Centers for Medicare & Medicaid Services (CMS) HHS.
This notice announces the extension of the expiration date for certain wage index geographic reclassifications and special exceptions as implemented by section 117 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (Pub. L. 110-173). Certain geographic reclassifications and special exception hospitals' wage indices that were set to expire on September 30, 2007 are now extended through September 30, 2008. In addition, for hospital reclassifications extended by Division B, Title I, section 106(a) of the Tax Relief and Health Care Act of 2006, Pub. L. 109-432, that resulted in a lower wage index for the second half of FY 2007, we will apply the higher wage index that was applicable to such hospitals during the first half of FY 2007, for the entire fiscal year.
Effective date: This notice is effective on February 22, 2008. Applicability date: This notice is applicable to the hospitals identified in section II.A. of this notice on October 1, 2007 and to the hospitals identified in section II.B. of this notice on April 1, 2007.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Brian Slater, (410) 786-5229.End Further Info End Preamble Start Supplemental Information
Section 508 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) (Pub. L. 108-173) permitted a qualifying hospital to appeal the wage index classification otherwise applicable to the hospital and apply for reclassification to another area of the State in which the hospital was located (or, at the discretion of the Secretary, to an area within a contiguous State). Hospitals were required to submit their applications by February 15, 2004. In the February 13, 2004 Federal Register (69 FR 7340), we published a notice that described our implementation of section 508 of MMA. The Congress limited the reclassifications under section 508 of MMA to a 3-year period beginning April 1, 2004 and ending March 31, 2007.
Section 106(a) of the Medicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) (Pub. L. 109-432) extended any geographic reclassification that was set to expire on March 31, 2007 by 6 months until September 30, 2007. In the March 23, 2007 Federal Register (72 FR 13799), we published a notice explaining how we would implement section 106 of MIEA-TRHCA. We also explained that for a subset of hospitals whose Start Printed Page 9808reclassifications were extended, the wage index for the second half of fiscal year (FY) 2007 would decrease from the first half of the year.
II. Provisions of the Notice
A. Reclassifications for Hospitals Affected by Section 117(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007
Section 117(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173) extends through September 30, 2008 both the reclassifications that were extended by section 106 of MIEA-TRCHA as well as certain special exception wage indices referenced in the FY 2005 inpatient prospective payment system (IPPS) final rule (69 FR 49105 and 49107). Consistent with how section 508 of MMA and special exceptions were implemented in FY 2005, hospitals receiving extensions under section 117(a) of MMSEA may not receive an out-migration adjustment. Such hospitals are treated in a manner consistent to reclassified hospitals, and section 1886(d)(13) of the Act specifies that a reclassified hospital is not eligible for the out-migration adjustment. In addition, the special exceptions granted in FY 2005 provided for the complete wage index to be assigned the specified hospitals without any addition of an out-migration adjustment. Further, we only extended the reclassification or special exception in cases where it benefited the hospital. If, in FY 2008, the hospital is already receiving a reclassification or wage index that results in a higher wage index than would be received under the reclassification or special exception extension, then we did not change the hospital's wage index value that was published in the October 10, 2007, or subsequent notice.
The following table lists providers affected by section 117(a) of MMSEA, which extends certain reclassifications and special exceptions through FY 2008 (October 1, 2007 through September 30, 2008):
|Fiscal intermediary No.||Provider No.||FY 2008 wage index||FY 2008 GAF|
|Start Printed Page 9809|
|1 This hospital has been assigned a wage index under a special exceptions policy (See the August 18, 2006 final rule (71 FR 48070)).|
|2 These hospitals are assigned a wage index value under a special exceptions policy (See Table 9B of the August 11, 2004 final rule (69 FR 49105) and the December 30, 2004 correction notice, (69 FR 78705)).|
|3 The hospital originally received an out-migration adjustment for FY 2008. However, due to the extension of the hospital's special reclassification or exception, the hospital no longer qualifies for the out-migration adjustment for FY 2008.|
B. Reclassifications for Hospitals Affected by Section 117(c) of the Medicare, Medicaid, and SCHIP Extension Act of 2007
Section 117(c) of MMSEA requires that, for hospital reclassifications extended by section 106(a) of MIEA-TRHCA that resulted in a lower wage index for the period April 1, 2007 through September 30, 2007, we will apply the higher wage index that was applicable to such hospitals during the period October 1, 2006 through March 31, 2007, for the entire FY 2007.
The following table lists providers affected by section 117(c), which revises the FY 2007 wage index from April 1, 2007 through September 30, 2007:
|Fiscal intermediary No.||Provider No.||Current wage index 4/1/2007-9/30/2007||Current GAF 4/1/2007-9/30/2007||Revised wage index 4/1/2007-9/30/2007||Revised GAF 4/1/2007-9/30/2007|
|Start Printed Page 9810|
We have implemented these provisions through instructions to the Medicare Administrative Contractors (MAC) (CMS Joint Signature Memorandum, JSM/TDL-08149, January 28, 2008). CMS has instructed FIs/MACs to reprocess claims for the affected providers FY 2007 and FY 2008.
When originally applying section 508 of MMA, we required each hospital to submit a request in writing by February 15, 2004, to the Medicare Geographic Classification Review Board (MGCRB), with a copy to CMS. We will neither require nor accept written requests for the extension required by section 117 of MMSEA, since that section, by providing a 1-year extension for certain special exceptions and reclassifications set to expire September 30, 2007, already specifies the affected hospitals.
III. Regulatory Impact Statement
We have examined the impact of this notice using the requirements of Executive Order 12866 (September 1993, Regulatory Planning and Review), and Executive Order 13132.
Executive Order 12866 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). This notice implements a statutory provision that would increase payments to hospitals by less than $100 million and is therefore, not a major rule. This notice also is not a legislative rulemaking under the Administrative Procedure Act, but rather interprets and applies a statutory mandate.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Again, although we do not consider this notice to be a substantive rule subject to notice and comment rulemaking, we note that this notice does not impose any costs on State or local governments. Therefore, the requirements of Executive Order 13132 would not be applicable.
We estimate the impact of sections 117(a) and (c) of MMSEA is to increase payments to hospitals by $24 million for FY 2007 and by $57 million for FY 2008.
In accordance with the provisions of Executive Order 12866, this notice was reviewed by the Office of Management and Budget.
(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: February 7, 2008.
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E8-2798 Filed 2-21-08; 8:45 am]
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