code is a required field on Medicare claims and indicates the source of the patient admissions. However, as we implemented the IPF PPS, we realized that admission code “4” is too broad to distinguish these claims because it reflects transfers from any acute care hospital or CAH. Currently, where admission code “4” is entered on a claim, the ED adjustment is not paid, even if the patient is transferred from a different acute hospital or CAH.

In order to pay these IPF claims appropriately, CMS requested a new source of admission code from the National Uniform Billing Committee to identify transfers from the same hospital or CAH. On June 07, 2005, the National Uniform Billing Committee granted our request to establish a new source of admission code to indicate transfers from the same hospital or CAH. The new source of admission code “D” is effective April 1, 2006. As proposed and in this final rule, the new code will be used by IPFs to identify IPF patients who have been transferred to the IPF from the same hospital or CAH. Claims with source of admission code “D” will not receive the ED adjustment.

Public comments and our response on the proposed new source of admission code to implement the ED adjustment are summarized below: Start Printed Page 27072

Comment: Several commenters indicated that CMS should not penalize IPFs if they receive a transfer from the acute care medical-surgical units of the same hospital. A commenter stated that there may only be one hospital with a psychiatric emergency department in a particular area. The commenter believes that to penalize the transfers is unfair; each facility whether it is the ED, surgical unit, medical unit or psychiatric unit is doing their job and should be appropriately compensated.

Response: As stated in the November 2004 final rule and the RY 2007 proposed rule, in § 412.424(d)(1)(v)(B) we specify that 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. The ED adjustment is not made in this case because the costs associated with the ED services are already reflected in the DRG payment paid to the acute care hospital or through the reasonable cost payment made to the CAH. As explained in the November 2004 IPF PPS final rule and in the RY 2007 proposed rule, if we provided the ED adjustment in these cases, the hospital would be paid twice for overhead costs of the ED (see 69 FR 66960 and 71 FR 3641 respectively).

We note that the ED adjustment is a facility-level adjustment, rather than a patient-level adjustment. This facility-level adjustment applies to psychiatric hospitals and acute care hospitals with distinct part units, and CAHs that maintain a qualifying ED. We are providing the adjustment to psychiatric units in acute care hospitals or CAHs, and psychiatric hospitals because the costs of the ED are allocated to all hospital departments, including the psychiatric units. Also, the adjustment is intended to account for ED costs allocated to the distinct part psychiatric unit for preadmission services otherwise payable under Medicare Part B furnished to a beneficiary during the day immediately preceding the date of admission to the IPF and the overhead cost of maintaining the ED.

In order to ensure that Medicare does not pay twice for these types of transfers, we proposed that admission code “D” be used by IPFs to identify IPF patients who have been transferred to the IPF from the same hospital or CAH. Claims with source of admission code “D” will not receive the ED adjustment.

Final Rule Action: We are finalizing our decision to adopt the new source of admission code “D”. Claims with source of admission code “D” will not receive the ED adjustment.

b. Applicability of the ED Adjustment to IPFs in Critical Access Hospitals

The BBA created the CAH program, designed to represent a separate provider type to provide acute care services in rural areas. Generally, in order to qualify as a CAH, a hospital must—

  • Be located in a rural area;
  • Provide 24-hour emergency care services;
  • Have an average LOS of 96 hours or less;
  • Operate up to 25 beds for inpatient critical access care;
  • Be located more than 35 miles from a hospital or another CAH or more than 15 miles in mountainous terrain or only secondary roads;
  • Or be certified by the State as of December 31, 2005 as being a “necessary provider” of health care services to residents in the area.

Section 405(g) of the MMA authorizes CAHs to establish distinct part psychiatric and rehabilitation units of up to 10 beds effective for cost reporting periods beginning on or after October 1, 2004. Services in these units are paid under the payment methodology that would apply if the services were provided in a distinct part psychiatric or rehabilitation unit of a hospital. As a result, IPFs that are distinct part units of CAHs are paid the same as if they were a distinct part unit of a hospital. Otherwise, the CAH is paid on a reasonable cost basis for inpatient critical access services.

In the November 2004 IPF PPS final rule, we amended § 413.70(e) to clarify that payments for services of distinct part psychiatric units in CAHs are made in accordance with the IPF PPS. In order to pay CAHs the same as other IPFs, CAHs would be subject to the 1-day preadmission services bundling provision specified in § 413.40(c)(2) for patients who are admitted to the CAH's IPF. As a result, the cost of preadmission services, including ED services furnished to CAH IPF patients would be allocated to the IPF.

D. Other Payment Adjustments and Policies

The IPF PPS includes the following payment adjustments: (1) An outlier policy 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; (2) a stop-loss provision, applicable during the transition period, to reduce financial risk to IPFs projected to experience substantial reductions in Medicare payments under the IPF PPS; (3) an interrupted stay policy to avoid overpaying stays that include a brief absence from the IPF followed by readmission to the IPF; and (4) a payment for patients who receive ECT. As proposed, we are updating those policies in this final rule. We are also making clarifications to the physician certification and recertification requirements in order to ensure consistent practices across IPFs. In addition, we are clarifying coverage of recreation therapy.

1. Outlier Payments

In the November 2004 IPF PPS final rule, we implemented regulations at § 412.424(d)(3)(i) to provide a payment adjustment for IPF stays that have extraordinarily high costs. Providing additional payments for outlier cases to IPFs that are beyond the IPF's control strongly improves the accuracy of the IPF PPS in determining resource costs at the patient and facility level because facilities receive additional compensation over and above the adjusted Federal prospective payment amount for uniquely high-cost cases. These additional payments reduce the financial losses that would otherwise be caused by treating patients who require more costly care and, therefore, reduce the incentives to under-serve these patients.

Under the IPF PPS, outlier payments are made on a per case basis rather than on a per diem basis because it is the overall financial “gain” or “loss” of the case, and not of individual days, that determines an IPF's financial risk. In addition, because patient-level charges (from which costs are estimated) are typically aggregated for the entire IPF stay, they are not reported in a manner that would permit accurate accounting on a daily basis.

Currently, 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 length of stay 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 hospital PPSs) might provide an incentive under the IPF per diem payment system to increase length of Start Printed Page 27073stay in order to receive additional payments. After establishing the loss sharing ratios, we determined the current fixed dollar loss threshold amount of $5,700 through payment simulations designed to compute a dollar loss beyond which payments are estimated to meet the 2 percent outlier spending target.

a. Update to the Outlier Fixed Dollar Loss Threshold Amount

As indicated in section II.A. of this final rule, in accordance with the update methodology described in § 412.428(d), we are updating 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 to make 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.

We continue to believe a 2 percent outlier policy is an appropriate target percentage and proposed to retain the 2 percent outlier policy. However, we believe it is necessary to update the fixed dollar loss threshold amount because analysis of the latest available data and rate increases indicates adjusting the fixed dollar loss amount is necessary in order to maintain an outlier percentage that equals 2 percent of total estimated IPF PPS payments. We intend to continue to analyze estimated outlier payments for subsequent years using the best available data in order to maintain estimated outlier payments at 2 percent of total estimated IPF PPS payments.

We have determined that in certain sections of the November 2004 IPF PPS final rule, we used the phrase “Fixed-dollar loss threshold” and, in other sections, we used the phrase “Fixed-dollar loss amount” to describe the dollar amount by which the costs of a case exceed payment in order to qualify for an outlier payment. In order to avoid confusion regarding these phrases, we are using the term “fixed-dollar loss threshold amount” when we are referring to the dollar amount by which the costs of a case exceed payment in order to qualify for an outlier payment.

As a result of this clarification, in § 412.402, we are revising the term “Fixed dollar loss threshold” to “Fixed dollar loss threshold amount.” We are also making clarifying changes to § 412.424(d)(3)(i) and § 412.424(d)(3)(i)(A) to state that we will provide an outlier payment if an IPF's estimated total cost for a case exceeds a “fixed dollar loss threshold amount” plus the total IPF adjusted payment amount for the stay, and that it is the fixed dollar loss threshold amount that is adjusted by the IPF's facility-level adjustments.

Aside from updating the terminology “fixed dollar loss threshold amount” and making the conforming changes to the regulation text described above, we did not propose to make any other changes to the outlier policy. Therefore, we will continue to adjust the fixed dollar loss threshold amount by the applicable facility-level payment adjustments and add this amount to the IPF PPS payment amount in order to determine if a case qualifies for an outlier payment. For cases that meet the threshold amount, we will pay 80 percent for days 1 through 9 and 60 percent for day 10 and thereafter.

In the November 2004 IPF PPS final rule, we described the process by which we calculate the outlier fixed dollar loss threshold amount. We will continue to use this process in this final rule. We begin by simulating aggregate payments with and without an outlier policy, and applying an iterative process to a fixed dollar loss amount that will result in outlier payments being equal to 2 percent of total simulated payments under the simulation. Based on this process, we proposed a fixed dollar loss threshold amount of $6200 for RY 2007. In this final rule, we are finalizing this amount. For RY 2007, IPF PPS will use $6200 as the fixed dollar loss threshold amount in the outlier calculation in order to maintain the proposed 2 percent outlier policy.

We note that the simulation analysis used to calculate the $6200 fixed dollar loss threshold amount includes all of the changes to the IPF PPS discussed in this final rule.

Public comments and our responses to changes to the outlier fixed dollar loss threshold amount are summarized below.

Comment: Several commenters requested that CMS use FY 2005 claims data to ensure that the fixed dollar loss threshold amount is correctly set, and if that data are not available, the commenters recommended that CMS keep the threshold at its current level.

Other commenters suggested that since CMS is not making any other changes to the major adjustments, changes should not be made to adjust the fixed dollar loss threshold amount. They felt that an increase in the threshold is unnecessary and might lead to a financial burden on IPFs. One commenter asked how CMS could accurately determine that 2 percent is the best outlier percentage and that the threshold amounts are appropriate.

Response: A complete set of FY 2005 claims data will not be available until later in the year, therefore we will not be able to analyze this data in time for publication of this final rule. It is necessary to update the fixed dollar loss threshold amount because we are increasing the Federal per diem base rate and the ECT payment rate. We are using the best available data to compute the updated fixed dollar loss threshold amount in our payment simulations. As stated above, we believe 2 percent is the optimal outlier percentage because it 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. In the future, as IPF PPS data becomes available, we can analyze the accuracy of the fixed dollar loss threshold amount.

Comment: Several commenters recommended that CMS provide a detailed description of the methodology used in calculating the fixed dollar loss threshold amount.

Response: We estimate the cost of each case and inflate these costs to RY 2007 dollars in our simulations. We used FY 2002 claims and cost report data to estimate the cost per stay. We calculated these costs by taking routine per diem costs from the cost report (for the routine costs) and by taking departmental charges and cost-to-charge ratios (for the ancillary costs). These are the costs we then inflated to RY 2007 dollars in our payment simulations. We then applied RY 2007 rates and policies in our payment simulations to compute the updated fixed dollar loss threshold amount.

Comment: Several commenters requested that CMS use the same methodology as IPPS to calculate the threshold.

Response: The cost-to-charge ratio applied to charges provides Medicare the most accurate measure of a provider's per-case cost for the purpose of paying for high-cost outlier cases at the point that we process the initial claim. The cost-to-charge ratio is based on the providers' own cost and charge information as reported by the providers. In this final rule, we have applied the cost-to-charge ratios to the reported charges to estimate the cost per case, and inflated the costs to current dollars. In the future, when more recent data is available, we will consider whether using the IPPS methodology of inflating the charges and applying the latest cost-to-charge ratios to estimate the cost per case is an even more accurate method of calculating the threshold amount. Start Printed Page 27074

Comment: One commenter suggested that CMS investigate the possibility and legality of carrying over any unused outlier money from year to year.

Response: We have responded to similar comments a number of times in the context of other PPS regulations, ((70 FR 24168), (70 FR 24196 through 24197), (57 FR 39784), (58 FR 46347), (59 FR 45408), (60 FR 45856), (61 FR 27496), (56 FR 43227), and (61 FR 46229 through 46230)). As we have explained before and as explained below, we do not make adjustments to PPS payment rates to account for differences between projected and actual outlier payments in a previous year.

We implemented the IPF PPS outlier policy at § 412.424(d)(3)(i). We set outlier criteria so that outlier payments are projected to equal 2 percent of estimated total IPF PPS payments. In doing so, we use the best available data at the time to make our estimates.

Outlier payments are “funded” through a prospective adjustment to the base rate. We do not set money aside into a discrete “pool” dedicated solely for outlier payments. Outlier payments are based on estimates. If outlier payments for a given year are greater than projected, we do not recoup money from IPFs; if outlier payments for a given year are lower than projected, we do not make an adjustment to account for the difference. If estimates turn out to be inaccurate, we believe the more appropriate action is to continue to examine the outlier policy and to try to refine the methodology for setting outlier thresholds. Thus, consistent with this approach, for this final rule we are finalizing our decision to update the outlier threshold amount to $6200 for RY 2007 to make estimated outlier payments equal to 2 percent of total estimated IRF PPS payments in RY 2007.

Final Rule Action: In this final rule, we are adopting $6200 as the fixed dollar loss threshold amount for RY 2007.

b. Statistical Accuracy of Cost-to-Charge Ratios

As stated previously, under the IPF PPS, an outlier payment is made if an IPF's cost for a stay exceeds a fixed dollar loss threshold 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 their overall cost to charge ratio (CCR). This approach to determining a provider's cost is consistent with the approach used under the IPPS and other prospective payment systems. In FY 2004, we implemented changes to the IPPS outlier 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, because we believe the IPF outlier policy is susceptible to the same payment vulnerabilities as the IPPS, we adopted an approach to ensure the statistical accuracy of CCRs under the IPF PPS. Therefore, we adopted the following 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.

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 RY 2007 is 1.7447 for rural IPFs, and 1.7179 for urban IPFs, based upon 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.

Additional information regarding the national median CCRs is included in the November 2004 IPF PPS final rule (69 FR 66961).

  • We do not apply the applicable national median CCR when an IPF's CCR falls below a floor. We made this decision because using the national median CCR in place of the provider's actual CCR would overstate the IPF's costs. We are applying the national CCRs to the following situations:

++ New IPFs that have not yet submitted their first Medicare cost report.

++ IPFs whose operating or capital CCR is in excess of 3 standard deviations above the corresponding national geometric mean (that is, above the ceiling).

++ Other IPFs for whom the fiscal intermediary obtains inaccurate or incomplete data with which to calculate either an operating or capital CCR or both.

For new facilities, we are using these national ratios until the facility's actual CCR can be computed using the first tentatively settled or final settled cost report, which will then be used for the subsequent cost report period.

We are not making any changes to the procedures for ensuring the statistical accuracy of CCRs in RY 2007. However, we are updating the national urban and rural CCRs (ceilings and medians) for IPFs for RY 2007 based on the full CY 2005 CCRs entered in the provider-specific file. In addition, we are updating the ceilings and national median CCRs will be based on CBSA-based geographic designations because the CBSAs are the geographic designations we are adopting for purposes of computing the proposed wage index adjustment to IPF payments beginning July 1, 2006. The national CCRs for RY 2007 were estimated to be 0.7100 for rural IPFs and 0.5500 for urban IPFs and will be used in each of the three situations cited above. These estimates were based on the IPF's location (either urban or rural) using the CBSA-based geographic designations.

In this final rule, we are finalizing our decision to update the national urban and rural CCRs (median and ceilings) based on the previous full CYs' provider-specific file. These CCRs will be announced in each year's annual notice of prospective payment rates published in the Federal Register. We are adding a new paragraph (g) to § 412.428 to clarify that we intend to update the national urban and rural ceilings and medians as part of the annual update of the IPF PPS and to specify when the national median urban and rural CCRs will be used.

Comment: One commenter asked that a provision be added to the national median CCR policy that an exception to the computed CCR be allowed to be filed with the FI if using the national median CCR overstates the IPF's costs.

Response: CMS believes that the actual CCR reported on the cost report should be used to calculate outlier payments. In the vast majority of cases, the IPF's CCR will be updated within a year, when the next cost report is filed. An interim cost report can be filed for special cases, in which case the updated CCR can be used. However, allowing IPFs to continually submit cost and charge data could create a burden for Fiscal Intermediaries. Finally, if the IPF is dissatisfied with the amount of payment, they can invoke existing appeal rights.

2. Stop-Loss Provision

In the November 2004 IPF PPS final rule, we implemented a stop-loss policy to reduce financial risk for those facilities expected to experience substantial reductions in Medicare payments during the IPF PPS transition period. This stop-loss policy guarantees that each facility receives total IPF PPS Start Printed Page 27075payments that are no less than 70 percent of its TEFRA payments, had the IPF PPS not been implemented.

This policy is applied to the IPF PPS portion of Medicare payments during the 3-year transition. Hence, during year 1, when three-quarters of the payment were based on TEFRA and one-quarter on the IPF PPS; stop loss payments guarantee payments which are at least 70 percent of the TEFRA payments. The resulting 92.5 percent of TEFRA payments in year 1 is the sum of 75 percent and 25 percent times 70 percent.

In year 2, one-half of the payment will be based on TEFRA and one-half on the IPF PPS. In year 3, one-quarter of the payment will be based on TEFRA and three-quarters on the IPF PPS. In year 4 of the IPF PPS, Medicare payments are based 100 percent on the IPF PPS.

The combined effects of the transition and the stop-loss policies will be to ensure that the total estimated IPF PPS payments are no less than 92.5 percent in year 1, 85 percent in year 2, and 77.5 percent in year 3. We are not making any changes to the Stop-Loss provision.

3. Patients Who Receive Electroconvulsive Therapy (ECT)

In developing the IPF PPS, we received numerous public comments recommending that we include a payment adjustment for patients who receive ECT treatments during their IPF stay because furnishing ECT treatment, either directly or under arrangements, adds significantly to the cost of these stays. When we analyzed the FY 2002 MedPAR data, we found that ECT cases comprised about 6 percent of all cases and that almost 95 percent of ECT cases were treated in IPFs that are psychiatric units of acute care hospitals. Even among psychiatric units, ECT cases are concentrated among a relatively small number of facilities. Overall, approximately 450 facilities had cases with ECT. Among these facilities, we estimated the mean number of ECT cases per facility to be approximately 25. In addition, approximately one-half of the IPFs providing ECT had no more than 15 cases in FY 2002.

Our analysis confirmed that cases with ECT are substantially more costly than cases without ECT. We found that on a per case basis, ECT cases are approximately twice as expensive as non-ECT cases ($16,287 compared to $7,684). Most of this difference is due to variation in LOS (20.5 days for ECT cases compared to 11.6 days for non-ECT cases). In addition, the ancillary costs per case for ECT cases are $2,740 higher than those for non-ECT cases.

Although we are able to determine the cost of stays with ECT, we are unable to develop an ECT cost per treatment using the FY 2002 IPF claims data because the claims do not include the number of treatments. As a result, in the November 2004 IPF PPS final rule, we established the following methodology for calculating the IPF PPS ECT payment adjustment.

We established an ECT base rate using the pre-scaled and pre-adjusted median hospital cost for CPT procedure code 90870 used for payment under hospital outpatient PPS (OPPS), based on hospital claims data. The median cost for all OPPS services are posted after publication of the OPPS proposed rule at the following address: http://www.cms.hhs.gov/​hospitaloutpatientPPS. We used unadjusted hospital claims data under the OPPS, that is, the pre-scaled and pre-adjusted median hospital cost per treatment, to establish the ECT base rate because we did not want the ECT payment under the IPF PPS to be affected by factors that are relevant to OPPS but not specifically applicable to IPFs. The median cost ($311.88) was then standardized and adjusted for budget neutrality, resulting in an ECT payment adjustment of $247.96 per treatment. The ECT base rate is adjusted for wage and COLA differences in the same manner that we adjust the Federal per diem base rate.

In order to receive the payment adjustment, IPFs must indicate on their claims the revenue code for ECT (901), along with the total number of units (ECT treatments) provided to the patient during their IPF stay. In addition, IPFs must include the ICD-9-CM procedure code for ECT (94.27) and the date of the last ECT treatment the patient received.

As we stated in the November 2004 IPF PPS final rule, although we established the ECT adjustment as a distinct payment under the IPF PPS, our preferred approach would be to include a patient level adjustment as a component of the model (for example, determined through the regression analyses) to account for the higher costs associated with ECT (69 FR 66951). We believe the approach will better control incentives towards over-utilization and be more consistent with the approach used for other patient level adjustments under the PPS. During the transition period we expect to collect more data on the number of ECT treatments per stay, and associated costs. We will utilize these data to evaluate alternative approaches for incorporating an adjustment for ECT in the payment system. To the extent that we change the payment methodology, we would propose the change first in a future rulemaking. Although our analysis will continue, we do not plan to redo the regression analysis until we analyze IPF PPS data.

It is important to note that since ECT treatment is a specialized procedure, not all providers are equipped to provide the treatment. Therefore, many patients who need ECT treatment during their IPF stay must be referred to other providers to receive the ECT treatments, and then return to the IPF. In accordance with § 412.404(d)(3), in these cases where the IPF is not able to furnish necessary treatment directly, the IPF would furnish ECT under arrangements with another provider. While a patient is an inpatient of the IPF, the IPF is responsible for all services furnished, including those furnished under arrangements by another provider. As a result, the IPF claim for these cases should reflect the services furnished under arrangements by other providers.

Public comments and our responses on the proposed ECT payment policy are summarized below.

Comment: Several commenters asked why CMS was continuing to adjust the ECT rate by the standardization factor, behavioral offset, stop-loss adjustment, and outlier adjustment when the IPF PPS is no longer budget neutral after the implementation year.

Response: We proposed to treat the ECT rate in a similar manner to the Federal per diem base rate. Specifically, we proposed to adjust the CY 2006 OPPS median rate for ECT by the standardization factor, behavioral offset, stop-loss adjustment, and outlier adjustment in addition to applying the wage index budget neutrality factor. This way, all of the adjustments that are incorporated into the Federal per diem base rate would be incorporated into the ECT rate. However, based on the comments we received, and in order to improve consistency and give more predictability in the ECT rate from year to year, we believe it is more appropriate to use the CY 2005 ECT rate as a base, and then update that amount by the market basket each rate year.

This methodology, we believe, will be even more consistent with the methodology we use to update the Federal per diem base rate because we will use the RPL market basket increase to increase both rates. Exactly as the standardization factor, behavioral offset, stop-loss adjustment, and outlier adjustment are already built into the Federal per diem base rate before we apply the market basket and the wage index budget neutrality factor, the implementation year ECT rate of Start Printed Page 27076$247.96 includes the standardization factor, behavioral offset, stop-loss adjustment, and outlier adjustment. Then, just as we updated the federal per diem base rate, we will then apply the corrected standardization factor (please see section V.B for a discussion of how we adjust this factor on Federal per diem base rate), the market basket increase of 4.3 percent, and the wage index budget neutrality factor of 1.0042 to compute a RY 2007 ECT rate of $256.20.

We will monitor ECT payments and usage under the IPF PPS and the OPPS to ensure that the increased payments for ECT do not lead to changes in the frequency of utilization by reviewing the FY 2005 MedPAR claims data.

Comment: One commenter stated that CMS should ensure that the ECT amount adequately reflects the cost of providing the treatment.

Response: We believe using the CY 2005 median cost for ECT under the OPPS as a basis for our ECT payment rate is the best option at this time to ensure the most appropriate payment for ECT. We will continue to monitor ECT payments as new data become available, and will make changes, if warranted.

Final Rule Action: In summary, we will finalize the update methodology for the ECT rate by using the CY 2005 ECT rate as a base and then updating that amount by the market basket increase each rate year. We will also continue to monitor ECT payments under the IPF PPS and the OPPS.

4. Physician Certification and Recertification Requirements

Since the publication of the November 2004 IPF PPS final rule, we have received inquiries related to physician certification and recertification. It appears that some psychiatric units in acute care hospitals have been following the timeframes that are applicable to the acute care hospital of which they are a part (as specified in § 424.13) rather than those that apply to psychiatric hospitals (as specified in § 424.14).

To eliminate the confusion that we believe may be caused by the titles of § 424.13 and § 424.14 and to ensure consistency in compliance with the requirements among all IPFs, in the RY 2007 proposed rule (71 FR 3616), we proposed to revise the title of § 424.14 from “Requirements for inpatient services of psychiatric hospitals” to “Requirements for inpatient services of inpatient psychiatric facilities.” In addition, we proposed that for the purposes of payment under the IPF PPS, all IPFs would follow the physician certification and recertification requirements as specified in § 424.14.

In the November 28, 2003 IPF PPS proposed rule (68 FR 66920), we proposed to—(1) amend § 424.14 to state that in recertifying a patient's need for continued inpatient care in an IPF, a physician must indicate that the patient continues to need, on a daily basis, inpatient psychiatric care (furnished directly by or requiring the supervision of IPF personnel) or other professional services that, as a practical matter, can be provided only on an inpatient basis; and (2) revise § 424.14(d) to require that a physician recertify a patient's continued need for inpatient psychiatric care on the 10th day following admission to the IPF rather than the 18th day following admission to the IPF (68 FR 66939).

However, in the November 2004 IPF PPS final rule, we did not include the proposed physician recertification requirement changes because most of the public comments we received on this issue did not support the proposed changes and indicated that there are inconsistencies in the timeframes currently required for IPFs that warranted additional analysis. Instead, we stated that we would continue to require that a physician recertify a patient's continued need for inpatient psychiatric care on the 18th day following admission to the IPF.

Since publication of the November 2004 IPF PPS final rule, we have received additional inquiries related to the physician certification and recertification timeframes that currently apply to IPFs. As noted above, it appears that some psychiatric units in acute care hospitals have continued to follow the timeframes that are applicable to the acute care hospital of which they are a part (as specified in § 424.13) rather than those that apply to psychiatric hospitals (as specified in § 424.14). Section 424.13(d) requires the initial certification no later than as of the 12th day of hospitalization and the first recertification is required no later than as of the 18th day of hospitalization. Section § 424.14(d) requires certification at the time of admission or as soon thereafter as is reasonable and practicable and the first recertification is required as of the 18th day of hospitalization.

In order to clarify requirements and establish further consistency among provider types, for purposes of payment under the IPF PPS, we proposed that all IPFs (distinct part units of acute care hospitals and CAHs and psychiatric hospitals) meet the physician certification and recertification timeframes in § 424.14.

As proposed, we are revising § 424.14(d) to provide that the initial physician certification will be required at the time of admission or as soon thereafter as is reasonable and practicable and the first recertification will be required as of the 12th day of hospitalization. Subsequent recertifications will be required at intervals established by the hospital's UR committee (on a case-by-case basis if desired), but no less frequently then every 30 days.

We chose to propose the 12th day because it is more in line with the median LOS and it is current practice for certification in psychiatric units.

In addition, we received inquiries from FIs requesting guidance on the content requirement of physician certifications at § 424.14(c), relating to the medical necessity of continued inpatient psychiatric care. As a result, we are adding language to clarify that for purposes of payment under the IPF PPS, the physician will also recertify that the patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel.

We received several comments related to the various changes we proposed making to the Certification and Plan of Treatment Requirements of § 424.14.

Commenters were silent with respect to our proposed title revision to § 424.14 from “Requirements for inpatient services of psychiatric hospitals” to “Requirements for inpatient services of inpatient psychiatric facilities.” We are finalizing the title revision for § 424.14 as “Requirements for inpatient services of inpatient psychiatric facilities.”

Overall, commenters supported making the physician certification requirements consistent among distinct part psychiatric units of acute care hospitals and CAHs and psychiatric hospitals. Therefore, for the purposes of payment under the IPF PPS, we are requiring that all IPFs (distinct part psychiatric units of acute care hospitals and CAHs and psychiatric hospitals) follow the physician certification and recertification requirements as specified in § 424.14.

We received mixed responses from commenters concerning our proposed physician certification and recertification timeframes.

Specific comments and our responses on the proposed changes implementing physician certification and recertification requirements are summarized below.

Comment: One hospital association expressed support for a 12-day recertification requirement, finding it Start Printed Page 27077preferable to 18 days. Other commenters requested the current requirement of 18 days for the initial recertification remain in place, citing added administrative burden since most patients are discharged before the 18th day. A couple of the commenters recommended maintaining the 18-day recertification requirement since it is part of the original language for § 424.14 and further believe it is the established practice in psychiatric hospitals.

Response: When § 424.14(d)(2) was developed in the 1980s, the average LOS for inpatient psychiatric hospitalization was much longer than the current median LOS of 9 days, thereby necessitating a parallel recertification requirement of 18 days, which was reflective of current treatment practice at that time. However, as inpatient psychiatric treatment has evolved with the development of new medications and therapies, so has the average length of inpatient care.

According to the MedPar 2002 claims data, the median LOS for Medicare beneficiaries in IPFs is 9 days. Since the duration of inpatient psychiatric hospitalization stays have shortened, the certification and recertification timeframe and practices need to be updated in order to remain consistent with current practice. Thus, an earlier recertification timeframe is indicated by the shorter LOS for inpatient psychiatric hospitalization. Therefore, we continue to believe that an 18-day recertification requirement is outdated and not reflective of current inpatient psychiatric treatment.

As a result, we are finalizing that for § 424.14(d)(2), the first recertification is required as of the 12th day of hospitalization. Subsequent recertifications will be required at intervals established by the hospital's Utilization Review committee (on a case-by-case basis if desired), but no less frequently then every 30 days.

Comment: In general, commenters were silent concerning our proposal to modify the certification and recertification language of § 424.14(c), relating to the medical necessity of continued inpatient psychiatric care. However, a couple of commenters requested that the language required for certification and recertification remain consistent with § 424.14(b) and § 424.14(c). Another commenter requested clarification on the proposed language requiring “the physician would recertify that the patient continues to need, on a daily basis* * *”. The commenter questioned whether physicians would need to chart daily in the patient's record that the patient continues to need active treatment.

Response: We proposed only one modification to § 424.14(c), “Content of recertification”, by adding language requiring that the physician would also recertify that the patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel. This means, the patient continues to need daily, active treatment that is furnished directly by or requiring the supervision of inpatient psychiatric facility personnel. To clarify, physician certification and recertification, under § 424.14, are not the same as progress notes. A physician must certify the necessity of the services and, in some instances, recertify the continued need for those services to ensure that Medicare pays only for services of the type appropriate for Medicare coverage. Progress notes, under § 412.27(c)(4), must also be recorded by the patient's physician, in addition to a nurse, social worker, and when appropriate, others significantly involved in active treatment modalities, but are used to document the progress of the patient's treatment, and are more frequent than the certification and recertification timelines. In addition to the purpose of clarifying the recertification content requirements, this modification is consistent with the medical necessity requirement for continued inpatient psychiatric care.

As a result, for purposes of payment under the IPF PPS, the physician would also recertify that the patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel.

Final Rule Action: In summary, we are changing the title for § 424.14 from “Requirements for inpatient services of psychiatric hospitals” to “Requirements for inpatient services of inpatient psychiatric facilities.”

In addition, for the purposes of payment under the IPF PPS, we are requiring that all IPFs (distinct part psychiatric units of acute care hospitals and CAHs and psychiatric hospitals) follow the physician certification and recertification requirements as specified in § 424.14.

Furthermore, § 424.14(d)(2) will require the first recertification as of the 12th day of hospitalization. Subsequent recertifications will be required at intervals established by the hospital's UR committee (on a case-by-case basis if desired), but no less frequently than every 30 days.

We are also finalizing the content requirement of physician certifications at § 424.14(c)(iii) by adding the following language, “the physician will also recertify that the patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel.”

5. Provision of Therapeutic Recreation in IPFs

Before the implementation of the IPPS payment methodology, Medicare coverage guidelines gave specific recognition to therapeutic recreation in inpatient psychiatric hospitals. The guidelines in § 3102.1.A of the Medicare Intermediary Manual, Part 3 (MIM-3), and in § 212.1 of the Medicare Hospital Manual (which now appear in the CMS Internet Online Manual at Pub. 100-02, Chapter 2, § 20.1ff.) specifically identify therapeutic recreation as one of the services that can constitute “active treatment” in this setting when they are—

  • Provided under an individualized treatment or diagnostic plan;
  • Reasonably expected to improve the patient's condition or for the purpose of diagnosis; and
  • Supervised and evaluated by a physician.

However, these guidelines refer to therapeutic recreation in terms of being an “adjunctive” therapy, indicating that even in this setting, it will not independently serve as a patient's sole or primary form of therapeutic treatment, but rather, will be furnished in support of (but subordinate to) some other, primary form of therapy.

When the IPPS was developed in 1983, to the extent that therapeutic recreation and other services had been furnished during the IPPS base period, the bundled IPPS payment for that setting would reflect these costs. However, during the IPPS rulemaking process, we received public comments concerned that, “the cost-saving incentives of the PPS would lead hospitals paid under the system to stop providing recreational therapy services.” In response, in the January 3, 1984 IPPS final rule (49 FR 242) we indicated that implementation of the IPPS would not, in fact, prohibit the provision of recreational therapy services, and that “these services will continue to be covered to the same extent they always have been under existing Medicare policies”.

In implementing the IPPS regulations, we included criteria for identifying certain types of institutions (for example, psychiatric hospitals) that would be excluded from the IPPS and, thus, would continue to be paid under some other methodology. The Start Printed Page 27078regulations also introduced criteria for identifying an IPPS-excluded inpatient psychiatric unit housed within a larger acute-care hospital that would itself be subject to the IPPS. One of these identifying criteria at 42 CFR 405.471(c)(4)(ii)(B) (later recodified at 42 CFR 412.27(b)) was the provision, through the use of qualified personnel, of a number of specified types of services, including psychological services, social work services, psychiatric nursing, occupational therapy, and recreational therapy.

As we explained in the IPPS interim final rule published on September 1, 1983 (48 FR 39758), the regulations designated these particular services because their provision “is typical of units which treat patients whose characteristics are like those in psychiatric hospitals. Consequently, the provision of these services is an identifier of such a patient population”. We note that the designation of these particular services in this context did not serve to define the scope of their coverage under Medicare, nor to mandate their provision in this setting, but merely to identify them as being characteristic of the type of psychiatric unit that would qualify for exclusion from the IPPS.

At the same time the IPPS was being developed, a parallel evolution was taking place in the certification requirements that facilities must meet in order to participate in the Medicare program: a shift from primarily “process-oriented” requirements to more “outcome-oriented” requirements, which focus more on direct indicators of the quality of care actually being furnished to the facility's patients (as reflected in the presence of positive results and the absence of negative ones), and less on the specific “process” through which the facility achieves the desired outcome.

In order to participate in the Medicare program, psychiatric hospitals not only had to meet the conditions of participation (COPs) that apply to general, acute-care hospitals, but additionally had to meet special conditions related to medical records and staffing. Consistent with the recognition of therapeutic recreation as constituting active treatment in this one particular setting (as discussed above), the original COPs for psychiatric hospitals at 42 CFR 405.1038(g) mandated the presence of qualified therapists, assistants, or aides “sufficient in number to provide comprehensive therapeutic activities, including at least occupational, recreational and physical therapy, as needed, to assure that appropriate treatment is rendered for each patient, and to establish and maintain a therapeutic milieu.” Furthermore, 42 CFR 405.1038(g)(3) specified that “recreational or activity therapy services are available under the direct supervision of a member of the staff who has demonstrated competence in therapeutic recreation programs,” and § 405.1038(g)(4) and § 405.1038(g)(5) went on to prescribe additional standards regarding therapy assistants or aides and overall staffing for recreational and activity therapy.

However, when the special medical record and staffing COPs for psychiatric hospitals were subsequently recodified at § 482.62(g), the specific references to recreation therapy were deleted and replaced with a more general requirement to provide a therapeutic activities program. In response to public comments that recommended us to restore the deleted requirements, we indicated that we believe that the deleted requirements concerning therapeutic activities were overly and unnecessarily prescriptive and that the hospital should have the flexibility to determine which activities are most appropriate to its patient population and to determine the criteria to be met by employees providing these services. (See the IPPS PPS rule published on June 17, 1986 (51 FR 22032)).

However, when the 1986 COP changes applicable to psychiatric hospitals were made, we inadvertently retained specific references to recreation therapy in § 412.27. Since the intent of § 412.27(b) is to identify services provided in psychiatric units that are characteristic of services furnished in psychiatric hospitals, we believe it is no longer appropriate to include references to specific therapies in § 412.27. Therefore, in order to have consistent requirements among IPFs, in the RY 2007 IPF PPS proposed rule, we proposed removing recreational therapy from § 412.27(b).

We went on to further explain in the RY 2007 IPF PPS proposed rule that in addition to being consistent with current provisions, we believe the IPF PPS base rate which was developed using FY 2002 data, already reflects the provision of recreation therapy.

We received a few public comments concerning our proposal to remove reference to recreational therapy in § 412.27(b). Overall the commenters recommended that we not delete the reference to recreational therapy.

Public comments and our responses on the proposed changes for removing the reference to recreational therapy are summarized below:

Comment: An industry organization suggested that if CMS'; goal is to maintain consistency, CMS should adopt the language as specified in § 482.62 from the COPs for § 412.27(b).

Response: We believe that this commenter raises a valid concern in terms of maintaining consistency. We also agree with the suggestion of applying the same language to both § 482.62 and § 412.27(b), thereby maintaining consistent requirements among IPFs. Since § 482.62 refers to “therapeutic activities,” we are revising § 412.27(b), to be consistent with § 482.62, by replacing the reference to recreational and occupational therapy with the term “therapeutic activities.”

Comment: Several commenters stated that the inclusion of recreational therapy in § 412.27(b), is no more specific than the references included for social work or occupational therapy.

Response: As we indicated in the RY 2007 IPF PPS proposed rule, since the intent of § 412.27(b) is to identify services provided in psychiatric units that are characteristic of services furnished in psychiatric hospitals, we believe it is essential to maintain consistency among the provisions for § 482.62 and § 412.27(b). Therefore, we are removing the reference to both recreational and occupational therapy from § 412.27(b) and replacing them with the more general reference to therapeutic activities which is currently used in § 482.62.

However, we believe it is important to maintain the reference to social work services in § 412.27, since it is currently included in § 482.62.

Comment: One commenter requested that CMS continue to pay for recreational therapy. Other commenters were concerned that if the reference to recreational therapy is removed, people may not know that Medicare has traditionally recognized recreational therapy as an adjunctive therapy in psychiatric facilities.

Response: As we discussed in the RY 2007 IPF PPS proposed rule, we believe the IPF PPS base rate, which was developed using FY 2002 data, reflects the provision of recreation and occupational therapy. Even though we are removing the specific reference to recreation and occupational therapy in § 412.27(b), both recreational and occupational therapy services will continue to be covered to the same extent they always have been under existing Medicare policies.

In addition, although we are removing the specific references to recreational and occupational therapy from § 412.27(b), we want to emphasize that both therapies are, and continue to be, Start Printed Page 27079valuable therapeutic interventions in psychiatric treatment.

Final Rule Action: In summary, for consistency, we are adopting the language as specified in § 482.62 from the COPs for § 412.27(b). Specifically, 412.27(b) will state—“Furnish, through the use of qualified personnel, psychological services, social work services, psychiatric nursing services and therapeutic activities.”

6. Same Day Transfers

Currently, when a transfer, discharge, or death occurs on the same day as an admission to an IPF, the IPF PPS PRICER does not recognize any covered IPF days and the IPF claims are suspended. Based on review of a limited sample of the IPF and subsequent IPPS claims, it appears that many of these patients are first seen in a hospital's ED, are admitted to the hospital's psychiatric unit and, later the same day, determined to be too medically compromised to be managed in the psychiatric unit. This scenario may occur because the patient presents at the ED and is admitted to the psychiatric unit in the middle of the night, and when the patient's admission to the unit is reviewed by a psychiatrist the next morning, the physician determines that the patient should be discharged for acute care. In other cases, a patient may have been admitted to a freestanding psychiatric hospital based on the information furnished by an ED of an acute care hospital. However, after admission, the psychiatric hospital staff evaluates the patient and determines that the patient has medical needs that they are not staffed or equipped to meet.

The Provider Reimbursement Manual addresses the same day transfer issue from the perspective of counting Medicare days for the purpose of Medicare cost reporting. Section 2205 indicates that only full patient days may be used to apportion inpatient routine care service costs and that a day begins at midnight and ends 24 hours later. However, section 2205.1 explains how to count a day if the day of admission and the day of discharge are the same. Section 2205.1 indicates that when a patient is admitted and then transferred from one participating provider to another before midnight of the same day, a day (except for utilization purposes) is counted at both providers. A day of Medicare utilization is charged only for the admission to the second provider. This distinction is important for psychiatric admissions because IPF stays are subject to the 190-day lifetime limit on inpatient psychiatric care.

Section 1812(b) of the Act and 42 CFR 409.62 indicate that payment is not available for inpatient psychiatric hospital services furnished beyond the 190-day lifetime limit. Thus, Medicare coverage of IPF services, specifically IPF services furnished in freestanding psychiatric hospitals is limited to 190 days. In consideration of the limit on coverage of IPF services, where there is a same day transfer between Medicare participating providers, we only count the second admission for utilization purposes. Therefore, the initial admission to the IPF does not count against a beneficiary's lifetime psychiatric services limit.

We have some concerns regarding same day transfers from an IPF. Under TEFRA, a hospital receives its cost up to the hospital's TEFRA limit. The TEFRA limit is based on the hospital's average cost per discharge in a base period. When an admission and discharge occur on the same day, the hospital's cost is unlikely to exceed the TEFRA limit, so the hospital receives its cost for the day. These same day transfers also improve the hospital's payment under TEFRA by slightly reducing its cost per discharge. We are also concerned that when the transfer occurs in the same hospital, this practice circumvents bundling rules under the IPPS, in that it unbundles the ED charges from the IPPS claim and allocates the ED costs to the psychiatric unit even though the patient may have been inappropriately admitted to the unit.

Based on the review of IPF PPS claims we conducted, it did not appear that the admissions to the IPF were medically reasonable and necessary. However, we believe it is important to base a decision regarding coverage of these days on a comprehensive review of the claims. Therefore, in the RY 2007 IPF PPS proposed rule, we did not propose a change in payment policy. However, we did consider several alternative methods for addressing same day transfers under the IPF PPS which are described below. Any change to treatment of same day transfers would be made prospectively.

We could treat these days as covered days under the IPF PPS. However, under the IPF PPS, a 19 percent adjustment to the base rate is applied to day 1 of the stay to reflect the additional administrative and clinical costs associated with admission and the day 1 adjustment is increased to 31 percent when the IPF has a qualifying ED. The IPF may also receive, for example, a teaching adjustment or rural adjustment, for these partial days of care. Several of the claims in our analysis indicate a stay of 2 hours. We are concerned that this approach would overpay IPFs and encourage inappropriate admissions and transfers.

Another option would be to make no PPS payment, but continue making TEFRA payments during the IPF PPS transition period. For example, for cost reporting periods beginning in 2006, IPFs would receive a blended payment consisting of 50 percent PPS and 50 percent TEFRA. Therefore, under this approach we would allow some payment for these days for cost reporting periods in 2006 and 2007, but once the IPF PPS transition period is over, the IPFs would receive no payment for these days. We think this approach would encourage changes in admission practices in order to avoid the need to transfer patients. However, once the IPF PPS transition is over, there would be no payment mechanism to pay IPFs for stays in which there is a circumstance, not reasonably foreseeable by the admitting IPF, for example, a serious change in health status on the day of admission.

We could treat these same day transfer cases as covered days under the IPF PPS but limit payment to the Federal per diem base rate or some other payment amount, for example, half the Federal per diem base rate. This approach would limit payment to IPFs in order to provide an incentive for IPFs to make medical clearance determinations as early in the IPF stay as possible. However, we are concerned that this approach would not lead to changes in admission practices to avoid inappropriate admissions and the need for subsequent transfers.

It is important to note that the cost for these days was included in the cost reports used to develop the IPF PPS, and, as a result, the average cost per day that was used to establish the Federal per diem base rate is higher than it would otherwise have been had those days not been included.

We specifically request public comment from IPFs on this issue to help us to develop a payment policy that pays IPFs appropriately for these days and provides an incentive to avoid same day transfers wherever possible.

Public comments and our responses on the proposed changes for implementing the same day transfers are summarized below.

Comment: We received several comments concerning the issue of an appropriate payment for same day transfers. Many commenters indicated that CMS should conduct a thorough examination of the 2005 claims because they do not believe that same day transfers would be found to be prevalent occurrences. The same commenters also stated that if CMS decides to investigate Start Printed Page 27080other options, the agency should convene the field through an open-door forum or other such venue to discuss the possibilities.

In addition, several commenters requested that when sufficient data is available to fully evaluate same day transfers, CMS should request input from the field before making any changes to current policy. Other commenters also indicated that CMS should continue to reimburse same day transfers as 1-day stays unless it can demonstrate empirically that the cost of the former is sufficiently less than the cost of the latter to justify a partial payment.

Another commenter requested that CMS release a version of the MedPar with relevant information to qualified researchers who would be pleased to conduct an empirical analysis for the agency.

Many commenters supported CMS' instructions for its payment methodology for the suspended IPF PPS same day transfer claims from January 1, 2005. The instructions counted these days as covered for cost reporting purposes if the day of admission and the day of discharge are the same. Other commenters indicated that CMS should not penalize provider's evaluation and treatment efforts, stating that the work was done, therefore providers should be compensated.

Furthermore, commenters support the way section 2205.1 of the Provider Reimbursement Manual instructs FIs to count a day if the day of admission and the day of discharge are the same. The majority of the commenters recommended paying the PPS per diem for these transfers.

Response: We will take all comments into consideration as we develop a payment policy that not only pays appropriately for these days, but will also provide an incentive to avoid same day transfers wherever possible.

Final Rule Action: In summary, we received multiple comments on the same day transfer. We will take all comments into consideration as we develop a payment policy for same day transfers. We will develop the policy for same day transfers in the future, after we analyze IPF PPS data.

VII. Miscellaneous Public Comments Within the Scope of the Proposed Rule

Comment: A commenter requested an inner-city adjustment, indicating that the difficulties of inner-city IPFs are related to a high volume of non-payment in contrast to the more likely rural under use and low volume costs. The commenter suggested a 20 percent adjustment at least, for inner-city IPFs.

Response: We did not include an explicit payment adjustment for inner city facilities in the November 2004 IPF PPS final rule nor did we propose an urban adjustment in the RY 2007 proposed rule. As indicated in the November 2004 IPF PPS final rule (69 FR 66954), we did not include an adjustment for urban IPFs because the regression analysis we conducted did not indicate that urban IPFs were more costly on a per diem basis.

As previously stated, we do not plan to rerun the regression analysis until we analyze IPF PPS data (that is no earlier than FY 2008). When we rerun the regression analysis, we will test for the need for an urban or inner city adjustment.

Comment: A commenter objected to CMS not posting the proposed rule to the CMS Web site until January 18, 2006 while the rule actually went on public display January 13, 2006 and was not published in the Federal Register until January 23, 2006. The commenter stated that if CMS chooses to start the comment period based on the date of display, CMS must ensure that the display copy is promptly posted on the Web site to provide interested parties sufficient time to review the rule and draft comments before the comment period ends.

Response: It is our general practice to post Federal Register documents on our website as soon as practicable after the documents are on public display at the Office of the Federal Register. When we chose to start the comment period from the day of public display, while we are not required to do so, it was our intent to post the proposed rule on CMS website immediately. However, due to circumstances out of our control, we were unable to immediately do so because our Web site at http://www.cms.hhs.gov was being redesigned. However, we did publish a press release on January 13, 2006, announcing the IPF PPS proposed rule went on public display at the Federal Register on January 13, 2006 and that it would be published in the Federal Register on January 23, 2006. In addition, we posted the rule as soon as was practicable for us to do so, on Wednesday, January 18, 2006.

VIII. Provisions of the Final Rule

This final rule essentially incorporates the provisions of the proposed rule, in which we proposed to update the IPF PPS for RY 2007 applicable to IPF discharges occurring during the RY beginning July 1, 2006 through June 30, 2007. In addition, we proposed to adopt the new OMB labor market area definitions for our geographic classifications. The provisions of this final rule that differ from the proposed rule are as follows.

ECT policy Payment

In the RY 2007 IPF PPS proposed rule, we proposed to update the ECT base rate using the pre-scaled pre-adjusted hospital median cost for ECT used for the CY 2006 update of the OPPS. The median cost would then be standardized, adjusted for budget neutrality, and adjusted for wage and COLA differences in the same manner that we adjust the per diem rate.

However, based on the public comments, we are changing the methodology used for calculating the ECT policy payment rate. In order to improve consistency with our updates to the Federal per diem base rate and provide IPFs more predictability for the ECT rate from year to year, we will use the CY 2005 ECT rate as a base, and then update that amount by the market basket increase each rate year.

Section 412.402 Definition

In § 412.402, we are adding the definition of “New GME education program” to mean a medical education program that receives initial accreditation by the appropriate accrediting body or begins training residents on or after November 15, 2004.

Section 412.27 Excluded psychiatric units: Additional requirements.

In § 412.27, we are amending paragraph (b) to remove the specific reference to “occupational therapy, and recreational therapy.” We are adding in its place “therapeutic activities” in order to maintain consistency with current provisions and since the IPF PPS base rate already reflects the provision of recreational therapy.

Section 412.428 Publication of updates to the inpatient psychiatric facility prospective payment system.

In § 412.428, we are revising paragraph (b)(3) to reflect that the rate of increase factor is revised as of October 1 of each year.

Other Issues

In the Inpatient Prospective Payment System proposed rule, published April 25, 2006 (71 FR 23996), we discussed in detail the Health Care Information Transparency Initiative and our efforts to promote effective use of health information technology (HIT) as a means to help improve health care quality and improve efficiency. Specifically, with regard to the transparency initiative, we discuss several potential options for making Start Printed Page 27081pricing and quality information available to the public (71 FR 24120 through 24121). We solicited comments on ways the Department can encourage transparency in health care quality and pricing whether through its leadership on voluntary initiatives or through regulatory requirements. We also are seeking comment on the Department's statutory authority to impose such requirements.

In addition, we discussed the potential for HIT to facilitate improvements in the quality and efficiency of health care services (71 FR 24100 through 24101). We solicited comments on our statutory authority to encourage the adoption and use of HIT. The 2007 Budget states that “the Administration supports the adoption of health information technology (IT) as a normal cost of doing business to ensure patients receive high quality care.” We also are seeking comments on the appropriate role of HIT in potential value-based purchasing program, beyond the intrinsic incentives of a PPS to provide efficient care, encourage the avoidance of unnecessary costs, and increase quality of care. In addition, we are seeking comments on promotion of the use of effective HIT through Medicare conditions of participation.

We intend to consider both the health care information transparency initiative and the use of health information technology as we refine and update all Medicare payment systems. Therefore, while these initiatives are not included in this final rule, we are in the process of seeking input on these initiatives in various proposed Medicare payment rules being issued this year and may pursue these policies in future rulemaking for the IPF PPS.

IX. Collection of Information Requirement

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.

X. Regulatory Impact Analysis

A. Overall Impact

We have examined the impact of this final rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (UMRA) (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).

Based on the impact analysis, we estimate the expenditures from the IPF PPS implementation year to the 2007 IPF PPS RY will be increased by $160 million. The updates to the IPF labor-related share and wage indices are made in a budget neutral manner and thus have no effect on estimated costs to the Medicare program. Therefore, the estimated increased cost to the Medicare program is the result of a combination of the updated IPF market baskets, which is offset by the transition blend and the revision of the standardization factor. The IPF PPS was budget neutral in the implementation year, but it is not budget neutral in RY 2007. As discussed in section V.B.2 of this final rule, the standardization factor and budget neutrality factors (behavioral offset, stop-loss adjustment, and outlier adjustment) are built into the Federal per diem base rate and the ECT rate. We are increasing these rates by the market basket, resulting in a $160 million increase in payments from the implementation year to RY 2007.

We note that aspects of the transition, including the stop-loss policy and the transition to the 50/50 percent blend in RY 2007 and the transition to the 75/25 percent blend in the 2008 IPF PPS RY, were included in the November 2004 IPF PPS final rule and thus are not incremental to this rule. Nevertheless, it is essential to analyze the impact of the transition blend in order to calculate the increase in cost to the Medicare program.

The impact of the transition blend is an approximately 0.2 percent (about $10 million) decrease in overall payments in RY 2007 and the distribution of that impact is summarized in Table 15. Therefore, the impact attributable to the policy changes finalized in this rulemaking, primarily the market basket update and the standardization correction, is approximately $170 million in the IPF PPS RY 2007.

Since costs to the Medicare program are estimated to be greater than $100 million, this final rule is considered a major economic rule, as defined in 5 U.S.C. 40(2).

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 governmental jurisdictions. Most IPFs and most other providers and suppliers are considered small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year. (For details, see the Small Business Administration's regulation that set forth size standards for health care industries at (65 FR 69432).)

HHS considers that a substantial number of entities are affected if the rule impacts more than 5 percent of the total number of small entities as it does in this rule. We included all freestanding psychiatric hospitals (79 are non-profit hospitals) in the analysis since their total revenues do not exceed the $29 million threshold. We also included psychiatric units of small hospitals, that is, those hospitals with fewer than 100 beds. We did not include psychiatric units within larger hospitals in the analysis because we believe this final rule would not significantly impact total revenues of the entire hospital that supports the unit. We have provided the following RFA analysis in section V.B to emphasize that, although the final rule will impact a substantial number of IPFs that were identified as small entities, we do not believe it will have a significant economic impact. Based on the analysis of the 1063 psychiatric facilities that were classified as small entities as described above, we estimate the combined impact of the IPF PPS will be a 4.2 percent increase in payments in RY 2007 relative to their payments in the implementation year of the IPF PPS. Based on the information available, we believe that Medicare payments may constitute a small portion of governmental IPFs' revenue stream. We have prepared the impact analysis in section X.B.2 to describe the impact of the final rule in order to provide a factual basis for our conclusions regarding small business impact.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a final 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. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we previously defined a small rural hospital as a hospital with fewer than 100 beds that is located outside of a Metropolitan Statistical Start Printed Page 27082Area (MSA) or New England County Metropolitan Area (NECMA). However, under the new labor market definitions, we will no longer employ NECMAs to define urban areas in New England. Therefore, for purposes of this analysis, we now define a small rural hospital as a hospital with fewer than 100 beds that is located outside of an MSA. We have determined that this final rule will have a substantial impact on hospitals classified as located in rural areas. As discussed earlier in this preamble, we will continue to provide a payment adjustment of 17 percent for IPFs located in rural areas. In addition, we have established a 3-year transition to the new system to allow IPFs an opportunity to adjust to the new system. Therefore, the impacts shown in Table 15 below reflect the adjustments that are designed to minimize or eliminate any potentially significant negative impact that the IPF PPS may otherwise have on small rural IPFs.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any final rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $120 million. This final rule will not mandate any requirements for State, local, or tribal governments, nor would it affect private sector costs.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a 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 final rule under the criteria set forth in Executive Order 13132 and have determined that the final rule will not have any substantial impact on the rights, roles, and responsibilities of State, local, or tribal governments.

B. Anticipated Effects of the Final Rule

We discuss below the impact of this final rule on the Federal Medicare budget and on IPFs.

1. Budgetary Impact

As discussed in detail in the IPF PPS proposed rule and summarized in section V.B. of this final rule, we applied a budget neutrality factor to the Federal per diem and ECT base rates to ensure that total 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. We do not plan to change any of these adjustment factors or projections until we analyze IPF PPS data. In accordance with § 412.424(c)(3)(ii), 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 re-assess the accuracy of all of the factors impacting budget neutrality.

In addition, as discussed in section VI.C.1 of this final rule, we are adopting the new CBSAs and labor market share in a budget neutral manner by applying a wage index budget neutrality factor to the Federal per diem and ECT base rates. Thus, the budgetary impact to the Medicare program by the update of the IPF PPS will be the combination of the market basket updates (see section V.C of this final rule), the revision of the standardization factor (see section V.B.3 of this final rule), and the planned update of the payment blend discussed below.

2. Impacts on Providers

To understand the impact of the changes to the IPF PPS discussed in this final rule on providers, it is necessary to compare estimated payments under the IPF PPS rates and factors for the RY 2007 to estimated payments under the IPF PPS rates and factors for the IPF PPS implementation year. The estimated payments for the IPF implementation year are a blend of: 75 percent of the facility-specific TEFRA payment and 25 percent of the IPF PPS payment with stop loss payment. The estimated payments for the IPF PPS RY 2007 are a blend of: 50 percent of the facility-specific TEFRA payment and 50 percent of the IPF PPS payment with stop loss payment. We determined the percent change of estimated 2007 IPF PPS RY payments to estimated IPF PPS implementation year 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 revision of the standardization factor (as discussed in section V.B.3 of this final rule, the ratio of estimated total TEFRA payments to estimated total PPS payments in the implementation year was overestimated and therefore needed to be reduced. We will apply the revised standardization factor prospectively to the Federal per diem base rate and ECT amount), the wage index changes for the IPF PPS RY 2007, the market basket update to IPF PPS payments, and the transition blend for the IPF PPS RY 2007 payment and the facility-specific TEFRA payment.

To illustrate the impacts of the final RY 2007 changes, our analysis begins with an implementation year baseline simulation model based on FY 2002 IPF payments inflated to 2005 with market baskets; the estimated outlier payments in 2005; the estimated stop-loss payments in 2005; the MSA designations for IPFs based on OMB's MSA definitions before June 2003; the 2005 MSA wage index; the implementation year labor-market share; and the implementation year percentage amount of the rural adjustment. During the simulation, the outlier payment is maintained at the target of 2 percent of total 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:

  • IPF PPS payments adjusted by the revised standardization factor.
  • The new CBSAs based on new geographic area definitions announced by OMB in June 2003 and the RY 2007 final budget-neutral labor-related share and wage index adjustment.
  • A blended market basket update of 4.5 percent resulting in an update to the hospital-specific TEFRA target amount and an update to the IPF PPS base rates as discussed below.

++ In the IPPS final rule published August 12, 2005 (70 FR 47707), we established an update factor of 3.8 percent effective for cost reporting periods beginning on or after October 1, 2005 using the 2002-based excluded hospital market basket. The 3.8 percent update is applied to the IPF's established TEFRA target amount for cost reporting periods beginning on or after October 1, 2005. However, since the midpoints of the RY 2007 and the IPF PPS implementation period are 15 months apart, the TEFRA payment increase is projected to be 4.6 percent.

++ An update to the Federal per diem base rate of 4.3 percent based on the 2002-based RPL market basket (see section V.C.1.b of this final rule). The market basket update is based on a 15-month time period (from the midpoint of the IPF PPS implementation period to the midpoint of the RY 2007).

  • The transition to 50 percent IPF PPS payment and 50 percent facility-specific TEFRA payment. Start Printed Page 27083

Our final comparison illustrates the percent change in payments from the IPF PPS implementation year (that is, January 1, 2005 to June 30, 2006) to RY 2007 (that is, July 1, 2006 to June 30, 2007).

Table 15.—Projected Impacts

Facility by type (1)Number of facilities (2)Standardization factor correction (percent) (3)CBSA wage index and labor share (percent) (4)Market basket (percent) (5)Transition blend (percent) (6)Total (percent) (7)
All Facilities1,806−0.30.04.5−0.2 4.0
By Type of Ownership:
Psychiatric Hospitals:
Government178−0.50.14.511.015.6
Non-profit79−0.40.14.51.66.0
For-profit150−0.40.14.54.38.7
Psychiatric Units1,399−0.30.04.5−1.82.3
Rural385−0.30.04.5−0.93.2
Urban1,421−0.30.04.5−0.14.1
By Urban or Rural Classification:
Urban by Facility Type:
Psychiatric Hospitals:
Government144−0.50.14.510.915.4
Non-profit73−0.40.14.51.76.1
For-profit143−0.40.14.54.48.8
Psychiatric Units1,061−0.30.04.5−1.72.4
Rural by Facility Type:
Psychiatric Hospitals:
Government34−0.5−0.14.512.016.3
Non-profit6−0.30.34.5−0.73.9
For-profit7−0.2−0.14.5−1.82.4
Psychiatric Units338−0.30.04.5−2.02.1
By Teaching Status:
Non-teaching1,537−0.30.04.5−0.43.8
Less than 10% interns and residents to beds148−0.30.14.50.54.7
10% to 30% interns and residents to beds72−0.30.04.50.44.6
More than 30% interns and residents to beds49−0.40.14.50.04.3
By Region:
New England126−0.30.04.5−0.43.8
Mid-Atlantic306−0.40.24.52.97.3
South Atlantic238−0.3−0.24.50.14.0
East North Central325−0.3−0.14.5−1.52.6
East South Central159−0.4−0.14.5−0.33.7
West North Central169−0.3−0.24.5−1.03.0
West South Central237−0.3−0.14.5−2.71.4
Mountain83−0.3−0.14.5−0.43.7
Pacific156−0.30.34.5−0.54.0
By Bed Size:
Start Printed Page 27084
Psychiatric Hospitals:
Under 12 beds26−0.20.14.5−3.80.6
12 to 25 beds46−0.3−0.24.50.24.3
25 to 50 beds91−0.40.14.54.28.6
50 to 75 beds82−0.40.14.53.88.3
Over 75 beds162−0.50.14.58.613.0
Psychiatric Units:
Under 12 beds600−0.3−0.14.5−4.5−0.5
12 to 25 beds474−0.30.04.5−1.92.2
25 to 50 beds228−0.30.04.5−0.63.5
50 to 75 beds58−0.30.04.50.14.3
Over 75 beds39−0.40.04.51.35.5

3. Results

Table 15 above displays the results of our analysis. The table groups IPFs into the categories listed below based on characteristics provided in the Online Survey and Certification and Reporting (OSCAR) file and the FY 2002 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 1,806 IPFs included in the analysis.

In column 3, we present the effects of the revised standardization factor (see section V.B.3 of this final rule for a discussion of this revision). This is defined to be the comparison of the simulated implementation year payments under the revised standardization factor to the simulated implementation year payments under the original standardization factor. In aggregate, the revision is projected to result in a 0.3 percent decrease in overall payments to IPFs. There are small distributional effects among different categories of IPFs. For example, urban and rural government psychiatric hospitals and psychiatric hospitals with over 75 beds will receive the largest decrease of 0.5 percent, while rural for-profit psychiatric hospitals and psychiatric hospitals with fewer than 12 beds will receive the smallest decrease of 0.2 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 new CBSA geographic area definitions announced by OMB in June 2003. This is a comparison of the simulated implementation year payments under revised budget neutral factor and labor-related share and wage index under CBSA classification to the simulated implementation year payments under revised budget neutral factor and labor-related share and wage index under current MSA classifications. There is no projected change in aggregate payments to IPFs, as indicated in the first row of column 4. There would, however, be small distributional effects among different categories of IPFs. For example, several categories of IPFs, such as IPFs located in the South Atlantic and West North Central regions, and psychiatric hospitals with between 12 and 25 beds, will experience a 0.2 percent decrease in payments. Rural non-profit hospitals and hospitals located in the Pacific region will receive the largest increase of 0.3 percent.

In column 5, we present the effects of the market basket update to the IPF PPS payments by applying the TEFRA and PPS updates to payments under revised budget neutral factor and labor-related share and wage index under CBSA classification. In the aggregate this update is projected to be a 4.5 percent increase in overall payments to IPFs. This 4.5 percent reflects the current blend of the 4.6 percent update for IPF TEFRA payments and the 4.3 percent update for the IPF PPS payments.

In column 6, we present the effects of the payment change in transition blend percentages to transition year 2 (TEFRA Rate Percentage = 50 percent, IPF PPS Federal Rate Percentage = 50 percent) from transition year 1 (TEFRA Rate Percentage = 75 percent, IPF PPS Federal Rate Percentage = 25 percent) of the IPF PPS under revised budget neutral factor, labor-related share and wage index under CBSA classification, and TEFRA and PPS updates to RY 2007. The overall aggregate effect, across all hospital groups, is projected to be a 0.2 percent decrease in payments to IPFs. There are distributional effects of these changes among different categories of IPFs. The largest increases will be among government psychiatric hospitals, with rural government hospitals receiving a 12.0 percent increase and urban government hospitals receiving a 10.9 percent increase. Alternatively, psychiatric hospitals and units with fewer than 12 beds will receive the largest decreases of 3.8 percent and 4.5 percent, respectively.

Column 7 compares our estimates of the changes reflected in this final rule for RY 2007, to our estimates of payments in the implementation year Start Printed Page 27085(without these changes). This column reflects all RY 2007 changes relative to the implementation year (as shown in columns 3 through 6). The average increase for all IPFs is approximately 4.0 percent. This increase includes the effects of the market basket updates resulting in a 4.5 percent increase in total RY 2007 payments. It also includes a 0.3 percent decrease in RY 2007 payments for the standardization factor revision and a 0.2 percent decrease in RY 2007 payments for the transition blend.

Overall, the largest payment increase is projected to be among government IPFs. Urban government psychiatric hospitals will receive a 15.4 percent increase and rural government psychiatric hospitals will receive a 16.3 percent increase. Psychiatric hospitals with fewer than 12 beds will receive a 0.6 percent increase and psychiatric units with fewer than 12 beds will receive a 0.5 percent decrease.

4. Effect on the Medicare Program

Based on actuarial projections resulting from our experience with other PPSs, we estimate that Medicare spending (total Medicare program payments) for IPF services over the next 5 years would be as follows:

Table 16.—Estimated Payments

Rate yearDollars in millions
July 1, 2006 to June 30, 2007$4,299
July 1, 2007 to June 30, 20084,427
July 1, 2008 to June 30, 20094,613
July 1, 2009 to June 30, 20104,813
July 1, 2010 to June 30, 20115,033

These estimates are based on the current estimate of increases in the excluded hospital with capital market basket as follows:

  • 3.4 percent for RY 2007;
  • 3.1 percent for RY 2008;
  • 2.8 percent for RY 2009;
  • 2.3 percent for RY 2010; and
  • 2.7 percent for RY 2011.

We estimate that there would be a change in fee-for-service Medicare beneficiary enrollment as follows:

  • −0.3 percent in RY 2007;
  • 0.1 percent in RY 2008;
  • 0.2 percent in RY 2009;
  • −0.3 percent in RY 2010; and
  • −0.2 percent in RY 2011.

In the implementation year we estimated aggregate payments under the IPF PPS to equal the estimated aggregate payments that would be made if the IPF PPS were not implemented. Our methodology for estimating payments for purposes of the budget-neutrality calculations uses the best available data.

We will evaluate the accuracy of the assumptions used to compute the budget-neutrality calculation in the implementation year. We intend to analyze claims and cost report data from the implementation year of the IPF PPS to determine whether the factors used to develop the Federal per diem base rate are not significantly different from the actual results experienced in that year. We plan to compare payments under the final IPF PPS (which relies on an estimate of cost-based TEFRA payments using historical data from a base year and assumptions that trend the data to the initial implementation period) to estimated cost-based TEFRA payments based on actual data from the first year of the IPF PPS. If we find that an adjustment is necessary, the percent difference (either positive or negative) would be applied prospectively to the established prospective payment rates to ensure the rates accurately reflect the payment levels intended by the statute.

Section 124 of Pub. L. 106-113 provides the Secretary broad authority to make an adjustment. We intend to perform this analysis within the first 5 years of the implementation of the IPF PPS.

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 IPF PPS. In fact, we believe that access to IPF services will be enhanced due to the patient and facility level adjustment factors, all of which are intended to adequately reimburse IPFs for expensive cases. Finally, the stop-loss policy is intended to assist IPFs during the transition. In addition, we expect that setting payment rates prospectively for IPF services would enhance the efficiency of the Medicare program.

6. Computer Hardware and Software

We do not anticipate that IPFs would incur additional systems operating costs in order to effectively participate in the IPF PPS. We believe that IPFs and CAHs possess the computer hardware capability to handle the billing requirements under the IPF PPS. Our belief is based on indications that approximately 99 percent of hospital inpatient claims are submitted electronically. In addition, we are not adopting significant changes in claims processing.

C. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/​omb/​circulars/​a004/​a-4.pdf), in Table 17 below, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this final rule. 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 final rule based on the data for 1,806 IPFs in our database. All expenditures are classified as transfers to Medicare providers (that is, IPFs).

 Table 17.—Accounting Statement: Classification of Estimated Expenditures, From the 2006 IPF PPS RY to the 2007 IPF PPS RY

[In millions]

CategoryTransfers
Annualized Monetized Transfers$170.
From Whom To Whom?Federal Government To IPFs Medicare Providers.

D. Alternatives Considered

We considered the following alternatives in developing the update to the IPF PPS:

One option we considered was incorporating a transition from MSA-based labor market definitions to CBSA-based labor market definitions for the purpose of applying the area wage index. As stated in section VI.C.1.e of this final rule, we are not adopting a transition policy here because IPFs are already in a transition from reasonable cost based reimbursement to IPF PPS payments. In addition, as evident in Table 15 above, the wage index change does not appear to have a large impact on IPFs.

We also considered increasing our outlier percentage so that outlier payments would be projected to be 3 percent (or higher) of total PPS payments. However, this approach would not target the truly costly cases. Instead, implementing such a policy would have the effect of lowering the fixed dollar loss threshold amount, therefore spreading outlier payments across more IPFs. In addition, the Federal per diem base rate would have to be reduced by another percentage point. Start Printed Page 27086

In this final rule, we used the best available complete data set (that is, FY 2002 claims and cost report data) to assess the impact of the various policy changes. As previously stated, we will not know the true impact of the wage index changes, the transition blend period, or the market basket increases until we analyze IPF PPS data.

We considered alternative policies in order to reduce financial risk to facilities in the event that they experience substantial reductions in Medicare payments during the period of transition to the IPF PPS. The stop-loss adjustment is applied to the IPF PPS portion of Medicare payments during the transition. We estimate that about 10 percent of IPFs would receive additional payments under the stop-loss policy.

The 70 percent of TEFRA stop-loss policy required a reduction in the per diem rate to make the stop-loss policy budget neutral during the implementation year. As a result, in the November 2004 IPF PPS final rule, we made a reduction to the Federal per diem base rate of 0.4 percent for budget neutrality.

In developing this final rule, we again considered an 80 percent stop-loss policy for RY 2007. Adopting an 80 percent policy would require a reduction in the Federal per diem base rate of over 2.5 percent, and we estimate that about 29 percent of IPFs would receive additional payments. We chose to stay with the 70 percent policy for the same reasons discussed in the November 2004 IPF PPS final rule. Specifically, the 70 percent stop-loss policy targets the IPFs that experience the greatest impact relative to current payments, and it limits the size of the reduction to the Federal per diem base rate.

In accordance with the provisions of Executive Order 12866, this rule was previously reviewed by OMB.

Start List of Subjects

List of Subjects

End List of Subjects Start Amendment Part

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

End Amendment Part Start Part

PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR HOSPITAL SERVICES

End Part Start Amendment Part

1. The authority citation for part 412 is revised to read as follows:

End Amendment Part Start Authority

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), Sec. 124 of Pub. L. 106-113, 113 Stat. 1515, and Sec. 405 of Pub. L. 108-173, 117 Stat. 2266.

End Authority Start Amendment Part

2. Amend § 412.27 by revising paragraph (b) to read as follows:

End Amendment Part
Excluded psychiatric units: Additional requirements.
* * * * *

(b) Furnish, through the use of qualified personnel, psychological services, social work services, psychiatric nursing, and therapeutic activities.

* * * * *
Start Amendment Part

3. Section 412.402 is amended by—

End Amendment Part Start Amendment Part

A. Republishing the introductory text.

End Amendment Part Start Amendment Part

B. Removing the definition of “Fixed dollar loss threshold.”

End Amendment Part Start Amendment Part

C. Adding the definitions of “Fixed dollar loss threshold amount,” and “new graduate medical education program” in alphabetical order.

End Amendment Part Start Amendment Part

D. Revising the definitions of “Qualifying emergency department,” “Rural area,” and “Urban area.”

End Amendment Part

The revisions and additions read as follows:

Definitions.

As used in this subpart—

* * * * *

Fixed dollar loss threshold amount means a dollar amount which, when added to the Federal payment amount for a case, the estimated costs of a case must exceed in order for the case to qualify for an outlier payment.

* * * * *

New graduate medical education program means a medical education program that receives initial accreditation by the appropriate accrediting body or begins training residents on or after November 15, 2004.

* * * * *

Qualifying emergency department means an emergency department that is staffed and equipped to furnish a comprehensive array of emergency services and meeting the definitions of a dedicated emergency department as specified in § 489.24(b) of this chapter and the definition of “provider-based status” as specified in § 413.65 of this chapter.

Rural area means for cost reporting periods beginning January 1, 2005, with respect to discharges occurring during the period covered by such cost reports but before July 1, 2006, an area as defined in § 412.62(f)(1)(iii). For discharges occurring on or after July 1, 2006, rural area means an area as defined in § 412.64(b)(1)(ii)(C).

Urban area means for cost reporting periods beginning on or after January 1, 2005, with respect to discharges occurring during the period covered by such cost reports but before July 1, 2006, an area as defined in § 412.62(f)(1)(ii). For discharges occurring on or after July 1, 2006, urban area means an area as defined in § 412.64(b)(1)(ii)(A) and § 412.64(b)(1)(ii)(B).

Start Amendment Part

4. Section 412.424 is amended by—

End Amendment Part Start Amendment Part

A. Revising paragraph (d)(l)(iii).

End Amendment Part Start Amendment Part

B. Republishing the heading of paragraph (d)(1)(v).

End Amendment Part Start Amendment Part

C. Revising paragraph (d)(1)(v)(A).

End Amendment Part Start Amendment Part

D. Adding paragraph (d)(2) introductory text.

End Amendment Part Start Amendment Part

E. Removing and reserving paragraph (d)(2)(iii).

End Amendment Part Start Amendment Part

F. Revising paragraphs (d)(3)(i) introductory text and (d)(3)(i)(A).

End Amendment Part

The revisions and additions read as follows:

Methodology for calculating the Federal per diem payment amount.
* * * * *

(d) * * *

(1) * * *

(iii) Teaching adjustment. CMS adjusts the Federal per diem base rate by a factor to account for indirect teaching costs.

(A) An inpatient psychiatric facility's teaching adjustment is based on the ratio of the number of full-time equivalent residents training in the inpatient psychiatric facility divided by the facility's average daily census.

(B) Residents with less than full-time status and residents rotating through the inpatient psychiatric facility for less than a full year will be counted in proportion to the time they spend in the inpatient psychiatric facility.

(C) Except as described in paragraph (d)(1)(iii)(D) of this section, the actual number of current year full-time equivalent residents used in calculating the teaching adjustment is limited to the number of full-time equivalent residents in the inpatient psychiatric facility's most recently filed cost report filed with its fiscal intermediary before November 15, 2004 (base year).

(D) If the inpatient psychiatric facility first begins training residents in a new approved graduate medical education program after November 15, 2004, the number of full-time equivalent residents determined under paragraph (d)(1)(iii)(C) of this section may be adjusted using the method described in § 413.79(e)(1)(i) and (ii) of this chapter.

(E) The teaching adjustment is made on a claim basis as an interim payment, Start Printed Page 27087and the final payment in full for the claim is made during the final settlement of the cost report.

* * * * *

(v) Adjustment for IPF with qualifying emergency departments. (A) CMS adjusts the Federal per diem base rate to account for the costs associated with maintaining a qualifying emergency department. A qualifying emergency department is staffed and equipped to furnish a comprehensive array of emergency services (medical and psychiatric) and meets the requirements of § 489.24(b) and § 413.65 of this chapter.

* * * * *

(2) Patient-level adjustments. The inpatient psychiatric facility must identify a principal psychiatric diagnosis as specified in § 412.27(a) for each patient. CMS adjusts the Federal per diem base rate by a factor to account for the diagnosis-related group assignment associated with the principal diagnosis, as specified by CMS.

* * * * *

(3) Other adjustments. (i) Outlier payments. CMS provides an outlier payment if an inpatient psychiatric facility's estimated total cost for a case exceeds a fixed dollar loss threshold amount for an inpatient psychiatric facility as defined in § 412.402 plus the Federal payment amount for the case.

(A) The fixed dollar loss threshold amount is adjusted for the inpatient psychiatric facility's adjustments for wage area, teaching, rural locations, and cost of living adjustment for facilities located in Alaska and Hawaii.

* * * * *
[Amended]
Start Amendment Part

5. In § 412.426, paragraph (a) introductory text is amended by removing the reference “§ 412.424(c)” and adding the reference “§ 412.424(d)” in its place.

End Amendment Part Start Amendment Part

6. Section 412.428 is amended by—

End Amendment Part Start Amendment Part

A. Republishing the introductory text.

End Amendment Part Start Amendment Part

B. Revising paragraph (b) and (d).

End Amendment Part Start Amendment Part

C. Adding a new paragraph (g).

End Amendment Part Start Amendment Part

D. Adding a new paragraph (h).

End Amendment Part

The revision and additions reads as follows:

Publication of updates to the inpatient psychiatric facility prospective payment system.

CMS will publish annually in the Federal Register information pertaining to updates to the inpatient psychiatric facility prospective payment system. This information includes:

* * * * *

(b)(1) For discharges occurring on or after January 1, 2005 but before July 1, 2006, the rate of increase factor, described in § 412.424(a)(2)(iii), for the Federal portion of the inpatient psychiatric facility's payment is based on the excluded hospital with capital market basket under the update methodology described in section 1886(b)(3)(B)(ii) of the Act for each year.

(2) For discharges occurring on or after July 1, 2006, the rate of increase factor for the Federal portion of the inpatient psychiatric facility's payment is based on the Rehabilitation, Psychiatric, and Long-Term Care (RPL) market basket.

(3) For discharges occurring on or after January 1, 2005 but before October 1, 2005, the rate of increase factor, described in § 412.424(a)(2)(iii), for the reasonable cost portion of the inpatient psychiatric facility's payment is based on the 1997-based excluded hospital market basket under the updated methodology described in section 1886(b)(3)(B)(ii) of the Act for each year.

(4) For discharges occurring on or after October 1, 2005, the rate of increase factor for the reasonable cost portion of the inpatient psychiatric facility's payment is based on the 2002-based excluded hospital market basket.

* * * * *

(d) Updates to the fixed dollar loss threshold amount in order to maintain the appropriate outlier percentage.

* * * * *

(g) Update the national urban and rural cost to charge ratio median and ceilings. CMS will apply the national cost to charge ratio to—

(1) New inpatient psychiatric facilities that have not submitted their first Medicare cost report.

(2) Inpatient psychiatric facilities whose operating or capital cost to charge ratio is in excess of 3 standard deviations above the corresponding national geometric mean.

(3) Other inpatient psychiatric facilities for which the fiscal intermediary obtains inaccurate or incomplete data with which to calculate either an operating or capital cost to charge ratio or both.

(h) Update the cost of living adjustment factor if appropriate.

Start Part

PART 424—CONDITIONS FOR MEDICARE PAYMENT

End Part Start Amendment Part

7. The authority citation for part 424 continues to read as follows:

End Amendment Part Start Authority

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

End Authority Start Amendment Part

8. Section 424.14 is amended by—

End Amendment Part Start Amendment Part

A. Revising the heading.

End Amendment Part Start Amendment Part

B. Adding a new paragraph (c)(3).

End Amendment Part Start Amendment Part

C. Revising paragraph (d)(2).

End Amendment Part

The addition and revisions read as follows:

Requirements for inpatient services of inpatient psychiatric facilities.
* * * * *

(c) * * *

(3) The patient continues to need, on a daily basis, active inpatient psychiatric care (furnished directly by or requiring the supervision of inpatient psychiatric facility personnel) or other professional services that can only be provided on an inpatient basis.

(d) * * *

(2) The first recertification is required as of the 12th day of hospitalization. Subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.

* * * * *

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program)

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Start Signature

Dated: April 19, 2006.

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.

Approved: April 28, 2006.

Michael O. Leavitt,

Secretary.

End Signature

Addendum A—Rate and Adjustment Factors

Per Diem Rate

Federal Per Diem Base Rate$595.09
Labor Share (0.75665)450.27
Non-Labor Share (0.24335)144.82

Fixed Dollar Loss Threshold Amount

$6200

Facility Adjustments

Rural Adjustment Factor1.17.
Teaching Adjustment Factor0.5150.
Wage IndexPre-reclass Hospital Wage Index (FY2006).

Cost of Living Adjustments (COLAs)

Alaska1.25
Hawaii:
Start Printed Page 27088
Honolulu County1.25
Hawaii County1.165
Kauai County1.2325
Maui County1.2375
Kalawao County1.2375

Patient Adjustments

ECT—Per Treatment$256.20

Variable Per Diem Adjustments

Adjustment factor
Day 1—Facility Without a Qualifying Emergency Department1.19
Day 1—Facility With a Qualifying Emergency Department1.31
Day 21.12
Day 31.08
Day 41.05
Day 51.04
Day 61.02
Day 71.01
Day 81.01
Day 91.00
Day 101.00
Day 110.99
Day 120.99
Day 130.99
Day 140.99
Day 150.98
Day 160.97
Day 170.97
Day 180.96
Day 190.95
Day 200.95
Day 210.95
After Day 210.92

Age Adjustments

Age (in years)Adjustment factor
Under 451.00
45 and under 501.01
50 and under 551.02
55 and under 601.04
60 and under 651.07
65 and under 701.10
70 and under 751.13
75 and under 801.15
80 and over1.17

DRG Adjustments

DRGDRG definitionAdjustment factor
DRG 424O.R. Procedure with Principal Diagnosis of Mental Illness1.22
DRG 425Acute Adjustment Reaction & Psychosocial Dysfunction1.05
DRG 426Depressive Neurosis0.99
DRG 427Neurosis, Except Depressive1.02
DRG 428Disorders of Personality & Impulse Control1.02
DRG 429Organic Disturbances & Mental Retardation1.03
DRG 430Psychosis1.00
DRG 431Childhood Mental Disorders0.99
DRG 432Other Mental Disorders Diagnoses0.92
DRG 433Alcohol/Drug Abuse or Dependence Leave Against Medical Advice (LAMA)0.97
DRG 521Alcohol/Drug Abuse or Dependence with Comorbid Conditions1.02
DRG 522Alcohol/Drug Abuse or Dependence with Rehabilitation Therapy without Comorbid Conditions0.98
DRG 523Alcohol/Drug Abuse or Dependence without Rehabilitation Therapy0.88
DRG 12Degenerative Nervous System Disorders without Comorbid Conditions1.05
DRG 23Non-traumatic Stupor & Coma1.07

Comorbidity Adjustments

ComorbidityAdjustment factor
Developmental Disabilities1.04
Coagulation Factor Deficit1.13
Tracheostomy1.06
Eating and Conduct Disorders1.12
Infectious Diseases1.07
Renal Failure, Acute1.11
Renal Failure, Chronic1.11
Oncology Treatment1.07
Uncontrolled Diabetes Mellitus with or without Complications1.05
Severe Protein Calorie Malnutrition1.13
Drug/Alcohol Induced Mental Disorders1.03
Cardiac Conditions1.11
Gangrene1.10
Chronic Obstructive Pulmonary Disease1.12
Artificial Openings - Digestive & Urinary1.08
Severe Musculoskeletal & Connective Tissue Diseases1.09
Poisoning1.11

Addendum B—RY 2007 IPF PPS Wage Index Table

SSA State/County CodeCounty nameMSA No.MSA urban/rural2006 MSA-based WICBSA No.CBSA urban/rural2006 CBSA-based WI
01000Autauga County, Alabama5240Urban0.861833860Urban0.8618
01010Baldwin County, Alabama5160Urban0.786199901Rural0.7446
01020Barbour County, Alabama01Rural0.743299901Rural0.7446
01030Bibb County, Alabama01Rural0.743213820Urban0.8959
01040Blount County, Alabama1000Urban0.900013820Urban0.8959
01050Bullock County, Alabama01Rural0.743299901Rural0.7446
01060Butler County, Alabama01Rural0.743299901Rural0.7446
01070Calhoun County, Alabama0450Urban0.768211500Urban0.7682
Start Printed Page 27089
01080Chambers County, Alabama01Rural0.743299901Rural0.7446
01090Cherokee County, Alabama01Rural0.743299901Rural0.7446
01100Chilton County, Alabama01Rural0.743213820Urban0.8959
01110Choctaw County, Alabama01Rural0.743299901Rural0.7446
01120Clarke County, Alabama01Rural0.743299901Rural0.7446
01130Clay County, Alabama01Rural0.743299901Rural0.7446
01140Cleburne County, Alabama01Rural0.743299901Rural0.7446
01150Coffee County, Alabama01Rural0.743299901Rural0.7446
01160Colbert County, Alabama2650Urban0.827222520Urban0.8272
01170Conecuh County, Alabama01Rural0.743299901Rural0.7446
01180Coosa County, Alabama01Rural0.743299901Rural0.7446
01190Covington County, Alabama01Rural0.743299901Rural0.7446
01200Crenshaw County, Alabama01Rural0.743299901Rural0.7446
01210Cullman County, Alabama01Rural0.743299901Rural0.7446
01220Dale County, Alabama2180Urban0.770199901Rural0.7446
01230Dallas County, Alabama01Rural0.743299901Rural0.7446
01240De Kalb County, Alabama01Rural0.743299901Rural0.7446
01250Elmore County, Alabama5240Urban0.861833860Urban0.8618
01260Escambia County, Alabama01Rural0.743299901Rural0.7446
01270Etowah County, Alabama2880Urban0.793823460Urban0.7938
01280Fayette County, Alabama01Rural0.743299901Rural0.7446
01290Franklin County, Alabama01Rural0.743299901Rural0.7446
01300Geneva County, Alabama01Rural0.743220020Urban0.7721
01310Greene County, Alabama01Rural0.743246220Urban0.8645
01320Hale County, Alabama01Rural0.743246220Urban0.8645
01330Henry County, Alabama01Rural0.743220020Urban0.7721
01340Houston County, Alabama2180Urban0.770120020Urban0.7721
01350Jackson County, Alabama01Rural0.743299901Rural0.7446
01360Jefferson County, Alabama1000Urban0.900013820Urban0.8959
01370Lamar County, Alabama01Rural0.743299901Rural0.7446
01380Lauderdale County, Alabama2650Urban0.827222520Urban0.8272
01390Lawrence County, Alabama2030Urban0.846919460Urban0.8469
01400Lee County, Alabama0580Urban0.810012220Urban0.8100
01410Limestone County, Alabama3440Urban0.914626620Urban0.9146
01420Lowndes County, Alabama01Rural0.743233860Urban0.8618
01430Macon County, Alabama01Rural0.743299901Rural0.7446
01440Madison County, Alabama3440Urban0.914626620Urban0.9146
01450Marengo County, Alabama01Rural0.743299901Rural0.7446
01460Marion County, Alabama01Rural0.743299901Rural0.7446
01470Marshall County, Alabama01Rural0.743299901Rural0.7446
01480Mobile County, Alabama5160Urban0.786133660Urban0.7891
01490Monroe County, Alabama01Rural0.743299901Rural0.7446
01500Montgomery County, Alabama5240Urban0.861833860Urban0.8618
01510Morgan County, Alabama2030Urban0.846919460Urban0.8469
01520Perry County, Alabama01Rural0.743299901Rural0.7446
01530Pickens County, Alabama01Rural0.743299901Rural0.7446
01540Pike County, Alabama01Rural0.743299901Rural0.7446
01550Randolph County, Alabama01Rural0.743299901Rural0.7446
01560Russell County, Alabama1800Urban0.856017980Urban0.8560
01570St Clair County, Alabama1000Urban0.900013820Urban0.8959
01580Shelby County, Alabama1000Urban0.900013820Urban0.8959
01590Sumter County, Alabama01Rural0.743299901Rural0.7446
01600Talladega County, Alabama01Rural0.743299901Rural0.7446
01610Tallapoosa County, Alabama01Rural0.743299901Rural0.7446
01620Tuscaloosa County, Alabama8600Urban0.876446220Urban0.8645
01630Walker County, Alabama01Rural0.743213820Urban0.8959
01640Washington County, Alabama01Rural0.743299901Rural0.7446
01650Wilcox County, Alabama01Rural0.743299901Rural0.7446
01660Winston County, Alabama01Rural0.743299901Rural0.7446
02013Aleutians County East, Alaska02Rural1.188899902Rural1.1977
02016Aleutians County West, Alaska02Rural1.188899902Rural1.1977
02020Anchorage County, Alaska0380Urban1.178411260Urban1.1895
02030Angoon County, Alaska02Rural1.188899902Rural1.1977
02040Barrow-North Slope County, Alaska02Rural1.188899902Rural1.1977
02050Bethel County, Alaska02Rural1.188899902Rural1.1977
02060Bristol Bay Borough County, Alaska02Rural1.188899902Rural1.1977
02068Denali County, Alaska02Rural1.188899902Rural1.1977
02070Bristol Bay County, Alaska02Rural1.188899902Rural1.1977
02080Cordova-Mc Carthy County, Alaska02Rural1.188899902Rural1.1977
02090Fairbanks County, Alaska02Rural1.188821820Urban1.1408
02100Haines County, Alaska02Rural1.188899902Rural1.1977
02110Juneau County, Alaska02Rural1.188899902Rural1.1977
Start Printed Page 27090
02120Kenai-Cook Inlet County, Alaska02Rural1.188899902Rural1.1977
02122Kenai Peninsula Borough, Alaska02Rural1.188899902Rural1.1977
02130Ketchikan County, Alaska02Rural1.188899902Rural1.1977
02140Kobuk County, Alaska02Rural1.188899902Rural1.1977
02150Kodiak County, Alaska02Rural1.188899902Rural1.1977
02160Kuskokwin County, Alaska02Rural1.188899902Rural1.1977
02164Lake and Peninsula Borough, Alaska02Rural1.188899902Rural1.1977
02170Matanuska County, Alaska02Rural1.188811260Urban1.1895
02180Nome County, Alaska02Rural1.188899902Rural1.1977
02185North Slope Borough, Alaska02Rural1.188899902Rural1.1977
02188Northwest Arctic Borough, Alaska02Rural1.188899902Rural1.1977
02190Outer Ketchikan County, Alaska02Rural1.188899902Rural1.1977
02200Prince Of Wales County, Alaska02Rural1.188899902Rural1.1977
02201Prince of Wales-Outer Ketchikan Census Area, Alaska02Rural1.188899902Rural1.1977
02210Seward County, Alaska02Rural1.188899902Rural1.1977
02220Sitka County, Alaska02Rural1.188899902Rural1.1977
02230Skagway-Yakutat County, Alaska02Rural1.188899902Rural1.1977
02231Skagway-Yakutat-Angoon Census Area, Alaska02Rural1.188899902Rural1.1977
02232Skagway-Hoonah-Angoon Census Area, Alaska02Rural1.188899902Rural1.1977
02240Southeast Fairbanks County, Alaska02Rural1.188899902Rural1.1977
02250Upper Yukon County, Alaska02Rural1.188899902Rural1.1977
02260Valdz-Chitna-Whitier County, Alaska02Rural1.188899902Rural1.1977
02261Valdex-Cordove Census Area, Alaska02Rural1.188899902Rural1.1977
02270Wade Hampton County, Alaska02Rural1.188899902Rural1.1977
02280Wrangell-Petersburg County, Alaska02Rural1.188899902Rural1.1977
02282Yakutat Borough, Alaska02Rural1.188899902Rural1.1977
02290Yukon-Koyukuk County, Alaska02Rural1.188899902Rural1.1977
03000Apache County, Arizona03Rural0.904599903Rural0.8768
03010Cochise County, Arizona03Rural0.904599903Rural0.8768
03020Coconino County, Arizona2620Urban1.184522380Urban1.2092
03030Gila County, Arizona03Rural0.904599903Rural0.8768
03040Graham County, Arizona03Rural0.904599903Rural0.8768
03050Greenlee County, Arizona03Rural0.904599903Rural0.8768
03055La Paz County, Arizona03Rural0.904599903Rural0.8768
03060Maricopa County, Arizona6200Urban1.012738060Urban1.0127
03070Mohave County, Arizona4120Urban1.115599903Rural0.8768
03080Navajo County, Arizona03Rural0.904599903Rural0.8768
03090Pima County, Arizona8520Urban0.900746060Urban0.9007
03100Pinal County, Arizona6200Urban1.012738060Urban1.0127
03110Santa Cruz County, Arizona03Rural0.904599903Rural0.8768
03120Yavapai County, Arizona03Rural0.904539140Urban0.9869
03130Yuma County, Arizona9360Urban0.912649740Urban0.9126
04000Arkansas County, Arkansas04Rural0.774499904Rural0.7466
04010Ashley County, Arkansas04Rural0.774499904Rural0.7466
04020Baxter County, Arkansas04Rural0.774499904Rural0.7466
04030Benton County, Arkansas2580Urban0.866122220Urban0.8661
04040Boone County, Arkansas04Rural0.774499904Rural0.7466
04050Bradley County, Arkansas04Rural0.774499904Rural0.7466
04060Calhoun County, Arkansas04Rural0.774499904Rural0.7466
04070Carroll County, Arkansas04Rural0.774499904Rural0.7466
04080Chicot County, Arkansas04Rural0.774499904Rural0.7466
04090Clark County, Arkansas04Rural0.774499904Rural0.7466
04100Clay County, Arkansas04Rural0.774499904Rural0.7466
04110Cleburne County, Arkansas04Rural0.774499904Rural0.7466
04120Cleveland County, Arkansas04Rural0.774438220Urban0.8680
04130Columbia County, Arkansas04Rural0.774499904Rural0.7466
04140Conway County, Arkansas04Rural0.774499904Rural0.7466
04150Craighead County, Arkansas3700Urban0.791127860Urban0.7911
04160Crawford County, Arkansas2720Urban0.824622900Urban0.8230
04170Crittenden County, Arkansas4920Urban0.941632820Urban0.9397
04180Cross County, Arkansas04Rural0.774499904Rural0.7466
04190Dallas County, Arkansas04Rural0.774499904Rural0.7466
04200Desha County, Arkansas04Rural0.774499904Rural0.7466
04210Drew County, Arkansas04Rural0.774499904Rural0.7466
04220Faulkner County, Arkansas4400Urban0.874730780Urban0.8747
04230Franklin County, Arkansas04Rural0.774422900Urban0.8230
04240Fulton County, Arkansas04Rural0.774499904Rural0.7466
04250Garland County, Arkansas04Rural0.774426300Urban0.9005
04260Grant County, Arkansas04Rural0.774430780Urban0.8747
04270Greene County, Arkansas04Rural0.774499904Rural0.7466
04280Hempstead County, Arkansas04Rural0.774499904Rural0.7466
04290Hot Spring County, Arkansas04Rural0.774499904Rural0.7466
Start Printed Page 27091
04300Howard County, Arkansas04Rural0.774499904Rural0.7466
04310Independence County, Arkansas04Rural0.774499904Rural0.7466
04320Izard County, Arkansas04Rural0.774499904Rural0.7466
04330Jackson County, Arkansas04Rural0.774499904Rural0.7466
04340Jefferson County, Arkansas6240Urban0.868038220Urban0.8680
04350Johnson County, Arkansas04Rural0.774499904Rural0.7466
04360Lafayette County, Arkansas04Rural0.774499904Rural0.7466
04370Lawrence County, Arkansas04Rural0.774499904Rural0.7466
04380Lee County, Arkansas04Rural0.774499904Rural0.7466
04390Lincoln County, Arkansas04Rural0.774438220Urban0.8680
04400Little River County, Arkansas04Rural0.774499904Rural0.7466
04410Logan County, Arkansas04Rural0.774499904Rural0.7466
04420Lonoke County, Arkansas4400Urban0.874730780Urban0.8747
04430Madison County, Arkansas04Rural0.774422220Urban0.8661
04440Marion County, Arkansas04Rural0.774499904Rural0.7466
04450Miller County, Arkansas8360Urban0.828345500Urban0.8283
04460Mississippi County, Arkansas04Rural0.774499904Rural0.7466
04470Monroe County, Arkansas04Rural0.774499904Rural0.7466
04480Montgomery County, Arkansas04Rural0.774499904Rural0.7466
04490Nevada County, Arkansas04Rural0.774499904Rural0.7466
04500Newton County, Arkansas04Rural0.774499904Rural0.7466
04510Ouachita County, Arkansas04Rural0.774499904Rural0.7466
04520Perry County, Arkansas04Rural0.774430780Urban0.8747
04530Phillips County, Arkansas04Rural0.774499904Rural0.7466
04540Pike County, Arkansas04Rural0.774499904Rural0.7466
04550Poinsett County, Arkansas04Rural0.774427860Urban0.7911
04560Polk County, Arkansas04Rural0.774499904Rural0.7466
04570Pope County, Arkansas04Rural0.774499904Rural0.7466
04580Prairie County, Arkansas04Rural0.774499904Rural0.7466
04590Pulaski County, Arkansas4400Urban0.874730780Urban0.8747
04600Randolph County, Arkansas04Rural0.774499904Rural0.7466
04610St Francis County, Arkansas04Rural0.774499904Rural0.7466
04620Saline County, Arkansas4400Urban0.874730780Urban0.8747
04630Scott County, Arkansas04Rural0.774499904Rural0.7466
04640Searcy County, Arkansas04Rural0.774499904Rural0.7466
04650Sebastian County, Arkansas2720Urban0.824622900Urban0.8230
04660Sevier County, Arkansas04Rural0.774499904Rural0.7466
04670Sharp County, Arkansas04Rural0.774499904Rural0.7466
04680Stone County, Arkansas04Rural0.774499904Rural0.7466
04690Union County, Arkansas04Rural0.774499904Rural0.7466
04700Van Buren County, Arkansas04Rural0.774499904Rural0.7466
04710Washington County, Arkansas2580Urban0.866122220Urban0.8661
04720White County, Arkansas04Rural0.774499904Rural0.7466
04730Woodruff County, Arkansas04Rural0.774499904Rural0.7466
04740Yell County, Arkansas04Rural0.774499904Rural0.7466
05000Alameda County, California5775Urban1.534636084Urban1.5346
05010Alpine County, California05Rural1.077599905Rural1.1054
05020Amador County, California05Rural1.077599905Rural1.1054
05030Butte County, California1620Urban1.051117020Urban1.0511
05040Calaveras County, California05Rural1.077599905Rural1.1054
05050Colusa County, California05Rural1.077599905Rural1.1054
05060Contra Costa County, California5775Urban1.534636084Urban1.5346
05070Del Norte County, California05Rural1.077599905Rural1.1054
05080Eldorado County, California6920Urban1.314340900Urban1.2969
05090Fresno County, California2840Urban1.042823420Urban1.0538
05100Glenn County, California05Rural1.077599905Rural1.1054
05110Humboldt County, California05Rural1.077599905Rural1.1054
05120Imperial County, California05Rural1.077520940Urban0.8906
05130Inyo County, California05Rural1.077599905Rural1.1054
05140Kern County, California0680Urban1.047012540Urban1.0470
05150Kings County, California05Rural1.077525260Urban1.0036
05160Lake County, California05Rural1.077599905Rural1.1054
05170Lassen County, California05Rural1.077599905Rural1.1054
05200Los Angeles County, California4480Urban1.178331084Urban1.1783
05210Los Angeles County, California4480Urban1.178331084Urban1.1783
05300Madera County, California2840Urban1.042831460Urban0.8713
05310Marin County, California7360Urban1.499441884Urban1.4994
05320Mariposa County, California05Rural1.077599905Rural1.1054
05330Mendocino County, California05Rural1.077599905Rural1.1054
05340Merced County, California4940Urban1.110932900Urban1.1109
05350Modoc County, California05Rural1.077599905Rural1.1054
05360Mono County, California05Rural1.077599905Rural1.1054
Start Printed Page 27092
05370Monterey County, California7120Urban1.412841500Urban1.4128
05380Napa County, California8720Urban1.398334900Urban1.2643
05390Nevada County, California05Rural1.077599905Rural1.1054
05400Orange County, California5945Urban1.155942044Urban1.1559
05410Placer County, California6920Urban1.314340900Urban1.2969
05420Plumas County, California05Rural1.077599905Rural1.1054
05430Riverside County, California6780Urban1.102740140Urban1.1027
05440Sacramento County, California6920Urban1.314340900Urban1.2969
05450San Benito County, California05Rural1.077541940Urban1.5099
05460San Bernardino County, California6780Urban1.102740140Urban1.1027
05470San Diego County, California7320Urban1.141341740Urban1.1413
05480San Francisco County, California7360Urban1.499441884Urban1.4994
05490San Joaquin County, California8120Urban1.130744700Urban1.1307
05500San Luis Obispo County, California7460Urban1.134942020Urban1.1349
05510San Mateo County, California7360Urban1.499441884Urban1.4994
05520Santa Barbara County, California7480Urban1.169442060Urban1.1694
05530Santa Clara County, California7400Urban1.511841940Urban1.5099
05540Santa Cruz County, California7485Urban1.516642100Urban1.5166
05550Shasta County, California6690Urban1.220339820Urban1.2203
05560Sierra County, California05Rural1.077599905Rural1.1054
05570Siskiyou County, California05Rural1.077599905Rural1.1054
05580Solano County, California8720Urban1.398346700Urban1.4936
05590Sonoma County, California7500Urban1.349342220Urban1.3493
05600Stanislaus County, California5170Urban1.188533700Urban1.1885
05610Sutter County, California9340Urban1.092149700Urban1.0921
05620Tehama County, California05Rural1.077599905Rural1.1054
05630Trinity County, California05Rural1.077599905Rural1.1054
05640Tulare County, California8780Urban1.012347300Urban1.0123
05650Tuolumne County, California05Rural1.077599905Rural1.1054
05660Ventura County, California8735Urban1.162237100Urban1.1622
05670Yolo County, California9270Urban0.995040900Urban1.2969
05680Yuba County, California9340Urban1.092149700Urban1.0921
06000Adams County, Colorado2080Urban1.072319740Urban1.0723
06010Alamosa County, Colorado06Rural0.938099906Rural0.9380
06020Arapahoe County, Colorado2080Urban1.072319740Urban1.0723
06030Archuleta County, Colorado06Rural0.938099906Rural0.9380
06040Baca County, Colorado06Rural0.938099906Rural0.9380
06050Bent County, Colorado06Rural0.938099906Rural0.9380
06060Boulder County, Colorado1125Urban0.973414500Urban0.9734
06070Chaffee County, Colorado06Rural0.938099906Rural0.9380
06080Cheyenne County, Colorado06Rural0.938099906Rural0.9380
06090Clear Creek County, Colorado06Rural0.938019740Urban1.0723
06100Conejos County, Colorado06Rural0.938099906Rural0.9380
06110Costilla County, Colorado06Rural0.938099906Rural0.9380
06120Crowley County, Colorado06Rural0.938099906Rural0.9380
06130Custer County, Colorado06Rural0.938099906Rural0.9380
06140Delta County, Colorado06Rural0.938099906Rural0.9380
06150Denver County, Colorado2080Urban1.072319740Urban1.0723
06160Dolores County, Colorado06Rural0.938099906Rural0.9380
06170Douglas County, Colorado2080Urban1.072319740Urban1.0723
06180Eagle County, Colorado06Rural0.938099906Rural0.9380
06190Elbert County, Colorado06Rural0.938019740Urban1.0723
06200El Paso County, Colorado1720Urban0.946817820Urban0.9468
06210Fremont County, Colorado06Rural0.938099906Rural0.9380
06220Garfield County, Colorado06Rural0.938099906Rural0.9380
06230Gilpin County, Colorado06Rural0.938019740Urban1.0723
06240Grand County, Colorado06Rural0.938099906Rural0.9380
06250Gunnison County, Colorado06Rural0.938099906Rural0.9380
06260Hinsdale County, Colorado06Rural0.938099906Rural0.9380
06270Huerfano County, Colorado06Rural0.938099906Rural0.9380
06280Jackson County, Colorado06Rural0.938099906Rural0.9380
06290Jefferson County, Colorado2080Urban1.072319740Urban1.0723
06300Kiowa County, Colorado06Rural0.938099906Rural0.9380
06310Kit Carson County, Colorado06Rural0.938099906Rural0.9380
06320Lake County, Colorado06Rural0.938099906Rural0.9380
06330La Plata County, Colorado06Rural0.938099906Rural0.9380
06340Larimer County, Colorado2670Urban1.012222660Urban1.0122
06350Las Animas County, Colorado06Rural0.938099906Rural0.9380
06360Lincoln County, Colorado06Rural0.938099906Rural0.9380
06370Logan County, Colorado06Rural0.938099906Rural0.9380
06380Mesa County, Colorado2995Urban0.955024300Urban0.9550
06390Mineral County, Colorado06Rural0.938099906Rural0.9380
Start Printed Page 27093
06400Moffat County, Colorado06Rural0.938099906Rural0.9380
06410Montezuma County, Colorado06Rural0.938099906Rural0.9380
06420Montrose County, Colorado06Rural0.938099906Rural0.9380
06430Morgan County, Colorado06Rural0.938099906Rural0.9380
06440Otero County, Colorado06Rural0.938099906Rural0.9380
06450Ouray County, Colorado06Rural0.938099906Rural0.9380
06460Park County, Colorado06Rural0.938019740Urban1.0723
06470Phillips County, Colorado06Rural0.938099906Rural0.9380
06480Pitkin County, Colorado06Rural0.938099906Rural0.9380
06490Prowers County, Colorado06Rural0.938099906Rural0.9380
06500Pueblo County, Colorado6560Urban0.862339380Urban0.8623
06510Rio Blanco County, Colorado06Rural0.938099906Rural0.9380
06520Rio Grande County, Colorado06Rural0.938099906Rural0.9380
06530Routt County, Colorado06Rural0.938099906Rural0.9380
06540Saguache County, Colorado06Rural0.938099906Rural0.9380
06550San Juan County, Colorado06Rural0.938099906Rural0.9380
06560San Miguel County, Colorado06Rural0.938099906Rural0.9380
06570Sedgwick County, Colorado06Rural0.938099906Rural0.9380
06580Summit County, Colorado06Rural0.938099906Rural0.9380
06590Teller County, Colorado06Rural0.938017820Urban0.9468
06600Washington County, Colorado06Rural0.938099906Rural0.9380
06610Weld County, Colorado3060Urban0.957024540Urban0.9570
06620Yuma County, Colorado06Rural0.938099906Rural0.9380
06630Broomfield County, Colorado2080Urban1.072319740Urban1.0723
07000Fairfield County, Connecticut5483Urban1.219614860Urban1.2592
07010Hartford County, Connecticut3283Urban1.107325540Urban1.1073
07020Litchfield County, Connecticut3283Urban1.107325540Urban1.1073
07030Middlesex County, Connecticut3283Urban1.107325540Urban1.1073
07040New Haven County, Connecticut5483Urban1.219635300Urban1.1887
07050New London County, Connecticut5523Urban1.134535980Urban1.1345
07060Tolland County, Connecticut3283Urban1.107325540Urban1.1073
07070Windham County, Connecticut07Rural1.173099907Rural1.1730
08000Kent County, Delaware2190Urban0.977620100Urban0.9776
08010New Castle County, Delaware9160Urban1.052748864Urban1.0471
08020Sussex County, Delaware08Rural0.957999908Rural0.9579
09000Washington Dc County, Dist Of Col8840Urban1.097647894Urban1.0926
10000Alachua County, Florida2900Urban0.938823540Urban0.9388
10010Baker County, Florida10Rural0.867727260Urban0.9290
10020Bay County, Florida6015Urban0.800537460Urban0.8005
10030Bradford County, Florida10Rural0.867799910Rural0.8568
10040Brevard County, Florida4900Urban0.983937340Urban0.9839
10050Broward County, Florida2680Urban1.043222744Urban1.0432
10060Calhoun County, Florida10Rural0.867799910Rural0.8568
10070Charlotte County, Florida6580Urban0.925539460Urban0.9255
10080Citrus County, Florida10Rural0.867799910Rural0.8568
10090Clay County, Florida3600Urban0.929927260Urban0.9290
10100Collier County, Florida5345Urban1.013934940Urban1.0139
10110Columbia County, Florida10Rural0.867799910Rural0.8568
10120Dade County, Florida5000Urban0.975033124Urban0.9750
10130De Soto County, Florida10Rural0.867799910Rural0.8568
10140Dixie County, Florida10Rural0.867799910Rural0.8568
10150Duval County, Florida3600Urban0.929927260Urban0.9290
10160Escambia County, Florida6080Urban0.809637860Urban0.8096
10170Flagler County, Florida2020Urban0.932599910Rural0.8568
10180Franklin County, Florida10Rural0.867799910Rural0.8568
10190Gadsden County, Florida8240Urban0.868845220Urban0.8688
10200Gilchrist County, Florida10Rural0.867723540Urban0.9388
10210Glades County, Florida10Rural0.867799910Rural0.8568
10220Gulf County, Florida10Rural0.867799910Rural0.8568
10230Hamilton County, Florida10Rural0.867799910Rural0.8568
10240Hardee County, Florida10Rural0.867799910Rural0.8568
10250Hendry County, Florida10Rural0.867799910Rural0.8568
10260Hernando County, Florida8280Urban0.923345300Urban0.9233
10270Highlands County, Florida10Rural0.867799910Rural0.8568
10280Hillsborough County, Florida8280Urban0.923345300Urban0.9233
10290Holmes County, Florida10Rural0.867799910Rural0.8568
10300Indian River County, Florida10Rural0.867742680Urban0.9434
10310Jackson County, Florida10Rural0.867799910Rural0.8568
10320Jefferson County, Florida10Rural0.867745220Urban0.8688
10330Lafayette County, Florida10Rural0.867799910Rural0.8568
10340Lake County, Florida5960Urban0.946436740Urban0.9464
10350Lee County, Florida2700Urban0.935615980Urban0.9356
Start Printed Page 27094
10360Leon County, Florida8240Urban0.868845220Urban0.8688
10370Levy County, Florida10Rural0.867799910Rural0.8568
10380Liberty County, Florida10Rural0.867799910Rural0.8568
10390Madison County, Florida10Rural0.867799910Rural0.8568
10400Manatee County, Florida7510Urban0.963942260Urban0.9639
10410Marion County, Florida5790Urban0.892536100Urban0.8925
10420Martin County, Florida2710Urban1.012338940Urban1.0123
10430Monroe County, Florida10Rural0.867799910Rural0.8568
10440Nassau County, Florida3600Urban0.929927260Urban0.9290
10450Okaloosa County, Florida2750Urban0.887223020Urban0.8872
10460Okeechobee County, Florida10Rural0.867799910Rural0.8568
10470Orange County, Florida5960Urban0.946436740Urban0.9464
10480Osceola County, Florida5960Urban0.946436740Urban0.9464
10490Palm Beach County, Florida8960Urban1.006748424Urban1.0067
10500Pasco County, Florida8280Urban0.923345300Urban0.9233
10510Pinellas County, Florida8280Urban0.923345300Urban0.9233
10520Polk County, Florida3980Urban0.891229460Urban0.8912
10530Putnam County, Florida10Rural0.867799910Rural0.8568
10540Johns County, Florida3600Urban0.929927260Urban0.9290
10550St Lucie County, Florida2710Urban1.012338940Urban1.0123
10560Santa Rosa County, Florida6080Urban0.809637860Urban0.8096
10570Sarasota County, Florida7510Urban0.963942260Urban0.9639
10580Seminole County, Florida5960Urban0.946436740Urban0.9464
10590Sumter County, Florida10Rural0.867799910Rural0.8568
10600Suwannee County, Florida10Rural0.867799910Rural0.8568
10610Taylor County, Florida10Rural0.867799910Rural0.8568
10620Union County, Florida10Rural0.867799910Rural0.8568
10630Volusia County, Florida2020Urban0.932519660Urban0.9299
10640Wakulla County, Florida10Rural0.867745220Urban0.8688
10650Walton County, Florida10Rural0.867799910Rural0.8568
10660Washington County, Florida10Rural0.867799910Rural0.8568
11000Appling County, Georgia11Rural0.816699911Rural0.7662
11010Atkinson County, Georgia11Rural0.816699911Rural0.7662
11011Bacon County, Georgia11Rural0.816699911Rural0.7662
11020Baker County, Georgia11Rural0.816610500Urban0.8628
11030Baldwin County, Georgia11Rural0.816699911Rural0.7662
11040Banks County, Georgia11Rural0.816699911Rural0.7662
11050Barrow County, Georgia0520Urban0.979312060Urban0.9793
11060Bartow County, Georgia0520Urban0.979312060Urban0.9793
11070Ben Hill County, Georgia11Rural0.816699911Rural0.7662
11080Berrien County, Georgia11Rural0.816699911Rural0.7662
11090Bibb County, Georgia4680Urban0.927731420Urban0.9443
11100Bleckley County, Georgia11Rural0.816699911Rural0.7662
11110Brantley County, Georgia11Rural0.816615260Urban0.9311
11120Brooks County, Georgia11Rural0.816646660Urban0.8866
11130Bryan County, Georgia7520Urban0.946142340Urban0.9461
11140Bulloch County, Georgia11Rural0.816699911Rural0.7662
11150Burke County, Georgia11Rural0.816612260Urban0.9748
11160Butts County, Georgia11Rural0.816612060Urban0.9793
11161Calhoun County, Georgia11Rural0.816699911Rural0.7662
11170Camden County, Georgia11Rural0.816699911Rural0.7662
11180Candler County, Georgia11Rural0.816699911Rural0.7662
11190Carroll County, Georgia0520Urban0.979312060Urban0.9793
11200Catoosa County, Georgia1560Urban0.908816860Urban0.9088
11210Charlton County, Georgia11Rural0.816699911Rural0.7662
11220Chatham County, Georgia7520Urban0.946142340Urban0.9461
11230Chattahoochee County, Georgia1800Urban0.856017980Urban0.8560
11240Chattooga County, Georgia11Rural0.816699911Rural0.7662
11250Cherokee County, Georgia0520Urban0.979312060Urban0.9793
11260Clarke County, Georgia0500Urban0.985512020Urban0.9855
11270Clay County, Georgia11Rural0.816699911Rural0.7662
11280Clayton County, Georgia0520Urban0.979312060Urban0.9793
11281Clinch County, Georgia11Rural0.816699911Rural0.7662
11290Cobb County, Georgia0520Urban0.979312060Urban0.9793
11291Coffee County, Georgia11Rural0.816699911Rural0.7662
11300Colquitt County, Georgia11Rural0.816699911Rural0.7662
11310Columbia County, Georgia0600Urban0.980812260Urban0.9748
11311Cook County, Georgia11Rural0.816699911Rural0.7662
11320Coweta County, Georgia0520Urban0.979312060Urban0.9793
11330Crawford County, Georgia11Rural0.816631420Urban0.9443
11340Crisp County, Georgia11Rural0.816699911Rural0.7662
11341Dade County, Georgia1560Urban0.908816860Urban0.9088
Start Printed Page 27095
11350Dawson County, Georgia11Rural0.816612060Urban0.9793
11360Decatur County, Georgia11Rural0.816699911Rural0.7662
11370De Kalb County, Georgia0520Urban0.979312060Urban0.9793
11380Dodge County, Georgia11Rural0.816699911Rural0.7662
11381Dooly County, Georgia11Rural0.816699911Rural0.7662
11390Dougherty County, Georgia0120Urban0.862810500Urban0.8628
11400Douglas County, Georgia0520Urban0.979312060Urban0.9793
11410Early County, Georgia11Rural0.816699911Rural0.7662
11420Echols County, Georgia11Rural0.816646660Urban0.8866
11421Effingham County, Georgia7520Urban0.946142340Urban0.9461
11430Elbert County, Georgia11Rural0.816699911Rural0.7662
11440Emanuel County, Georgia11Rural0.816699911Rural0.7662
11441Evans County, Georgia11Rural0.816699911Rural0.7662
11450Fannin County, Georgia11Rural0.816699911Rural0.7662
11451Fayette County, Georgia0520Urban0.979312060Urban0.9793
11460Floyd County, Georgia11Rural0.816640660Urban0.9414
11461Forsyth County, Georgia0520Urban0.979312060Urban0.9793
11462Franklin County, Georgia11Rural0.816699911Rural0.7662
11470Fulton County, Georgia0520Urban0.979312060Urban0.9793
11471Gilmer County, Georgia11Rural0.816699911Rural0.7662
11480Glascock County, Georgia11Rural0.816699911Rural0.7662
11490Glynn County, Georgia11Rural0.816615260Urban0.9311
11500Gordon County, Georgia11Rural0.816699911Rural0.7662
11510Grady County, Georgia11Rural0.816699911Rural0.7662
11520Greene County, Georgia11Rural0.816699911Rural0.7662
11530Gwinnett County, Georgia0520Urban0.979312060Urban0.9793
11540Habersham County, Georgia11Rural0.816699911Rural0.7662
11550Hall County, Georgia11Rural0.816623580Urban0.8874
11560Hancock County, Georgia11Rural0.816699911Rural0.7662
11570Haralson County, Georgia11Rural0.816612060Urban0.9793
11580Harris County, Georgia1800Urban0.856017980Urban0.8560
11581Hart County, Georgia11Rural0.816699911Rural0.7662
11590Heard County, Georgia11Rural0.816612060Urban0.9793
11591Henry County, Georgia0520Urban0.979312060Urban0.9793
11600Houston County, Georgia4680Urban0.927747580Urban0.8645
11601Irwin County, Georgia11Rural0.816699911Rural0.7662
11610Jackson County, Georgia11Rural0.816699911Rural0.7662
11611Jasper County, Georgia11Rural0.816612060Urban0.9793
11612Jeff Davis County, Georgia11Rural0.816699911Rural0.7662
11620Jefferson County, Georgia11Rural0.816699911Rural0.7662
11630Jenkins County, Georgia11Rural0.816699911Rural0.7662
11640Johnson County, Georgia11Rural0.816699911Rural0.7662
11650Jones County, Georgia4680Urban0.927731420Urban0.9443
11651Lamar County, Georgia11Rural0.816612060Urban0.9793
11652Lanier County, Georgia11Rural0.816646660Urban0.8866
11660Laurens County, Georgia11Rural0.816699911Rural0.7662
11670Lee County, Georgia0120Urban0.862810500Urban0.8628
11680Liberty County, Georgia11Rural0.816625980Urban1 0.91981
11690Lincoln County, Georgia11Rural0.816699911Rural0.7662
11691Long County, Georgia11Rural0.816625980Urban1 0.91981
11700Lowndes County, Georgia11Rural0.816646660Urban0.8866
11701Lumpkin County, Georgia11Rural0.816699911Rural0.7662
11702Mc Duffie County, Georgia0600Urban0.980812260Urban0.9748
11703Mc Intosh County, Georgia11Rural0.816615260Urban0.9311
11710Macon County, Georgia11Rural0.816699911Rural0.7662
11720Madison County, Georgia0500Urban0.985512020Urban0.9855
11730Marion County, Georgia11Rural0.816617980Urban0.8560
11740Meriwether County, Georgia11Rural0.816612060Urban0.9793
11741Miller County, Georgia11Rural0.816699911Rural0.7662
11750Mitchell County, Georgia11Rural0.816699911Rural0.7662
11760Monroe County, Georgia11Rural0.816631420Urban0.9443
11770Montgomery County, Georgia11Rural0.816699911Rural0.7662
11771Morgan County, Georgia11Rural0.816699911Rural0.7662
11772Murray County, Georgia11Rural0.816619140Urban0.9079
11780Muscogee County, Georgia1800Urban0.856017980Urban0.8560
11790Newton County, Georgia0520Urban0.979312060Urban0.9793
11800Oconee County, Georgia0500Urban0.985512020Urban0.9855
11801Oglethorpe County, Georgia11Rural0.816612020Urban0.9855
11810Paulding County, Georgia0520Urban0.979312060Urban0.9793
11811Peach County, Georgia4680Urban0.927799911Rural0.7662
11812Pickens County, Georgia0520Urban0.979312060Urban0.9793
11820Pierce County, Georgia11Rural0.816699911Rural0.7662
Start Printed Page 27096
11821Pike County, Georgia11Rural0.816612060Urban0.9793
11830Polk County, Georgia11Rural0.816699911Rural0.7662
11831Pulaski County, Georgia11Rural0.816699911Rural0.7662
11832Putnam County, Georgia11Rural0.816699911Rural0.7662
11833Quitman County, Georgia11Rural0.816699911Rural0.7662
11834Rabun County, Georgia11Rural0.816699911Rural0.7662
11835Randolph County, Georgia11Rural0.816699911Rural0.7662
11840Richmond County, Georgia0600Urban0.980812260Urban0.9748
11841Rockdale County, Georgia0520Urban0.979312060Urban0.9793
11842Schley County, Georgia11Rural0.816699911Rural0.7662
11850Screven County, Georgia11Rural0.816699911Rural0.7662
11851Seminole County, Georgia11Rural0.816699911Rural0.7662
11860Spalding County, Georgia0520Urban0.979312060Urban0.9793
11861Stephens County, Georgia11Rural0.816699911Rural0.7662
11862Stewart County, Georgia11Rural0.816699911Rural0.7662
11870Sumter County, Georgia11Rural0.816699911Rural0.7662
11880Talbot County, Georgia11Rural0.816699911Rural0.7662
11881Taliaferro County, Georgia11Rural0.816699911Rural0.7662
11882Tattnall County, Georgia11Rural0.816699911Rural0.7662
11883Taylor County, Georgia11Rural0.816699911Rural0.7662
11884Telfair County, Georgia11Rural0.816699911Rural0.7662
11885Terrell County, Georgia11Rural0.816610500Urban0.8628
11890Thomas County, Georgia11Rural0.816699911Rural0.7662
11900Tift County, Georgia11Rural0.816699911Rural0.7662
11901Toombs County, Georgia11Rural0.816699911Rural0.7662
11902Towns County, Georgia11Rural0.816699911Rural0.7662
11903Treutlen County, Georgia11Rural0.816699911Rural0.7662
11910Troup County, Georgia11Rural0.816699911Rural0.7662
11911Turner County, Georgia11Rural0.816699911Rural0.7662
11912Twiggs County, Georgia4680Urban0.927731420Urban0.9443
11913Union County, Georgia11Rural0.816699911Rural0.7662
11920Upson County, Georgia11Rural0.816699911Rural0.7662
11921Walker County, Georgia1560Urban0.908816860Urban0.9088
11930Walton County, Georgia0520Urban0.979312060Urban0.9793
11940Ware County, Georgia11Rural0.816699911Rural0.7662
11941Warren County, Georgia11Rural0.816699911Rural0.7662
11950Washington County, Georgia11Rural0.816699911Rural0.7662
11960Wayne County, Georgia11Rural0.816699911Rural0.7662
11961Webster County, Georgia11Rural0.816699911Rural0.7662
11962Wheeler County, Georgia11Rural0.816699911Rural0.7662
11963White County, Georgia11Rural0.816699911Rural0.7662
11970Whitfield County, Georgia11Rural0.816619140Urban0.9079
11971Wilcox County, Georgia11Rural0.816699911Rural0.7662
11972Wilkes County, Georgia11Rural0.816699911Rural0.7662
11973Wilkinson County, Georgia11Rural0.816699911Rural0.7662
11980Worth County, Georgia11Rural0.816610500Urban0.8628
12005Kalawao County, Hawaii12Rural1.055199912Rural1.0551
12010Hawaii County, Hawaii12Rural1.055199912Rural1.0551
12020Honolulu County, Hawaii3320Urban1.121426180Urban1.1214
12040Kauai County, Hawaii12Rural1.055199912Rural1.0551
12050Maui County, Hawaii12Rural1.055199912Rural1.0551
13000Ada County, Idaho1080Urban0.905214260Urban0.9052
13010Adams County, Idaho13Rural0.909799913Rural0.8037
13020Bannock County, Idaho6340Urban0.935138540Urban0.9351
13030Bear Lake County, Idaho13Rural0.909799913Rural0.8037
13040Benewah County, Idaho13Rural0.909799913Rural0.8037
13050Bingham County, Idaho13Rural0.909799913Rural0.8037
13060Blaine County, Idaho13Rural0.909799913Rural0.8037
13070Boise County, Idaho13Rural0.909714260Urban0.9052
13080Bonner County, Idaho13Rural0.909799913Rural0.8037
13090Bonneville County, Idaho13Rural0.909726820Urban0.9420
13100Boundary County, Idaho13Rural0.909799913Rural0.8037
13110Butte County, Idaho13Rural0.909799913Rural0.8037
13120Camas County, Idaho13Rural0.909799913Rural0.8037
13130Canyon County, Idaho1080Urban0.905214260Urban0.9052
13140Caribou County, Idaho13Rural0.909799913Rural0.8037
13150Cassia County, Idaho13Rural0.909799913Rural0.8037
13160Clark County, Idaho13Rural0.909799913Rural0.8037
13170Clearwater County, Idaho13Rural0.909799913Rural0.8037
13180Custer County, Idaho13Rural0.909799913Rural0.8037
13190Elmore County, Idaho13Rural0.909799913Rural0.8037
13200Franklin County, Idaho13Rural0.909730860Urban0.9164
Start Printed Page 27097
13210Fremont County, Idaho13Rural0.909799913Rural0.8037
13220Gem County, Idaho13Rural0.909714260Urban0.9052
13230Gooding County, Idaho13Rural0.909799913Rural0.8037
13240Idaho County, Idaho13Rural0.909799913Rural0.8037
13250Jefferson County, Idaho13Rural0.909726820Urban0.9420
13260Jerome County, Idaho13Rural0.909799913Rural0.8037
13270Kootenai County, Idaho13Rural0.909717660Urban0.9647
13280Latah County, Idaho13Rural0.909799913Rural0.8037
13290Lemhi County, Idaho13Rural0.909799913Rural0.8037
13300Lewis County, Idaho13Rural0.909799913Rural0.8037
13310Lincoln County, Idaho13Rural0.909799913Rural0.8037
13320Madison County, Idaho13Rural0.909799913Rural0.8037
13330Minidoka County, Idaho13Rural0.909799913Rural0.8037
13340Nez Perce County, Idaho13Rural0.909730300Urban0.9886
13350Oneida County, Idaho13Rural0.909799913Rural0.8037
13360Owyhee County, Idaho13Rural0.909714260Urban0.9052
13370Payette County, Idaho13Rural0.909799913Rural0.8037
13380Power County, Idaho13Rural0.909738540Urban0.9351
13390Shoshone County, Idaho13Rural0.909799913Rural0.8037
13400Teton County, Idaho13Rural0.909799913Rural0.8037
13410Twin Falls County, Idaho13Rural0.909799913Rural0.8037
13420Valley County, Idaho13Rural0.909799913Rural0.8037
13430Washington County, Idaho13Rural0.909799913Rural0.8037
14000Adams County, Illinois14Rural0.830199914Rural0.8271
14010Alexander County, Illinois14Rural0.830199914Rural0.8271
14020Bond County, Illinois14Rural0.830141180Urban0.8954
14030Boone County, Illinois6880Urban0.998440420Urban0.9984
14040Brown County, Illinois14Rural0.830199914Rural0.8271
14050Bureau County, Illinois14Rural0.830199914Rural0.8271
14060Calhoun County, Illinois14Rural0.830141180Urban0.8954
14070Carroll County, Illinois14Rural0.830199914Rural0.8271
14080Cass County, Illinois14Rural0.830199914Rural0.8271
14090Champaign County, Illinois1400Urban0.959416580Urban0.9594
14100Christian County, Illinois14Rural0.830199914Rural0.8271
14110Clark County, Illinois14Rural0.830199914Rural0.8271
14120Clay County, Illinois14Rural0.830199914Rural0.8271
14130Clinton County, Illinois7040Urban0.896241180Urban0.8954
14140Coles County, Illinois14Rural0.830199914Rural0.8271
14141Cook County, Illinois1600Urban1.078316974Urban1.0790
14150Crawford County, Illinois14Rural0.830199914Rural0.8271
14160Cumberland County, Illinois14Rural0.830199914Rural0.8271
14170De Kalb County, Illinois1600Urban1.078316974Urban1.0790
14180De Witt County, Illinois14Rural0.830199914Rural0.8271
14190Douglas County, Illinois14Rural0.830199914Rural0.8271
14250Du Page County, Illinois1600Urban1.078316974Urban1.0790
14310Edgar County, Illinois14Rural0.830199914Rural0.8271
14320Edwards County, Illinois14Rural0.830199914Rural0.8271
14330Effingham County, Illinois14Rural0.830199914Rural0.8271
14340Fayette County, Illinois14Rural0.830199914Rural0.8271
14350Ford County, Illinois14Rural0.830116580Urban0.9594
14360Franklin County, Illinois14Rural0.830199914Rural0.8271
14370Fulton County, Illinois14Rural0.830199914Rural0.8271
14380Gallatin County, Illinois14Rural0.830199914Rural0.8271
14390Greene County, Illinois14Rural0.830199914Rural0.8271
14400Grundy County, Illinois1600Urban1.078316974Urban1.0790
14410Hamilton County, Illinois14Rural0.830199914Rural0.8271
14420Hancock County, Illinois14Rural0.830199914Rural0.8271
14421Hardin County, Illinois14Rural0.830199914Rural0.8271
14440Henderson County, Illinois14Rural0.830199914Rural0.8271
14450Henry County, Illinois1960Urban0.872419340Urban0.8724
14460Iroquois County, Illinois14Rural0.830199914Rural0.8271
14470Jackson County, Illinois14Rural0.830199914Rural0.8271
14480Jasper County, Illinois14Rural0.830199914Rural0.8271
14490Jefferson County, Illinois14Rural0.830199914Rural0.8271
14500Jersey County, Illinois7040Urban0.896241180Urban0.8954
14510Jo Daviess County, Illinois14Rural0.830199914Rural0.8271
14520Johnson County, Illinois14Rural0.830199914Rural0.8271
14530Kane County, Illinois1600Urban1.078316974Urban1.0790
14540Kankakee County, Illinois3740Urban1.072128100Urban1.0721
14550Kendall County, Illinois1600Urban1.078316974Urban1.0790
14560Knox County, Illinois14Rural0.830199914Rural0.8271
14570Lake County, Illinois1600Urban1.078329404Urban1.0429
Start Printed Page 27098
14580La Salle County, Illinois14Rural0.830199914Rural0.8271
14590Lawrence County, Illinois14Rural0.830199914Rural0.8271
14600Lee County, Illinois14Rural0.830199914Rural0.8271
14610Livingston County, Illinois14Rural0.830199914Rural0.8271
14620Logan County, Illinois14Rural0.830199914Rural0.8271
14630Mc Donough County, Illinois14Rural0.830199914Rural0.8271
14640Mc Henry County, Illinois1600Urban1.078316974Urban1.0790
14650Mclean County, Illinois1040Urban0.907514060Urban0.9075
14660Macon County, Illinois2040Urban0.806719500Urban0.8067
14670Macoupin County, Illinois14Rural0.830141180Urban0.8954
14680Madison County, Illinois7040Urban0.896241180Urban0.8954
14690Marion County, Illinois14Rural0.830199914Rural0.8271
14700Marshall County, Illinois14Rural0.830137900Urban0.8870
14710Mason County, Illinois14Rural0.830199914Rural0.8271
14720Massac County, Illinois14Rural0.830199914Rural0.8271
14730Menard County, Illinois7880Urban0.879244100Urban0.8792
14740Mercer County, Illinois14Rural0.830119340Urban0.8724
14750Monroe County, Illinois7040Urban0.896241180Urban0.8954
14760Montgomery County, Illinois14Rural0.830199914Rural0.8271
14770Morgan County, Illinois14Rural0.830199914Rural0.8271
14780Moultrie County, Illinois14Rural0.830199914Rural0.8271
14790Ogle County, Illinois6880Urban0.998499914Rural0.8271
14800Peoria County, Illinois6120Urban0.887037900Urban0.8870
14810Perry County, Illinois14Rural0.830199914Rural0.8271
14820Piatt County, Illinois14Rural0.830116580Urban0.9594
14830Pike County, Illinois14Rural0.830199914Rural0.8271
14831Pope County, Illinois14Rural0.830199914Rural0.8271
14850Pulaski County, Illinois14Rural0.830199914Rural0.8271
14860Putnam County, Illinois14Rural0.830199914Rural0.8271
14870Randolph County, Illinois14Rural0.830199914Rural0.8271
14880Richland County, Illinois14Rural0.830199914Rural0.8271
14890Rock Island County, Illinois1960Urban0.872419340Urban0.8724
14900St Clair County, Illinois7040Urban0.896241180Urban0.8954
14910Saline County, Illinois14Rural0.830199914Rural0.8271
14920Sangamon County, Illinois7880Urban0.879244100Urban0.8792
14921Schuyler County, Illinois14Rural0.830199914Rural0.8271
14940Scott County, Illinois14Rural0.830199914Rural0.8271
14950Shelby County, Illinois14Rural0.830199914Rural0.8271
14960Stark County, Illinois14Rural0.830137900Urban0.8870
14970Stephenson County, Illinois14Rural0.830199914Rural0.8271
14980Tazewell County, Illinois6120Urban0.887037900Urban0.8870
14981Union County, Illinois14Rural0.830199914Rural0.8271
14982Vermilion County, Illinois14Rural0.830119180Urban0.9028
14983Wabash County, Illinois14Rural0.830199914Rural0.8271
14984Warren County, Illinois14Rural0.830199914Rural0.8271
14985Washington County, Illinois14Rural0.830199914Rural0.8271
14986Wayne County, Illinois14Rural0.830199914Rural0.8271
14987White County, Illinois14Rural0.830199914Rural0.8271
14988Whiteside County, Illinois14Rural0.830199914Rural0.8271
14989Will County, Illinois1600Urban1.078316974Urban1.0790
14990Williamson County, Illinois14Rural0.830199914Rural0.8271
14991Winnebago County, Illinois6880Urban0.998440420Urban0.9984
14992Woodford County, Illinois6120Urban0.887037900Urban0.8870
15000Adams County, Indiana2760Urban0.970699915Rural0.8624
15010Allen County, Indiana2760Urban0.970623060Urban0.9793
15020Bartholomew County, Indiana15Rural0.873918020Urban0.9588
15030Benton County, Indiana15Rural0.873929140Urban0.8736
15040Blackford County, Indiana15Rural0.873999915Rural0.8624
15050Boone County, Indiana3480Urban0.986526900Urban0.9920
15060Brown County, Indiana15Rural0.873926900Urban0.9920
15070Carroll County, Indiana15Rural0.873929140Urban0.8736
15080Cass County, Indiana15Rural0.873999915Rural0.8624
15090Clark County, Indiana4520Urban0.929331140Urban0.9251
15100Clay County, Indiana8320Urban0.833745460Urban0.8304
15110Clinton County, Indiana3920Urban0.873699915Rural0.8624
15120Crawford County, Indiana15Rural0.873999915Rural0.8624
15130Daviess County, Indiana15Rural0.873999915Rural0.8624
15140Dearborn County, Indiana1640Urban0.973417140Urban0.9615
15150Decatur County, Indiana15Rural0.873999915Rural0.8624
15160De Kalb County, Indiana2760Urban0.970699915Rural0.8624
15170Delaware County, Indiana5280Urban0.893034620Urban0.8930
15180Dubois County, Indiana15Rural0.873999915Rural0.8624
Start Printed Page 27099
15190Elkhart County, Indiana2330Urban0.962721140Urban0.9627
15200Fayette County, Indiana15Rural0.873999915Rural0.8624
15210Floyd County, Indiana4520Urban0.929331140Urban0.9251
15220Fountain County, Indiana15Rural0.873999915Rural0.8624
15230Franklin County, Indiana15Rural0.873917140Urban0.9615
15240Fulton County, Indiana15Rural0.873999915Rural0.8624
15250Gibson County, Indiana15Rural0.873921780Urban0.8713
15260Grant County, Indiana15Rural0.873999915Rural0.8624
15270Greene County, Indiana15Rural0.873914020Urban0.8447
15280Hamilton County, Indiana3480Urban0.986526900Urban0.9920
15290Hancock County, Indiana3480Urban0.986526900Urban0.9920
15300Harrison County, Indiana4520Urban0.929331140Urban0.9251
15310Hendricks County, Indiana3480Urban0.986526900Urban0.9920
15320Henry County, Indiana15Rural0.873999915Rural0.8624
15330Howard County, Indiana3850Urban0.950829020Urban0.9508
15340Huntington County, Indiana2760Urban0.970699915Rural0.8624
15350Jackson County, Indiana15Rural0.873999915Rural0.8624
15360Jasper County, Indiana15Rural0.873923844Urban0.9395
15370Jay County, Indiana15Rural0.873999915Rural0.8624
15380Jefferson County, Indiana15Rural0.873999915Rural0.8624
15390Jennings County, Indiana15Rural0.873999915Rural0.8624
15400Johnson County, Indiana3480Urban0.986526900Urban0.9920
15410Knox County, Indiana15Rural0.873999915Rural0.8624
15420Kosciusko County, Indiana15Rural0.873999915Rural0.8624
15430Lagrange County, Indiana15Rural0.873999915Rural0.8624
15440Lake County, Indiana2960Urban0.939523844Urban0.9395
15450La Porte County, Indiana15Rural0.873933140Urban0.9399
15460Lawrence County, Indiana15Rural0.873999915Rural0.8624
15470Madison County, Indiana3480Urban0.986511300Urban0.8586
15480Marion County, Indiana3480Urban0.986526900Urban0.9920
15490Marshall County, Indiana15Rural0.873999915Rural0.8624
15500Martin County, Indiana15Rural0.873999915Rural0.8624
15510Miami County, Indiana15Rural0.873999915Rural0.8624
15520Monroe County, Indiana1020Urban0.844714020Urban0.8447
15530Montgomery County, Indiana15Rural0.873999915Rural0.8624
15540Morgan County, Indiana3480Urban0.986526900Urban0.9920
15550Newton County, Indiana15Rural0.873923844Urban0.9395
15560Noble County, Indiana15Rural0.873999915Rural0.8624
15570Ohio County, Indiana1640Urban0.973417140Urban0.9615
15580Orange County, Indiana15Rural0.873999915Rural0.8624
15590Owen County, Indiana15Rural0.873914020Urban0.8447
15600Parke County, Indiana15Rural0.873999915Rural0.8624
15610Perry County, Indiana15Rural0.873999915Rural0.8624
15620Pike County, Indiana15Rural0.873999915Rural0.8624
15630Porter County, Indiana2960Urban0.939523844Urban0.9395
15640Posey County, Indiana2440Urban0.871321780Urban0.8713
15650Pulaski County, Indiana15Rural0.873999915Rural0.8624
15660Putnam County, Indiana15Rural0.873926900Urban0.9920
15670Randolph County, Indiana15Rural0.873999915Rural0.8624
15680Ripley County, Indiana15Rural0.873999915Rural0.8624
15690Rush County, Indiana15Rural0.873999915Rural0.8624
15700St Joseph County, Indiana7800Urban0.978843780Urban0.9788
15710Scott County, Indiana4520Urban0.929399915Rural0.8624
15720Shelby County, Indiana3480Urban0.986526900Urban0.9920
15730Spencer County, Indiana15Rural0.873999915Rural0.8624
15740Starke County, Indiana15Rural0.873999915Rural0.8624
15750Steuben County, Indiana15Rural0.873999915Rural0.8624
15760Sullivan County, Indiana15Rural0.873945460Urban0.8304
15770Switzerland County, Indiana15Rural0.873999915Rural0.8624
15780Tippecanoe County, Indiana3920Urban0.873629140Urban0.8736
15790Tipton County, Indiana3850Urban0.950829020Urban0.9508
15800Union County, Indiana15Rural0.873999915Rural0.8624
15810Vanderburgh County, Indiana2440Urban0.871321780Urban0.8713
15820Vermillion County, Indiana8320Urban0.833745460Urban0.8304
15830Vigo County, Indiana8320Urban0.833745460Urban0.8304
15840Wabash County, Indiana15Rural0.873999915Rural0.8624
15850Warren County, Indiana15Rural0.873999915Rural0.8624
15860Warrick County, Indiana2440Urban0.871321780Urban0.8713
15870Washington County, Indiana15Rural0.873931140Urban0.9251
15880Wayne County, Indiana15Rural0.873999915Rural0.8624
15890Wells County, Indiana2760Urban0.970623060Urban0.9793
15900White County, Indiana15Rural0.873999915Rural0.8624
Start Printed Page 27100
15910Whitley County, Indiana2760Urban0.970623060Urban0.9793
16000Adair County, Iowa16Rural0.859499916Rural0.8509
16010Adams County, Iowa16Rural0.859499916Rural0.8509
16020Allamakee County, Iowa16Rural0.859499916Rural0.8509
16030Appanoose County, Iowa16Rural0.859499916Rural0.8509
16040Audubon County, Iowa16Rural0.859499916Rural0.8509
16050Benton County, Iowa16Rural0.859416300Urban0.8825
16060Black Hawk County, Iowa8920Urban0.855747940Urban0.8557
16070Boone County, Iowa16Rural0.859499916Rural0.8509
16080Bremer County, Iowa16Rural0.859447940Urban0.8557
16090Buchanan County, Iowa16Rural0.859499916Rural0.8509
16100Buena Vista County, Iowa16Rural0.859499916Rural0.8509
16110Butler County, Iowa16Rural0.859499916Rural0.8509
16120Calhoun County, Iowa16Rural0.859499916Rural0.8509
16130Carroll County, Iowa16Rural0.859499916Rural0.8509
16140Cass County, Iowa16Rural0.859499916Rural0.8509
16150Cedar County, Iowa16Rural0.859499916Rural0.8509
16160Cerro Gordo County, Iowa16Rural0.859499916Rural0.8509
16170Cherokee County, Iowa16Rural0.859499916Rural0.8509
16180Chickasaw County, Iowa16Rural0.859499916Rural0.8509
16190Clarke County, Iowa16Rural0.859499916Rural0.8509
16200Clay County, Iowa16Rural0.859499916Rural0.8509
16210Clayton County, Iowa16Rural0.859499916Rural0.8509
16220Clinton County, Iowa16Rural0.859499916Rural0.8509
16230Crawford County, Iowa16Rural0.859499916Rural0.8509
16240Dallas County, Iowa2120Urban0.966919780Urban0.9669
16250Davis County, Iowa16Rural0.859499916Rural0.8509
16260Decatur County, Iowa16Rural0.859499916Rural0.8509
16270Delaware County, Iowa16Rural0.859499916Rural0.8509
16280Des Moines County, Iowa16Rural0.859499916Rural0.8509
16290Dickinson County, Iowa16Rural0.859499916Rural0.8509
16300Dubuque County, Iowa2200Urban0.902420220Urban0.9024
16310Emmet County, Iowa16Rural0.859499916Rural0.8509
16320Fayette County, Iowa16Rural0.859499916Rural0.8509
16330Floyd County, Iowa16Rural0.859499916Rural0.8509
16340Franklin County, Iowa16Rural0.859499916Rural0.8509
16350Fremont County, Iowa16Rural0.859499916Rural0.8509
16360Greene County, Iowa16Rural0.859499916Rural0.8509
16370Grundy County, Iowa16Rural0.859447940Urban0.8557
16380Guthrie County, Iowa16Rural0.859419780Urban0.9669
16390Hamilton County, Iowa16Rural0.859499916Rural0.8509
16400Hancock County, Iowa16Rural0.859499916Rural0.8509
16410Hardin County, Iowa16Rural0.859499916Rural0.8509
16420Harrison County, Iowa16Rural0.859436540Urban0.9560
16430Henry County, Iowa16Rural0.859499916Rural0.8509
16440Howard County, Iowa16Rural0.859499916Rural0.8509
16450Humboldt County, Iowa16Rural0.859499916Rural0.8509
16460Ida County, Iowa16Rural0.859499916Rural0.8509
16470Iowa County, Iowa16Rural0.859499916Rural0.8509
16480Jackson County, Iowa16Rural0.859499916Rural0.8509
16490Jasper County, Iowa16Rural0.859499916Rural0.8509
16500Jefferson County, Iowa16Rural0.859499916Rural0.8509
16510Johnson County, Iowa3500Urban0.974726980Urban0.9747
16520Jones County, Iowa16Rural0.859416300Urban0.8825
16530Keokuk County, Iowa16Rural0.859499916Rural0.8509
16540Kossuth County, Iowa16Rural0.859499916Rural0.8509
16550Lee County, Iowa16Rural0.859499916Rural0.8509
16560Linn County, Iowa1360Urban0.882516300Urban0.8825
16570Louisa County, Iowa16Rural0.859499916Rural0.8509
16580Lucas County, Iowa16Rural0.859499916Rural0.8509
16590Lyon County, Iowa16Rural0.859499916Rural0.8509
16600Madison County, Iowa16Rural0.859419780Urban0.9669
16610Mahaska County, Iowa16Rural0.859499916Rural0.8509
16620Marion County, Iowa16Rural0.859499916Rural0.8509
16630Marshall County, Iowa16Rural0.859499916Rural0.8509
16640Mills County, Iowa16Rural0.859436540Urban0.9560
16650Mitchell County, Iowa16Rural0.859499916Rural0.8509
16660Monona County, Iowa16Rural0.859499916Rural0.8509
16670Monroe County, Iowa16Rural0.859499916Rural0.8509
16680Montgomery County, Iowa16Rural0.859499916Rural0.8509
16690Muscatine County, Iowa16Rural0.859499916Rural0.8509
16700O Brien County, Iowa16Rural0.859499916Rural0.8509
Start Printed Page 27101
16710Osceola County, Iowa16Rural0.859499916Rural0.8509
16720Page County, Iowa16Rural0.859499916Rural0.8509
16730Palo Alto County, Iowa16Rural0.859499916Rural0.8509
16740Plymouth County, Iowa16Rural0.859499916Rural0.8509
16750Pocahontas County, Iowa16Rural0.859499916Rural0.8509
16760Polk County, Iowa2120Urban0.966919780Urban0.9669
16770Pottawattamie County, Iowa5920Urban0.956036540Urban0.9560
16780Poweshiek County, Iowa16Rural0.859499916Rural0.8509
16790Ringgold County, Iowa16Rural0.859499916Rural0.8509
16800Sac County, Iowa16Rural0.859499916Rural0.8509
16810Scott County, Iowa1960Urban0.872419340Urban0.8724
16820Shelby County, Iowa16Rural0.859499916Rural0.8509
16830Sioux County, Iowa16Rural0.859499916Rural0.8509
16840Story County, Iowa16Rural0.859411180Urban0.9536
16850Tama County, Iowa16Rural0.859499916Rural0.8509
16860Taylor County, Iowa16Rural0.859499916Rural0.8509
16870Union County, Iowa16Rural0.859499916Rural0.8509
16880Van Buren County, Iowa16Rural0.859499916Rural0.8509
16890Wapello County, Iowa16Rural0.859499916Rural0.8509
16900Warren County, Iowa2120Urban0.966919780Urban0.9669
16910Washington County, Iowa16Rural0.859426980Urban0.9747
16920Wayne County, Iowa16Rural0.859499916Rural0.8509
16930Webster County, Iowa16Rural0.859499916Rural0.8509
16940Winnebago County, Iowa16Rural0.859499916Rural0.8509
16950Winneshiek County, Iowa16Rural0.859499916Rural0.8509
16960Woodbury County, Iowa7720Urban0.941643580Urban0.9381
16970Worth County, Iowa16Rural0.859499916Rural0.8509
16980Wright County, Iowa16Rural0.859499916Rural0.8509
17000Allen County, Kansas17Rural0.804099917Rural0.8035
17010Anderson County, Kansas17Rural0.804099917Rural0.8035
17020Atchison County, Kansas17Rural0.804099917Rural0.8035
17030Barber County, Kansas17Rural0.804099917Rural0.8035
17040Barton County, Kansas17Rural0.804099917Rural0.8035
17050Bourbon County, Kansas17Rural0.804099917Rural0.8035
17060Brown County, Kansas17Rural0.804099917Rural0.8035
17070Butler County, Kansas9040Urban0.917548620Urban0.9153
17080Chase County, Kansas17Rural0.804099917Rural0.8035
17090Chautauqua County, Kansas17Rural0.804099917Rural0.8035
17100Cherokee County, Kansas17Rural0.804099917Rural0.8035
17110Cheyenne County, Kansas17Rural0.804099917Rural0.8035
17120Clark County, Kansas17Rural0.804099917Rural0.8035
17130Clay County, Kansas17Rural0.804099917Rural0.8035
17140Cloud County, Kansas17Rural0.804099917Rural0.8035
17150Coffey County, Kansas17Rural0.804099917Rural0.8035
17160Comanche County, Kansas17Rural0.804099917Rural0.8035
17170Cowley County, Kansas17Rural0.804099917Rural0.8035
17180Crawford County, Kansas17Rural0.804099917Rural0.8035
17190Decatur County, Kansas17Rural0.804099917Rural0.8035
17200Dickinson County, Kansas17Rural0.804099917Rural0.8035
17210Doniphan County, Kansas17Rural0.804041140Urban0.9519
17220Douglas County, Kansas4150Urban0.853729940Urban0.8537
17230Edwards County, Kansas17Rural0.804099917Rural0.8035
17240Elk County, Kansas17Rural0.804099917Rural0.8035
17250Ellis County, Kansas17Rural0.804099917Rural0.8035
17260Ellsworth County, Kansas17Rural0.804099917Rural0.8035
17270Finney County, Kansas17Rural0.804099917Rural0.8035
17280Ford County, Kansas17Rural0.804099917Rural0.8035
17290Franklin County, Kansas17Rural0.804028140Urban0.9476
17300Geary County, Kansas17Rural0.804099917Rural0.8035
17310Gove County, Kansas17Rural0.804099917Rural0.8035
17320Graham County, Kansas17Rural0.804099917Rural0.8035
17330Grant County, Kansas17Rural0.804099917Rural0.8035
17340Gray County, Kansas17Rural0.804099917Rural0.8035
17350Greeley County, Kansas17Rural0.804099917Rural0.8035
17360Greenwood County, Kansas17Rural0.804099917Rural0.8035
17370Hamilton County, Kansas17Rural0.804099917Rural0.8035
17380Harper County, Kansas17Rural0.804099917Rural0.8035
17390Harvey County, Kansas9040Urban0.917548620Urban0.9153
17391Haskell County, Kansas17Rural0.804099917Rural0.8035
17410Hodgeman County, Kansas17Rural0.804099917Rural0.8035
17420Jackson County, Kansas17Rural0.804045820Urban0.8920
17430Jefferson County, Kansas17Rural0.804045820Urban0.8920
Start Printed Page 27102
17440Jewell County, Kansas17Rural0.804099917Rural0.8035
17450Johnson County, Kansas3760Urban0.949028140Urban0.9476
17451Kearny County, Kansas17Rural0.804099917Rural0.8035
17470Kingman County, Kansas17Rural0.804099917Rural0.8035
17480Kiowa County, Kansas17Rural0.804099917Rural0.8035