3136 Federal Register / Vol. 65, No. 13 / Thursday, January 20, 2000 / Rules and Regulations

PART 70—[AMENDED]

1. The authority citation for Part 70

continues to read a follows:

Authority: 42 U.S.C. 7401, et seq.

2. Appendix A to Part 70 is amended

by adding paragraph (d) to the entry for

Nebraska; City of Omaha; LincolnLancaster County Health Department to

read as follows.

Appendix A to Part 70—Approval

Status of State and Local Operating

Permits Program

* * * * *

Nebraska; City of Omaha; LincolnLancaster County Health Department

* * * * *

(d) The Nebraska Department of

Environmental Quality submitted the

following program revisions on August

20, 1999; NDEQ Title 129, Chapters 1,

2, 5, 6, 7, 8, 10, 29, and 41; City of

Omaha Ordinance No. 34492, amended

section 41–2, and LLCHD Articles 2–1,

2–2, 2–5, 2–6, 2–7, 2–8, and 2–15,

effective February 22, 2000.

* * * * *

[FR Doc. 00–618 Filed 1–19–00; 8:45 am]

BILLIING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 412

[HCFA–1124–IFC]

RIN 0938–AJ92

Medicare Program; Medicare Inpatient

Disproportionate Share Hospital (DSH)

Adjustment Calculation: Change in the

Treatment of Certain Medicaid Patient

Days in States With 1115 Expansion

Waivers

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Interim final rule with

comment period.

SUMMARY: This interim final rule with

comment period implements a change

to the Medicare DSH adjustment

calculation policy in reference to

section 1115 expansion waiver days.

This rule sets forth the criteria to use in

calculating the Medicare DSH

adjustment for hospitals for purposes of

payment under the prospective payment

system.

DATES: Effective date: January 20, 2000.

Applicability Date: These regulations

are applicable to discharges occurring

on or after January 20, 2000.

Comment date: Comments will be

considered if we receive them at the

appropriate address, as provided below,

no later than 5 p.m. on March 20, 2000.

ADDRESSES: Mail an original and 3

copies of written comments to the

following address: Health Care

Financing Administration, Department

of Health and Human Services,

Attention: HCFA–1124–IFC, P.O. Box

8010, Baltimore, MD 21244–8010.

If you prefer, you may deliver an

original and 3 copies of your written

comments to one of the following

addresses:

Room 443–G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW, Washington, DC 20201, or

Room C5–16–03, 7500 Security

Boulevard, Baltimore, Maryland

21244–1850.

FOR FURTHER INFORMATION CONTACT:

Kathleen Buto, Deputy Director, Center

for Health Plans and Providers, (202)

205–2505.

SUPPLEMENTARY INFORMATION:

I. Background

A. Summary

The Medicare disproportionate share

hospital (DSH) adjustment provision

under section 1886(d)(5)(F) of the Social

Security Act (the Act) was enacted by

section 9105 of the Consolidated

Omnibus Budget Reconciliation Act

(COBRA) of 1985 and became effective

for discharges occurring on or after May

1, 1986, as set forth in the May 6, 1986

final rule with comment period (51 FR

16772).

The size of a hospital’s Medicare DSH

adjustment, which is applied to the

hospital inpatient prospective payment

system (PPS) payment, is based on the

sum of the percentage of patient days

attributable to patients eligible for both

Medicare Part A and Supplemental

Security Income (SSI), and the

percentage of patient days attributable

to patients eligible for Medicaid but not

Medicare Part A. The first computation

includes days for patients who, during

a given month, were entitled to both

Medicare Part A and SSI (excluding

State supplementation). This number is

divided by the number of covered

patient days utilized by patients under

Medicare Part A for that same period.

The second computation includes

patient days associated with

beneficiaries who were eligible for

medical assistance (Medicaid) under a

State plan approved under Title XIX but

who were not entitled to Medicare Part

A. (See 42 CFR 412.106(b)(4).) This

number is divided by the total number

of patient days for that same period.

Currently, hospitals whose

disproportionate patient percentage

exceeds a certain threshold (which

varies for urban and rural areas) receive

either a fixed adjustment or, in the case

of large urban hospitals (100 or more

beds) or large rural hospitals (500 or

more beds), a variable adjustment based

on a statutory formula. As of April 1,

1990, variable adjustments were made

for large urban hospitals and rural

referral centers. Facilities that qualify as

rural referral centers as well as sole

community hospitals receive the greater

of a fixed adjustment or a variable

adjustment based on a statutory

formula. Qualifying large rural hospitals

and sole community hospitals receive a

fixed adjustment. Urban hospitals with

100 or more beds that receive funds

from State and local governments for

indigent care in excess of 30 percent of

net inpatient revenues are treated

separately (42 CFR 412.106(c)).

B. Section 1115 Expansion Waivers

Some States provide medical

assistance under a demonstration

project (also referred to as a section

1115 waiver). In some section 1115

waivers, a given population that

otherwise could have been made

eligible for Medicaid under section

1902(r)(2) or 1931(b) in a State plan

amendment is made eligible under the

waiver. These populations are referred

to as hypothetical eligibles, and are

specific, finite populations identifiable

in the budget neutrality agreements

found in the Special Terms and

Conditions for the demonstrations; the

patient days utilized by that population

are to be recognized for purposes of

calculating the Medicare DSH

adjustment. In addition, the section

1115 waiver may provide for medical

assistance to expanded eligibility

populations that could not otherwise be

made eligible for Medicaid.

Under current policy, hospitals were

to include in the Medicare DSH

calculation only those days for

populations under the section 1115

waiver who were or could have been

made eligible under a State plan. Patient

days of the expanded eligibility groups,

however, were not to be included in the

Medicare DSH calculation.

II. Provisions of the Interim Final Rule

With Comment Period

In this interim final rule with

comment period, we are revising the

policy, effective with discharges

occurring on or after January 20, 2000,

to allow hospitals to include the patient

days of all populations eligible for Title

XIX matching payments in a State’s

Federal Register / Vol. 65, No. 13 / Thursday, January 20, 2000 / Rules and Regulations 3137

section 1115 waiver in calculating the

hospital’s Medicare DSH adjustment.

One purpose of a section 1115

expansion waiver is to extend Title XIX

matching payments to services

furnished to populations that otherwise

could not have been made eligible for

Medicaid. The costs associated with

these populations are matched based on

section 1115 authority. In fact, section

1115(a)(2)(A) of the Act states that the

‘‘costs of such project which would not

otherwise be included as expenditures

under section * * * 1903 * * * shall,

to the extent and for the period

prescribed by the Secretary, be regarded

as expenditures * * * approved under

(Title XIX).’’ Thus, the statute allows for

the expansion populations to be treated

as Medicaid beneficiaries.

In addition, at the time that the

Congress enacted the Medicare DSH

adjustment, there were no approved

section 1115 expansion waivers.

Nonetheless, we believe allowing

hospitals to include the section 1115

expanded waiver population in the

Medicare DSH calculation is fully

consistent with the Congressional goals

of the Medicare DSH adjustment to

recognize the higher costs to hospitals of

treating low income individuals covered

under Medicaid. Therefore, inpatient

hospital days for these individuals

eligible for Title XIX matching

payments under a section 1115 waiver

are to be included as Medicaid days for

purposes of the Medicare DSH

adjustment calculation.

In order to provide consistency in

both components of the calculation, any

days that are added to the Medicaid day

count must also be added to the total

day count, to the extent that they have

not been previously so added.

Regardless of the type of allowable

Medicaid day, the hospital bears the

burden of proof and must verify with

the State that the patient was eligible

under one of the allowable categories

during each day of the patient’s stay.

The hospital is responsible for and must

provide adequate documentation to

substantiate the number of Medicaid

days claimed. Days for patients that

cannot be verified by State records to

have fallen within a period wherein the

patient was eligible for Medicaid as

described in this rule cannot be

counted.

III. Response to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, we are not able

to acknowledge or respond to them

individually. We will consider all

comments we receive by the date and

time specified in the DATES section of

this preamble, and, when we proceed

with a subsequent document, we will

respond to the comments in the

preamble to that document.

IV. Waiver of Proposed Rulemaking

and 30-Day Delay in the Effective Date

We ordinarily publish a notice of

proposed rulemaking in the Federal

Register and invite public comment on

the proposed rule. The notice of

proposed rulemaking includes a

reference to the legal authority under

which the rule is proposed, and the

terms and substances of the proposed

rule or a description of the subjects and

issues involved. This procedure can be

waived, however, if an agency finds

good cause that a notice-and-comment

procedure is impracticable,

unnecessary, or contrary to the public

interest and incorporates a statement of

the finding and its reasons in the rule

issued.

We find that it would be contrary to

the public interest to undertake prior

notice and comment procedures before

implementing this interim final rule

with comment period. States that have

approved section 1115 waivers are

continually involved in critical efforts to

implement, refine, and operate their

Medicaid programs. For example, the

States, managed care organizations, and

hospitals are always considering their

financial positions and the adequacy of

rates paid between these critical

partners. We believe this policy change

impacts their financial positions.

Therefore, we believe the extended

period of uncertainty for hospitals and

others that would result if this policy

change were to go through proposed and

final rulemaking could adversely affect

the course of these critical efforts and

thereby disrupt services to Medicaid

beneficiaries and other low-income

patients who are served by hospitals,

especially safety net hospitals.

Moreover, because our prior guidance

on certain aspects of our Medicare DSH

policy was insufficiently clear, many

hospitals in States with approved

section 1115 expansion waivers have

been receiving Medicare DSH payments

reflecting the inclusion of expansion

population patient days. But for an

immediate effective date of this rule,

these Medicare DSH payments will

cease until completion of the notice and

comment rulemaking process, and, as a

result, many of these hospitals may

experience financial difficulties that

may adversely affect access to services

by the low-income patients served by

these safety net hospitals.

Therefore, we find good cause to

waive the notice of proposed

rulemaking and to issue this final rule

on an interim basis. We are providing a

60-day comment period for public

comment.

Also, we normally provide a delay of

30 days in the effective date of a

regulation. However, if adherence to

this procedure would be impracticable,

unnecessary, or contrary to the public

interest, we may waive the delay in the

effective date. For the reasons discussed

above, it is important that the provisions

of this final rule with comment period

have immediate effect in order to avoid

a potential hardship for hospitals and a

potential disruption of services for their

patients.

V. Collection of Information

Requirements

Under the Paperwork Reduction Act

of 1995 (PRA), we are required to

provide 60-day notice in the Federal

Register and solicit public comment

before a collection of information

requirement is submitted to the Office of

Management and Budget (OMB) for

review and approval. In order to fairly

evaluate whether an information

collection should be approved by OMB,

section 3506(c)(2)(A) of the Paperwork

Reduction Act of 1995 requires that we

solicit comment on the following issues:

• The need for the information

collection and its usefulness in carrying

out the proper functions of our agency.

• The accuracy of our estimate of the

information collection burden.

• The quality, utility, and clarity of

the information to be collected.

• Recommendations to minimize the

information collection burden on the

affected public, including automated

collection techniques.

We are soliciting public comment on

each of these issues for the following

sections of this document that contain

information collection requirements:

Section 412.106(b)(4) (ii) and (iii)

contain information collection

requirements that are subject to the

PRA. The requirements are as follows:

In paragraph (b)(4)(ii), effective with

discharges occurring on or after January

20, 2000, for purposes of counting days

under paragraph (b)(4)(i) of this section,

hospitals may include all days

attributable to populations eligible for

Title XIX matching payments through a

waiver approved under section 1115 of

the Social Security Act.

In paragraph (b)(4)(iii), the hospital

has the burden of furnishing data

adequate to prove eligibility for each

Medicaid patient day claimed under

paragraph (b)(4) and of verifying with

the State that a patient was eligible for

Medicaid during each claimed Medicaid

day. We solicit comments on the burden

3138 Federal Register / Vol. 65, No. 13 / Thursday, January 20, 2000 / Rules and Regulations

associated with these requirements.

Based upon the burden estimates

received from the public, HCFA will

add these new requirements and

associated burden to the existing

information collections entitled;

‘‘Medicaid Disproportionate Share

Adjustment Procedure and Criteria’’

(OMB #0938–0691, HCFA–R–194,

current expiration date 9/30/2002; and/

or ‘‘Medicaid Disproportionate Share

Hospital Payments—Institutions for

Mental Disease’’ (OMB #0938–0746,

HCFA–R–0266, current expiration date

6/30/2002.

If you comment on these information

collection and recordkeeping

requirements, please mail copies

directly to the following:

Health Care Financing Administration,

Office of Information Services,

Information Technology Investment

Management Group, Attn: Julie

Brown, Room N2–14–26, 7500

Security Boulevard, Baltimore, MD

21244–1850.

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Room 10235, New Executive

Office Building, Washington, DC

20503, Attn: Allison Herron Eydt,

HCFA Desk Officer.

VI. Regulatory Impact Analysis

A. Introduction

Section 804(2) of title 5, United States

Code (as added by section 251 of Public

Law 104–121), specifies that a ‘‘major

rule’’ is any rule that the Office of

Management and Budget finds is likely

to result in—

• An annual effect on the economy of

$100 million or more.

• A major increase in costs or prices

for consumers, individual industries,

Federal, State, or local government

agencies, or geographic regions; or

• Significant adverse effects on

competition, employment, investment

productivity, innovation, or on the

ability of United States based

enterprises to compete with foreign

based enterprises in domestic and

export markets.

We estimate that the impact of this

interim final rule with comment period

will exceed $100 million. Therefore,

this rule is a major rule as defined in

Title 5, United States Code, section

804(2).

We have examined the impacts of this

interim final rule with comment period

as required by Executive Order 12866,

the Regulatory Flexibility Act (RFA)

(Public Law 96–354), and the Unfunded

Mandates Reform Act of 1995 (Public

Law 104–4). Executive Order 12866

directs agencies to assess all costs and

benefits of available regulatory

alternatives and, when regulation is

necessary, to select regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety

effects, distributive impacts, and

equity). The RFA requires agencies to

analyze options for regulatory relief of

small businesses. For purposes of the

RFA, small entities include small

businesses, non-profit organizations and

government agencies. Most hospitals

and most other providers and suppliers

are small entities, either by non-profit

status or by having revenues of $5

million or less annually. Individuals

and States are not included in the

definition of a small entity.

We generally prepare a regulatory

flexibility analysis that is consistent

with the Regulatory Flexibility Act

(RFA) (5 U.S.C. 601 through 612), unless

we certify that a final rule will not have

a significant economic impact on a

substantial number of small entities. For

purposes of the RFA, we consider all

hospitals to be small entities.

Also, section 1102(b) of the Act

requires us to prepare a regulatory

impact analysis for any rule that may

have a significant impact on the

operations of a substantial number of

small rural hospitals. Such an 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 define a

small rural hospital as a hospital with

fewer than 100 beds that is located

outside of a Metropolitan Statistical

Area (MSA) or New England County

Metropolitan Area (NECMA). Section

601(g) of the Social Security

Amendments of 1983 (Public Law 98–

21) designated hospitals in certain New

England counties as belonging to the

adjacent NECMA. Thus, for purposes of

the hospital inpatient prospective

payment system, we classify these

hospitals as urban hospitals.

It is clear that the changes being made

in this rule would affect a number of

hospitals, and the effects on some may

be significant. Therefore, the discussion

below constitutes a combined regulatory

impact analysis and regulatory

flexibility analysis.

Section 202 of the Unfunded

Mandates Reform Act of 1995 requires

that agencies prepare an assessment of

anticipated costs and benefits before

issuing any rule that may result in an

expenditure in any one year by State,

local and tribal governments, in the

aggregate, or by the private sector, of

$100 million or more (adjusted annually

for inflation). We have concluded that

this rule does not impose any mandates

on State, local, or tribal governments, or

the private sector that will result in an

annual expenditure of $100 million or

more.

B. Impact of This Interim Final Rule

With Comment Period

There are currently eight States with

section 1115 expansion waivers

(Delaware, Hawaii, Massachusetts,

Missouri, New York, Oregon,

Tennessee, and Vermont). Under this

interim final rule with comment period,

hospitals in these eight States would be

allowed to include in the Medicaid

percentage portion of their Medicare

DSH calculation the inpatient hospital

days attributable to patients who are

eligible under the State’s section 1115

expansion waiver. Because our policy

was that these days were not allowable

prior to the effective date of this interim

final rule with comment period, by

allowing hospitals to begin to include

these days in their Medicare DSH

calculation the impact will be to

increase the DSH payments these

hospitals will receive compared to what

they would receive absent this change.

Based on data available for the

numbers of individuals covered by the

expansion waiver in each of the eight

States compared to the total number of

individuals covered by Medicaid in

each State (adjusted for utilization), we

have estimated the impact of this

change to be $270 million in higher FY

2000 PPS payments, (total FY 2000 DSH

payments are projected to be $4.6

billion), and $370 million in FY 2001

payments. Thus the total impact of this

change for the period from FY 2001

through FY 2005 is estimated to be

$2.14 billion.

In accordance with the provisions of

Executive Order 12866, this interim

final rule with comment period was

reviewed by the Office of Management

and Budget.

VII. Federalism

We have reviewed this interim final

rule with comment period under the

threshold criteria of Executive Order

13132, Federalism. In considering this

policy change, we have evaluated any

potential Federalism impacts. States are

already responsible as needed for

providing information to hospitals and

fiscal agents under current regulations.

In addition, there are existing

requirements for maintaining and

reporting these data under the Terms

and Conditions of their section 1115

demonstration agreement. Therefore,

States already possess the information

necessary to implement this change, and

no new standards or requirements are

Federal Register / Vol. 65, No. 13 / Thursday, January 20, 2000 / Rules and Regulations 3139

established as a result of this change.

Indeed there may be a reduction in State

responsibilities since section 1115

demonstration populations will no

longer have to be treated differently

from other Medicaid eligibles.

In order to assist the States in making

this information available to the

Medicare fiscal intermediaries so they

can accurately count days related to

patients eligible under an 1115 waiver,

we are issuing clarifying instructions to

the States specifying exactly what data

are to be included in the Medicare DSH

calculation, and the States’ role in

providing this information. In addition,

we are in ongoing contact with States

that have waivers in order to assist and

monitor the development and

implementation of their waivers.

We believe this regulation meets

Federalism requirements as it does not

increase the burden on States and is

responsive to requests from hospitals

who partner with States in providing

health services to needy populations.

List of Subjects in 42 CFR Part 412

Administrative practice and

procedure, Health facilities, Medicare,

Puerto Rico, Reporting and

recordkeeping requirements.

For reasons set forth in the preamble,

42 CFR chapter IV, part 412 is amended

as follows:

PART 412—PROSPECTIVE PAYMENT

SYSTEMS FOR INPATIENT HOSPITAL

SERVICES

1. The authority citation for part 412

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

Social Security Act (42 U.S.C. 1302 and

1395hh).

2. In § 412.106, republish the

headings of paragraphs (b) and (b)(4),

redesignate paragraph (b)(4)(ii) as

paragraph (b)(4)(iii), and add a new

paragraph (b)(4)(ii) to read as follows:

§ 412.106 Special treatment: Hospitals that

serve a disproportionate share of lowincome patients.

* * * * *

(b) Determination of a hospital’s

disproportionate patient percentage.

***

(4) Second computation. * * *

(ii) Effective with discharges

occurring on or after January 20, 2000,

for purposes of counting days under

paragraph (b)(4)(i) of this section,

hospitals may include all days

attributable to populations eligible for

Title XIX matching payments through a

waiver approved under section 1115 of

the Social Security Act.

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: December 22, 1999.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Approved: December 22, 1999.

Donna E. Shalala,

Secretary.

[FR Doc. 00–1357 Filed 1–14–00; 3:09 pm]

BILLING CODE 4120–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 27

[CC Docket No. 99–168; FCC 00–5]

Service Rules for the 746–764 and 776–

794 MHz Bands

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document establishes

service rules governing the initial

assignment of licenses, by competitive

bidding, and the subsequent regulatory

treatment of commercial services to be

provided on the 746–764 and 776–794

MHz Bands. The service rules adopted

in this document enable assignment of

these bands to licensees by competitive

bidding, scheduled to commence in

early May in order to comply with the

statutory requirement that revenues

from the auction of the commercial

spectrum segments be received in the

U.S. Treasury by September 30, 2000.

DATES: This rule is effective January 20,

2000.

FOR FURTHER INFORMATION CONTACT:

Legal Information: Stan Wiggins, 202–

418–1310; Technical Information:

Martin Liebman, 202–418–1310.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s First

Report and Order (First R&O) in WT

Docket No. 99–168, FCC 00–5, adopted

January 6, 2000, and released January 7,

2000. The complete text of this First

R&O is available for inspection and

copying during normal business hours

in the FCC Reference Information

Center, Courtyard Level, 445 12th

Street, S.W., Washington, DC, and also

may be purchased from the

Commission’s copy contractor,

International Transcription Services

(ITS, Inc.), CY–B400, 445 12th Street,

S.W., Washington, DC. The informal

text of the First R&O is posted on the

Commission’s Internet web site, at

www.fcc.gov/Bureaus/Wireless/Orders/

2000/fcc00005.txt.

Synopsis of the First Report and Order

1. The Commission adopts a First

Report and Order (First R&O) in WT

Docket No. 99–168, establishing service

and auction rules for the commercial

licensing of 36 megahertz of spectrum,

the 746–764 and 776–794 Bands, as

directed by Congress in the Balanced

Budget Act of 1997. The subsequent

legislation, referred to as the

Consolidated Appropriations enactment

directs the Commission to assign these

licenses by competitive bidding, and to

deposit revenues from those

assignments in the U.S. Treasury no

later than September 30, 2000. The

assignment of this spectrum to

commercial licensees has the potential

to expand existing wireless services,

both fixed and mobile, and to introduce

both new technologies and new

services.

2. The First R&O divides these Bands

into several sub-bands, as subsequently

described in the ‘‘band plan’’ and these

decisions reflect broad spectrum

management considerations. The First

R&O also determines the more specific

service rule and auction rule issues

raised with respect to the sub-bands

occupying 30 of the 36 megahertz, while

it defers to a subsequent R&O the

comparably specific issues raised with

respect to the remaining 6 megahertz,

which are designated as Guard Bands

and occupy spectrum adjacent to

frequencies previously allocated for

public safety use. Those issues are the

subject of a Public Notice issued January

7, 2000, which seeks additional

comment on technical and operational

issues. See Public Comment Sought On

Issues Related To Guard Bands In The

746–764 MHz and 776–794 MHz

Spectrum Block (WT Docket No. 99–

168), Public Notice (January 7, 2000). A

future R&O will also adopt revisions to

Form 601.

3. These spectrum Bands occupy

frequencies formerly reserved for analog

UHF television service, and new

licenses assigned by auction on these

Bands will be required to protect

existing UHF television services from

harmful interference. This obligation to

protect existing UHF television services

will continue until the termination of

analog television service, as part of the

scheduled transition to digital television

(DTV) service. Analog television

licenses may not be renewed beyond

December 31, 2006, unless the

Commission determines that an

extension is authorized. See 47 U.S.C.

309(j)(14)(B).