Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

                    See the                                          Document Drafting Handbook                                        for more details.                  

###### Department of Health and Human Services

###### Centers for Medicare & Medicaid Services

          - [CMS-5042-N]
          - RIN 0938-ZA90

# AGENCY:

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

# ACTION:

Notice. 

# SUMMARY:

This notice is to inform interested parties of an opportunity to apply to participate in the Medicare Hospital Gainsharing Demonstration being implemented by CMS. The Medicare Hospital Gainsharing Demonstration authorized under Section 5007 of the Deficit Reduction Act (DRA) of 2005 was established to test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work. The purpose of this demonstration is to improve the quality and efficiency of care provided to Medicare beneficiaries and to develop improved operational and financial hospital performance with the sharing of remuneration payments between hospitals and physicians in six projects, each project consisting of one hospital. Two projects must be rural. This demonstration will be limited in scope: we intend to focus on the short-term impacts of gainsharing programs.

# DATES:

Applications will be considered timely if we receive them no later than 5 p.m., Eastern Standard Time (E.S.T.), on November 17, 2006.

# FOR FURTHER INFORMATION CONTACT:

                        Lisa Waters at (410) 786-6615 or                         *GAINSHARING@cms.hhs.gov.*                         Interested parties can obtain a complete solicitation, application, and supporting information on the following CMS Web sites at                         *http://www.cms.hhs.gov/​DemoProjectsEvalRpts/​MD/​itemdetail.asp?​itemID=​CMS1186805*                         or                               ( print page 54665)    *http://www.cms.hhs.gov/​DemoProjectsEvalRpts/​*.                    

                        Paper copies can be obtained by writing to Lisa Waters at the address listed in the                         **ADDRESSES**                         section of this notice.                    

# ADDRESSES:

Mail or deliver applications to the following address: Centers for Medicare & Medicaid Services, Attention: Lisa Waters, Mail Stop: C4-17-27, 7500 Security Boulevard, Baltimore, Maryland 21244.

Because of staff and resource limitations, we cannot accept applications by facsimile (fax) transmission or by e-mail.

*Eligible Organizations:*                         Section 5007 of the DRA provides that hospitals receiving payment under section 1886(d) of the Social Security Act are eligible to apply.                    

For the purpose of this demonstration, hospitals may provide gainsharing payments to physicians (as defined in 1861(r)(1) or (3) and practitioners (as described in 1842(b)(18)(C)). Section 5007(g)(4) permits practitioners as described in section 1842(b)(18)(C) to participate in this demonstration. We believe that the reference to section 1842(e)(18)(C) in DRA section 5007(g) is a scrivener's error, and that the reference should be to section 1842(b)(18)(C). Section 5007(g) explicitly provides that the reference to physicians who are permitted to participate in the demo is deemed to include certain practitioners, which we believe is clear evidence of Congress' intent to include such practitioners in the demo. We also note the Conference Report language specifically refers to the inclusion of practitioners as part of the gainsharing arrangement. Since section 1842(e)(18)(C) does not exist, and since section 1842(b)(18)(C) is, with the exception of substituting (b) for (e), identical to that section], specifically defines practitioners, we believe that section 1842(b)(18)(C) is the one that Congress actually intended to reference, and that the substitution of the (e) for the (b) is a scrivener's error. We do not believe that this typographical error impedes any authority to otherwise implement this demonstration. Furthermore, a comprehensive list of all eligibility requirements can be found in the “Eligible Organizations” section of the solicitation.

# SUPPLEMENTARY INFORMATION:

## I. Background

Section 5007 of the Deficit Reduction Act of 2005 (DRA) requires the establishment of a qualified gainsharing demonstration program that will test and evaluate methodologies and arrangements between hospitals and physicians designed to govern the utilization of inpatient hospital resources and physician work to improve the quality and efficiency of care provided to beneficiaries and to develop improved operational and financial hospital performance with the sharing of remuneration as specified in the project. It will have a short-term focus given the limited size of the demonstration.

## II. Provisions of the Notice

This notice solicits applications to participate in the DRA Section 5007 Medicare Hospital Gainsharing Demonstration that will assist in determining if gainsharing can align incentives between hospitals and physicians to improve the quality and efficiency of care provided to beneficiaries, which will promote improved operational and financial performance of hospitals. The focus of each demonstration will be to link physician incentive payments to improvements in quality and efficiency. Each demonstration will provide measures to ensure that the quality and efficiency of care provided to beneficiaries is monitored and improved.

                    Overall, we seek demonstration models that result in savings to Medicare. We will assure the demonstration is budget neutral.                    ****

## III. Collection of Information Requirements

This information collection requirement is subject to the Paperwork Reduction Act of 1995 (PRA); however, the collection is currently approved under OMB control number 0938-0880 entitled “Medicare Demonstration Waiver Application.”

Authority:Section 5007 of the Deficit Reduction Act of 2005, Pub. L. 109-171.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program; No. 93.773 Medicare—Hospital Insurance Program; and No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: August 7, 2006.

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.

[FR Doc. 06-7738 Filed 9-13-06; 3:58 pm]

BILLING CODE 4120-01-P