[Federal Register Volume 72, Number 128 (Thursday, July 5, 2007)]
[Rules and Regulations]
[Pages 36613-36616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3261]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412 and 413

[CMS-1529-CN]
RIN 0938-AO30


Medicare Program; Prospective Payment System for Long-Term Care 
Hospitals RY 2008: Annual Payment Rate Updates, and Policy Changes; 
Corrections

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

ACTION: Correction of final rule.

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SUMMARY: This document corrects technical errors in the ``Medicare 
Program; Prospective Payment System for Long-Term Care Hospitals RY 
2008: Annual Payment Rate Updates, and Policy Changes; and Hospital 
Direct and Indirect Graduate Medical Education Policy Changes; Final 
Rule'' (hereinafter referred to as the RY 2008 LTCH PPS final rule) 
that appeared in the May 11, 2007 Federal Register. We are correcting 
the high cost outlier (HCO) fixed-loss amount that is effective for 
long-term care hospital (LTCH) prospective payment system (PPS) 
payments beginning on or after July 1, 2007 from $22,954 to $20,738. 
The incorrect fixed-loss amount was determined due to a typographical 
error in the computer programming. We are also correcting figures in 
Table 9 and Table 11 since the incorrect figures originally published 
originated from the same typographical error. We are making additional 
conforming changes to the preamble of the final rule which were 
necessary as a result of the correction of the fixed-loss amount and 
the figures in Tables 9 and 11.

EFFECTIVE DATE: July 1, 2007.

FOR FURTHER INFORMATION CONTACT: Tzvi Hefter, (410) 786-4487 (General 
information). Elizabeth Truong, (410) 786-6005 (Federal rate update, 
budget neutrality, other adjustments, and calculation of the payment 
rates).

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 07-2206 (72 FR 26870), there were technical errors 
stemming from a typographical error in the computer programming of the 
payment simulation program that are identified and corrected in the 
Correction of Errors section below. The provisions in this correction 
notice are effective as if they had been included in the RY 2008 LTCH 
PPS final rule. Accordingly, the corrections are effective July 1, 
2007.

II. Summary of Errors

    In the RY 2008 LTCH PPS final rule, we incorrectly calculated the 
HCO fixed-loss amount. Specifically, we discovered that there was a 
typographical error in one of the numeric inputs used in the payment 
simulation program and this resulted in an understating of the nonlabor 
share of payments to LTCHs. Since the nonlabor related share is used in 
the calculation of the fixed-loss amount, this error caused the fixed-
loss amount to be inaccurate. We corrected the typographical error in 
the payment simulation program and computed the payment using the same 
payment methodology that was discussed and used in the final rule. 
Consequently, the corrected final fixed-loss amount for RY 2008 is 
$20,738. This document replaces all incorrect HCO fixed-loss amounts 
references in the RY 2008 LTCH PPS final rule with the corrected fixed-
loss amount of $20,738.
    Furthermore, the payment simulation program was used in the 
analysis of payment changes for the impact section of the RY 2008 LTCH 
PPS final rule. Specifically, Tables 9 and 11 of the final rule address 
the projected impact of payment rate policy changes by comparing 
payments based on the policies that were in effect for RY 2007 to LTCH 
PPS payments based on policies to be in effect for RY 2008, including 
the RY 2008 HCO fixed-loss amount (72 FR 26870, 26977 through 26978, 
and 26985 through 26986). In this correction notice, we are providing 
the revised Tables 9 and 11 to reflect the changes resulting from 
correcting the typographical error in the payment simulation program. 
We note that it was necessary to revise only two columns in Table 11. 
Correcting the typographical error for the nonlabor share generally 
reduced the estimated impact on estimated payments per discharge from 
RY 2007 to RY 2008 due to finalized changes to the area wage adjustment 
(column 7). In addition, applying the revised fixed-loss amount, which 
is $2,216 lower than the incorrect fixed-loss amount applied in the RY 
2008 LTCH PPS final rule, generally reduced the estimated impact on 
estimated payments per discharge from RY 2007 to RY 2008 (column 9). In 
addition, we are making conforming changes to the preamble of the final 
rule (as indicated in Section III. of this correction notice) that are 
necessary as a result of the correction of the fixed-loss amount and 
Tables 9 and 11.

III. Correction of Errors

    In FR Doc. 07-2206 (72 FR 26870), make the following corrections:
    1. On page 26898,
    a. In the 2nd column, 1st full paragraph, lines 25 and 30, the 
figure ``$22,954'' is corrected to read ``$20,738''.
    b. In the 3rd column, 2nd full paragraph, lines 4 and 11, the 
figure ``$22,954'' is corrected to read ``$20,738''.
    2. On page 26899,
    a. In the 1st column,
    (1) In the 1st partial paragraph,
    (a) Line 26, the figure ``3.8'' is corrected to read ``1.2''.
    (b) Line 42, the figure ``1.0'' is corrected to read ``0.5''.
    (c) Lines 46 through 48, the sentence ``We also project an 
estimated 2.5 percent decrease in estimated payments per discharge from 
RY 2007 to RY 2008 due'' is corrected to read, ``We also project an 
estimated 0.4 percent decrease in estimated payments per discharge from 
RY 2007 to RY 2008 primarily due''.
    (2) In the 1st full paragraph, line 2, the figure ``$22,954'' is 
corrected to read ``$20,738''.
    b. In the 2nd column,
    (1) In the 1st partial paragraph, line 14, the figure ``10'' is 
corrected to read ``8''.
    (2) In the 1st partial paragraph, line 31, the figure ``10'' is 
corrected to read ``8.5''.
    3. On page 26900, in the 1st column, in the 3rd full paragraph, in 
the 2nd line from the bottom, the figure ``$22,954'' is corrected to 
read ``$20,738''.
    4. On page 26977, in the 3rd column, in the 1st partial paragraph, 
lines 27 and 28, the phrase ``approximately $156 million (or about 3.8 
percent).'' is corrected to read, ``approximately $50 million (or about 
1.2 percent). In addition, applying the case-mix adjustment (2.49 
percent) to account for the increase in payments in FY 2005, the result 
is estimated to be an impact of approximately $100 million.''
    5. On pages 26977 through 26978, Table 9: Estimated Impact of the

[[Page 36614]]

Provisions of this Final Rule is corrected to read as follows:

    Table 9.--Estimated Impact of the Provisions of This Final Rule 1
------------------------------------------------------------------------
                                                           Estimated
                                                       percent change in
                        Policy                             estimated
                                                         aggregate LTCH
                                                          PPS payments
------------------------------------------------------------------------
Payment Rate and Policy Changes:
    Changes to the Federal Rate \2\..................                0.6
    Changes to the Area Wage Adjustment..............               -0.5
    Revision of the SSO Policy.......................               -0.9
    Adjustment of the High Cost Outlier Threshold \3\               -0.4
        Subtotal \4\.................................               -1.2
Expansion of the ``25 Percent'' Policy \5\...........                0
                                                      ------------------
            Total \6\ (-1.2% + 0%)...................               -1.2 
------------------------------------------------------------------------
\1\ Percent change in estimated aggregate LTCH PPS payments from the
  2007 LTCH PPS rate year to the 2008 LTCH PPS rate year based on the
  best available data for 377 LTCHs.
\2\ As discussed in greater detail in section XV.B.4. of this regulatory
  impact analysis, about 34 percent of all LTCH cases are projected to
  receive a payment under the existing SSO policy that is based either
  on the estimated cost of the case or the ``IPPS comparable amount''
  (rather than the Federal rate). Therefore, the percent change in
  estimated aggregate LTCH PPS payments due to the changes to the
  Federal rate, 0.61 percent, is slightly less than the update to the
  Federal rate of 0.71 percent.
\3\ This estimated 0.4 percent decrease in estimated payments per
  discharge from RY 2007 to RY 2008 is primarily due to the changes in
  the fixed-loss amount resulting from the use of more recent LTCH data
  to estimate the cost of each LTCH case.
\4\ We also note that the estimated percent change for all payment rate
  and policy changes may not exactly equal the sum of the estimated
  percent change for the changes to the Federal rate, the changes to the
  area wage adjustment and the revision of the SSO policy due to the
  effect of estimated changes in aggregate HCO payments, as well as
  other interactive effects that cannot be isolated.
\5\ Expansion of the existing special payment provision for co-located
  LTCHs (HwHs and satellites of LTCHs) at existing Sec.   412.534 to
  certain situations not presently covered by existing Sec.   412.534
  for subclause (I) LTCHs (as discussed in section V.B. of the preamble
  of this final rule).
\6\ Total estimated impact of the provisions of this final rule (that
  is, sum of the estimated impact of the payment rate and policy change,
  including the revision of the SSO policy, and the estimated impact of
  the expansion of the ``25 percent'' policy).

    6. On page 26978,
    a. In the 1st column, 1st paragraph, lines 6 and 7, the phrase ``We 
note the $156 million (or 3.8 percent)'' is corrected to read, ``We 
note the approximately $50 million (or 1.2 percent)''.
    (b) In the 2nd column,
    (1) In the 2nd full paragraph,
    (a) Line 3, the figure ``3.8'' is corrected to read ``1.2''.
    (b) Line 4, the figure ``$156 million'' is corrected to read 
``approximately $50 million''.
    (c) Line 9 the figure ``3.8'' is corrected to read ``1.2''.
    b. In the 3rd column, in the 1st partial paragraph, line 7, the 
figure ``3.8'' is corrected to read ``1.2''.
    7. On page 26979,
    a. In the 1st column,
    (1) In the 1st full paragraph,
    (a) Line 2, the figure ``2.5'' is corrected to read ``0.4''.
    (b) Lines 4 and 5, the phrase ``discharge from RY 2007 to RY 2008 
due to the changes in'' is corrected to read ``discharge from RY 2007 
to RY 2008 due primarily to the changes in''.
    b. In the 2nd column,
    (1) In the 1st partial paragraph,
    (a) Line 14, the figure ``9'' is corrected to read ``8.5''.
    (b) Line 28, the figure ``10.3'' is corrected to read ``9.6''.
    (c) Line 42, the figure ``22,954'' is corrected to read 
``$20,738''.
    (d) Lines 44 and 45, the phrase ``estimated aggregate LTCH PPS 
payments of 2.5 percent, we believe that'' is corrected to read 
``estimated aggregate LTCH PPS payments of 0.4 percent, we believe 
that''.
    (2) In the 1st full paragraph, line 5, the figure ``3.8'' is 
corrected to read ``1.2''.
    c. In the 3rd column, in the 1st partial paragraph, lines 2 and 3, 
the phrase ``finalizing a 3.8 percent decrease to the Federal rate'' is 
corrected to read ``finalizing an estimated 1.2 percent decrease in 
estimated LTCH PPS payments''.
    8. On page 26980,
    a. In the 1st column, 1st full paragraph, line 21, the figure 
``1.0'' is corrected to read ``0.5''.
    b. In the 2nd column, 2nd full paragraph, line 5, the figure 
``3.8'' is corrected to read ``1.2''.
    c. In the 3rd column, 2nd full paragraph,
    (1) Line 4, the figure ``3.8'' is corrected to read ``1.2''.
    (2) Line 5, the figure ``$156 million'' is corrected to read ``$50 
million''.
    9. On page 26981, in the 1st column, 1st partial paragraph, line 2, 
the figure ``6.2'' is corrected to read ``3.1''.
    10. On page 26982,
    a. In the 1st column, 1st full paragraph,
    (1) Line 2, the figure ``2.8'' is corrected to read ``0.7''.
    (2) Lines 4 and 5, the phrase ``per discharge to rural LTCHs from 
RY 2007 to RY 2008 due to the changes in'' is corrected to read ``per 
discharge to rural LTCHs from RY 2007 to RY 2008 due primarily to the 
changes in''.
    (3) Line 29, the figure ``$22,954'' is corrected to read 
``$20,738''.
    (4) Lines 32 and 33, the phrase ``payments to rural hospitals by 
2.8 percent, we believe that this is'' is corrected to read ``payments 
to rural LTCHs, we believe that this is''.
    b. In the 2nd column, in the 1st full paragraph, lines 26 and 39, 
the figure ``6.2'' is corrected to read ``3.1''.
    11. On page 26984, in the 2nd column, 1st partial paragraph, line 
4, the figure ``$22,954'' is corrected to read ``$20,738''.
    12. On pages 26985 and 26986, Table 11: Projected Impact of Payment 
Rate and Payment Rate Policy Changes to LTCH PPS Payments for RY 2008 
is corrected to read as follows:

[[Page 36615]]



                      Table 11.--Projected Impact of Payment Rate and Payment Rate Policy Changes to LTCH PPS Payments for RY 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Percent
                                                                                                     Percent      change in      Percent
                                                                                                    change in     estimated     change in
                                                                                                    estimated   payments per    estimated      Percent
                                                                         Average RY   Average RY  payments per    discharge   payments per    change in
                                                            Number of    2007 LTCH    2008 LTCH     discharge   from RY 2007    discharge   payments per
             LTCH Classification               Number of     LTCH PPS     PPS rate     PPS rate   from RY 2007   to RY 2008   from RY 2007    discharge
                                                 LTCHs        cases         year         year      to RY 2008        for       to RY 2008   from RY 2007
                                                                          payment      payment         for        finalized        for       to RY 2008
                                                                          per case     per case     finalized    changes to     finalized      for all
                                                                                                   changes to     the area     changes to      changes
                                                                                                   the Federal      wage         the SSO
                                                                                                      rate       adjustment      policy
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALL PROVIDERS...............................          377      129,812   $32,968.71   $32,562.05           0.6          -0.5          -0.9          -1.2
By Location:
    RURAL...................................           23        5,300    27,010.90    26,162.27           0.7          -2.2          -0.9          -3.1
    URBAN...................................          354      124,512    33,222.31    32,834.47           0.6          -0.4          -0.9          -1.2
        LARGE...............................          182       75,064    34,591.56    34,353.33           0.6          -0            -0.9          -0.7
        OTHER...............................          172       49,448    31,143.73    30,528.78           0.6          -1.2          -0.9          -2
By Participation Date:
    BEFORE OCT. 1983........................           16        6,989    28,729.04    28,674.54           0.6           0.2          -0.6          -0.2
    OCT. 1983-SEPT. 1993....................           44       20,751    34,169.65    33,823.79           0.6          -0.2          -0.9          -1
    OCT. 1993-SEPT. 2002....................          203       73,460    32,818.53    32,447.29           0.6          -0.5          -0.8          -1.1
    AFTER OCTOBER 2002......................          108       27,949    33,597.54    32,959.21           0.6          -0.9          -1.1          -1.9
    UNKNOWN PARTICIPATION DATE..............            6          663    30,205.22    30,024.91           0.6          -0.5          -0.7          -0.6
By Ownership Type:
    VOLUNTARY...............................           83       25,732    32,181.69    31,691.50           0.6          -0.6          -1            -1.5
    PROPRIETARY.............................          254       97,294    33,104.72    32,737.43           0.6          -0.5          -0.9          -1.1
    GOVERNMENT..............................           14        2,694    36,419.51    35,676.30           0.6          -0.8          -0.9          -2
    UNKNOWN OWNERSHIP TYPE..................           23        4,027    32,404.90    31,809.07           0.6          -0.7          -1            -1.8
By Census Region:
    NEW ENGLAND.............................           16        9,634    27,887.51    27,850.12           0.6           0.3          -0.7          -0.1
    MIDDLE ATLANTIC.........................           30        8,114    33,652.40    33,219.72           0.6          -0.7          -0.9          -1.3
    SOUTH ATLANTIC..........................           47       13,402    36,643.93    36,003.38           0.6          -0.9          -1            -1.7
    EAST NORTH CENTRAL......................           69       19,477    35,747.81    35,504.41           0.6          -0            -0.9          -0.7
    EAST SOUTH CENTRAL......................           28        7,848    33,545.58    32,685.39           0.6          -1.7          -1            -2.6
    WEST NORTH CENTRAL......................           18        5,337    35,484.45    34,896.78           0.6          -0.7          -0.9          -1.7
    WEST SOUTH CENTRAL......................          129       50,983    29,564.84    28,976.97           0.6          -1.2          -0.9          -2
    MOUNTAIN................................           22        5,768    35,135.25    35,239.57           0.6           1.1          -1.1           0.3
    PACIFIC.................................           18        9,249    41,954.57    42,350.72           0.6           1.5          -0.7           0.9
By Bed Size:
    BEDS: 0-24..............................           32        4,998    30,275.32    29,713.64           0.7          -0.8          -0.9          -1.9
    BEDS: 25-49.............................          196       45,487    33,230.63    32,686.65           0.6          -0.9          -1            -1.6
    BEDS: 50-74.............................           65       24,371    33,247.51    32,865.03           0.6          -0.4          -0.9          -1.2
    BEDS: 75-124............................           48       22,364    33,634.49    33,243.59           0.6          -0.4          -0.8          -1.2
    BEDS: 125-199...........................           21       17,716    33,285.43    32,909.60           0.6          -0.2          -0.9          -1.1
    BEDS: 200 +.............................           15       14,876    31,237.88    31,203.20           0.6           0.3          -0.7          -0.1
    UNKNOWN BED SIZE........................            0            0         0.00         0.00           0             0             0             0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    13. On page 26986, in the 2nd column, in the 1st full paragraph, 
line 4, the figure, ``3.8'' is corrected to read ``1.2''.
    14. On page 26987, in the 3rd column,
    (a) In the 1st partial paragraph, line 23, the figure ``$22,954'' 
is corrected to read ``$20,738''.
    b. In the 1st full paragraph,
    (1) Line 13, the figure ``6.2'' is corrected to read ``3.1''.
    (2) Line 14, the figure ``3.7'' is corrected to read ``1.2''.
    c. In the 3rd full paragraph,
    (1) Line 2, the figure ``3.2'' is corrected to read ``0.7''.
    (2) Line 7, the figure ``4.7'' is corrected to read ``2''.
    15. On page 26988,
    a. In the 1st column,
    (1) In the 1st full paragraph, lines 2 and 3, the phrase, 
``experience a lower than average decrease in estimated payments per'' 
is corrected to read, ``experience no change in estimated payments 
per''.
    (2) In the 3rd full paragraph, line 12, the figure, ``3.8'' is 
corrected to read ``1.1''.
    (3) In the 4th full paragraph,
    (a) Line 6, the figure, `` 3.4'' is corrected to read, ``1.0''.
    (b) Line 18, the figure ``0.8'' is corrected to read ``0.2''.
    b. In the 2nd column,
    (1) The 1st full paragraph is corrected in its entirety to read as 
follows:
    ``LTCHs that began participating before October 1983 are projected 
to experience a 0.2 percent increase in estimated payments per 
discharge from the 2007 LTCH PPS rate year compared to the 2008 LTCH 
PPS rate year (see Table 11). We are projecting that LTCHs that began 
participating in Medicare before October 1983 would experience an 
increase in estimated payments for RY 2008 as compared to RY 2007 
primarily because we are projecting that LTCHs in this participation 
date category would experience a decrease in estimated payments in RY 
2008 as compared to RY 2007 because several of these LTCHs are located 
in areas that have a wage index value of greater than 1.0, as explained 
above.
    (2) In the 2nd full paragraph,
    (a) Line 7, the figure ``4.5'' is corrected to read as ``1.9''.
    (b) Line 19, the figure ``1.5'' is corrected to read as ``0.9''.
    c. In the 3rd column,
    (1) In the 1st partial paragraph, line 10, the figure ``4.5'' is 
corrected to read as ``2.0''.
    (2) In the 1st full paragraph, line 5, the figure ``4'' is 
corrected to read as ``1.5''.
    (3) In the 2nd full paragraph, line 6, the figure ``3.7'' is 
corrected to read as ``1.1''.
    16. On page 26989,
    a. In the 1st column,
    (1) In the 1st partial paragraph,

[[Page 36616]]

    (a) Lines 1 through 3, the phrase ``East South Central and West 
South Central regions (5.3 percent and 4.8 percent, respectively; see'' 
is corrected to read ``East South Central region (2.6 percent, see''.
    (b) Lines 9 through 12, the phrase ``adjustment (2.3 percent for 
the East South Central region, and 1.7 percent for the West South 
Central region, as shown in Table 11)'' is corrected to read 
``adjustment (1.7 percent, as shown in Table 11)''.
    (c) Line 15, the phrase ``and the West South Central regions'' is 
removed.
    b. In the 3rd full paragraph,
    (1) Line 10, the figure ``4.7'' is corrected to read ``1.9''.
    (2) Line 12, the figure ``4.3'' is corrected to read ``1.6''.
    c. In the 2nd column
    (1) In the 1st partial paragraph, line 10, the figure ``2.5'' is 
corrected to read ``0.1''.
    (2) In the 1st full paragraph,
    (a) Lines 12 and 13, the phrase ``about $156 million'' is corrected 
to read ``approximately $50 million''.
    (b) Line 13, the figure ``3.8'' is corrected to read ``1.2''.
    17. On page 26991, in the 1st column,
    (a) In the 1st full paragraph, lines 5 and 6, the phrase ``payments 
of $156 million (or about 3.8 percent)'' is corrected to read 
``payments of approximately $50 million (or about 1.2 percent)''
    (b) In Table 12, in the 2nd row, in the 2nd column, line 4, the 
figure ``$156'' is corrected to read ``$50''.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we 
can waive this notice and comment procedure if the Secretary finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefore in the correction 
notice.
    Section 553(d) of the APA ordinarily requires a 30-day delay in 
effective date of final rules after the date of their publication in 
the Federal Register. This 30-day delay in effective date can be 
waived, however, if an agency finds for good cause that the delay is 
impracticable, unnecessary, or contrary to the public interest, and the 
agency incorporates a statement of the findings and its reasons in the 
rule issued.
    This correction notice corrects technical errors in the RY 2008 
LTCH PPS final rule. It does not make substantive changes to the 
policies or payment methodologies that were adopted in the final rule. 
We believe it is unnecessary to undergo notice and comment procedures 
and have a 30-day delay in effective date of these technical changes 
because they merely ensure that the RY 2008 LTCH PPS final rule 
accurately reflects the policies that were adopted in that final rule, 
final policies which were previously subjected to notice and comment 
procedures and that have had more than a 30 day-delayed effective date. 
We believe it impracticable to engage in notice and comment procedures 
and have a 30-day delayed effective date for these technical 
corrections as the correct payment rates must be effective July 1, 
2007.
    Therefore, we are waiving proposed rulemaking and the 30-day delay 
in effective date for the technical corrections in this correction 
notice.

Authority

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

    Dated: June 29, 2007.
Ann C. Agnew,
Executive Secretary to the Department.
[FR Doc. 07-3261 Filed 6-29-07; 3:21 pm]
BILLING CODE 4120-01-P